Magazine article American Banker

Idaho Shakeout That Left a Few Small Independents Seen as Look at the Future

Magazine article American Banker

Idaho Shakeout That Left a Few Small Independents Seen as Look at the Future

Article excerpt

The Bank of Commerce in Idaho Falls normally wouldn't warrant a great deal of notice in independent banking circles.

With barely 2% of the state's deposits, 12 branches, and only $250 million in assets, at first glance it's a minor player in Idaho's overall banking picture.

Nonetheless, tiny Bank of Commerce is the biggest independent bank in the state. It owes its No. 1 ranking to the consolidation sparked by interstate banking.

Bankers in Idaho say the state's banking market is a harbinger. In the post-consolidation world, a few national companies are expected to control the bulk of the market, with a nimble group of very small banks clutching to what's left.

Idaho, having adopted national interstate banking eight years ago, has already gone through what much of the rest of the country will experience with the implementation of the Riegle-Neal Interstate Branching and Banking Law.

If the state's banking industry is a sign of what's to come for the rest of the nation, Idaho's bank regulator said he thinks other states have nothing to worry about.

"It hasn't been a negative thing here," said Gavin M. Gee, acting director of Idaho's Department of Finance. "It has spawned a lot of interest in new banks, and others are relocating here."

Mr. Gavin said six groups may apply for charters soon, one application is pending, and three Washington banks are in the process of relocating their headquarters to the state.

Still, Idaho banking does have some unusual characteristics. For example, Coeur D'Alene has a population of more than 25,000, but the combined assets of its two independent institutions, Idaho Independent Bank and Mountain West Savings Bank, don't even reach $50 million.

Neither Nampa (population 29,000) nor Twin Falls (28,000) has an independent commercial bank, though each has a thrift.

Tiny communities like Malad City (1,946), Montpelier (2,656), Sandpoint (5,203), and Meridian (9,596) all have independent banks, but the state's two largest cities - Boise (126,000) and Pocatello (46,080) - don't. …

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