The Banker's Advocate - March 31, 2004 - Page 2

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Text Box: out for this study include only applications to establish new branch offices. Applications that can result in a bank adding branches – for example, merger or purchase-and-assumption applications – are not included. Every branch application processed during the period by the Bank Department is factored in, even if a branch office ultimately was not established. Finally, branch offices opened by national banks based in Arkansas or out-of-state banks are not considered. Applications to establish a branch at a site not in the county where the applicant’s main office is located or in a contiguous county were first allowed

Text Box: The volume of branch applications filed with the Arkansas State Bank Department has picked up considerably the past five years, which likely is no surprise to customers in central or northwest Arkansas. What may be somewhat surprising, however, is the response during that time to a law that permits banks to branch statewide. From the beginning of 1994 to the end of 2003, 347 branch applications were filed with the Bank Department, an average of 35 per year. In the last five years of that 10-year period, however, 40 branch applications were filed, on average, each year. The filings broken

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Text Box: for filing on July 1, 1998. This was six months to the day before such “statewide” branching was permitted under state law. Interest in statewide branching initially was high. In the first 18 months during which applications for statewide branches were accepted, 32 such applications were filed. This represents 44 percent of all branch applications filed during the period. Interest in statewide branching has since leveled off. During the four years of 2000 through 2003, 42 statewide branch applications were filed. All told, from July 1, 1998, through year-end 2003, one of every three branch applications filed was for statewide offices. Where have the branching “hot spots” been the past 10 years? The accompanying map of Arkansas congressional districts shows a relatively even distribution of applications for branches in the 1st, 2nd and 3rd districts. Applications for branches in the 4th District have lagged far behind. When the 10-year period is divided in half, an interesting trend emerges. In the first five years – 1994 through 1998 – the 1st District led the pack. Forty-nine applications were filed to establish

See BRANCH, Page 3