Amarillo, Tex., is undergoing an economic resurgence, and banks there are among the beneficiaries.
The most recent data from the Federal Deposit Insurance Corp. shows 12% growth in Amarillo metropolitan market deposits in the 12 months through June 30, to nearly $3.6 billion. It was the second straight year of double-digit deposit gains after more than a decade of slow growth.
The surge in deposits can be linked directly to job growth. Employers frustrated by the high costs of doing business in other regions of the country are flocking to the Amarillo area for its relatively low land and labor costs, observers said.
Though it is not growing as fast as such other Texas markets as Austin, Dallas, or San Antonio, the Amarillo region added nearly 2,500 jobs in the 12 months through Sept. 30 and has the second-lowest unemployment rate in the state, 3.6%, according to the Texas Workforce Commission.
Amarillo is viewed as a market "where there isn't much going on," said John Blaylock, the associate director at Alex Sheshunoff & Co. in Austin, who recently prepared a report on Texas' deposit trends. "Except there is. It's one of those hidden stories."
Among the economic highlights:
- Bell Helicopter of Fort Worth has almost doubled the number of employees in its Amarillo plant, to 858, in the past 24 months.
- A cheese factory is under construction in nearby Hereford to capitalize on the region's strength as a dairy producer. The region already produces 38% of the state's milk, and industry watchers expect production to at least triple in the next decade.
- Several ethanol plants are under construction, which is expected to create demand not only for crops but also farm waste, which will power the plants.
Gary Molberg, the president and chief executive officer of the Amarillo Chamber of Commerce, said diversification has helped the area weather a lengthy drought that hit many wheat and cattle farmers hard. Aside from labor and land costs, Mr. Molberg said, employers have been attracted by the transportation network.
"It's been a great economic year," he said. "Throughout Amarillo everything is so positive."
Bankers agree. The $2.1 billion-asset Amarillo National Bank reported a 34% increase in loans and a 26% rise in deposits in the 12 months through June 30.
"I don't know that we have ever had this kind of growth," said Stan Callahan, an executive vice president. "At least not in the 25 years that I have been here."
Mr. Callahan attributed the growth to the influx of new businesses - specifically the dairy farmers - as well as to technology that lets customers make deposits remotely. Lenders have also become more aggressive in bringing in loans and deposits, he said.
Happy State Bank, with $490 million of assets, reported an 18% increase in deposits in the year ended June 30. And the bank is so bullish on Amarillo that it is building a branch downtown that it expects to open in 2008. The branch is to be in what would be the first multistory building to open downtown since 1982.
J. Pat Hickman, Happy State Bank's CEO and chairman, attributed the deposit growth to the strong economy and the fact "that we are out hustling a lot of business."
He conceded, though, that some growth has come at the expense of large, out-of-town banks.
In July 2005, for example, Wells Fargo & Co. bought four Amarillo branches - with nearly $183 million of deposits - from Plains-Capital Bank in Lubbock, Tex. This should have increased Wells' deposits in the market to about $391 million, but FDIC data showed Wells with $303 million of deposits in the market at June 30, which suggests it had considerable runoff.
"Every time one of the big conglomerate banks buys a community bank, our deposits go up dramatically," Mr. Hickman said.
