MSA Hits HHI?s Top 10 in Banks

Concetrated Top 10
Click here for a look at the Hefindahl-Hirschman Index. (Chart requires Adobe Acrobat viewer. Click here for a free copy.)

Everyone knows there’s a lot of banking activity in Northwest Arkansas, but sometimes it’s hard to see the forest for the trees.

According to a report from the Federal Deposit Insurance Corp., the Fayetteville-Springdale-Rogers metropolitan statistical area hit No. 10 in the country for positive percent change in HHI concentration when the FDIC’s summary of deposits was tabulated.

HHI is the Herfindahl-Hirschman Index, a standard industry measure of market concentration. The HHI takes into account the size and distribution of the firms in a market and approaches zero when a market consists of a large number of firms of relatively equal size.

For the decade from 1994 to 2004, the MSA had a positive 1,312 HHI change, just behind San Antonio, Texas.