The 1 Bank Winning the Battle for Texas

In 2012, Texas had a Gross Domestic Product, which measures its total economic output, of $1.4 trillion dollars -- which would make it the 12th largest country in the world by GDP according to The World Bank, eclipsing Spain, Mexico, and South Korea. Knowing that, it is understandable that many banks would vie for the honor of being called the top bank in Texas.

Yet the banks at the top of the list may surprise you -- and one of them is actually adding to its share of the market in the Lone Star State at an unmatched rate.

As of this June, the top banks by deposits in Texas were as follows:

Source: FDIC.

While the deposit data can be incredibly useful in the instances of USAA Federal Savings Bank and Wells Fargo Bank South Central, banks often have holding companies located in specific states because of favorable regulation. Its presence in the state does not necessarily indicate that all of those deposits are from customers located in Texas -- so for the purposes of this analysis, those banks will be excluded.

One of the helpful things to gauge is the market share -- and while BBVA Compass and Frost Bank have seen relatively stable market share around 5% and 3% -- you'll see that one of the top three banks is adding to its market share in a big way:

Source: FDIC.

As you can see in the chart above, Bank of America had a clear lead over Wells Fargo in 2010 and was less than 2% away from JPMorgan Chase -- but things have changed dramatically since then, as the gap between first and second now stands at almost 7%.

Since 2010, JPMorgan has watched its total deposits grow by 56% in Texas, whereas Bank of America and Wells Fargo have seen theirs grow by 15% and 27%, respectively. Meanwhile the total deposits in Texas has grown by 30%.

While the expansions of banks into foreign countries is often explored in depth -- rarely do we pay enough attention to those banks that aggressively pursue growth in specific states, especially those as large as Texas. In addition, Texas has also seen its own GDP grow by 14% from 2010-2012, while the U.S. has watched its GDP only grow by 9%. So JPMorgan gaining market share in a big way in this big state is undoubtedly a good thing.

Beyond Texas
Many investors are terrified about investing in big banking stocks after the crash, but the sector has one notable stand-out. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.


Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2676930, ~/Articles/ArticleHandler.aspx, 12/20/2014 4:02:36 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement