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Commerce gains top spot in area deposits

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Commerce Bank is now the top dog among banks in the Springfield metropolitan statistical area, taking the spot from Great Southern Bank, according to the latest Federal Deposit Insurance Corp. market share report, released Oct. 4.

Springfield-based Great Southern had held the No. 1 ranking in the five-county MSA since 2002. Kansas City-based Commerce grabbed 12.53 percent of the deposit market share as of June 30, while Great Southern held 12.37 percent in the MSA, comprising Greene, Christian, Dallas, Polk and Webster counties.

In the FDIC report, Commerce reported deposits of $932.5 million at 13 branches in the five-county area, and Great Southern held deposits of $920.7 million in its 25 area branches.

Other key changes include three-year-old Springfield First Community Bank cracking the top 10, up from No. 16 in the area last year, and Liberty Bank taking the fourth position from Guaranty Bank.

Great Southern still controls the top spot in the city with 15.85 percent of the deposit market share. Commerce is No. 2 with 13.7 percent.

Commerce Bank Regional President Bob Hammerschmidt said he’s pleased that his organization has landed the top spot, but that position has never been a goal of the bank.

“Just by virtue of dogged determination and conservative management, we have risen,” said Hammerschmidt, who joined Commerce in 1988 when the likes of Boatmen’s Bank and Mercantile Bank dominated the market. “We don’t really make it a goal to be the largest in any particular market. We just try to focus on taking care of our customers.”

Great Southern spokeswoman Kelly Polonus cited the bank’s efforts to reduce its number of brokered certificates of deposit, national CDs and wholesale funding for the drop in market status.

“With everything that’s going on in this economic cycle, interest rates are very low. And some of the funding that we had was at higher interest rates, and so by design, some of that funding source was just allowed to roll off,” she said.

Under FDIC rules, only well-capitalized banks can solicit and accept brokered deposits, which typically expand a bank’s access to potential investment funds and improve its liquidity, according to Investopedia.com. Core deposits include traditional checking and savings accounts and certificates of deposit made by individuals.

According to the FDIC, Great Southern’s brokered deposits dropped to $310 million by June 30 from $886 million at the same time in 2009. Those deposits now amount to 11.6 percent of its total assets, down from 34.7 percent two years ago.

The good news, according to Polonus, is that the bank’s core deposits have grown by $40 million in the last year.

“The core deposits are the things that banks really pay attention to,” she said.

Hammerschmidt said the rankings are misleading, in a sense, because Great Southern is reacting to market conditions by reducing its wholesale funding costs.

He said Commerce has never participated in brokered deposit programs, which has given it an advantage in the current market.

“What we’ve found in this environment is that brokered deposits are so expensive, and there aren’t many loans to cover those costs,” he said. “Banks are awash with deposits right now, even though, ironically, rates are at historic lows.

“Our deposits are growing, more than we can grow our loans, which is really a challenge that you’ll find with Great Southern or Empire … or any bank in town,” he said. “In the absence of those loans, I would do the very same thing that Joe Turner is doing over at Great Southern. I would reduce my wholesale funding costs, which are very expensive.”

Empire Bank held its No. 3 position in the MSA, while growing its deposit market share to 11.98 percent from 9.72 percent in 2010. BancorpSouth and Bank of America held steady at No. 6 and No. 7, respectively. U.S. Bank jumped into the eighth spot, while Metropolitan National Bank fell one spot to No. 9, and Peoples Bank of the Ozarks fell out of the top 10.

Jan Baumgartner, executive vice president of Springfield First Community Bank, said the staff was excited to learn about the bank’s climb to No. 10.

“It kind of stops you for a few minutes and you think, “All this hard work paid off,’” she said.

Baumgartner cites the bank’s focus on customer service and similar advantages offered by larger banks, such as a network of 40 ATMs in the area where Springfield First customers can use the machines without fees attached.

While operating a single branch on South Glenstone Avenue, Springfield First deposits grew by roughly $49 million in the last year, according to FDIC data.

“We won’t be the largest in the market, but I’ll bet you’ll see us in a higher position next year,” Baumgartner added.[[In-content Ad]]

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