Houston Business Journal September 13, 1993

Banker's Alley Booms In Kingwood:

Seven rivals saturated bustling street

by Kenneth R. Pybus

When Bayshore National Bank opened a location in Kingwood three years ago, the branch was surrounded by empty fields. These days, the Bayshore National Branch Manager Greg Eversole looks out his window and sees a growing parade of competitors.

"This must be a popular location for financial institutions," Eversole quips. "It seems like every day a new sign goes up announcing another bank coming in with a branch."

He's almost right. Three other banks have set up shop and three savings and loans are under construction at the thriving intersection of Kingwood Drive and Lake Houston Parkway.

In two short years, this once-sleepy street corner has become the financial hub of Kingwood. Since Bayshore placed its branch, the master-planned community has sprawled to the southeast, and affluent neighborhoods have slowly enveloped the intersection. And two weeks ago, Kingwood announced plans to build an upscale shopping center at the intersection and create a town center area with the look of a small town America.

The recent opening of a nearby bridge over Lake Houston connecting Kingwood with Atascocita will further add to growth by opening up the Atascocita market to the Kingwood-based banks. Increased traffic flow is already apparent on nearby roads.

While the budding banker's alley continues to expand with an influx of newcomers, banks cite different reasons for wanting to be in the area. NationsBank is no stranger to the popular intersection. The bank moved its branch two years ago after completing feasibility studies and watching the signs of Kingwood's growth.

"We basically doubled our volume because there wasn't much banking available out here at that time," says NationsBank Branch Manager Frances Fuller. ?And even with the new banks, we've continued to grow. We've also gotten a fair amount of business from Atascocita.?

First Interstate Bank came to the center as part of a new Randall's Food Store, and First Heights Savings Bank opened its office last year to take advantage of the growing market.

Fears of oversaturation might have scared off some financial institutions at this point, but not Bank United. The Houston bank has a new branch under construction at the intersection.

"It's crowded," admits Jay Freeman, Bank United's director of retail support. "But we made the decision to come into the market with our eyes wide open. We knew the competition was there. But we wouldn't have come in unless we thought we had a niche to fill."

Freeman says he thinks Bank United has gleaned the prime location for its branch to be completed in mid-October - accessible from both major streetsand part of the upscale shopping project. He expects convenience to help attract initial customers.

"Plus Kingwood is a growth market, and we're in the growing area," he says. "A tremendous amount of the location's appeal is being a part of that development."
Guaranty Federal Bank has been the latest to announce plans to put a branch at the booming center. Grace Mansfield, South Texas region manager for the S&L, says construction will begin this fall.

Guaranty Federal was one of Kingwood's first financial institutions and hopes to cash in on the city's growth with a second location.

"Where we are now, we're landlocked," Mansfield says. "We're unable to expand and we're having some growing pains. We want to improve our service quality by being able to expand.

"Guaranty Federal already has considerable market share in Kingwood because we were one of the pioneers out there in the mid-1970s," she adds. "And obviously, we've got a position to protect and see the potential for growth that direction."

World Savings, a California thrift, also is nearing completion on construction of its own branch at the intersection.

As more financial institutions muscle into the area, nobody can predict for sure just how many banks will be able to maintain profitable operations. But the street corner offers a wide variety of options for the discriminating depositor.

NationsBank's Fuller is pragmatic about the competition, saying it was inevitable.
"It just shows the potential of the market - there's a lot of it to go around," she says. "Everyone wants a piece pf the pie."


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