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Game On for BBVA Compass

When you look across the Houston skyline," says Francisco González, chairman and CEO of BBVA Group, "there's not one building that defines it." True enough. In the biggest city in Texas, there is no Space Needle, no Empire State Building, no Gateway Arch, no Sears (or make that Willis) Tower. Houston has Heritage Plaza, the JPMorgan Chase Tower and the Wells Fargo Bank Plaza, but nothing on the iconic scale of the postmodern Cuatro Torres (Four Towers) in BBVA's corporate home of Madrid, or even Dallas' Reunion Tower, capped by a bulging-ball design.

No, in Houston, the city's primary architectural achievement, the Astrodome, sits vacant and neglected, and the former Enron Tower now goes by the less-than-catchy name of "1400 Smith Street."

González offers his observation not to puncture the civic pride of the city adopted as BBVA's U.S. headquarters, but to underscore the vibrancy and potential of what both he and BBVA USA manager Manuel "Manolo" Sánchez see as a perpetually growing city, one that perhaps would give any skyline feature trouble emerging from the bustle.

And now BBVA has made its own contribution to the urban landscape, a sleek, 22-story headquarters representing close to a decade's worth of Texas-sized ambition from across the pond.

A June ribbon-cutting at BBVA Compass Plaza attracted a crowd of 800 mostly local guests eager to see the results of the first new construction project completed in nearly 30 years in Houston's densely developed Galleria area.

"We chose Houston eight years ago as a base for our U.S. operations," Sánchez says at the ceremony, "because like BBVA, it's hardworking, fast growing and global. A city of the future."

The guests toured the seven upper floors, where the staff works in an open-space atmosphere with few doors and offices, no cubicles and apparently no printers. (Paper waste is eschewed by the environmentally conscious bank, where managers attend meetings only with smartphones and tablets.)

Some visitors peeked into the Innovation Lab off the lobby, where the company's mobile banking technology can be sampled on a wall-mounted, oversized iPhone with a screen as big as the door on a wine refrigerator.

BBVA, formally known as Banco Bilbao Vizcaya Argentaria SA, entered the United States less than 10 years ago to invest in a money-remittance business. A subsequent $12 billion acquisition spree netted several small banks in South Texas along with the former Compass Bancshares of Birmingham, Ala., which was purchased in 2007 for $9.1 billion.

BBVA Compass, as the combined U.S. subsidiary is known, is now a top 30 U.S. commercial bank in both deposits and assets, and the fourth-largest bank in Texas, where its 6 percent market share is about what Wells Fargo had in the state before acquiring Wachovia, Sánchez notes.

BBVA's U.S. growth strategy has had hiccups. The company took a $1.3 billion charge against earnings for 2011 after writing down goodwill at the U.S. business. It was the second major U.S. goodwill writedown in three years.

But analysts say that the business has bounced back, and structurally it is better positioned than other foreign-owned banks because it already meets the Federal Reserve's proposed requirement that foreign-owned institutions be held under a domestic intermediary holding company.

Prior to the financial crisis, the market had expected BBVA Compass to maintain its acquisitive streak, and some analysts say the predictions may yet come true.

"The fundamentals of the West are still attractive," says Chris Marinac, managing partner with investment research firm FIG Partners in Atlanta. "Being deeper in California still makes sense, and with the heft of the parent company you have to wonder to some extent do they circle back at that again."

At nearly $70 billion in assets, BBVA Compass still has ample room for growth in key markets within its seven-state branch footprint. It's still only the fourth-largest bank by deposit market share in Houston, for instance.

But it's unclear that any of BBVA's growth ambitions involve an expansion in the traditional sense.

Sánchez who was appointed as head of the U.S. banking operations in 2008, acknowledges that "internally we think about growth strategies, in which acquiring banks is one of the possibilities. But there are so many other things we could be doing in terms of developing new business models to acquire clients, through lighter fiscal infrastructure deployment, also through new ways of creating brand awareness."

For example, it is experimenting with direct-banking approaches to customer acquisition outside its branch footprint.

As part of this effort, BBVA Compass, which has marketed itself nationwide as the official bank of the National Basketball Association, offers NBA-themed checking and savings through a branchless account.

It also is developing a new generation of automated teller machines with video- conferencing, for transactions requiring chats with a teller, which could bring more BBVA Compass services into markets where the bank lacks a traditional branch presence.