IPO Means More Green Ahead for Green Bank

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IPO Means More Green Ahead for Green Bank

By Andrea Rumbaugh, Houston Chronicle

GeoffChronHouston’s Green Bancorp is going public, and its growth strategy doesn’t stop there.

The company on Tuesday said it filed documents with regulators to launch an initial public offering.

The move follows a deal that Green Bancorp, the holding company for Green Bank, announced last month to buy a Plano-based bank.

Moving forward, Green Bancorp will be on the lookout for more acquisitions, Geoff Greenwade,
president of Green Bancorp and president and CEO of Green Bank, said in an interview.

“I can’t think of a better place to grow than being in the state of Texas,” he said. “And so Texas is our No. 1, 2 and 3 priority.”

Green Bancorp applied to the Securities and Exchange Commission to list its common stock
under the symbol GNBC. Its preliminary prospectus did not detail how many shares it would offer, the price range or what exchange it will be traded on.

Green Bank, a nationally chartered commercial bank, has seven branches in the Houston area and five others in the Dallas and Austin areas.

In May, Green Bancorp announced it inked a deal to acquire SP Bancorp, the parent holding company of Plano-based Share-Plus Bank, for $46.2 million. That will add four branches: three in the Dallas area and one inLouisville, Ky.

The deal is Green Bancorp’s fifth acquisition in seven years, Greenwade said, and it’s expected to close late in the third quarter of this year.

Growing in Texas

Greenwade said he looks to keep growing in the bank’s current three markets in Texas, but will look at adding new areas, including Fort Worth. As for acquisitions, Greenwade said he has a target list of banks he will continue to woo.

The planned IPO’s fundraising target is up to $100 million. The company said in its filing that it intends to use $8 million of the net proceeds toward the purchase of SharePlus. Then, all but $5 million of the remaining net proceeds will go for general purposes at Green Bank.

Dan Bass, managing director of investment banking for bank advisory firm Performance Trust Capital Partners, noted there are only a handful of public banks based in Texas.

Being a publicly traded company, he said, will give Green Bancorp liquid currency for future merger and acquisition opportunities, giving it a leg up on other buyers without the same access.

“It offers them a currency to do more deals in the Houston market,” he said.

It is also an opportunity to attract out-of-state investors. And since there are few public banks in the area, he said Green Bancorp will add another option for investors wanting into the Texas or specifically the Houston banking market.

Out-of-state banks?

But given its size, Bass said, Green Bancorp is already on the radar of large out-of-state banks looking to gain entrance into the Texas marketplace through a possible acquisition.

As of March 31, Green Bancorp had total assets of $1.8 billion, total loans of $1.4 billion (of which $1.39 billion were originated by the company and $18.8 million were acquired), total deposits of $1.5 billion and total shareholders’ equity of $203.6 million, according to its SEC filing.

Greenwade said Green Bancorp doesn’t have a target size, and its focus now is on becoming a stronger, more valuable bank in terms of profitability and strength of balance sheet.

Jeff Davis, Nashville based managing director for Mercer Capital, said Texas is hot from an investor’s perspective because of its growing economy. And because Green Bancorp is a growth company based in Houston, he thinks the IPO may have a little richer valuation than typical banks.

“I think it’s going to be a very well received IPO on Wall Street,” he said.