Some two thousand members of the North Texas business elite once gathered for a black-tie gala to celebrate the grand opening of a banking giant’s new headquarters. InterFirst Corporation was moving to the newly built InterFirst Plaza, a seventy-two–story skyscraper that remains the tallest building in Dallas nearly forty years later. As partygoers feasted on shrimp high above downtown, a city councilwoman flipped on a set of lights that bathed the outline of the building in neon green.
That September 1985 event demonstrated the heights that the city’s finance industry had scaled over the previous few decades. Area bankers had grown prosperous by lending to the oil and gas and real estate industries, and Dallas was home to three of the country’s twenty-five largest financial institutions. The city’s financiers even had the ears of then-vice president George H.W. Bush and Treasury Secretary James Baker, both Texans who had developed close ties with the banking industry before assuming roles in Washington.
Yet a few months after the gala, the glow at InterFirst Plaza had faded. The building’s developers noticed gaps in the skyscraper’s neon outline and turned off the lights altogether. The embarrassment portended a far greater calamity for the bankers working inside. The price for a barrel of U.S. crude oil slipped to around $10 in April 1986, down by more than half from a few months earlier, when Saudi Arabia doubled its production. Oil companies and real estate developers, suffering from oversupply after the energy sector’s struggles wiped out demand, defaulted on loans, shrinking area banks’ assets.
In 1987, InterFirst merged with Republic, another banking giant based in Dallas, and the new entity crumbled a year later in what was then the largest single bank failure in American history. Other Texas banks shed employees and got absorbed by out-of-state institutions less inclined to lend to local businesses, stymying economic progress in the Dallas–Fort Worth area. “They say the Great Recession happened in 2008, 2010. Our Great Recession happened in Texas in the eighties. In fact, I would say we were in a depression,” said Jody Grant, who became CEO of Fort Worth’s Texas American Bank in April 1986 and led it until it failed in 1989.
Grant, founder and chairman emeritus of Texas Capital Bank, told me stories about the eighties crash from his office on the fifth floor of an Uptown Dallas skyscraper adjacent to Klyde Warren Park. Beneath his window, a construction crew works on the foundation of a new Bank of America office. JPMorgan Chase’s offices sit in a building visible across the park, and down the street Goldman Sachs is building a new Dallas campus that will house roughly five thousand employees. Grant calls the area Financial Row. Combined with new or soon-to-be ready nationwide or regional headquarters for financial firms in suburbs such as Westlake (Fidelity and Charles Schwab) and Irving (Wells Fargo), it exemplifies a new boom era for the Dallas–Fort Worth area’s banking sector.
In the last decade, North Texas has added about 100,000 banking jobs, roughly half of which have come since the onset of the COVID-19 pandemic in the spring of 2020. The metro area’s finance sector employment totals a little less than 370,000, according to the Bureau of Labor Statistics. This recent growth spurt has vaulted DFW past Chicago and Los Angeles in this metric, making it the nation’s No. 2 financial capital.
The region still trails the New York City area by about 450,000 jobs, however. For all their investment in Texas, for instance, Goldman Sachs and JPMorgan Chase each employ about twice as many workers in NYC as in DFW. But finance jobs represent a larger share of total employment in North Texas, at 8.7 percent, than in the Big Apple (8.2 percent), according to BLS data.
Cities such as Dallas, Plano, and Irving have spent millions luring banking jobs here, believing they’ll deliver wider benefits to local economies. Of course, the last time North Texas was synonymous with banking power—nearly 10 percent of area jobs were in finance in April 1986—the lights eventually went out and plunged the region’s economy into darkness.
Almost nobody expects the Dallas–Fort Worth area to ever supplant New York as the country’s top financial job center—or for Financial Row in Uptown to match Wall Street as the symbolic and physical heart of the industry. But the influence of finance to the area’s economy—and reputation as a destination for bankers—is growing. Amid the dense cluster of financial firms at the edge of downtown and Uptown, most weekdays you can’t walk a block without seeing someone in a long-sleeve button-down shirt topped with a fleece vest, the unofficial “finance bro” uniform.
Dallas–Fort Worth’s ascent from the rubble of the eighties came as the area’s economy matured beyond oil and gas and real estate into business services, manufacturing, and technology. Out-of-state companies, seeking lower taxes and living costs, flocked to North Texas. Twenty-two firms of the Fortune 500 are now headquartered in the area, compared to nine in 1979. That puts DFW fourth among cities hosting Fortune 500 firms, behind New York, Chicago, and Houston.
Chicago has suffered from stagnant population growth (and complaints from some companies about a hostile business environment), while North Texas has boomed. As for Greater Houston, more than 20 of its 26 Fortune 500 companies operate in the energy and petrochemical industries. That leaves Houston banks more exposed to oil and gas prices, compared to banks in DFW, according to Torrey Littlejohn, managing director for the real estate services company JLL Dallas. The Fortune 500 companies headquartered in the Dallas–Fort Worth area are spread among sectors including aviation, construction, health care, real estate, and technology, along with six in energy and petrochemicals.
That diversity, said William Maxwell, a finance professor at Southern Methodist University, “created a gravity that started pulling in all these other [financial] firms” that wanted to be close to corporate decision makers. At first much of the banking industry growth involved support jobs—employees who carried out investment decisions made by higher-level managers who lived elsewhere. But over the last few years, those decision-making positions have been drawn to DFW. “Every single investment bank in the world is trying to get in front of Dallas’s Fortune 500 executives,” Maxwell said, adding that they’re more likely to do business with somebody they’ve “played golf with” than a New Yorker who flies in “with their Guccis on.”
Aasem Khalil was a lifelong New Yorker until about eight years ago, after his boss at Goldman Sachs asked him to move to Dallas, for proximity to clients in the region. At first Khalil pictured a flyover city devoid of culture. He even thought about the dreaded “equities in Dallas” reference, industry shorthand for an undesirable finance job, from Michael Lewis’s 1989 book Liar’s Poker. But now Khalil, Goldman’s global head of investment banking services, refers to Dallas using “we,” boasting everything from sporting events at the American Airlines Center to the convenience of DFW International Airport to the friendliness of the finance community. New York colleagues who thanked him for taking one for the team when they heard he had to move, now express curiosity about what it’s like to live in Texas. He routinely bumps into corporate leaders at Central Market or youth basketball games near his home in the tony Park Cities, building connections that he says would be harder to make if he were simply visiting from New York.
Proximity matters so much to the banks that most of JPMorgan’s area employees (who number around 18,500, up from about 4,000 twenty years ago) work from its regional headquarters in Plano rather than its offices on the edge of Uptown Dallas. Much of North Texas’s growth has occurred in the Collin County suburbs and exurbs. Diego Gordillo, a regional head of middle market banking at JPMorgan, said the sprawl allows room for land-intensive manufacturing companies and for banks to swoop in nearby to finance their growth. “Just purely from a geographic perspective Dallas . . . can continue to expand horizontally,” he said.
Local governments have bet big on the burgeoning finance industry’s impact. The city of Irving gave Wells Fargo a $31 million incentive package to build a campus there that’s slated to open next year. Goldman Sachs and Hunt Realty Investments, which is developing Goldman’s new property, got about $18 million in grants and tax abatements from Dallas. In return, the city expects to earn about $2.4 million in annual tax revenues from the first phase of the Goldman Sachs development, and at least 35 percent of the 5,000 employees expected to work at the office must reside in the city of Dallas.
In 2022, the Dallas City Council debated the merits of offering financial aid to such a well-heeled public corporation. Councilwoman Carolyn King Arnold remarked that the city was being asked to put “money into the hands of those eating on a regular basis,” rather than in southern Dallas, where the median household income is about 40 percent lower than in the metro area as a whole and where residents enjoy fewer economic opportunities, including fewer physical bank offices willing to provide loans. But the measure passed unanimously. Tennell Atkins, mayor pro tem of Dallas and chair of the city’s economic development committee, told Texas Monthly he would have preferred Goldman Sachs build an office in southern Dallas but believes the economic incentive was needed to secure the deal and guarantee the new jobs and property taxes.
He and others view Dallas–Fort Worth as benefitting from the banks, and vice versa. Littlejohn, the JLL Dallas managing director, said the region’s economic diversity offers banks opportunities to spread their investments, while also reducing the odds of the sort of economic crash that occurred in the eighties. DFW recently ranked second among large metros in Moody’s Industrial Diversity Index, behind Chicago and tied with Atlanta.
Back before the eighties crash, Jody Grant’s Texas American Bank had 40 percent of its loans tied up in the oil and gas industry at one point (and when that got risky the bank shifted to real estate). Other top banks had as much as 50 percent of their investments in oil and gas and similarly moved to real estate when oil prices got volatile, giving them little room to weather a decline in both of those industries. (In contrast, in the first quarter of this year, oil and gas represented under 3 percent of JPMorgan Chase’s overall credit exposures.) Any metro-wide finance-industry crunch, Grant said, would likely be the result of a malaise affecting the whole country.
Nevertheless, the finance sector has seen better days. Several major banks, such as Goldman Sachs and Wells Fargo, initiated layoffs in 2023, reducing their head counts by between 2 percent to 7 percent. It led to a loss of more than 23,000 big bank jobs, according to Reuters. Financial services jobs overall, however, were up slightly at the end of last year compared to December 2022. A collapse in the commercial real estate sector, hypothesized since the onset of the pandemic, could lead to further problems for banks. The good news for Dallas, Irving, and other suburbs with new office space for the finance industry is that bankers tend to go into the office.
And they seem to embrace Dallas–Fort Worth. “We have not had any trouble getting people to Texas,” said Rob Holmes, president and CEO of Texas Capital Bank. Clinton Warren, JPMorgan Chase’s south region head of investments and advice, was at first concerned with Dallas’s old-money reputation. But he said he’s found others in the city willing to share connections. That assessment strikes a contrast to an anecdote Grant tells about one prominent banking executive who moved to Dallas in the eighties after his company absorbed one of the area’s failed banks. When the executive applied to join the exclusive Dallas Country Club, somebody on the membership committee ripped his application in half.
As for the newer finance execs who’ve come to town in recent years? “They’ve become Texans,” said Grant, and he suspects he knows why. “Is there any place almost in the world that you’d rather be in than Dallas, Texas, economically today?”
