San Antonio Express-News (Sunday)
After 77 years, Jefferson Bank continues growth with new HQ and Austin office
San Antonio’s banking sector has been transformed multiple times in the 77 years since Jefferson Bank was founded to serve the Jefferson neighborhood on the near Northwest Side.
The sector has endured numerous economic recessions, as well as booms and busts in the real estate market. Lately, rising mortgage rates have put a damper on demand for housing. Meanwhile, the local banking sector has grown more crowded with national banks such as PNC moving in.
Yet Jefferson Bank, one of San Antonio’s oldest community banks, continues to grow. This year, it took two major steps forward, opening an office in downtown Austin and moving employees into a new headquarters tower on Broadway Street across from Pearl.
“I think Austin-San Antonio will be a metroplex, just like Dallas and Fort Worth, so it’s just natural evolution for us to be there,” said Mike Wueste, president of Jefferson’s mortgage division.
The bank also underwent leadership changes this year, with Paul McSween, who had been its president, becoming board chairman — only the fourth in its long history. Danny Butler, its CEO, is now president also.
Wueste and Michelle Casillas, a vice president and trust officer, recently met with the Express-News to discuss its expansion in Austin, trends in the banking industry and the advantages community banks offer over national banks.
Wueste has been with the bank for 12 years and has worked in mortgage banking for 47 years. Casillas, who joined the bank in February, helps clients form trusts — arrangements under which they enlist the bank to perform services such as looking after their finances in their old age or after their children who have special needs in the event that something happens to them. With a law degree from the University of Texas School of Law, she was previously a staff attorney for three years in Bexar County Probate Court No. 2.
The following has been edited for brevity and clarity.
Q: Mike, how did you come to specialize in mortgage banking?
Wueste:
I was working for a commercial developer, and I knew somebody in the mortgage business. In 1976, they were growing their operation, and he thought I’d be good. I didn’t even know how to spell “mortgage” back then. Nobody grows up wanting to be a mortgage banker.
Q: But you enjoy it? Wueste:
I love it — helping people with the most important financial transaction in their lives.
Q: Has the mortgage business become more competitive in San Antonio as more banks have entered the market?
Wueste:
Well, the mortgage business has always been competitive. Even back in the day, when I got in the business, when there were no more than seven or eight mortgage companies and a few savings and loans. In today’s world, it is more commoditized because of the big national lenders. You’re bombarded with price — the fastest and lowest price.
Q: You must have seen so much during your career — the post-9/11 recession, the Great Recession, the COVID-19 pandemic and so on. Having been through all that, can you endure market swings more easily than your younger colleagues?
Wueste:
I don’t know that I have any different perspective. What’s critical is when things are tough, you just make good strategic business plans and keep moving forward. In spite of how different this environment is today versus two years ago, when rates were at 3 percent, I can look anybody in the eye and tell them, “It’s a good time to buy a home.” If you don’t own a home and you’re going to live in the same place for three to five years, you should buy a home.
Q: Tell me about what’s going on in the mortgage market right now.
Wueste:
The environment is very difficult for our customers, so it’s difficult for us. It’s difficult for us to help them fulfill because of the high interest rates, high housing prices and a very tight
Compound that with how quickly interest rates moved up — it was just a really difficult time for prospective homebuyers, psychologically. That said, through September, we’ve helped over 450 families with home loan products this year. That’s down a little bit from last year, about 15 percent. But in spite of all the negativity you hear about housing, we’re still in a reasonably affordable environment in San Antonio. I think that the supply issue will work itself out. Relatively speaking, a 7% interest rate over my career is not all that traumatic. My wife and I had the privilege of paying doubledigit interest rates for one of our houses, and we were glad to get it.
Q: What’s the advantage of using a local bank versus a national bank for a mortgage?
Wueste:
In the case of Jefferson Bank, I think the benefit to our customers is our ties to the community. Since 1946, when the bank was chartered, we’ve been doing home loans in San Antonio. We bring a lot of knowledge and understanding about the local real estate market. We know the appraisers, title companies, the engineering firms that do surveys. Our fulfillment is painless. The process of buying a home does not have to be a traumatic experience. It may require us giving people some tough plans to follow, relative to cleaning up credit or saving some money or maybe recalibrating what they’d like to buy. But we do that well.
Q: So you have deeper knowledge of the local market than national lenders.
Wueste:
They’re more transaction-driven. They’re trying to do more of a finite number of products, where we’re not deterred by a complicated product or a complicated process of acquiring somebody down payment resources through the city and the Federal Home Loan Bank.
Q: Tell me about the bank’s growth plans for the mortgage department.
Wueste:
We have recently expanded to Austin. We make loans all over the state of Texas. We’ve limited our coverage beyond Texas simply because we want to bring local knowledge. We don’t want to get into a state or municipality that has fees or codes that we don’t understand. We found that we were helping secondand third-generation customers in Houston, Dallas and then naturally in Austin.
Q: Basically, looking to expand your volume of mortgages elsewhere in Texas?
Wueste:
Well, we’re focused on San Antonio and Austin. There’s so much opportunity in these two markets. That’s where our resources are going to go. If we have the opportunity to make a home loan to somebody that’s got an existing relationship with us in Houston or Dallas, we’ll accommodate always.
Q: Michelle, what are the advantages of using a trust?
Casillas:
We have a population that is aging, so a lot of concerns come about: “Who’s going to look after us?” Now that people are living longer, that’s a concern. I had a couple that called and said, “We don’t have any family members that we could give this responsibility.” Unfortuinventory. nately, they saw it as a burden — but it’s not a burden, right? You should be able to be taken care of. They realized that they want to make sure they have a trust where they can name someone like Jefferson Bank to be able to step in and manage their assets for their care. You also have individuals who may have blended families, and they want to continue the harmony that they’ve built. Sometimes, it can be easier to put someone neutral in place to manage that. Should something happen to them, ultimately, what gets distributed and how it gets distributed.
Q: Do you ever have to have difficult conversations — telling beneficiaries that they can’t buy what they want to buy?
Casillas:
That’s definitely something we have to do. As people say, the easy part is saying “yes,” but when you have to say “no,” I think part of it is giving the individual the knowledge of what is going on: “Look, this is what I’m bound by.” We’re not just making up a “yes” or “no”; we’re actually being thoughtful in what you want and making sure it complies with our instructions. There’s some accounts that I’ve had where they’re young beneficiaries, so we’re sitting down with them to say, “Have you ever had a budget? Let’s work on one.”
Q: With the aging population, I would imagine demand for trusts is growing.
Casillas:
I certainly saw it in private practice. There’s a lot of need for probate work growing in the state as well. We saw the creation, I think, of about four new probate courts in Texas just this past (legislative) session. So that’s pretty big.
Q: Do you have growth plans for the trust department?
Casillas:
We definitely are growing. I’m part of it, right? I joined earlier in the year. We want to make sure that it’s controlled growth because we want to make sure that at the end of the day we are still providing that first-rate service and continue to be that community bank where you can get someone on the line and get questions answered.
Q: If you’re creating a trust, it seems like you would want to trust the person doing it — hence the name.
Casillas:
Yes. Just as an example, today one of the other trust officers was mentioning that they had talked to someone who was interested in creating a trust for their child who has special needs, so if anything should happen to the parents, someone like Jefferson could step in to take care of them. In talking to them, (the officer found out) that their child really enjoys the pool and it’s a form of therapy. It seems like something small, but in carrying out that trust in the future, if that’s a request that’s coming in from the family members taking care of them, we know that there is a need for this — that this would be a good thing to invest in for their benefit. So it does help to get to know people, and that’s what we try to do.