Wachovia takes over top spot as area's largest bank
Wachovia has wrested the title of being the largest bank in the Washington metropolitan area away from Bank of America as it recorded a significant growth in deposits over the past year, according to newly released data from the Federal Deposit Insurance Corp.
The agency's annual summary of deposits, a record of deposits on June 30, shows Wachovia took in $19.6 billion at 152 branches, up from $16.6 billion for the same date a year earlier. That increase translates to roughly 16.1 percent of the local market share. Deposits, meanwhile, at Bank of America's 186 Washington area locations rose less than 1 percent to $17.9 billion, giving the bank 14.6 percent of the market.
Wachovia's performance reflects the continued effort of San Francisco-based Wells Fargo, which acquired the institution in late 2008, to shore up its position in the region. Following the merger, Wachovia experienced a near $3 billion runoff in local deposits, as customers worried about the health of the bank during the 2007 credit crisis.
"Now that we have the Wells Fargo brand, we really went after those lost deposits and got a lot of that back," said George Swygert, Wachovia's regional president for greater Washington.
He noted that Wells Fargo has added more than 300 tellers, personal bankers and district managers to the region to acquaint customers with its more than 80 business lines.
Wachovia also apparently benefited from people and companies setting aside more cash as a hedge against an uncertain economy.
"Strong businesses are hoarding cash," Swygert said. "A lot of folks are not quite sure what's going to happen with the tax situation next year, or may be looking for a more opportune time to make an investment in the market."
This is perhaps the reason why a majority of the banks in this region experienced at least some growth in deposits in the past year.
At Wachovia, a closer look at individual branch data showed the largest uptick in local deposits, about $1.7 million, in the District, where the bank opened two new branches in the past year. The Wachovia at 740 15th St. NW, for instance, boosted its intake 68 percent, from $2.5 million to $4.2 million. Swygert explained that such leaps are typically related to corporate accounts or the existence of wealthy multinationals in the area.
Wachovia branches in Northern Virginia also showed gains, with $834,388 in additional deposits. A large portion of that activity was recorded in Loudoun County, which welcomed a new branch. The three recently-opened locations in Montgomery and Prince George's counties contributed to a $465,584 increase in Maryland.
Swygert suspects some of these deposit results may be a reflection of the fact that roughly 65 percent of Wachovia customers have accounts in two or three jurisdictions here. "They may have a Virginia checking, a D.C. credit card and a North Carolina savings from when they were in college," he said.
The FDIC's data offers little insight into where the deposits are coming from. And the data includes non-retail bank deposits, such as private banking investments and trusts, that can often influence results.
"You have to throw out some of those huge offices, where it's government and corporate accounts, to get an accurate depiction," said banking consultant Bert Ely.
Take Capital One, for instance. Based on deposits that included more than $14 billion from its non-retail operations, the McLean bank was considered the top institution in the area, by FDIC figures. Capital Business only included deposits related to the former Chevy Chase Bank branches in its analysis, which placed Capital One in the fifth spot with $12.2 billion and about 10 percent market share.
Overall, the bank recorded a 5.9 percent drop in deposits in the region. At one location on Wisconsin Avenue, it lost $810,159 worth of deposits. Much of the decline in the past year comes from several branch closings throughout the area.
Ely said it is too soon to draw any conclusions about Capital One's dip in deposits, as next year's data will give a clearer picture of the fallout from the conversion. "People don't move that quickly," he said. "It will take some time."