This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Texas Bank Growth Needs to be Wrangled

All four of the states we have already surveyed for the fourth quarter had banks or thrifts included on TheStreet's Bank Watch List, that were undercapitalized under ordinary regulatory guidelines. Texas had none.

Texas Banks with Weakest Asset Quality

The following list includes all banks in the state with nonperforming assets comprising more than 10% of total assets as of Dec 30:

Nonperforming assets (NPA) include nonaccrual loans, loans past due 90 days or more and repossessed assets. Government-guaranteed loan balances are excluded. The ratio of net charge-offs to average loans is annualized.

The total risk-based capital ratios needs to be at least 8% for most institutions to be considered adequately capitalized by regulators and 10% for most to be considered well-capitalized. Most of the undercapitalized banks on the above list are operating under regulatory orders to achieve and maintain total risk-based capital ratios higher than 10%.

The list also includes financial strength ratings provided by Weiss Ratings. Weiss Ratings uses a very conservative ratings model, placing the greatest weight on capital strength, credit quality and earnings stability to assign ratings ranging from A-plus (Excellent) to E-minus (Very Weak).

The Texas institution with the highest nonperforming assets ratio as of Dec. 30 was Park Cities Bank of Dallas, which had $612 in total assets as of Dec. 30 and a crippling nonperforming assets ratio of 29.23%. The bank is operating under an April 2010 consent order from the FDIC and state regulators, agreeing to raise its total risk-based capital ratio to 13%, submit a strategic plan, and improve its credit administration and interest rate risk management.

Largest Texas Banks

Deposit gathering in Texas is dominated by three of the "big four" U.S bank holding companies.

JPMorgan Chase Bank NA -- the main subsidiary of JPMorgan Chase (JPM) -- has the leading deposit market share in Texas, with 18% of deposits in the state as of June 30, 2011, according to the most recent FDIC data. The bank's deposit market share grew from 16% a year earlier.

Bank of America NA-- held by Bank of America (BAC - Get Report) -- has a second-place market share in Texas, with 14% of deposits in the state as of June 30, with its share unchanged from a year earlier. After Tom Brown of Second Curve Capital said in December that he had suggested to Bank of America board of directors member Chad Gifford that the company consider selling part of its branch network -- with the company's Texas operations given as an example -- as a way of showing the market that the company's assets really were worth more than the fraction of book value the stock was trading for, the Wall Street Journal on Feb. 17 reported that the company might indeed consider a Texas sale if it were to come under severe stress.
2 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $17.52 0.46%
CFR $69.83 0.00%
CMA $46.39 0.00%
PB $55.57 0.00%
WFC $55.39 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs