Bank holding companies earned $2.84 billion from the sale of annuities in 2011, up 10.4% from the previous year, according to a report from Michael White Associates, a bank insurance consulting firm based in Radnor, Pa.

While annuity commissions were up for the year, they slowed significantly in the fourth quarter to $579.7 million, a 20.5% drop from the $729.5 million in the same quarter the year before. Annuity sales hit a record-setting $781.4 million in the second quarter of 2011, according to the stats. 

“The industry’s double-digit increase in annuity fee income in 2011 was due to widespread growth throughout the industry,” said Kevin McKechnie, executive director of American Bankers Insurance Association, which sponsored the report. “What gives cause for concern was the significant slide in quarterly annuity income, particularly in the last quarter.”

Bank holding companies with more than $10 billion in assets saw the greatest increase in annuity commissions, earning $2.69 billion, up 10.9% from 2010. The top five bank holding companies that generated the most annuity income in 2011 were Wells Fargo & Co., Morgan Stanley, JPMorgan Chase & Co., Bank of America Corp., and SunTrust Banks Inc.

Banks with $500 million to $1 billion in assets generated $23.3 million in annuity commissions, up 4.9% from 2010.  The leaders in this category were Northeast Bancorp, Citizens Bancshares, Inc., River Valley Bancorporation, Inc., Nodaway Valley Bancshares, Inc., and Van Diest Investment Co.

The banks with the smallest increase in annuity sales were those with assets between $1 billion and $10 billion. These banks recorded an increase of 0.2% in annuity fee income in 2011, according to the report. 

The report is based on data from all 6,679 commercial and FDIC-supervised banks and 930 top-tier bank holding companies with consolidated assets greater than $500 million operating on Dec. 31, 2011.

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