A funny thing happened on the way to community banks”™ supposed domination of the hearts and wallets of consumers in the wake of the Great Recession.
In affluent Fairfield County, they failed to do so.
For the fiscal year ending in June, Fairfield County”™s dozen-plus home-grown community banks saw deposits drop nearly 1 percent as a group, according to new data from the Federal Deposit Insurance Corp. While the decline was due to two community banks reporting $220 million less in combined deposits, it appears those customers did not move those accounts in droves to one of the other dozen community banks based here.
By contrast, the largest national and regional banks with Fairfield County branches reported a combined 7 percent increase in deposits. While those amounts can include the impact of large account balances being transferred onto the FDIC ledger sheets of local branches, the same dynamic can result in such large accounts being shifted elsewhere.
For the first time, People”™s United Financial Inc. reported having less than half its deposits in its home turf of Fairfield County, where the Bridgeport-based bank leads the market with 65 branches and $5.7 billion in deposits for a nearly 18 percent market share.
In the past 18 months, People”™s United has completed acquisitions of multiple banks in New York and Massachusetts, while also opening new branches in the Boston area.
While People”™s United increased deposits 5 percent in Fairfield County, that was not enough to ward off a sixth straight year in which it has lost market share in Fairfield County ”“ although it just missed turning the tide with a 0.1 percent drop in local market share.
A week after raising the ire of consumer activists and some customers with plans to establish a $5 monthly fee on debit card purchases ”“ Bank of America Corp. reported a 10 percent increased in Fairfield County deposits for fiscal 2011.
Of the biggest banks with at least $1 billion in local deposits, Citibank upped deposits by a whopping 31 percent, allowing it to seize an additional 1.6 percent of market share. Across the some 400 bank branches in Fairfield County, deposits were up 6 percent to $32 billion ”“ representing a one-third increase from 2007 at the height of the last economic cycle.
A few local community banks stood out in the latest FDIC figures. Darien Rowayton Bank increased deposits by more than half to $133 million and Bank of New Canaan, a subsidiary of BNC Financial Group Inc., reported a 30 percent increase to $278 million, thanks mostly to its affiliated Stamford First Bank branch accumulating $58 million in deposits in its first year of operation.
After spending the past few years touting their roots with area customers in an effort to boost deposits, however, local community banks lost nearly 1 percent market share as a group ”“ primarily the result of Patriot National Bank shedding some $120 million in deposits and Fairfield County Bank $100 million.
Stamford-based Patriot National closed multiple branches in the past year and otherwise attributed a drop in deposits to its decision to lower interest rates on some savings programs it offers.
After filing in March 2010 for an initial public offering of stock, Ridgefield-based Fairfield County Bank quietly withdrew its registration last January.
