.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;}
Because of the recent turmoil in the financial markets, people are paying more attention to the relative safety of banks, and Greater Des Moines bankers are recognizing those concerns to attract new deposits.

Great Western Bank, for instance, has run advertisements that tout its five-star “superior” “Safe and Sound” rating by Bankrate.com, an evaluation based on many of the same safety and soundness indicators that regulators use when examining a bank. The South Dakota-based bank is among the largest of about two dozen banks with operations in Iowa that currently hold that rating.

“We’ve had a fairly conservative approach to banking for a long time,” said Allen Shafer, Great Western’s regional president for Iowa and Missouri. “What we’re doing now is sharing information about what we’ve been doing for a long time; it’s just even more salient now because of what’s happened in the marketplace.”

Growth in deposits is important, because Iowa banks for the most part still rely on their deposit bases to fund their loans, said Tom Gronstal, the state banking superintendent.

“Contrast that with large banks we hear about on the news,” he said. “Those banks fund less than half their loans with deposits, so they’re in the money markets, the commercial paper markets, every day. Iowa banks have a much more steady deposit base, so as those deposits grow, they’re able to lend back to the local economy. So in most instances, I don’t think you’ll see people being turned down because (the banks) didn’t have funding.”

Many local banks stand to gain in deposits as investors flee to perceived safer ground, particularly now that the Federal Deposit Insurance Corp. (FDIC) has temporarily increased the deposit insurance limit to $250,000.

Though third-quarter figures won’t be available until early November, “I have some anecdotes that some banks have seen some substantial growth in the past month or two as people have cashed out of the market and put their money into deposits,” Gronstal said. “I don’t know if that’s a major trend or not; I don’t know if lots of banks have experienced that.”

Over the longer term, Greater Des Moines’ market leaders haven’t changed a lot. According to data released earlier this month by the FDIC, the same 10 banks hold the largest market share of deposits locally as five years ago, with most increasing their deposits by double-digit percentages. Collectively, those 10 banks hold nearly 76 percent of local deposits.

First American Bank saw the largest increase in deposits in that period, nearly doubling its deposit base. At the same time, Wells Fargo Bank, which led the local market in 2003 with a whopping 36 percent of local deposits, lost 64 percent of its deposits to competitors by June 2008, dropping to second place with 13.13 percent of deposits. In the same period, Principal Bank increased an already large local deposit base by 10 percent to capture the largest share – nearly 16.5 percent – of total local deposits.

“To be honest, right now we think it’s a pretty good environment for us,” said Art Bacci, president and CEO of Principal Bank, the Des Moines-based online banking subsidiary of Principal Financial Group Inc. “We’re part of a larger organization with a focus on retirement and post-retirement planning. It’s been a very good environment for our customers to put money in during this turbulent time.”

Principal’s market leadership in Greater Des Moines is probably boosted by the company’s employment base here as well as name recognition, Bacci said. Nationwide, Principal Bank has grown by about 15 percent annually in deposits, and those deposits are not concentrated in any one state, he said. Its deposits in Iowa, for instance, represent approximately 14 percent of its total deposits.

Relatively few institutions in Greater Des Moines have actually declined in deposits since 2003; Bank of the West was the only other institution in the top 10 besides Wells Fargo that saw a decline in local deposits over the past five years.

The FDIC’s announcement that it has increased the deposit insurance limit should help banks attract more deposits, bankers say. Meanwhile, safety has become the focus, Great American’s Shafer said.

“I think what people are really trying to figure out now is, what is a safe place to keep their money?” he said. “They’re focusing on return of principal, rather than a return on principal. I think a lot of people would like to just get their money back; that’s not going to happen for a lot of folks.”