Houston Business Journal Feb 27, 2006

Banker back for colorful encore

Green Bank sprouts as new sequel from former Coastal chief HoustonBusinessJournal February24, 2006 by Jim Greer HoustonBusinessJournal Manny Mehos is back in Houston banking and going for the green.

GreenBank is the latest venture for Mehos, who built the former Coastal Bancorp into a savings bank network with $2.6 billion in assets before selling to Hibernia Corp.

His 12 percent ownership stake in Coastal Bancorp delivered Mehos an estimated pretax windfall of more than $27 million in the 2004 sale.

A non-compete agreement that has since kept Mehos on the sideline expires in June.

He is already sowing the seeds of Green Bank, a state savings bank awaiting charter approval from regulators.

Mehos continues to map strategy for growth and iron out shareholder details for Green Bank, part of Houston-based holding company Green Bancorp Inc.

But the bank's name already is set in stone.

"It's the color of money," notes Mehos, chairman and CEOof Green Bancorp. The name also implies growth.

"We want to get to $500 million as quickly as possible," says Mehos.

A hurdle to growth

Green Bank's quest to reach $500 million in assets and $500 million in deposits principally through acquisitions faces a financial hurdle in the current market.

"Prices for banks are so high now," says Mehos.

Chris Marinac, research director at FIG Partners LLC,agrees that price expectations among acquisition targets "remain lofty."

Mehos acknowledges a deal-making environment that's hardly ideal. Even so, he expects to tote an initial investment in the startup bank of 25 percent to 50 percent.

Such a sizable stake is impressive, says Jefferson Harralson, a bank equity analyst at Keefe, Bruyette &Woods.

"It shows a lot of confidence in the game plan if he's going to put significant dollars into it," says Harralson.

industry players have peppered the Houston area with a flurry of new branches.

Mehos jumps into this fray.

Regulators could approve a state savings bank for Green Bank in the current quarter.

The CEO's plan calls for the startup bank to open a temporary location on Montrose Boulevard at Colquitt.

Green Bank will build a permanent headquarters on the Southwest Freeway feeder road at Greenbriar. The main bank and corporate offices will go on the southwest corner of Greenbriar and the Southwest Freeway, near the Magic Island restaurant.

Southampton and West University customers and their high incomes are perched within easy reach of the bank's home base.

For the roughly one square mile that will represent the main bank's primary market area, Mehos cites a cumulative household income of more than $200 million per year.

On the consumer banking side, Green Bank initially will concentrate marketing efforts in that area, probably through direct mail.

Two key lending areas for the state savings bank will be mortgages and multifamily. Coastal also emphasized real estate when Mehos was at the helm Says Marinac: "That's what he knows best."

jgreer@bizjournals.com .713-960-5933