Texas State Bank

Texas State Bank executives—Vance Jones, left, executive vice president of lending at Texas State Bank, and Gary Cox, the bank’s president, say the community bank’s continued lending success is based on local control and personal attention.
Texas State Bank executives—Vance Jones, left, executive vice president of lending at Texas State Bank, and Gary Cox, the bank’s president, say the community bank’s continued lending success is based on local control and personal attention.

Diversity Plugs Oil Influence in West Texas

Texas State Bank
San Angelo, Texas

Assets: $259 million
Retail locations: Three
Full-time employees: 60
Chartered: 1963
Website: www.txbank.com

Diversity helps keep an economy healthy, and San Angelo, Texas, has it. The economy of the west Texas city is powered by Goodfellow Air Force Base, Angelo State University, two major hospitals, cotton farming and the oil industry. Thus it’s no surprise that Texas State Bank, the only community bank chartered in San Angelo, has enjoyed solid growth in its lending business. Volume rose 7 percent in 2014 and 10 percent in 2013.

“One of the positives of San Angelo is that it has not been a boom or bust environment,” says Gary Cox, president of the $260 million-asset community bank. “It’s always kind of steady.”

The diversity of the community is reflected in Texas State Bank’s loan portfolio: 41 percent commercial or commercial real estate, 30 percent residential mortgages, 20 percent agricultural, 5 percent construction and land development, and 4 percent consumer installment credit.

Oil isn’t always king

Cox notes that the oil industry, while pouring cash into the community during good times, does not hold sway in San Angelo like it does in some other Texas communities. “When oil prices were high, the companies drilling and acquiring leases were throwing a lot of money around,” he says. “As the oil market started heating up, we tried to remind ourselves it wouldn’t last forever.”

Cox’s prediction was correct. As oil prices have dropped in recent months, activity from the oil industry has declined. But Texas State Bank has taken the slowdown in stride. “Our lending exposure [related to the oil industry] has not been tremendous, so we’re not losing sleep over it having a long-term impact on our model,” he says.

In fact, a slowdown in the oil business has an upside for some of the community bank’s customers—they may regain employees who had been lured away by oil dollars. “We have a number of employers who will be glad to have some truck drivers and other employees back,” says Vance Jones, the bank’s executive vice president of lending. “We can probably absorb all of those people back into the local economy.”

Nevertheless, the slide in oil prices may affect loan business in 2015, Cox adds. He expects no significant growth in volume for the year.

Prosperous medical community Lending to the medical community was one area of success for Texas State Bank in 2014. San Angelo is home to Shannon Medical Center and San Angelo Community Medical Center, which together employ more than 3,000 people.

“The medical community likes the flexibility a community bank can provide,” Cox says. “We don’t have a book of guidelines that was produced in California or New York or somewhere that says this is how we do this kind of loan.”

Cox says Texas State Bank’s continued success is based on local control and personal attention. The bank has a full-service trust department that serves clients deemed too small by larger banks, and its lending department can pull the trigger quickly. “We know we need to add value with our service, and quick response is one way to do that,” Cox says.