When it comes to banking in Nebraska, a few miles can mean a passel of dollars.
That’s one conclusion to be drawn from the just-released bank deposit market-share statistics from the Federal Deposit Insurance Corp.
Take Omaha and Lincoln. In Omaha, the runaway leader in deposit share is First National Bank of Omaha, the largest bank based in the state and the largest privately held bank in the nation.
It commands 27.5 percent of the deposits in the Omaha-Council Bluffs metropolitan statistical area, a $7.1 billion cash cache that is more than double that of the No. 2 entrant, San Francisco-based Wells Fargo Bank.
But just a few dozen miles aways, in Lincoln, it is a far different story.
There, Lincoln-based Union Bank & Trust leads in deposits, with 24 percent of that metro-area’s share. First National Bank of Omaha ranks eighth in Lincoln, with barely 3 percent, from five branches.
And it is a two-way street; Lincoln top dog Union Bank doesn’t even crack the top 10 in Omaha, commanding fewer than 1 percent of the metro-area’s deposits, with only three branches.
Both banks are old timers in Nebraska. Union Bank is almost 100 years old, while First National of Omaha is even older.
“What you are looking at is a state with a very stable population and tremendous loyalty to legacy banks that have been in business for a very long time,” said Tony Plath, a banking professor at the University of North Carolina at Charlotte. “You don’t see those kinds of splits in states and cities with a lot of coming and going.
“I would bet Nebraska’s older banks have been doing business with the same families and companies for generations.”
Overall, bank deposits in Nebraska as of June 30 rose 7 percent from a year earlier, to $55.1 billion, according to the FDIC. Deposits in Nebraska have risen in all but one year in the past five; they fell 7 percent in 2010 from a year earlier, to $43 billion. They rose 12 percent in 2011 and 8 percent in 2012.
Statewide, the deposit share numbers are a lot closer than they are in the large metro areas, according to FDIC figures, which are released annually in October.
First National of Omaha is the statewide leader, but with about 13 percent of the deposits; only one other bank, Wells Fargo, has more than 10 percent.
In all, 15 banks command at least 1 percent of the state’s bank deposits: First National Bank of Omaha, Wells Fargo Bank, Mutual of Omaha Bank, U.S. Bank, Pinnacle Bank, Great Western Bank, Union Bank & Trust, Bank of the West, World’s Foremost Bank, American National Bank, Cornerstone Bank, Five Points Bank, Security National Bank of Omaha, Security First Bank and Elkhorn Valley Bank & Trust.
In the Omaha area, 2013 movers in rank included Wells Fargo, which elbowed its way into second place this year, from third a year ago.
The president of Wells Fargo’s Nebraska region, Kirk Kellner, attributed the increase to “business from new customers and deepened relationships with existing ones.”
He added: “We also saw more customers keep more deposits with Wells Fargo. This is especially true on the business side. Businesses are keeping cash on hand, and continue to be cautious about making investments.”
Omaha-based American National Bank cracked the top five in the metro-area, moving up from sixth place a year earlier.
In cash, market leader First National of Omaha increased its metro-area share by $700 million, good for a half-percent increase in deposit share.
“The significant increase in First National Bank’s market share and deposit volume reflects the strong response we’ve had to our free checking account,” said President Dan O’Neill. “We listened to customer concerns about checking account fees and requirements and, based on their feedback, dedicated ourselves to creating an account that is simple, transparent and free.”
Minnesota-based U.S. Bank, which added $420 million in Omaha area deposits over the year, attributed part of the gain to a savings-account incentive program.
“The program rewards customers with $50 rewards cards when they reach a $1,000 savings goal and then again when they save that amount a year,” said Steve Erwin, U.S. Bank’s Steve Erwin, regional president for Nebraska and Western Iowa. “Omaha customers have earned more than $450,000 in rewards as a result.”
Erwin concurred with banking counterparts in Nebraska about business spending.
“We also see customers continuing to shore up their savings and businesses are continuing to keep cash on hand,” he said. “We expect businesses will invest more as the economy improves, deploying more cash and drawing down credit to grow their operations.”
Executives at Pinnacle Bank, which added almost $300 million of deposits over the year, said economic uncertainty has fueled deposit growth.
“Consumers and businesses want to have easier access to their funds,” said Christine Wendlandt, senior vice president at Pinnacle Bank.
Wendlandt also said Pinnacle’s banks statewide are led by local executives who make their own decisions, which he said helped the Lincoln-based company increase state market share from 4.9 percent to 5.2 percent.
There is a lesson to be learned from the growth in deposits, said Plath, banking professor in Charlotte: people and companies are keeping their cash in the bank because they do not feel confident enough to spend or invest it.
“Washington D.C. is a mess,” Plath said, “No well-managed business is investing right now, there is too much political and economic instability. That is not a criticism of any single person or policy, but rather the entire Congress and government apparatus, which shows zero understanding of what is required to get the economy and employment back on track.”