The numbers are so June 30.
Federal regulators on Wednesday released an annual batch of statistics showing the bank deposit market share of Nashville's financial institutions, as of mid-year. Given all that has transpired in the American financial sector since then, though, the head of the largest bank in town suggests the up-to-the-minute stats may be rather different by now.
The figures from the Federal Deposit Insurance Corp. show another year of big gains by Nashville's locally owned banks, along with diminished market share for the large regional and nationwide banks active in Nashville. Major out-of-town banks held 80 percent of all local deposits in 2000. Today, they hold just under 67 percent.
But Jim Schmitz, Middle Tennessee area executive for Regions Bank — which remains at the top of the deposit-share list with about 19 percent of the market — says depositors have changed their behavior in recent weeks.
"We've seen a lot of flight to safety," Schmitz says. He said the bank does not keep statistics on which banks depositors are leaving in favor of Regions. But observing at an anecdotal level, he has seen "a lot of people who had money in smaller banks, who got concerned, and who have moved it to us," Schmitz says.
Numerous start-up banks have commenced operations in the Nashville area since 2000. Kicking off the wave that year was Pinnacle Financial Partners Inc., started by veterans of local banking leader First American Corp. after AmSouth Bancorp bought it in 1999.
Any suggestion that depositors are leaving some of those small and mid-sized banks cannot be confirmed until they file regulatory reports in the weeks to come. And any such movement would run decidedly counter to trends illustrated in the annual summary-of-deposits reports from the FDIC.
The big three banks of Nashville — Regions, Bank of America and SunTrust, and their locally owned predecessors — controlled 56 percent of deposits in 1996, 52 percent in 2000, and just under 49 percent in 2007. In this year's summary of deposits, they come in at a cumulative 45.5 percent.
The upstarts of the past decade, meanwhile, show continued gains in market share as of June 30. Pinnacle moved ahead of First Tennessee Bank to take 4th place on the list behind the big three.
Pinnacle had $1.23 billion more in deposits at June 30, 2008 than it had a year earlier. Its purchase of Nashville-based Mid-America Bankshares closed last November, accounting for the majority of Pinnacle's market-share gain of 3.76 percent. Yet fully a fifth of that gain came from organic growth and not from the Mid-America buy, according to Pinnacle President and CEO Terry Turner.
"The deposit-acquisition aspect of this business is the most important and most difficult challenge we face," Turner says. He notes that Pinnacle has reached $3 billion in deposits without ever running an advertisement to drum up deposit business. When asked about his customers' reaction to the ongoing U.S. financial turbulence, however, Turner says depositor concerns have come to the forefront.
"The largest volume of questions that we get really centers around FDIC insurance," Turner says. The agency insured deposits up to $100,000 for two decades until October 3, when crisis-related changes expanded the upward limit to $250,000 per depositor in any one institution.
Some Pinnacle depositors with more than $10 million in the bank have raised no questions, he says, but "you do get questions from people who have, say, $200,000 or $300,000 in the bank. They're watching CNBC, and it's 24 hours of crisis. People do get worked up, and they say, 'Gosh, I better figure out what I need to do to protect this money.'"
Turner has not indicated that any of those depositors have taken their business elsewhere, and Pinnacle may be too large to be among the "small banks" to which Schmitz refers. There are 40 banks operating in the Nashville metropolitan area that have fewer than $1 billion in deposits.
Schmitz characterizes Regions' own performance in the deposit field as "pretty much flat" — its market share fell by 0.75 percent. The banker says he is "fairly pleased" to see yesterday's numbers after Regions closed or sold off 13 branches in the course of the year (the same number of branches that Pinnacle added) in consolidating the AmSouth and Regions networks following the merger of the two banks.
The branch counts of second-place BofA and third-place SunTrust remained even at 40 and 59, respectively. Each bank's deposit share fell slightly.
Pinnacle's move ahead of First Tennessee in the Nashville market coincides with Regions' dethroning of the Memphis-based bank in statewide deposit rankings, as further covered yesterday in financial-industry blog The Bank Draft.
This week's numbers show that as of mid-year, locally headquartered banks held $9.6 billion of the $31.4 billion in overall Nashville-area bank deposits. The total held by the locals is $6.7 billion higher than it was in 2000.