Border-Town Bank in Texas Thrives on Mexico Trade
O'Hara, Terrence, American Banker
BROWNSVILLE, Tex. - In full view of the bridge that spans the Rio Grande between here and Matamoros, Mexico, dozens of Mexican boys each day strip off every stitch of clothing, wade in up to their necks, and cross into the United States illegally.
Above the din of the bridge traffic, you can hear the boys chattering - unworried - as they make their way across the dirty stream that separates the two countries. On the other side, they dress and disappear into the crowded streets of downtown Brownsville.
All this in full view of the armed Customs agents and representatives of half a dozen other U.S. government agencies at the crossing gate. The Border Patrol, which alone is charged with policing the ban against unregulated crossing between the United States and Mexico, doesn't have a heavy presence here.
The Peso and the Dollar
The crossings illustrate a simple fact about this border community: Notwithstanding the debate over the North American Free Trade Agreement, the United States and Mexico, at least here, are as one.
And it's Mercantile Bank that has picked up most of the transborder banking business - so it's no wonder that Mercantile, the largest bank in Brownsville, made its logo out of a silver dollar and a peso.
"If Mexico's economy suffered, so would our bank," said Mercantile chairman and CEO E.A. "Gene" Gibbs.
Moreover, if community banks take on the character of their communities, then Mercantile is a pure community bank - taking on the strengths and contradictions of this bustling town.
Spanish Spoken There
One of its top three officers, Graciela Guttierrez, is a Mexican citizen. Nearly 99% of Mercantile's employees are bilingual. It is 97% owned by a wealthy Mexican hospital operator, Olegario Vazquez Rana, but its chief executive is a died-in -the-wool Texan who speaks Spanish only haltingly.
Its annual report is printed in Spanish and English. And, though the the bank recently expanded to the north, Mr. Gibbs said he wished he could open a branch in Vera Cruz or Mexico City, where the bank has hundreds of customers. American banks are barred from owning Mexican banks under Mexican law.
In his 10 years as head of Mercantile, Mr. Gibbs has dealt with more changes in his world than most community bankers, even in big cities, have had to deal with in a lifetime.
One of the few MCorp banks to survive that company's 1989 bankruptcy debacle, Mercantile has been at the heart of the blinding growth of Mexican trade here and the mass influx of both people and companies that went with it.
"You really have to know what you're doing down here," Mr. Gibbs said. "It's not like any other banking environment I know."
The difference lies in the fact that almost every facet of daily life in Brownsville, whether business or social, revolves around its proximity with Mexico.
Like the Texas border communities of Laredo and El Paso, Brownsville and the people who do business there have made a profitable sport of building trade around the complex and restrictive barriers, legal and otherwise, that separate the two countries.
Main Trading Partner
Not surprisingly, Mexico is Texas' leading trade partner, with exports totaling $18.8 billion in 1992.
Texas products amount to 44% of the total U.S. products exported to Mexico according to the Brownsville Economic Development Corp.
And Mercantile, with its myriad trade products - such as letters of credit, foreign exchange, international wire transfer, and a host of links with the Export-Import Bank, the Small Business Administration, and the Texas Department of Commerce - is as busy as the toll takers on the Brownsville-Matamoros bridge.
To be sure, Mercantile's competitors all have pieces of the trade action in Brownsville.
Texas Commerce Bank, the Chemical Banking Corp. …