The rising interest rate environment in the U.S. is creating more competition for banking deposits and providing an incentive for banks to waive fees.
Total service charges and fees for the banking industry hit $4.23 billion in the first quarter, down from $4.29 billion a quarter earlier and $4.30 billion in the year-ago quarter. These figures include overdraft-related service charges, ATM fees and maintenance service charges.
Service charges and fees make up an increasingly small portion of the industry's overall operating revenue — just 2.13% in the first quarter, marking the lowest point since banks began reporting for the metric in 2016. On a median basis, service charges accounted for 1.83% of operating revenue at U.S. banks and thrifts.
Not surprisingly, the three largest retail banks reported the highest consumer deposit fees in the first quarter, led by Bank of America NA at $742.0 million.


Many of the institutions most dependent on fees as a percentage of operating revenue are smaller community banks. Of the top 20, only three had total assets over $5 billion. TD Bank NA, by far the largest name on the list at $294.83 billion in assets, derived over 10% of its operating revenue from service fees in the first quarter.
The top three banks most dependent on service fees as a percentage of operating revenue maintain most of their branches in Wal-Mart stores. Killeen, Texas-based First National Bank Texas reported service fees equal to 41.91% of operating revenue, the most of any bank in the nation, followed by Kansas City, Missouri-based Academy Bank NA at 37.71% and The Woodlands, Texas-based Woodforest National Bank at 36.62%.

Did you enjoy this analysis? Click here to set up real-time alerts for data-driven articles on the U.S. financial sector. Commercial banks, savings banks, and savings and loan associations report service fees from consumer deposits in schedule RI of the call report. Click here to see the aggregate data for U.S. commercial banks (scroll to the bottom). Click here to access an Excel template showing the keyfields used to pull the list of companies with the highest service fees-to-operating revenue ratios in the first quarter of 2018. |

