Allegiance Bancshares Files for IPO

By Chris Lange Updated Aug 25, 6:43AM EDT · Published Aug 24, 5:46PM EDT

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Allegiance Bancshares Inc. has filed an S-1 form with the Securities and Exchange Commission (SEC) for its initial public offering (IPO). No terms were given in the filing but the offering is valued up to $60 million, although this number is normally just a placeholder. The company intends to list on the Nasdaq Global Market under the symbol ABTX.

The underwriters for this offering are Baird, Stephens Inc., Keefe Bruyette & Woods and Sandler O’Neil.

Allegiance is a Texas corporation and a registered bank holding company headquartered in Houston, Texas. Through its wholly owned subsidiary, Allegiance Bank, the company provides a diversified range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses and individual customers.

Allegiance currently operates 16 full-service banking locations in the Houston metropolitan area and two full-service banking locations in Central Texas. The company has experienced significant growth since it began banking operations in 2007, through both organic growth, including de novo branching, and two whole-bank acquisitions. Most recently, on January 1, 2015, Allegiance completed the acquisition of Farmers & Merchants Bancshares and its subsidiary bank, Enterprise Bank.

As of June 30, 2015, the company had total assets of $1.95 billion, total loans of $1.56 billion, total deposits of $1.63 billion and total stockholders’ equity of $201.8 million. Also from December 31, 2007 to June 30, 2015, book value per common share increased to $19.37 from $9.62 per share, and the tangible book value per common share has increased to $14.79 from $9.62 per share.

The company detailed in the filing that it has a diversified loan portfolio, and it stressed in the filing that it has no direct focus on the energy industry in its business model. We highlighted the point about ‘no energy focus’ as well. Allegiance’s filing said:

Our focus on loans to small to medium-sized businesses results in a more diversified portfolio of relatively smaller loan relationships, thus reducing the risk that results from dependence on larger lending relationships. As of June 30, 2015, our average funded loan size was approximately $260 thousand. We do not lend directly to oil and gas exploration and production companies and roughly 2.5% of our total loan portfolio is to customers in the oilfield services industry. Although we operate in the Houston metropolitan area, we believe that our lack of direct lending to oil and gas exploration and production companies and reserve-based lending will reduce the effect to our business in the event of a prolonged period of lower oil and gas prices.

Allegiance plans to use the proceeds from this offering to pay down its indebtedness, for general working capital and other corporate expenses.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.