By year end, CrossFirst Holdings LLC should complete two things that management believes are long overdue.

The $330 million-asset company plans to complete the last leg of a capital-raising effort it began in 2008. CrossFirst also announced last month that it plans to merge its CrossFirst Leawood, formerly known as Town & Country Bank, into its flagship CrossFirst Bank.

"We would have loved to merge it in immediately," said Ron Baldwin, the company's chairman and chief executive in an interview late last month. "But regulators didn't want us to taint our de novo with a bank that could have failed. Now both banks are in good shape."

CrossFirst may have wanted to comingle its banks right away, but banking observers said the approach of holding off could be a good way to spur acquisitions.

"There's definitely some validity in this kind of good bank, bad bank scenario. It allows the good bank to be able to continue to build and grow and not be dragged down," said Randy Dennis, the president of DD&F Consulting in Little Rock, Ark. "You can be creative in working out problems through your holding company. You do have to have the cash available to do it."

CrossFirst formed a separate workout division for CrossFirst Leawood's issues. Through the group, the company reduced the $86 million-asset bank's noncurrent loans from $4.1 million at March 31, 2010, to just $118,000 at the end of this year's second quarter.

CrossFirst, launched in October 2007, is backed by a group with a deep understanding of acquisitions. For instance, Baldwin has overseen 60 acquisitions, which included executive roles at Fourth Financial Corp. and Intrust Bank, both in Wichita, Kan.

Baldwin said CrossFirst is considering more acquisitions but "we are fully prepared to live on organic growth through good old fashioned blocking and tackling."

Baldwin said he envisions CrossFirst as "specialty boutique" that caters to businesses and professionals. Once the Leawood bank is merged into the main bank, CrossFirst will close the Leawood office and keep a single location in Overland Park. The company is opening a second location in Wichita. CrossFirst also wants to assist other banks through an advisory service.

John Blaylock, an associate director at Sheshunoff & Co. Investment Banking, said de novos that were launched during the darkest points of the recession have benefited from everyone else's misfortune. "What a great time to start a bank. You had no legacy assets to worry about while the whole industry was frozen and you get to pick and choose the customers and credits you wanted," he said, adding that CrossFirst has experienced "phenomenal growth."

CrossFirst has grown assets ten- fold since its creation, with assets reaching $229 million at June 30.

The company initially raised $15 million from 200 investors. After its first year, CrossFirst said it wanted another $35 million. But the raise began around the same time of the Lehman Brothers collapse in September 2008, when the market came to a halt.

In 2009, it raised $20 million, then $7.4 million last year. It plans to finish the final placement this fall. "It has been tough raising the money, but we did it …three years after we kicked off the campaign," Baldwin said.

Wesley A. Brown, a managing partner at St. Charles Capital, a Denver investment bank, said de novos have had a particularly tough time raising extra capital because investors who were willing to bet on banking were searching for bargains. "Management teams have been stunned by how many investors that they thought would readily pull out their checkbooks and then didn't come through," he said.

"De novo raises are basically priced at book value or even 110% of book. So, for an investor, do you buy a bank with a dream at 110% or do you buy an existing bank with some bruises for two-thirds of its book value?" Brown said.

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