![]() “Our strategy is to place banking offices in underbanked areas, such as Uptown, The Cedars, Garland and, soon, Deep Ellum,” he says. But as Heinke demonstrated during a recent interview, his institution, like the rest of the dozen community banks, succeeds through their courage to not follow the crowd. Those services get fees for helping put the transactions together. To meet strong loan demand, institutions like Dallas-based Texas Brand Bank sometimes add to their deposit bases by tapping outside middlemen called “listing services,” according to its CEO, Fritz Heinke. “With the progress made through online banking offerings, we are more focused on keeping lending clients’ operating accounts with us, even if their hotels are in a different city or state,” says Sushil Patel, president of Dallas-based State Bank of Texas, a niche hospitality lender. Small banks are also shifting to services that incentivize businesses to put in large amounts of money without expecting high rates of return, such as treasury management or handling their payrolls. ![]() “Today, most depositors are aware of the highest yields regardless of location and are comfortable placing deposits through the internet.”ĭeposits are enough of a problem that banks are buying one another primarily for the money they hold for clients, Lee says. “Ten years ago, we were strictly a rural bank and our competitors were other banks in our community,” says Bramlet Beard, president of Ennis State Bank, which does business as Trinity Capital Bank of Texas. The ease with which customers can shop rates has also forced changes at community banks. “Today it’s more of a hand-to-hand combat issue with other folks in town for deposits,” says Malcolm Holland, president and CEO of Dallas’ Veritex Community Bank, an $8 billion asset unit of Dallas’ Veritex Holdings. The increasingly heated scraps for customers’ dough are partly the result of the Federal Reserve’s rate hikes. ![]() But they, too, are reducing their footprint.”Īfter years of near-zero interest rates, small banks are finding themselves competing for deposits, which they use to keep the lights on. “Wells Fargo, JPMorgan Chase, and Bank of America have a lot of branches that are dependent on foot traffic. “The big banks have the sophistication, product set, and technology to compete” for everyday folks, Lee says. Consumers have mostly moved to large institutions, partly because a 2010 law, the Dodd-Frank Wall Street Reform and Consumer Protection Act.Īlthough large parts of the law have since been changed, many community banks still view it as creating too much regulatory risk to home loans for too little return. Small banks generally eschew branches because most cater to businesses, where loan officers can go to take care of most everything they need to do with a customer. Lee of Piper Jaffray.Įnnis State Bank DBA Trinity Capital Bank of Texas Here are the top-performing community banks in North Texas, according to an analysis by Dallas investment banker C.K. “Today, by using technology, we can reach more low-cost depositors without overhead from bricks and mortar facilities.” “At one time, a bank’s only choice to be convenient was to have a physical office or branch near prospective customers,” says David Baty, president and CEO of the $256.4 million asset shop. Take Frisco-based Texas Republic Bank, whose charter dates to 1891-the oldest in Collin County. “If you manage the credit risk, the income statement will take care of itself,” he says.īut what distinguishes this dozen is an ability to successfully shift their business models as regulatory and market factors have changed the formula for community bank prosperity over the last 10-plus years. To prevent today’s high-profit loans from turning into tomorrow’s bad debt, bank leaders must focus on building the right kinds of loans, loan structures, and customers, says Lee, who helps financial services companies put together deals like mergers, acquisitions, and capital raises.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |