Dozens of banks have opened in Texas in the last decade, but San Antonio is one market that has proved difficult to crack.
While organizers have flocked to Houston, Dallas, and Fort Worth, they generally have steered clear of San Antonio, because the market has not undergone much consolidation and it is viewed as sufficiently banked, bankers and industry observers said.
That could be changing. One bank holding company recently opened for business there, and two others in organization are expected to open in the first half of next year.
The three companies are going after distinct audiences. One will target small and midsize businesses. Another will market to wealthy Mexican families and individuals - on both sides of the border - and the third says it largely will target "underbanked" Hispanics.
What they have in common is a belief that San Antonio, Texas' third-largest metropolitan market, can support new banks. They point to the strong, diversifying economy that serves as a hub for south Texas, the city's growing population, and strong ties to Mexico.
"The economy is good - it's growing," said Brent Givens, president and chief executive of Bank of San Antonio, which expects to open in the second quarter. "We are diversifying away from military and tourism and moving into manufacturing and distribution."
Of the 91 banks that have opened around Texas in the past 10 years, only two were in San Antonio. Both opened in 1999, and both were sold just a few years later.
Alta International Bank plans to start in March with $8 million of capital and will focus on the wealthy Mexican market. Bank of San Antonio plans to start with $20 million in the second quarter and will focus on small and midsize businesses.
Also, Family Bancorp Inc. of San Antonio wants to build a branch network that focuses on underbanked Hispanics in San Antonio and south Texas. It recently announced a deal to buy the $49 million-asset First National Bank of Refugio, and it plans to use that bank's charter to open several branches in lower-income markets in San Antonio.
Curtis Carpenter, the managing director of Sheshunoff & Co. Investment Banking of Austin, said that San Antonio has not been particularly welcoming to new banks, because it already has a number of strong local ones, including the $11.7 billion-asset Frost National Bank, the $1.7 billion-asset Broadway National Bank, and the $590 million-asset Jefferson State Bank.
The city also is home to two large credit unions, each with more than $1 billion of assets, and large out-of-state banking companies such as Wells Fargo & Co., Wachovia Corp., and Bank of America Corp are strengthening their grip on the market by continuing to open branches, he said.
One potential challenge for new banks could be finding talent. San Antonio has not had as much consolidation as other Texas markets, so there are fewer experienced bankers looking for work, Mr. Carpenter said.
"Still, they'll be able to find some, because there is such an appeal to moving over to one of these start-ups, where they can get an equity interest and opportunity to build something from scratch," he said. "It might be exciting for a veteran banker who is bored where he is, and a chance to build wealth if the bank sells."
Mr. Given pointed to the Toyota Motor Corp. plant that opened this fall on the south side of town and has brought suppliers with it. Medical and technology companies also are growing in the city, he said.
"This is the right time for a locally owned, locally managed bank to do business with locally owned businesses," he said. "The big guys are coming to town and getting a share. Why shouldn't we create a local bank to offer an alternative?"
Bank of San Antonio is being organized by a well-known and diverse group of San Antonio business leaders, who will put up $10 million of capital. They are looking to raise another $10 million from local business executives, who they hope will become customers.
In addition to Mr. Given, the organizers include Richard T. Schloberg 3rd, the former publisher and chief executive officer of the Los Angeles Times; Robert M. Cavender, the president of Cavender Auto Group; Gene Dawson Jr., the president of Pape-Dawson Engineers Inc.; and Dr. Mark E. Healy.
Mr. Given, the only organizer who will work at the bank, stepped down as the chief operating officer of Compass Bank-San Antonio to help start the new bank. He also worked at a previous Bank of San Antonio, which Compass Bancshares Inc. of Birmingham, Ala., bought in 1995 and renamed Compass Bank-San Antonio.
A few of the core investors of the new bank - Bruce Bugg Jr., Steven Q. Lee, and James W. Gorman Jr. - were also investors in the original Bank of San Antonio, which opened in 1986.
"We think there is a growing market in San Antonio, and with the relationships that the organizers have in the community, we will be able to build a broad base of interest," Mr. Bugg said.
Mr. Carpenter said he expects the new bank grow quickly, because of the group's roots in the community.
"These are the same people who built the Bank of San Antonio and sold to Compass," he said. "I feel pretty comfortable with what they are attempting to do there. They'll be pulling on the same relationships and have some built-in business. ... Being able to start with quality customers should give them a clean launch and should make for a really profitable situation."
Alta's organizers say they see an opportunity offering private banking to San Antonio's wealthy Mexicans, who are drawn to the city that serves as a hub for the south Texas economy and offers excellent health care.
Three San Antonio residents and three residents of Monterrey, Mexico, who do business in San Antonio are organizing Alta. They plan to open the first branch in the northeast quadrant of the city, where wealthy Mexicans own about 30% of the expensive homes, said Glenn Biggs, the new bank's chairman and chief executive officer. It then plans to open loan production offices in Monterrey and along the U.S.-Mexico border, where it would sell loans to Mexicans who own U.S. businesses.
The bank will operate as a private bank for wealthy individuals interested in protecting or enhancing their wealth, and it will work with San Antonio small businesses, he said.
"San Antonio has long had a simpatico kind of relationship with northern Mexico," Mr. Biggs said. "Monterrey is a city of 5 million people, and that will be a target area for us. And in time we will have facilities in the border areas."
