Independent Bank of Austin Now I Bank Texas, SSB; Prospers in Unsteady Economy; Charts Steady Growth & Enhancements; Forecasts 2011 Outlook

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Customers have long called us 'I Bank'

Lakeway, TX (PRWEB) January 4, 2011

Locally owned and operated Independent Bank of Austin, SSB, based (at 3209 RR620 South) in Lakeway, TX, with operations in Georgetown, changed its legal name to I Bank Texas, SSB, effective Jan. 1.

The 5 ½-year-old state savings bank, a longtime top performer in the 2005 Class of de novos (start-up banks), confirmed that the ownership, staffing, location and contact information will remain the same. Online banking will be at the new web address http://www.ibanktexas.com. Current CD rates and terms are unaffected.

"Customers have long called us 'I Bank'," said Denny Buchanan, founding President and CEO. (Photo: http://www.ibankaustin.com/3004-01-IBA/UserFiles/Image/denny.jpg "This change also alleviates some confusion with another bank in our marketplace with the similar old name."

"Through earnings alone, the hard way, we've built our capitalization from $10 million to $18.7 million," Buchanan emphasized. "And that's while many banks have been reducing their caps.

"Customer loyalty has been our strength, with area bank failures having driven some new customers to us partly due to our rankings," he said. The bank has consistently placed in the top five in return on average equity (ROAE) among the 174 de novos (start-up banks) in 2005.

"We've not been immune to problems," conceded Julie Buchanan, Executive V.P.-Operations. "But we had the earnings power to combat them, and we were aggressive early on about getting rid of non-performing loans. We did more conservative lending and required equity in projects, which helped avoid any large losses if problems arose."

I Bank Texas currently has about 540 loans, split 25-75 between individual and commercial.

In 2007, the average size and life of a loan was 13 months and $500,000. Now it is a "more prudent" $240,000 and 22 months, and there are less construction loans and more "purchase money" agreements for homesteads, she noted.

Total loans at year end were about $127.6 million versus $128.5 in the previous September 2010 quarter, and down about $2 million from year-end 2009, she reported, an effort to raise the capitalization ratio in the uncertain economy. "But we anticipate steady, solid growth as we continue to diligently and prudently add good, reliable loans to our portfolio."

Throughout the nation's 2008 financial crisis, the bank's management declined taking any TARP (Troubled Asset Relief Program) funds from the U.S. Treasury. Also, in a deliberate Board decision, the company allowed its total assets to settle at $156.8 million at year-end 2010, down 3% from its 2009 level, as the economy stabilized.

"Two years ago, I publicly stated: 'As a result of the mortgage mess, I believe community banks (like ours) will emerge stronger after the shake out . . . and banks will once again have the advantage of funding solid loans based on sound principles'," Denny Buchanan recalled.

"I believe that's what we are seeing now, even as we build our niche helping people purchase homes through the mortgage crisis," he stated.

I Bank Texas' 1600 deposit accounts - mostly in a Central Texas marketplace that also includes Bee Cave, Round Rock, Sun City and portions of Austin - totaled $118.3 million at year end.

"We have only 16 full-time and two part-time employees at our headquarters and three fulltime staffers in Georgetown (3613 Williams Dr., #201)," he stated, noting, "Our efficiency ratio is impressive, about half that of other banks in our peer group."

Denny, his wife Julie, and Chairman Jack Buchanan (who is not kin) have more than 75 years of banking experience between them. "And we hire people with deep experience. We are working managers, which is why our efficiency ratios are so good. Five of our seven board members have been here since the bank's inception.

"Our abiding objective is to continue building a quality, customer-focused, independent community bank operation with bankers and banking you can trust," the CEO said. "Decisions are made here. If we're open you won't get a recording."

Banking Enhancements . . . 2011 Growth Outlook
I Bank completed its modest, 3,500-square-foot corporate headquarters across from Lake Travis High School two years ago. The building and property, estimated at $1.5 million in value, will get a commercial boost in coming years with the anticipated completion in 2012 of the $250 million, 50-acre Lakeway Regional Medical Center, just across from the bank.

Chairman Jack Buchanan believes brick and mortar banking operations will continue to shrink as institutions shed branches and customers move to more online and mobile banking. He also sees regulatory pressure changing "tremendously" how banks do business, such as new rules on insurance coverage for non-interest bearing accounts, on overdrafts and on paying interest on commercial accounts.

"When interest payments on commercial accounts kicks in some time in 2011, many banks will scramble to redesign products to meet customer expectations. That may well affect sweep accounts," he observed.

I Bank Texas now offers top-line Internet banking services with bill pay and remote deposit capture. Its mobile banking capability will soon include an I-phone application, and additional merchant services will be announced this quarter.

The bank also offers a credit card through its correspondent bank, as well as its own debit card that allows platinum account holders four free withdrawals per month from ATMS at other Banks.

"I believe the economic recovery has begun, but it will be over an extended time," Denny Buchanan said. "Fortunately, Texas is the leading state in the nation and Austin is identified as a No. 1 performer by several key publications. This region's tech sector is a major plus.

"However, people are still de-leveraging their own balance sheets, shedding under-performing, unwanted and unnecessary assets with stricter corporate and individual mindsets on the 'new frugality.' That will keep the recovery slow moving and, hopefully, more sensibly, sure-footed and sustainable."

I Bank Texas, SSB is approved by the Texas Savings and Mortgage Lending Dept. and the Federal Deposit Insurance Corp. (FDIC). The bank's deposits are insured by the FDIC. (Cert. No. 58014)

Additional recent financial performance data on I Bank Texas can be seen at https://cdr.ffiec.gov/public/ManageFacsimiles.aspx. The next call report will be available in late January 2011.

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