State Bank of Texas is the culmination of years of hard work, grit and a determination to succeed, driven by founder Chan Patel. His story is the story of State Bank of Texas.
Founder: Chan Patel
Born in Bombay, India, in 1945, Chan Patel is an example of the American Dream personified. He grew up in an 8 X 8 room in the Dadar area of Mubai, India, with four siblings and his parents. In 1965 with $600 (his father’s whole life savings), he came to American to attend Stanford University and, through hard work and perseverance, earned his bachelor’s degree with top honors. Following his undergraduate degree, he was accepted to some of the finest graduate institutions in America, including MIT, Columbia, and Stanford. This was the beginning of Chan’s journey to the American Dream, a journey that would help transform the face of the hospitality industry.
After earning master’s degrees from both Stanford and John’s Hopkins University, Chan took a job as a programmer with Braniff Airlines—a job that brought him to Dallas, Texas where he would make his indelible mark. In 1976 Chan bought his first hotel. In his first year as a hotel owner, he worked three jobs to support his investment and his new family; because of his dedication, his hotel quickly began to make money and he was able to stop working with Braniff and devote himself to becoming a hotelier. It took him no time at all to become a giant in the hotel industry, and he quickly expanded his empire to include a total of 17 hotels. However, Patel has never been a man to rest on his laurels. In his journey to become a hotel owner, he learned that many of his fellow immigrants found it difficult to get a loan due to cultural differences. With this observation, a dream was born.
The beginning of State Bank of Texas
Chan Patel knew that his fellow immigrants were smart, hard-working and able entrepreneurs but the lack of lending solutions for them made it difficult for them to purchase cars, let alone start businesses and begin to build their own American Dream. So, he decided the best way to help would be to create a bank designed to meet the lending needs of the immigrant community, especially those who were in the hospitality industry. His journey to begin the State Bank of Texas was not an easy one. In the 1980’s, the economy was struggling, and capital was extremely limited. But obstacles have never been a problem for Chan Patel.
In order to start a bank at that time, it required $2 million of capital. With Chan willing to invest $1 million himself, he approached other local Indian businessmen and professionals to purchase shares at $10 per share. With banking being such a new venture, he was unable to raise the capital. He then approached several family members and friends to invest $100,000 each. In exchange, he promised that all of them would become professional bankers and be directors of the bank throughout their lifetimes. With this novel approach, he was able to raise the remaining $1 million within two weeks. Thus on October 19, 1987, Black Monday (the day the stock market crashed), Chan Patel began the State Bank of Texas with a single paid employee. With all eyes watching these “Motel Patels” opening a bank, Chan wanted to ensure the success of the bank. To this end he, his investors and their spouses took the necessary bank training courses and ran the bank with only one paid employee. With perseverance, they made it through the worst of the recession and later hired trained bankers to serve the growing customer base. From the second quarter of the opening to this day, State Bank of Texas has not reported any operating losses in any quarter.
State Bank of Texas Today
Today, over 30 years later, State Bank of Texas is still a family-owned and -operated bank, specializing in lending solutions for the hospitality industry. Under the leadership of Chan Patel, along with the execution and drive from his two sons, Sushil and Rajan Patel, State Bank of Texas continues to shape the banking and hospitality industries. Since its inception, SBT has distributed more than $70 million in profits and maintains a book equity value of $80 million—all without ever raising another penny in capital. Despite their success, the Patels maintain the values that made them successful. They develop one-to-one relationships with those they lend to, as well as with their account holders, and they work tirelessly to provide a maximum return on investment to their shareholders. In the last ten years, their growth has reached new levels, including acquisitions of Millennium State Bank of Texas, National Republic Bank of Chicago and Seaway Bank, and now State Bank of Texas is the largest Indian-American owned bank in the United States.