Just five years ago, in the midst of the Great Recession, it probably would have been unthinkable to see some of Ohio’s fastest-growing banks located in small rural areas east of Interstate 77.
But several years into the state’s shale fracking boom, it’s clear eastern Ohio is a nice place to collect customer deposits as landowners attract huge sums of money from drillers and local businesses see more activity.
“We are definitely hearing anecdotally of improvements in the deposit flows from some of the banks in eastern Ohio,” Charles Crowley, managing director of investment banking at Boenning & Scattergood Inc. in Cleveland, told me. “It has been a very sluggish economy for decades and it hasn’t necessarily been real exciting for investors. This has changed that dynamic.”
In Monroe County, home to five of the state’s 10 highest-producing natural gas wells, bank deposits grew by 77 percent over the past five years to $203 million, according to midyear data from the Federal Deposit Insurance Corp.
By comparison, all the state’s banks collectively increased deposits 15 percent since 2009 to $272 billion.
And it wasn’t just Monroe outpacing peers. FDIC-insured institutions in Noble County held $226 million as of June 30, up 56 percent from 2009. Deposit growth in Belmont and Harrison counties also beat the state average over the five-year period.
Of course, to really capitalize on deposit growth those institutions want to lend out money. That’s proven more challenging.
“In some cases the loan growth hasn’t been dramatic,” Crowley said.