New bank gets Green 4 Sep 2006
New bank gets Green light with equity infusion
Greenbacks are pouring into Green Bancorp Inc., a new Houston bank holding company that
has bolstered its capital base with a $20 million commitment from a private equity firm in San
Francisco.
Belvedere Capital Fund II LP, which primarily provides private equity for the financial
services industry, will in end up with about a 37 percent stake in Green Bancorp Inc. after the bank
holding company completes its merger with Houston's Redstone Bank NA.
The San Francisco firm agreed to put $20 million into Green Bancorp, according to Manuel
Mehos, chairman of the bank holding company.
"They're getting a big infusion," notes Dan Bass, managing director at Carson Medlin Co.
Investment Bankers in Houston.
Belvedere will account for roughly 40 percent of the capital that Green Bancorp will have after the
Redstone merger doses. The Houston bank holding company was launched this year and has not
yet opened any locations.
The Redstone branches will take the "Green Bank" name after the merger closes. The merger,
announced in late .June, is expected to be finalized in the fourth quarter.
The pending Green-Redstone combination enables Belvedere to take a stake in an outstanding
franchise in the Houston market, notes Richard Decker.J 1'.,chairman and co-founder of the
private equity firm.
Belvedere has invested in or purchased 11community banks nationally since 1994.
But in Houston banking, it's unusual for a private equity firm to acquire more than a third of a
start-up bank.
Green Bancorp is quickly proving it isn't a typical newcomer to the competitive local banking
market. Roughly $50 million in capital will bolster Green after it completes the Redstone merger.
In addition to an estimated $20 million from Redstone shareholders and the $20 million injection
from Belvedere, Green's final $10 million in initial capital will come from a Mehos-Ied group of
investors.
"Everyone in the end ends up with Green Bancorp stock," Mehos says.
Mehos knows the potential payoff for putting his own skin in the game. When he was CEO and
chairman of Houston-based Coastal Bane, the savings bank network was acquired by Hibernia
Corp. for about $230 million in cash. His 12 percent stake in Nasdaq-listed Coastal Bancorp
delivered Mehos an estimated pretax ,will indfall of more than $27 million.
With Belvedere Capital and other investors backing Green Bancorp, Mehos acknowledges that
