GNBC-Current_Form_8K

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8-K


CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): October 31, 2017


Green Bancorp, Inc.

(Exact name of registrant as specified in its charter)


 

 

 

 

 

 

 

 

 

 

TEXAS

(State or other jurisdiction
of incorporation)

001-36580

(Commission File Number)

42-1631980

(I.R.S. Employer
Identification No.)

 

4000 Greenbriar

Houston, Texas 77098

(Address of principal executive offices, including zip code)

(713) 275 - 8220

(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


 

 

Item 7.01.Regulation FD Disclosure.

Information is being furnished herein in Exhibit 99.1 with respect to the slide presentation to investors and others that may be made by executive officers of Green Bancorp, Inc. (the "Company"). This information includes selected financial and operational information through the third quarter of 2017 and does not represent a complete set of financial statements and related notes prepared in conformity with generally accepted accounting principles ("GAAP"). Most, but not all, of the selected financial information furnished herein is derived from the Company’s consolidated financial statements and related notes prepared in accordance with GAAP and management’s discussion and analysis of financial condition and results of operations included in the Company’s reports on Forms 10-K and 10-Q. The Company’s annual financial statements are subject to independent audit. These materials replace and supersede investor presentation materials previously furnished as an exhibit to Current Reports on Forms 8-K. These materials are dated October 31, 2017 and the Company does not undertake to update the materials after that date.

The investor presentation includes certain non−GAAP (generally accepted accounting principles) financial measures that the Company’s management uses to evaluate its performance. Specifically, the investor presentation includes tangible common equity, pre-tax, pre-provision return on average assets, the return on average tangible common equity ratio, tangible book value per common share, and allowance for loan losses plus acquired loans net discount to total loans adjusted for acquired loan net discount.   The investor presentation furnished as Exhibit 99.1 hereto includes a reconciliation the non-GAAP measures to the most directly comparable GAAP financial measure.

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended  (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall it be deemed incorporated by reference in any filing of Green Bancorp, Inc. under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Please refer to pages 2 and 3 of Exhibit 99.1 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto, and the use of non-GAAP financial measures included therein.

Item 9.01.  Financial Statements and Exhibits 

 

(d) Exhibits.  The following is furnished as an exhibit to this Current Report on Form 8-K:

 

 

 

Exhibit
Number

Description of Exhibit

99.1

Green Bancorp, Inc. Third Quarter 2017 Investor Presentation

 

 


 

 

EXHIBIT INDEX

 

 

 

Exhibit
Number

Description of Exhibit

99.1

Green Bancorp, Inc. Third Quarter 2017 Investor Presentation

 

 

 

 


 

 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

Green Bancorp, Inc.

 

 

 

 

Date: October 31,  2017

/s/ Terry S. Earley

 

Terry S. Earley

 

Executive Vice President and Chief Financial Officer

 

 

 

 


gnbc_Ex99_1

Exhibit 99.1

 

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Third Quarter 2017 Investor Presentation NASDAQ: GNBC

 

 


 

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Safe Harbor The fol l owi ng i nforma ti on contai ns , or ma y be deemed to conta i n, "forwa rd-l ooki ng s ta tements " (a s defi ned i n the U.S. Pri va te Securi ti es Li ti ga ti on Reform Act of 1995) gi vi ng Green Ba ncorp, Inc.’s (“Green Ba ncorp”) expecta ti ons or predi cti ons of future fi na ncial or busi nes s performa nce or condi tions . Mos t forward-l ooki ng s ta tements contai n words tha t i denti fy them a s forwa rd-l ooki ng, s uch as "pla n", "s eek", " expect", "i ntend", "es ti ma te", "a nti ci pa te", "bel i eve", "proj ect", "opportuni ty", "ta rget", " goa l ", "growi ng“, "conti nue“, “pos i ti ons ,” “pros pects ” or “potenti al ,” by future condi tional verbs s uch as “will ,” “woul d,” “s houl d,” “could” or “ma y”, or by va ria ti ons of s uch words or by si milar expressi ons tha t rela te to future events , a s oppos ed to pas t or current events , or nega ti ves of s uch words . By thei r na ture, forwa rd-l ooking s ta tements a re not s ta tements of his tori cal fa cts a nd invol ve ris ks a nd uncertai nti es beca us e they rela te to events a nd depend on circums ta nces tha t ma y or ma y not occur i n the future. Thes e s ta tements gi ve Green Ba ncorp's current expecta ti on of future ev ents or i ts future performa nce a nd do not rel a te directl y to his torical or current events or Green Ba ncorp's his tori cal or future performa nce. As s uch, Green Ba ncorp's future res ul ts ma y vary from a ny expecta ti ons or goals expres s ed i n, or i mpl i ed by, the forwa rd-l ooking s ta tements i ncl uded i n thi s pres enta ti on, pos s ibly to a ma teri a l degree. Green Ba ncorp ca nnot as sure you tha t the as sumpti ons ma de i n prepa ri ng a ny of the forward-l ooki ng s ta tements wi ll prove accura te or tha t a ny l ong-term fi na ncial goals will be reali zed. Al l forward-l ooki ng s ta tements i ncluded i n this pres enta ti on s pea k onl y a s of the da te ma de, a nd Green Ba ncorp underta kes no obli ga ti on to upda te or revis e publicl y a ny s uch forwa rd-l ooki ng s ta temen ts , whether a s a res ul t of new i nforma ti on, future even ts , or otherwi s e. In pa rti cular, Green Ba ncorp ca uti ons you not to pla ce undue wei ght on certa i n forwa rd-l ooki ng s ta temen ts perta i ning to potenti al growth opportuni ti es or l ong-term fi na ncial goals s et forth herei n. Green Ba ncorp's busi ness is s ubj ect to numerous ris ks a nd uncertai nti es , which ma y ca us e future res ul ts of opera ti ons to va ry s i gnificantly from thos e pres ented herei n. In addi tion to fa ctors previ ousl y discl os ed i n Green Ba ncorp’s reports fil ed wi th the SEC a nd thos e i denti fi ed els ewhere i n this communica ti on, the foll owi ng factors a mong others , coul d caus e a ctual res ul ts to di ffer ma teriall y from forward-l ooki ng s ta tements : cha nges i n a ss et quali ty a nd credi t ri s k; the i na bili ty to sus tai n revenue a nd earni ngs growth; cha nges i n i nteres t ra tes and ca pi tal ma rkets ; i nfl a ti on; cus tomer borrowi ng, repa yment, i nves tment a nd depos i t practices ; cus tomer disi ntermedi a ti on; the i ntroducti on, wi thdra wal , s uccess a nd ti mi ng of business i ni tia ti ves ; competi ti ve condi tions ; the i na bili ty to reali ze cos t s a vings or revenues or to i mpl ement i ntegra ti on pla ns a nd other cons equences ass ocia ted wi th mergers , a cquisi ti ons a nd di ves ti tures ; economi c condi tions ; a nd the i mpact, extent a nd ti mi ng of technol ogi cal cha nges , ca pi tal ma na gement a cti vi ti es , a nd other a cti ons of the Federal Res erve Boa rd a nd l egi sla ti ve a nd regula tory acti ons a nd reforms . Unlis ted factors ma y pres ent si gni fi ca nt a ddi ti onal obs ta cl es to the rea l i zati on of forwa rd-looking s ta tements . Annua l i zed, pro forma , proj ected a nd es ti ma ted numbers a re us ed for i l l ustrati ve purpose onl y, a re not foreca s ts a nd ma y not refl ect a ctua l res ul ts. 2

 

 


 

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Non-GAAP Financial Information This document i ncludes the pres enta ti on of both GAAP (g enera ll y a ccepted a ccounti ng pri ncipl es ) a nd non-GAAP fi nancial mea s ures . Green Ba ncorp’s ma na gement us es certai n non−GAAP fi na ncial meas ures to eval ua te i ts performa nce a nd beli eves tha t the pres enta ti on of non-GAAP fi na ncial mea s ures i s us eful to i nves tors beca us e i t provides i nves tors wi th a more compl ete unders ta ndi ng of Green Ba ncorp’s opera ti onal resul ts a nd a mea ni ngful comparis on of Green Ba ncorp’s performa nce between peri ods . Non-GAAP fi nancial meas ures pres ented i n this pres enta tion or other pres enta tions , press rel eas es a nd si milar documents iss ued by Green Ba ncorp ma y incl ude, but a re not l i mi ted to, pre-ta x pre-provisi on return on a vera ge ass ets, ta ngi bl e book val ue per common s hare, the ta ngi bl e common equi ty to ta ngi bl e a ss ets ra ti o, the return on a vera ge ta ngi bl e common equi ty ra ti o, all owa nce for loa n l oss es l ess allowa nce for l oa n l oss es on a cquired l oa ns to tota l l oa ns excl udi ng a cqui red l oa ns , a nd all owa nce for l oa n l oss es plus acquired l oa ns net dis count to tota l l oa ns adjus ted for acqui red l oa n net dis count. Thes e non-GAAP fi na ncial meas ures do not have a ny s ta ndardi zed mea ni ng and, therefore, a re unli kel y to be comparabl e to s i mila r meas ures pres ented by compa ra bl e compani es . Ma na gement ma y us e thes e non-GAAP fi na ncial mea sures to es ta blis h opera ti onal goals and, i n s ome cas es , for mea s uri ng the performa nce of Green Ba ncorp. Pl eas e refer to the “G AAP to pres enta ti on. Non-G AAP R econcilia ti ons ” i n the Annex of thi s pres enta ti on for a reconcili a ti on of non-GAAP fi na ncial mea s ures us ed i n this 3

 

 


 

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Company Snapshot • • • Headquartered in Houston, Texas Established in 2006 via merger with Redstone Bank; completed IPO in 2014 Focused on commercial and private banking relationships across a variety of industries, predominantly in the “Texas Triangle” Listing Market Capitalization (O ctober 27, 2017) Total Bran ches NASDAQ: GNBC $876 22 Balance Sheet – Quarter Ended September 30, 2017 Total Assets Total Loans Held f or Investment Total Deposits Tang ible Book Val ue Per Common Share $4,161 $3,072 $3,408 $9.93 Asset Quality – Quarter Ended September 30, 2017 NPAs / Total Assets NCOs / Average Loans 2.23% 0.03% Profitability – Quarter Ended September 30, 2017 ROAA ROATCE Effi ciency Ratio $ i n mi l lions, except per s hare 1.10% 12.74% 50.59% 4 Company Highlights Branch Map Overview

 

 


 

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Financial Highlights Post-MARS 5 Financial Metric 2Q17 3Q17 Combined Fully Diluted Earnings Per Share $0.35 $0.31 $0.66 Return on Average Assets (Annualized) 1.26% 1.10% 1.18% Return on Average Tangible Common Equity 15.04% 12.74% 13.89% Efficiency Ratio 47.83% 50.59% 49.21% Net Interest Margin 3.63% 3.65% 3.64% Pre-Tax Pre-Provision Return on Average Assets (Annualized) 2.09% 1.88% 1.99% Growth in Tangible Book Value Per Share $0.40 $0.28 $0.68

 

 


 

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Fully Diluted EPS and TBVPS $1.00 $0.50 $0.31 $0.75 $0.25 $0.50 $0.00 $0.25 -$0.25 $0.00 $(0.03) -$0.25 -$0.50 FY13 FY14 FY15 FY16 FY17 YTD 3Q16 4Q16 1Q17 2Q17 3Q17 $9.93 $10.00 $9.75 $9.50 $9.25 $9.00 $8.75 3Q16 4Q16 1Q17 2Q17 3Q17 6 $9.65 $9.25 $9.01 $9.06 Tangible Book Value Per Share $0.35 $0.19 $0.07 $(0.25) $0.85 $0.61 $0.65 $0.54 Earnings Per Share

 

 


 

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Investment Highlights • Highly skilled bankers in Houston and Dallas metro areas with capacity to drive growth • Well positioned for growth: core markets of Houston and Dallas rank * in the Top 5 MSAs in the nation • Asset sensitive balance sheet benefits from rising rates • Energy loans (including HFS) represent 2.8% of total loans as of September 30, 2017 with E&P only 0.9% • Track record of successful strategic acquisitions, proactive management of energy exposure and building (*) Repres ents Houston a nd Dallas rank a mongst the Top 25 l a rgest U.S. MSAs by population 7 Experienced Management Team • Management team with significant experience driving the franchise out origination teams to support growth Proactively Managed Loan Exposure • Meaningfully reduced energy exposure of $277.4 million to $86.3 million over seven quarters • Managed commercial real estate exposure down to within regulatory guidance over three quarters Capable Strategic Acquirer • Track record of disciplined acquisitions and successful integrations • Acquisitions have provided significant strategic benefits and opportunities Strong Core Earnings Profile • Branch light business model delivers efficient funding • 3Q17 net income of $11.4 million, representing an annualized return on average assets of 1.10% vs. 1.26% for 2Q17 Attractive Core Markets • Attractive commercial footprint supported by deposit base that is nearly entirely held in Texas for both estimated 2018-2023 population growth and in the Top 10 for total MSA deposits Well Positioned for Growth • Scalable platform to support significant organic growth • Significant liquidity and capital to support growth initiatives

 

 


 

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Scalable Platform with Attractive Growth Profile • • • Highly productive origination team actively generating loans and serving as the primary point of contact for our customers —Private and business bankers focus on emerging, affluent and small business customers —Commercial and specialty bankers focus on C&I, real estate, mortgage warehouse and SBA loans Continue to drive increased productivity of existing bankers Banking Staff (as of September 30, 2017) Strategic M&A has been an important growth driver Disciplined acquisition strategy to supplement organic growth Since 2010: • — Completed 5 transactions –3 whole-bank, 2 branch Acquired $1.4bn in loans Acquired $1.8bn in deposits • — — Total Loans Total Deposits '12-16 CAGR: 27% '12-'16 Organic CAGR: 11% $3,131 $3,098 $3,012 $3,123 $3,072 '12-'16 CAGR: 24% '12-'16 Organic CAGR: 9% $3,101 Private Banker - 3 $3,375 $3,416 $3,360 $3,408 4% 15% Business Banker - 12 25% Commercial Banker - 33 $1,461 $1,447 $26 Specialty Banker - 13 16% 40% Deposit Relationship Manager - 21 2012 2013 2014 2015 2016 1Q17 2Q17 3Q17 2012 2013 2014 2015 2016 1Q17 2Q17 3Q17 Total Loans Acquired in Period Total Deposits Acquired in Period 8 $1,799 $1,081 $3,098 $3,012 $3,123 $3,072 $2,050 $1,205 $1,359 $251 $1,548 $1,359 $1,179 $3,375 $3,416 $3,360 $3,408 $1,846 $1,103 $1,998 $44 $270 $1,576 $1,417 $1,447 Strategic Acquisitions Organic Growth

 

 


 

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Well Positioned in Attractive Texas Markets MSA Deposits ($ in billions) (Top 25 Rank 1 ) • Texas remains one of the more attractive states in the U.S. from a demographic and commercial opportunity perspective: 2018-2023 Pop. Growth (Top 25 Rank 1 ) 2018-2023 HHI Growth (Top 25 Rank 1 ) — — Population growth expected to double U.S. average If Texas were a sovereign nation, it would be the world’s 12th largest economy (ahead of Australia and just behind Canada) Pro-business environment with no state income taxes 44 of the 51 Fortune 500 companies headquartered in Texas are located near either Houston or Dallas Texas is the #1 exporter in the nation, exporting $232 billion in goods in 2016 Third largest share of domestic travel revenue generating $67.5 billion $ 241 (#6) 8.3% (#1) 7.7% (#24) Houston, TX $ 265 (#7) 7.7% (#4) 9.8% (#16) Dallas, TX — Texas $ 818 7.1% 9.5% — Source: Federal Deposit Insurance Corporation; S&P Global Market Intelligence (Demographic data as of September 30, 2017, 1 Represents Houston and Dallas rank amongst the Top 25 largest U.S. MSAs by population) — — 350 • Crude oil prices have recovered since their recent low in 1Q16, driving stabilization in the production market: .3 320 290 Oil Rig Count Current 1-Year Ago % Change 260 Texas 451 245 +84% 230 200 Source: Baker Hughes; oil rig count data as of September 30, 2017 (Note: figures include land, inland waters and offshore), Texas Office of the Governor (Economic Development and Tourism) Sep-07 Sep-09 Sep-11 Sep-13 Sep-15 Sep-17 Source: Federal Reserve Bank of Dallas 9 United States 940 522 +80% Texas Business Cycle Index 315 Continued Strengthening of Texas Economy United States $ 11,781 3.5% 8.9% Favorable Demographics Overview

 

 


 

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Well Positioned in Attractive Texas Markets • 5th most populous MSA in the U.S. (6.9 million residents) • 3rd most headquartered location for Fortune 500 companies • Largest export market in the U.S., with a diverse economy • 4th most populous MSA in the U.S. (7.3 million residents) • 4th most headquartered location for Fortune 500 companies • Experienced the largest year-over-year percentage increase in employment among MSAs for 2016 Houston Employment Dallas Real GDP Construction 7.0% $ 434 bn Other 12.3% Trade, Transportation, & Utilities Professi Servic 15.2 Edu. & Health Svcs. 12.9% al Leisure & Hospitality 10.6% Manufacturing 7.7% Govt. 2016 2021 Branches Bankers De posits Other 6% Other 4% Other 14% Dallas 39% Dallas 40% Houston 50% Houston 54% Houston 57% Dallas 36% Total Branches: 22 Total Bankers: 84 Total Deposits: $3,408 $ i n mi l lions, Source: BEA, Federa l Deposit I nsurance Corporation, Perryman Group, Texas Workforce Commission, Greater Houston Partnership 10 Regional Distribution as of September 30, 2017 $ 353 bn Dallas Houston

 

 


 

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Loan Portfolio Overview • $ 3,123 Commercial-focused loan portfolio with over 97% of the loan portfolio focused on non-energy loans $ 3,098 $ 3,072 $ 3,048 $ 3,012 • In-footprint focus with portfolio primarily distributed across Houston 55% and Dallas 21% • % Diversified loan portfolio with no concentration to any single industry in excess of 10% of total loans • • Only 4.2% of the loan portfolio is classified 3Q16 C&I (ex. Energy) 4Q16 1Q17 Energy Constr. and Dev. 2Q17 3Q17 Owner Occ. CRE Consumer & Other Large number of lending relationships with no significant borrower concentration Non-Owner Occ. CRE By Class Loan Repricing By Regional Distribution* Other 7% Remaining TX, 9% Dallas 21% Acquired 19% Fixed Rate 20% Central TX, 8% Rate Reset in Eligible for Rate Reset in 4Q17 69% 1Q18 or Later 11% Originated 81% Houston 55% 11 Loan Portfolio Detail as of September 30, 2017 8 % 4 % 8 % 8 % 2 % 9 % 2 3 % 8 % 3 % 8 % 9 % 35 % 37 % 36 % 36 % 37 % 13 % 13 % 14 % 13 % 13 % 35 % 34 % 31 % 29 % 31 % Loan Portfolio Composition Highlights

 

 


 

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Investment Portfolio Overview • 3Q17 buildup of cash combined with securities runoff resulted in a lower concentration of securities —Securities decreased to $708 million at September 30, 2017 from $719 million at June 30, 2017 —Securities comprised 80% of total cash and securities at September 30, 2017, down from 84% at June 30, 2017 Average yield of securities portfolio was 2.42% for 3Q17 vs. 2.32% for 2Q17 Securities² Cash • Sector Allocation Coupon Type Muni. 1% ​Tax-free Corp. <1% Adj. 15% ​SBA 15% ​MBS 48% ​CMO 36% Fixed 85% 3Q16 4Q16 1Q17 2Q17 3Q17 16 % 17 % 21 % 20 % 21 % % of Assets $ i n mi l lions, (*) denotes portfolio distribution based on i nvestment portfolio pa r value as of September 30, 2017, 2 denotes s ecurities excl. other investments 12 Cash & Sec. Portfolio Distribution * $ 632 $ 699 $ 845 $ 854 $ 887 20 % 16 % 30 % 84 % 80 % 56 % 50 % 70 % 44 % 50 % Total Cash & Securities Highlights

 

 


 

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Deposits & Liquidity • $ 3,416 $ 3,408 $ 3,375 $ 3,360 $ 3,316 Deposits comprised ~81% of overall funding at September 30, 2017 — Total deposits increased by $48 million or 1.4% during 3Q17, to $3.4 billion — Cost of deposits was 0.77% in 3Q17 compared to 0.72% in 2Q17 Loan to deposit ratio was 90.1% at September 30, 2017 and is below our targeted level Noninterest-bearing deposits increased slightly and comprised 20% of deposits as of September 30, 2017 42% 6% 5% • 3Q16 4Q16 1Q17 2Q17 3Q17 • Noninterest-bearing MMDA and savings Interest-bearing transaction Certificates and other time $4,132 $4,132 101.0% 100% 81% 97.5% Deposit 93.9% 92.9% 91.8% Funded 90.1% 88.2% 82.4% Sources of Funds Uses of Funds Equity Noninterest-bearing Other Interest-bearing Loans Securities Other 2012 2013 2014 2015 2016 1Q17 2Q17 3Q17 $ i n mi l lions, (*) represents the 3Q17 mi x of funding sources a nd the a verage a ssets i n which those funds a re invested as a percentage of a verage total a ssets 13 16% 7% 65% 11% 8% 17% 74% Loans / Deposits Ratio Funding Profile * 40% 5% 38% 6% 40% 6% 39% 35% 35% 35% 33% 34% 21% 19% 19% 20% 20% Deposit Composition Highlights

 

 


 

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Impact From Hurricane Harvey • Identified $1.9 billion of loans located in Texas counties within the FEMA Disaster Declaration area for Hurricane Harvey Portfolio bankers completed detailed loan-by-loan impact assessments after the storm Impact assessments have been completed for approximately 97% of loans in the affected counties, in addition to all loans with balances greater than $1 million No specific losses have been identified to date Following the initial assessments of potential credit impact, Green Bank accrued $1 million of incremental provision for credit losses related to Hurricane Harvey • • • • Not Yet Reviewed 3% Moderate Impact 5% No Impact 78% 14% 14 Initial Impact Assessment for $1.9 Billion of GNBC Loans Within FEMA Disaster Declaration Area

 

 


 

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Asset Quality • Nonperforming assets (NPAs) totaled $92.6 million or 2.23% of period end total assets at September 30, 2017 compared to $75.5 million or 1.80% of period end total assets at June 30, 2017 Allowance for loan losses was 1.09% of total loans at September 30, 2017, and the allowance for loan losses plus the acquired loan net discount to total loans adjusted for the acquired loan net discount was 1.25% Provision expense for the third quarter of 2017 was $2.3 million, $1.0 million of which was related to the potential impact from Hurricane Harvey • • 3.31 % 1.18% 2.23 % 1.09% 1.06% 1.02% 1.80 % 0.85% 3Q16 4Q16 1Q17 2Q17 NPAs / Total Assets 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 NPLs / Total Loans (*) Ba s ed on percentage of tota l gross l oans held for investment 15 3.36% 2.64 % 2.15 % 2.86% 3.05% 2.52% 2.33% Allowance for Loan Losses Ratio * Asset Quality

 

 


 

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Overview of Energy Portfolio Progress • On April 28, 2016 the Company announced its intent to exit energy lending with $277.4 million of energy loans, the primary objective was to de-risk the loan portfolio, reduce balance sheet volatility and position the company for normalized earnings and growth The company’s total energy exposure stood at $70.8 million or 2.3% of total loans as of September 30, 2017 (excluding $15.5 million of energy production loans held for sale), comprised of $12.1 million in energy production and $58.7 million in oilfield services loans • − The $70.8 million of energy loans held for investment are being carried at 77.3% of outstanding customer principal balance The $15.5 million of energy loans held for sale are being carried at 85.4% of outstanding customer principal balance − $ 111.2 $ 110.0 $ 12.1 $ 12 1Q16 2Q16 (inc. HFS) 3Q16 (inc. HFS) 4Q16 (inc. HFS) 1Q17 (inc. HFS) 2Q17 (inc. HFS) 3Q17 (inc. HFS) HFS 3Q17 (excl. HFS) Energy Production Oi lfield Services Held for Sale $ i n mi l lions 16 $ 277.4 $ 249.7 $ 166.2 $ 139.7$ 168.6 $ 119.5 $ 103.8 $ 93.7$ 87.2$ 86.3 $ 81.5 $ 62.2 $ 58.7$ 58.7 $ 64.8$ 38.0$ 31.5$ 28.5 $ 27.6 $ 15.5$ 70.8 $ 59$ 58.7 Energy Portfolio Resolution History

 

 


 

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Performance Metrics 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% 20% 15% 10% 5% 0% -5% -10% -15% 1.26% 1.10% 25)% 3Q16 3Q16 4Q16 1Q17 2Q17 PTPP * 3Q17 4Q16 1Q17 Reported 2Q17 3Q17 Reported 75% 70% 65% 60% 55% 50% 45% 4.00% 3.75% 3.50% 3.25% 3Q16 4Q16 1Q17 Reported 2Q17 3Q17 3Q16 4Q16 1Q17 Reported 2Q17 3Q17 (*) Repres ents pre-tax pre-provision return on a verage a ssets, a non-GAAP mea sure used by ma nagement to eva l uate the Compa ny’s financial performance 17 3.62% 3.63% 3.65% 3.47% 3.40% 61.92% 60.99% 54.64% 50.59% 47.83% Net Interest Margin Efficiency Ratio 1.75%2.09% 1.88% 1.47%1.34% 0.73% 0.25% (0.92)% 15.04% 12.74% 8.91% 3.35% (10. ROATCE ROAA

 

 


 

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Net Interest Income & Net Interest Margin $40 5.50% • NIM increased 2 basis points to 3.65% in 3Q17 Loan yields increased by 9 basis points in 3Q17 driven by the Fed’s rate increase in June, which was partially offset by: $35 5.00% 2% • 6% $30 % 4.50% – The impact of higher non-accruals and related accrual interest reversals An unfavorable mix shift in earning assets as the growth in earning assets was all in categories other than loans Higher cost of funds reflecting a deposit cost beta of ~20% $25 29% – 4.00% $20 3.65% .63% % 3.50% – $15 .47% % • Cost of deposits including noninterest-bearing was 0.77%, up 5 basis points compared to the prior quarter $10 3.00% 3Q16 4Q16 1Q17 2Q17 3Q17 Loan Yield excl. Fees (R) NII (L) NIM (R) Loan Yield (R) $ i n mi l lions 18 Net Interest Income Net Interest Margin $36.3 $35.3 5.1 4.6 1% 9% $33.7 5.0 4. 59% 4 3 .77 4.2 .62 $32.2 $32.6 4.8 4. 42% 3 0% 3 4.71 4. .40 % 3 Highlights

 

 


 

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Noninterest Income Customer Service Fees Loan Fees Gain on sale of guaranteed portion of loans, net Other $6 $5 $4 $3 $2 $1 $0 3Q16 4Q16 * 1Q17 * 2Q17 * 3Q17 * (*) Excl uding net l oss on the s a le of held-for-sale l oans of $1.4 million i n 4Q16 and $0.1 million in 1Q17, net ga in on hel d-for-sale l oans of $0.2 mi llion and net ga i n on the s ale of a vailable-for-sale s ecurities of $0.3 million in 2Q17, i n addition to net l oss on held-for-sale loans of $1.3 million a nd net l oss on the s a l e of a vailable-for-sale s ecurities of $0.3 million i n 3Q17 $ i n mi l lions 19 $5.6 $4.1 10.8% $5.2$5.0 19.3% 34.2% 9.5% 26.0% 16.9% 19.4% $3.6 20.2% 21.3% 23.7% 17.4% 14.8% 10.5% 20.8% 19.7 47.1% 42.4% 40.2% 48.6% 37.2%

 

 


 

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Noninterest Expense Salaries and Employee Benefits Occupancy Professional & Regulatory Fees Other $25 $20.1 $19.6 $20 $15 $10 $5 $0 3Q16 4Q16 1Q17 2Q17 3Q17 61.9% 61.0% 54.6% 47.8% 50.6% Ratio $ i n mi l lions 20 Efficiency $23.4 30.3% $21.0$20.8 22.3% 19.4% 15.8% 15.4% 11.5% 11.6% 9.7% 9.3% 11.6% 10.4% 9.6% 10.4% 9.4% 9.8% 64.5% 59.5% 62.2% 51.0% 56.3%

 

 


 

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Capital Position Ho lding Company Bank Capital Adequ acy Level * 12.9% 12.6% 10.5% 9.5% % CET1 Tier 1 RBC Total RBC T1 Leverage (*) denotes ful ly phased-in capital a dequacy to ta ke effect on Ja nuary 1, 2019, the Ba s el I II Capital Rules will require GNBC to ma intain a n additional capital cons ervation buffer of 2.5% CET1, effecti vel y resulting i n minimum ratios of 7.0% CET1, 8.5% Ti er 1, 10.5% Tota l RBC and 4.0% mi nimum leverage ratio $ i n mi l lions 21 Capital$371.1$407.8$384.3$407.8$451.6$435.3$384.3$407.8 11.8%11.8% 10.1% 10.6% 11.0% 8.5% 7.0% 4.0

 

 


 

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Proven Track Record as a Strategic Acquirer • Selective use of strategic acquisitions to augment growth Focused on well-managed banks in our target markets with: Date Target Value Loans Deposits Branches October 2015 Patriot $ 139 $ 1,081 $ 1,103 9 • — — — — — Favorable market share Low-cost deposit funding Compelling fee income generating business Growth potential Other unique attractive characteristics May 2012 Opportunity $ 10 $ 26 $ 44 1 • Key metrics used when evaluating acquisitions: October 2010 La Jolla / One West — — $ 188 1 — — — EPS accretion / (dilution) TBVPS earn-back IRR • • Reputation as an experienced acquirer Maintain discipline in pricing and pursue transactions expected to produce attractive risk adjusted returns 22 December 2006Redstone—$ 85$ 1832 October 2011Main Street—$ 13$ 1683 October 2014SharePlus$ 48$ 251$ 2704 Acquisition History Overview

 

 


 

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Experienced Management Team • • Former Chairman / CEO / President of Coastal Bancorp, Inc. Securities Sales at Goldman, Sachs & Co. CPA at KPMG MBA – University of Texas BBA – University of Texas Manuel J. Mehos CEO, Green Bancorp, Inc. Chairman, Green Bank • • • • 30 years of banking • • Wells Fargo MBA – Baylor University BBA – Texas A&M University Geoffrey D. Greenwade — — • Regional Manager of Business Banking EVP, Commercial Business Banking President, Green Bancorp, Inc. President and CEO, Green Bank • Bank of America • 32 years of banking — — Banking Center President Lending Manager • • Yadkin – EVP & CFO Rocky Mountain Bank – CEO RBC Bank (USA) – CFO and COO CPA at KPMG BSBA – UNC Chapel Hill • • • Terry S. Earley • 33 years of banking EVP and Chief Financial Officer • • BBVA Compass Bank – EVP and Credit Risk Executive Guaranty Bank – Executive VP and Chief Credit Officer Bank of America – SVP and Senior Approval Officer BBA in Finance – Texas A&M University Donald S. Perschbacher • • 32 years of banking EVP and Corporate Chief Credit Officer • 23 Education & Experience Qualification Details Name and Title

 

 


 

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Closing Remarks • • • • Branch-light business model located in attractive major metropolitan markets in Texas Scalable platform to accommodate significant organic growth and enhance profitability Houston market is recovering quickly from the impact of Hurricane Harvey Initiative to reduce CRE exposure to below 300% of regulatory capital is complete, and CRE growth capacity supports expectations for stronger loan production and growth Strong core earnings profile post-MARS, highlighted by strong ROAA of 1.18%, ROATCE of 13.89%, and efficiency ratio of 49.21% Asset sensitive balance sheet is well positioned for rising rates Significant liquidity and capital to support future growth • • • 24

 

 


 

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Appendix 25

 

 


 

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Pre-Tax Pre-Provision Adjusted Net Income $22 4% $20 $18 3% $16 $14 2% $12 $10 1% $8 $6 0% 3Q16 4Q16 PTPP Adj. Net Income (L) 1Q17 2Q17 3Q17 MARS-Related (L) PTPP ROAA (R) $ i n mi l lions 26 $21.4 2.1% $19.6 1.9% $0.6 $3.1 $17.3 1.8% $2.9 $14.4 1.5% $13.4 1.4%

 

 


 

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Commercial Real Estate (CRE) Portfolio Detail Central TX, 10% Remaining TX, 12% Multifamily 24% Retail, 24% Other, 2% Residential Real Estate, 3% Land, 5% Dallas 15% Houston 60% Office 21% Hospitality, 5% Senior Housing, 5% Industrial Warehouse, 13% $1,395 $1,500 $1,389 400% $1,324 $1,300 $1,250 375% ADC 16% $1,000 350% $750 325% $500 300% 35 $40 $250 $37 $37 $38 275% CRE 84% $0 250% 3Q16 4Q16 1Q17 2Q17 3Q17 Total R BC CRE Ratio (*) Centra l TX denotes Austin, Sa n Antonio a nd Sa n Ma rcos $ i n mi l lions, portfolio detail excludes Fa rmland per CRE guidance regulations, though i t is i ncluded in financial reporting 27 36 9% 8 37 3% 2 $1,252 34 5% 3 31 8% 9 28 8% $4 Regulatory CRE/Total Risk Based Capital CRE vs. ADC as of September 30, 2017 By Product as of September 30, 2017 By Regional Distribution as of September 30, 2017*

 

 


 

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Financial Guidance – Updated • • • • • • • 4Q 2017 Net Interest Margin in the range of 3.65 – 3.70% * FY 2017 Net Interest Income in the range of $139 – 143 million FY 2017 Provision Expense in the range of $12 – 15 million FY 2017 Noninterest Income in the range of $21 – 23 million ** FY 2017 Noninterest Expense in the range of $80 – 82 million 2017 EPS target in the range of $1.15 – $1.20 * 2018 EPS target in the range of $1.50 – $1.60 *** (*) Ba s ed on a ssumption of one 25 basis point i ncrease to the Fed Funds ta rget ra te i n December 2017 (**) Excl udes loss on held for s ale l oans a nd a vailable for s ale s ecurities (***) Ba s ed on a ssumption of one 25 basis point i ncrease to the Fed Funds ta rget rate i n the fi rst half of 2018 28

 

 


 

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Analyst Coverage 29 Firm Analyst Rating Price Target 2017E EPS 2018E EPS Brian Zabora Outperform $25.00 $1.19 $1.51 Brady Gailey Market Perform $24.00 $1.17 $1.50 Brett Rabatin Overweight $26.00 $1.19 $1.52 Brad Milsaps Buy $25.50 $1.19 $1.70 Michael Young Hold $23.00 $1.19 $1.45 Average $24.70 $1.19 $1.54

 

 


 

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GAAP to Non-GAAP Reconciliations 30

 

 


 

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Reconciliation of Total Shareholders’ Equity to Tangible Common Equity Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 (Dollars in thousands, except per share data) Tangible Common Equity To ta l s ha re hol de rs ’ e qui ty Adjus tme nts : Go o d will Co re de pos i t i nta ngi bl e s Tangible common equity Co mmo n s ha re s o uts ta ndi ng (1) Book va l u e p e r common s h a re (1) Ta ngi bl e boo k va l ue pe r co mmo n s ha re (1) $ 462,311 $ 451,741 $ 437,288 $ 430,482 $ 426,215 85,291 8,835 85,291 9,215 85,291 9,595 85,291 9,975 85,291 10,356 $ 368,185 $ 357,235 $ 342,402 $ 335,216 $ 330,568 37,096 12.46 9.93 37,035 12.20 9.65 37,015 11.81 9.25 36,988 11.64 9.06 36,683 11.62 9.01 $ $ $ $ $ $ $ $ $ $ 1 Excl udes the di lutive effect of common stock issuable upon exercise of outstanding stock options. The number of exercisable options outsta nding was 467,257 as of September 30, 2017; 465,281 a s of June 30, 2017; 472,653 a s of March 31, 2017; 493,241 a s of December 31, 2016; a nd 792,619 a s of September 30, 2016. 31

 

 


 

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Reconciliation of Avg. Tangible Common Equity to Avg. Common Equity and Net Income excl. Amortization of Core Deposit Intangibles, Net of Tax to Net Income For the Nine Months Ended For the Quarter Ended Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Sep 30, 2017 Sep 30, 2016 (Dollars in thousands) Net income (loss) adjusted for amortization of core deposit intangibles Ne t i n come (l os s ) Adjus tme nts : Pl u s : Amorti za ti on of core d e p os i t in tan gib le s Le s s : Ta x b e n e fi t a t th e s ta tu to ry ra te Net income (loss) adjusted for amortization of core deposit intangibles $ 11,407 $ 12,898 $ 7,212 $ 2,544 $ (8,986) $ 31,517 $ (3,516) 380 133 380 133 380 133 382 134 402 141 1,140 399 1,205 422 $ 11,654 $ 13,145 $ 7,459 $ 2,792 $ (8,725) $ 32,258 $ (2,733) Average Tangible Common Equity To tal a ve rage s h a re h o ld e rs ’ e q u ity Adjus tme nts : Ave rage go o d will Ave rage co re d e p o s it in tan gib le s Average tangible common equity Return on Average Tangible Common Equity (Annualized) $ 457,303 $ 445,334 $ 435,695 $ 427,550 $ 434,620 $ 446,190 $ 439,993 85,291 9,065 85,291 9,461 85,291 9,844 85,291 10,223 85,291 10,618 85,291 9,454 85,290 11,018 $ 362,947 $ 350,582 $ 340,560 $ 332,036 $ 338,711 $ 351,445 $ 343,685 12.74 % 15.04 % 8.88 % 3.35 % (10.25) % 12.27 % (1.06) % 32

 

 


 

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Reconciliation of Allowance for Loan Losses plus Acquired Loans Net Discount to Total Loans adj. for Acquired Loan Net Discount Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 (Dollars in thousands) Allowance for loan losses plus acquired loan net discount Allo wan ce fo r lo an lo s s e s at e n d o f p e rio d Pl us : Ne t di s co unt o n a cqui re d l o a ns Total allowance plus acquired loan net discount $ 33,480 5,112 $ 31,991 6,240 $ 31,936 7,314 $ 26,364 9,937 $ 35,911 13,698 $ 38,592 $ 38,231 $ 39,250 $ 36,301 $ 49,609 Total loans adjusted for acquired loan net discount To tal lo an s Pl us : Ne t di s co unt o n a cqui re d l o a ns Total loans adjusted for acquired loan net discount Allowance for loan losses plus acquired loan net discount loans to total loans adjusted for acquired loan net discount $ 3,071,761 5,112 $ 3,123,355 6,240 $ 3,012,275 7,314 $ 3,098,220 9,937 $ 3,047,618 13,698 $ 3,076,873 $ 3,129,595 $ 3,019,589 $ 3,108,157 $ 3,061,316 1.25 % 1.22 % 1.30 % 1.17 % 1.62 % 33

 

 


 

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Reconciliation of Pre-Tax Pre-Provision Return on Avg. Assets For the Nine Months Ended For the Quarter Ended Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Sep 30, 2016 Sep 30, 2017 Sep 30, 2016 (Dollars in thousands) Pre-Tax, Pre-Provision Net Income Ne t I n come (l os s ) $ 11,407 5,895 2,300 $ 12,898 6,985 1,510 $ 7,212 3,942 6,145 $ 2,544 1,355 9,500 $ (8,986) (4,831) 28,200 $ 31,517 16,822 9,955 $ (3,516) (1,757) 55,200 Pl us : Pro vi s i o n (be ne fi t) fo r i nco me Plu s : Pro vis io n fo r lo an lo s s e s Total pre-tax, pre-provision net income $ 19,602 $ 21,393 $ 17,299 $ 13,399 $ 14,383 $ 58,294 $ 49,927 Total Average Assets Pre-Tax, Pre-Provision Return on Average Assets (Annualized) $ 4,131,706 $ 4,096,386 $ 4,016,744 $ 3,974,244 $ 3,894,127 $ 4,082,033 $ 3,822,722 1.88 % 2.09 % 1.75 % 1.34 % 1.47 % 1.91 % 1.74 % 34