Southwest Bancshares Inc. CEO J. Bruce Bugg Jr. announced Tuesday that he and several other San Antonio executives are starting a new bank in Austin, the first such bank in Texas since the recession.
“A huge opportunity exists for a new community bank with emphasis on local decision makers who understand opportunities and challenges that are unique to Austin-based small to mid-sized business and professional customers,” Bugg told the Rivard Report. “That’s the gap we intend to fill with The Bank of Austin.”
Austin Bancshares, Inc. is the proposed holding company for “The Bank of Austin,” which would focus on serving Travis and Williamson counties. The partnership filed applications with the Texas Department of Banking and the Federal Deposit Insurance Corporation (FDIC), according to a company news release.
Jon Eckert, a 24-year veteran of commercial banking in Austin, is the proposed president and CEO of The Bank of Austin, as well as a member of the bank’s board of directors.
Other proposed directors include Robert Cavender, president of Cavender Automotive Group; Gene Dawson Jr., chairman of Pape-Dawson Engineers; David Spencer, who served as chairman of the State of Texas’ Emerging Technology Fund; and Brent R. Given, president and CEO of The Bank of San Antonio.
Cavender, Dawson, Spencer, and Given were among the organizers of The Bank of San Antonio, along with Bugg, when it was formed in 2007. That bank opened with $25 million in capital and assets, and as of Nov. 30, 2016, has more than $661 million in total assets. It is currently the fourth largest locally owned bank in San Antonio.
Organizers of The Bank of Austin expect the bank will be initially capitalized with up to $40 million, a substantial majority of the Bank’s investors to come from the local Austin business community.
Bugg pointed to “compelling business metrics” when he explained why they chose Austin.
“The population of Austin has grown substantially over last eight years or so, and the deposits in the Greater Austin area (have) grown to $40 billion,” he said. “All of this is happening in a backdrop of no new community banks started in the Austin area. When you look at the metrics we looked at for starting The Bank of San Antonio, it’s similar.”
There are 50 banks operating in Travis County, only three of which have headquarters in Austin.
“The response from serving the small to medium-size business market in San Antonio has been tremendous, and a lot of it is based on just good old-fashioned relationships – people like that personal service,” Bugg said. “We are going to take that proven business strategy and experience, and replicate that in the Austin market.”
Bugg recently resigned from his position as chairman and president of the Bexar County Performing Arts Foundation, a group that led the funding and creation of the landmark Tobin Center for the Performing Arts in San Antonio. Sam Dawson, CEO of Pape-Dawson Engineers, will succeed him as chair of the foundation.
The Bank of Austin, pending approval, is expected to open by the third quarter of 2017. With recent improved performance in the banking industry, the FDIC has signaled that they are inviting applications for new bank charters and deposit insurance.
“The timing, we feel, is good,” Bugg added. “We are cautiously optimistic based on meetings with the FDIC and Texas Department of Banking, and they have said they are open to considering our applications.”