In May, Independent Banker, the flagship publication of the Independent Community Bankers of America (ICBA), published its annual list of the “Best-performing Banks 2023,” which includes six banks based in Texas or with branches in Texas.
“Through creativity, local knowledge and dedication to their customers, community banks continued to demonstrate the value of their relationship-based model in the past year,” notes Tiffany Lukk, Independent Banker’s managing editor. “Independent Banker’s annual listing of the Best-performing Banks 2023 illustrates how critical it is for community banks to lean into their strengths while seeking out innovation to better serve Main Street America.”
ICBA compiled this year’s rankings with the aim of recognizing community banks that are consistently high performers. Using FDIC data, the organization took into account pre-tax return-on-assets (ROA) figures from the past three years, with the most recent year weighted at 3x, the second most recent year at 2x and the third most recent year at 1x. Community banks were divided into three broad segments based on asset size and ICBA ranked each segment based on the three-year weighted average ROA. A bank must have a rating of C or higher by Kroll Bond Ratings (formerly LACE) to be considered for the ranking.
Texas-based “Best-performing Banks” with assets less than $300 million (of 25 listed)
No. 2: Brazos National Bank, Richwood, 3.23 pretax ROA (three-year weighted)
No. 18: The Cowboy Bank of Texas, Maypearl, 2.6 pretax ROA (three-year weighted)
No. 23: The First State Bank, Abernathy, 2.52 pretax ROA (three-year weighted)
Texas-based “Best-performing Banks” with assets more than $1 billion (of 25 listed)
No. 1: State Bank of Texas, Dallas, 4.46 pretax ROA (three-year weighted)
No. 5: Wallis Bank, Wallis, 3.52 pretax ROA (three-year weighted)
No. 21: United Texas Bank, Dallas, 2.29 pretax ROA (three-year weighted)
There were no Texas-based banks among the 25 banks that made the $300 million to $1 billion segment of the list.
Dallas-based State Bank of Texas, which topped the list of banks with more than $1 billion in assets, credits its growth to “being owner-operated, making it capable of adapting quickly to market demands and client needs,” according to a press release. “Additionally, being focused on hospitality lending contributed to the bank’s growth and success. During the COVID-19 crisis, when many banks halted lending to hotels, State Bank of Texas saw an opportunity to acquire new clients.”
“Combined, our owners and board own nearly 165 hotels in the US. That knowledge and experience is of significant benefit to the health of our business and to our clients,” says Sushil Patel, president of State Bank of Texas. “Our clients understand the value of having a lender they can contact at any time.”
State Bank of Texas was established in 1987 by hotelier Chan Patel and continues to be owned and operated by the Patel family, with Chan Patel (father) serving as CEO, Sushil Patel (son) as president and Rajan Patel (son) as chief lending officer and executive vice president. It is the largest Indian-American-owned bank in the U.S.