New FDIC data show that community banks may be reaping the benefits of a few megabanks’ decisions last year, but if they want to continue that forward momentum, experts say, they’ll need to get smart about how they compete for deposits.

You may recall that Bank of America made headlines about this time last year when it dropped several municipal accounts with smaller Massachusetts cities and towns, including Fitchburg and Fall River. And it was also about a year ago that Citigroup yanked its retail operations from the Greater Boston area, shuttering 17 branches that were quickly snapped up by the Waterbury, Connecticut-based Webster Bank.

Of course, Webster boosted its Boston-area deposits after taking over those branches. The FDIC’s latest deposit market share summary showed that Webster increased its market share from 0.22 percent last year to 0.32 percent of the Boston-Cambridge-Newton market, or about $994.5 million. And there’s still plenty of business to be shared among Massachusetts’ community banks.

Belmont Savings Bank, for example, boosted its deposit market share to 0.45 percent, or about $1.4 billion, from 0.35 percent, or $1.2 billion, a year ago. Year-over-year, that’s a 20 percent increase in deposits. Blue Hills Bank bumped its market share up to 0.44 percent from 0.34 percent last year, about a 21 percent increase year-over-year to $1.4 billion in deposits. Similarly, East Boston Savings Bank increased its market share from 0.78 percent last year to 0.99 percent at June 30, representing about $3.1 billion in Boston-area deposits.

East Boston Savings has focused on growing its deposit base and winning other customer business by strategically opening up branches in parts of the city that get a lot of foot traffic. President and CEO Richard Gavegnano said the bulk of the bank’s deposit growth came from retail customers migrating to East Boston Savings from some of the largest banks in the country, and he anticipates opening two more branches within the city of Boston by the end of 2017.

But as customers increasingly move away from traditional branches and toward self-service channels, some banks are getting creative in trying to win deposits – and looking beyond the retail consumer.

Getting Creative, Sharpening Focus

Belmont Savings Bank COO Hal Tovin said that while retail deposits have increased a little in markets like Belmont, Cambridge and Newton, deposits from municipal and commercial real estate customers drove the bulk of the growth at Belmont Savings.

“In today’s world, for a community bank, you have to have a multipronged deposit strategy. You certainly have to supplement your retail segment, but that’s a tougher place to grow,” he said. “Most people look at deposits and think it’s all about branches, but for a community bank it’s got to be more than just branches.”

William M. Parent, president and CEO of Blue Hills Bank, told a similar story. After BofA dropped some of its municipal business, Blue Hills Bank hired a new employee to lead its new government banking capability earlier this year, and Parent expects Blue Hills will further increase its deposit share with the addition of its newest branch in Boston’s Seaport District.

Don Musso, president of the New Jersey-based bank consulting firm FinPro, said that the recent competition for deposits is in some ways an inevitable aspect of the business cycle. In the heart of a downturn (see, for example, the recent Great Recession), businesses and consumers flee to safety, specifically FDIC-insured bank deposits, and they tightened up their belts. Loan demand shrank, and banks fought tooth and nail for the few good credits there were. Now, Musso said, the pendulum has begun to swing the other way.

“When you really get full scale in the recovery, what tends to happen is everybody uses up their cash so deposit balances are down and they start to borrow more so their lending balances are up,” he said. “We’re in that part of the cycle right now and will be until the next downturn.”

Of course, recent uncertainty around the U.S. election and the British exit from the European Union has driven some customers to park their cash in FDIC-insured bank accounts, a few bankers told Banker & Tradesman.

But more broadly, Musso said that bankers who want to win deposits have to think outside the box. He identified a number of different strategies he’s advised banks to use in winning deposits, including customer segmentation, affinity and niche marketing, and identifying spheres of influence that can drive business back to the bank. For example, if you can win over the local plumbing supply store, then you have a better shot at getting business from the plumbers in your area, he said.

“Our higher performing banks are doing customer segmentation and affinity and sphere of influence with success. A lot of banks are modest performers and their values reflects that. They’re just going with the flow and they always have. They’re the ones I’m worried about,” Musso said. “If I had to bring it down to one word, I’d tell you it’s ‘focus.’”