Nacogdoches evaluates banking options with six banks responding to city proposals

In a recent City Council meeting held on July 1, 2025, the financial strategies of Nacogdoches were a focal point, particularly regarding the city's banking relationships. The meeting highlighted a competitive selection process involving six local banks, which was praised for its strong turnout and engagement.

The city evaluated proposals from these banks based on a holistic approach, considering not only the financial impact but also the banks' capabilities and service offerings. Key factors included the cost of services, interest rates on city balances, and the convenience of bank locations. The city has maintained an average balance of nearly $10 million over the past year, which was crucial for calculating potential returns from these banks.

Cadence Bank emerged as the top contender, offering a no-fee proposal with an attractive interest rate of 3.7%. This was significant, as four of the six banks provided no-fee options, but the interest rates varied widely, impacting the overall attractiveness of their proposals. The council noted that while no fees are appealing, they must also ensure that the city earns interest on its deposits.

Concerns were raised about First National Bank, which, despite having a competitive offer, is located in a Walmart. This raised safety issues regarding the transport of cash, prompting the council to consider alternatives. Ultimately, Cadence Bank and Austin Bank were identified as the leading options, with Southside Bank, the current provider, also being considered for a demonstration.

The council also discussed the possibility of adjusting the city's banking strategy by lowering balances to explore more aggressive investment opportunities. This reflects a proactive approach to managing city finances and maximizing returns.

As the council moves forward, the decisions made in this meeting will have significant implications for the city's financial health and its ability to serve the community effectively. The next steps will involve further evaluations and potential negotiations with the selected banks to finalize agreements that best serve Nacogdoches.