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Posted on Thu, Oct 14, 2010 : 6 a.m.

FDIC: Washtenaw County's community banks continue to gain market share

By Paula Gardner

Washtenaw County’s community banks pushed their market share up to 28.1 percent of the $6 billion in local deposits, according to a new federal report.

The percentage continues a growth arc for the community banks, building from a total of 23.96 percent in 2009 and 22.07 percent in 2008.

The trend comes as the total amount on deposit in Washtenaw County fell by $19 million to a total of $6.029 billion, according to the Federal Deposit Insurance Corp.

It also comes as the U.S. tries to recover from a banking crisis that’s hurt the reputation of many larger banks as institutions of all sizes face challenges and scrutiny of their balance sheets.

Gains in the local market share were shown by:

• JPMorgan Chase Bank, moving into 3rd place with 12.04 percnt of the market share among its 12 offices. • Michigan Commerce Bank, moving into number 6 with 8.09 percent of the market at its single office, up from 5.69 percent. • Bank of Ann Arbor, now in 7th place with 7.92 percent and 6 area offices, up from 7.04 percent. • United Bank & Trust, climbing to 5.37 percent of the market among its 5 offices, up from 5.2 percent. • Chelsea State Bank, with 3.26 percent of the market and 3 locations, up from 3.22 percent. • Ann Arbor State Bank, a 2008 startup that grew to 1.24 percent from 0.56 percent. • And Dearborn-based Fidelity Bank, which closed its West Stadium branch in summer 2009. The bank has 0.95 percent of the local market share, up from 0.81 percent.

Meanwhile, University Bank held steady at 2.25 percent market share.

The data, based on filings as of June 30, was just released by the FDIC.

Big banks “no longer need localized deposits,” said Peter Schork, president and COO of Ann Arbor State Bank.

That’s because inter-bank borrowing -when a large bank borrows from a community bank - gives the large banks enough access to cash for loans, in addition to the large-scale deposits the banks hold nationally.

On a local basis, the smaller banks rely on local deposits to generate the local loans, Schork said, keeping their need to drive new deposits high.

“Big banks don’t really want small depositors,” Schork said.

Banks losing market share in Washtenaw County include:

• Market leader TCF Bank, which dropped from 14.58 market share to 13.24 percent. • PNC Bank, which acquired National City and now has about 12.04 percent of deposits, a drop fro 12.69 percent. • Keybank, which fell from 11.99 in 2008 to 10.63 by 2010. • Comerica, which dropped to 8.82 percent from 9.26 percent.

Michigan Commerce Bank’s growth is likely related to changes within the bank, said CEO John Smythe, involving accounts that were formerly held at affiliated being transferred internally.

The former Ann Arbor Commerce Bank holds the charter for the 10-bank network. The bank has been operating under the oversight of state and federal regulators since spring after a consent order sought to restore “all aspects of the bank to a safe and sound condition.”

Growth in local banks also is reflected in growth in their mortgage businesses in addition to deposit share, Schork said.

“All of the local banks have increased or enhanced their retail mortgage presence,” he said.

While fewer homes are being sold, one reason for the increase is the drop in mortgage brokers due to changing regulation; another is the quality of the residential loans now being written, also due to increased scrutiny.

“The pie is smaller, but we’re all getting a bigger piece of it,” Schork said.

Local banks also are adding employees and seeing expansion opportunities. One example is the Bank of Ann Arbor, which acquired a bank in Plymouth in 2010.

The increase in market share “confirms our strategy that local, community banks serve a big role in our future economy,” said Hans Meier, senior vice president.

Paula Gardner is Business News Director of Contact her at 734-623-2586 or by email. Sign up for the weekly Business Review newsletter, distributed every Thursday, here.


Paula Gardner

Fri, Oct 15, 2010 : 9:04 a.m.

I just made a correction to the Fidelity Bank number -the increase moved to 0.95 percent from 0.81 percent.


Fri, Oct 15, 2010 : 7:11 a.m.

Yes, Yes, Vote w/ your money. Pretty obvious Bernero doesn't understand the working of big business and would make a terrible governor.


Thu, Oct 14, 2010 : 10:21 a.m.

Chase: One advantage for Michigan is to deposit money with the large banks because the larger banks are the underwriter of any borrowings they State may need. A dozen small community banks underwriting (example) would be to expensive a process to attempt the same activity. Famine or feast greed or fear we have not learned to regulate well. We go as overboard as the markets. The regulations do the same. Common sense is not so common.

Chase Ingersoll

Thu, Oct 14, 2010 : 9:39 a.m.

Anyone who has a complaint concerning the economy should put their money where their mouth and the rest of them is - in a local bank rather than the big international banks which presently have a majority of the deposits. If you caught V. Bernero on WJR 760 yesterday, he was defending his threat to take $1 Billion in State of Michigan funds out of JP Morgan Chase if they didn't loosen their lending standards to local businesses. This left me scratching my head as to why Michigan did not long ago take it and deposit it with community banks around the state. Someone correct me if I am wrong, but wouldn't that theoretically allow the small banks in Michigan to lend out $10 Billion. Boom - local stimulus. So then one must wonder why State of Michigan has not already done this? What is the political leverage used by JP Morgan Chase to obtain the billion on deposit in the first place and what pain could JPMC cause the Michigan economy/politicians if Michigan were to actually pull the funds? Comments? More information please..

Al Feldt

Thu, Oct 14, 2010 : 9:08 a.m.

It would have been nice to see data on local Credit Unions as well as straight banks. I moved my accounts from Chase to UM Credit Union in February, following the Huffington Post suggestion. It took three months to complete the transfers but it was well worth it, both for the improved service as well as the good feeling of no longer supporting Chase.

Bob Bethune

Thu, Oct 14, 2010 : 8:32 a.m.

Michigan Commerce Bank is not a locally-owned bank. As previous reported right here, MCB is or very recently was controlled by Capitol Bankcorp. "Capitol Bancorp Limited (NYSE:CBC) is a publicly-traded, multi-billion dollar company composed of a network of community banks located in towns and cities from coast to coast." The remaining local banks have a small fraction of the market. Nonlocal institutions have the rest. I see no reason why that will not continue indefinitely. If the supposed advantages of local banking were as substantial as we are supposed to believe, bank customers would have already voted with their money, and the situation would be the opposite of what it actually is.


Thu, Oct 14, 2010 : 6:46 a.m.

Why Comerica still has almost 9% share amazes me. Here's company that told Michigan to "Drop Dead" and moved its headquarters and jobs to Texas and left a huge empty building in Detroit. They now talk about having their roots in Michigan. What a joke. Support local!

Stephen Lange Ranzini

Thu, Oct 14, 2010 : 6:01 a.m.

Amen @AlphaAlpha! The mega banks are the biggest threat to our democracy. America's four largest banks - Citibank, Bank of America, JPMorgan Chase, and WellsFargo have concentrated in them $7.4 trillion in assets, equal to 52% of our entire GDP. They also originate over half of all home mortgages and provide almost 3/4 of all short term business lending in the U.S. The collapse of any one would endanger the American economy, even the world economy. They are truly "too big to fail." They also have too much economic and political power because of their enormous size and market share. The CEOs of these organizations, four people, can cause anything to happen that they want to and order almost any entity around. Few organizations would survive if the order came down to cut off credit to them. The government in turn can tell them what to do (remember the meeting where Secretary of the Treasury Hank Paulson told the 19 big bank CEOs to take this $15 billion in aid or we'll fire you?) Now they are all TARP banks and Congress has the power to pass any law telling TARP banks what to do. How can our democracy survive in the long term with this concentration of power into so few hands??? Unfortunately, the so-called Wall Street Reform Bill, despite being 2,319 pages, doesn't do anything to solve this problem, though it does have plenty of other provisions in it, which would actually increase the size, power and market share of these banks. I'm rather amazed at the poor job the media is doing in highlighting exactly what is in this mega-bill and how it doesn't accomplish what it purports to do. Why do you think Goldman Sachs was in favor of this bill? Think about it.


Thu, Oct 14, 2010 : 5:43 a.m.

Folks, with respect to the bailouts, if you disapprove of the behavior and political influence of the huge banks, vote with your money, and continue moving your money to local banks.