Despite suffering some financial bruises over the past year, M&I Marshall & Ilsley Bank continues to lead the Madison metropolitan area in market share, according to deposit data released in October by the Federal Deposit Insurance Corp.

Business and community banks also have shown deposit growth in the market while some larger banks, including AnchorBank, Associated Bank, Amcore Bank and U.S. Bank, have suffered declines, according to the FDIC data, which is based on June 30 deposits.

Among 52 banks serving the market, which includes Columbia, Dane and Iowa counties, M&I holds a market share of about 16 percent, and its deposits have grown by 71.8 percent over the past five years.

The quality of its staff is the biggest factor that differentiates M&I Bank, which also leads the state and Milwaukee in deposit market share, said Doug Nelson, president of M&I's Southwest Wisconsin Region.

"We're very pleased with the market share that we hold," Nelson said.

"We've continued to gain the confidence of our individual household depositors as well as businesses of all sizes."

Nelson said M&I employees have had to respond recently to many customer questions about national problems related to the banking industry.

And M&I has some challenges of its own. The bank's holding company reported a second-quarter loss of $393.8 million, largely attributed to the housing market outside Wisconsin. As the state's largest bank with 193 Wisconsin offices, M&I also operates in Arizona, Florida, Indiana, Minnesota, Missouri and Nevada.

The bank's financial picture improved in the third quarter with $83.1 million in net income, which still was down 62.2 percent from a year ago.

Last week M&I said that it had received preliminary approval for the sale of $1.7 billion in preferred stock to the U.S. Treasury under the recently announced Troubled Asset Relief Program.

Statewide gains

Two of the larger banks with deposit declines in the Madison market showed deposit growth statewide.

U.S. Bank deposits throughout Wisconsin were up 18.9 percent while AnchorBank's deposits statewide were up 5 percent. Associated Bank had a statewide decline of 5.8 percent while Amcore Bank's Wisconsin deposits were down 4.3 percent.

AnchorBank president Mark Timmerman previously has said the bank's recent growth has been in other parts of the state, such as last year's acquisition of S&C Bank of New Richmond.

Business banks

Unfettered by problems related to home mortgage foreclosures, business banks have shown deposit growth over the past year.

Community Business Bank of Sauk City's deposit growth rate of 64.7 percent in the Madison market was partly the result of opening a DeForest branch early this year, which had June 30 deposits of about $2.2 million. The bank also has a Lodi branch, which had deposits of $12.9 million, up from $9.1 million the year before.

"Everything has an ebb and flow, and we might have had a big year of growth," said Debra Lins, the bank's president and chief executive.

The Sauk City bank has substantial investments in commercial real estate, a problem area for some banks. But Lins said most of the investments are in owner-occupied real estate and the bank maintains close relationships with its borrowers.

With the area's sixth-highest market share, First Business Bank of Madison has increased its deposits by 84.4 percent over the past five years.

President and chief executive Mark Meloy said the bank works with quality real estate developers and has been consistent in its underwriting standards.

"We've staked out more of a niche rather than trying to be a lot of things to different constituencies," he said. "That allows us to be more focused and more efficient at what we're trying to do."

'Flight to quality'

Deposits have increased at many Madison-area banks as investors moved out of the volatile stock market, said Greg Dombrowski, president of Johnson Bank-Madison. The Racine-based bank's Madison market deposits rose 29.4 percent since last year and 115.4 percent over the past five years.

"Some would argue that a bigger branch network should help in capturing more deposits," he said. "I believe there's been a perceived flight to quality and perhaps a deeper awareness of what we offer in the community."

Some community banks also continued to show solid growth over the past year. Leading the way were McFarland State Bank, Oregon Community Bank and Evergreen State Bank of Stoughton.

"It's just a positive trend that shows people want to do business in the local community," said Daryll Lund, president and chief executive of Community Bankers of Wisconsin. "What we're seeing is an influx of deposits with the increase in deposit insurance and also as people look for a safer investment."

Some out-of-area banks that opened branches in the market over the past several years also continued to increase deposits, including Town Bank of Hartland and Great Midwest Bank of Brookfield.

Starion Financial, based in Bismarck, N.D., showed the largest deposit decline in the Madison market of 35 percent over the past year.

Market president William McDonough said the decline was caused by moving brokered deposits out of the branch, which masked an actual deposit increase from $6 million to $13 million. Brokered deposits are collected from groups of depositors by a broker to take advantage of higher interest on larger amounts.

"We're happy with the trajectory of our deposit growth," McDonough said. "The changes in FDIC insurance and the bailout plan we feel are going to have a significant impact in terms of community banks being able to garner more deposits."