Several examples were cited by John Anderlik, regional manager, FDIC division of insurance and research in Kansas City.CBC Bank
, with headquarters in Bowling Green, Mo., has two branches in the St. Louis area.The Bank of Bloomsdale, Mo.
, has had a branch here since 1994.Also running St. Louis-area branches are Bay-Hermann-Berger bank
in Hermann, Mo.; Sun Security Bank
in Ellington, Mo.; and Community State Bank of Bowling Green
"What we're seeing throughout the Great Plains is that banks in rural areas, especially those with declining or stagnant populations, are finding it difficult to maintain and grow their assets and deposit bases to the extent that they feel would be healthy," Anderlik
said."So what they're doing is pursuing strategies of looking to branch into more vibrant rural areas or 'micropolitan' counties -- counties with a city of at least 50,000 -- and into metropolitan counties, to achieve the type of growth that they think they need to be successful."
Competition on a level which, according to Anderlik
, is "more fierce now that it has been in recorded history" for both rural and metropolitan banks, is what's driving the branching activities.
"Net interest margins have been on a steady decline for about 12 years now," he
said."The trend has been steadily downward.Banks are fighting over a smaller and smaller pool of borrowers, and they're fighting over a smaller and smaller pool of depositors.And certainly the stock markets over the past 15 years have been a draw for funds that these banks used to be able to use quite well."
For the most part, Anderlik
said, the tactic has been successful in terms of achieving the growth the banks were seeking.He
cites the example of Commercial Bank of Gideon, Mo.
, (population 1,064), which opened or acquired three branches in Sikeston, Mo., and went from a $52 million bank to more than $100 million in one year.