February 12, 2014 / 3:50 PM / in 4 years

Talmer Bancorp shares rise in U.S. debut

(Reuters) - Shares of Talmer Bancorp Inc TLMR.O, backed by billionaire investor Wilbur Ross, rose as much as 7 percent in their market debut, valuing the U.S. bank holding company at about $971 million.

Talmer’s initial public offering raised about $203 million after its Class A shares were priced at $13 per share, near the lower end of its $12.50-$14.50 expected range.

“Part of the attraction (for bank holding companies) is the barriers to entry are high in today’s highly regulated market,” said Francis Gaskins, a partner at IPO research company IPODesktop.com. “Investors like bank holding companies in areas that may show economic growth.”

The Troy, Michigan-based lender’s shares opened at $13.75 and touched a high of $13.88 on the Nasdaq on Wednesday. The stock was up about 5 percent at $13.70 in early trading.

Of the 15.6 million shares on offer, Talmer sold 3.7 million shares, while the rest came from shareholders.

Ross, the company’s biggest shareholder and a board member, sold 3.6 million shares in the offering, cutting his stake to 18 percent from 24 percent.

Other notable shareholders who sold a part of their holdings include Manulife Asset Management (US) LLC and David Einhorn’s hedge fund Greenlight Capital.

Talmer is the third financial services company to go public this year after the $1.8 billion IPO of Spanish bank Santander SA’s (SAN.MC) auto finance unit Santander Consumer USA Holding Inc (SC.N) and the $226 million IPO of commercial real estate mortgage lender Ladder Capital Corp (LADR.N).

Santander Consumer’s shares have risen 6 percent since the IPO, while Ladder Capital’s stock has gained about 2 percent.

    Talmer is focused on the U.S. mid-western market, with 94 branches in Michigan, Ohio, Indiana, Wisconsin, Illinois, Nevada and New Mexico.

    The company, which started operations as a single branch in 2007, has grown substantially in the past seven years, with much of the growth coming from four Federal Deposit Insurance Corp-assisted acquisitions.

    Talmer’s net income jumped 75 percent to $10.5 million in the quarter ended September 30, while its assets more than doubled to $4.74 billion in the period.

    Net interest income, the difference between what a bank earns from loans and pays out for deposits, rose about 76 percent to $44 million in the quarter.

    Keefe Bruyette & Woods Inc and J.P. Morgan Securities LLC were the lead underwriters to the offering.

    Reporting by Neha Dimri and Avik Das in Bangalore; Editing by Kirti Pandey

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