Going by the numbers, Bank of America had a banner year in Rhode Island. Its deposits within the state skyrocketed to $12.4 billion as of June 30, up 63 percent from $7.6 billion a year earlier, according to Federal Deposit Insurance Corp. statistics.
That represents $4.8 billion in deposit growth in the Ocean State in one year. The increase catapulted the Charlotte, N.C.-based banking titan past Providence-based Citizens Bank for the largest market share of deposits in Rhode Island, prompting some local banking executives to question whether Bank of America had moved funds in from another state.
Bank of America says that’s not the case. Bank of America Chairman and CEO Brian Moynihan and Rhode Island Market President William F. Hatfield told Providence Business News the bank’s deposit growth came from within Rhode Island. The reason? Across-the-board gains in its banking businesses here, they say.
“It’s across our various lines of business,” said Hatfield, citing the consumer and small-business segment, wealth management and commercial business.
A main driver of that growth, Hatfield said, is the bank’s enhanced mobile-banking offerings. “In this market,” he added, “we have [more than] 60 percent of our customers who are using this technology that just didn’t exist [a few years ago].”
Nationwide, Moynihan said, more than 3 million Bank of America users have accessed Erica, billed as the industry’s only “artificial intelligence” virtual assistant, since its April rollout, and nearly one-quarter of deposit transactions in the last quarter were done via mobile devices.
It’s hard for smaller banks to compete with the technology of giant banks because of their deep pockets.
“We don’t have the budget” of Bank of America, said The Washington Trust Co. Chairman and CEO Edward O. Handy III. “I think we’ll still have opportunities to grow market share,” he added. “We’ll just keep our heads down and compete, like we have for years.”
To put Bank of America’s local deposit growth into perspective, deposits among all consumer banks in Rhode Island grew to $35.1 billion as of June 30, an increase of 16 percent from $30.2 billion a year earlier. Citizens Bank, now with the second-largest market share, saw its deposits drop to $10.8 billion, a decline of 5 percent from $11.3 billion a year earlier. Westerly-based Washington Trust was third with $3.2 billion in local deposits, a 10 percent increase from $2.9 billion last year, FDIC statistics show.
Those three banks now control more than 75 percent of deposits in Rhode Island, led by Bank of America with a 35 percent market share.
When asked if Bank of America’s local deposit growth will lead to more local lending, Hatfield said: “We certainly have the capacity. … So, it’s really a function of what the underlying economic activity is that’s driving demand.”
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.