Deposits in Arkansas Show Only Slight Drop Despite ANB's Failure

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Total bank deposits in Arkansas declined by 0.16 percent in the year that ended June 30, a good showing considering that 3 percent of the state's bank deposits disappeared with the failure of ANB Financial of Bentonville in May.

The 159 individually chartered banks doing business in the state at the end of June held a total of $47.148 billion in deposits, down just under $75 million from the same day a year earlier, according to the annual summary of deposits released Wednesday morning by the Federal Deposit Insurance Corp.

ANB was the seventh-largest bank operating in Arkansas as measured by deposits on June 30, 2007, but $1.48 billion of its $1.74 billion in deposits were brokered – that is, purchased from outside the market to fund its loan growth.

The failure of ANB also took a toll on Benton County deposits, which were off more than 30 percent year over year, dropping behind Washington County in total deposits for the first time since 1994 – when Sebastian County beat them both.

The Office of the Comptroller of the Currency shut down ANB on May 9, and Pulaski Bank & Trust of Little Rock purchased $212.9 million of its non-brokered deposits. (See sidebar, Page 34.) Pulaski Bank, which was already the 11th-largest bank by deposits in 2007, had organic growth elsewhere in the state and moved solidly into the No. 10 spot with an increase of almost $215 million.

The biggest bank in Arkansas in terms of deposits remains Arvest Bank of Fayetteville, which widened its lead over No. 2 Regions Bank of Birmingham, Ala. Bank of America remains at No. 3 with $2.64 billion – an increase of $343 million, or almost 15 percent, in a year. Every bit of that and more is attributable to deposit growth in Pulaski County. BOA's main Little Rock branch at 200 W. Capitol Ave. added $371.6 million in deposits in the year that ended June 30; deposits in Pulaski County grew by $377 million.

Wilson Moore, the Little Rock president of Bank of America, attributed the growth at the main office – the only branch office in the state with more than $1 billion in deposits – to the fact that BOA's "private" and "premier" banking functions for high net worth clients are located in the main branch. When those clients move dollars from uninsured brokerage accounts to FDIC-insured bank accounts, the money typically becomes part of the main branch's deposit base.

So, he said, do public funds and commercial and wholesale deposits.

"From what I've looked at, we've had deposit growth in our retail base," he said. "We have also had good growth in all our lines of business.

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