Magazine article American Banker

No Letup Seen in Buyouts of Small Houston Banks

Magazine article American Banker

No Letup Seen in Buyouts of Small Houston Banks

Article excerpt

Houston is hot for community bank deals.

Seven deals to buy Houston banks have been announced this year, and 19 since January 1998. The latest, announced last month by Whitney Holding Corp. of Houston, was a $58 million deal for Bank of Houston.

The nation's fourth-largest metropolitan market has dozens of independent community banks, and observers say the current consolidation wave there will continue.

"There are several buyers who have told us that they would take a look at anything in Houston," said Charlie I. Miller, managing director of investment banking at Alex Sheshunoff & Co. in Austin, Tex.

Most of the deals have been in-market, with companies such as Sterling Bancshares Inc., Prosperity Bancshares, and Woodforest Bancshares buying smaller competitors. But the Whitney deal illustrates out-of-state banks' eagerness to enter Houston, which has a diverse economy and a strong concentration of deposits.

"The greater Houston area has $45 billion of deposits, which is more than the whole state of Louisiana," said William L. Marks, chairman and chief executive officer of $5.2 billion-asset Whitney. "It's a no-brainer to be there."

Another newcomer is $42.5 billion-asset Southtrust Corp. of Birmingham, Ala. The company entered Houston in March by purchasing Langham Creek National Bank for $24.5 million and followed up in July with a $18 million purchase of Navigation Bank.

Analysts and investment bankers note that a main reason Houston still has more than 50 banks with less than $1 billion of assets is that Texas was one of the last states to get rid of unit banking. …

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