Bank of Choice parent headed for public offering

Facebook’s pending IPO was the big news on Wall Street in recent days but there’s another public offering in the works that should be of interest, at least in Northern Colorado.

Bank of Choice’s holding company, NBH Holdings Corp., has taken the first step toward becoming publicly traded.

NBH is the parent company of Bank Midwest, which acquired Bank of Choice in July 2011.

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Its registration, filed with the Securities and Exchange Commission in the fall, does not include details about how many shares are to be offered or what the ticker symbol might be for the holding company, which was formed in 2009 for the purpose of buying troubled banks.

Boston-based NBH acquired Bank Midwest, headquartered in Kansas City, Mo., in 2010.

The next year, Bank Midwest assumed just over $1 billion in assets after Bank of Choice was declared insolvent by regulators.

Representatives at Bank of Choice are unable to comment on the offering, due to the “silent period” required by the SEC following the filing of a registration statement.

The only other publicly-traded bank in the area with Colorado roots is Guaranty Bank, whose holding company, Guaranty Bancorp., went public in 2005.

The amount of time between filing a registration statement and actually being listed on the stock exchange varies depending on market conditions, the company and what regulators might have to say.

In the case of Guaranty Bancorp, this process took approximately six months, according to CEO Paul Taylor.

NBH’s situation is “not dissimilar” to Guaranty’s when it went public, Taylor said. The main difference is that Guaranty had merged with healthy banks just before its IPO, and NBH’s acquisitions have been troubled institutions.

When a troubled bank is purchased, a long process begins during which the new owners of an institution must weed out assets that aren’t producing, recapitalize, and report frequently to regulators about progress made.

According to NBH’s filing, as of Sept. 30, 33.7 percent of its loans and 60 percent of the troubled real estate over which it assumed ownership were covered by loss-sharing agreements reached with the FDIC when the troubled assets were acquired.

In spite of certain risk factors associated with the troubled assets owned by NBH, the company believes that it has positive attributes to offer potential stockholders, not the least of which is enough capital to support continued growth. As of June 30, NBH held approximately $6.8 billion in assets.

Statewide, NBH is the sixth-largest bank by market share, with 2.2 percent of all deposits. In Larimer and Weld counties combined, as of June 30, Bank of Choice held 12.23 percent of the deposit market share and was ranked the second-largest institution in Weld County, with only Wells Fargo holding more deposits.

All 17 of Bank of Choice’s branches were also acquired by Bank Midwest, but have kept their original name, as have Community Banks of Colorado, which were acquired by NBH in two separate transactions in 2011.

Most of the remainder of NBH’s assets are held by banks in the Kansas City area. The company also owns four branches in California, which it acquired as part of Community Banks of Colorado.

Molly Armbrister covers Banking for the Northern Colorado Business Report. She can be reached at marmbrister@ncbr.com or 232-3139.