Houston banks to merge in $1.5 billion all-stock transaction

Houston-based banks, Allegiance Bank and CBTX, have agreed to merge in an all-stock transaction. The combined market capitalization will be around $1.5 billion. and it will have $8.7 billion in deposits, placing it 6th in the Houston region (behind JP Morgan, Wells Fargo, Bank of America, PNC and Zions).



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Allegiance has 28 branches, 27 in Houston and 1 in Beaumont. CBTX has 19 branches in Houston, 15 in the Beaumont area and one in Dallas.

Allegiance shareholders will own 54% of the combined stock, CBTX 46%. The bank name has yet to be determined.

Steve Retzloff, CEO of Allegiance, will become Executive Chairman, while Paul Egge, CFO of Allegiance, will take the same role in the combined company. Bob Franklin, CEO of CBTX, will become CEO of the combined company.

Both banks began operations in 2007. Allegiance initially concentrated on organic growth but in recent years made four acquisitions including Farmers & Merchants and Post Oak Bank. It completed its IPO in 2015.

CBTX started out in Beaumont in 2007 with the acquisition of CountyBank and later bought Crosby State Bank, Vista Bank and Memorial City Bank to expand into Houston. It went public in 2017.

The banks expect annualized pre-tax cost savings of $36 million. That’s net of $1 million of incremental costs for increased regulations and risk management that are required when a bank exceeds $10 billion in assets.

Closing is expected in the 2nd quarter of 2022.

SEC filing – Allegiance and CBTX merger

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