Consolidation radically changes banking

In the last 10 years, seven of the area’s top 11 banks in market share have closed or merged with other institutions, according to Federal Deposit Insurance Corp. data.

FDIC tracks banks’ market shares in the metropolitan statistical area; the earliest year available is 1994.

At that time, Commerce Bank had the largest share of deposits in what is now the Springfield MSA – Christian, Dallas, Greene, Polk and Webster counties. That’s not a big surprise; Commerce is second on the current list.

What follows, though, is a sure sign of the changing times.

The changing market

Second on the 1994 list: Boatmen’s Bank of Southern Missouri, a name no longer in existence.

Following a long list of acquisitions, it’s now Bank of America.

Third on the 1994 list is Roosevelt Bank, later acquired by Mercantile Bank, which is sixth on that list.

Mercantile later became Firstar, and now is U.S. Bank.

Todd Parnell was privy to some of that merger activity during his 34 years in Missouri’s banking industry.

Though he retired in May, Parnell’s career included everything from working in a large regional bank in St. Louis to a small startup in Springfield.

Parnell said many of the major changes in the market can be traced back to one event.

“I think the major merger was when NationsBank bought Boatmen’s,” Parnell said.

Boatmen’s was, itself, the product of several local-bank mergers.

“Boatmen’s had a dominant market share,” he added. “NationsBank opened the door for four banks to start in a period of two years, which is unprecedented in a market the size of Springfield.”

From 1997 to 1999, Old Missouri National Bank, Signature Bank, The Bank and Village Bank were chartered.

“Smaller banks were able to fill the void as larger banks centralized power,” Parnell said. “That spawned that whole era of bank startups.”

Two Springfield startups have since fallen prey to merger fever, and Parnell found himself right in the thick of it. The Bank, which Parnell helped launch in 1997, merged with Signature Bank in 2004, creating The Signature Bank.

Meanwhile, Springfield-based Great Southern Bank has quietly climbed the market-share ladder, from No. 5 in 1994 to currently No. 1 with 16.7 percent market share.

Joe Turner, president of Great Southern, told SBJ in December that the changing market has helped his institution.

“We’ve grown substantially in the last few years. When Boatmen’s Bank sold in 1996, we took advantage of that,” he said.

In the last decade, Great Southern has grown its assets from $500 million to $1.9 billion while adding properties in Springfield, Nixa, Ozark, Republic and in central Missouri via acquisition of three Peoples Bank of the Ozarks branches.

Future community

The role of community banks is expected to become more important as the first members of the baby boomer generation begin to retire.

According to the FDIC study, “The Future of Banking in America,” the boomers will likely make less use of credit and liquidate more assets than subsequent age groups.

That new emphasis on liquidity and individualized finances will make service to the consumer an even bigger priority, one reason why Parnell said the community bank will always have a place in the market.

“Absolutely (small banks) can survive,” he said.

“It depends on what their strategy is. If they wish to continue to be small and focus on providing personalized focus to a targeted market, they will continue to be there.”

The latest banking trend finds Springfield banks reaching beyond this market.

The Signature Bank opened a loan production office in St. Louis in August 2004, just days after the completion of its merger. Great Southern operates loan production offices in Kansas City, opened in January 2003, in Rogers, Ark., opened in September 2004, and in St. Louis, where an office opened in March.