Editor’s Eye on Houston: Banks Doing Much Better, Says Encore CEO D’Agostino

Posted September 9, 2011

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James D’Agostino Jr.

By Julie Armstrong

There are a lot of banks in Houston, says James D'Agostino Jr. The company he founded and is chairman and CEO of, Encore (Nasdaq: EBTX), happens to be one of 'em.

D'Agostino on Thursday presented the state of commercial banking as part of law firm BoyarMiller's fifth annual "Current State of the Capital Markets Breakfast Forum" at the Houstonian Hotel.

The forum addressed U.S. stock market performance, the credit markets and the European debt crisis, while also digging into U.S. mergers and acquisitions activity with a focus on energy and middle markets, as well as the state of the U.S. employment market.

Adding to his point that Houston has a lot of banks, D'Agostino noted:

• Three TBTF (too big to fail) banks have 60 percent of the market.
• Out-of-town banks control more than 75 percent of the market.
• Local banks have $24 billion in loans.

In general, the banks are doing much better than a year ago, according to D'Agostino's presentation, with more capital and liquidity and fewer problem assets, but revenue, loans and margins are all weak while costs are rising.

Encore Bancshares Inc., which has 11 private client offices in greater Houston, reported a 2010 net loss of $24.23 million on $100.55 million in revenue, compared with net income of $1.79 million on $104.56 million in revenue the previous year. The company offers banking, wealth management, trust, mortgage and insurance services.

Encore's stock closed trading Thursday at $10.64, with a 52-week range of $6.49 to $12.69.

D'Agostino founded Encore in March 2000. From 1986 until 1999, he worked in top roles for American General Corp. in Houston. Before that D'Agostino was chairman, president and CEO of American General Life and Accident Insurance Co., and had worked for Citigroup, Chase Manhattan Bank and Fidelity Union Trust Co.

He has served as a director of Midland, Texas-based Basic Energy Services Inc. (NYSE: BAS) since 2004.

BoyarMiller is a Houston-based law firm composed of two practice groups: business and litigation. The business group serves multinational companies, middle-market businesses and entrepreneurs in need of collaborative and strategic representation. The litigation group represents organizations of all sizes seeking to resolve complex business issues and employment disputes.

What do you think is the current state of Houston's capital market? Please comment below.

Also at citybizlist, see:

Encore Bancshares Reports Q1 2011 Net Earnings of $1.2M

Derek Munger Joins Encore Bank as SVP - Private Banking

Encore Bancshares' Sale of 4 Branches to Ovation Holdings Delayed - cbl

Encore