Overdraft fee income ticks up from 3-year low in Q2 2024

US banks' overdraft fees increased in the second quarter after hitting a three-year low during the first quarter.

Overdraft fee income rose to $1.40 billion in the second quarter from $1.36 billion in the first quarter, but fell from $1.41 billion year over year. For the last six quarters, the level has ranged from $1.36 billion to $1.41 billion after a steep decline in the wake of regulatory and competitive pressure in late 2021.

During the quarter, ATM fees increased to $425.5 million from $403.0 million in the previous quarter, while maintenance fees decreased to $1.03 billion from $1.04 billion.

The banks that rely on fee income

Service charges on consumer deposits made up more than 10% of just three US banks' operating revenue for the 12 months ended June 30.

Woodforest National Bank topped the list at 22.3% followed by Gate City Bank at 15.5% and International Bank of Commerce Oklahoma at 10.5%.

Arvest Bank remains the only bank in the top 20 by proportion of consumer deposit fees with over $10 billion in assets.

– Click here to access S&P Global Market Intelligence's top 20 banks ranked by service fees as a proportion of operating revenue. – Read some of today's top news and insights from S&P Global Market Intelligence.

Half of the top 20 US banks by consumer deposit fees' proportion of operating revenue reported fee increases year over year. The largest of those was First Bank, up 29.8%, followed by VeraBank NA, up 8.9%.

International Bank of Commerce Oklahoma reported the largest drop on the list, down 8.3%.

Deposit fees decrease overall

The largest US banks — JPMorgan Chase Bank NA, Wells Fargo Bank NA and Bank of America NA — brought in the most in consumer deposit fees, but the totals for each fell by at least 3.0% while the industry median dropped 1.2%.

Of the top 20 banks by total consumer deposit fees, 12 recorded decreases in consumer deposit fee income year over year. Half of those were double-digit drops, with USAA Federal Savings Bank observing the largest drop of 47.0% year over year. Truist Bank dipped 27.1% and Regions Bank decreased 17.4%.

Conversely, Manufacturers and Traders Trust Co. posted the biggest rise, up 18.7%.