IPO Report: Green Bancorp (GNBC)

Francis Gaskins |

Green Bancorp IPO, IPO report, stocks to buy now, IPOs this week, small-cap stocksGreen Bancorp ($GNBC) is a Texas-focused bank holding company headquartered in Houston, Texas, growing primarily from acquisitions.

Five other new companies are scheduled for the week of Aug. 4, 2014. The full IPO calendar is available at IPOpremium.

The manager and  co-managers are Sandler O'Neill and Jefferies. The joint managers are J.P. Morgan, RBC Capital Markets, Keefe, and Bruyette & Woods.

GNBC scheduled a $75 million IPO with a market capitalization of $407 million at a price range midpoint of $16 for Friday, August 8, 2014 on the Nasdaq. SEC filings

Green Bancorp IPO Report

Overview

GNBC is a Texas focused bank holding company headquartered in Houston, Texas, growing primarily from acquisitions.

Valuation

Glossary

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualilzing net income est for Q2 '14

     

Green Bancorp (GNBC)

$408

n/a

18.5

1.5

1.6

18%

             

Conclusion

Neutral

Yet another bank holding company growing by acquisitions.

Business

GNBC is a Texas focused bank holding company headquartered in Houston, Texas. GNBC’s wholly owned subsidiary, Green Bank, N.A., a nationally chartered commercial bank, provides commercial and private banking services primarily to Texas based customers through twelve full service branches in the Houston, Dallas and Austin MSAs.

The Houston, Dallas and Austin MSAs are GNBC’s target markets, and GNBC believes its growing economies and attractive demographics, together with its scalable platform, provide GNBC with opportunities for long-term and sustainable growth.

As of March 31, 2014, GNBC had consolidated total assets of $1.8 billion, total loans of $1.4 billion (of which $1.39 billion were originated by GNBC and $18.8 million were acquired), total deposits of $1.5 billion, and total shareholders' equity of $203.6 million.

GNBC’s emphasis is on continuing to expand its existing business by executing on its proven portfolio banker driven business model as well as pursuing select strategic acquisitions and attracting additional talented portfolio bankers. During 2012 and 2011, GNBC completed the following acquisitions:

-- Main Street Bank Asset Purchase: three branches of Main Street Bank located in the Houston MSA with $167.7 million in total deposits and $12.7 million in loans, acquired in October 2011.

-- Opportunity Bancshares Stock Purchase: Opportunity Bancshares with one branch located in the Dallas MSA, $44.1 million in total deposits and $25.6 million in total loans, acquired in May 2012.

-- In addition, GNBC recently entered into a definitive agreement for the acquisition of SharePlus.

As of March 31, 2014, SharePlus had four branches (three in the Dallas MSA and one in Kentucky), $33.1 million in stockholders' equity, $315.8 million in total assets, $273.5 million in deposits and $228.7 million in loans.

Dividend Policy

No dividends are planned.

Competition

GNBC’s banking competitors in its target markets include Chase (JPM) , Wells Fargo (WFC) , Bank of America (BAC) , BBVA Compass, Amegy (ZION) , Comerica (CMA) , Regions (RF) , Prosperity Bank (PB) , BancorpSouth, Independent Bank (INDB) , Texas Capital (TCBI) , and various community banks.

GNBC is subject to vigorous competition in all aspects of its business from banks, savings banks, savings and loan associations, finance companies, credit unions and other providers of financial services, such as money market mutual funds, brokerage firms, consumer finance companies, asset-based non-bank lenders, insurance companies and certain other non-financial entities, including retail stores which may maintain their own credit programs and certain governmental organizations which may offer more favorable financing than GNBC can.

5% stockholders

Stephen Eisenstein        24.1%

Investment funds affiliated with Friedman Fleischer & Lowe, LLC             24.1%

Investment funds affiliated with Harvest Partners, LP      24.1%

Investment funds affiliated with Pine Brook Road Partners, LLC 24.1%                                                 

Use of proceeds

GNBC intends to use the $68 million in proceeds from its IPO as follows:

$8 million of the net proceeds from this offering received by GNBC to pay a portion of the purchase price of SharePlus and to contribute all but $5 million of the remaining net proceeds to the Bank to be used for general corporate purposes. Other than SharePlus, GNBC has no current plans, arrangements or understandings to make any acquisitions. However, at any given time GNBC may be evaluating other acquisition candidates, conducting due diligence and may have entered into one or more letters of intent.

 

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Companies

Symbol Name Price Change % Volume
GNBC Green Bancorp Inc. 13.23 0.13 0.95 34,999
JPM JP Morgan Chase 84.98 0.91 1.08 10,955,347
PB Prosperity Bancshares Inc. 71.87 2.48 3.57 272,459
BAC Bank of America Corporation 22.94 0.37 1.64 102,100,554
RF Regions Financial Corporation 14.62 0.16 1.07 17,393,173
CMA Comerica Incorporated 69.69 1.34 1.96 1,074,474
TCBI Texas Capital Bancshares Inc. 77.20 2.05 2.73 459,845
WFC Wells Fargo & Company 57.30 0.02 0.03 23,791,847
INDB Independent Bank Corp. 71.05 1.70 2.45 83,871
ZION Zions Bancorporation 43.27 0.98 2.32 1,682,163
JNX:CX2 Junex Inc. n/a n/a n/a n/a

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