Bank of America increased its lead this year in Nevada and accounted for almost one of every four dollars deposited in the state, data compiled by SNL Financial show.
Bank of America, which has dominated the Nevada bank deposit market every year since 2003, had $9.55 billion in deposits on June 30, far exceeding the $8.14 billion at Wells Fargo & Co.
“We’ve seen strong performance from the beginning of the year onward. We are very pleased our customers view us so favorably,” said DeLois Hollinger, community market executive for Bank of America in Las Vegas.
“Our customers were really flying to safety,” Hollinger said. “We’re still seeing more of our customers bring us more of their (banking) relationships.”
She and other analysts say that customers with large deposits have moved accounts to big banks not only because of perceptions about the banks’ financial strength but also because customers believe the government considers giant, multistate banks “too big to fail.”
Although bank regulators have allowed some small community banks to fail this year, some customers believe the government doesn’t want to deal with the ramifications of a giant bank collapse and would therefore bail out a giant bank.
Customers “want us to be safe and sound, and second of all they want us to be convenient,” Hollinger said.
Bank customers typically get Federal Deposit Insurance Corp. protection up to $250,000 in interest-bearing accounts. Bank accounts that draw no interest, however, have unlimited FDIC insurance at many commercial banks of all sizes.
In addition to offering safety, Bank of America touts its convenience for customers. It has 88 branches in Nevada and believes it leads the world in the number of customers who bank on the Internet.
Deposit market share at many other banks either grew little or declined from a year ago.
Wells Fargo, the second largest bank in Nevada in deposits, increased its market share by less than one-half a percentage point.
Since June, however, Wells Fargo has agreed to acquire Wachovia Corp., which was 10th in Nevada with $1 billion in deposits.
Zions Bancorp, which owns Nevada State Bank, boosted its Nevada deposit share, but only because SNL Financial added deposits it purchased from Silver State Bank in September, when government regulators closed Silver State.
U.S. Bancorp came next, but its share of Nevada deposits has shrunk dramatically by 1.5 percentage points to a 4.5 percent share of the Nevada deposit market. U.S. Bancorp, which gets good ratings for safety and soundness, declined to comment for this story.
Community Bancorp ranked eighth and has increased its share of deposits over the last year.
Community Bank has gathered deposits aggressively over the last year, he said, but the bank wasn’t offering particularly high rates on certificates of deposit in June.
The bank holding company reported that 34.7 percent of its deposits in Arizona and Nevada totaled $461.4 million and came from seven customers.
Brokered deposits typically are CDs sold through stock brokerages.
Western Alliance, the holding company for Bank of Nevada, reported that 16.4 percent of its total deposits in three states came from brokered deposits.
The deposit market share for Western Alliance declined more than one-half a percentage point. The holding company, which offers to split up customer deposits among its five banks to increase FDIC deposit insurance limits. Some of the deposit loss in Nevada resulted from customers who divided deposits among banks for increased deposit insurance, Chief Financial Officer Dale Gibbons said.
Customers didn’t start to panic about banks’ safety until the last few months, bankers said, and that is helping some institutions draw deposits.
Wells Fargo Bank’s Nevada deposit growth has accelerated since June, “and a lot of it has to do with the strength of Wells Fargo,” said Kirk Clausen, the bank’s regional president.
“The great majority of financial institutions out there are well-managed, well-regulated,” Clausen said. “They are perfectly safe.”
Nevada State Bank is noticing a increase in deposit growth in recent months, as well, said Terry Shirey, chief financial officer of Nevada State Bank.
“There’s a lot of money leaving the stock market, and people are putting that money in banks where it’s FDIC insured,” he said.
“We’re benefiting a little bit from a flight to quality,” he said. “I’d like to say (revenues of business clients) are improving. I don’t know that’s necessarily the case. We’re just doing a better job in growing our customer base.”
Total Nevada bank deposits grew by 1.8 percent over the previous year to $38.93 billion on June 30.
Contact reporter John G. Edwards at email@example.com or 702-383-0420.