Sovereign Bank in Dallas is converting its loan production office in Houston into a regional headquarters and is eyeing further expansion in Texas' largest city.

Citybizlist in Dallas reported last week that the $847 million-asset Sovereign has signed a deal to lease more than 7,000 square feet in an uptown Houston office building where it recently opened a loan office, where it primarily offers private banking and commercial real estate and energy lending. In a statement on the bank's Web site, Sovereign Chairman and Chief Executive Thomas J. Mastor said that the bank intends to open other branches in Houston in 2012.

Founded in 2004, Sovereign is well positioned to expand because it is flush with capital and has very few problem loans on its books, according to Federal Deposit Insurance Corp. data. The bank is also coming off its most-profitable year ever, reporting earnings of $6.6 million for 2011.

Sovereign has eight branches in the Dallas-Fort Worth Market and two branches in the Austin area.

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