Banks in Wal-Mart Stores Discount Danger in Retailer's Plan to Buy Thrift
Whiteman, Louis, American Banker
Wal-Mart Stores Inc.'s application in June for permission to buy a small Oklahoma thrift made many community bankers uneasy.
They worried that the retailing giant, which said it may use the thrift charter to build a branch network, could run them out of business, just as it has done to countless general stores, hardware stores, and drug stores.
But Wal-Mart has leased space to banks in its superstores, and the bankers in that program say they are not fretting about the possibility that they might be thrown out on the street. Indeed, they say they are going full steam ahead with plans to put more branches in the superstores.
"It is not something I am worried about," said Peter Montpelier, president and chief executive officer of Norway Savings Bank in Maine. Norway, with $345 million of assets, has one Wal-Mart branch and another on the way. "By the time they start looking at where to put branches, my hope is that we will be doing so well here, they will look elsewhere."
Wal-Mart applied to the Office of Thrift Supervision to buy Federal BankCentre of Broken Arrow, Okla.
Wal-Mart said in its application, which is still under review by the OTS, that it would like eventually to put branches of the $26 million-asset thrift in some of its stores.
Robert L. Epling, president of Community Bank, a $260 million institution in Homestead, Fla., said that he was concerned when he first heard of Wal-Mart's plan.
Only months before, he had negotiated a deal to open branches in 15 Florida superstores throughout Florida.
Mr. Epling said subsequent discussions with the retailer quieted his fears.
"They have given us their word that the thrift deal will not affect their dealings with us," he said. "I have that and a long-term lease. I don't know what else I could ask for as assurance."
Mr. Epling said his leases are in the "15- to 20-year range." Norway Savings has a five-year lease with three five-year options to renew, Mr. Montpelier said.
More than 200 banks have branches in Wal-Mart stores, in 450 of the chain's 600 superstores nationwide, company spokesman Mike Maher said. Wal-Mart would like to put FederalCentre branches in some of the other 150 stores, he said.
"Our goal is to constantly add new services to our stores, which is why we bring banks into them in the first place," he said. …