The big banks strike back

FDIC deposit report shows top three adding more than $1B in past year

The flight to quality continues.

In the year ended June 30, six of the top seven banks in the Nashville area attracted deposits faster than the market's overall growth — the only exception being hometown player Pinnacle Financial — and added more than 3 percentage points to their combined market share.

Leading the way was No. 1 Regions Bank, which grew its area deposit base by more than $550 million to top $7 billion, according to annual data from the Federal Deposit Insurance Corp. Regions' 18.1 percent share it held as of June 30 was its highest since mid-2008.

Also gaining ground were Bank of America and SunTrust, the only other banks with more than 10 percent of the region's deposit market. They combined to add about $570 million to their vaults in the past year.

A number of players not far below them in the size rankings also posted strong growth. First Tennessee and U.S. Bank, which last week said it will relocate its Tennessee headquarters, both grew their deposits by about 18 percent. First Tennessee now controls 6.6 percent of the market; U.S. Bank, 3.5 percent. Just below them, community banks Wilson Bank & Trust, CapStar, Avenue and Franklin Synergy also posted strong gains. For our full set of numbers on the region's top 20 banks, click here.

Ward Wilson, U.S. Bank's leader in the Nashville market, said his team's growth was all organic and did not involve the relocation of deposits from one part of the superregional bank to another, something that often skews the FDIC's MSA statistics.

"We've shown good growth across the country," Wilson said of U.S. Bank, which has largely kept its nose clean during the recession and its aftermath. "Our real strength [...] is now being recognized in this market."

Wilson said his team's success in bringing in new deposits has come from both retail and commercial accounts, although he couldn't provide a rough breakdown of the two.

One of the factors that is likely influencing the market-share shifts, said Wynne Baker of KraftCPAs, is that some banks simply don't want too many more deposits because they're not seeing the loan demand that would let them capitalize on inflows. To that end, those institutions — Pinnacle among them — are cutting what they'll pay on certificates of deposit and essentially directing savers elsewhere.

"If it's coming to you as CDs, you've got nothing to do other than buy securities and you'll get no spread," said Baker, who leads Kraft's financial institutions group.

Looking ahead, Baker said the potential end of the FDIC's higher-limit deposit insurance program at the end of this year could bring about some more movement among customers.