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Capital Bank Financial and National Bank Holdings priced their initial public offerings below the ranges they gave last week. Other banking companies have struggled in the IPO market this year.
September 20 -
Plans by National Bank Holdings and Capital Bank Financial to go public will create common stock that can supplement cash for open-bank acquisitions.
September 13 -
A month after calling off a planned public offering, Customers Bancorp in Pennsylvania, led by former Sovereign CEO Jay Sidhu, will bring in $100 million in capital by acquiring Acacia Federal Savings.
June 22
National Bank Holdings in Denver had to weigh the payoff it thought it deserved — and wouldn't get — versus the value of becoming a publicly traded company. It chose the latter.
The $5.8 billion-asset company
Shares began trading Thursday on the New York Stock Exchange under the ticker "NBHC."
National Bank Holdings decided to proceed with the offering because a public company is better suited for buying open banks, Chief Executive Timothy Laney said a few hours after ringing the opening bell of the New York Stock Exchange.
"We were on a roller-coaster ride," Laney said. "But we found ourselves oversubscribed and had to make a tough decision. Ultimately, we thought it was important to get on with it and create a public currency."
The stock opened on Thursday at $20.25 and was trading at $19.60 late in the day on volatile session for the markets.
"Nothing was more exciting and anxiety-driving than opening the stock on the market this morning," Laney said. "Now it is up to us to demonstrate that we can leverage our capital and grow the bank."
National Bank Holdings is not the only company that saw its initial public offering priced lower than expected. Capital Bank Financial (CBF) in Coral Gables, Fla., priced at $18 per share on Thursday; it had estimated an initial share price of $21 to $23 per share.
National Bank Holdings filed its plans to go public in November 2011. At that point the IPO was supposed to be a mix of existing and new shares. National Bank Holding sought to raise $250 million until it realized where it would have to price the offering.
"At $20 to $22, our reaction was, 'we are not going to raise capital in this range,' we are much more valuable," Laney said. So the company assembled a group of investors who were interested in trimming their positions to create an adequate amount of stock to offer.
It was founded in 2009 with capital of $974 million and a tangible book value of $18.82 per share. It had a total risk-based capital ratio of 50.2% at June 30 of this year.
"The good news is that we are in a unique position of having $350 million of excess capital," Laney said. "It was a real advantage. We were not going to be held hostage in the markets to bring it public."
National Bank Holdings was one of a handful of companies formed with hopes of buying failed and distressed banks.
Though others focused on regions like the Southeast, Laney headed west. National Bank Holdings has acquired three failed institutions and the operations of one open bank in Kansas and Colorado. It was initially based in Boston but has since moved its headquarters to Denver.
National Bank Holdings has identified 48 struggling banks and 80 relatively healthy banks that could be potential targets as it looks for ways to deploy its capital, according to its registration statement filed with the Securities and Exchange Commission.
Regulators have slowed the pace of bank failures considerably from their peak in 2010, but Laney said he believes more deals brokered by the Federal Deposit Insurance Corp. are coming. "We believe that there will be a point where you'll begin to see the FDIC methodically move those banks through the resolution process," Laney said. "If you follow the banks quarter to quarter, they are not getting healthier."
