The Rise and Fall of the 

        River Oaks State Bank

The July meeting of the River Oaks Area Historical Society featured a River Oaks resident of 60 years, also recognized as a long time business owner here. Jack Farlow shared some very interesting information about a bank known as the River Oaks State Bank, which had just under a two year history before its untimely demise. Many of the ROAHS members present certainly remembered the excitement of having a River Oaks Bank, and the disappointment connected with the bank’s closing. A few of them had even been stockholders in the establishment.

First, a little history about Jack. His parents, Mary Esther and James Frank Farlow, moved to the Poly area of Fort Worth in 1930. Their children were Mary Esther Farlow, Jr. born in 1931, James Frank Farlow. Jr., born in 1933. and John, whom they called Jack, born in 1934. The family moved into the Morningside area where the children went to school for awhile, and in 1942, they became residents of what we called Castleberry, because the city of River Oaks had not been incorporated.  

Jack said there was one paved street which was Roberts Cut-Off from White Settlement Road to Carter’s Place, which is now the convenience store across from our present Post Office. There was also a road out to the Air Base we knew as Tarrant Field, later Carswell, and Jack said that was the extent of their world at that time.  However, because of World War II, houses were being built all over Castleberry and it was predicted that when the war was over, it would become a ghost town. Of course, that did not happen and Jack told us that as a child, he was disappointed about that be­cause he had never seen a ghost and he sure wanted to. I am sure that when I met Jack who was one class ahead of me at North Side High School, he no longer believed in ghosts. 

The community kept growing and became the City of River Oaks in 1949. In the early ‘50s, the business people decided it would be nice to have a bank in town and Jack’s father, a prominent insurance business owner on the Boulevard, promoted this idea. Jack had brought with him that evening, several articles from the River Oaks News and the Fort Worth Star Telegram to substantiate his story. He told us that other information came from his father’s personal papers. There was a picture of his father from the River Oaks News dated Feb. 12, 1954. It showed Mr. Farlow holding applications that were coming in to purchase small amounts of stock and stated an application had been made in Austin for a charter for a bank. Mr. Farlow sent many letters to business leaders and other citizens in the area, asking them to participate in buying stock. The State Banking Department required $350,000.00 in capital in order to receive a charter. Jack had a list of the original 165 stockholders who bought anywhere from one share to several hundred shares at $35 a share. The sale amounted to 10,000 shares which made the required amount of capital. He read several of the 165 names, some of whom are deceased and others still living.

 A building had to be leased and a staff hired. Jack asked if anyone remembered the old Howard Johnson’s Ice Cream Parlor which was between the shopping center we knew as Fair Oaks (later Monnings Oaks) and the present Griffs Hamburger Restaurant. A few people remembered it and also remembered that the bank leased the vacant Howard Johnson’s building, renovated it and added a vault. Mr. Granville Carpenter, who was president of First State Bank in Vernon, wanted to move to the area and he was hired as the first president. Jack showed us a Star Telegram picture and article dated Nov. 27, 1954, showing a man from the State Banking Department presenting a charter for the new River Oaks State Bank to Granville E. Carpenter, president, and Frank Farlow, a director.

 The bank opened on a Saturday, an unusual day of the week, and there were long lines of people wanting to become depositors. The first person to open an account was a fifteen year old Lawther Drive boy named Ronnie Johnston. Accepting the deposit was Mildred Matzinger who lived on Lynda Drive. His deposit was one silver dollar and one dollar bill. Within one month, the bank’s deposits exceeded one million dollars and included accounts from people and businesses from outside our area. Some of these were municipalities such as Lake Worth, Sansom Park, Fort Worth and even the State of Texas. 

In June of 1956, a reputable banker, a person named as Man of the Year by the Fort Worth Chamber of Commerce, became the bank’s second president. No one knew the bank would last only four months from that appointment. 

The new bank president had friends connected with an abstract company and this group became involved in a check-kiting scheme.   

This involves writing a check on an account, or writing a check to take cash out of an account which does not have sufficient funds, and then covering it by depositing a check from another bank’s account which also does not have sufficient funds or perhaps no funds at all. This group was reported to have about 30 accounts so they could go in circles, using money which basically did not exist. It was learned that they were primarily investing in an oil lease in Knox County, Texas which had the prospect of turning into a good oil field.

 Jack reminded us that in the 1950s, we didn’t have computers and a check had to go through proof and posting departments, be bundled and sent to a clearing house and then sent back to the bank on which it was written, often taking four to five days. This gave a person time to cover inadequate accounts with a check from another inadequate account and continue through a number of accounts with very little money in them. He also reminded us that check-kiting doesn’t work very well in our computer age where funds can come out of your bank within one day of writing a check or if using a debit card, can come out immediately.

 The River Oaks State Bank, like all state banks, was audited twice a year. An audit done in September of 1956 showed nothing wrong with the bank. However, the State already had their eye on a certain Abstract Co. and on October 12, a state examiner intercepted a check which was a deposit into the River Oaks Bank to cover another kited check. It was hand carried to the bank and found to be insufficient. A number of similar checks had been written and went undetected earlier the same week. Employees, examiners and bankers worked all weekend to determine the extent of the loss which ultimately exceeded $800,000. The bank was called a defunct institution and the FDIC closed it on October 15. It was determined that one mastermind, primarily the attorney of the abstract company, and several lesser persons were involved. They pled guilty to the charge of mail fraud. The FDIC, which insured accounts up to $10,000 in those days, paid most of the bank’s depositors and ironically, the oil field which the guilty parties invested in, eventually began to produce and paid back 97 percent of the losses over a six year period. Jack said another ironic part of the history was that the River Oaks State Bank was really in the edge of Fort Worth, just outside of the River Oaks boundary on the Boulevard. It was a wonderful dream of a bank that could give service to the city and it caused a lot of heartache to those honest people involved but like most River Oaks folks, those business people and other citizens were resilient and life went on. The rise and fall of the River Oaks State Bank is just another interesting part of the great history of River Oaks. 

Program Chairman Mearl Ellis presented a potted plant to Jack and we were able to visit with Jack and his wife, Marty, and their children who came to hear Dad speak that night. Even eight month old grandson, Andrew, was a good listener. We had the opportunity to view the newspaper clippings and to visit with one another. Jack took over his father’s insurance business in 1966 and ran it till 1996 when he merged his agency with another insurance agency. He still spends time servicing those accounts. Thanks to Jack for a very enjoyable and informative evening at ROAHS.