Jackson banks boom in past 12 years

Driving down East Jackson Boulevard, the drive-through possibilities are numerous.

Taco Bell, McDonald's, Burger King ... and Union Planters, Commerce, First National.

In Jackson, the banking business has been super-sized since the early 1990s. Today, there are more banks, 10, than fast-food franchises, nine (and that includes a drive-through-only Dairy Queen).

In 1991, only two banks served the county seat. At that time, Cape County Bank became Union Planters. The Jackson Exchange Bank was shut down by the FDIC and a portion of its deposits and loans were purchased by Boatman's.

There were roughly 9,000 residents in the town, and the banking business was unstable at best.

Fast forward to 2003.

The population has grown to 12,000, an increase of 25 percent. Meanwhile, the number of banks has increased by 500 percent.

"What we're finding is that we've done very well in the Jackson market," said US Bank president Lowell Peterson. "This is our fourth year. It's an excellent, excellent location, and we've done well over our projections."

What makes Jackson so attractive is a combination of elements. Some say the growth is not a trend specific to Jackson, but one that is being experienced in many progressive communities.

It started in the late 1980s when strict regulations were lifted on big national banks in many states, including Missouri. Bigger banks were allowed to spread across the country without having to be rooted in a state. That's when big-bank branches started popping up in towns everywhere.

But other factors contributed to the bank boom in Jackson, many bankers say, including the local economy.

In neighboring Cape Girardeau, 17 banks serve 35,000 residents. That's about one bank per 2,000 people. In Jackson, there is one bank for 1,200 people.

'A spot where we can fit'

According to Peterson, bankers look at a variety of factors before opening a bank.

"You look at the growth of the community, at the competitors and see how fast everything is growing," Peterson said. "The FDIC is a good source of information. Then you factor what you can add to the mix and ask yourself if we have a spot where we can fit."

Apparently, a lot of banks are finding spots to fit.

That includes Jackson's newest member of the banking family, First Midwest Bank. The bank is not yet a full-service branch. The bank's senior vice president, John Thompson, is still working at getting permits to open a temporary office.

"From a financial standpoint, I think Jackson is a good market because of the growth," Thompson said.

But more than that, he said, Jackson's population is made up of people that "have good jobs and are conscientious of their property and their indebtedness."

Bankers see Jackson as a growing community. Much attention has been given to Jackson's residential growth, but the town also has an active business climate.

Old money, new opportunity

Many new businesses have moved into town in the last 12 years.

"There's a lot of old money in Jackson, plus there is new opportunity with new businesses like Procter & Gamble," said Chris Hutson, vice president and community bank manager at Jackson's Union Planters. "Plus you've got two hospitals and a university in Cape. People don't realize what a regional economic hub Cape Girardeau and Jackson is. Jackson is still a bed and breakfast of Cape Girardeau, but there are a lot of banking opportunities."

Although Jackson has seen an extraordinary growth in the number of banks, it has relied on help from banks in Cape Girardeau.

Of Jackson's 10 banks, only People's Bank and First Midwest Bank do not also have a location in Cape Girardeau. The trend has been for a bank to first build a location in Cape Girardeau, then expand into Jackson.

Jackson resident E.P. Kurre said he banks at Bank of America and Union Planters. He said it wouldn't matter if a bank was located in Jackson or not; he'd drive to Cape as long as the interest rates were better.

But not everyone shares Kurre's opinion.

Bobby Buesha of Jackson said he banks at Bank of Missouri and is happy with the service.

"But if there wasn't a branch here, no, I wouldn't bank here," he said. "It's just the convenience."

Jay Knudtson, vice president of First Missouri State Bank, and also the mayor of Cape Girardeau, said his banks in Cape Girardeau and Jackson target small and medium-size business owners. He said First Missouri State Bank attempts to build relationships as opposed to huge conglomerate banks that concentrate more on numbers.

Be where the people are

But to build those types of relationships, it's necessary to be where the people are, he said.

"I think in years past, when Jackson was just a sleepy bedroom community, there weren't many banks in Jackson," he said. "But with the growth they've experienced, there are too many choices out there, so to think you could do business and capture a segment of the market in Jackson without a facility there is an unrealistic expectation."

First Missouri State Bank and other smaller "community banks" are in competition with larger national banks such as Union Planters, US Bank and Bank of America.

Officials at the smaller banks say they're finding clients that the bigger banks are overlooking. They say they can make decisions in-house instead of at an office in another state.

The big banks argue that work can be done more efficiently at their banks. Decisions, though perhaps not made locally, can be made more quickly.

Whatever the client's preference, there are plenty of options in Jackson, but that may not always be the case.

"Right now, with rates being low, everyone can compete," Hutson said. "Once they go back up, and they will over time, some of the smaller, community-oriented banks' margins will be too thin and the larger banks will have the advantage. We're in that cycle again where banks are popping up. Wait a few years and a lot of them will consolidate or disappear. Then the cycle will start all over again."

bmiller@semissourian.com

243-6635