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In Florida, rising satisfaction in bigger banks squeezes what's left of smaller competitors

 
Published May 2, 2016

If you're a bank in Florida, it seems bigger is better these days.

Mid-sized banks, if you can find them, are finding it hard to keep up with the big players and tough to appear as personable as the small community bank. And community banks? Well, they are either being gobbled up or trying to make do with the scraps of business the big banks leave behind.

Such is the view of J.D. Power, the business ranking firm that just asked 75,000 consumers across the country what they think of their banking services.

The findings? Satisfaction with big banks rose for the sixth consecutive year. J.D. Power attributed the gains to improved digital offerings, more engaged personal interactions and stronger connections with growth segments of the population. Satisfaction with mid-sized banks fell for the first time since 2010.

J.D. Power banking director Jim Miller said the trend line shows the country's largest retail banking institutions are expected to achieve a substantial lead in overall customer satisfaction versus mid-sized and regional banks by 2020. That puts mid-sized banks most at risk. "Regulatory costs have made it difficult for them to invest in strategies to compete with larger rivals, and unless they take proactive steps to change course, we expect this to result in consolidation in the mid-sized bank marketplace."

In Florida, J.D. Power's polling of consumers shows TD Bank gets the highest overall marks for customer satisfaction among 10 big institutions. The bank is a unit of Canada's Toronto-Dominion Bank (hence the "TD" name) and operates about 15 offices in the immediate Tampa Bay area. It says it is one of the 10 largest banks in the United States.

TD calls itself "America's Most Convenient Bank," a claim it backs up with the unveiling of a newly designed branch on Fourth Street N in St. Petersburg and — unlike most of its tradition-stunted competitors — extended "store" hours seven days a week.

Of course, no bank is perfect. TD Bank nationally shut down its popular coin-counting "Penny Arcades" in April after a report found the kiosks were shortchanging consumers — by as much as 15 percent. The bank faces a class-action lawsuit over the matter.

Still, TD Bank achieved a retail customer satisfaction score of 837 on a scale of 1,000 points in Florida from J.D. Power, 13 points ahead of its closet competitor. That's an increase of seven points over last year, when the bank placed second. TD Bank also ranked higher in customer satisfaction in 2013.

Here's how the rest of the big banks in Florida fared in customer satisfaction:

Right behind TD are Chase, PNC and SunTrust banks in the "better than most" category. Following them are Wells Fargo, Regions and Citibank (though Citi offers few services in this metro area) in the "about average" category. And limping behind in the lowest category: Fifth Third, Bank of America and, finishing last, BB&T.

Keep in mind that smaller Tampa Bay banks have been the target of numerous acquisitions in the past year, mainly by Midwestern and out-of-state Gulf Coast banks seeking to expand their small footholds in the faster-growing Florida market.

Among the high-profile deals about to be completed is St. Petersburg's C1 Bank's takeover by Bank of the Ozarks. Other done deals of late are St. Petersburg's Cornerstone Bank, bought by Kentucky-based Republic Bank; Tampa's Bay Cities Bank by Arkansas-based Home Bancshares; and last year's acquisition of Tampa's Florida Bank Group by Louisiana-based IberiaBank, among other transactions.

Where once these smaller community banks would be replaced rapidly by new banks started from scratch by local investors, that's no longer the case. New requirements for bank startups to raise more money and more demanding regulations have discouraged the opening of new banks in this state. That means the hunt for the fewer remaining community banks in the area will only grow more intense and, probably, more expensive for buyers.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow @venturetampabay.