Deep in the Heart of Texas
- The Independent Lender
- Sep 3
- 3 min read
Texas is quickly putting itself on the commercial finance map with recent new firms starting and a region that is clearly growing.
"Deep in the Heart of Texas" is an popular American song about Texas. The 1941 song evokes a strong sense of patriotism, pride, and nostalgia for the state of Texas. The phrase is often used to express a love for the state's natural beauty, history, and cultural identity. The phrase can now be applied to express admiration for the state’s growing commercial finance industry. Texas is becoming home to a new crop of lenders including Legacy Corporate, Mountain Ridge, nFusion and of course fast-growing regional banks, Texas Capital Bank and Triumph Financial. The state is also seeing an influx of lending talent on all fronts – lenders, attorneys, turnaround firms, etc. Many major law firms including Winston & Strawn, Holland and Knight and Paul Hastings have significant lender-focused attorneys in Texas. (Editor’s Note: For a full list of Texas law firms, visit https://www.sfnet.com/home/membership/member-directory) The confluence of factors including population growth, pro-business regulation, no state income tax and cost of living taken together have created a new political-economic model.
The Texas Triangle, which contains the states five largest cities, and is home to over half of Texas’ population. The Triangle, formed by four main urban centers, Austin, Dallas-Ft Worth, Houston, and San Antonio, is projected to hit 23 million people in 2025. No other regional cluster of cities in the U.S. comes close to this population. Dallas-Fort Worth's population, which contains many bank and non-bank ABL groups, is projected to continue growing significantly, with estimates suggesting it could reach 9.3 million by 2030. The metroplex is on track to become the third largest in the U.S. by 2030, surpassing Chicago. The Houston-Galveston Area Council (H-GAC) projects a population increase of 3.6 million by 2050, reaching a total of 10.7 million residents. In case of Texas, following the people will lead to following the money. The reasons behind the state’s anticipated growth are many.
The state's regulatory structure is designed to be fair, transparent, and predictable, providing businesses with a stable operating environment. Texas has a large and diverse workforce, including a growing number of college graduates and skilled workers, which provides businesses with access to talent. Texas has the second-largest GDP in the United States, indicating a robust and diversified economy. Texas's central location provides businesses with access to global markets and transportation networks. Compared to states like California, Texas has a lower cost of living, making it an attractive location for businesses and individuals. The steady flow of Californians leaving for Texas, outpaced the reverse flow of Texans moving to CA, by 2 to 1, making up for a notable spike in 2018 and 2019. California topped the list of most residents moving to TX between 2022 and 2023.
Taken all together it’s easy to see why non-banks are starting there and banks are expanding there. It’s also clear that if you build it, they will come as the lending ecosystem has grown along with it. Texas Capital Bank is a prime example of a strong regional bank that now has almost 2,000 employees and acts like a full-service bank providing commercial banking, personal banking, investment banking, capital markets, ABL and even wealth management. Triumph Financial has morphed into a publicly traded diversified financial services company, including traditional banking, from its roots as a factor. These are just a few examples of regional banks that are trying to take share from the nation’s largest banks that are also growing significantly in the Texas market. It should be said that the nation’s biggest banks are also aggressively hiring in the Texas market.
Commercial finance in Texas is not quite early innings, but it is still being formed given the new firm formations and expansion of the nation’s biggest banks followed by the state’s regional banks expanding. It should also be noted that many of the leading companies have relocated to or formed hubs in the Dallas and surrounding areas such as Plano. Plano/Frisco is home to the headquarters of Toyota Motor North America, Capital One, Pizza Hut, Pepsi-Co North America, and Frito Lay. Ericsson, J.S Penny, NTT Data, also have significant operations here, and regional offices include Bank of America, Ericsson, FedEx, Intuit, Liberty Mutual, JP Morgan Chase. The PGA just moved their headquarters here and opened an amazing golf complex just north of Frisco. This translates into a significant demand for capital and surrounding ecosystem that comes with it. The historical ABL power cities of Chicago, NYC, LA and Atlanta better watch out as the lenders in Texas are just getting started. The stars at night are big and bright, deep in the heart of Texas.
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