U.S. Bank is the No. 1 bank in Wisconsin and the powerhouse leader in Milwaukee but has lost one-third of its market share in the Madison area, where it comes in a distant second.
The data, compiled from June 30 bank deposit reports to the Federal Deposit Insurance Corp., show BMO Harris Bank, Chicago, solidified its lead among Madison-area bank customers.
BMO Harris — which acquired Milwaukee-based Marshall & Ilsley Bank in 2011 — had $2.5 billion in deposits.
That gave BMO Harris a 15.88 percent market share, up slightly from 15.63 percent, a year ago.
U.S. Bank reported nearly $1.5 billion in local deposits, a 9.25 percent market share, down from $2.6 billion and 15.42 percent of deposits.
A spokeswoman for the Minneapolis-based U.S. Bank cautioned against reading too much into the figures.
“We measure our growth in a number of ways, and while the FDIC market share report is important, keep in mind that it’s a snapshot in time,” spokeswoman Amy Frantti said.
She said all client deposits are lumped together in the report. “So, for example, a major corporate or institutional client could draw down a multimillion-dollar (or larger) deposit on June 29 and then make an equally sizable deposit a few weeks or months down the road, which could make it look like we lost ground when we did not,” Frantti said.
In Milwaukee, U.S. Bank had a commanding 36.7 percent of the deposits, while statewide, its market share was 18.9 percent.
Associated Bank, Green Bay, held onto third place in the Madison area with 7.87 percent, and AnchorBank, Madison, was fourth, with 6.74 percent of the market share.
One of the banks moving up on the list was First Business Bank, Madison, which rose from sixth place to fifth for Madison-area deposits. First Business reported $942.2 million in deposits, or 5.97 percent, up from $848.2 million in deposits, or 5.04 percent, a year ago.
Corey Chambas, president and chief executive of parent company First Business Financial Services, said he thinks the increase reflects a concerted effort by First Business to capture more of the marketplace after the banking industry “disruption” and the recession.
“We added a significant number of business development staff in 2012 because we thought there was going to be an opportunity for growth,” Chambas said. He said First Business added 10 people — including at least five in Madison — for a one-third increase in business development employees.
“It just gives us greater presence. It gives us the opportunity to develop relationships with more people, more businesses, and they like our story,” Chambas said.
He said the bank serves not only businesses and their executives but also other wealthy individuals. “The approach we have with individual clients ... is the same as we have on the business side. It’s very high-touch, a very individualized, personal relationship,” Chambas said.
JPMorgan Chase Bank, New York, also staged a significant jump over 2012 deposit data, with $805.5 million in deposits locally, or 5.10 percent, compared with $553.4 million, or 3.29 percent of the Madison-area market last year.
In all, bank deposits in 54 Madison-area banks totaled just under $15.8 billion, or about $1 billion less than the $16.8 billion in local bank deposits a year ago.
In the Milwaukee area, bank deposits shrank more than $2.1 billion over the past year, and statewide they dropped $3.1 billion.
$1 billion in shares — which are similar to bank deposits — for a total of $21.2 billion for state-chartered credit unions as of June 30, up from $20.2 billion a year ago, according to statewide figures from the Wisconsin Department of Financial Institutions (DFI).
Landmark Credit Union, New Berlin, led the pack with $2.0 billion in shares, followed by Summit Credit Union, Madison, with nearly $1.7 billion in shares. (Local results were not available.)
But the rise in credit union shares does not necessarily indicate that bank customers are moving their money to credit unions, DFI secretary Peter Bildsten said.
“I wouldn’t read too much, in this market, into any significant shifts between institutions or from banks to credit unions,” Bildsten said.
“Oftentimes, deposit growth — or lack thereof — is part of a bigger strategic effort on the part of banks and credit unions, most importantly to fund loans. In today’s market, there’s a lot more competition for quality loans than there is for deposits,” he said.
Bildsten said financial institutions also have to structure their deposits to correspond with loans. “When you look at a balance sheet, it’s no surprise that deposits are included in the section called liabilities ... They are an obligation and they’re an expense to a bank or credit union” based on the interest they pay, he said.
The mix of deposits has become very important to banks and credit unions, he added. “Are they low-interest checking accounts? Are they higher-cost CDs? Or are they broker deposits that they’re gathering from other sources?” said Bildsten.
Chambas, of First Business Bank, said he was surprised to see a reduction in deposits in the Madison market as a whole, but he speculated that it may reflect a less cautious attitude about making purchases and investing in the stock market as the economy and the market have improved.
“It (has been) a great year in the stock market. A big flood of liquidity came into the banking industry during the recession. People were frightened; they wanted their money to be safe. I could easily see there’s been some people getting back into the markets,” Chambas said.
At the same time, Chambas said, companies have begun reinvesting capital in their businesses instead of letting it sit on the balance sheet.
“Everybody deleveraged — businesses and households. A lot of businesses had accumulated cash. When the economy started to get better and they wanted to buy a new piece of equipment, maybe they just spent cash on it,” Chambas said.
Statewide, 12 banks and six credit unions had deposits of more than $1 billion, as of June 30, including AnchorBank, Summit Credit Union and University of Wisconsin Credit Union, all based in Madison.
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