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FIGURE I: The fifteen ‘majors’ No. of Total Deposits Pending Bank Name and Location Subsi December 31, 1976 acqui diaries Amount Pct. of State sitions 27 $4,140,600,000 34 4,101,200,000 26 3,982,700,000 11 3,257,400,000 7 2,205,300,000 105 Top Five Total 15 1,856,200,000 10 1,597,400,000 7 1,145,800,000 11 1,056,900,000 13 1,026,300,000 161 Top Ten Total 6 616,700,000 4 532,000,000 5 505,400,000 2 469,300,000 10 325,900,000 First City Bancorporation of Texas, Inc., Houston 2 Texas Commerce Bancshares, Inc., Houston 3 First International Bancshares, Inc., Dallas 4 Republic of Texas Corporation, Dallas 5 Mercantile Texas Corporation, Dallas MANISMONVISSOMMIMI 6 Southwest Bancshares, Inc., Houston 7 Texas American Bancshares, Inc., Fort Worth 8 Frost/Cullen Bankers, Inc., Houston/San Antonio 9 First United Bancorporation/First National Bank of Fort Worth 10 Allied Bancshares, Inc., Houston 11 PanNational Group Inc., El Paso 12 National Bancshares Corporation of Texas, San Antonio 13 Trans Texas Bancorporation, Inc., El Paso 14 Austin Bancshares Corporation, Austin 15 First Security National Corporation, Beaumont 188 Top Fifteen Total * The largest independent bank would be number fifteen in these rankings. 7.81 1 7.74 3 7.51 2 6.14 4.16 0 33.36% 7 3.50 0 3.01 0 2.16 0 1.99 0 1.94 5 45.96% 12 1.16 0 1.00 1 0.95 0 0.89 0 0.61 0 50.57% 14 and just as many transactions will be up for approval. Statewide banking power, which before this decade was dispersed among hundreds of independent bankers, is rapidly being monopolized. It has taken bankholding companies just seven years to assume a dominant position in Texas banking. In 1970, only four were established in the state, and they held only 11 percent of Texans’ bank deposits. Today, such institutions operate through 241 subsidiary banks in 63 cities and towns to control 54 percent of all deposits in the state. Think of it: 34 of the state’s 1,350 banking organizations have cornered better than half the action. The top fifteen With Texas’ top five holding companies controlling 105 banks and through banking power in the state is more tightly controlled than this broad picture suggests. The fifteen biggest holding companies have nearly 51 percent of deposits, leaving the 19 remaining concerns with just 3 percent of statewide deposits. The fifteen majors hold the majority of banking power in Texas. In what economists call the “relevant market,” the holding companies’ share of deposits is greater still. A relevant market is the place consumers do businesspeople seldom go out of town to bank, so the relevant market for most is not the entire state, but a specific urban area. As Figure II shows, bankholding companies are generally much more powerful in metropolitan areas \(where the vast statewidefour holding companies in El Paso, for example, hold 88 percent of deposits; three have 64 percent of the Brownsville-Harlingen deposits; in Texarkana, just one holding company has 57 percent of the banked wealth. The Big Five frequently dominate these local markets. They control a third of Texas’ deposits, but 49 percent of Houston’s banked money, 70 percent of Dallas’, and 54 percent of Austin’s. The three leading bankholding companies alone have 39 percent of MidlandOdessa deposits and 54 percent of the San Angelo market. There’s more. In addition to outright control of their “member banks” \(subminority interests in other Texas banks. Their degree of control over these is not what it is over full-fledged subsidiaries, but as stockholders they throw around whatever weight their minority positions give them, and this influence should be figured in when holding company power is computed. Example: Texas Commerce Bancshares, the state’s fourth largest bankholding company, not only has 34 member banks, but also owns 21 percent of Houston’s Chemical Bank & Trust, 24.7 percent of the stock of First National Bank of Stafford, and 20 percent of the stock of Lockwood National Bank in Houston. \(Five TCBancshares board members serve as advisory directors on the board of Chemical Bank & cent of Houston’s deposits, and they add to TCBancshare’s presence in the city’s banking market. Similarly, Republic of Texas Corp., the second largest of the state’s bankholding companies, has 25.8 percent of deposits in the Dallas market and also a minority interest \(from 10 to Dallas-area banks that together hold another 2.7 percent of local deposits. Texas American Bancshares commands 30 percent of the Fort Worth market, and holds 25 percent interests in five banks in the Fort Worth suburbs. The bankholding company movement continues unabated. Acquisition rates reflect the rhythms of the state’s economy, but the major firms are steadily capturing depositor wealth and building their power accordingly. Meanwhile, no public agency asks any rude questions. Judging from the number of acquisitions coming before the Federal Reserve Board, the banking conglomerates should soon control 60 percent of Texas deposits; there is little doubt that they will press on to 70 percent and beyond if left unchecked. The state’s five largest bankholding companies have, among them, seven acquisitions pending before the Federal Reserve Board that if approved would add another .71 percent of the state’s deposits to their books. Nationwide, the Fed approves 90 percent of proposed acquisitions, and the figures for Texas pace the trend. There is nothing to suggest a slowdown here or elsewhere. Certainly, the bankholding companies themselves remain expansionist-minded. Forbes magazine reported on July 1 that Houston’s Allied Bancshares “plans to go on acquiring $10 million-to-$50 million-assets banks in the eastern third of Texas,” and the officers of First International Bancshares state in their latest report that “During 1977 and beyond, we expect to pursue bank acquisitions in additional Texas markets as well as certain of the markets in which we are presently represented.” Branch banks Article XVI of the Texas constitution declares that banks “shall not be authorized to engage in business at more than one place.” That is as explicit a ban on branch banking as one could hope to find in state law. For those hard to please, a Texas statuteArticle 342-903 VTCSreally does nail it down: “No state, national or private bank shall engage in business in more than one place, maintain any branch office . . . .” But try to square these legal bans with what Houston’s Texas Commerce Bancshares is up to. TCBancshares, through subsidiaries, is doing business in Arlington, Austin, Beaumont, Brownsville, Conroe, Corpus Christi, Fort Worth, Garland, Hurst, Irving, Longview, Lubbock, New Braunfels, Odessa, San Angelo and San Antonio, in Dallas at six handy locations, and in Houston at twelve more. “Members of Texas Commerce Bancshares welcome Southern Bank to our family of banks,” proclaimed a full-page ad in The Dallas Morning News on May 8, four days after completion of the merger. The new family tie was celebrated with this 72-point boast: “32 banks. $5.2 billion strong.” \(TCBancshares has added two more