“The most common problem that comes up is that if the bank has more than one charter in different areas, or offices spread throughout many areas, there’s the potential under the same corporate umbrella to transfer large deposits basically seamlessly without really having any bearing on whether or not the business has risen or fallen as far as activity goes in your specific area,” he said.
As Brown explained, a financial institution can move a large corporate account to a branch because it has certain personnel at a large branch or office that might be better suited to handle that particular account.
Or, it could move a large corporate account out of a large office and into a smaller one. It could go either way — without really having any bearing on the geography, Brown pointed out.
That’s a question that comes up a lot, particularly when there are MSA changes, he said, because it’s not uncommon for a bank holding company to acquire a bank or another bank holding company.
“Let’s say, for instance, that the old bank holding company was located in your geographic area as far as headquarters go, and the new bank holding company is located in another geographic area.
“It would not be uncommon after that merger for the larger corporate accounts to maybe be transferred to wherever the centralized home office is. It could go either direction.”
Those types of accounts are typically very large — say, the country’s largest brewer or manufacturer of widgets, for example.
Such an account can just as easily be handled someplace in Ohio or someplace in Missouri, Brown noted.
“It’s not really something that has to be associated with maybe where the business is located because you’re talking about computers and wire transfers and that sort of thing.”