Big California, N.Y. Firms Eager for Access : Texas May Open Door to Outside Banks

Texas appears on the verge of liberalizing its restrictive banking laws to allow in banks from other states, and there is no shortage of eager candidates looking to enter the Lone Star state.

Despite the deep slump in Texas’ oil-dependent economy, banks from California and New York are eager to gain a banking license in Texas. They view the state as a natural step in their quest for a nationwide presence, with attractive long-term potential.

“Long-term, it’s a very attractive market and one that a lot of the big players want to be in,” said Chris Kotowski of Oppenheimer & Co.

“Due to the size of the top Texas banks, either a large California or New York bank has to be a buyer,” added Frank Anderson of Weber, Hall, Sale & Associates.

While opinion varied about potential takeover targets, the name on everyone’s lips as the most likely buyer was the nation’s largest banking company, Citicorp.

“Texas is clearly a market we think is valuable in the long term,” said a spokeswoman for Citicorp, which has been at the vanguard of the push by New York banks into other parts of the country.

Several other major money center banks are also considered to be likely suitors, including Chase Manhattan and Chemical Bank of New York and First Interstate Bancorp of California.

“We have no specific plans at the current time, but obviously we would be alert to any attractive opportunities if the legislation passes,” a Chase spokesman said.

After recent hearings before the state banking committees and private talks among the various interested parties, bank analysts are confident that Texas’ longstanding opposition to interstate banking has been finally vanquished.

Posted Major Loss

Increased strains in the already depressed energy and real estate sectors caused InterFirst Corp., the state’s No. 3 bank, to post a $281-million loss in the second quarter.

Although a major Texas bank failure does not appear likely, Banking Commissioner James Sexton told Reuters that “I think it is better to have the mechanism in place to solve any problems that might emerge, if they do emerge.”

The chairman of the Texas House Banking Committee, Bruce Gibson, said Federal Reserve Board Chairman Paul A. Volcker and Comptroller of the Currency Bob Clarke are also keen on interstate banking.

“The pressures of lower oil prices have created a crisis condition,” said James McDermott of the financial firm Keefe, Bruyette & Woods.

“It is not wholly unreasonable to assume there will be some form of (interstate banking) legislation.”

Assuming that Gov. Mark White adds an interstate banking bill to the agenda of a special legislative session on the state budget on Wednesday, some analysts speculated that a new law could be on the statute books soon.

“We are definitely going to have interstate banking before the end of 1986,” said Michael Plodwick of E. F. Hutton.

However attractive a full banking license in Texas may seem in theory, bankers were conscious of the potential pitfalls.

“Probably, most banks view being in Texas in the long run as a very positive thing, but a takeover of one of the major banks would not be that easy because of size and current problems in credit quality,” said the chief financial officer of a major New York bank, who requested he not be identified.

At the end of 1985, the top five Texas bank holding companies had assets of between $16 billion and $23 billion, not far behind those of most of their potential purchasers.

Despite a number of steps to make themselves ready for loan problems, doubts linger that most of the big Texas banks have guarded themselves from new problems due the economic depression in the oil and real estate areas.

“The banks may seem cheap, but they wouldn’t be if you had to write down assets further,” the senior bank official said.

Thus, most banks were taking a wait-and-see attitude for the moment.

“I’m sure we’d be interested if we got as good a deal as we did in Oklahoma,” said a spokesman for First Interstate, which recently took over Oklahoma’s largest bank, First National Bank & Trust Co. of Oklahoma City.