Community Bank Deposits Rise

Community Bank Touch Goes a Long Way


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A couple of times a year, we look at how community banks are growing their deposits. When deposit rates are on the rise, that’s easy enough. But when rates are falling, attracting deposits is a lot trickier.

The 50 community banks listed on page 7 all had well over 50% deposit growth between June 30, 2018 and June 30, 2019. Some we have already reported on in previous issues, but let’s see how some of the new additions are managing to grow their deposits in an increasingly difficult climate.

5-Star One Florida Bank, Orlando, FL increased its deposits nearly 300% in the 12 month period  noted. It did so with new ownership and fresh infusion of capital. One Florida Bank was established in Chipley, Florida as One South Bank in October 2008. While Chipley is the County Seat for Washington County, don’t feel bad if you’ve never heard of it. As of the 2010 census, there were fewer than 1,000 families living in the small town (pop. 3,600).

In its first ten years, One South’s growth was limited, ending 2018 with deposits of just $44 million.

Then things changed. By the end of March 2019, the bank had changed its name to One Florida Bank, established two new locations and moved its headquarters to Orlando, where it has found a niche in the area’s burgeoning business industry.

In the first six months of 2019, One Florida Bank’s assets grew five-fold. Its deposit growth has been a little slower, but it is adding more branches quickly to remedy that situation.

Another new addition with a similar story is 4-Star Keystone Bank, NA, Austin, TX. Originally established in 1997 as Ballinger National Bank in Ballinger, TX, the bank’s charter was purchased by a new team that changed its name and moved its headquarters to the much more robust city of Austin (10/18).

As a result, the bank’s assets and deposits started to climb. Then it acquired another Austin branch (1/19) and things really took off. In a 12 month period, Keystone Bank’s assets went from $43 million to nearly $150 million and its deposits climbed from $39 million to $120 million. As they say, it’s location, location, location.

About six months ago (2/23/19), 3½-Star Unity Bank, Augusta, WI, which has roots going back to 1882, merged its three separate banks (15 branches) in Minnesota and Wisconsin, into one. That’s how it made the list on page 7. But that’s not half the story.

Sometimes it doesn’t matter where the bank is headquartered, or even where it has branches. During the Great Recession, Unity Bank, a longtime agriculture lender, was having trouble finding local farmers in need of loans. At the same time, lending options had all but dried up for northern California’s smaller wineries.

Unity Bank was familiar with the crops of the Midwest, but knew nothing about grapes. The lenders quickly came to realize that the basic principles of agriculture are the same no matter what the crop is that you are growing.

Today, between 15 and 20% of Unity Bank’s loan portfolio is comprised of loans for wineries and vineyards in California. Local agriculture still accounts for the majority of its loan portfolio, but the diversification in both crops and locations gives the bank an advantage over other lenders. A drought in the Midwest or an earthquake in California could be devastating for other, less diversified banks.

Community Bank Deposit and Loan Growth
Community Bank Deposit and Loan Growth

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