2021 Mckinney Ave.
The North Texas financial landscape is being transformed as smaller banks from other states plant themselves in Texas while local and regional institutions are lured to Dallas-Fort Worth, where they see opportunity.
A recent newcomer is CrossFirst Bank, a $2.3 billion commercial and private bank based in Kansas City, Kansas, that moved into its Uptown Dallas headquarters in May. It occupies one floor of the new, ultra-modern McKinney & Olive business and retail landmark.
George Jones, who spent a career building and running local banks, was persuaded to come out of retirement to lead CrossFirst’s market entry. Jones founded Texas Capital Bank in 1998, grew its assets to $12 billion and retired as CEO in 2013.
“I’ve banked in Dallas all my life. When my non-compete burned off from Texas Capital, I got a call from [CrossFirst CEO] Ron Baldwin. He said, ‘Have you got another one in you?’ ”
With that, Jones became vice chairman of the bank’s parent company, CrossFirst Holdings, which was founded in 2007 during the nationwide financial crisis. Baldwin and a handful of others raised more than $15 million in capital and now have about 1,250 investors and $250 million in capital.
CrossFirst is a community bank that has worked its way down Interstate 35, opening banks in Wichita, Oklahoma City, Tulsa and now Dallas. It also operates an Energy Bank division that does business in a dozen states.
CrossFirst plans no branches anytime soon but, Jones said, “Tarrant County will be the first place we look when the time is right.”
Jones spent the past year working from temporary offices recruiting other veteran bank executives, including David Williams, the new bank’s president. Williams spent 32 years at PlainsCapital Bank, JPMorgan Chase and Wells Fargo.
Building a shareholder base was also done in the background as Jones and Williams worked their contacts – mainly individual and family investors. “That’s where we get most of our visibility as opposed to institutional investors who you don’t see,” Jones said.
“We called on a lot of people who were investors with us before and lot of new people as well,” he said. The result was $100 million raised to fund the bank; about half came from the Metroplex and includes Fort Worth unit-holders.
Jones and Williams know the banking community and have hired about 30 staff. They plan to have 65 people working in the 26,000 square feet of office space the bank leased for 12 years.
“It’s all about the people,” Jones said. “It’s hiring strong, experienced people who have relationships. The kind of business we want, bank with people not with the institution.”
The kind of business CrossFirst wants is focused on commercial and industrial lending, real estate funding and private banking services. It plans to leave wealth management, retail banking and consumer lending to the big banks that have established themselves in those markets.
“Pricing is competitive so you can’t complete on product. It’s on how you deliver that relationship,” Jones said. “We have a servant mentality and strongly understand that our livelihood is dependent on our customers.”
Federal Reserve Bank of Dallas researchers agree with that approach and wrote in a 2012 report: “Community banks, which rely on strong customer relationships and disciplined lending practices, weathered the financial crisis better than large, nontraditional banks.”
Wall Street’s “too-big-to-fail” banks dominated the financial world but, the Fed report said, “During the 2007–09 recession the merits of the community bank model re-emerged. With relatively high loan quality, U.S. community banks weathered the severe operating environment — the worst financial crisis since the Great Depression — better than their largest competitors, many of which required special government support.”
Community banks tend to focus on business lending so fueling local growth may be a reason to welcome the banks entering the North Texas market. Among those banks are Abilene-based First Financial, which opened offices in Fort Worth this year; Houston’s Amegy Bank, which plans a Tarrant County expansion; and Valliance Bank from Oklahoma City, which opened a downtown Fort Worth banking center to serve small businesses.
The Dallas Fed noted in its 2012 report that community banks held overall business loans equal to 30 percent of assets, compared with only 12 percent for the largest banks.
“Just as important,” the report said, “a significant share of this lending goes to small businesses. Community banks as a group have about 13 percent of assets in small-business loans, far above the 2 percent for the largest banks.”
The FDIC’s first quarter 2017 banking profile noted that smaller banks are putting credit on the street at a greater rate as well. “The 12-month growth rate in loan balances at community banks was 7.7 percent, while loan growth at non-community banks was 3.3 percent.”
Jones, who began his career in 1965 working at a bank part time while a student at the University of North Texas, is aggressive in setting goals for his post-retirement encore performance as a creator of banking success.
“I think the Metroplex and any other expansion in the state of Texas will give us all we need to build a $30 billion bank,” he said.