Arvest Bank remains the largest bank in Arkansas based on deposits in the state, but Bank of the Ozarks jumped ahead of five banks to take the No. 2 spot, according to annual figures released Friday by the Federal Deposit Insurance Corp.
The data are as of June 30.
Arvest, based in Fayetteville, had almost $7.7 billion in deposits in Arkansas, up 7.2 percent from 2015, accounting for 12.6 percent of the market share of deposits in the state.
Little Rock-based Bank of the Ozarks passed Bank of America, Regions Bank, First Security, Simmons Bank and Centennial Bank. It had $5.4 billion in deposits in Arkansas, an increase of 61 percent, adding $2 billion in deposits compared with June 2015 when it had less than $3.4 billion in deposits.
There were several reasons for the growth in deposits, said Tyler Vance, Bank of the Ozarks' chief operating officer.
About $1 billion of the additional deposits were core deposits, such as 14,000 new checking accounts for the year, opening two new branches in Arkansas, and a substantial growth in loans, Vance said.
But the biggest single contributor to the growth in deposits was the addition of about $1 billion in brokered deposits, Vance said.
"They were raised at a very low cost to help fund the robust loan growth that we experienced," Vance said.
Brokered deposits are obtained through large investment houses by offering clients high interest rates on products such as certificates of deposit.
What the use of brokered deposits reflects is that Bank of the Ozarks had a higher loan demand than a deposit base, said Garland Binns, a Little Rock banking attorney.
"They used the brokered deposits to fill the gap," Binns said.
Publicly traded Bank of the Ozarks has had tremendous loan demand in its offices around the country, said Randy Dennis, president of DD&F Consulting Group, a Little Rock bank-consulting firm.
"It's not unusual for banks to fund [loans] short-term by using brokered deposits," Dennis said.
Deposits statewide were up 7.6 percent to about $60.8 billion.
Two of the other publicly traded Arkansas banks increased their deposits. Centennial Bank, which is owned by Home BancShares of Conway, had an almost 11 percent growth in deposits in the past year. Simmons Bank of Pine Bluff grew its deposits by almost 5 percent for the year.
Citizens Bank of Batesville, which announced in October of 2015 that it would acquire Parkway Bank of Rogers, was an addition to the list of the largest 20 banks ranked by deposits.
Citizens Bank had a 30 percent increase in deposits for the year.
Farmers & Merchants Bank of Stuttgart grew its deposits by 70 percent for the year. It announced last year that it would buy Bank of Fayetteville.
Business on 10/01/2016