Arvest Bank of Fayetteville has the most deposits of any bank in Arkansas, the Federal Deposit Insurance Corp. said Tuesday.
Arvest had $8.5 billion in deposits in its 116 Arkansas branches as of June 30. That was about 10 percent more than the deposits the bank had in Arkansas in June 2016. Arvest had 13.2 percent of the state's deposits, up from 12.6 percent in June 2016.
Deposits are money placed with a bank that includes demand deposits, money market accounts and other savings deposits, time deposits and deposits in foreign offices.
There isn't a simple explanation for why Arvest's deposits grew by 10 percent over the previous year, said Jason Kincy, an Arvest spokesman.
Arvest has seen good growth from its existing accounts, Kincy said.
"This naturally leads to an increase in deposits as more and more consumers and businesses choose to bank with us," Kincy said.
The change in deposits also could reflect normal fluctuations in deposit totals from month to month or even day to day, Kincy said.
Arvest does not generally depend on brokered deposits, Kincy said.
Brokered deposits are obtained through large investment houses by offering clients high interest rates on products such as certificates of deposit.
Arvest also doesn't typically have unique offers or specials on interest rates to drive deposit growth, Kincy said.
Arvest will grow deposits significantly next year with its announced purchase of Bear State Bank.
Just based on deposits on June 30, Arvest's deposits would grow to about $9.8 billion with the purchase of Bear State.
Little Rock-based Bank of the Ozarks had the second-highest total of deposits in the state with $6 billion, which was an 11 percent increase in deposits compared with June last year. That is 9.4 percent of the Arkansas market.
The 118 institutions in Arkansas had a total of $64.2 billion in deposits, a 5.6 percent increase in deposits in the state.
Arkansas' banks outperformed the national average, said Garland Binns, a Little Rock banking attorney with the firm of Dover Dixon Horne. The national average growth in deposits was about 4 percent, Binns said.
"Arkansas banks continue to do well," Binns said.
The report also reflects the continuing consolidation of community banks, Binns said.
Including banks based out of state but with branches in Arkansas, there are 118 financial institutions doing business in Arkansas. That's down from 127 in 2016.
The number of Arkansas-based banks in the state has dropped from 104 in 2016 to 98 through June this year.
That doesn't include recent announcements of sales of Bank of McCrory, Bear State Bank and Heartland Bank.
"And there will be other banks for sale in the future," Binns said.
In the future, one attraction for potential buyers will be small rural banks with a low percentage of their deposits lent out, Binns said.
"For example, a bank in a rural area has loans of 50 percent of its deposits, those banks have become very attractive to banks in metropolitan areas," Binns said.
The larger metropolitan banks have such a huge loan demand, those banks can use the deposits in those community banks, Binns said.
"That is something we are seeing today as consolidation continues," Binns said.
Business on 10/04/2017