Banking Market Share: Who’s Gaining, Who’s Not?

By Luke Haase

Things have changed a lot in the past two decades of northern Michigan banking. Gone are names like First of America, NBD, Republic, North Country, and others. Some banks have changed hands (and names) multiple times, like NBD-turned-Bank One-turned-Chase.

So which bank is biggest here these days? Who’s gaining market share and who’s losing?

The TCBN examines banking market share in Grand Traverse County twenty years ago, ten years ago, five years ago, and today (most recent FDIC report as of June 30, 2014). Data is based on total local deposits.

The data reads like a novel about the recent history of Traverse City banking, showing dips at individual banks coinciding with management changes and regulatory orders, gains virtually across the board during boom economic years, and the constant change of names, including the appearance of Traverse City State Bank on the scene in 2000.

One thing that hasn’t changed? The market leader. Twenty years ago, Old Kent Bank – formerly Pacesetter Bank – had a dominating 37 percent of Grand Traverse County bank deposits. Over two decades, the Cincinnati-based bank’s share has shrunk to 25 percent. Still, Fifth-Third’s new (as of June) Community President David Shooltz noted, “As the leader, we know customers are being called on by other banks. For us that means we have to continue to be as strategic as possible with our clients and bringing value added service.”

More recently, the bank with the biggest deposit growth over the past five years is Chase Bank, currently the nation’s largest bank. Local Area Manager Doug Wolf said “Nationally we are gaining market share in just about every market we’re in,” and attributes the growth to the bank’s local clients and staff, advanced technology, and “fortress balance sheet.”

Huntington Community President Mike Witkop noted that deposits don’t always tell the whole story. “While deposits are one of the only public sources of data to benchmark bank performance at the market level, the data doesn’t take into account the bank’s cost to maintain deposits, or the benefit of its lending relationships. We continue to lead as a dominant business bank as evidenced by our consistent top ranking as a Small Business Administration 7(a) lender.”

Note that there are lots of asterisks in a report like this, including the fact that only Grand Traverse County is being highlighted; a wider geography like, say, the five-county region, would show a much different lineup, as many banks have a larger regional footprint. Also consider that many bank customers are headquartered elsewhere and bank locally, or vice versa. Data also does not include credit unions, which report deposit data via National Credit Union Association which, in turn, does not divulge market share details. And, due to the lag in FDIC reporting, the most recent snapshot is six months old and does not reflect the most recent change in the market – the transition of Northwestern Bank to Chemical Bank.