Energy lending has hamstrung many banks and Green Bancorp's (NASDAQ:GNBC)
previously outsized exposure to the energy sector has come back to bite
this small Texas lender. Management is moving fairly aggressively to
exit its energy lending business and pivot toward lending growth
opportunities in Dallas and Austin, but weakness in the Houston metro
area remains a concern, as does this company's funding base.
I
like Green Bancorp's portfolio banker lending model, and I think the
underlying growth in major Texas metro areas like Dallas, Houston, and
Austin can support above-average loan growth. That said, there's a lot
of competition within Texas, and management needs to prove that it can
carve out a durable differentiated lending franchise and expand its base
of lower-cost deposits. The current valuation already assumes a lot of
improvement (and long-term earnings growth in the range of 20%) and that
doesn't leave much room for excitement from me.
Read more here:
Knocked Back By Energy, Green Bancorp Looking To Rebuild The Growth Story Next Year
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