Texas Banker Battles for Bragging Rights as Biggest

Despite Texans' reputation for bravado, Texas bankers have tended to be genteel, not boastful, when discussing how they compete with one another.

But that is changing now that Dennis Nixon has set out to make International Bancshares the biggest banking company based in the state.

Mr. Nixon, the Laredo-based company's chairman and chief executive officer, wants to take bragging rights away from Cullen/Frost Bankers Inc. in San Antonio, whose leaders are none too pleased.

In a recent interview, Mr. Nixon said he is negotiating acquisitions that would make his $4.2 billion-asset company larger than Cullen/Frost, which now has $5.2 billion.

His motivation: "That's part of Texas. It's being the biggest."

Officials at Cullen/Frost, though acknowledging Mr. Nixon as a formidable competitor, stress quality.

"It's not how big you are but how focused your strategies are," said Phillip Green, Cullen/Frost's chief financial officer.

"I'm happy for our Texas-based competitors," Mr. Green added. "If they're growing, it means the economy of the state is growing." But he noted that Mr. Nixon has his "sights on a moving target."

Cullen/Frost is making its own acquisitions. It announced last month that it plans to buy $250 million-asset Harrisburg Bancshares of Houston.

Both Texas-based companies are dwarfed by out-of-state bank holding companies such as NationsBank Corp. of Charlotte, N.C., which has $50 billion of Texas assets; Chase Manhattan Corp.'s Texas Commerce Bank, with $23 billion of assets; and Banc One Corp. of Columbus, Ohio, with $22 billion of assets in the state.

Cullen/Frost, the most prominent Texas bank to survive the long regional recession in the 1980s, has for several years held the title of largest independent commercial bank in the state.

International Bancshares views the contest as sport.

"Our goal is to be the Super Bowl champs," Mr. Nixon said. "We're $1 billion behind Cullen/Frost, but they had a 100-year head start on us."

Mr. Nixon said he is hoping to do some deals that could be announced in coming months. One source said Mr. Nixon wants to buy $1.3 billion-asset Pacific Southwest Bank, a privately held thrift that is on the block in Corpus Christi. But at least three others-Norwest Corp. of Minneapolis, Compass Bancshares of Birmingham, Ala., and Coastal Bancorp of Houston-are also said to be interested in the company. All declined to comment on the speculation.

Pacific Southwest is expected to select the winning suitor in December, sources said.

When asked about Pacific Southwest, Mr. Nixon said, "That's a possibility, but I'm not in a position to comment."

Mr. Green said Cullen/Frost is one of the few big banks that is not interested in the property.

International Bancshares, a closely held company that has built its business by serving customers on both sides of the Texas-Mexico border, has stepped up its pace of acquisitions during the past seven years, Mr. Nixon said. Founded in 1966, International has been expanding from its southern Texas base. It closed a deal last week to buy five-branch, $235 million- asset University Bancshares of Houston.

Robert Ollech, an analyst at Principal Financial Securities, said Texas is primed for more deals, especially ones of significant size. "The pricing has been very good among sellers," he said. "If I were a banker, I'd look at it very seriously right now."

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