An Update on Emerging Issues in Banking 

New Reporting Offers Insight Into Bank Activities

April 18, 2002 

Noninterest income has grown in importance at commercial banks for almost 25 

years. Until last year, however, the quarterly Reports of Income that banks filed 

with federal regulators provided only limited detail on noninterest revenues. Last 

year, these reports began to include more detail on the relative importance of 

different activities and products to bank earnings. The new data show that some 

significant revenue sources are overwhelmingly concentrated in a few 

institutions, while other activities—notably insurance—are conducted by 

thousands of small banks across the U.S. 

Noninterest income has become more important for banks (Chart 1) as nonbank 

competition for loan customers, especially in sectors such as home mortgage 

lending and lending to large commercial borrowers, has limited growth in net 

interest income. At the same time, banks' enhanced ability to market and deliver 

fee-earning transactional services, made possible by advances in 

telecommunications and data processing, and the development of new financial 

products, aided by deregulation and innovation, have produced a growing 

number of sources of noninterest income. This trend has been evident at both 

large and small banks, although larger banks have consistently obtained a 

significantly greater share of their revenues from noninterest sources. Greater 

diversification in revenues should promote greater stability and consistency in 

bank earnings. While some noninterest revenue sources are sensitive to 

conditions in financial markets, and may be more volatile over time than net 

interest income, other noninterest revenues, notably those obtained from 

transaction-based services, should be less susceptible to cyclical influences. 
D

Before 2001, banks reported the amounts of their noninterest income that 

consisted of service charges on deposit accounts, fiduciary (trust) income, and 

revenues from trading operations. Any other sources of noninterest income were 

reported in the residual categories of "Other Fee Income" and "All Other 

Noninterest Income." The new report format introduced in the first quarter of 

2001 still includes fiduciary income, deposit service charges, and trading 

revenues, but it now also breaks out income from investment banking services, 

revenues from venture capital investments, servicing fees, income from asset 

securitization activities, insurance commissions and fees, and proceeds from 

sales of loans, other real estate, and other assets. With this information, it is 

possible to examine the relative importance of each of these income sources to 

bank revenues, and see how widespread these business lines are among 

insured commercial banks. 

During 2000, the residual categories of "other fee income" and "all other 

noninterest income" together comprised almost two-thirds (62.5 percent) of all 

noninterest income reported by insured commercial banks. The new categories 

reported in 2001 provide a more detailed look at roughly half of these "other" 

revenues. The data show that securitization income (net gains on sales of 

securitized assets plus non-servicing fees), at $16.4 billion for the year, 

represented the largest amount of any of the new categories. The next-highest 

category was servicing fees, at $11.6 billion. Fees and commissions from 

investment banking, advisory, brokerage, and underwriting services totaled $9.1 

billion in 2001. Sales of loans, other real estate, and other assets yielded net 

gains of $7.0 billion. Insurance commissions and fees totaled $2.9 billion, while 

venture capital activities produced a net loss of $740 million for the year. The 

remaining category of "all other" noninterest income, which includes income from 

unconsolidated subsidiaries, data processing services, ATM usage fees charged 

to depositors from other institutions, as well as service charges and fees for a 
variety of other services, was still the largest component of total noninterest 

income. At $51.3 billion, it represented 32.7 percent of commercial banks' 

noninterest income in 2001. 

Table 1 

Noninterest Income Of Insured Commercial Banks, 2001

(Amounts in $ Thousands)

Noninterest Income 

Category

Full Year 

Amount

% of 

Total

# of Banks 

Reporting

Combined Share of 5 

Largest Reported 

Amounts

Income from fiduciary 

activities 20,751,226 13.2% 1,668 39.4%

Service charges on 

deposit accounts 26,472,609 16.8% 7,909 33.9%

Trading revenues 12,524,834 8.0% 175 82.6%

 On interest-rate 

contracts 6,075,878 3.9% 106 85.1%

 On foreign exchange 

contracts 4,338,966 2.8% 47 82.5%

 On equity contracts 1,878,327 1.2% 20 95.4%

 On commodity & 

other contracts 231,663 0.1% 10 N/M

Investment banking & 

other fees 9,096,981 5.8% 2,178 55.8%

Venture capital 

revenue -740,222 -0.5% 61 N/M

Servicing fees 11,568,730 7.4% 1,626 41.5%

Securitization income 16,349,975 10.4% 100 64.0%

Insurance 

commissions & fees 2,874,938 1.8% 4,063 38.4%

Net gains/losses on 

loan sales 4,642,565 3.0% 1,739 47.5%

Net gains/losses on 

sales of OREO 65,348 0.0% 2,129 N/M

Net gains/losses on 

sales of other assets 2,249,208 1.4% 2,321 84.6%

Other noninterest 

income 51,335,770 32.7% 7,983 21.2%

Total noninterest 

income 157,171,912 8,050

Source: Bank Call Reports (Research Information System)

Table 1 shows the amounts of noninterest income in its component categories, 

as well as the number of banks reporting non-zero amounts in each category. It 

also shows the share of income in each category represented by the combined 

totals of the five largest amounts reported, to provide an indication of how highly 

concentrated each underlying activity was within the banking industry during 

2001. Based on the frequency of nonzero amounts reported, service charges on 

deposit accounts were the most widespread and were the largest identifiable 

dollar category. Although far less important in terms of dollars, insurance-related 

activities were the next most widespread; more than half of the 8,080 commercial 

banks at year-end reported some income from these activities. At the other end 

of the scale, only 61 banks reported any results from venture capital investments, 
and only 100 banks reported any income from securitization activities. 

As an indicator of concentration within different activities, the combined shares of 

the five largest reporters in each category varied widely. The five largest 

reporters accounted for 84.6 percent of the $2.2 billion in gains from sales of 

other assets, and almost two-thirds of the $16.4 billion in securitization income 

reported by commercial banks in 2001, while the five largest amounts reported 

for insurance commissions and fees represented only 38.4 percent of the 

industry's total income in this category. Most of the industry's income from

securitization activities was earned by 24 specialized credit-card banks; they 

accounted for 86.4 percent of all securitization income reported in 2001. 

Just as large and small banks show different relative levels of noninterest 

income, they also show significant differences in the composition of their 

noninterest revenues. Larger banks as a group exhibit greater diversification in 

their noninterest revenues. For commercial banks with assets greater than $1 

billion, three of the new categories—securitization income (11 percent), servicing 

fees (7 percent), and investment banking income (6 percent)—provide more than 

5 percent of the group's aggregate noninterest income. The largest identifiable 

category for large banks, service charges, comprised only 16 percent of their 

noninterest income (Chart 2). Banks with less than $1 billion in assets, in 

contrast, have more of their noninterest revenues (29%) concentrated in service 

charges. Of the newly reported activities, only servicing fees (7 percent) provided 

more than 5 percent of aggregate noninterest income for small banks in 2001 

(Chart 3). 
D
D

Last Updated 04/18/2002 
Chart 1

Noninterest Income Provides a Growing Share of Bank Revenues

Ye

ar

No

. of 

Ins

t.

Total 

Intere

st 

Inco

me

Total 

Intere

st 

Expe

nse

Net 

Intere

st 

Inco

me

Total 

NonIntere

st 

Inco

me

Total 

NonIntere

st 

Expe

nse

Provis

ion for 

Loan 

and 

Lease 

Losse

s

Pretax 

Net 

Operat

ing 

Incom

e

Securitie

s 

Gains/Lo

sses (-)

Applic

able 

Incom

e 

Taxes

Net 

Extra

-

ordin

ary 

Items

Net 

Inco

me

200

0

8,31

5

427,985

,443

224,195

,004

203,790

,442

152,750

,779

215,752

,512

29,254,2

57

111,534,

449 -2,285,246

38,043,44

8 -30,226

71,175,

520

19

75

24

%

199

9

8,58

0

367,321

,536

175,128

,619

192,192

,909

144,399

,890

204,195

,999

21,813,7

47

110,583,

061 181,015

39,377,44

0 168,882

71,555,

517

18

%

199

8

8,77

4

362,019

,427

179,266

,364

182,753

,063

123,698

,673

194,142

,572

22,215,6

10

90,093,5

54 3,130,738

31,946,38

6 506,756

61,784,

652

18

%

199

7

9,14

2

339,540

,553

165,038

,458

174,502

,093

104,498

,556

169,982

,976

19,851,4

45

89,166,2

30 1,841,825

31,871,30

1 19,084

59,155,

806

18

%

199

6

9,52

7

312,742

,340

149,988

,642

162,753

,698

93,568,

711

160,698

,237

16,285,3

97

79,338,7

75 1,113,584

28,190,60

2 88,396

52,350,

138

18

%

199

5

9,94

0

302,382

,735

148,172

,638

154,210

,062

82,425,

540

149,728

,728

12,602,8

26

74,304,0

83 540,982

26,125,44

8 25,671

48,745,

268

19

80

20

%

199

4

10,4

51

257,828

,305

111,277

,545

146,550

,766

76,276,

366

144,234

,492

10,965,1

61

67,627,4

73 -570,667

22,419,32

3 -15,227

44,622,

203

22

%

199

3

10,9

58

245,055

,191

105,742

,497

139,312

,686

74,954,

193

139,695

,401

16,813,8

60

57,757,6

26 3,059,652

19,852,09

5

2,069,9

71

43,035,

111

23

%

199

2

11,4

62

255,223

,143

121,804

,746

133,418

,416

65,648,

171

130,965

,454

26,048,2

04

42,052,9

10 4,005,452

14,480,57

2 408,755

31,986,

575

24

%

199

1

11,9

21

289,214

,022

167,302

,352

121,911

,675

59,739,

039

124,794

,714

34,314,2

37

22,541,7

58 2,971,851 8,264,847 686,675

17,935,

435

25

%

199

0

12,3

43

320,475

,804

204,952

,380

115,523

,415

54,899,

362

115,768

,467

32,087,0

55

22,567,2

64 481,249 7,704,184 646,766

15,991,

078

19

85

25

%

198

9

12,7

09

317,371

,442

205,141

,604

112,229

,834

50,915,

568

108,121

,205

31,020,0

96

24,004,1

05 801,197 9,540,222 309,802

15,574,

853

27

%

198

8

13,1

23

272,276

,911

165,027

,852

107,249

,055

44,953,

378

101,329

,856

17,164,4

70

33,708,1

11 279,458 9,987,808 812,450

24,812,

194

29

%

198

7

13,7

03

244,839

,538

144,952

,607

99,886,

934

41,481,

014

97,244,

511

37,543,8

26

6,579,60

8 1,427,364 5,404,283 200,526

2,803,2

19

30

%

198

6

14,1

99

237,765

,872

142,829

,241

94,935,

622

35,876,

520

90,249,

964

22,105,8

77

18,457,3

10 3,950,856 5,265,640 276,192

17,417,

674

31

%

198

5

14,4

07

248,220

,304

157,322

,506

90,897,

788

31,054,

038

82,364,

741

17,774,0

41

21,813,0

54 1,565,198 5,628,710 227,500

17,977,

015

19

90

32

%

198

4

14,4

82

250,339

,385

169,078

,046

81,261,

268

26,510,

416

73,811,

526

13,816,1

66

20,144,0

63 -140,398 4,721,246 218,111

15,499,

844

33

%

198

3

14,4

69

217,226

,000

143,887

,000

73,339,

000

23,269,

000

66,909,

000

10,802,0

00

18,896,0

00 -21,000 4,017,000 73,000

14,931,

000

33

%

198

2

14,4

51

238,316

,000

169,343

,000

68,972,

000

20,176,

000

61,561,

000

8,342,00

0

19,245,0

00 -1,280,000 3,037,000 68,000

14,996,

000

35

%

198

1

14,4

14

231,274

,000

169,840

,000

61,431,

000

17,527,

000

53,658,

000

5,066,00

0

20,234,0

00 -1,583,000 3,904,000 56,000

14,803,

000

34

%

198

0

14,4

34

176,419

,000

120,122

,000

56,297,

000

14,348,

000

46,662,

000

4,478,00

0

19,505,0

00 -854,000 4,658,000 17,000

14,010,

000

19

95

35

%

197

9

14,3

64

138,900

,000

87,912,

000

50,988,

000

11,381,

000

40,692,

000

3,785,00

0

17,891,0

00 -650,000 4,442,000 39,000

12,838,

000

37

%

197 14,3 103,957 59,383, 44,574, 9,625,0 35,573, 3,526,00 15,101,0 -447,000 3,940,000 45,000 10,759, 37
8 91 ,000 000 000 00 000 0 00 000 %

197

7

14,4

11

82,252,

000

44,565,

000

37,687,

000

8,106,0

00

30,925,

000

3,303,00

0

11,565,0

00 142,000 2,875,000 47,000

8,879,0

00

40

%

197

6

14,4

10

73,033,

000

39,328,

000

33,705,

000

7,630,0

00

27,731,

000

3,691,00

0

9,914,00

0 312,000 2,409,000 26,000

7,843,0

00

43

%

197

5

14,3

84

57,917,

000

30,240,

000

27,675,

000

8,643,0

00

23,729,

000

3,612,00

0

8,977,00

0 37,000 1,793,000 34,000

7,255,0

00

20

00

43

%

197

4

14,2

30

61,218,

304

35,070,

707

26,148,

000

6,925,8

58

21,545,

066

2,290,00

0

9,238,00

0 -87,000 2,084,000 11,920

7,078,9

20

20.9

%

197

3

13,9

76

47,034,

126

24,489,

474

22,545,

000

5,999,9

92

18,571,

197

1,263,69

5

8,709,30

5 -27,000 2,122,000 21,561

6,581,8

66

21.0

%

197

2

13,7

33

35,029,

550

15,602,

943

19,427,

000

5,220,0

22

16,423,

000 972,238

7,251,76

2 92,000 1,708,000 20,000

5,655,7

62

21.2

%

197

1

13,6

12

31,628,

167

13,603,

029

18,025,

000

4,747,4

70

15,191,

318 868,000

6,713,00

0 213,000 1,689,000 -639

5,236,3

61

20.8

%

197

0

13,5

11

30,513,

367

12,455,

568

18,057,

000

4,202,1

92

14,428,

000 703,150

7,126,85

0 -104,000 2,173,000 -12,810

4,837,0

40

18.9

%

196

9

13,4

73

27,284,

580

11,532,

649

15,753,

000

3,521,0

00

12,024,

000 521,064

6,727,93

6 -237,000 2,164,000 6,914

4,333,8

50

18.3

%

196

8

13,4

87

22,501,

000

9,314,9

86

13,186,

000

2,974,0

00

10,140,

000 512,000

5,509,00

0 -457,000 1,266,000 N/A

3,786,0

00

18.4

%

196

7

13,5

14

19,152,

000

7,733,6

64

11,418,

000

2,626,0

00

8,903,0

00 434,000

4,707,00

0 -21,000 1,177,154 N/A

3,508,8

46

18.7

%

196

6

13,5

38

17,135,

311

6,627,8

11

10,508,

000

2,373,0

49

8,001,0

00 417,000

4,462,00

0 -392,447 1,029,906 N/A

3,039,6

47

18.4

%

196

5

13,5

44

14,714,

998

5,316,4

63

9,399,0

00

2,113,5

98

7,298,4

04 324,000

3,891,00

0 -426 1,029,162 N/A

2,861,4

12

18.4

%

196

4

13,4

93

13,110,

723

4,241,0

87

8,870,0

00

1,924,6

74

6,780,3

01 251,000

3,764,00

0 -14,000 1,148,000 N/A

2,602,0

00

17.8

%

196

3

13,2

91

11,769,

514

3,574,1

60

8,196,0

00

1,750,1

46

6,205,7

47 238,000

3,502,00

0 118,000 1,227,000 N/A

2,393,0

00

17.6

%

196

2

13,1

24

10,570,

237

2,911,3

71

7,659,0

00

1,659,8

32

5,746,1

84 167,000

3,406,00

0 198,000 1,256,000 N/A

2,348,0

00

17.8

%

196

1

13,1

15

9,539,8

66

2,146,4

65

7,394,0

00

1,549,8

82

5,383,1

21 190,000

3,371,00

0 409,000 1,406,000 N/A

2,374,0

00

17.3

%

196

0

13,1

26

9,176,1

24

1,874,4

95

7,302,0

00

1,578,3

32

5,141,9

47 206,000

3,532,00

0 110,000 1,384,000 N/A

2,257,0

00

17.8

%

195

9

13,1

14

8,247,4

27

1,661,8

19

6,585,0

00

1,456,0

00

4,853,0

00 53,000

3,135,00

0 -698,000 884,000 N/A

1,553,0

00

18.1

%

195

8

13,1

24

7,187,0

01

1,407,1

02

5,780,0

00

1,333,5

49

4,286,2

00 61,000

2,766,00

0 588,000 1,271,000 N/A

2,082,0

00

18.7

%

195

7

13,1

65

6,817,8

76

1,193,4

87

5,625,0

00

1,243,9

96

4,046,8

49 72,000

2,750,00

0 -173,000 998,000 N/A

1,578,0

00

18.1

%

195

6

13,2

18

6,125,8

87 853,638

5,272,0

00

1,122,4

01

3,725,2

64 92,000

2,577,00

0 -286,000 815,000 N/A

1,476,0

00

17.6

%

195

5

13,2

37

5,381,7

31 703,911

4,677,0

00

1,020,1

31

3,370,1

49 49,000

2,278,00

0 -164,000 794,000 N/A

1,320,0

00

17.9

%

195

4

13,3

23

4,860,5

54 629,809

4,231,0

00 930,856

3,086,9

97 44,000

2,031,00

0 350,000 908,000 N/A

1,473,0

00

18.0

%

195

3

13,4

32

4,660,7

04 561,643

4,098,0

00 837,205

2,901,8

68 59,000

1,974,00

0 -117,000 786,000 N/A

1,070,0

00

17.0

%

195

2

13,4

39

4,160,0

52 482,655

3,677,0

00 786,790

2,603,1

25 35,000

1,826,00

0 -64,000 695,000 N/A

1,067,0

00

17.6

%

195

1

13,4

55

3,658,1

57 398,887

3,259,0

00 755,208

2,344,8

19 35,000

1,634,00

0 -27,000 559,000 N/A

1,047,0

00

18.8

%

195

0

13,4

46

3,248,8

81 351,669

2,897,0

00 700,276

2,119,9

59 29,000

1,448,00

0 52,000 428,000 N/A

1,072,0

00

19.5

%
194

9

13,4

36

2,975,2

06 336,685

2,638,0

00 650,905

1,970,5

70 59,000

1,259,00

0 35,000 325,000 N/A

968,00

0

19.8

%

194

8

13,4

19

2,797,6

97 325,232

2,473,0

00 642,386

1,852,3

56 28,000

1,235,00

0 -19,000 275,000 N/A

941,00

0

20.6

%

194

7

13,4

03

2,540,9

43 306,911

2,234,0

00 601,913

1,687,4

69 53,000

1,096,00

0 -18,000 302,000 N/A

775,00

0

21.2

%

194

6

13,3

59

2,346,1

37 279,333

2,067,0

00 576,135

1,505,4

20 -3,000

1,141,00

0 76,000 323,000 N/A

894,00

0

21.8

%

194

5

13,3

02

2,027,1

75 247,538

1,779,0

00 577,859

1,309,1

73 -11,000

1,059,00

0 134,000 299,000 N/A

894,00

0

24.5

%

194

4

13,2

68

1,788,2

53 201,530

1,586,0

00 519,402

1,199,4

37 -14,000 920,000 19,000 203,000 N/A

736,00

0

24.7

%

194

3

13,2

74

1,567,4

12 178,726

1,388,0

00 484,142

1,118,3

45 -10,000 764,000 -13,000 128,000 N/A

623,00

0

25.9

%

194

2

13,3

47

1,427,2

98 189,533

1,237,0

00 419,540

1,085,1

79 12,000 560,000 -54,000 80,000 N/A

426,00

0

25.3

%

194

1

13,4

27

1,357,1

75 208,193

1,149,0

00 446,483

1,101,5

31 33,000 460,000 -16,000 8,000 N/A

436,00

0

28.0

%

194

0

13,4

38

1,268,6

50 218,577

1,049,0

00 435,928

1,033,1

91 48,000 404,000 -15,000 6,000 N/A

383,00

0

29.4

%

193

9

13,5

34

1,248,6

81 234,307

1,015,0

00 423,392 992,045 71,000 375,000 0 5,000 N/A

370,00

0

29.4

%

193

8

13,6

57

1,236,8

54 249,990 987,000 409,068 968,050 94,000 334,000 -49,000 4,000 N/A

281,00

0

29.3

%

193

7

13,7

95

1,282,0

19 260,878

1,021,0

00 409,512 958,453 52,000 421,000 -59,000 5,000 N/A

357,00

0

28.6

%

193

6

13,9

69

1,236,9

91 273,383 964,000 504,638 949,833 140,000 379,000 113,000 2,000 N/A

490,00

0

34.4

%

193

5

14,1

23

1,190,7

27 298,196 893,000 582,979 853,888 237,000 385,000 -211,000 N/A N/A

174,00

0

39.5

%

193

4

14,1

37

1,241,0

92 327,723 913,000 469,533 863,300 500,000 20,000 -377,000 N/A N/A

-

357,00

0

34.0

%
Chart 2

Large Bank Revenues Indicate a Variety of Products and Services

Assets > $1 Billion 

2001

% of 

Total

Income from fiduciary activities 18,709,045 13.1%

Service charges on deposit 

accounts 22,310,156 15.6%

Trading revenues 12,514,131 8.8%

On interest-rate contracts 6,067,261 4.2%

On foreign exchange contracts 4,336,854 3.0%

On equity contracts 1,878,353 1.3%

On commodity & other contracts 231,663 0.2%

Investment banking & other fees 8,685,482 6.1%

Venture capital revenue -745,193 -0.5%

Servicing fees 10,545,446 7.4%

Securitization income 15,917,146 11.1%

Insurance commissions & fees 2,603,886 1.8%

Net gains/losses on loan sales 3,877,895 2.7%

Net gains/losses on sales of 

OREO 48,527 0.0%

Other noninterest income 46,130,607 32.3%

Total noninterest income 142,826,143
Chart 3

Smaller Banks' Revenues Show Less Diversity

Assets < $1 Billion 

2001

% of 

Total

Income from fiduciary activities 2,042,181 14.2%

Service charges on deposit 

accounts 4,162,453 29.0%

Trading revenues 10,703 0.1%

On interest-rate contracts 8,617 0.1%

On foreign exchange contracts 2,112 0.0%

On equity contracts -26 0.0%

On commodity & other contracts 0 0.0%

Investment banking & other fees 411,499 2.9%

Venture capital revenue 4,971 0.0%

Servicing fees 1,023,284 7.1%

Securitization income 432,829 3.0%

Insurance commissions & fees 271,052 1.9%

Net gains/losses on loan sales 764,670 5.3%

Net gains/losses on sales of 

OREO 16,821 0.1%

Other noninterest income 5,205,163 36.3%

Total noninterest income 14,345,769