Deposits in Arkansas Banks Grow by 2.7 Percent

by Gwen Moritz  on Monday, Nov. 5, 2012 12:00 am  

John Womack, CEO of Arvest in central Arkansas: “We lead with deposits. We think that’s the most important thing to get.” (Photo by Michael Pirnique)

“If you think about Wal-Mart, if something isn’t working, you take it in and they either give you another one or give you your money back,” Womack said.

“We want to be very profitable — don’t get me wrong, we think that’s good. But we’re in it for the long term. And if we take care of the customers, that will take care of the bank profits.”

Arvest Bank earned $42 million last year and is on pace for $50 million in net income this year.

(Also see: Arvest Controls 12% of Arkansas Bank Deposits)

Bank of the Ozarks, which is publicly traded, has a much more bottom-line view of deposits — and it shows on the bottom line. With $3.75 billion in assets, barely a quarter the size of Arvest, BOZ earned almost $66 million last year and had net income of $38.7 million in the first half of the year.

“We could easily have twice as many deposits as we have today,” Greg McKinney, the bank’s CFO, said recently. “But the key is, you have to have a place to invest those deposits, either in the bond market or loans. It doesn’t make you any money to pay 40 or 50 basis points to have deposits and not have any place to put it.”

Bank of the Ozarks acquired, with FDIC help, two banks in Georgia just weeks before the deposit snapshot in 2011, and typical post-acquisition deposit runoff since then was evident in its out-of-state deposits: down more than $330 million.

That was fully expected, McKinney said.

“In some [acquisitions], we predict as much as 50-75 percent runoff.”

Unlike Arvest, Bank of the Ozarks isn’t concerned about not having enough deposits. “That’s where you have to look strategically,” McKinney said.

“If we had an opportunity tomorrow to fund $1 billion in loans or to go into the bond market and buy very good quality bonds, we could do that quickly.”

BOZ’s return on assets last year: 3.74 percent last year, buoyed by those FDIC acquisitions. At June 30, it was a hair over 2 percent.

Growth In Arkansas Bank Deposit Market
Deposits and branches as of June 30.

20082009201020112012
Total Deposits Statewide $47,147,996 $48,537,630 $50,877,672 $51,988,518 $53,384,259
Annual % Change -0.16% 2.95% 4.82% 2.18% 2.68%
Total Branches Statewide 1,513 1,505 1,483 1,484 1,447
Annual Change 23 -8 -22 1 -37

The Lists

25 Largest Banks in Arkansas: PDF
10 Largest bank Holding Companies: PDF
Bank Market Share in Select Counties of Arkansas: PDF
Bank Deposits by County: PDF

 

 

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