3 min read January 2024 — In an interview with Invest:, Danny Schroder, Houston region chairman of PlainsCapital Bank, talked about how the demographic growth of the Greater Houston area has created new opportunities for the bank to grow. He also discussed the bank’s continued lending despite the challenges presented by the current interest rate environment and how the bank is educating its customers to prevent fraud.
What is the most important contribution of PlainsCapital Bank to the Greater Houston market?
Houston is a thriving city offering great opportunities for businesses across the region. After entering this market several years ago, PlainsCapital acquired The Bank of River Oaks in 2018, which greatly expanded our local presence, and in 2020, we also opened a new location in The Woodlands. We see Houston as an important growth market with great opportunities.
Because of PlainsCapital’s strength, stability, and conservative business practices, we have the flexibility to continue lending during a tough interest rate environment, and this of course has a positive impact.
We strengthened our ties in the Houston market during 2023, thanks to our strong and stable teams who are very active in the community, participating in chambers of commerce and charitable organizations, while building relationships and helping drive the success of our business partners. We are excited to carry our momentum into 2024.
What overarching opportunities exist in Greater Houston that PlainsCapital Bank aims to exploit in 2024?
Houston and Texas in general continue to see net migration from other states, and that will help drive growth in Houston. For PlainsCapital, it is all about building relationships, treating customers with respect, finding out what they need, and providing it to them through our portfolio of financial products and services. There is still a fair amount of uncertainty around interest rates as we head into 2024, and we expect that it will continue to be a challenging business environment. Nevertheless, we continue to see excellent opportunities in Greater Houston, and we are poised to help with that growth.
What approach does PlainsCapital Bank take in terms of lending, given a macroeconomic environment shaped by high interest rates and prevalent inflation?
While many banks are slowing down or cutting back their lending, our lending window remains open. The strength of our bank gives us flexibility and enables us to take advantage of the opportunities that are out there. While we have seen clients put projects on hold due to the current interest rate environment, we expect those projects will become viable again once there is some downward movement in rates.
Considering that PlainsCapital Bank covers a wide array of industry solutions, what do you see as the growing industries in Greater Houston?
We like Old-Economy businesses, such as manufacturing, distribution, and real estate development. Since the 1970s and 1980s, Houston has diversified significantly into many areas other than oil and gas and its dependent industries. For instance, healthcare is a huge component of the Houston economy. We finance medical office buildings and continue to see a need for medical equipment lending and medical practice lending, as well. PlainsCapital Bank offers loans to medical professionals who are starting their practice, which is a good growth area. As more people move into the area, the need for healthcare will grow as well, and we will certainly continue to be active in that space.
Additionally, Houston will need more single-family and multifamily housing in the future as more people move in. With an easing or at least stabilization of interest rates, demand should come back robustly.
In terms of geographic areas, the Houston Ship Channel is a strong, vibrant contributor to local economic well-being, and PlainsCapital Bank continues to be involved with organizations around the Channel. Additionally, the George Bush Intercontinental Airport area is also a priority for us. That airport was built to handle a population of around 2 million while there are 7 million people out there, so the airport area is expanding significantly. We expect to see some nice opportunities there.
How do you see technology strengthen the cybersecurity and fraud prevention aspects of the banking business?
Technology has changed banking in a lot of different ways. Most of them are positive, but technology also allows for bad actors, especially people who engage in fraudulent activities. Technology will go a long way in helping prevent fraud, but it’s an ongoing battle to stay ahead of the fraudsters.
At PlainsCapital Bank, we are quite proactive in fraud prevention and educating our clientele about the dangers that exist out there. That includes phishing, hacking, and other nefarious techniques that fraudsters use. Fraud education and remaining in close contact with our clients are the best things we can do. We are diligent in monitoring suspected fraud and must be swift to address potential cases when they arise.
What initiatives or programs does PlainsCapital Bank have in place to consolidate its relationship with the community in Greater Houston?
We are honored to be a part of the Houston business landscape and to support the area beyond serving its banking needs. As a large community bank, it is important to us to be involved in our community. We are active in civic organizations such as the Port of Houston, The Woodlands Chamber of Commerce, the West Houston Chamber, the Partnership Lake Houston Chamber, and a number of charitable institutions. We are actively involved in helping those organizations grow and strengthen.
We strongly believe in supporting young people’s success. Encouraging our young bankers to get out and get involved not only helps the community, it’s also good for their banking careers. Being involved in those organizations gives our staff a greater sense of purpose beyond the day-to-day work of the bank.
What is your outlook for PlainsCapital Bank and for the Greater Houston market in the next two to three years?
We have a great opportunity to grow in the Houston market, because we have an experienced and stable team of bankers, analysts, and support staff who know and embrace this area. The growth, strength, and diversity of Houston will continue to drive the area’s already strong economy and create significant opportunities. We are a relationship-oriented bank. Our clients appreciate that our staff has been with us for several years, and they know that their bankers will be there for them when they need them. Through our stability, strength, and commitment to personal service, we’re focused on building long-term relationships rather than one-off transactions, and the trust we’ve built during our time in the market has us well-positioned to grow.
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