At least one Houston bank has firmly put the energy business behind it.
“Our energy exposure has largely been resolved and we can now finally return to the business of banking,” said Manuel Mehos, chairman and chief executive of Houston financial company Green Bancorp., the parent company of Green Bank., during a conference call with investors this week.
The bank said it has sold off or borrowers have paid off $157 million of its $250 million energy loans since late April, when it decided to unwind the business entirely. It has about $95.5 million in energy loans left on its books, 85 percent of which is debt held by oil field service firms. It has another $24 million in energy loans held for sale, and expects its energy exposure to decline to 3.1 percent in the first quarter.
“A number of these firms got burned,” said John Castellano, managing director at consultancy AlixPartners. Castellano noted oil companies have turned to public equity markets to raise more expensive capital from stock-market investors. Oil explorers have raised $48.6 billion from secondary stock offerings over the past two years, according to data collected by Bloomberg. “There is capital available (from public equity markets and private equity firms). But it’s a cautious recovery.”