El Paso Realtor

Location, Location, Location?

The trick to Lester Parker's longevity in banking-he's been at it for 50 years and counting-isn't really much of a trick.

"I act like the tortoise, but I am certain I am going to get to the end of the race and my 500 stockholders are going to reach the end with me," says the chairman, president and chief executive of United Bank of El Paso del Norte. "I have seen a lot of institutions act like the hare. They are blowing and going and doing wonderful things, but they trip before they hit the finish line."

United is fairing better than peers its size nationally. To some extent, the bank benefits from being in Texas, which has weathered the economic crisis much better than other sunny states. And United's hometown of El Paso abuts Fort Bliss, which more than tripled the number of troops stationed there in recent years.

But just because El Paso is doing relatively well doesn't mean all of its banks are. Capital Bank, another of the three financial institutions based in this city of 620,000 people, has lost money in recent years, compelling it to sell a majority share to investors for $13.5 million at the end of 2009. The $112 million-asset thrift engorged on real estate loans before the crash and, according to Federal Deposit Insurance Corp. data, had a noncurrent loan ratio of 11.8 percent at March 31.

On the other end of the spectrum is El Paso's Bank of the West (not affiliated with the BNP Paribas-owned institution in California). One of the top-performing community banks in the country, Bank of the West had a 30.4 percent return on equity, a 2.53 percent return on assets and a noncurrent loan ratio of less than 1 percent, first-quarter data from the FDIC shows.

United's performance falls somewhere between that of its two hometown rivals.

As such, El Paso offers a microcosm of the banking industry across the country, illustrating how institutions operating side by side can diverge dramatically based on the decisions made every day about how to run them.

"The difference in banks in the same market always gets down to the people," says Randall James, a banking consultant and a former commissioner with the Texas Department of Banking. "Some people are going to take return-on-equity risk and think they can manage those risks. Others are going to say, 'We are fine. We don't need to go up like a rocket today. We will continue to make loans, but we don't have to take every loan.'"

Like much of the country, El Paso did well economically in the mid-2000s. The housing market boomed. Local banks booked more loans and made more money.

El Paso Realtors urge lawmakers in Austin to consider housing ...

Several El Paso Realtors spent Monday in Austin visiting state legislators as part of the Texas Realtors Legislative Hill Visit.

Among the El Pasoans who went were Linda Bastraw, Kenny Gross, Jennifer Stroh, Doug Hamilton, Dan Olivas, R. Scott Kesner, Michael Bray, Elizabeth Leal, Al Jurado, Sharron Ramirez and 10 others of Greater El Paso Association of Realtors.

The group was in Austin to urge the consideration of several legislative measures to protect homeowners when they get home-equity loans, including that homeowners may borrow a maximum of 80 percent of their appraised home value.

The group also talked to legislators about transfer fees that require the buyer of a property to remit a payment to a private entity each time the property is sold.

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