Despite drop in local deposits, People’s United still on top
Despite a slight drop in customer deposits attributed to local branches, People’s United Financial extended its dominance in its backyard of Fairfield County with 24 cents of every dollar on deposit as of June, the first time the bank had reached that level since the high-tech boom nearly two decades before.
It was the first time Bridgeport-based People’s United had tallied at least 24 percent of total local deposits since 2000, a year after its market dominance peaked at 26 percent, according to Federal Deposit Insurance Corp. records that date back to 1994 online.
People’s United reduced the size of its Fairfield County footprint by three branches in the 12-month period through June, with deposits dropping by $42 million to just above $11.5 billion.
After an unbroken run of increases dating back a decade, overall bank deposits in Fairfield County dropped $1.3 billion to $47.5 billion, with several possible factors at play including changes to the numbers and mixes of residents and businesses; what options they use for banking; and the specific branches to which banks assign deposits, particularly those operating in multiple states.
Speaking to investment analysts in July, People’s United CEO Jack Barnes indicated the bank was starting to see the impact of increased competition for customer deposits by rivals, whether through marketing or higher interest they are paying on certificates of deposit. People’s United estimated its net interest income dropped $5.4 million from the second quarter of 2017 due to higher interest it was paying out for deposit accounts.
“While we will remain competitive gathering deposits in order to protect (market) share and client relationships, we will continue to be disciplined and not lead the market in pricing,” Barnes said. “We’re always looking to on-board and attract new customers. ... Sometimes that will happen with the CDs, but we obviously much prefer it if it happens with checking accounts.”
After People’s United, the ranks of the next six banks for deposit market share in Fairfield County remained unchanged, with No. 2 depositor Bank of America gaining ground slightly with 15 percent market share. Charlotte, N.C.-based Bank of America was the runaway leader statewide with $32.1 billion for nearly 24 percent of all Connecticut deposits, well ahead of Waterbury-based Webster Financial ($18.6 billion, 14 percent) and People’s United ($17.5 billion, 13 percent).
In Fairfield County, JPMorgan Chase and Webster were the only two other banks in the top seven to register increased market share, ranked fourth and seventh respectively, with Citi, Wells Fargo and TD Bank losing ground.
New Canaan-based Bankwell edged past Ridgefield-based Fairfield County Bank as the community bank with the highest percentage of local deposits, with Union Savings Bank based in Danbury rounding out the top 10.
Alex.Soule@scni.com; 203-842-2545; @casoulman