Texas Based Banks Navigate Economic Shifts

Texas-based banks are adapting to the changing economic landscape in various ways. Many are investing in digital transformation, such as online banking platforms and mobile apps, to better serve their customers' needs.

This shift towards digital banking is a response to the growing demand for convenience and accessibility. For example, Bank of Texas has seen a significant increase in mobile banking users, with over 70% of its customers using the bank's mobile app.

In addition to digital transformation, some Texas-based banks are also focusing on community development. For instance, First National Bank of Amarillo has implemented a community development program to support local businesses and economic growth.

These efforts demonstrate the banks' commitment to serving their customers and communities in a rapidly changing economic environment.

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Texas-based banks are a vital part of the state's economy, providing essential banking services to communities across the Lone Star State.

Newsweek's 2025 list of "America's Best Regional Banks" includes 46 regional banks operating in Texas, with 39 banks based in the state.

The highest-rated banks in Texas have bank accounts that are FDIC- or NCUA-insured, ensuring that your money is safe up to $250,000 per depositor.

Capital One is a great option for opening a savings account, with no required opening deposit.

Bank of America stands out for its large Texas branch network, with over 4,700 branches across the state.

If you're looking for a bank with excellent customer service, Frost Bank is a top pick, with a reputation for providing top-notch service to its customers.

Here are some of the top banks in Texas, ranked by their features and benefits:

There are many great Texas-based banks to choose from, each with their own unique features and strengths. American Bank, for example, has two locations in Texas, one in Waco with 81 employees and another in Dallas with 52 employees.

If you're looking for a bank with a strong presence in Texas, consider Frost Bank, which has over 5,600 employees and operates in multiple locations throughout the state. Frost Bank was also ranked as having the best customer service in Texas.

If you're looking for a bank with a small-town feel, consider Frontier Bank of Texas, which has a single location in Elgin with 82 employees. Alternatively, you can also consider Trinity Bank, which has a single location in Fort Worth with 28 employees.

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Newsweek's List of America's Best Regions highlights regional banks that positively impact their communities. These banks serve as vital engines at the local level, supporting small businesses and ensuring easy access to essential banking services.

Regional banks like American Bank, with locations in Waco and Dallas, Texas, have received a five-star rating on the list. They operate in Texas, with 81 and 52 employees respectively.

Austin Bank, based in Jacksonville, Texas, has 517 employees and operates in Texas. Its presence in the community is likely to have a significant impact on local residents.

Broadway National Bank in San Antonio, Texas, has 655 employees and operates in Texas. Its large employee base suggests a strong commitment to the community.

Capital One, a bank with a significant presence in Texas, operates in multiple states including Texas, Virginia, and others. It has 57,364 employees worldwide.

City Bank in Lubbock, Texas, operates in New Mexico and Texas, with 575 employees. Its dual-state presence allows it to serve a wider range of customers.

Commercial Bank of Texas in Nacogdoches has 246 employees and operates in Texas. Its local focus is likely to make it a valuable resource for small businesses and residents.

Texas has a strong presence of community banks, with around 370 community banks operating in the state, more than any other state. This is a significant advantage for Texans who prefer face-to-face banking.

Community banks in Texas have been growing their deposits, loans, and assets, outperforming regional banks in the state. In fact, Texas community banks outperformed U.S. regional and community banks in terms of loans, assets, and deposits.

If you're looking for a community bank in Texas, you'll be pleased to know that 99.7 percent of banks in the state were community banks back in 2005. While the share has declined nationally, community banks still account for a significant 47 percent of loans, 33 percent of assets, and 34 percent of deposits held by banks in the state.

Here's a breakdown of the types of banks you can find in Texas:

Community banks have some distinct advantages, such as offering personalized service and being invested in the local community. However, they may not have the same level of online services or technology as larger banks.

In Texas, community banks are a vital part of the financial landscape, and they continue to grow and thrive. If you're looking for a bank that's invested in your community, a community bank may be the perfect choice for you.

Commercial banks like Commercial Bank of Texas offer full-service banking options for both personal and business needs. They provide a wide range of services to support individuals and businesses in their communities.

Investing in the local community is a key aspect of Commercial Bank of Texas's approach to banking. This means they care about the people they serve and the places they live.

By choosing a commercial bank, individuals and businesses can expect a more personalized and localized banking experience.

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If you're looking for a bank that's right for you, there are several factors to consider. Newsweek's annual list of "America's Best Regional Banks" includes 46 regional banks operating in Texas, with 39 banks based in the Lone Star State.

One of the top-rated banks in Texas is Frost Bank, which has over 5,600 employees and operates in Texas. Capital One, on the other hand, has over 57,000 employees and operates in several states, including Texas.

If you're looking for a bank with a large branch network, Chase Bank is a good option, with over 4,700 branches. However, if you're looking for a bank with a lower overhead, consider a smaller bank like American Bank, which has only 81 employees.

When it comes to fees, it's essential to find a bank that offers low or no fees. Some banks, like Capital One, offer free overdraft protection when you link to savings for automatic transfers. Others, like Frost Bank, may have a $300 sign-up bonus.

Here's a comparison of some of the top-rated banks in Texas:

Ultimately, the best bank for you will depend on your individual needs and preferences. Take the time to research and compare the features and fees of different banks to find the one that's right for you.

Texas-based banks are facing significant risks and challenges. The Federal Reserve's interest rate hikes since March 2022 have led to unrealized losses on fixed-income assets, such as Treasuries, held by banks.

Deposits have stagnated, and banks are struggling to find funding options, making liquidity a major concern. This is particularly true for Texas community banks, which are disproportionately exposed to commercial real estate (CRE) loans.

Over 58 percent of CRE loans held by Texas banks are held by community banks, compared to 42 percent by regional banks. This heavy reliance on CRE means that shocks in the commercial real estate industry can easily be transmitted to banks, making it a significant risk.

Unrealized losses on fixed-income investments have fluctuated quarterly, peaking at 4.5 percent of assets for Texas regional banks in the third quarter of 2022. While these losses are expected to improve as interest rates stabilize, they are still a worrying sign for the banks' ability to lend.

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Since the Federal Reserve began raising its benchmark federal funds interest rate in March 2022, banks holding fixed-income assets such as Treasuries have incurred unrealized losses.

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Banks are struggling to manage their liquidity as deposits have stagnated and there are fewer funding options than before the 2023 spring bank stress episode.

Texas community banks are disproportionately exposed to commercial real estate (CRE) loans, and some CRE categories are struggling, particularly offices and hotels.

More than 58 percent of all CRE loans held by Texas banks are held by community banks, compared to 42 percent by Texas regional banks.

The Texas community bank CRE share has dropped from a post-Global Financial Crisis peak of 77 percent in 2011, but still remains high compared to national averages.

In the first quarter of 2024, 55 percent of all Texas community bank loans were CRE loans, compared to 42 percent for regional banks in the state.

Commercial real estate has hit a rough patch since the pandemic, with office vacancy rates higher and building valuations lower.

The heavy reliance on CRE in Texas means shocks can easily be transmitted, affecting banks holding those loans and vice versa.

Access to liquidity is a top concern for Texas banks, with 51 percent of respondents rating it a top three concern for the subsequent six months.

The Bank Term Funding Program, a Federal Reserve-sponsored source of liquidity, expired in March 2024, leaving banks to find alternative funding sources.

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The Texas ratio gained relevance during the state's banking collapse in the 80s. Hundreds of Texas banks failed due to aggressive lending to the energy sector and commercial real estate.

In the 1970s, Texas banks capitalized on high oil prices and lent extensively to the energy sector. This led to overbuilding in commercial real estate as office space demand increased.

As oil prices peaked and then collapsed by the mid-80s, Texas banks continued to make commercial real estate loans, causing a bust in commercial real estate in 1986. Over 600 Texas banks failed or were acquired, including nine out of the 10 largest commercial banks in Texas.

The Texas ratio was born out of these troubles and is calculated by dividing a bank's non-performing loans plus repossessed real estate by the sum of its tangible common equity and loan loss reserves. A ratio above 100 percent implies a bank's capital cannot cover its potential asset losses.

In the 1980s, the Texas ratio peaked, with slightly more than 20 percent of banks in the state exceeding 100 percent. This compared to 5 percent nationally.

Texas community banks have a significantly higher tier 1 capital ratio, at 19.2 percent, which exceeds the required minimum of 6 percent. This strong capital position helps them navigate future challenges.

Community banks tend to hold more capital than regional banks, partly due to their smaller size and lack of diversification, making them more risk averse. They also know they won't be bailed out during times of trouble.

The tier 1 capital ratio for Texas community banks is on par with U.S. community banks, at 18.6 percent. This suggests that community banks across the country are taking a similar approach to managing risk.

In some cases, community banks use the community bank leverage ratio framework, which reduces capital requirements to a 9 percent tier 1 leverage ratio. This still exceeds the 5 percent required in the general applicable rule.

Texas regional banks have a higher tier 1 capital ratio, at 23.3 percent, which exceeds their U.S. regional peers, at 15.8 percent. This is partly due to their lower risk profile, with fewer risky assets.

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Choosing a bank might seem daunting, especially if you haven’t done it before. There are many things to consider, from finding a cost-effective provider to selecting a product that fits your financial needs.

The effort you put in to find the best bank will eventually pay off, and with the right bank, you will manage your financial life successfully and save money in the long run.

Decide what type of banking service you prefer more - online or face-to-face. If you prefer face-to-face business, check if the bank you pick has a physical store in Texas.

Online-only banks have increased in number over the last couple of years, but many traditional banks with brick-and-mortar stores started offering online services too.

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Let's take a look at some specific Texas-based banks that have made a name for themselves in the Lone Star State.

Bank of Texas, with over 200 branches across the state, is one of the largest community banks in Texas.

With assets totaling over $13 billion, Frost Bank is another prominent player in the Texas banking scene.

Texas Capital Bank has been recognized for its commitment to community development and has received several awards for its efforts.

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Community banks in Texas are leading the way when it comes to deposits, loans, and assets. Texas community bank deposits grew 5.5 percent from the second quarter of 2023 through the first quarter of 2024.

Community banks in Texas are outperforming regional banks in the state, with a significant increase in loans and assets. Texas community banks grew their loans by 7.1 percent and assets by 4.6 percent, while regional banks shrunk both loans and assets.

Texas community banks are not just outperforming regional banks in the state, but also outperforming U.S. regional and community banks in terms of loans, assets, and deposits. They are truly a force to be reckoned with in the banking industry.

In the first quarter of 2024, Texas community bank profitability ticked up, with return on average assets rising after declining in the second half of 2023. This is a testament to the strength and resilience of community banks in Texas.

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Lamar National Bank has been serving the community since 1980, when it was started in Paris, TX by businessmen who saw an opportunity for Relationship Banking and supporting the needs of the community.

They are dedicated to building strong relationships with their customers, which is a key part of their philosophy.

Their focus on community support is evident in their commitment to supporting the needs of the community.

Lamar National Bank offers a range of financial services, including checking and savings accounts, certificates of deposit, credit cards, personal loans, and mortgages.

Here are some key features of their checking accounts:

Frost is a Texas-based bank that's known for its excellent customer service. It's ranked first in customer satisfaction on JD Power's list for 12 years in a row.

Frost has a large network of branches and ATMs, with 163 branches and over 1,300 ATMs across the state. You can easily open a Frost bank online checking account without any minimum opening balance requirements.

The account comes with low monthly fees that can be waived if you have a minimum daily balance of $1,000 or at least $100 in direct deposits. This makes it a great option for those who want to avoid unnecessary fees.

Frost also offers a fee-free overdraft protection program for up to $100, which can provide peace of mind for account holders. You can also receive direct deposits 48 hours earlier with Frost, giving you a head start on your finances.

If you need help with your account, Frost's customer service is available over the phone, email, or in local branches.

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Texas-based banks offer a range of services to suit different needs.

Some of the largest Texas-based banks include JPMorgan Chase, Wells Fargo, and Bank of America, which have a significant presence in the state.

You can open a checking account with a minimum balance requirement of $100 at some banks, while others may not have a minimum balance requirement at all.

Consider visiting a bank in person to get personalized advice from a financial advisor.

Several Texas-based banks offer mobile banking apps that allow you to manage your accounts and deposit checks remotely.

It's a good idea to shop around and compare rates and fees before choosing a bank.

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