Allegiance Bancshares Quietly Enters the Market in IPO

By Chris Lange Published Oct 8, 11:15AM EDT

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Allegiance Bancshares Inc. (NASDAQ: ABTX) entered the market in its initial public offering (IPO) on Thursday. Its 2.6 million shares priced at $21 per share, which was just below the expected price range of $22 to $24. There is an overallotment option for an additional 390,000 shares. At this price the entire offering is valued up to $62.79 million.

The underwriters for the offering are Baird, Stephens, Keefe Bruyette & Woods and Sandler O’Neill Partners.

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

The company currently operates 16 full-service banking locations in the Houston metropolitan area and two full-service banking locations in Central Texas. Allegiance 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, the company completed its acquisition of Farmers & Merchants Bancshares and its subsidiary bank, Enterprise Bank. At the end of June 2015, Allegiance 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.

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In terms of its finances, Allegiance gave a third-quarter update as follows:

We expect to report net income in the range of $4.0 million to $4.3 million and net income attributable to common stockholders in the range of $3.8 million to $4.1 million for the three months ended September 30, 2015 as compared to net income of $3.9 million and net income attributable to common stockholders of $3.6 million for the three months ended June 30, 2015. The expected increase in net income is primarily attributable to growth in outstanding loan balances, a corresponding increase in net interest income and efficiencies achieved through our continued integration of F&M Bancshares. For the period from June 30, 2015 to September 15, 2015, average loans increased $92.7 million to $1.57 billion from $1.48 billion for the three months ended June 30, 2015.

We expect to report diluted earnings per share in the range of $0.40 to $0.43 for the three months ended September 30, 2015. We expect to report tangible book value per common share in the range of $15.34 to $15.37 as of September 30, 2015.

The company plans to use the net proceeds from this offering to repay its indebtedness and for working capital and general corporate purposes.

Shares of Allegiance were up 6.2% to $22.31 on Thursday morning, just after shares entered the market. The trading range was $22.16 to $22.73 after 11 a.m. Eastern. At the same time, 441,000 shares had moved on the day.

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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.