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Bank of Ozarks Fuels State Deposit Growth

4 min read

Arkansas bank deposits grew at a 7.5 percent clip in the year that ended June 30, handily beating the national growth rate and topping $60 billion for the first time as the number of separate banks and branch locations operating in the state continued to decline.

More than $2 billion of the state’s $4.28 billion in additional deposits flowed to Bank of the Ozarks, the fast-growing publicly traded bank headquartered in Little Rock. With Arkansas deposits of $5.42 billion, up 61 percent from $3.37 billion in mid-2015, Bank of the Ozarks moved from No. 7 last year to No. 2, passing Bank of America, Regions Bank, First Security Bank, Simmons Bank and Centennial Bank.

Arvest Bank still had the most Arkansas deposits as of June 30, $7.67 billion, but in July Bank of the Ozarks overtook Arvest as the largest bank chartered in Arkansas ranked by total assets when it completed the acquisitions of Community & Southern Bank of Atlanta and C1 Bank of St. Petersburg, Florida.

The Federal Deposit Insurance Corp. released its annual summary of deposits on Sept. 30. It is an accounting taken at midyear by the government agency that insures bank deposits. It is not a holistic report card on the health of a bank or of the banking industry, but it is the only official report that provides Arkansas-specific trend data for multistate banks like Arvest, Regions and Bank of America.

Bank of the Ozarks’ dramatic increase in Arkansas deposits is a reflection of “tremendous growth momentum in our company in recent years,” Chief Operating Officer Tyler Vance said last week.

BOZ now has offices in nine states, and companywide it added about $3.1 billion in new deposits in the 12 months that ended June 30, surpassing $10.2 billion. (That doesn’t include the two July acquisitions, which added some $4.6 billion in deposits.)

Just more than $2 billion of that was attributed to Arkansas, and Vance said about half of that represented “really strong core deposits,” including new checking accounts and public funds. The other billion dollars attributed to BOZ’s headquarters in Little Rock came from brokered deposits, bundled deposits that banks seek out in order to fund loan demand.

In the year that ended June 30, famously efficient Bank of the Ozarks tripled its bundled deposits from $501 million to $1.5 billion. “There are times in the brokered deposit market when those funds are actually cheaper… than what you can raise retail deposits for,” said Vance.

Banks and Branches
While the total number of branches operating in Arkansas at the end of June (1,354) was down by 11 from a year earlier, BOZ has been expanding its in-state deposit-gathering network — specifically in the northwest corner. It opened a branch in Siloam Springs in March and one in Fayetteville in May, and No. 84 in the state will open in Springdale later this month.

Only Arvest, with 118, and Regions, 95, have more branches in Arkansas than Bank of the Ozarks, and for a few days, BOZ and Simmons are tied with 83. Simmons had 85 in-state offices as of June 30; since then, spokesman Rex Nelson said, it has closed offices at Fairfield Bay, on Hogan Lane in Conway and on Wedington Drive in Fayetteville and opened one on Mission Boulevard in Fayetteville.

“We enjoy a very strong brand position in Arkansas. We’re proud to call it home,” Vance said.

The number of banks that call Arkansas home stood at 104 as of June 30, down by two from mid-2015. The two that dropped out of the roster were Bank of Fayetteville, which was acquired by Farmers & Merchants Bank of Stuttgart in November, and Parkway Bank of Rogers, which was acquired by Citizens Bank of Batesville in December.

Since the June 30 snapshot, however, the Arkansas State Bank Department closed undercapitalized Allied Bank of Mulberry on Sept. 23 and its deposits and assets were acquired by Today’s Bank of Huntsville.

Another in-state merger is also in the works: As Arkansas Business reported last week, Central Bank of Little Rock is planning to acquire Pinnacle Bank of Rogers.

Twenty-three banks chartered outside Arkansas also did business in the state as of June 30. The only one to enter Arkansas since mid-2015 was Texana Bank of Linden, Texas, which opened a branch on the Arkansas side of Texarkana in December. Texana had $141.8 million in assets as of June 30, and the Arkansas branch is its fifth.

An Alabama thrift that had done business in the northeast corner of Arkansas, SouthBank of Huntsville, was liquidated in May. By then, however, its three Arkansas branches — at Blytheville, Manila and Osceola — had been sold to Cross County Bank of Wynne in November.

Mark Waldrip, a Lee County agri-businessman, announced last week that his family had struck a deal to buy Forrest City Bank, but that purchase will not affect the total number of banks operating in the state. (See Waldrip Family to Purchase Forrest City Bank.)

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