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TYPES OF
REPORTS AVAILABLE:
INSURANCE
BROKERAGE FEE INCOME
Insurance brokerage fee income is derived from non-underwriting activities and consists mostly of income from insurance product sales and referrals, including service charges, commissions, and fees earned from insurance sales, including credit, life, health, property, casualty, and title insurance products. Insurance income of this nature also includes fees earned from customer referrals for insurance products to insurance companies and insurance agencies external to the consolidated bank. Also included are management fees from separate accounts and universal life products.
Insurance brokerage fee income also includes the bank’s proportionate share of the income or loss before extraordinary items and other adjustments from its investments in equity method investees that are principally engaged in insurance product sales and referrals. Equity method investees include unconsolidated subsidiaries; associated companies; and corporate joint ventures, unincorporated joint ventures, general partnerships, and limited partnerships over which the bank exercises significant influence.
Insurance brokerage fee income does not include any income earned from annuity sales and referrals or insurance underwriting and reinsurance underwriting
activities.
TOTAL
INSURANCE FEE INCOME
Total insurance income includes all income from insurance brokerage sales activities and insurance underwriting or reinsurance activities. Insurance income also includes the bank’s proportionate share of the income or loss before extraordinary items and other adjustments from its investments in ventures over which the bank exercises significant influence that are principally engaged in insurance underwriting, reinsurance, or insurance sales activities. “Total Insurance Income” would be calculated as the sum of “Insurance and Reinsurance Underwriting Income” and “Insurance Brokerage Fee Income.”
Total insurance income does not include commissions and fees that the bank earns from the sale of annuities to bank customers by the bank’s securities brokerage firm, which are now reported as investment fee income. It also excludes commissions and fees from sales of annuities by the bank’s trust department (or by a consolidated trust company subsidiary) that are executed in a fiduciary capacity. The year 2003 marked the first time that banking regulators required banks to report separately insurance commissions and fees from underwriting and reinsurance income
INVESTMENT
FEE INCOME
Investment fee income consists of investment banking, advisory, brokerage, and underwriting fees and commissions. These include fees and commissions from securities brokerage activities, from the sale and servicing of mutual funds, from the sale of annuities to bank customers by securities brokerage firms, and from the purchase and sale of securities and money market instruments where the bank is acting as agent for other banks or customers. Additionally, investment fee income includes fees and commissions earned from underwriting securities, private placements of securities, investment advisory and management services, merger and acquisition services, and other related consulting fees. Investment fee income also includes the bank’s proportionate share of the income or loss before extraordinary items and other adjustments from its investments in equity method investees that are principally engaged in investment banking, advisory, brokerage, or securities underwriting activities. Equity method investees include unconsolidated subsidiaries; associated companies; and corporate joint ventures, unincorporated joint ventures, general partnerships, and limited partnerships over which the bank exercises significant influence. In 2001, revenues earned from the sale of annuities were all reported as insurance income (see above); as of 2002, sales of annuities by securities brokerage firms are now reported as investment fee income.
Representing fee income earned from both the broking and dealing activities of broker-dealers, investment fee income has been reported from 2001 through 2006.
Beginning in 2007, investment fee income is no longer reported, but MWA still calculates it by adding “Investment Banking, Advisory, and Underwriting Fees and Commissions,” “Securities Brokerage Income,” and “Annuity Fee Income.”
INVESTMENT
PROGRAM INCOME
Investment program income is the sum of securities brokerage income and annuity fee
income.
SECURITIES
BROKERAGE INCOME
Securities brokerage income includes fees and commissions from securities brokerage activities, from the sale and servicing of mutual funds, from the purchase and sale of securities and money market instruments where the bank is acting as agent for other banks or customers, and from the lending of securities owned by the bank or by bank customers. Securities brokerage income does not include income from fiduciary activities, trading revenue, or fees and commissions from the sale of annuities (fixed, variable, and other) to bank customers by the bank or any securities brokerage subsidiary. But, it does also include the bank’s proportionate share of the income or loss before extraordinary items and other adjustments from its investments in equity method investees that are principally engaged in securities brokerage activities. Equity method investees include unconsolidated subsidiaries; associated companies; and corporate joint ventures, unincorporated joint ventures, general partnerships, and limited partnerships over which the bank exercises significant influence.
ANNUITY
COMMISSIONS
Annuity commissions and fees consist of those fees and commissions earned from sales of annuities (fixed, variable, and other) by the bank and any subsidiary of the bank and fees earned from customer referrals for annuities to insurance companies and insurance agencies external to the consolidated bank. They include management fees earned from annuities. However, they do not include fee and commissions from sales of annuities by the bank’s trust department (or by a consolidated trust company subsidiary) that are executed in a fiduciary capacity. Annuity commissions and fees also include the bank’s proportionate share of the income or loss before extraordinary items and other adjustments from its investments in equity method investees that are principally engaged in annuity sales. Equity method investees include unconsolidated subsidiaries; associated companies; and corporate joint ventures, unincorporated joint ventures, general partnerships, and limited partnerships over which the bank exercises significant influence.
MUTUAL
FUND & ANNUITY FEE INCOME
Available only for
institutions with at least $1 billion in total consolidated assets.
Income from the sale and servicing of mutual funds and annuities (whether private label, third party or proprietary mutual funds and annuities) includes income earned as a result of sales of these products on the premises of the bank or its subsidiaries; or income earned from the sale of these products by the bank or a subsidiary, or by affiliated or unaffiliated entities from whom the bank reports income. This income may be in the form of fees or sales commissions at the time of the sale or fees earned over the duration of the account (e.g., annual fees, Rule 12b-1 fees or “trailer fees,” and redemption fees). Income that is reported from leasing arrangements with affiliated and unaffiliated entities that lease space in offices of the bank or its subsidiaries for use in selling mutual funds and annuities and fees for providing investment advisory services for mutual funds and annuities is reported as income earned (i.e., on an accrual basis). Mutual fund and annuity income includes fees for providing securities custody, transfer agent, and other operational and ancillary services to mutual funds and annuities that are sold on the premises of the bank, or sold by the bank or its subsidiaries, through a subsidiary, or by affiliated or unaffiliated entities from whom the bank reports income at the time of sale or over the duration of the account. Income includes that earned from sales conducted through the bank’s trust department that are not executed in a fiduciary capacity (e.g., trustee, executor, administrator, conservator). Sales conducted by the trust department that are executed in a fiduciary capacity are excluded from mutual fund and annuity income. Income from leasing arrangements, or the portion thereof, that is fixed in amount and does not vary based on sales volume may have been reported as a deduction from “Expenses of premises and fixed assets, net of rental income.” Thus, the income to be included in this item is reported gross rather than net of expenses incurred by the reporting bank or a consolidated subsidiary. Excluded are fees earned for providing securities custody, transfer agent, and other operational and ancillary services to third party mutual funds and annuities that are not sold on bank premises and are not otherwise sold by the reporting bank, through a subsidiary, or by affiliated or unaffiliated entities from whom the bank receives income at the time of the sale or over the duration of the
account.
INCOME
FROM FIDUCIARY ACTIVITIES
Fiduciary income is gross income from
services rendered by a bank’s trust department or by any of its consolidated
subsidiaries acting in any fiduciary capacity. It includes commissions and fees
on sales of annuities that are executed in a fiduciary capacity. It excludes
commissions and fees received for the accumulation or disbursement of funds
deposited to Individual Retirement Accounts (IRAs) or Keogh Plan accounts when
they are not handled by the bank's trust department.
WEALTH
MANAGEMENT FEE INCOME
MWA defines Wealth Management Income as
including securities brokerage income, either alone or in conjunction with any
of the following: investment advisory, banking income; annuity commissions; and
income from fiduciary activities. If a bank earns only fiduciary-related revenues, then it doesn’t have a wealth management program. It has a trust program, and its trust program is better compared, ranked and rated as a trust program, not a wealth management program.
TOTAL
NONINTEREST FEE INCOME
Total noninterest fee income is derived
from non-lending activities and consists of such forms of additional noninterest income consisting of insurance commissions; investment banking fees and brokerage commissions; fiduciary income; domestic deposit account service charges; venture capital revenue; net servicing fees from servicing real estate mortgages, credit cards, and other financial assets held by others; net securitization income; and other noninterest income such as rental of safe deposit boxes, the sale of bank drafts, money orders, cashiers’ checks, and travelers’ checks, and income and fees from the sale and printing of checks.
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