Cleve T. Breedlove doesn't look for fights. But, being a South Texan, he's not about to run away from one.

Mr. Breedlove, incoming chairman of the Independent Bankers Association of Texas, one of the largest and most powerful community banking groups in the county, will lead the first legislative charge to get Texas to opt out of interstate branching.

In so doing, Mr. Breedlove and the group will go head to head with the superregional banks that have the most to gain from interstate branching: Chemical, BankAmerica. First Interstate and, the big daddy of all pro-interstate banks, Nationsbank, whose biggest subsidiary is in Texas.

Mr. Breedlove, chief executive of Firstbank in Los Fresnos, joined the bank in 1970 when it was called Los Fresnos National and had $2.5 million in assets. It has since grown to $1.74 million in assets.

On the eve of the annual convention of the IBAT in Austin, American Banker talked with Mr. Breedlove about what's ahead for Texas community banks in the next year.

Q.: Why will the trade group try to scuttle interstate branching in Texas?

BREEDLOVE: It's a big issue for community bankers here. A lot of people I've heard around the country say its just a non-issue, but it's a very real problem for rural, community banks.

We have more than 800 member banks, and a lot of them are still in relatively isolated areas. They will automatically be at a disadvantage if it's easier for a large bank to open a branch in their community.

There are going to be a few other legislative issues arising in the next session [in about four months], but that will be the one we concentrate on.

Q.: Do you think you can win?

BREEDLOVE: I would say we have a real positive feeling about it.

There's already a sentiment in the state against the larger banks. They've suffered from the perception that they are not supporting their communities. And community banks have come on strong in recent years.

Q.: Hugh McColl [chairman of NationsBank] won't be happy if he can't take advantage of interstate branching in Texas.

BREEDLOVE: Well, he's been leading the parade on this for a while. But we don't see it as just us versus NationsBank.

There are a lot of important issues wrapped up in this, like how do we tax these companies. It creates too much uncertmnty for the banking industry and the economy.

Q.: Will the IBAT rethink its position later, say in a few vears. when some of that uncertainty is dealt with?

BREEDLOVE: That's not part of our strategy. We don't have a plan of allaying it for two or three years and then letting it go through. But, who knows what can happen that far in the future.

Q.: Is an issue like interstate branching going to galvanize community bankers all the more, perhaps to become more politically active?

BREEDLOVE: Well, it's not a new position for us. We're just following through on a long commitment.

But I think it will be a continuation of community banking coming into higher prominence. There's a recognition among legislators and the public of our worth:

That's not to say we have to be complacent. Community banks still have to strive to reach a level of competitiveness with the larger banks.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.