Biggest banks are growing deposits faster than the rest

Despite the Occupy Wall Street protests and public frustration with big banks, customers are rewarding those same banks with an increasing amount of deposits in the form of money in checking, saving and other products, while smaller banks have been losing out.

A recent analysis by SNL Financial found superregional and mega banks, or those with more than $50 billion in assets, have seen the largest annual compound growth rate in deposits during the last three years, at 15.2 percent. The top ranked for deposit growth are Bank of New York Mellon, Wells Fargo & Co., and BMO Financial Group.

The smallest banks, those with less than $1 billion in assets, saw an overall drop in deposits during the same time period, losing .57 percent, partly because that size category has borne the brunt of bank failures during the financial crisis.

“In essence, customers in markets where a community bank has faltered have often taken their money to a larger bank, viewing it a safer bet than a neighboring small-town bank, making notable growth difficult for the remaining community banks even as customers put more of their money into savings accounts,’’ according to SNL.

The trend held true for banks in the middle asset range, where bigger was better as well. Banks between $1 billion and $10 billion in assets saw their three-year compound annual growth rate rise about 7 percent, while their larger counterparts bested them. Banks in the range of $10 billion to $50 billion in assets saw growth rates of 12 percent during the same time period.

But some smaller banks with strong capital and in acquisition mode were able to grab deposits from weaker competitors.

For example, Georgia’s State Bank Financial Group, a $2.9 billion asset holding company for State Bank and Trust and Co., nabbed five failed banks from the Federal Deposit Insurance Corp. It was the fastest growing bank in the $1 billion to $10 billion range and was also No. 1 in Bank Director’s Bank Performance Scorecard this year, a ranking based on a combination of profitability, capital and asset quality. The bank got started in 2009 with a $300 million investment from institutional shareholders.

The fastest growing bank in the small bank category was RomAsia, a $136 million asset institution in Monmouth, New Jersey, which got started three years ago to cater to the Asian-American community in New Jersey.

Hancock Holding Co. in Louisiana, which swallowed up its much larger competitor recently, was also a top growth bank. For a story about Hancock Holding, see coverage of Bank Director’s Acquire or Be Acquired conference, where the bank’s president and CEO Carl Chaney talks about the bank’s strategy.

Fastest growing banks and thrifts under $1 billion in assets:

Fastest growing banks and thrifts with $1 billion to $10 billion in assets:

Fastest growing banks and thrifts with $10 billion to $50 billion in assets: