Bank brokerage revenue finally increased in the third quarter after five quarters of decline, according to the Bank Insurance and Securities Association's Productivity and Performance Report: Third Quarter 2009.

The average bank brokerage revenue increased 10% over the prior quarter and 5% over the previous year, to $1,790 per $1 million of retail deposits. This measure allows banks of all sizes to benchmark their performance against the average. Bank reps turned in an average production of $16,575 per month in the third quarter, up 5% from the second quarter, but down 6% from the third quarter of 2008.

"We're certainly up from the beginning of the year and the trend line looks like things are firming up a little," says Heywood Sloane, managing director at BISA. The figure "$16,575 is a good average for the quarter and November's figure of $17,300 reinforces that things are moving in the right direction."

Average platform rep productivity continued to decline, however. It hit $799 per month in the third quarter, down from $828 per month in the second. Year-over-year platform rep productivity is down 17%. That's primarily because platform reps, for the most part, only sell fixed annuities, which have been doing poorly. More clients are now interested in mutual funds, which have bounced back since last year. "People are getting more comfortable with equities," Sloane says. Mutual funds accounted for 11% of brokerage revenue, up from 9% a year earlier.

Fixed annuities-still a key product in banks-hovered around one-third of the average bank brokerage program's product mix, constituting the lion's share of sales. Fixed annuities' share of sales mix is down slightly from 2008, though, when they averaged 36.7% of brokerage revenue.

Sales of variable annuities held steady, hitting 17% of brokerage revenue in the third quarter, up from 16.5% in the second quarter and 15.3% in the third quarter of 2008.

Recurring revenue, which includes fees and trails, grew slightly, to 16.9% of brokerage revenue, up from 16.2% in the second quarter, but still below its 18.3% share of the pot in the third quarter 2008.

While it only accounts for 5.8% of brokerage revenue, life insurance, very much the underdog in the overall product mix, grew 87% year over year. Stocks and bonds held steady at around 14% of brokerage revenue.

Sloane says that advisors' overall sentiment is one of cautious optimism, barring such crisis aftershocks as the recent Dubai World debt crunch. In BISA's forward-looking monthly opinion panel of reps, advisors say their clients are still 50/50 on the market's future, as they have been for months. But advisors themselves are more confident about their production: 50% expect November's numbers to beat October's-a result that early reports suggest is playing out.

While BISA only polls a small number of advisors, 70% of the panel produces $30,000 or more per month. "These guys are the bellwether," Sloane says. "Where they go, the industry goes."

Only 40% of advisors expected to grow their production in December, but Sloane thinks that's because of holidays more than market pessimism. "It'll come back up in January," he says.