National Bank's Laney Preparing for 'Disciplined' Growth in '13

National Bank Holdings (NBHC) had an eventful 2012 that included going public and moving its corporate offices to Colorado.

The company, formed in 2009 to buy failed and struggling banks, could be poised for an even more eventful 2013. But don't expect anything flashy: National Bank may be in its infancy, but it is modeling itself after much older institutions.

"We're often comparing ourselves to banks that have been around for 75 years," says Tim Laney, the company's president and chief executive. "We are quickly growing up."

It has been more than a year since National Bank completed his last acquisition. Instead, the $5.4 billion-asset company has been busy integrating Bank of Choice and Community Banks of Colorado.

Armed with $350 million in excess capital and equipped with infrastructure to more than double in size, the Greenwood Village, Colo., company is in a position to pursue more acquisitions. For that reason, Laney will be closely watched in coming months.

"The big news was the IPO that was a success," says Chris McGratty, an analyst at KBW's Keefe, Bruyette & Woods. "You turn the page for 2013 and it's all about capital deployment."

National Bank has been "disciplined" with four attractively priced acquisitions so far, says Peyton Green, an analyst at Sterne Agee & Leach. Laney has also shown that he has the "flexibility to look at anything and everything," including open- and failed-bank deals.

"It's a very young company but with a ground-up operating system," Green says. "They didn't inherit anyone's legacy system."

An ability to develop its own infrastructure has proven advantageous for the company, Laney says. National Bank embraced newer technology, such as cloud computing, instead of pouring money into programs that must work with older systems, he says.

In July, National Bank completed its final systems integrations. Now all of its banks are operating on the same platform.

National Bank has also been busy putting pieces into place for organic growth, Green says.

Laney's team has bulked up National Bank's credit functions and made a number of key hires, first in Missouri and, more recently, in Colorado. The company has focused on general areas of lending such as mortgages, commercial real estate and commercial-and-industrial lending, but is also targeting niches like energy and agricultural lending, Green says.

National Bank has many resources in place for expansion, Laney says. The company has the second-largest retail distribution network around Kansas City, Mo., but its deposit share still lags more-established banks. To remedy this, Laney has been hiring talent to tap into the market's potential.

The company has more than 100 branches. Most are concentrated in Colorado and around Kansas City, with a few in Texas and California. As National Bank looks to grow next year, it will likely stick with these markets or adjacent ones, industry observers say.

National Bank has enough capital to acquire a bank with up to $1 billion of assets, McGratty says. Laney will probably focus on distressed banks and look for prices that are a little under book value, he says.

National Bank is "actively engaged in due diligence of potential partners," Laney says, though he declined to provide more details.

"Investors who participated in the IPO expect them to deploy capital," says McGratty, who notes that the company recently issued its first dividend. "The real story . . . is whether they will announce one or more deals."

Laney likes the company's current markets, which have outperformed other regions as the economy recovers. Colorado, including Denver and Boulder, has a highly educated population, a strong university system and a culture focused on entrepreneurship, all factors that make it attractive, he says.

Kansas City is "a bit of a hidden jewel" that includes industries, such as the food services, agriculture and animal sciences, that produce "solid medium-sized businesses," Laney says.

National Bank did not receive any money from its initial public offering. Only secondary shares were sold and the offering's pricing ended up lower than management's original expectations. Those shares have been unable to consistently trade above tangible book value, which could make it more costly for National Bank to pay for deals with its own stock.

Still, becoming publicly traded has given National Bank a potentially powerful weapon. As its shares strengthen, "we will be able to use the stock" for acquisitions, Laney says. The company's strong capital base could also allow it to offer a larger cash component, which could be attractive to potential sellers, Green says.

National Bank also has its leadership in place, McGratty says. In a recent note to clients, McGratty wrote that the company is "armed with a bench deeper than" the company's short history.

Laney spent 24 years at Bank of America (BAC), serving as president of the Charlotte, N.C., company's Florida market and as a member of the management operating committee. He joined Regions Financial (RF) in 2007 to lead changes in the Birmingham, Ala., company's wholesale lines of business.

Brian Lilly, National Bank's chief financial officer, also brings a "high level of experience and expertise," including a stint as the CFO of F.N.B. Corp. (FNB) in Hermitage, Pa., where he oversaw acquisitions, McGratty says.

Despite expectations that the company will pursue more deals next year, "we will not be doing acquisitions for the sake of it," Laney says. "It's incredibly important to focus on strategic ones that create more convenience for our clients. We are not a buyer at any cost."