Community Developments Investments (May 2018)

Texas Capital and Texas National Banks: Collaborating for Mutual Benefit

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Barry Wides, Deputy Comptroller for Community Affairs, OCC

Janet Fix, Analyst to the Deputy Comptroller for Community Affairs, OCC

Jesse Jackson, a Senior Vice President of Texas Capital Bank, and Jose "Joe" Quiroga, President of Texas National Bank, consider their partnership mutually beneficial. (OCC)

When the Office of the Comptroller of the Currency (OCC) invited Texas Capital Bank to join the first Minority Depository Institutions (MDI) Collaboration Roundtable, Chief Executive Officer Keith Cargill and Director of Community Development Effie Dennison did not know what might result from the meeting. They returned home to Dallas with a new—and potentially profitable—opportunity for the bank's business strategy.

Two years later, Texas Capital Bank is collaborating with and providing correspondent banking services to about 21 MDIs and community development financial institutions (CDFI). The partnerships are giving Texas Capital Bank, a $25 billion commercial and private client bank, access to new business and consumer relationships in culturally diverse and low-to moderate-income communities across the nation.

In return, Texas Capital Bank is receiving Community Reinvestment Act consideration for its MDI collaborations.

"What we heard from these banks was their long, rich history of meeting the needs of their communities, and that they were not looking for a handout," said Ms. Dennison. "Rather, they were looking for an opportunity to be strategic by helping each other's businesses grow for mutual benefit."

Texas Capital Bank's MDI–CDFI program provides reciprocal deposit agreements and other correspondent bank services designed to meet the balance sheet needs and earning asset goals of its partners. These MDI and CDFI partners are coast to coast and range in size from $80 million to $4 billion in assets.

The partnerships further Texas Capital Bank's strategic plan, which has led the bank to partner with more than 340 banks in 40 states. "We've quietly built what some would say is the largest correspondent banking division in the country, based on deposits," said Jesse Jackson, a Senior Vice President of Texas Capital Bank.

Texas Capital Bank formed its MDI–CDFI partnerships after the OCC's first roundtable in 2016 and held a subsequent meeting at its headquarters for chief executives of selected MDIs and CDFIs. That meeting focused on how Texas Capital Bank could support MDIs and CDFIs through loan participations, reciprocal deposit relationships, sharing intellectual capital and specialized expertise about talent management, recruiting, compliance risk, marketing, and cybersecurity.

Next, Texas Capital Bank ensured the collaborations it formed were successful for all involved by

  • staying in touch with partners regularly through on-site visits and meetings.
  • building relationships with each MDI's executive management team.
  • offering deposit rates that successfully compete with the federal funds rate and rates offered by other banks.
  • reducing the size of loan participations to $1 million to $5 million (a fraction of the bank's typical $10 million to $15 million minimum) to meet the lower lending limits of partners.

"At the end of the day, our job is to create opportunities for [our partner] banks to buy into deals," Mr. Jackson said. "Our internal credit culture and the folks that manage MDI–CDFI relationships in our bank have become familiar with the size of transactions these banks require. We are comfortable with the segment of banks that are participating in our program."

Relationship banking is a key ingredient. "When we do business with you, we enjoy getting to know you," Mr. Jackson said. "That is the way we cultivate our relationships."

The results have proven to be mutually beneficial to Texas Capital Bank and its partners.

"The social impact is very important, but we also set out to build a profitable business with our MDI and CDFI partners," Mr. Jackson said. "The overall impact is far reaching and rewarding. We'll touch more banks, more communities, and more people through MDI collaborations than you can on your own."

The rewards have been positive and unexpected, said Jose "Joe" Quiroga, president of Texas National Bank, which is based in Mercedes, Texas, and has locations in four other small communities.

"The partnership with Texas Capital Bank has helped us to leverage our minority status in a growing market," Mr. Quiroga said. "To have Texas Capital Bank come in and make a deposit in our institution that diversifies our funding sources was very helpful for us."

The asset diversification has helped Texas National better compete in a growth market that is 90 percent Hispanic and to provide loans to customers, Mr. Quiroga said. The partnership also has resulted in phone-based trainings for Texas National's staff members by Texas Capital Bank's experts in a number of key areas.

Additional collaborations are possible, Mr. Quiroga said, because Mr. Jackson and his Texas Capital Bank team are "just phenomenal. They keep an open mind about where our partnership can go from here. … There's a variety of different things we are working on together, going forward."

Unlike other bankers who may balk at suggestions they collaborate with bigger banks that could be viewed as competitors, Mr. Quiroga had no qualms about partnering with Texas Capital Bank.

"Texas Capital Bank is not in my backyard, and I don't have a presence in its market in Dallas or Houston," Mr. Quiroga said. "If anything, I wish I could do more from the standpoint of dreaming up new ideas of how we could collaborate together."

That is at the core of these efforts. "We are free to ask, ‘How can I make you better and how can you make me better?'" Mr. Quiroga said.

Texas Capital Bank is open to collaborating with other MDIs and CDFIs in 2018.

"We've worked closely with each of [our partner] banks to understand their needs, to identify where the opportunities are, and to determine what fits with what we're trying to do to meet both organizations' profitability objectives," Mr. Jackson said. "We want to make sure we are adding value and doing things to move these partnerships forward."

For more information, visit Texas Capital Bank's website or contact Jesse Jackson at

This publication is part of:

Collection: Community Developments Investments

Deputy Comptroller
Barry Wides

Editorial Staff
David Black
Janet Fix
Emily Gold

Design Staff
Vincent Harris

On the cover
Clockwise from top right, façade of a bank in San Francisco, Elouise Cobell, St. Luke Penny Savings Bank, Romana Acosta Bañuelos and James A. Conlon, a Freedman's Savings and Trust Co. passbook, Maggie L. Walker, and Frederick Douglass. (Photos courtesy of Alamy, AP Images, National Park Service, Bureau of the Public Debt, U.S. Department of the Treasury, National Park Service, and Shutterstock.)

For questions or comments, call (202) 649-6420 or email This and previous editions are available on the OCC's website at

Articles by non-OCC authors represent the authors' own views and not necessarily the views of the OCC.

Deputy Comptroller
Barry Wides

Editorial Staff
Ted Wartell
Bill Reeves
David Black
Dan Gibbard

Design Staff
Rick Shacklette
Cheryle Robison

For questions or comments, call (202) 649-6420 or email This and previous editions are available on the OCC's website at

Articles by non-OCC authors represent the authors' own views and not necessarily the views of the OCC.