Oklahoma banks see increased deposits, market shares

Jeff Elkins, The Norman Transcript, Okla.
·3 min read

Mar. 21—Small bank market shares and deposits are increasing in Oklahoma, Federal Deposit Insurance Corporation data reveals.

According to a National Community Reinvestment Coalition report, from 2012 to 2018, the number of the largest national banks — those with more than $100 billion in assets — increased from 19 to 30 during the period. At the same time, small banks declined from 5,018 to 3,443 institutions.

However, market share and deposit trends show growth for state-chartered banks in the state of Oklahoma.

FDIC data shows the top 10 banks headquartered in Oklahoma represent 47.4% of Oklahoma bank deposits as of June 2020, up from 38.4% in June 2015.

JP Morgan Chase Bank and Bank of America, two large national banks operating in Oklahoma, account for 9.3% of Oklahoma bank deposits in 2020, down from 10.5% in June 2015.

Robert Dauffenbach, senior associate dean of economic development and impact at the University of Oklahoma Price College of Business, said there are hundreds of banks in the state that have less than 1% of deposits, with 214 institutions in the market in June 2020.

"There were 233 in June 2015, thus some consolidation is taking place," Dauffenbach said. "Still, small banks represent a sizable proportion of total bank deposits."

In 2020, banks accounting for less than 1% of deposits represented 38.3% of total deposits.

"The vast majority of those banks are chartered in Oklahoma," Dauffenbach said.

According to FDIC data, the top five state-chartered banks headquartered in Oklahoma, by market share in 2015, were Bancfirst with 7.05%; First United Bank and Trust Company with 2.70%; RCB Bank with 2.45%; Interbank with 1.39% and Armstrong Bank with 0.69%.

The top five state-chartered banks headquartered in Oklahoma by market share, as of June 2020, were Bancfirst with 6.83% market share; First United Bank and Trust Company with 3.51%; RCB Bank with 2.18%; Armstrong Bank with 1.32% and Interbank with 1.17%.

Armstrong Bank nearly doubled its market share over the last five years, with a 0.68% increase.

Armstrong Central Oklahoma CEO Chuck Thompson said smaller community banks thrive in certain markets because they can cater to the needs of small businesses.

"To have a great relationship with a local business, you really have to get to know them on a personal level and understand their business because they all have their own unique aspects," Thompson said. "Local branches of community banks are really the bread and butter of business lending."

When the COVID-19 pandemic hit the state, Thompson said it was more likely that business owners and the community reached out to the banks they had the deepest relationship with.

"Community banks did the vast majority of PPP lending across America," Thompson said. "That's because those community bankers are the ones that were the most familiar with the needs of those local businesses. I think community banks are growing market shares because they know how to meet needs unique to each business."

During the Great Recession, Thompson said many moved their money to large money center banks such as JP Morgan Chase, Wells Fargo, City Bank and Bank of America because they were worried about community banks failing.

"FDIC later did a report that showed had it not been for the diversified strength of the community banking network, the American economic system could have failed," Thompson said. "It was the thousands of community banks across America that bolstered local employers and local businesses in a way that national banks weren't able to."

Jeff Elkins covers business, living and community stories for The Transcript. Reach him at Jelkins@normantranscript.com or at @JeffElkins12 on Twitter.