State Bank of Texas Announces the Acquisition of the National Republic Bank of Chicago

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Transaction makes State Bank of Texas the largest Indian-American owned and operated bank in the United States with over $1 billion in total assets.

State Bank of Texas acquires National Republic Bank of Chicago

State Bank of Texas acquires National Republic Bank of Chicago

This is truly a unique and attractive opportunity for our Bank to acquire a banking operation in Chicago which is such a major market. And with over [66%] of the acquired loans in the lodging sector, we will be expanding our asset base while still...

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Highlights of the Announced Transaction:

  •     National Republic Bank of Chicago (“NRB”) was closed on October 24, 2014 by the OCC, the Office of the Comptroller of Currency, appointing the FDIC as Receiver.
  • FDIC entered into a Purchase and Assumption Agreement with State Bank of Texas (“SBT”).
  • As of June 30, 2014, the NRB had approximately $993 million in total assets and $915 million in total deposits.
  • In addition to assuming all of the non-brokered deposits of the failed bank, SBT agreed to purchase close to $626 million of the total assets.
  • The two branches of NRB will reopen as branches of SBT and maintain their normal business hours on October 25, 2014.
  • Depositors of NRB automatically will become depositors of SBT. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of NRB can continue to use their existing branch.
  • Opportunity for SBT to expand its operations into a major market and continue its niche lending strategy in the lodging sector

State Bank of Texas announced that it has acquired the National Republic Bank of Chicago by entering into a Purchase and Assumption Agreement with the FDIC acting as Receiver for the National Republic Bank of Chicago, a Chicago based nationally chartered bank with $993 million in total assets and $915 million in total deposits as of June 30, 2014. This transaction will strengthen State Bank of Texas to be the largest Indian-American owned and operated bank in the United States with over $1 billion in total assets. In addition, it provides a unique opportunity for SBT to expand its operations to a major market in Chicago while retaining its strong lending foothold in the lodging industry. State Bank of Texas is led by Chan Patel, CEO and Chairman, and his two sons, Sushil Patel, EVP and Chief Lending Officer, and Rajan Patel, SVP of Lending.

Chan Patel commented, “This is truly a unique and attractive opportunity for our Bank to acquire a banking operation in Chicago which is such a major market. And with over [66%] of the acquired loans in the lodging sector, we will be expanding our asset base while still sticking to what we know – Indian borrowers and hotel loans.” NRB has two branches in Chicago which will reopen as branches of State Bank of Texas and continue operations with their normal business hours. Chan Patel added, “NRB’s existing customers will continue to receive the same customer service and products without disruption and we anticipate business as usual.” SBT will retain its headquarters in Dallas, TX and anticipates significant cost savings and synergies from the eventual merging of the back office bank operations and loan departments.

State Bank of Texas was founded in 1987 by Chan Patel with the vision of supporting the entrepreneurship of his fellow Indian immigrants. It is a Texas state-chartered, family owned and operated bank based in Dallas, TX. As of June 30, 2014, SBT had $413 million in total assets and about $100 million in total capital. State Bank of Texas was recently named as the top performing community bank in the United States by Sageworks based on an analysis of more than 4,500 banks that had between $100 million and $10 billion in assets. Based on return on average assets (ROAA), a metric Warren Buffett reportedly uses to identify the best big-bank investments, State Bank of Texas did the best job at generating income using available assets. Its efficiency ratio was also superior to the other banks evaluated using data from Sageworks Bank Information. State Bank of Texas has produced a 5.1 percent return on average assets (ROAA) and an efficiency ratio of 24.4 percent, through June 30 of this year. Efficiency Ratio is determined by taking the bank’s overhead cost as a percentage of its revenue, so it is a frequently assessed metric to determine bank performance. As Chan Patel described it, “Great efficiency ratios occur when you have any owner-operated business…it means no throwing away any money, no top heavy staff, and no unnecessary expenses.” With the acquisition of NRB and its growth to over $1 billion in total assets, State Bank of Texas intends to continue its formula of providing loans to hard-working entrepreneurs while applying the same conservative fiscal practices that have been responsible for its historical success.

About State Bank of Texas and Its Owners

Founded in 1987, State Bank of Texas (http://www.statebnk.com/) was founded by Chan Patel with the vision of supporting the entrepreneurship of other fellow Indian immigrants. State Bank of Texas is a Texas state-chartered, family-owned and operated bank based in Dallas, TX. As of June 30, 2014, SBT had $413 million in total assets with a strong niche lending focus in the lodging industry. Under the leadership and guidance of Chan Patel, a graduate of Stanford University and Johns Hopkins University graduate programs, and the expertise and execution of his two sons, Sushil Patel and Rajan Patel, who joined in 2004 after obtaining degrees in Business and Finance (Sushil - an MBA from the University of Chicago; and Rajan – a Masters in Banking from the Southwest Graduate School of Banking), they operate SBT with a strong family ethic and continue to assist other immigrants in obtaining loans in order to build upon their dreams, just as he and his own family did.

Related FDIC Announcement:
https://www.fdic.gov/news/news/press/2014/pr14089.html

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