Highlands Bancshares Inc. of Dallas is planning an aggressive branch-building strategy in rural and urban markets to gather deposits it will deploy largely in the Dallas area.
Last week the $165 million-asset company opened its first Dallas branch, under the name Highlands Bank, and Thomas Yenne, its chairman and chief executive, said it intends to open 10 more there and five in the Jacksboro area over the next five years.
Highlands Bancshares has one branch in Jacksboro, Tex., and one in nearby Runaway Bay, but Mr. Yenne said that even though the branches are flush with deposits, lending opportunities are scarce in those markets.
"The problem … [the branches] have is that they don't have a place to deploy their liquidity," he said. "They are 50% loaned out. In Texas cities, the average loan-to-deposit ratio is 85% to 95%."
Still, he said Highland wants to add more branches in and around Jacksboro — about 90 miles from Dallas — because the drilling that recently started there at one of the world's largest natural gas fields has created significant wealth.
"We have checking accounts there with $1 million in them," Mr. Yenne said. "That is value. That is the golden goose."
Highlands Bancshares was organized last year with the intention of buying a rural bank and expanding it into the more robust Dallas market.
Company organizers found their match last year when they learned that the owners of First National Bank of Jacksboro were looking for a buyer that would allow it to retain its identity. Highlands bought it Dec. 31 for $21 million.
(Highlands will continue to operate the Jacksboro branches as First National Bank of Jacksboro and will open branches in Dallas as Highlands Bank.)
Since the acquisition the Dallas lending team has added $20 million of loans in that market without having a branch there.
But Mr. Yenne said that he expects loan growth to accelerate now that the Dallas branch has opened. Some of Highlands' 270 investors started bringing deposits to a temporary Dallas branch about four weeks ago, so when the permanent one opened last week it already had $3 million of deposits, he said.
Highlands is focusing on making commercial and commercial real estate loans of between $1 million and $10 million. Its legal lending limit is around $4 million, but Mr. Yenne said one of its investors is a San Antonio bank (which he would not name) that partners with it on participations.
Aside from the additional branches, Highlands is counting on a team of experienced bankers to generate loan and deposit growth.
Its president and chief operating officer, Robert Butler, was an executive vice president and a chief retail officer in the Dallas region for the $15.7 billion-asset Guaranty Bank of Austin.
Other Dallas bankers who joined Highlands while it was in organization or shortly thereafter include Lawrence Bates, its managing director of entrepreneurial and commercial banking, formerly the Dallas corporate lending team leader for Cullen/Frost Bankers Inc. of San Antonio; J. Terry Smith, Highlands' managing director of real estate lending, previously a senior vice president at Cullen/Frost; Steven Boswell, chief risk officer for Highlands, previously Guaranty's head of capital markets; Robin Wantland, Highlands' managing director and president of commercial banking, previously the national director for commercial banking at Compass Bancshares Inc. of Birmingham, Ala.; and Samuel Baughman, Highlands' chief financial officer, previously a financial adviser for two oil and gas investors.
