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Top 1 Percent of U.S. Banks Own 76 Percent of the Deposit Wallet Share ($7.2 Trillion)
Tuesday, October 8, 2013 6:50 AM

Large banks once again tightened their grip on the deposits of American bank customers, according to a yearly look at national market share figures.

Banks with at least $10 billion of assets held about $7.16 trillion in deposits, as of June 30, according to the Federal Deposit Insurance Corp.'s summary of deposits. That figure represents 75.9 percent of all U.S. bank and thrift deposits, up from 74.4 percent a year earlier. Banks in this asset category increased their share while adding a net total of only 90 branches nationwide.

The smallest banks also continued to lose share. Institutions with $300 million of assets and under controlled about 5.4 percent of total U.S. deposits, down from 5.9 percent a year earlier. These small banks also trimmed retail footprints, with total branches dropping 5.1 percent, to 14,067 offices.

The annual FDIC report surveys 6,949 federally insured financial institutions in the U.S. and its territories.

Community banks may be losing ground in market share as a function of lending competition. Competition for quality loans is intense and bigger banks are tough competitors. Some deposit growth is attributable to acquisitions and consolidations

In the largest U.S. cities, the megabanks rule in terms of deposit market share. JPMorgan Chase controls the top spot in three of the five largest U.S. cities: New York, Chicago and Houston. Bank of America claims the lead in Boston, Dallas and Los Angeles. Wells Fargo is tops in Denver, Miami and San Diego.

A few cities saw changes at the top of the market-share leaderboard. JPMorgan passed Wells for the lead in Phoenix, with Chase holding 27 percent of the market, compared with 26 percent for Wells. But Wells nabbed the lead in the metro Washington market, rising to 12.6% and knocking off Capital One Financial. And, in Nashville, TN, Regions Financial ceded the top slot to Bank of America, whose share of the market climbed to 16.3 percent.

Regional banks that are headquartered in smaller cities often enjoy the lead in their own backyards. First Horizon National is tops in market share in Memphis, Tenn., where it's based. The same goes for MidFirst Bank in Oklahoma City; M&T Bank in Buffalo, N.Y.; and Huntington Bancshares in Columbus, Ohio.

(Source: American Banker, 4 October 2013)