From the Ground Up

Republican activist and one-time state treasurer candidate David Hartman wasn't the only banker to pull through the bust of the late 1980s, a time when bank failures were shaking the foundations of Austin's once-strong economy. But his bank, Hartland, saw success beyond that of any other community bank in Austin, growing in just over 10 years to 14 times its original value -- from $21 million in assets in 1989 to $294 million this year.

Prior to 1988, Hartman, a former El Paso oilman and trucking executive, had just one foray into the banking business to his credit: Until 1995, he had held a majority share in Valley Bancorp, a holding company in El Paso. When the banks began to fail, Hartman saw opportunity in the carnage; along with his brothers, Wayne and Doug, he bought the failed Guaranty Savings Bank for a pittance -- $2.5 million -- in 1988. While Congress was busy "letting the savings and loans carry on after they were clearly bankrupt and allowing the banks to fail," Hartman says, he and his brothers began building Hartland from the ground up, transforming a bank that had been hobbled by a series of loan missteps into a profitable paragon for community banking in Austin.

Hartman's decision to enter banking was only the latest in a series of pursuits which led him from the oil and chemical industries to the trucking business to party politics. A longtime activist in the Republican party, Hartman has published several studies on fiscal policy for conservative publications and think tanks like the Cato Institute;his article credits include such titles as "The Work vs. Welfare Trade-off," "The Economic Assault of the Welfare State on the Traditional American Family," and "Closing the U.S. Capital Deficit."

During Gov. Bill Clements' administration, Hartman put his skills as a policy wonk to work as a member of the governor's special committee on state agency organization. In 1994, he ran for state treasurer on the Republican ticket, losing by less than 1% of the vote in a race marred by a minor scandal when Hartman made a comment about the differences in math and science abilities between boys and girls.

A social and fiscal conservative, Hartman blames credit unions and Congress -- not the rapid expansion of megabanks like Wells Fargo and Bank of America -- for the demise of small, independent banks. "The government has seemed to support consolidation" of banks, Hartman says. "Personally, I don't feel that's a necessity. I say, let the market decide what it needs."

During his tenure, Hartland specialized in commercial loans to small businesses and in customer service, two features that Hartman believes set the family-run bank apart from the larger institutions. "Personally, I'm inclined to think that there is some advantage to having locally owned banks that provide what people in the community need," Hartman says. Still, he says he is confident that Compass, which recently bought Hartland for $84 million, will carry on the bank's tradition of strong customer service. "I think our customers have taken a wait-and-see position on [the sale], but they seem confident that they're going to be dealing with the same people, so I think they'll keep that personal relationship they have had." --E.C.B.