News Column

Bankers, Mortgage Lenders Seeing Green

June 2007, HISPANIC BUSINESS Magazine

Derek Reveron

Dennis Nixon, chairman, president, and CEO of International Bancshares.
Dennis Nixon, chairman, president, and CEO of International Bancshares.

The finance sector, the smallest segment in this year's HISPANIC BUSINESS 500 with 17 companies, showed a 3.8 percent increase in revenues, moving from $1.79 billion in 2005 to $1.86 billion in 2006.

Finance also outpaced nearly every other sector in average company revenue with a 28.2 percent year-over-year increase to $109 million. Only the wholesalers (31.2 percent) enjoyed a higher percentage gain.

International Bancshares Corp., based in Laredo, Texas and founded by Tony Sanchez Sr. in 1990, leads the Hispanic-owned financial firms as it expands despite growing competition from larger banks, and the rising cost both of bank acquisitions and opening new branches. The Sanchez family remains the bank's largest shareholder by far.

IBC, which is No. 7 on our elite list, reported revenues of $786 million in 2006, up from $675.9 million in 2005. Net income for 2006 decreased to $117 million from $140.8 million. The 2006 results included an $8.9 million charge from settling a tax lawsuit with the IRS. IBC's assets as of December 31 were $10.9 billion compared to $10.4 billion a year earlier. As the holding company for International Bank of Commerce and Commerce Bank, IBC operates 230 branches and more than 360 ATMs in more than 90 communities in Texas and Oklahoma. It has grown largely through acquisitions.

"We are interested in buying banks when they are available and if they meet our criteria to expand into areas that we like," says IBC Chairman, CEO, and President Dennis Nixon.

The total number of banks in the United States declines about 5 percent every year due to consolidation, according to the Federal Deposit Insurance Corp. In Texas, the number of banks dropped from 681 to 650 between 2004 and the fourth quarter of 2006. During the same period, the total assets of banks in Texas increased from $215.4 billion to $255.9 billion.

While acquisitions have beefed up IBC's retail operations, commercial lending still accounts for most of the institution's loan portfolio. The firm also operates in Mexico, where it grants loans to U.S.-owned business operations.

Many financial institutions that specialize in mortgages have fallen on tough times, but not Miami-based First Equity Mortgage Bankers, Inc. The lender posted $230 million in revenues in 2006, and 2007 is shaping up to be a better year, says CEO Daniel Rodriguez. First Equity, which is No. 31 on the Hispanic Business 500, granted more than $40 million in loans in April, the all-time monthly record for the 10-year-old institution.

Mr. Rodriguez says the key to success is serving Hispanic markets in Florida, Puerto Rico, and Georgia. First Equity plans to launch operations in North Carolina within a year.

In the capital equipment leasing area, Bridgeport, Connecticut-based Somerset Capital Group Ltd., thrives along with the nation's strong economy. Revenues were $206 million in 2006 and should be as strong in 2007, says President and CEO Pedro Wasmer. Somerset, No. 34 on our list, funds leases through its network of banks, financial institutions, and investors nationwide. "There's still quite a bit of economic expansion going on. More companies are investing in IT infrastructure and equipment," he says.



Source: HISPANIC BUSINESS Magazine and Hispanicbusiness.com, Copyright (c) 2007 All Rights Reserved.


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