State Bank of Texas set to do better

CHICAGO: An oft repeated banking maxim for lending is – lend to those whom you know and trust. For the State Bank of Texas headed by Chan Patel it is ingrained as one of its cardinal principles for its lending operations.

Though regulators were a shade skeptical over the Banks heavily loaded loan portfolio in favor of hospitality industry, the Bank has not suffered in profitability right from the Black Friday – October 19, 1987 the day when the new York Stock market saw a big plunge with Dow Jones nose diving with 500 points

Chan Patel with a Masters in engineering under his belt proved his business acumen running the bank as well. “There is not a single quarter”, recalling the Bank’s performance since launch, “that we did not earn profit.” The principle that the management follows is to lend whom you know with usual security considerations.

The bank known often in jest as hotel bank had its hotel loan originate in 26 States. Regulators who had misgivings about the bank loan portfolio noted that the hotel book outperformed its other loan account.

The $700 plus million dollar asset bank is now looking forward to do one better in coming years , especially in the light of improving general economic conditions.

Chan Patel recalls that he got himself plunged into the banking field when a good number of hoteliers whom he knew really well found it hard to get commercial loans from financial institutions. He had his own motels too and he could easily understand the woes and problems faced by his fellow hoteliers.

With his own $one million capital and raising another $one million from investor friends he launched what it is now known across the country as State Bank of Texas. It was Black Friday.

The day was ominous in the sense that New York exchange painted a somewhat gloomy economic picture. But for Chan Patel his intuition and innate business sense proved more decisive in shaping the fortune of the Bank that he launched. In the very first year of the launch, 1987-88, it showed profit and there was not a single quarter since then that the Bank did not show profit

Chan’s background in hospitality industry and his close acquaintance with a number of hotel owners had an edge over others and he proved to the hilt that a relative more emphasis on one sector of economy for lending. About $500 plus million dollar loans involve hotels.

SBT not only survived a periodic economic crisis that engulfed the nation economy in general during the course of past two and half decades, but it continued to show progress and expansion. In the first half year of the current year the Bank is reported to have capped $20 million profit, a creditable achievement by any standard

Many a financial institution tanked during an economic crisis that beset the country in 2008 to 2010 and went under water. Not SBT. In fact, it picked up two banks which ran into problems. One such bank was Millennium State Bank of Texas in Dallas and the other National Republic Bank of Chicago which is now christened State Bank of Texas.

By all account, the National Republic Bank of Chicago, now SBT, has turned a corner and is in green now, thanks to its overhauling and cost cutting measures. It has started in full scale entertaining applications for commercial loans. With a turn for better in general economic condition, the Bank is confidently looking for future growth and serving the community at large in this area.

Surendra Ullal