$40M Capital Raise Funds C&I Growth
Susser Bank recently closed on $40.3M in equity fundraising, providing opportunities to grow our commercial and industrial relationships, while continuing to provide the same level of outstanding service to clients. Dallas Business Journal has the story>
Susser Bank has more than $40 million in new capital as it looks to continue growing loans and deposits, with a focus on commercial lending.
The Dallas-based bank’s holding company, Susser Banc Holdings Corp., recently closed a $40.3 million round of equity fundraising. CEO Sam Susser said the bank initially targeted raising about $20 million. The private capital raise included money from 68 new investors as well as several existing investors. The largest investment was $10 million from an entity that is majority owned by the Susser family.
Susser Bank’s successful capital raise follows a year when the banking industry dealt with its greatest crisis since the Great Recession with the failures of several large institutions. In addition to the industry turmoil, banks have also held off on raising capital as they have tightened their balance sheets amid soaring interest rates, the possibility of an upcoming recession and challenges in the commercial real estate market.
Following the oversubscribed round, Susser launched a tender offer for $17.5 million of shares to legacy investors of Affiliated Bank, Susser Bank’s predecessor, who have generally been invested for 20 to 25 years.
“That is underway right now and creates a path to liquidity for any shareholders that have been around a long time and would like to monetize their investment,” Susser said in an interview.
The Susser family acquired a majority stake in BancAffiliated Inc. in 2018. The family converted the bank from a national bank to a state-chartered bank in 2020, renamed it Susser Bank and later moved its headquarters from Bedford to the Crescent in Dallas. Susser, a longtime Corpus Christi businessman, became CEO in 2021.
Under the Susser family’s control, the bank has more than tripled its assets from about $700 million to $2.1 billion as of Sept. 30, 2023, according to federal filings. Susser Bank has $1.9 billion in deposits and a $1.5 billion loan book.
Susser said his bank kept a strong balance sheet and continued to grow last year while others struggled in the wake of the failures of Silicon Valley Bank, Signature Bank and First Republic Bank.
“They were either too hot in a post-Silicon Valley world, meaning their loan-to-deposit ratios were too high and not enough liquidity on hand, or they had liquidity but they were getting it through borrowings instead of their core deposits,” Susser said. “We were blessed to not be in that category.”
Some banks that have historically operated conservatively with low loan-to-deposit ratios also ran into trouble because of their bond portfolios. Banks bought tons of bonds after the Federal Reserve slashed interest rates during the pandemic, but rate hikes since 2022 have eroded their value.
“Knock on wood, our balance sheet was very strong during the crisis,” Susser said.
Susser Bank has also expanded into new Texas markets as part of an effort to become a statewide institution. It operates nine branches, including six in Dallas-Fort Worth, and has opened locations in Houston, San Antonio and Round Rock, outside Austin. The bank also currently operates a loan production office in Austin slated to become a full-service branch later this year.
Amid that growth, Susser said it became “time to bring in some additional capital.”
“This capital, along with our internally generated profits, will hopefully allow us to grow the bank another $300 [million] or $400 million [in assets] over the next couple of years,” Susser said.
As the bank puts its new capital to work, Susser said the focus will be on growing commercial and industrial relationships. The bank will also continue hiring additional commercial lenders and employees for its mortgage business. In the last year, Susser Bank added 14 employees as of Sept. 30, growing its workforce to 243.
Susser Bank has grown assets at a “double-digit” clip annually over the last five years, and Susser said he sees that trend continuing in 2024. The first half of the year “looks pretty good,” he said, and the second half could be even stronger if the Federal Reserve cuts rates as many economists have predicted. While he doesn’t fixate on certain asset size goals, Susser wants to ensure the bank grows consistently while continuing to provide a high level of personalized service to its customers.
By Holden Wilen – Staff Writer, Dallas Business Journal
Jan 10, 2024
