ustxtxb_obs_1977_07_29_50_00003-00000_000.pdf

Bankholding companies Republic of Texas Corporation has applied for the Board’s approval to acquire all of the voting shares of the Midway National Bank of Grand Prairie. Federal Register, June 27 First City Bancorporation of Texas has applied for the Board’s approval to acquire 100 percent of the voting shares of City National Bank of Austin. Federal Register, June 23 First International Bancshares, Inc., Dallas, Texas, a bankholding company has applied for the Federal Reserve Board’s approval to acquire 100 percent of the voting shares of Peoples State Bank of Baytown. Federal Register, June 22. First City Bancorporation of Texas, Inc., Houston, Texas, [has applied for an] extension of time within which to consumate the acquisition of Red Bird National Bank, Dallas. Federal Register, June 24 First Texas Bancorp, Inc., Georgetown, Texas, has applied for the Board’s approval to acquire 100 percent of voting shares of First National Bank, Copperas Cove. Federal Register, June 20 By Tim Mahoney Austin, Dallas, Houston A radical change is taking place in the Texas banking world, yet few depositors know about it, much less appreciate its implications. The state’s longestablished system of independently owned banks is falling prey to ambitious and relatively new corporate entities: bankholding companies. These are banking conglomerates; corporations formed to own and operate banks they effectively circumvent the state’s constitutional prohibition against branch banking, and some of them appear to be illegal. There is more involved here than an esoteric question of corporate structure. As Walter Hall, an independent banker in Dickinson, says, “Whether it is a hold ing company or branch banking, the real issue is the same, namely, the control of money.” With depositor money concentrated in fewer and fewer hands, the rise of the Bankholding company affects everyone with a passbook or a checking account. Affected, too, are small and mediumsized borrowers, since control of lending capital is ebbing away from hometown banks toward the banking centers of Houston and Dallas. Bankholding companies are already big and getting bigger, merging existing local banks into their corporate struc tures and opening new banks of their own. The pace of this movement is phenomenal, as the Federal Register announcements above reveal. They note Federal Reserve Board consideration of five major acquisitions by Texas bankholding companies in a one-week period this summer. The volume is typicallook at the Register for any other week during the last year or in 1978 The Texas constitution Article XVI, Section 16. A [bank] shall not be authorized to engage in business at more than one place which shall be designated in its charter.