With an eye toward providing shareholders a more liquid stock, the largest community bank in Houston last week went public.
Southwest Bancorp., which has $913 million of assets as of Sept. 30, raised about $20 million in its Jan. 29 initial public offering. The stock opened at $16.50 a share, briefly hit $19.75, then settled at $18.
Walter Johnson, a veteran Houston banker who has leveraged his local contacts to build fast-growing Southwest into a commercial lending powerhouse, said he expected to see more Texas banks start tapping the equity market. The Lone Star State led the country with 897 banks as of Sept. 20; the vast majority of those are privately held.
"Prices are at all-time highs and banks are saying, 'Let's get the best price we can for our shareholders,'" said Mr. Johnson, who has been Southwest's chief executive officer since 1989.
Another Texas banker who expects to see more offerings is Bryan Stephenson, chief executive officer of Independent Bankshares, Abilene. The $203.8 million-asset company has been publicly held for more than 15 years and completed a secondary offering last week to fund an acquisition.
"You might see more going public because they'll be wanting the liquidity a public market will provide," Mr. Stephenson said.
Of the $20 million Southwest raised, $7.5 million is going toward redeeming preferred stock held by NationsBank Corp., Charlotte, N.C. The stock originally was held by Boatmen's Bancshares, St. Louis.
NationsBank, unlike Boatmen's, competes in the Houston market, and Southwest didn't want to create an impression that it was under the superregional's thumb, said David C. Farries, executive vice president of Southwest.
Mr. Farries stressed that the offering had been in the works for about two years, before NationsBank and Boatmen's laid out their merger in September.
Mr. Johnson and Mr. Farries hinted that some of the proceeds of the offering might go toward funding acquisitions, which would be unusual because Southwest has been able to rack up stellar internal growth. The bank's assets have grown 93% since December 1993.
Mr. Johnson said he wants to maintain that fast rate.
"We're going to keep doing what we're doing," he said.