Texas Primaries

The results are in the books for the delayed Texas primaries
and, as usual, there was plenty of drama, and a few surprises.  Here
is a brief recap of the high and lowlights:

US Senate
IBAT-endorsed David Dewhurst fell short of the majority vote
needed to avoid a runoff with 46%.  He and Ted Cruz will no doubt have a
lively and costly campaign leading up to the July 31 runoff.

On the Republican side, there were 23 contested races. 
The IBAT FedPAC contributed in sixteen of these, and supported the winners in
all.  The other seven races were either very crowded open-seat races, or
contests in which Rs are running in solidly D districts with little, if any,
chance of success in November.

On the Democratic side, there were 16 races, including
several open seats and a number of candidates running in solidly R districts. 
We contributed in three of these races, won two, and were unsuccessful with the
loss of El Paso Congressman Silvestre Reyes.

For the two-year election cycle, we have contributed in 27
of the now 32 Texas Congressional races, along with several key out-of-state

Texas Senate
There were ten contested races on the R side.  We made
contributions in nine of these, and were nine for nine.  There were no
contested primaries on the D side.  So far this cycle, the IBAT PAC has
made contributions in 23 (of 31) Senate races.

Texas House
There were 59 races in the Republican primary  . . . we
contributed to candidates in 37 of these, again with those we didn't being open
seats with no clear consensus among our members or Rs running in D
districts.  We contributed in five open seat races after polling our
district bankers, and those races resulted in three outright wins and two
runoffs.  Additionally, four incumbent candidates supported by the IBAT
PAC will be in runoffs.  Five incumbents supported by the IBAT PAC lost
their races . . . Beck, Christian, Eissler, Nash and Truitt.

On the D side, there were 23 contested races, and the IBAT
PAC was six for six in those where we made contributions.

So far this cycle, we have made contributions to 104 candidates
in the Texas House races.

You can follow all of the election results on the Texas Tribune
, or get vote totals for the Republican and Democratic primary
races on the Secretary of State's

Special thanks to all of you who provided input regarding
races in your districts to allow us to make early contributions to a number of
candidates.  We will be "going back to the well" for the runoffs, and hope
to have the opportunity to be engaged in a number of these contests. 
Additionally, your contributions to the IBAT PAC and IBAT FedPAC are greatly
appreciated.  Thanks to all of you for your faithful support of our political

Fun Fact: Shelby American Tour

Later this year, one Texas community bank will attract
locals and car enthusiasts as they host a display of rare and vintage
automobiles.  LegacyTexas Bank in Plano hosts Shelby American's 50th Anniversary Tour
on its only Texas stop.  The event, scheduled for Saturday, June
30th, will celebrate one of the most recognized American auto brands of
the last half century. 


Chosen as one of only 13 tour sites nationwide,
LegacyTexas will host the event at its corporate headquarters on Legacy Drive
and open the day's activities to the public at no charge. The local
community bank, which will soon celebrate its 50th anniversary, is
majority-owned by the Shelby family of North Texas. According to Executive
Vice President Aaron Shelby, the tour will honor the innovation
and craftsmanship synonymous with the Shelby name, as well the memory
of the late Carroll Shelby, the iconic auto designer.

General Purpose Reloadable Card

Consumer Financial Protection Bureau (CFPB) is seeking information about
prepaid cards known as a general purpose reloadable card (GPR card). GPR cards
are issued for a set amount in exchange for payment by a consumer. They are
reloadable and may use devices such as a key fob or cell phone app that access
a financial account.  At this time, the CFPB is not seeking information
about closed loop cards, debit cards, non-reloadable cards, payroll cards,
electronic benefit transfers, or gift cards.  The CFPB is gathering this
information to determine how to best implement consumer protection rules for
GPR cards. The CFPB has put together an online visual guide to prepaid cards
and why they are interested in them entitled "What's the deal with prepaid cards?"

TIB's 30th Anniversary

congratulates The Independent Bankers Bank (TIB) which celebrated its 30 year
anniversary at its annual shareholders' meeting in Irving last week. "It
was a truly memorable event with over 250 shareholders, directors and past
directors in attendance," said IBAT President and CEO Chris Williston.

there was plenty to celebrate, including TIB's record consolidated net income
of $15.9 million and a record-setting return of revenue to TIB customer banks
of $25.5 million. TIB now boasts customer banks in all 50 states and Guam.

was instrumental in passing legislation in the 1981 Texas Legislative
session that authorized the creation of the Bankers Bank.

The State of Our Economy

I recently kicked off a tour across Texas to talk
about the state of our economy and a few important fiscal challenges we are sure
to face in the future. I think it is important for Texas taxpayers to
understand the facts, figures and trends fueling our economy and ensuring our
strong fiscal health.

The Texas economy is strong. Unemployment is only 7
percent, more than a point better than that of the entire country. The number
of Texas workers reached an all-time high of 10.65 million in December 2011.
Texas employers replaced all 427,600 jobs shed during the recession as our
economy rebounded more quickly than the U.S. as a whole, and continues to add
jobs. Nationally, through March 2012 only 41 percent of recession-hit jobs have
been recovered.

In addition, we've had 25 consecutive months of
growth in sales taxes and our rainy day fund is a healthy $6.2 billion.  In many ways, it is good to be a Texan.

For example, Texas banks
are healthier than nationwide averages, reflecting the relatively intact
Texas housing market and comparatively resilient strength in the overall
economy. According to the Federal Deposit Insurance Corporation, only 7.4
percent of Texas depository institutions were unprofitable during the period
ending December 31, 2011, only half the national average of 14.7 percent. Texas
banks also had an average return on equity of 9.9 percent, compared to 8.1
percent nationally. In addition, Texas banks showed a slightly higher return on
assets, a higher return on net equity, and lower nonperforming assets than the
average of national banks.

However, while our economy is expanding, a growing
population and demand for public services as well as an increase in federal
regulatory burdens could pose challenges to the economic growth we are
currently experiencing.

For example, the federal health care reform law
will drive Texas Medicaid spending sharply upward. By 2014, Texas' Medicaid
population is projected to grow by more than 75 percent, from 3.5 million to
6.2 million recipients. By 2023, we expect to see Medicaid consume more than 37
percent of general revenue, with public education receiving about the same
share. That means three-fourths of state spending will be on just two services,
leaving other state needs fighting for a share of the remaining quarter.

Fortunately, there are things we can all do in our
own neighborhoods to help the economy. Get engaged. Find out what you can do to
institute smart practices in your community or the public sector. Look for ways
various levels of government can cooperate with each other to save money. For
example, in one Dallas-area suburb, school district officials collaborated with
city officials to house district and city offices and the police department in
the same building. The measure saved about $4 million in combined construction
costs and another $50,000 annually in district operating costs.

Keeping this economy strong is up to all of
us.  Let's work together and continue to
make Texas the economic model for the rest of the country.

Susan Combs is Texas Comptroller of Public
Accounts. For more information on the Texas economy, please visit the
Comptroller's Texas Ahead website at

Memorial Day

In observance of Memorial Day,
the IBAT office will be closed on Monday, May 28, 2012 and will reopen for
regular business hours on Tuesday, May 29.

With solidarity, the IBAT family
says, "thank you," to the families of those who have been lost in current and
past armed conflicts.  We are eternally grateful for the ultimate
sacrifice that has been made by many for the freedom we enjoy. 

Happy Memorial Day and God Bless

Branch Certificate Policy Revision

As of June 1, 2012, the Texas Department of Banking will no longer issue branch certificates of authority, and Texas state chartered banks will no longer be required to display a certificate of authority at each branch.

The Department will continue to notify banks when branch applications are approved.  However, instead of notifying the Department five days prior to opening the branch, banks will be given up to ten days to notify the Department after an approved branch is opened.  Upon notification, the Department will reflect a branch opening in its information systems.  Banks may retain existing branch certificates of authority.

This new policy does not apply to policies regarding a certificate of authority issued under Texas Finance Code § 32.006 to a bank’s home office.  And it does not affect the requirements of Texas Finance Code § 32.203 and 203.001 with regard to establishing and engaging in the business of banking at a branch office.

Questions may be directed to Program Specialist Carrie Lemke at (512) 475-1342 or Director of Corporate Activities Dan Frasier at (512) 475-1322.

Memorial Day: Proper Flag Display

Displaying the state and national flags is an important duty in carrying out our mission for the people of the state of Texas.  The proper display of flags leads the people into times of joy and mourning, and into times of reflection and celebration. 

On the morning of Monday, May 28 (Memorial Day), both the U.S. and State of Texas flags should be raised briskly to full-staff and then slowly lowered to half-staff until noon.  At noon, both the U.S. and the State of Texas flags should be raised briskly to full-staff for the remainder of the day.  Flags should be at full-staff on Tuesday, May 29.  

These requirements only apply to days that your institution normally displays the flag.  

Please read Best Practices Concerning the Flying of State and National Flags for the general rules and Statutory References for Proper Display of the Flag for proper procedure.

Al Green Outreach Meeting

Over 30 IBAT members attended an outreach meeting hosted by Congressman Al Green on May 21, 2012 in Houston. The Congressman is a member of the House Financial Services Committee, and recommended this meeting to hear directly from community bankers.  

"We are grateful to the Congressman for his interest in our sector of the industry," said Chris Williston, President and CEO of IBAT.  "He has always had an open door for us, and thoughtfully considers our concerns.  We appreciate his willingness to meet with a cross-section of our members in the Houston area, and look forward to continuing an excellent relationship with Congressman Green."

Congressman Green stated that he had carefully reviewed the briefing materials we sent prior to the meeting, and was struck by the number of challenges facing community banking, which he described as "overwhelming." He proposed putting together a small group of local bankers to call upon on a regular basis to discuss issues of importance.  

IBAT wishes to express our appreciation to Congressman Green and his staff for hosting this meaningful event. With the U.S. House of Representatives on recess this week, IBAT encourages community bankers to reach out to Congressional officials on issues of importance.  Pertinent financial services issues can be found on the IBAT website.

Welcome Gordon Moore

IBAT Services is proud to announce the addition of Gordon Moore as the new vice president of business development.  In this role, Moore will proactively pursue new endorsement opportunities and manage existing relationships with the IBAT-endorsed service providers. Moore's addition to the team will further enhance IBAT Services' commitment of "enhancing profitability of community banks by marketing quality products and services."

"Our member banks rely on IBAT Services more than ever in today's competitive market and Gordon Moore's leadership on the IBAT Services team will be beneficial to all," Curt Nelson, IBAT Services President, said. "His proven ability to identify strategic partnerships and build relationships will be invaluable."

Moore brings to IBAT Services six years of experience helping a variety of companies achieve their legislative, regulatory and business goals. His past experience includes working with companies in the telecommunications, private equity and government sectors. Most recently, Moore held the position of account executive at Public Strategies, Inc. In this role, he developed internal and external communications strategies for clients' corporate citizenship and sustainability initiatives. Moore also worked on site at a Fortune 50 global telecommunications leader, reporting directly to the vice president of public affairs.

He holds a Bachelor of Arts in government with a minor in business from The University of Texas at Austin. Gordon is also very active in the Austin Young Men's Business League and currently serves as the League's Vice President of Communications.

2011 Top Performers

American Banker
has released its list of 2011 community bank top performers. Each Spring the
publication recognizes the top 150 community banks in the country with the
highest returns on average equity (ROE) as reported in the December 31

wishes to congratulate the following bank members who were recognized:

  • Mainland
    Bank, Texas City  (28.13)
  • First
    National Bank of Fabens (27.87)
  • TexasBank,
    Brownwood (25.27)
  • Cowboy
    Bank of Texas, Maypearl (25.00)
  • Bank
    of DeSoto (23.85)
  • First
    National Bank of Central Texas, Waco (22.69)
  • First
    State Bank, Louise (22.50)
  • Crockett
    National Bank, San Angelo (22.28)
  • First
    Bank, Roxton (22.05)
  • Peoples
    Bank, Paris 21.80)
  • Horizon
    Bank,SSB, Austin (21.29)
  • First
    State Bank, Bedias (21.09)

Banking Industry Differences

IBAT for years has been espousing the absolute necessity of recognizing the stark differences that have evolved in the banking industry.  Tiered regulation, recognizing that the risk profiles, activities and cultures of community banks and the too-big-to-fail conglomerates are dramatically different, is critical to ensure a future for our successful and important business model.  

Two community bankers have weighed in on this issue over the past weeks.  First, Tom Frost, Chairman Emeritus of Frost Bank, appeared before a Subcommittee of the Senate Banking Committee in Washington, DC on May 9.  Mr. Frost made an eloquent and impassioned plea for separation of “traditional” banking from the more risky investment banking and other activities of the largest banks, much of which contributed to the recent meltdown.  The hearing video is available online, and we believe you will appreciate Mr. Frost’s comments.  His testimony starts at the 99:30 mark, and questions from the Senators commence at the 127:00 mark.  
A blog by an attorney for a pharmaceutical company, Lee Cusenbary, in the San Antonio Express News not only recaps Mr. Frost’s testimony, but provides some interesting and relevant observations.

Additionally, former IBAT Chairman and President and CEO of HomeTown Bank, N.A. in Galveston, Jimmy Rasmussen, provided a thoughtful guest column to the Galveston Daily News that appeared on May 17.  Jimmy, in a very understandable fashion, uses the recent JP Morgan Chase trading blunder to point out yet again the differences in the Main Street vs. Wall Street business models.