Document And Entity Information	6 Months Ended
Document And Entity Information	Jun. 30, 2018	Aug. 01, 2018
Document And Entity Information
Entity Registrant Name	Allegiance Bancshares, Inc.
Entity Central Index Key	0001642081
Trading Symbol	abtx
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding (in shares)		13,367,590

CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) In Thousands	Jun. 30, 2018	Dec. 31, 2017
ASSETS
Cash and due from banks	$ 153,537	$ 133,124
Interest-bearing deposits at other financial institutions	47,108	48,979
Total cash and cash equivalents	200,645	182,103
Available for sale securities, at fair value	300,897	309,615
Loans held for investment	2,358,675	2,270,876
Less: allowance for loan losses	(23,831)	(23,649)
Loans, net	2,334,844	2,247,227
Accrued interest receivable	12,413	12,194
Premises and equipment, net	19,049	18,477
Other real estate owned	1,710	365
Federal Home Loan Bank stock	16,806	12,862
Bank owned life insurance	22,701	22,422
Goodwill	39,389	39,389
Core deposit intangibles, net	2,883	3,274
Other assets	15,089	12,303
TOTAL ASSETS	$ 2,966,426	$ 2,860,231
Deposits:
Noninterest-bearing	$ 749,787	$ 683,110
Interest-bearing
Demand	$ 174,665	$ 215,499
Money market and savings	495,214	554,051
Certificates and other time	894,120	761,314
Total interest-bearing deposits	1,563,999	1,530,864
Total deposits	2,313,786	2,213,974
Accrued interest payable	977	610
Borrowed funds	275,569	282,569
Subordinated debt	48,779	48,659
Other liabilities	7,427	7,554
Total liabilities	2,646,538	2,553,366
COMMITMENTS AND CONTINGENCIES (See Note 11)
SHAREHOLDERS’ EQUITY:
Preferred stock, $1 par value; 1,000,000 shares authorized; no shares issued or outstanding	$ 0	$ 0
Common stock, $1 par value; 40,000,000 shares authorized; 13,340,919 shares issued and outstanding at June 30, 2018 and 13,226,826 shares issued and outstanding at December 31, 2017	13,341	13,227
Capital surplus	220,665	218,408
Retained earnings	90,089	74,894
Accumulated other comprehensive (loss) income	(4,207)	336
Total shareholders’ equity	319,888	306,865
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 2,966,426	$ 2,860,231

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) (USD $)	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Shares issued (in shares)	0	0
Shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	13,340,919	13,226,826
Common stock, shares outstanding (in shares)	13,340,919	13,226,826

CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
INTEREST INCOME:
Loans, including fees	$ 31,846	$ 26,736	$ 61,963	$ 51,996
Securities:
Taxable	$ 646	$ 503	$ 1,245	$ 1,001
Tax-exempt	1,451	1,591	2,910	3,215
Deposits in other financial institutions	250	157	466	287
Total interest income	$ 34,193	$ 28,987	$ 66,584	$ 56,499
INTEREST EXPENSE:
Demand, money market and savings deposits	$ 887	$ 702	$ 1,863	$ 1,356
Certificates and other time deposits	3,284	2,283	6,069	4,240
Borrowed funds	1,472	761	2,508	1,414
Subordinated debt	734	134	1,439	254
Total interest expense	6,377	3,880	11,879	7,264
NET INTEREST INCOME	27,816	25,107	54,705	49,235
Provision for loan losses	631	3,007	1,284	4,350
Net interest income after provision for loan losses	$ 27,185	$ 22,100	$ 53,421	$ 44,885
NONINTEREST INCOME:
Gain on sale of other real estate	$ 1	$ 0	$ 1	$ 0
Bank owned life insurance income	138	146	279	294
Rebate from correspondent bank	564	336	1,008	569
Other	782	606	1,444	1,172
Total noninterest income	$ 1,805	$ 1,477	$ 3,451	$ 2,818
NONINTEREST EXPENSE:
Salaries and employee benefits	$ 12,778	$ 10,415	$ 25,572	$ 20,977
Net occupancy and equipment	1,367	1,302	2,639	2,729
Depreciation	433	398	840	798
Data processing and software amortization	1,356	719	2,409	1,414
Professional fees	1,126	987	1,595	1,882
Regulatory assessments and FDIC insurance	509	569	1,043	1,158
Core deposit intangibles amortization	196	196	391	391
Communications	259	233	507	480
Advertising	342	288	672	551
Other	1,494	1,354	2,909	2,630
Total noninterest expense	19,860	16,461	38,577	33,010
INCOME BEFORE INCOME TAXES	9,130	7,116	18,295	14,693
Provision for income taxes	1,574	1,721	3,028	3,300
NET INCOME	$ 7,556	$ 5,395	$ 15,267	$ 11,442
EARNINGS PER SHARE:
Basic (in dollars per share)	$ 0.57	$ 0.41	$ 1.15	$ 0.88
Diluted (in dollars per share)	$ 0.55	$ 0.40	$ 1.12	$ 0.85
Deposit Account, Nonsufficient Funds Fee
NONINTEREST INCOME:
Revenue from contract with customer	$ 214	$ 184	$ 390	$ 383
Deposit Account, Service Charge Fee
NONINTEREST INCOME:
Revenue from contract with customer	$ 106	$ 205	$ 329	$ 400

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 7,556	$ 5,395	$ 15,267	$ 11,442
Unrealized (loss) gain on securities:
Change in unrealized holding (loss) gain on available for sale securities during the period	$ (759)	$ 4,183	$ (5,841)	$ 5,380
Total other comprehensive (loss) income	(759)	4,183	(5,841)	5,380
Deferred tax benefit (expense) related to other comprehensive (loss) income	159	(1,465)	1,298	(1,884)
Other comprehensive (loss) income, net of tax	(600)	2,718	(4,543)	3,496
Comprehensive income	$ 6,956	$ 8,113	$ 10,724	$ 14,938

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) (USD $) In Thousands, except Share data	Total	Common Stock	Capital Surplus	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Balance at Dec. 31, 2016	$ 279,817	$ 12,958	$ 212,649	$ 57,262	$ (3,052)	$ 0
Balance (in shares) at Dec. 31, 2016		12,958,341
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 11,442			$ 11,442
Other comprehensive income (loss)	3,496				3,496
Common stock issued in connection with the exercise of stock options and restricted stock awards (in shares)		194,712
Common stock issued in connection with the exercise of stock options and restricted stock awards	2,907	195	2,712
Stock based compensation expense	797		797
Balance at Jun. 30, 2017	298,459	13,153	216,158	68,704	444	0
Balance (in shares) at Jun. 30, 2017		13,153,053
Balance at Dec. 31, 2017	$ 306,865	$ 13,227	$ 218,408	$ 74,894	$ 336	$ 0
Balance (in shares) at Dec. 31, 2017		13,226,826
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 15,267			$ 15,267
Other comprehensive income (loss)	(4,543)				(4,543)
Common stock issued in connection with the exercise of stock options and restricted stock awards (in shares)		114,093
Common stock issued in connection with the exercise of stock options and restricted stock awards	1,536	114	1,422
Stock based compensation expense	835		835
Reclassification of amounts within AOCI to retained earnings due to tax reform (See Note 1)	(72)			(72)
Balance at Jun. 30, 2018	$ 319,888	$ 13,341	$ 220,665	$ 90,089	$ (4,207)	$ 0
Balance (in shares) at Jun. 30, 2018		13,340,919

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 15,267,000	$ 11,442,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and core deposit intangibles amortization	$ 1,231,000	$ 1,189,000
Provision for loan losses	1,284,000	4,350,000
Excess tax benefit related to the exercise of stock options	(325,000)	(959,000)
Net amortization of premium on investments	1,627,000	1,678,000
Bank owned life insurance	(279,000)	(294,000)
Net accretion of discount on loans	(207,000)	(408,000)
Net amortization of discount on subordinated debentures	55,000	53,000
Net amortization of discount on certificates of deposit	(3,000)	(3,000)
Net gain on sale of other real estate	(1,000)	0
Federal Home Loan Bank stock dividends	(149,000)	(118,000)
Stock based compensation expense	835,000	797,000
Increase in accrued interest receivable and other assets	(1,745,000)	(3,004,000)
Increase in accrued interest payable and other liabilities	630,000	1,973,000
Net cash provided by operating activities	$ 18,220,000	$ 16,696,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and principal paydowns of available for sale securities	$ 1,813,074,000	$ 2,004,385,000
Proceeds from sales of available for sale securities	0	9,000,000
Purchase of available for sale securities	(1,811,824,000)	(2,014,496,000)
Net change in total loans	(90,038,000)	(222,722,000)
Purchase of bank premises and equipment	(1,446,000)	(1,057,000)
Net purchases of Federal Home Loan Bank stock	(3,795,000)	(3,382,000)
Net cash used in investing activities	$ (94,029,000)	$ (228,272,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in noninterest-bearing deposits	$ 66,677,000	$ 68,776,000
Net increase in interest-bearing deposits	33,138,000	160,286,000
Proceeds from borrowed funds	0	25,000,000
Paydowns on borrowed funds	(7,000,000)	0
Proceeds from the issuance of common stock, stock option exercises, restricted stock awards and the ESPP	1,536,000	2,907,000
Net cash provided by financing activities	94,351,000	256,969,000
NET CHANGE IN CASH AND CASH EQUIVALENTS	18,542,000	45,393,000
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	182,103,000	142,098,000
CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 200,645,000	$ 187,491,000
SUPPLEMENTAL INFORMATION:
Income taxes paid	$ 3,300,000	$ 3,100,000
Interest paid	$ 6,010,000	$ 7,080,000

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES	NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES Nature of Operations-Allegiance Bancshares, Inc. (“Allegiance”) and its wholly-owned subsidiary, Allegiance Bank, (the “Bank”, and together with Allegiance, collectively referred to as the “Company”) provide commercial and retail loans and commercial banking services. The Company derives substantially all of its revenues and income from the operation of the Bank. The Company is focused on delivering a wide variety of relationship-driven commercial banking products and community-oriented services tailored to meet the needs of small to medium-sized businesses, professionals and individuals through its 16 offices and one loan production office in Houston, Texas and the surrounding region. The Bank provides its customers with a variety of banking services including checking accounts, savings accounts and certificates of deposit, and its primary lending products are commercial, personal, automobile, mortgage and home improvement loans. The Bank also offers safe deposit boxes, automated teller machines, drive-through services and 24-hour depository facilities. Basis of Presentation-The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in accordance with guidance provided by the Securities and Exchange Commission. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis, and all such adjustments are of a normal recurring nature. Transactions with Allegiance have been eliminated. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. Significant Accounting and Reporting Policies The Company’s significant accounting and reporting policies can be found in Note 1 of the Company’s annual financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. New Accounting Standards Adoption of New Accounting Standards ASU 2014-09 “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company records revenue from contracts with customers in accordance with Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers” (“Topic 606”). Under Topic 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the Company satisfies a performance obligation. Significant revenue has not been recognized in the current reporting period that results from performance obligations satisfied in previous periods. The Company’s primary sources of revenue are derived from interest and dividends earned on loans, investment securities and other financial instruments that are not within the scope of ASU 2014-09. The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the Consolidated Statements of Income was not necessary. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed, charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, there is little judgment involved in applying Topic 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers. The new standard was effective for the Company on January 1, 2018 and did not have a significant impact on its consolidated financial statements and related disclosures. ASU No. 2016-01, "Financial Instruments - Overall (Subtopic 825-10): Recognition of Financial Assets and Financial Liabilities." ASU 2016-01 makes targeted amendments to fair value measurement and disclosure guidance. ASU 2016-01 requires equity investments (other than equity method investments) to be measured at fair value with changes in fair value recognized in net income. This change is only applied if a readily determinable fair value can be obtained. The update also requires the use of exit prices to measure fair value for disclosure purposes as well as other enhanced disclosure requirements. ASU 2016-01 was effective for the Company on January 1, 2018 and did not have a significant impact on its financial statements and related disclosures. See Note 5 – Fair Value Disclosures for further information. ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments." ASU 2016-15 provides guidance related to certain cash flow issues in order to reduce the current and potential future diversity in practice. Among other things, the update clarifies the appropriate classification for proceeds from settlement of bank owned life insurance (BOLI) policies. The guidance is effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted with retrospective application. ASU 2016-15 was effective for the Company on January 1, 2018 and did not have a significant impact on its financial statements and related disclosures. ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” ASU 2018-02 amends ASC 220, Income Statement - Reporting Comprehensive Income, to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. On December 22, 2017, the United States enacted tax reform legislation commonly known as the Tax Cuts and Jobs Act (the “Tax Act”), resulting in significant modifications to existing law. Authoritative guidance and interpretation by regulatory bodies is ongoing, and as such, the accounting for the effects of the Tax Act is not final and the full impact of the new regulation is still being evaluated. ASU 2018-02 is effective on January 1, 2019, with early adoption permitted. The Company early adopted and recognized a decrease to retained earnings of $72 thousand due to a reclassification on January 1, 2018. Newly Issued But Not Yet Effective Accounting Standards ASU 2016-02 “Leases (Topic 842)." ASU 2016-02 will, among other things, require lessees to recognize a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model and ASC Topic 606, “Revenue from Contracts with Customers.” ASU 2016-02 will be effective for the Company on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early application of this ASU is permitted for all entities. Adoption of ASU 2016-02 is not expected to have a material impact on the Company’s financial statements. The Company leases certain properties and equipment under operating leases that will result in the recognition of lease assets and lease liabilities on the Company’s balance sheet under the ASU. While the Company is currently evaluating the impact of adopting ASU 2016-02, it is aware that the adoption will result in an increase in right-of-use assets and lease liabilities recorded on our balance sheet. ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” Among other things, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better form their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, ASU 2016-13 amends the accounting for credit losses on available for sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for the Company on January 1, 2020 and must be applied using the modified retrospective approach with limited exceptions. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. While the Company is currently unable to reasonably estimate the impact of adopting ASU 2016-13, the Company expects that the impact of adoption will be significantly influenced by the composition, characteristics and quality of its loan and securities portfolios as well as the prevailing economic conditions and forecasts as of the adoption date. The Company has formed a cross functional team and with the assistance of a third-party provider is assessing the Company's data and system needs to evaluate the impact that adoption of this standard will have on the financial condition and results of operations of the Company. ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” ASU 2017-04 eliminates Step 2 from the goodwill impairment test which required entities to compute the implied fair value of goodwill. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will be effective for the Company on January 1, 2020, with earlier adoption permitted and is not expected to have a significant impact on the Company's financial statements. ASU 2017-08,“Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20) - Premium Amortization on Purchased Callable Debt Securities.” ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium to require such premiums to be amortized to the earliest call date unless applicable guidance related to certain pools of securities is applied to consider estimated prepayments. Under prior guidance, entities were generally required to amortize premiums on individual, non-pooled callable debt securities as a yield adjustment over the contractual life of the security. ASU 2017-08 does not change the accounting for callable debt securities held at a discount. ASU 2017-08 will be effective for the Company on January 1, 2019, with early adoption permitted. The Company is currently evaluating the potential impact of ASU 2017-08 on its financial statements.

GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS

Changes in the carrying amount of the Company’s goodwill and core deposit intangible assets were as follows:



	Goodwill		Core Deposit Intangibles
	(Dollars in thousands)
Balance as of January 1, 2017	$	39,389	$	4,055
Amortization	—		(781		)
Balance as of December 31, 2017	39,389		3,274
Amortization	—		(391		)
Balance as of June 30, 2018	$	39,389	$	2,883

Goodwill is recorded on the acquisition date of an entity. Management performs an evaluation annually, and more frequently if a triggering event occurs, of whether any impairment of the goodwill and other intangible assets has occurred. If any such impairment is determined, a write-down is recorded. As of June 30, 2018, there were no impairments recorded on goodwill and other intangible assets.

The estimated aggregate future amortization expense for core deposit intangible assets remaining as of June 30, 2018 is as follows (dollars in thousands):



Remaining 2018	$	390
2019	781
2020	744
2021	484
2022	484
Thereafter	—
Total	$	2,883

SECURITIES

6 Months Ended

Jun. 30, 2018

Investments, Debt and Equity Securities [Abstract]

SECURITIES

The amortized cost and fair value of investment securities were as follows:



	June 30, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
U.S. Government and agency securities	$	6,290	$	101	$	(70	)	$	6,321
Municipal securities	220,407		1,022		(4,556		)	216,873
Agency mortgage-backed pass-through securities	41,078		55		(1,163		)	39,970
Corporate bonds and other	38,446		—		(713		)	37,733
Total	$	306,221	$	1,178	$	(6,502	)	$	300,897



	December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in thousands)
Available for Sale
U.S. Government and agency securities	$	8,507	$	232	$	(24	)	$	8,715
Municipal securities	222,330		2,470		(1,842		)	222,958
Agency mortgage-backed pass-through securities	32,014		159		(361		)	31,812
Corporate bonds and other	46,247		62		(179		)	46,130
Total	$	309,098	$	2,923	$	(2,406	)	$	309,615

As of June 30, 2018, the Company’s management does not expect to sell any securities classified as available for sale with material unrealized losses, and the Company believes it is more likely than not it will not be required to sell any of these securities before their anticipated recovery, at which time the Company will receive full value for the securities. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of June 30, 2018, management believes the unrealized losses in the previous table are temporary and no other than temporary impairment loss has been realized in the Company’s consolidated statements of income.

The amortized cost and fair value of investment securities at June 30, 2018, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations at any time with or without call or prepayment penalties.



	Amortized Cost		Fair Value
	(Dollars in thousands)
Due in one year or less	$	7,185	$	7,159
Due after one year through five years	68,002		67,086
Due after five years through ten years	90,960		89,533
Due after ten years	98,996		97,149
Subtotal	265,143		260,927
Agency mortgage-backed pass through securities	41,078		39,970
Total	$	306,221	$	300,897

Securities with unrealized losses segregated by length of time such securities have been in a continuous loss position are as follows:



	June 30, 2018
	Less than 12 Months					More than 12 Months					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(Dollars in thousands)
Available for Sale
U.S. Government and agency securities	$	1,318	$	(38	)	$	524	$	(32	)	$	1,842	$	(70	)
Municipal securities	98,358		(1,988		)	59,303		(2,568		)	157,661		(4,556		)
Agency mortgage-backed pass-through securities	24,333		(609		)	10,524		(554		)	34,857		(1,163		)
Corporate bonds and other	36,733		(713		)	—		—			36,733		(713		)
Total	$	160,742	$	(3,348	)	$	70,351	$	(3,154	)	$	231,093	$	(6,502	)



	December 31, 2017
	Less than 12 Months					More than 12 Months					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(Dollars in thousands)
Available for Sale
U.S. Government and agency securities	$	3,110	$	(9	)	$	595	$	(15	)	$	3,705	$	(24	)
Municipal securities	42,249		(517		)	56,483		(1,325		)	98,732		(1,842		)
Agency mortgage-backed pass-through securities	13,238		(105		)	8,921		(256		)	22,159		(361		)
Corporate bonds and other	30,203		(179		)	—		—			30,203		(179		)
Total	$	88,800	$	(810	)	$	65,999	$	(1,596	)	$	154,799	$	(2,406	)

No securities were sold during the three and six months ended June 30, 2018. During the three and six months ended June 30, 2017, the Company sold $9.0 million of corporate bonds with a minimal gain recognized. At June 30, 2018 and December 31, 2017, the Company did not own securities of any one issuer, other than the U.S government and its agencies, in an amount greater than 10% of consolidated shareholders’ equity at such respective dates.

The carrying value of pledged securities was $3.0 million at June 30, 2018 and $5.0 million at December 31, 2017, respectively. The securities are pledged to further collateralize letters of credit issued by the Bank but confirmed by another financial institution.

LOANS AND ALLOWANCE FOR LOAN LOSSES

6 Months Ended

Jun. 30, 2018

Loans and Allowance for Loan Losses [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

The loan portfolio balances, net of unearned income and fees, consist of various types of loans primarily made to borrowers located within Texas and are classified by major type as follows:



	June 30, 2018			December 31, 2017
	(Dollars in thousands)
Commercial and industrial	$	452,307		$	457,129
Mortgage warehouse	51,552			69,456
Real estate:
Commercial real estate (including multi-family residential)	1,134,903			1,080,247
Commercial real estate construction and land development	270,965			243,389
1-4 family residential (including home equity)	330,053			301,219
Residential construction	109,962			109,116
Consumer and other	8,933			10,320
Total loans	2,358,675			2,270,876
Allowance for loan losses	(23,831		)	(23,649		)
Loans, net	$	2,334,844		$	2,247,227

Nonaccrual and Past Due Loans

An aging analysis of the recorded investment in past due loans, segregated by class of loans, is as follows:



	June 30, 2018
	Loans Past Due and Still Accruing
	30-89 Days		90 or More Days		Total Past Due Loans		Nonaccrual Loans		Current Loans		Total Loans
	(Dollars in thousands)
Commercial and industrial	$	1,662	$	—	$	1,662	$	5,983	$	444,662	$	452,307
Mortgage warehouse	—		—		—		—		51,552		51,552
Real estate:
Commercial real estate (including multi-family residential)	4,222		—		4,222		4,917		1,125,764		1,134,903
Commercial real estate construction and land development	1,350		—		1,350		—		269,615		270,965
1-4 family residential (including home equity)	1,594		—		1,594		1,237		327,222		330,053
Residential construction	1,593		—		1,593		—		108,369		109,962
Consumer and other	30		—		30		—		8,903		8,933
Total loans	$	10,451	$	—	$	10,451	$	12,137	$	2,336,087	$	2,358,675



	December 31, 2017
	Loans Past Due and Still Accruing
	30-89 Days		90 or More Days		Total Past Due Loans		Nonaccrual Loans		Current Loans		Total Loans
	(Dollars in thousands)
Commercial and industrial	$	1,069	$	—	$	1,069	$	6,437	$	449,623	$	457,129
Mortgage warehouse	—		—		—		—		69,456		69,456
Real estate:
Commercial real estate (including multi-family residential)	4,932		—		4,932		6,110		1,069,205		1,080,247
Commercial real estate construction and land development	5,274		—		5,274		—		238,115		243,389
1-4 family residential (including home equity)	924		—		924		781		299,514		301,219
Residential construction	674		—		674		—		108,442		109,116
Consumer and other	74		—		74		—		10,246		10,320
Total loans	$	12,947	$	—	$	12,947	$	13,328	$	2,244,601	$	2,270,876

Impaired Loans

Impaired loans by class of loans are set forth in the following tables.



	June 30, 2018
	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	4,798	$	5,310	$	—
Mortgage warehouse	—		—		—
Real estate:
Commercial real estate (including multi-family residential)	15,949		15,949		—
Commercial real estate construction and land development	—		—		—
1-4 family residential (including home equity)	1,189		1,189		—
Residential construction	—		—		—
Consumer and other	—		—		—
Total	21,936		22,448		—

With an allowance recorded:
Commercial and industrial	7,440		7,835		2,741
Mortgage warehouse	—		—		—
Real estate:
Commercial real estate (including multi-family residential)	1,260		1,446		160
Commercial real estate construction and land development	—		—		—
1-4 family residential (including home equity)	—		—		—
Residential construction	—		—		—
Consumer and other	—		—		—
Total	8,700		9,281		2,901

Total:
Commercial and industrial	12,238		13,145		2,741
Mortgage warehouse	—		—		—
Real estate:
Commercial real estate (including multi-family residential)	17,209		17,395		160
Commercial real estate construction and land development	—		—		—
1-4 family residential (including home equity)	1,189		1,189		—
Residential construction	—		—		—
Consumer and other	—		—		—
	$	30,636	$	31,729	$	2,901



	December 31, 2017
	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	5,792	$	6,666	$	—
Mortgage warehouse	—		—		—
Real estate:
Commercial real estate (including multi-family residential)	12,155		12,155		—
Commercial real estate construction and land development	209		209		—
1-4 family residential (including home equity)	948		948		—
Residential construction	—		—		—
Consumer and other	—		—		—
Total	19,104		19,978		—

With an allowance recorded:
Commercial and industrial	5,600		5,652		1,640
Mortgage warehouse	—		—		—
Real estate:
Commercial real estate (including multi-family residential)	8,009		8,194		716
Commercial real estate construction and land development	—		—		—
1-4 family residential (including home equity)	—		—		—
Residential construction	—		—		—
Consumer and other	—		—		—
Total	13,609		13,846		2,356

Total:
Commercial and industrial	11,392		12,318		1,640
Mortgage warehouse	—		—		—
Real estate:
Commercial real estate (including multi-family residential)	20,164		20,349		716
Commercial real estate construction and land development	209		209		—
1-4 family residential (including home equity)	948		948		—
Residential construction	—		—		—
Consumer and other	—		—		—
	$	32,713	$	33,824	$	2,356

The following table presents average impaired loans and interest recognized on impaired loans for the three and six months ended June 30, 2018 and 2017:



	Three Months Ended June 30,
	2018				2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
Commercial and industrial	$	12,426	$	103	$	16,758	$	95
Mortgage warehouse	—		—		—		—
Real estate:
Commercial real estate (including multi-family residential)	17,281		175		16,239		103
Commercial real estate construction and land development	—		—		210		4
1-4 family residential (including home equity)	1,194		1		571		—
Residential construction	—		—		—		—
Consumer and other	—		—		159		1
Total	$	30,901	$	279	$	33,937	$	203



	Six Months Ended June 30,
	2018				2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
Commercial and industrial	$	12,585	$	197	$	17,004	$	234
Mortgage warehouse	—		—		—		—
Real estate:
Commercial real estate (including multi-family residential)	17,373		316		16,338		180
Commercial real estate construction and land development	—		3		315		4
1-4 family residential (including home equity)	1,209		5		572		1
Residential construction	—		—		—		—
Consumer and other	—		—		160		1
Total	$	31,167	$	521	$	34,389	$	420

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including factors such as: current financial information, historical payment experience, credit documentation, public information and current economic trends. The Company analyzes loans individually by classifying the loans by credit risk. As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio and methodology for calculating the allowance for credit losses, management assigns and tracks risk ratings to be used as credit quality indicators.

The following is a general description of the risk ratings used:

Pass—Loans classified as pass are loans with low to average risk and not otherwise classified as watch, special mention, substandard or doubtful. In addition, the guaranteed portion of SBA loans are considered pass risk rated loans.

Watch—Loans classified as watch loans may still be of high quality, but have an element of risk added to the credit such as declining payment history, deteriorating financial position of the borrower or a decrease in collateral value.

Special Mention—Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Substandard—Loans classified as substandard have well-defined weaknesses on a continuing basis and are inadequately protected by the current net worth and paying capacity of the borrower, impaired or declining collateral values, or a continuing downturn in their industry which is reducing their profits to below zero and having a significantly negative impact on their cash flow. These classified loans are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful—Loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values highly questionable and improbable.

Based on the most recent analysis performed, the risk category of loans by class of loan at June 30, 2018 is as follows:



	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(Dollars in thousands)
Commercial and industrial	$	426,434	$	7,955	$	3,790	$	14,128	$	—	$	452,307
Mortgage warehouse	51,552		—		—		—		—		51,552
Real estate:
Commercial real estate (including multi-family residential)	1,071,586		25,429		5,145		32,743		—		1,134,903
Commercial real estate construction and land development	266,252		1,042		1,361		2,310		—		270,965
1-4 family residential (including home equity)	323,592		2,983		1,135		2,343		—		330,053
Residential construction	108,408		569		—		985		—		109,962
Consumer and other	8,893		40		—		—		—		8,933
Total loans	$	2,256,717	$	38,018	$	11,431	$	52,509	$	—	$	2,358,675

The following table presents the risk category of loans by class of loan at December 31, 2017:



	Pass		Watch		Special Mention		Substandard		Doubtful		Total
	(Dollars in thousands)
Commercial and industrial	$	427,336	$	10,274	$	2,195	$	17,324	$	—	$	457,129
Mortgage warehouse	69,456		—		—		—		—		69,456
Real estate:
Commercial real estate (including multi-family residential)	1,016,831		23,039		4,685		35,692		—		1,080,247
Commercial real estate construction and land development	231,536		4,397		—		7,456		—		243,389
1-4 family residential (including home equity)	295,744		2,696		785		1,994		—		301,219
Residential construction	103,611		5,505		—		—		—		109,116
Consumer and other	10,207		111		—		2		—		10,320
Total loans	$	2,154,721	$	46,022	$	7,665	$	62,468	$	—	$	2,270,876

Allowance for Loan Losses

The following table presents the activity in the allowance for loan losses by portfolio type for the three and six months ended June 30, 2018 and 2017:



	Commercial and industrial			Mortgage warehouse		Commercial real estate (including multi-family residential)			Commercial real estate construction and land development			1-4 family residential (including home equity)			Residential construction			Consumer and other			Total
	(Dollars in thousands)
Allowance for loan losses:
Three Months Ended
Balance March 31, 2018	$	9,398		$	—	$	9,352		$	2,545		$	2,300		$	946		$	87		$	24,628
Provision for loan losses	1,183			—		(148		)	(257		)	(111		)	(32		)	(4		)	631

Charge-offs	(1,521		)	—		(1		)	—			—			—			—			(1,522		)
Recoveries	94			—		—			—			—			—			—			94
Net charge-offs	(1,427		)	—		(1		)	—			—			—			—			(1,428		)

Balance June 30, 2018	$	9,154		$	—	$	9,203		$	2,288		$	2,189		$	914		$	83		$	23,831