Arvest Bank Group has strengthened its position as the largest bank in Arkansas, based on the annual federal deposit report released Tuesday.
Arvest had more than $6.6 billion in deposits in Arkansas on June 30, $2.6 billion more than Regions Financial, the second-largest bank in the state, the Federal Deposit Insurance Corp. said. Arvest's deposits grew 7 percent compared with 2013.
Arvest's deposits represent 12.3 percent of the banking market in the state.
"Arvest has been a beneficiary of a lot of the changes in the marketplace," said Randy Dennis, president of DD&F Consulting Group, a Little Rock-based bank consulting firm.
Often, customers of banks that are sold are miffed by the sale and decide to change banks, Dennis said.
"If their bank is going to sell, then by golly they are going to choose who they want next," Dennis said. "And Arvest is a very stable entity."
Four of the 20 largest banks in the state last year were sold -- Liberty Bancshares of Jonesboro to Home Bancshares, Summit Bancorp of Arkadelphia to Bank of the Ozarks, Rogers Bancshares of Little Rock (which owned Metropolitan National Bank) to Simmons First National and First National Security of De Queen to Bear State Financial.
The purchase of Liberty helped Home BancShares, owner of Centennial Bank, to more than double its Arkansas deposits from $1.6 billion in 2013 to $3.5 billion this year. The purchase moved Home BancShares from the ninth largest bank in the state last year to the third largest this year.
Bank of the Ozarks' deposits grew by two-thirds to $2.8 billion after the purchase of Summit Bancorp. Simmons' in-state deposits increased from $2.5 billion to $3.3 billion this year after it bought Metropolitan. And Bear State Financial's deposits rose from $443 million to $1.2 billion after buying First National.
Besides Bear State, three other banks were new to this year's list of the 20 largest banks in the state -- First Community Bancshares of Batesville, Chambers Bancshares of Danville and First Arkansas Bancshares of Jacksonville.
Deposits in the 1,388 offices of Arkansas' 20 largest banks rose by 1.3 percent to $53.8 billion this year, after dropping by 0.5 percent last year.
One reason for the increase, Dennis said, is the uneasiness people have with the stock market.
"So they have flocked to banks," Dennis said. "There is the fear that if interest rates go up, a lot of this money may flow out of the market."
Interest rates on certificates of deposits are low but "it is better to be safe at a bank account than getting [the same] or a lower yield in a money market account," Dennis said.
Another reason for the increase in deposits is the stability and health of the Arkansas economy, Dennis said. That attracts retirees to the state, who bring money they deposit in their banks, he said.
There is a lot of competition for deposits among banks, said Garland Binns, a Little Rock banking attorney.
"Of course, you can't really use deposits unless you have a way to utilize them, primarily with loans," Binns said. "So if the loan demand is not there, deposits can be a liability to you. There are only so many loans out there."
Most banks are paying similar interest rates on certificates of deposit and other interest-bearing accounts, Binns said.
Pulaski County had $10.8 billion in deposits, the most of any county in the state, followed by Washington County with $4.1 billion, Benton County with $4.0 billion, Sebastian County with $2.5 billion and Craighead County with $2.2 billion.
Business on 10/01/2014