Podcast: Growing a Bank Amid the Ups and Downs of Oil

“If you’re in Midland, Texas, you’re in the oil business,” says Jay Isaacs. “It doesn’t matter if you have a doughnut shop or a dry cleaners.” Isaacs is president of Midland-based FirstCapital Bank of Texas, and on the latest episode of the ABA Banking Journal Podcast, he talks about how his bank manages the unique challenges and opportunities faced by banks in the oil patch.

While no more than 14% of the bank’s portfolio is directly in oil and gas, most businesses and consumers in the Permian Basin are in some way affected by swings in oil prices and production. Isaacs says FirstCapital Bank focuses on lending to independent oil and gas producers, which he describes as safer than lending to drilling companies and oilfield services, which are often the first hit when prices drop. He also talks about how customers’ oil and gas-related business deals can result in large cash flows in and out of the bank, requiring higher liquidity levels.

Isaacs also discusses FirstCapital Bank’s recent entry into new markets in Texas — Horseshoe Bay, Wichita Falls and Dallas — via M&A and de novo strategies, as well as its workplace culture and expansion in mortgage lending.

If you can’t see the audio player above, click here to listen to this week’s episode.