stxb-10q_20190930.htm

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Former name, former address and former fiscal year, if changed since last report:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 4, 2019, the registrant had 16,140,422 shares of common stock, no par value, outstanding.

	September 30, 2019			December 31, 2018
Assets:
Cash and due from banks	$	28,822		$	22,664
Interest-bearing deposits in other banks		122,721			66,351
Total cash and cash equivalents		151,543			89,015
Time deposits in other banks		1,225			—
Investment securities:
Available for sale securities, at fair value		166,669			179,461
Total investment securities		166,669			179,461
Loans held for sale		2,784			3,945
Loans:
Loans held for investment		1,487,602			1,102,808
Less: allowance for loan and lease losses		(6,565	)		(6,286	)
Loans, net		1,481,037			1,096,522
Premises and equipment, net		65,144			53,877
Accrued interest receivable		6,319			4,934
Other real estate owned and repossessed assets		1,042			782
Goodwill		43,086			18,253
Core deposit intangible		11,628			8,558
SBA servicing asset		3,548			3,965
Deferred tax asset, net		—			328
Bank-owned life insurance		15,521			7,401
Federal Home Loan Bank and other bank stock, at cost		6,233			5,304
Other assets		4,005			4,276
Total assets	$	1,959,784		$	1,476,621
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Transaction accounts:
Noninterest-bearing	$	366,209		$	256,784
Interest-bearing		593,064			378,822
Total transaction accounts		959,273			635,606
Time deposits		625,940			547,042
Total deposits		1,585,213			1,182,648
Accrued interest payable		1,002			702
Short-term borrowings		—			12,500
Long-term borrowings		74,165			77,784
Deferred tax liability, net		215			—
Other liabilities		2,451			4,191
Total liabilities		1,663,046			1,277,825
Commitments and contingencies (Note 13)
Stockholders' Equity:
Preferred stock, $1 par value; 5 million shares authorized; 0 shares issued and outstanding		—			—
Common stock, no par value; 50 million shares authorized; 16,121,479 and 12,103,753 shares issued and outstanding		251,875			169,939
Retained earnings		41,970			27,003
Accumulated other comprehensive income (loss)		3,091			1,854
Treasury stock		(198	)		—
Total stockholders' equity		296,738			198,796
Total liabilities and stockholders' equity	$	1,959,784		$	1,476,621

The accompanying notes are an integral part of these unaudited, consolidated financial statements

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018		2019		2018
Interest income:
Interest and fees on loans	$	23,064		$	13,901	$	62,386	$	39,270
Interest and dividends on investment securities		1,143			202		3,627		611
Other interest income		794			173		2,172		536
Total interest income		25,001			14,276		68,185		40,417
Interest expense:
Interest on deposits		4,097			2,197		11,106		5,869
Interest on FHLB advances and other borrowings		425			389		1,414		1,395
Total interest expense		4,522			2,586		12,520		7,264
Net interest income		20,479			11,690		55,665		33,153
Provision for loan losses		900			486		2,081		1,460
Net interest income after provision for loan losses		19,579			11,204		53,584		31,693
Noninterest income:
Service charges and fees		866			462		2,564		1,238
SBA loan servicing fees		234			529		538		1,701
Mortgage referral fees		173			160		481		524
Gain on sales of loans, net		1,151			1,369		3,339		3,884
Gain on sales of investment securities		—			—		2,134		—
Other noninterest income		257			47		457		111
Total noninterest income		2,681			2,567		9,513		7,458
Noninterest expense:
Salaries and employee benefits		9,502			6,623		25,391		19,524
Occupancy and equipment expenses		1,710			1,279		4,662		3,736
Professional services		791			624		2,854		1,249
Data processing and network		884			302		2,100		936
Regulatory assessments and insurance		(256	)		266		157		787
Amortization of intangibles		1,015			176		2,624		527
Advertising		134			83		398		300
Marketing		136			115		407		354
Telephone expense		289			120		767		332
Conversion expense		314			—		1,918		—
Other operating expenses		1,037			693		3,107		2,043
Total noninterest expense		15,556			10,281		44,385		29,788
Income before income tax expense		6,704			3,490		18,712		9,363
Income tax expense		1,374			719		3,745		1,898
Net income	$	5,330		$	2,771	$	14,967	$	7,465
Earnings per common share:
Basic	$	0.35		$	0.28	$	1.09	$	0.86
Diluted	$	0.34		$	0.27	$	1.05	$	0.82
Weighted average common shares outstanding:
Basic		15,370,480			9,792,032		13,774,776		8,673,106
Diluted		15,771,249			10,360,301		14,198,926		9,094,691

The accompanying notes are an integral part of these unaudited, consolidated financial statements

	Shares of Common		Shares of Preferred		Common			Preferred		Retained		Treasury		Accumulated Other Comprehensive			Total Stockholders'
	Stock		Stock		Stock			Stock		Earnings		Stock		Income (Loss)			Equity
Three Months Ended September 30,
Balance as of July 1, 2018		9,786,611		—	$	127,344		$	—	$	21,719	$	—	$	(1,077	)	$	147,986
Net income		—		—		—			—		2,771		—		—			2,771
Shares issued in offering, net adjustment		—		—		(161	)		—		—		—		—			(161	)
Exercise of stock options and warrants		25,870		—		177			—		—		—		—			177
Stock-based compensation		—		—		181			—		—		—		—			181
Other comprehensive income (loss)		—		—		—			—		—		—		(61	)		(61	)
Balance as of September 30, 2018		9,812,481		—	$	127,541		$	—	$	24,490	$	—	$	(1,138	)	$	150,893

Texas	90-0499552
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1836 Spirit of Texas Way Conroe, TX	77301
(Address of principal executive offices)	(Zip Code)

		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Consolidated Financial Statements (Unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Changes in Stockholders’ Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	61
PART II.	OTHER INFORMATION	62
Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 3.	Defaults Upon Senior Securities	62
Item 4.	Mine Safety Disclosures	62
Item 5.	Other Information	62
Item 6.	Exhibits	63
Signatures		64