The Jefferson County banking market New banks, smaller banks adding branches, gaining market share

The total amount of money on deposit in Jefferson County is growing, and the distribution of those deposits among our 10 local financial institutions is changing.

For the year ending June 2003, the net increase in deposits at local banks and credit unions was $41,230,000. During that year, MarinerBank took in $11,222,000, or 27.22 percent, of that net increase to lead all local financial institutions. The fledgling bank, opened in a former fast-food restaurant on Port Townsend's Sims Way in December 2002, was open for less than seven months during the reporting period.

The Federal Deposit Insurance Corporation (FDIC) releases deposit data every November, and that data is for June of each year. The National Credit Union Administration (NCUA) releases data every quarter. All numbers in this article are as of June 2003.

Following MarinerBank for net gain in deposits in the year ending June 2003 are American Marine Bank, Washington Mutual, First Federal Savings & Loan, Bank of America, Quimper Community Federal Credit Union, Pacific Northwest Bank, U.S. Bank and Olympic Community Federal Credit Union (formerly PEJCO).

Frontier Bank was the only institution to experience a net decrease in deposits during the most recent reporting year, a decline of $1,936,000. However, Frontier has experienced a net increase in deposits since 1994, as have the other nine institutions. See graph at top left of page C-1 for a list of where funds were deposited as of June 2003.

B of A still largest bank

Although MarinerBank is off to an good start, it ranks ninth among the 10 institutions that operate in Jefferson County.

Bank of America is still the largest bank as measured by the amount of money on deposit in Jefferson County, with $85,361,000. However, Bank of America has lost more market share than any other local bank over the last 10 years, dropping from 34.87 percent of the market in 1994 to 22.87 percent today.

Bank of America's local deposits have grown from $76,085,000 in 1994 to $85,361,000 today, an increase of $9,276,000. That's less than the $11,222,000 MarinerBank picked up in its first seven months.

Over the past 10 years, Bank of America ranks sixth for dollar gain in deposits, while MarinerBank ranks fifth.

Market share trends

Five institutions have gained market share and five have lost market share since 1994. American Marine Bank (+7.96 percent), Washington Mutual Bank (+6.36 percent), Frontier Bank (+5.16 percent), MarinerBank (+3.01 percent) and First Federal Savings & Loan (+2.57 percent) have all gained market share.

In addition to Bank of America (-12.00 percent), Quimper Community Federal Credit Union (-0.03 percent), Olympic Community Federal Credit Union (-0.26 percent), U.S. Bank (-5.09 percent) and Pacific Northwest Bank (-7.68 percent) have lost market share.

Pacific Northwest Bank was recently acquired by Wells Fargo Bank.

All 10 institutions have experienced a net gain in their dollar amount of deposits since 1994. The biggest gain in deposits is at Washington Mutual, with an increase of $43,070,000. Washington Mutual was ranked fourth in deposits in 1994 but is a close second to Bank of America today.

American Marine Bank, which opened in Port Ludlow in January 2000, placed second for increase in deposits, with $29,691,000. Frontier Bank gained $25,467,000 and First Federal Savings gained $20,146,000 to place third and fourth, respectively, for increase in deposits since 1994.

Branching out

Of the 10 financial institutions that operate in Jefferson County, all but Bank of America (Port Hadlock and Port Townsend) and U.S. Bank (Quilcene and Port Townsend) have just one location. By this time next year, several of the smaller banks plan to be opening second locations of their own.

Quimper Community Federal Credit Union recently added the word "federal" to its name when it received a charter authorizing it to operate in Clallam and Jefferson counties instead of just East Jefferson County. Quimper was founded at the Port Townsend Paper Corp. mill in 1939.

Quimper President and CEO Jerry Hickman said his credit union should have its first branch - next to the new NAPA auto parts store along State Route 19 in Port Hadlock - open by late summer or early fall 2004. "So many of our members live there now," he said.

Tiny Olympic Community Federal Credit Union has growth plans as well. Founded in 1967 as PEJCO (Public Employees of Jefferson County), the Port Townsend-based credit union was chartered to serve only the 2,600 people who work for public employers in Jefferson County.

With a new charter and name in October 2003, Olympic can now serve all 27,000 residents of Jefferson County - a tenfold increase in potential members. The credit union has no plans for a second location yet but is launching a website in January, said Manager Harriet Logg.

American Marine Bank was founded on Bainbridge Island in 1948 and has six branches today. Linda Germeau, manager of the Port Ludlow branch, credited her customers for the bank's rapid growth in Jefferson County since opening in 2000. American Marine Bank is first for gain in market share and second for gain in deposits in Jefferson County over the last 10 years.

"We are always looking for opportunities - we are in a growth mode," said Germeau when asked about opening a second location in Jefferson County. She said the bank is opening a branch in Kingston next year and is looking for a location in the Poulsbo area.

Although Washington Mutual ranks first for gain in dollars and second for gain in market share, Manager Jon Murock of the Port Townsend branch said his bank does not envision a second location in Jefferson County. Among other things, he attributed Washington Mutual's success to offering a "platinum" checking account that pays interest.

Back at MarinerBank, President and CEO Jim Grabicki said his goal is to open a branch in Port Hadlock within the next six months. "We have concentrated to this point on Port Townsend because that's where our branch is," he explained. He also said that the bank has no firm plans to add Saturday hours at this point

When MarinerBank was making plans to open last year, Grabicki estimated that it would take about two years before the bank would become profitable. MarinerBank lost $204,506 in its first quarter, $95,153 in its second quarter, and $52,455 in its third quarter, which ended Sept. 30, 2003.

Grabicki declined to update his prediction on when MarinerBank might be in the black. However, he smiled and said, "We're working toward profitability."

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.