TWST: Would you begin with a background sketch of Texas Bancshares. What are the key challenges and opportunities for TCBI?
Mr. Jones: As you probably know, Texas Capital Bank was chartered in 1998 and we've been in business 10 years. We're a Texas-based business bank, and our market focus is commercial middle-market businesses and affluent individuals. We operate in the five largest MSAs in the State of Texas: Dallas, Fort Worth, Houston, Austin and San Antonio. We're a growth company and most of the middle-market companies we want to bank reside in or near these five regions.
Our strategy relates to recruiting premier local bankers in the regions we serve. We don't move people from Dallas to Houston or from Austin to San Antonio. Our bankers are typically experienced, they have a good book of business and, when we bring them on board, they typically bring with them many of their best customers. If you look at our numbers since 1998, you'll see that we've been a strong growth company. We started small in 1998 and today we're approaching $5 billion in assets. All this growth has been organic. We have not acquired any financial institutions. We believe that dilutive acquisitions are not in our shareholders' best interests. If you're a growth company in the banking business, you've got to match that growth with a strong credit culture. It's very important to have a strong, centralized credit approval, grading and review process in place.
Regarding our corporate strategy and strategic direction over the next two or three years, in this country today, we're going through a financial crisis that we've never seen in our lifetime. We're fortunate to be in the State of Texas. Texas is handling the financial crisis much better than other parts of the country, but the state will not be immune to some of the problems that are being experienced elsewhere. However, I do believe that they will be manageable over a reasonable time period.
One of the real positives in Texas is the energy business. Even though energy prices have come down fairly dramatically in the near term, energy has been very supportive to the Texas economy and has helped many of these middle-market companies and energy producers do quite well. So one challenge, obviously, over the next two to three years is managing through the credit crisis we see happening in the United States today. TCBI successfully raised $55 million of capital on our own about 45 days ago. We are well capitalized and we will stay well capitalized. We believe having excess capital is prudent in this environment. Credit quality, slower growth and liquidity will be challenges that we will experience for the next two to three years.
But again, issues like what I'm talking about also bring opportunities, particularly for companies like ours, companies with good credit quality that have good growth, that are well-capitalized. There will be opportunities because many of our competitors are in a weakened condition through this particular downturn. When these competitors turn inward, customer service levels fall and it's an opportunity for us to attract really good relationship managers and those people will bring their premier customers with them. While the financial environment today is difficult, it is an opportunity to increase market share.
TWST: Is your bank a potential takeover target? Is that a strategy or a goal?
Mr. Jones: No, that's not our goal. We have opportunity to grow and be very profitable within our existing markets. We believe we can give value to our shareholders through organic asset growth, growth of our EPS, and growth of our stock value without having to sell the company to realize that return. We're a public company — if the stock does well, our shareholders will be rewarded through the stock price.
TWST: Are there any plans for changes in your management team and your internal operations or specific needs that you see over the next year or two that you will be addressing?
Mr. Jones: That's a very timely question. Our Chairman and CEO retired in May of this year and I was made CEO of the company. A couple of weeks ago we continued our succession planning and appointed a new President of the bank. The Bank is Texas Capital Bank, a wholly owned subsidiary of Texas Capital Bancshares. Keith Cargill was named President and Chief Operating Officer of the bank. We had two other promotions, as well. Vince Ackerson was made president of the Dallas region, which makes up approximately 65% of the company, and Russell Hartsfield has taken on additional responsibilities in the corporate banking area.
We have made these three changes within the last couple of weeks and continue to recognize and promote talented individuals in our company. We'll continue to do that as we see people excel in what they do. An additional responsibility of management is to provide backup management that gives the shareholders a comfort level that the company will be well managed in the future.