Federal Deposit Insurance Corporation
FDIC
Bankin;
Review
Winter 1990
Vol. 3, No. 2
A Letter from the Editor
In 1980 the phrase "the Texas economy" evoked images of surging oil prices and
boundless possibilities; by 1990 those images had been replaced by the reality of va
cant office buildings and bankruptcy court. In the interim, nine of the ten largest Texas
banking organizations were recapitalized with FDIC or other outside assistance, 425
Texas banks failed or were assisted by the FDIC, and the FDIG incurred insurance
losses of nearly #11 billion in Texas.
How did this calamity occur? Certainly, much of the blame can be ascribed to
economic events, but what was the role of the supervisory and examination process
and the deposit insurance system itself? In an effort to answer these questions,
Chairman L. William Seidman directed the FDIC's Division of Research and Statistics
to conduct a study of the causes of the Texas banking crisis.
The study, entitled "The Texas Banking Crisis: Causes and Consequences," appears
in this issue of the FDIC Banking Review. In light of the length and importance of
the study, the Editorial Committee decided to publish it in a special issue. This study
contains much new and interesting information on the Texas banking crisis and, in
my view, will come to be regarded as an extremely valuable contribution to the historical
record on the anatomy of that crisis.
George E. French
Editor
FDIC Banking Review
FDIC
Bankin;
Review
Winter 1990
Vol. 3, No. 2
A Letter from the Editor
In 1980 the phrase "the Texas economy" evoked images of surging oil prices and
boundless possibilities; by 1990 those images had been replaced by the reality of va
cant office buildings and bankruptcy court. In the interim, nine of the ten largest Texas
banking organizations were recapitalized with FDIC or other outside assistance, 425
Texas banks failed or were assisted by the FDIC, and the FDIG incurred insurance
losses of nearly #11 billion in Texas.
How did this calamity occur? Certainly, much of the blame can be ascribed to
economic events, but what was the role of the supervisory and examination process
and the deposit insurance system itself? In an effort to answer these questions,
Chairman L. William Seidman directed the FDIC's Division of Research and Statistics
to conduct a study of the causes of the Texas banking crisis.
The study, entitled "The Texas Banking Crisis: Causes and Consequences," appears
in this issue of the FDIC Banking Review. In light of the length and importance of
the study, the Editorial Committee decided to publish it in a special issue. This study
contains much new and interesting information on the Texas banking crisis and, in
my view, will come to be regarded as an extremely valuable contribution to the historical
record on the anatomy of that crisis.
George E. French
Editor
FDIC Banking Review
Federal Deposit Insurance Corporation
FDIG
Chairman
L William Seidman
Division of Research
and Statistic**,
Director
Win. Hoger Wjitson
Editor
George E. French
Editorial Committee
Frederick S. Cams
Gary S, Fissel
Arthur .1. Murion
list rail vc
Manager
Delta Voesar
Editorial Secretary
Gathy Wright
Design and Production
Design and Priming
Unit
The views expressed are
[hose of the authors and do
not necessarily refled of-
ficial positions of [he Federal
Deposit Insurance Corpora-
lion. Articles may be
reprinted or abstracted if the
Review and author are
credited. Ptease provide [he
PDIG's Division of Research
and Statistics with a copy of
any publications contain ing
reprinted material
Single-eopy subscriptions
are available to the public
free of charge. Requests for
subscriptions, back issues or
address changes should be
mailed \.o: FDlC tianking
Review, Office of Corporate
Communications, Federal
Deposic Insurance Corpora
tion, 550 17th Street, NW,
Washington, DC 20429.
Review
Winter 1990
Vol. 3, No. 2
Table of Contents
Page
Executive Summary 1
Introduction 2
Growth Rates among Commercial Banks: Texas versus the U.S 4
Condition and Performance Trends:
Texas versus the U.S 6
Major Metropolitan Areas 7
Texas Bank Holding Companies 9
Bank Supervision: Bank Examination and Oversight 9
Funding Bank Activities: The Rote of Deposit Insurance 13
.Appendices
A. Trends in Lending Activity: Texas versus the U.S 15
B. Failed-Bank Lending Activity: Major Metropolitan Areas 24
C. Case Histories 27
FDIG
Chairman
L William Seidman
Division of Research
and Statistic**,
Director
Win. Hoger Wjitson
Editor
George E. French
Editorial Committee
Frederick S. Cams
Gary S, Fissel
Arthur .1. Murion
list rail vc
Manager
Delta Voesar
Editorial Secretary
Gathy Wright
Design and Production
Design and Priming
Unit
The views expressed are
[hose of the authors and do
not necessarily refled of-
ficial positions of [he Federal
Deposit Insurance Corpora-
lion. Articles may be
reprinted or abstracted if the
Review and author are
credited. Ptease provide [he
PDIG's Division of Research
and Statistics with a copy of
any publications contain ing
reprinted material
Single-eopy subscriptions
are available to the public
free of charge. Requests for
subscriptions, back issues or
address changes should be
mailed \.o: FDlC tianking
Review, Office of Corporate
Communications, Federal
Deposic Insurance Corpora
tion, 550 17th Street, NW,
Washington, DC 20429.
Review
Winter 1990
Vol. 3, No. 2
Table of Contents
Page
Executive Summary 1
Introduction 2
Growth Rates among Commercial Banks: Texas versus the U.S 4
Condition and Performance Trends:
Texas versus the U.S 6
Major Metropolitan Areas 7
Texas Bank Holding Companies 9
Bank Supervision: Bank Examination and Oversight 9
Funding Bank Activities: The Rote of Deposit Insurance 13
.Appendices
A. Trends in Lending Activity: Texas versus the U.S 15
B. Failed-Bank Lending Activity: Major Metropolitan Areas 24
C. Case Histories 27