Invest1 publisher3 min readPublished
Texas's new bank price war is a margin story, not a market-share one
Out-of-state buyers took Comerica, Veritex and Cadence, and Huntington went from zero Texas branches to 140 in a year. Incumbents from Frost down to a $55 million bank in Groom say they will bend on price.
The Investor · Invest desk
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What happened
- Texas-headquartered banks are facing stiffer competition for loans and deposits as a consequence of out-of-state banks seeking greater access to the Texas economy.
- Three of the larger merger-and-acquisition deals announced last year involved sales of Texas banks to out-of-state buyers: the purchases of Comerica, Veritex Holdings and Cadence Bank.
- The competition is pushing some Texas banks to evaluate their loan pricing and deposit rates, and to sharpen their focus on building and maintaining full banking relationships, as they seek to retain customers and grow market share.
- Tracy Harris, CEO of State National Bank: "We don't want to lose our customer base by being too rigid."
- Tracy Harris has been State National Bank's CEO since May and is the immediate past chair of the Independent Bankers Association of Texas.
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Why it matters
Three of the larger bank deals announced last year handed Texas franchises to buyers headquartered somewhere else: Comerica, Veritex Holdings and Cadence Bank [2]. The incumbents are responding by reconsidering loan pricing and deposit rates to hold onto customers [3], which means the cost of this invasion shows up in spread income before it shows up in share tables.
Huntington Bancshares, the $284.4 billion-asset company in Columbus, Ohio [15], is the clearest illustration of the pace. Brant Standridge, its president of consumer and regional banking, told analysts on the July second-quarter call that Huntington had no branches in Texas a year earlier, has 140 now, and ranks eighth in the state by total deposits [14]. That build came by purchase: Huntington agreed to buy Dallas-based Veritex and Houston-based Cadence, and it was absent from the Texas Department of Banking's latest list of banks in the state [13].
The market it entered was already crowded from outside. Texas was home to 414 banks as of March 31, 196 of them chartered by the state [11], which leaves 218 operating under some other charter [1]. JPMorganChase had the most branches at 476, followed by Wells Fargo at 462, Bank of America at 319 and PNC Financial Services Group at 314, all headquartered elsewhere [12] and totalling 1,571 branches between them [2]. Truist, of Charlotte, North Carolina, counts Austin and Dallas among its target metro areas [16]. The draw is arithmetic: Texas gross domestic product was $2.9 trillion in 2025 according to the Federal Reserve Bank of St. Louis, making it the world's eighth-largest economy [17].
What is notable is how uniform the defensive posture is across size bands. Frost Bank, the banking arm of San Antonio-based Cullen/Frost Bankers, will compete on loan pricing, CEO Phil Green said on the second-quarter earnings call, particularly for good relationships and good prospects: "You have to find out what the market is, and you have to gauge at a market price. And so we're doing that" [10]. Some of the state's largest regionals say the same, especially for their best customers [9].
At the other end, State National Bank has about $55 million of assets, is the only bank in Groom, a Panhandle town of roughly 550 people, and runs two branches including a new one in Panhandle, Texas [6]. Its CEO since May, Tracy Harris, who is the immediate past chair of the Independent Bankers Association of Texas [5], says the bank will work with customers on loan pricing and deposit rates as a way to "do right by the customer" [7]. "There are multiple banks in towns 20 or 30 minutes away from us," Harris said. "We don't want to lose our customer base by being too rigid" [8][4]. Huntington's balance sheet is roughly 5,170 times the size of State National's [3], and both are making the same concession.
Concessions on price are cheaper than losing an account and harder to reverse than a branch opening. The disclosures to read next are yields on new loans and cost of interest-bearing deposits at Cullen/Frost [10] and at the Texas community banks now matching Amarillo-area rates [7], plus whether Huntington's 140 branches move it above eighth in state deposits [14]. Share can hold while the spread on it erodes.