stxb-10q_20200930.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 October 26, 2020, the registrant had 17,290,133 shares of common stock, no par value, outstanding.

	September 30, 2020			December 31, 2019
Assets:
Cash and due from banks	$	29,345		$	32,490
Interest-bearing deposits in other banks		121,739			293,467
Total cash and cash equivalents		151,084			325,957
Time deposits in other banks		—			490
Investment securities:
Available for sale securities, at fair value		119,814			96,937
Total investment securities		119,814			96,937
Loans held for sale		4,287			3,989
Loans:
Loans held for investment		2,452,353			1,767,182
Less: allowance for loan and lease losses		(12,207	)		(6,737	)
Loans, net		2,440,146			1,760,445
Premises and equipment, net		82,734			75,150
Accrued interest receivable		11,612			6,507
Other real estate owned and repossessed assets		302			3,653
Goodwill		77,681			68,503
Core deposit intangible		8,698			11,472
SBA servicing asset		3,051			3,355
Deferred tax asset, net		494			-
Bank-owned life insurance		15,878			15,610
Federal Home Loan Bank and other bank stock, at cost		5,709			8,310
Other assets		3,580			4,244
Total assets	$	2,925,070		$	2,384,622
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Transaction accounts:
Noninterest-bearing	$	667,199		$	444,822
Interest-bearing		940,930			803,557
Total transaction accounts		1,608,129			1,248,379
Time deposits		679,387			679,747
Total deposits		2,287,516			1,928,126
Accrued interest payable		1,321			1,219
Short-term borrowings		10,000			—
Long-term borrowings		267,746			105,140
Deferred tax liability, net		—			672
Other liabilities		6,966			3,760
Total liabilities		2,573,549			2,038,917
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; 18,318,678 and 18,272,245 shares issued; 17,316,313 and 18,258,222 shares outstanding		298,509			297,188
Retained earnings		65,783			48,139
Accumulated other comprehensive income (loss)		(237	)		667
Treasury stock		(12,534	)		(289	)
Total stockholders' equity		351,521			345,705
Total liabilities and stockholders' equity	$	2,925,070		$	2,384,622

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

	Three Months Ended September 30,					Nine Months Ended September 30,
	2020		2019			2020		2019
Interest income:
Interest and fees on loans	$	29,901	$	23,064		$	87,222	$	62,386
Interest and dividends on investment securities		465		1,143			1,426		3,627
Other interest income		115		794			1,200		2,172
Total interest income		30,481		25,001			89,848		68,185
Interest expense:
Interest on deposits		3,392		4,097			11,844		11,106
Interest on FHLB advances and other borrowings		875		425			1,941		1,414
Total interest expense		4,267		4,522			13,785		12,520
Net interest income		26,214		20,479			76,063		55,665
Provision for loan losses		2,831		900			6,840		2,081
Net interest income after provision for loan losses		23,383		19,579			69,223		53,584
Noninterest income:
Service charges and fees		1,525		866			4,106		2,564
SBA loan servicing fees		619		234			885		538
Mortgage referral fees		428		173			987		481
Swap referral fees		494		—			1,336		—
Gain on sales of loans, net		612		1,151			1,402		3,339
Gain on sales of investment securities		1,031		—			1,031		2,134
Other noninterest income		110		257			349		457
Total noninterest income		4,819		2,681			10,096		9,513
Noninterest expense:
Salaries and employee benefits		11,365		9,502			31,100		25,391
Occupancy and equipment expenses		2,222		1,710			7,298		4,662
Professional services		555		791			2,166		2,854
Data processing and network		1,002		884			2,594		2,100
Regulatory assessments and insurance		517		(256	)		1,298		157
Amortization of intangibles		919		1,015			2,784		2,624
Advertising		333		134			605		398
Marketing		18		136			216		407
Telephone expense		563		289			1,453		767
Conversion expense		279		314			1,825		1,918
Other operating expenses		1,520		1,037			5,018		3,107
Total noninterest expense		19,293		15,556			56,357		44,385
Income before income tax expense		8,909		6,704			22,962		18,712
Income tax expense		1,821		1,374			4,106		3,745
Net income	$	7,088	$	5,330		$	18,856	$	14,967
Earnings per common share:
Basic	$	0.41	$	0.35		$	1.07	$	1.09
Diluted	$	0.41	$	0.34		$	1.06	$	1.05
Weighted average common shares outstanding:
Basic		17,340,898		15,370,480			17,701,003		13,774,776
Diluted		17,383,427		15,771,249			17,771,665		14,198,926

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		Equity
Three Months Ended September 30,
Balance as of July 1, 2019		13,790,332		—	$	204,974	$	—	$	36,640	$	—	$	2,496	$	244,110
Net income		—		—		—		—		5,330		—		—		5,330
Shares issued in offering, net		2,300,000		—

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	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	66
Item 4.	Controls and Procedures	66
PART II.	OTHER INFORMATION	67
Item 1.	Legal Proceedings	67
Item 1A.	Risk Factors	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3.	Defaults Upon Senior Securities	69
Item 4.	Mine Safety Disclosures	69
Item 5.	Other Information	69
Item 6.	Exhibits	70
Signatures		71

	Three Months Ended September 30,					Nine Months Ended September 30,
	2020			2019		2020			2019
Net income	$	7,088		$	5,330	$	18,856		$	14,967
Other comprehensive income (loss):
Unrealized net holding gains (losses) on investment securities available for sale, net of (tax) and benefit of $182, $(158), $22, and $(857), respectively		(690	)		595		(85	)		3,225
Reclassification adjustment for realized (gains) on investment securities available for sale included in net income, net of taxes of $212, $0, $212, and $529, respectively		(819	)		—		(819	)		(1,988	)
Total other comprehensive income (loss)		(1,509	)		595		(904	)		1,237
Total comprehensive income	$	5,579		$	5,925	$	17,952		$	16,204