When Green Bancorp was founded in 2005, its organizers said that the name was chosen because green is the color of money.
But now the name is about to take on a different meaning.
Today the $235 million-asset Houston company will change the name of its lone subsidiary from Redstone Bank to Green Bank to reflect a new, environmentally conscious strategy that will cover everything from the coffee cups it orders to the design of its branches and the loan and deposit products it offers.
"I think the customers are asking for it, and we see this as a way to differentiate ourselves in a very crowded market," said Bob New, the bank's president and chief executive officer.
The new approach is not unique, but it is a departure for the eight-year-old Redstone, which has been a traditional commercial and construction lender. (Green Bancorp acquired Redstone last year.)
Executives began thinking about changing its strategy this year, because "we couldn't pick up a publication and not read about green," Mr. New said. "It stopped being a color and started being a way of life."
Other banks have adopted green practices as well. For example, Wainwright Bank in Boston and New Resource Bank in San Francisco offer cheaper financing on construction loans if the borrowers comply with green building standards. A number of Illinois community banks are participating in a program in which they get government deposits for offering rebates on loans to purchase hybrid cars. And many banks are designing branches and other facilities to be more energy efficient.
Mr. New said that one of his company's primary goals is to become carbon neutral by the end of next year.
To that end, it is cutting down on paper by doing much of its marketing on the Internet, designing its new headquarters to meet the Leadership in Energy and Environmental Design standards, and eliminating drive-through lanes at future branches. It also has ordered coffee mugs for its employees to discourage them from using paper or Styrofoam cups.
Mr. New even traded in his Chevrolet Tahoe for a hybrid.
The company also is developing green loan and deposit products. For example, it has an interest-bearing checking account for customers who receive monthly statements online. The company will refund other companies' automated teller machine surcharges so that customers do not have drive across town just to use its ATMs, and it is working on developing loans that will give customers lower rates for building and operating their businesses in ways that are less destructive to the environment.
Manuel J. Mehos, the former CEO of Coastal Bancorp of Houston, formed Green Bancorp with the intention of building it through acquisitions. He had founded Coastal in 1986 and by the time he sold it in 2004 to Hibernia Corp. of New Orleans it had about $3 billion of assets. (Capital One Financial Corp. later bought Hibernia.)
Mr. New said that acquisitions are still part of Green Bancorp's strategy, and that it is targeting banks in all of Texas' major markets with $100 million to $300 million of assets. The plans is to build Green to $1 billion of assets in the next five years and then take it public, he said.
Dan Bass, the managing director of Carson Medlin Co. in Houston, said that now that Green has adopted a more environmentally conscious strategy, it will have to be more selective in its acquisition targets. "They'll have to look at the facilities and processes that are in place," he said. "They'll have to do more due diligence to see if the bank can easily be converted to green."
The strategy also could limit Green's appeal to potential buyers, he said. "Initially, I think it would lower the prospects of the pool of buyers, but at the end of the day, it might make them more money because of their unique niche."
Robert Passikoff, the president of Brand Keys Inc. in New York, said he believes companies cannot go wrong with a strategy that emphasizes environmental responsibility. "Caring for the Earth and the environment is one of those no-brainers," he said.
Chris Lehman, president of the Austin chapter of the Sierra Club, said he was please to hear about the bank's strategy and he expects it would be received especially well in Austin, one of the most environmentally conscious cities in Texas.
"I would support a bank that doesn't support drive-ins," he said.
