Last September, as part of its planned growth strategy, Dallas-based NexBank successfully raised another $54 million through a private placement of subordinated notes. Typical of private placements, high net worth individuals and large institutional investors now hold the notes which were not registered under the U.S. Securities Act. Non-registered notes cannot be sold in the United States, meaning NexBank, a regional financial institution, has attracted the attention of foreign investors. The bank’s profitability has been a major factor, showing better than average performance for return on equity among U.S. financial institutions.
These particular notes are BBB rated, that is, investment grade, are non-callable for five years, allowing the bank ample time to earn a strong return on the funds. At a reasonable rate of 6.375%, the placement is advantageous for NexBank and accelerates the institution above the $280 million mark in capital raised since 2016.
A long trusted financial institution, originally chartered in 1922 as Heritage Bank, NexBank’s asset volume exceeded $8 billion in 2017. Texan John L. Holt, Jr., President, and CEO since 2011 when total assets were $600 million, largely orchestrated this growth trajectory. Doing business with other financial institutions, corporations and real estate investors are NexBank’s expertise, nevertheless, despite its asset size, the bank maintains a personal feel through its 3 locations in the Dallas area and 87-member staff.
Notwithstanding asset size, a bank’s safety and soundness are of paramount importance to its clients. In 2017, NexBank received a five-star rating from Bankrate, the highest rating available, for safety and soundness. Most financial institutions typically score in the three to four-star range. An acknowledged leader in the financial services industry, Bankrate has over 40 years’ experience in financial publishing. Added Bankrate in their review, “Overall, NexBank, SSB exhibited a superior condition…”
Staying true to its core mission of industry leadership and commitment to clients, for 2018, NexBank’s group of financial professionals is well positioned to weather the volatility of the commercial lending and mortgage banking marketplaces.