Illinois' share of US deposits inches up as state deposits grow nearly 3%

Banks in Illinois booked a nearly 3% growth in deposits year over year, pushing the state's share of total US deposits higher.

Deposits in Illinois accounted for 3.95% of the nation's deposits as of June 30, compared with 3.86% a year ago, according to the annual Summary of Deposits data from the Federal Deposit Insurance Corp. In the year ended June 30, Illinois deposits grew at a higher rate relative to the entire US banking industry.

As of June 30, deposits in Illinois totaled $686.73 billion, up 2.95% year over year even as the number of bank branches in the state fell by 63 to 3,680. The US banking industry's deposits increased 0.8% to $17.406 trillion after dropping for the first time on record a year earlier, when three large banks collapsed.

US deposits returned to growth despite an elevated competition for deposits in a high-interest-rate environment. The first Federal Reserve rate cut in years is already in the rearview mirror, with more rate cuts potentially ahead.

"Lower rates could be a catalyst to drive loan and deposit levels higher," Wedbush Securities analyst David Chiaverini wrote in a Sept. 25 note.

Top 4

The top four banks by deposits in Illinois were unchanged from a year earlier. JPMorgan Chase & Co. and Bank of America Corp. — two of the Big Four US banks — continued to rank first and third, respectively, even though their Illinois deposits dropped 7.5% to $117.56 billion and 7.0% to $47.24 billion, respectively, on a year-over-year basis.

JPMorgan booked a 193-basis-point decline in its market share to 17.12% and shed 12 of its Illinois branches, putting the total number of its branches in the state to 269. BofA logged a 73-basis-point decline in its market share to 6.88%.

At No. 2, Bank of Montreal, the parent company of Chicago-based BMO Bank NA, recorded a 145-basis-point jump in its Illinois market share as its deposits in the state climbed 13.5% to $107.35 billion.

Rosemont, Ill.-based Wintrust Financial Corp. nabbed the fourth spot with $45.32 billion in Illinois deposits, up 8.9%. The competition for deposits in Chicago is "more or less stable," Wintrust President and CEO Timothy Crane said.

"We've been seeing six months to 13-, 14-month type rates at around 5%. The only surprise that I would have personally is that some people have longer terms out there than others," Crane said during a July 18 earnings call. "We're thinking that those rates should be 5% and down here going forward. But again, our competitors sometimes do strange stuff."

Other banks in the top 25

Among the top 25 banks by deposits in Illinois, Chicago-based Northern Trust Corp. logged the largest year-over-year increase in state deposits at 27.7% to $34.19 billion, followed by Chicago-based Byline Bancorp Inc. with a 24.2% jump to $7.26 billion. Citigroup Inc. booked the biggest decline at 21.1% to $14.72 billion.

Effingham, Ill.-based Midland States Bancorp Inc. was one of the banks that posted a year-over-year decrease in Illinois deposits. Its deposits were $4.75 billion, down 3.7%.

In a July 25 news release, Midland States Bancorp President and CEO Jeffrey Ludwig said the company hired a market president for Northern Illinois and a chief deposit officer who will "positively impact our treasury management services and our ability to add new commercial deposit relationships."

Aurora, Ill.-based Old Second Bancorp Inc. reported $4.55 billion in Illinois deposits, down 3.8% year over year, and Bloomington, Ill.-based HBT Financial Inc.'s Illinois deposits amounted to $4.22 billion, up 4.1%.

D.A. Davidson analyst Jeff Rulis downgraded his call on the stocks of Old Second and HBT to "neutral" from "buy," respectively, on Sept. 25. Among other things, the analyst believes the companies' credit and deposit strengths could "be overlooked or minimized should the market's attention turn to 'risk-on' credit names and/or banks with a greater ability to lower deposit costs" given the Fed's rate cut path.