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Delaware banks are doing well, but not this well

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Peter Osborne
Editor

The FDIC released the third-quarter call reports early last week and many media outlets quickly released their numbers.

At first glance, it’s been a very good year for Delaware’s 21 FDIC-insured institutions, according to the FDIC’s release of Call Report and Thrift Financial Reports. Our banks’ 106,169 employees generated $8.9 billion in net income in the first nine months of 2019 on total assets of $988.5 billion and total deposits of $755 billion.

Compared to the same period last year, net income is down significantly ““ it was $11.1 billion through the first three quarters of 2018, on assets of $1.04 trillion. And total deposits were $715 billion.

Wow, the state must be doing very, very well with bank franchise taxes.

But not so fast.

A story that is actually pretty easy to write for banking reporters in other states isn’t nearly as easy in Delaware, where we have banks that have massive credit card operations, collect online deposits that are housed here, and/or have a significant investment banking role based here. Add to that it appears as if the FDIC’s Delaware data includes activities and people located outside the state (hence the 106,169 employee number).

This is probably a good place to mention that the FDIC media person was very nice and tried to be helpful as we talked about the numbers, but she admitted at multiple points that this wasn’t an issue she had seen before.

The truth is that Delaware had 28,385 bank employees at the end of 2018, up a bit from 27,900 in 2017, according to the Office of the Delaware State Bank Commissioner. These numbers have stayed within a relative narrow band over the last few years.

At the same time, we saw a slight bump in tax collections by fiscal year, with $89.2 million collected in FY 2018, a $1 million increase over FY 2017. But that’s the first upward tick since 2011 when the state collected $119.7 million. The high point came in 2007 when bank activities generated $175.2 million to
the state’s coffers.

This challenge extends to the FDIC’s Deposit Market Share Report where Capital One, thanks to its online deposit-collections efforts, shows a 36.3% market share in Delaware, followed closely behind by TD Bank at 26.2% and Discover Bank at 19%. TD Bank does have a number of branches in Delaware, but it does raise questions about whether these data points are fair to the state’s larger financial institutions that have branches across the state or the smaller institutions whose share is dwarfed by the big boys collecting deposits to fund secured cards or supplement loan products. We began to address this earlier in the year when we switched the ranking criteria for our Top 25 Banks list to Number of Branches, but we need to do a better job of capturing the diversity of our Delaware banking industry.

But I’m hoping the discussions I had with some of the FDIC staff will lead to a way to break out our unique numbers. I welcome any thoughts from my friends in the banking industry and I’ll keep everyone posted.

Christmas Books: Our next issue will be dated Dec. 24 (although many of you will receive it on Dec. 21). I’m sure that all of you will have your holiday shopping done by then (no, really, I’m sure of it). I had hoped to write something in this issue on “Delaware Eyewitness” by John Riley and “Byrd of Legislative Hall” by Robert Lee Byrd (with assistance from former News Journal reporter Celia Cohen).

But time got away from me and I have read much of both but not all of either. I’ll get something up online next week, but I just want to recommend both books to longtime Delawareans who will recognize many of the stories and welcome the additional context as well as to newcomers who can now appear to be longtime Delawareans in just over 550 pages.

Coming Next Issue: Please keep an eye out for our annual People to Watch issue, which will focus on at least 25 people who we’re predicting will do great and interesting things next year. We had more than 80 nominations and I’m still getting suggestions. The really fun thing is that I’ll be spending the next few weeks talking to these people and most, if not all, will likely be telling me about really positive things that you’ll be reading about over the next 12 months.

At Deadline: I will admit that this column was the last thing that went into the paper. I wanted to add one quick thing that just arrived in my inbox that will end this column on an upbeat note:

Jennifer Sims-Mourtada, Ph.D., director of the Translational Breast Cancer Research at ChristianaCare’s Helen F. Graham Cancer Center & Research Institute, has received a $659,538 grant from the Lisa Dean Moseley Foundation to further research on inflammation as a driver of triple-negative breast cancer. The three-year grant will enable Sims-Mourtada and her team at the Cawley Center for Translational Cancer Research to continue investigating the role of cells immediately around a tumor in spurring the growth of triple-negative breast cancer and a possible therapy for this particularly difficult cancer. Congratulations!

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