COVID slows market share change, PPP helps deposits

Several high profile mergers and acquisitions helped spur a bit of a shakeup last year in the distribution of market share within Northern Colorado and the Boulder Valley’s banking sector, but a slowdown in M&A activity — partially attributable to the COVID-19 outbreak — has resulted in more market share stability in 2020.

Mergers and acquisitions have lessened “nationwide, not just in Colorado,” Colorado Bankers Association president Jenifer Waller said. “I don’t want to attribute all of it to COVID, but the pandemic certainly has slowed M&A activities in all industries, not just banking. A lot of people are pausing.”

Early 2019 saw McKinney, Texas-based Independent Bank, now Independent Financial, complete its acquisition of Guaranty Bancorp just a few months after BOK Financial Corp. of Tulsa, Oklahoma, closed on its purchase of CoBiz Financial Inc., a commercial bank with a presence in both Colorado and Arizona. There were no such large-scale deals this year and the top 10 banks in terms of market share remained the same and in the same order between June 30, 2019, and June 30, 2020, the period in which the Federal Deposit Insurance Corp. calculates its annual market share report.

The largest banks in 2020 in Boulder, Broomfield, Larimer and Weld counties were Wells Fargo Bank (17.7% market share), JPMorgan Chase Bank (15.3%), First National Bank of Omaha (11.3%), Firstbank (10.9%), Independent Bank (5.73%), Bank of Colorado (5.63%), U.S. Bank (5%), Great Western Bank (3.5%), Bank of the West (2.85%)  and AMG National Trust Bank (1.68%).

The three largest Colorado-chartered banks — FirstBank, Bank of Colorado and AMG — also remained steady with a combined 2020 market share of 18.24 and a 2019 market share of 17.97%

In all, there are 45 institutions operating in the four-county region in 2020, two more than the prior year. There are a total of 288 banking offices in the Boulder Valley and Northern Colorado, also two more than in 2019.

Total deposits, both those coming from inside the region and out, also rose between 2019 and 2020, despite the onset of a global economic crisis in March.

“Our customer base is pretty resilient, and they’ve been reacting to what’s going on around them,” said Dan Allen, president of Greeley-based FirstFarm Bank, which had a market share of 0.43% in 2020.

Banks operating in the area held deposits of more than $5.9 trillion in 2020, compared to less than $4.5 trillion last year.

“Going into the pandemic or economic downturn, the banking industry was really strong. Capital ratios were very high and reserves were very high,” Waller said, “So we went into it from a position of strength, which is very beneficial for us as we go through the next few quarters.”
The most recent FDIC deposit market share report does “include [the Paycheck Protection Program] impact, so you will see banks that participated most heavily in that program having a little bit of a higher deposit number than they would have otherwise,”  said Kyle Heckman, president Boulder’s Flatirons Bank, which posted a market share of 0.73% in 2020.

According to Waller, “Colorado received a disproportionate amount of PPP funds, so the small businesses of Colorado benefited from the aggressive approach institutions took in seeking funds and placing loan applications.”

Windsor-based Points West Bank, which accounts for 0.46% of market share in 2020,  is “pretty liquid in terms of our deposits, as is the case with most banks,” bank president Mark Brase said. “With all the stimulus money and PPP money … it shot millions and billions into the banking system.”

See related story: Banks weather COVID storm, so far

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