Autobiography - The Galindo Group

Ram Galindo THE MAKING OF AN AMERICAN Page 131
disease became terminal and in a few months he passed away. I personally believe
that, had he survived into the1990s, he would have managed to keep Western from
closing down.
Woody Callan, as he was called, was an inspiration to me. When I approached him in
1981 to inquire about his interest in forming a bank with me, I had not ever met him
before. He attentively listened to my presentation for half an hour without even moving
an eyelid. He was 78 years young at the time, had recently married a bride not much
younger and moved to Bryan, her home, from his boyhood town of Waco, his previous
home. At the end of my talk his only words were - “when do we start?” In reality he was
the most enthusiastic, savvy and dynamic member of our group. He left deep tracks on
my consciousness with the attitude he radiated and his dedication to always doing what
he said he would do.
It will always be a matter of conjecture whether Woody could have saved the bank or
not. The real forces gravitating against our continued solvency were the bank and S&L
crisis I have described and the crude oil price drop. When President Reagan took office
many of the restrictions that kept oil companies hamstrung were removed. A flurry of
exploration ensued not only in Texas but also throughout the world. Oil became more
plentiful and OPEC (the cartel of oil producing countries) decided it could not afford to
curtail production among its members to support the price. The result was that in the
course of a few months in 1986 the price of crude went from a high of $36 a barrel to
almost $6, a towering example of the power released when government gets out of the
way and lets private initiative work. This sudden drop in the cost of energy was good for
the country, but bad for banks, especially Texas banks. It was deadly for young Bryan
College Station banks, where at least four fairly new and two old institutions went down.
At about the time we were founding Western, the local economy had been greatly
enriched by newly discovered oil. Just before 1980, an oil-bearing sandstone called
Woodbine was proven to be productive in a deep section whose surface was occupied
by the City of Bryan. The gentleman who hit the discovery well called his company
“Dreamers Oil”, for, like Mr. Patino in the mountains, he had had a long-held, strong
belief that there was oil where he was looking. He persevered until he found his gusher.
The high price of oil then prevailing caused a mini-boom of oil drillers in our area. Many
surface owners who had their mineral rights turned millionaires overnight. People from
all over the country moved to Brazos County. We became part of the oil patch. By far
the majority of the loans granted by Western during the early 1980s were based either
on real estate subject to the artificial support of banking and tax legislation or on oil
reserves calculated at high oil prices. In 1985 nobody even considered the possibility
that oil prices would take such a dramatic drop. In 1986 both of these macroeconomic
piers swung out from under our foundations and our loan portfolio began to collapse.
At the time we founded Western we educated ourselves about the advantages of
establishing a one-bank holding company. As soon as the viability of Western permitted
Autobiography.doc 131 of 239