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Update: Green Bancorp Is A Buy For Risk-Comfortable Investors

Green Bancorp (GNBC) posted an excellent quarter, an excellent full year, and addressed the market's biggest concern head on - the bank's exposure to oil and gas, but despite doing all this, I am changing the bank to a BUY from a HOLD only for those investors looking to take on an equal risk to reward trade. As attractive as the bank's high return, heavily weighted (~90%) commercial loan portfolio is and as attractive as the rare net interest margin growth shown was, I can't recommend GNBC to longs looking for an asymmetric trade. I continue to have my doubts in regards to the bank's ability to withstand further and/or longer oil and gas commodity degradation:

GNBC reported the following (SOURCE: GNBC Q4 PR):

  • full year 32.3% loan growth inclusive of acquisitions
  • full year 25.5% deposit growth inclusive of acquisitions - non-interest bearing deposits comprised 23.4% of deposits up