The growing number of community banks entering the warehouse banking field because they want a better return on investment has added another participant. The newest entrant is Southwest Bank, Fort Worth, Texas, which has hired David E. Frase to run its operation. Until last fall, he had been in charge of this line of business at Southwest Securities FSB, Dallas. (Despite the similar names, the two institutions are not related.)
At this point, many of the details of the program are still taking shape, said Southwest Bank chairman and CEO Vernon Bryant. The bank has approximately $860 million in assets, and its market is the Fort Worth-Dallas area, as he put it. In an interview, Bryant said at all the institutions he had been associated with have had mortgage operations. (Previously, he was president of Texas Bank, which was purchased by Compass Bank in 2006; he then formed First Texas BHC, which purchased Community Bank of Texas NA and Southwest Bank in July 2007, and merged them to form the current Southwest Bank.)
“I’ve always liked the mortgage business, and quite frankly we’ve had so many requests since we’ve had Southwest Bank in the last three-and-one-half years for us to furnish mortgage warehouse lines of credit,” he said.
Bryant continued that Marshall Boyd, the co-president of Southwest Bank’s mortgage business, told him it was fine to get into the warehouse business, as long as he had the right person to run it. Boyd told Bryant that Frase was available, and “I said well let’s talk to him because I would really like to get into that business,” Bryant recounted.
It is a good opportunity for Southwest Bank to expand, but such growth requires “people who are very knowledgeable,” and after checking Frase out, Bryan said he found Frase to be one of the top people for doing that. Besides Southwest Securities, Frase also headed the warehouse business at Texas Capital Bank.
Policies and procedures need to be put into place, so it is unlikely any warehouse lines will be funded before Sept. 1.
