As one competitor put it, Citizens Bank is the “800-pound gorilla” of the Rhode Island banking market. And in the last year, new FDIC figures show, it has gained a few pounds.
As of June 30, Citizens had $10.37 billion in FDIC-insured deposits in Rhode Island, according to a report issued Oct. 13 by the federal agency. That’s 43.65 percent of the market’s total $23.77 billion – and two-and-a-half times the Rhode Island market share of its nearest competitor, Bank of America.
The Federal Deposit Insurance Corporation issues these market-share reports only once a year, and industry insiders say they’re a bit tricky. First, they’re based on a snapshot from a single day, June 30. Second, and more notably, they can be skewed by quirks in banks’ reporting systems – so money may be assigned to one market because that’s where the account-holder is based, for example, or because it’s being processed there.
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And so it is that Rhode Island’s third-largest bank as of June 30 was not Sovereign Bank – which has rebounded slightly after losses in recent years, and still has the third-strongest presence in the state – but rather the MetLife Bank, which is based in New Jersey and does most of its business over the Internet, but has a call center in West Warwick.
Exclude the MetLife Bank’s $2.31 billion in deposits as of June 30, and Citizens had more than 48 percent of the Rhode Island deposit market, up from 47 percent last year.
Meanwhile, Bank of America, successor to the once-No. 1 Fleet Bank, still can’t break 20 percent, and no other bank even makes it into the double digits.
The MetLife figures also don’t change the trends: Citizens, Sovereign, The Washington Trust Co., Webster Bank, Newport Federal Savings Bank and Domestic Bank all grew their market share in the last year, while the other large and mid-sized banks lost ground.
Bank Rhode Island and BankNewport both grew their deposits, but not as quickly as the market as a whole, which grew by a dramatic 8.9 percent. Since 2002, deposits in Rhode Island have increased by more than 51 percent, almost four times as fast as the gross state product.
In an interview, Joseph J. MarcAurele, president and CEO of Citizens Bank of Rhode Island, said for his institution, the numbers definitely include only Rhode Island-based deposits – “they are not corporate deposits that have been put in Rhode Island.”
Nationwide, MarcAurele said, there’s been “very significant” bank deposit growth since the Sept. 11 attacks, which led to a substantial downturn in the stock market and made the safety of banks more appealing to consumers.
In Rhode Island in particular, MarcAurele added, Citizens has special advantages.
“We are obviously the largest bank in Rhode Island,” he said. “We have more branches – obviously our Stop & Shop branches are incredibly convenient – and I think our marketing, our advertising, the incredible stability of Citizens in Rhode Island, maintaining Providence as our corporate headquarters – all of those things contribute to us outperforming the others.”
That said, MarcAurele added, “the competitors are very good, and they’re very solid, so it’s always a tough battle” to maintain dominance.
At Bank of America, meanwhile, spokesman Ernesto Anguilla said the numbers for his institution don’t entirely reflect its presence in Rhode Island. When deposits such as escrow accounts are excluded and non-FDIC-insured accounts are included, he said, BofA is actually growing “modestly” in Rhode Island. (The bank also remains No. 1 in Massachusetts, with a 19.25-percent market share – though only a 12.63-percent share in Bristol County, where Sovereign leads, with 17.7 percent of deposits.)
Robert E. Maddock, executive vice president of community banking at BankNewport, said the rate of deposit growth in Rhode Island is slowing, so growth here is now driven, to a great extent, by certificates of deposit and money-market accounts.
But B. Michael Rauh Jr., executive vice president for sales, service and delivery at Washington Trust, said that with today’s narrow interest margins, banks can’t afford to build deposits through aggressive CD-rate promotions.
“We try not to be victims to that game, and focus really on great locations and great service,” he said. Washington Trust has been growing by opening new branches in well-chosen locations, such as Cranston and Warwick – and is preparing to open one more in each city – as it continues to focus on offering good service and a friendly, knowledgeable staff.
With this strategy, Rauh said, “we compete very well against the big three banks, and so we’re very excited about the future opportunities here.”
