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TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on June 23, 2014

Registration No. 333-            

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Green Bancorp, Inc.
(Exact Name of Registrant as Specified in Its Charter)



Texas
(State or Other Jurisdiction of
Incorporation or Organization)
  6021
(Primary Standard Industrial
Classification No.)
  42-1631980
(I.R.S. Employer
Identification No.)

4000 Greenbriar
Houston, Texas 77098
(713) 275-8220
(Address, Including Zip Code, of Registrant's Principal Executive Offices)

John P. Durie
Executive Vice President and Chief Financial Officer
Green Bancorp, Inc.
4000 Greenbriar
Houston, Texas 77098
(713) 275-8220
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)



Copies to:

Michael J. Zeidel, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(212) 735-3000
(212) 735-2000 (facsimile)

 

Sanford M. Brown
William S. Anderson
Jason M. Jean
Bracewell & Giuliani LLP
1445 Ross Avenue, Suite 3800
Dallas, Texas 75202
(214) 468-3800
(214) 758-8300 (facsimile)



Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 under the Exchange Act. (check one)

Large accelerated filer o

  Accelerated filer o   Non-accelerated filer ý   Smaller reporting company o

CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities
To Be Registered

  Proposed Maximum
Aggregate Offering
Price(1)(2)

  Amount Of
Registration Fee

 

Common Stock, $0.01 par value per share

  $100,000,000   $12,880

 

(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)
Includes the offering price of any additional shares of common stock that the underwriters have the option to purchase.

          THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.


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The information in this preliminary prospectus is not complete and may be changed. Neither we nor the selling shareholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated June 23, 2014

PROSPECTUS

                    Shares

GRAPHIC

Green Bancorp, Inc.

Common Stock



        This is the initial public offering of shares of the common stock of Green Bancorp, Inc., the holding company for Green Bank, N.A., a national banking association headquartered in Houston, Texas.

        We are offering              shares of our common stock and the selling shareholders identified in this prospectus are offering an additional              shares of our common stock. We will not receive any proceeds from the sale of our common stock by the selling shareholders. No public market currently exists for our common stock. We have applied to list our common stock on the              under the symbol "GNBC."

        We anticipate that the initial public offering price per share of our common stock will be between $          and $          .

        We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 and are subject to reduced public company disclosure standards.

        Investing in our common stock involves risks. See "Risk Factors" beginning on page 14 of this prospectus to read about factors you should consider before investing in our common stock.

       
 
 
  Per share
  Total
 

Initial public offering price of our common stock

  $                   $                
 

Underwriting discounts and commissions

       
 

Proceeds, before expenses, to us

       
 

Proceeds, before expenses, to the selling shareholders

       

 

        We have granted the underwriters the option to purchase up to an additional            shares of our common stock from us within 30 days of the date of this prospectus on the same terms and conditions set forth above.

        Neither the Securities and Exchange Commission, any state securities commission, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency nor any other regulatory authority has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

        These securities are not deposits, savings accounts or other obligations of any bank or savings association and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency and are subject to investment risks, including the possible loss of the entire amount you invest.

        The underwriters expect to deliver the shares to purchasers on or about        , 2014, subject to customary closing conditions.

SANDLER O'NEILL + PARTNERS, L.P.   Jefferies

 

J.P. Morgan   RBC Capital Markets   Keefe, Bruyette & Woods
                                       
A Stifel Company



The date of this prospectus is            , 2014


GRAPHIC


Table of Contents


TABLE OF CONTENTS

 
  Page  

Forward-Looking Statements

    iii  

Summary

    1  

Risk Factors

    14  

Use of Proceeds

    35  

Capitalization

    36  

Dilution

    38  

Dividend Policy

    40  

Selected Consolidated Financial Data

    41  

Management's Discussion and Analysis of Financial Condition and Results of Operations

    44  

Business

    80  

Regulation and Supervision

    98  

Management

    111  

Executive Compensation and Other Matters

    118  

Principal and Selling Shareholders

    123  

Certain Relationships and Related Party Transactions

    126  

Description of Capital Stock

    129  

Shares Eligible for Future Sale

    134  

U.S. Federal Income Tax Consequences For Non-U.S. Holders

    136  

Underwriting

    139  

Legal Matters

    143  

Experts

    143  

Where You Can Find More Information

    143  

Index to Financial Statements

    F-1  



        You should rely only on the information contained in this prospectus and any free writing prospectus prepared by us or on our behalf that we have referred you to. We, the selling shareholders and the underwriters have not authorized anyone to provide you with additional or different information. If anyone provides you with additional, different or inconsistent information, you should not rely on it. We, the selling shareholders and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. We and the selling shareholders are not making an offer of these securities in any state, country or other jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus or any free writing prospectus is accurate as of any date other than the date of the applicable document regardless of its time of delivery or the time of any sales of our common stock. Our business, financial condition, results of operations and cash flows may have changed since the date of the applicable document.



        This prospectus includes demographic, economic, employment, industry and trade association data, forecasts and information that we have prepared based, in part, upon data, forecasts and information obtained from independent trade associations, industry publications and surveys, government agencies and other information available to us, which information may be specific to particular markets or geographic locations. Some data is also based on our good faith estimates, which are derived from management's knowledge of the industry and independent sources. Industry publications and surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe these sources are reliable, we have not independently verified the information. Statements as to our market position are based on market data currently available to us. While we are not aware of any misstatements regarding the demographic, economic, employment, industry and trade association data presented herein, these estimates involve risks and


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uncertainties and are subject to change based on various factors, including those discussed under the heading "Risk Factors" in this prospectus. Similarly, we believe our internal research is reliable, even though such research has not been verified by any independent sources.



        As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). We will continue to be an emerging growth company until the earliest to occur of: (i) the last day of the fiscal year following the fifth anniversary of this offering; (ii) the last day of the fiscal year in which we have more than $1.0 billion in annual revenues; (iii) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); or (iv) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities. Until we cease to be an emerging growth company, we may take advantage of specified reduced reporting and other regulatory requirements generally unavailable to other public companies. Those provisions allow us to present only two years of audited financial statements, discuss only our results of operations for two years in related Management's Discussions and Analyses and provide less than five years of selected financial data in an initial public offering registration statement; to not provide an auditor attestation of our internal control over financial reporting; to choose not to comply with any new requirements adopted by the Public Company Accounting Oversight Board ("PCAOB") requiring mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and our audited financial statements; to provide reduced disclosure regarding our executive compensation arrangements pursuant to the rules applicable to smaller reporting companies, which means we do not have to include a compensation discussion and analysis and certain other disclosure regarding our executive compensation; and to not seek a non-binding advisory vote on executive compensation or golden parachute arrangements. We may choose to take advantage of some or all of these reduced reporting and other regulatory requirements. We have elected in this prospectus to take advantage of the reduced disclosure requirements relating to executive compensation arrangements.

        The JOBS Act also permits an "emerging growth company" to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. However, we have "opted out" of this provision. As a result, we will comply with new or revised accounting standards to the same extent that compliance is required for non-emerging growth companies. This decision to opt out of the extended transition period under the JOBS Act is irrevocable.

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FORWARD-LOOKING STATEMENTS

        Forward-looking statements included in this prospectus are based on various facts and derived utilizing numerous important assumptions and are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include the information concerning our future financial performance, business and growth strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Statements preceded by, followed by or that otherwise include the words "believes," "expects," "anticipates," "intends," "projects," "estimates," "plans" and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. You should understand that the following important factors could affect our future results and cause actual results to differ materially from those expressed in the forward-looking statements:

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        Other factors not identified above, including those described under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," may also cause actual results to differ materially from those described in our forward-looking statements. Most of these factors are difficult to anticipate and are generally beyond our control. You should consider these factors in connection with considering any forward-looking statements that may be made by us. We undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events unless we are required to do so by law.

iv


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SUMMARY

        This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider in making your investment decision. You should read the following summary together with the entire prospectus, including the more detailed information regarding us, the common stock being sold in this offering and our consolidated financial statements and the related notes included elsewhere in this prospectus. You should carefully consider, among other things, the matters discussed in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this prospectus before deciding to invest in our common stock. Some of the statements in this prospectus constitute forward-looking statements. See "Forward-Looking Statements."

        Except where the context otherwise requires or where otherwise indicated, in this prospectus the terms "Company," "we," "us," "our," "our company" and "our business" refer to Green Bancorp, Inc. and our banking subsidiary, Green Bank, N.A., a national banking association, and the term "Bank" refers to Green Bank, N.A. In this prospectus, we refer to the Houston—Sugar Land—Baytown, Dallas—Fort Worth—Arlington and Austin—Round Rock metropolitan statistical areas as the Houston, Dallas and Austin MSAs.

Our Company

        We are a Texas focused bank holding company headquartered in Houston, Texas. Our wholly owned subsidiary, Green Bank, N.A., a nationally chartered commercial bank, provides commercial and private banking services primarily to Texas based customers through twelve full service branches in the Houston, Dallas and Austin MSAs. The Houston, Dallas and Austin MSAs are our target markets, and we believe their growing economies and attractive demographics, together with our scalable platform, provide us with opportunities for long-term and sustainable growth. Our emphasis is on continuing to expand our existing business by executing on our proven portfolio banker driven business model as well as pursuing select strategic acquisitions and attracting additional talented bankers. As of March 31, 2014, we had consolidated total assets of $1.8 billion, total loans of $1.4 billion (of which $1.39 billion were originated by us and $18.8 million were acquired), total deposits of $1.5 billion and total shareholders' equity of $203.6 million.

Our History and Growth

        We began operations as a bank holding company on December 31, 2006 when we acquired Redstone Bank, N.A. ("Redstone Bank"), a Houston community bank with two branches and $219.3 million in total assets. We were formed by our Chairman and Chief Executive Officer, Manny Mehos, who previously founded, led and sold Coastal Bancorp, Inc. after overseeing its growth from one branch and less than $11 million in assets in 1986 to 43 branches and $2.7 billion in assets in 2004, with the objective of building a commercially focused bank in attractive Texas metropolitan markets.

        We have experienced significant growth since commencing operations, while maintaining what we believe to be a healthy balance sheet. During the period from December 31, 2009 through March 31, 2014, we experienced a 37% compounded annual growth rate in total loans and a 31% compounded annual growth rate in total deposits, while extending our branch footprint from five to twelve locations and expanding our team of portfolio bankers from 21 to 50. A key aspect of our growth has been increasing our commercial and industrial loan balances, and as of December 31, 2013, we had the eleventh largest commercial and industrial loan portfolio among banks headquartered in Texas. Our scale has allowed us to leverage our infrastructure to operate our business more efficiently as evidenced by the decrease in our efficiency ratio from 103.4% for the year ended December 31, 2009 to 64.6% for the year ended December 31, 2013, while our total assets grew from $545.4 million to $1.7 billion as of December 31, 2009 and 2013, respectively. We have also increased our net income from a loss of $3.3 million in 2009 to net income of $12.6 million in 2013, while preserving a strong credit culture and

 

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conservative risk profile, as evidenced by the fact that our historical non-performing assets to total assets ratio has consistently remained below the average among all publicly traded banks in the United States, according to information obtained from SNL Financial.

Loans
(Dollars in millions)
  Deposits
(Dollars in millions)


GRAPHIC

 


GRAPHIC

Net income
(Dollars in thousands)

 

Return on Average Assets


GRAPHIC

 


GRAPHIC

        Following our acquisition of Redstone Bank, we have supplemented our organic growth and increased our total deposits by successfully completing and integrating the following acquisitions:

    OneWest Bank Asset Purchase: one branch of OneWest Bank located in the Dallas MSA with $188.4 million in total deposits, acquired in October 2010;

    Main Street Bank Asset Purchase: three branches of Main Street Bank located in the Houston MSA with $167.7 million in total deposits and $12.7 million in loans, acquired in October 2011; and

    Opportunity Bancshares, Inc. ("Opportunity Bancshares") Stock Purchase: Opportunity Bancshares with one branch located in the Dallas MSA, $44.1 million in total deposits and $25.6 million in total loans, acquired in May 2012.

        These acquisitions have provided significant strategic benefits and opportunities, including additional quality deposits which have provided funding for our lending business, new business lines which have contributed to the expansion of our product offerings and additional branches which have extended our geographic footprint and provided opportunities for consolidation of our support areas.

        In addition, we recently entered into a definitive agreement for the acquisition of SP Bancorp, Inc., which owns SharePlus Bank (together, "SharePlus"), a Texas chartered state bank headquartered in the Dallas MSA. As of March 31, 2014, SharePlus had four branches (three in the Dallas MSA and one in

 

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Kentucky), $33.1 million in stockholders' equity, $273.5 million in deposits and $228.7 million in loans. See "—Recent Developments" below for more information.

Our Strategy

        Our goal is to be a leading provider of personalized commercial and private banking services to Texas businesses, entrepreneurs and individuals while capitalizing on the vibrant and growing economies of our target markets. We have made the strategic decision to focus on the Houston, Dallas and Austin MSAs because we believe these markets offer a compelling combination of economic growth, favorable demographics and desirable prospective customers.

        We employ a model that relies upon experienced bankers to originate quality loans, attract and retain low cost deposits, and generate fee income. Within this model, which we refer to as our portfolio banking model, our customers are generally assigned a dedicated portfolio banker who acts as the primary point of contact and relationship manager. We believe that this model allows us to build and maintain long-term relationships, leading to increased business opportunities and referrals, while improving our risk profile through ongoing and proactive credit monitoring and loan servicing. Our portfolio banking model has been the primary driver of our loan growth and has also helped us achieve what we believe to be a comparatively high level of average deposits per branch.

        Our target commercial customers include Texas based small and medium-sized businesses in the manufacturing, distribution, supply and energy sectors, as well as real estate investors, mortgage originators and professional firms. We offer a wide variety of banking products and services, including credit and deposit products and treasury management services. We also seek to attract traditional retail customers and to generate retail business from mass affluent individuals with the capacity to maintain significant deposit balances through a combination of diverse product offerings with attractive rates, convenient branch locations and personalized service.

        As a significant portion of our historical growth has occurred in a low interest rate environment, a key aspect of our strategy has been the maintenance of an asset-sensitive balance sheet that we believe will produce increased net interest income if market interest rates rise. As of March 31, 2014, 76.9% of our total loans were comprised of floating-rate loans, which may be subject to changes in yield as the interest rate environment changes. Our loan portfolio has grown to $1.4 billion as of March 31, 2014 from $373.0 million as of December 31, 2009, largely as a result of new loans originated by us during that period. Accordingly, our loan portfolio includes loans that we originated within the past two years, which we consider to be relatively unseasoned because of their limited payment history.

        We intend to continue our legacy of growth by executing our portfolio banker driven organic growth strategy complemented by disciplined strategic acquisitions.

        Portfolio Banker Growth Strategy.    Our portfolio banker driven growth strategy will continue to emphasize organic growth through:

    increasing the productivity of our existing portfolio bankers, as measured by loans, deposits and fee income per banker, while improving profitability by leveraging our existing scalable operating platform and lowering our cost of funding;

    hiring additional seasoned and proven bankers who will thrive within our portfolio banking model as well as opening additional branches in attractive locations within our target markets that offer strong commercial and private banking opportunities;

    providing a wide range of credit product offerings, including commercial lines of credit, working capital loans, commercial real estate-backed loans (including loans secured by owner occupied commercial properties), reserve-based energy loans, equipment financing, mortgage-warehouse

 

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      lines, residential mortgage products, loans guaranteed by the U.S. Small Business Administration ("SBA loans"), and purchased receivables financing; and

    adhering to our disciplined and sophisticated underwriting process and a portfolio banker based loan servicing model to maintain strong credit metrics and a conservative risk profile.

        Strategic Acquisitions.    We intend to supplement our organic growth by executing a disciplined acquisition strategy:

    focusing on targets with a quality loan and deposit customer base and attractive branch locations in the Houston, Dallas and Austin MSAs that possess favorable market share, low cost deposit funding, compelling noninterest income generating businesses and other unique and attractive characteristics;

    leveraging our reputation as an experienced acquirer of banks, recognizing many banks in our target markets face scale and operational challenges, regulatory burdens, management succession issues or shareholder liquidity expectations; and

    pursuing transactions that we expect will produce attractive risk-adjusted returns for our shareholders.

Our Competitive Strengths

        We believe the following competitive strengths will allow us to capitalize on our substantial market opportunity and achieve our business goals:

        Well-positioned within attractive major metropolitan markets in Texas.    We are one of the few Texas based banking franchises focused primarily on the major metropolitan markets in the state with a presence in each of the Houston, Dallas and Austin MSAs. Substantially all of our branches are strategically located within these markets in areas that we consider to be among the most attractive in terms of serving existing and attracting new customers. We believe our model will allow us to continue to capitalize on the favorable demographic and commercial characteristics of our economically robust target markets. Within these markets, we target commercial customers with annual revenues between $5 and $150 million, and we believe that we offer customers of this size a greater level of attention than our larger competitors while providing access to a broad range of sophisticated banking products that cannot be matched by most community banks. There are numerous businesses located in the markets we serve meeting this profile and we believe that we are well-positioned to attract these target customers relative to our competitors as a result of our extensive local knowledge, broad service offerings and portfolio banking model.

        Scalable portfolio banking and operational platforms with the capacity to generate and accommodate significant organic growth.    Our management team has built a capable and knowledgeable staff and made significant investments in the technology and systems necessary to build a scalable corporate infrastructure with the capacity to support continued growth, while also improving operational efficiencies. As a result of the personalized nature of our portfolio banking model, we generally expect that it will take up to five years for our portfolio bankers to reach full capacity in terms of customer relationships and profitability. As of March 31, 2014, the average tenure across our team of portfolio bankers was approximately three years, and we believe that our current team has the capacity to grow loans, deposits and fee income without significant additional overhead expense. Furthermore, we believe that our scalable credit, operational, technology and governance infrastructure will continue to allow us to efficiently and effectively manage the growth driven by our strategies. For example, our efficiency ratio has decreased from 103.4% for the year ended December 31, 2009 to 64.6% for the

 

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year ended December 31, 2013, while our total assets grew from $545.4 million to $1.7 billion as of December 31, 2009 and 2013, respectively.

        Disciplined and sophisticated credit governance process.    Our approach to credit risk management balances well-defined credit policies, disciplined underwriting criteria and ongoing risk monitoring and review processes with our portfolio banking model which demands that we respond promptly to our customers' needs. Our processes emphasize early-stage review of loans and regular credit evaluations, which supplement the ongoing and proactive credit monitoring and loan servicing provided by our portfolio bankers. This balanced team approach has allowed us to maintain strong credit metrics while executing our growth strategy, as evidenced by the fact that our historical non-performing assets to total assets ratio has consistently remained below the average among all publicly-traded banks in the United States, according to information obtained from SNL Financial. In addition, we believe our nimble and responsive credit culture and underwriting process will help us to attract and retain experienced bankers who are eager to be more responsive to customers' credit requests.

        Experienced acquirer and integrator of financial institutions.    We have developed a proven platform to identify acquisition candidates, conduct comprehensive due diligence, model financial expectations, and effectively consummate the transaction and integrate the acquired institution into our scalable infrastructure and achieve synergies. Since completing a successful capital raise in 2010, we have completed three acquisitions and have recently entered into a definitive agreement to acquire SharePlus. In addition, members of our senior management team have successfully led over 30 bank merger and acquisition transactions since the mid-1980s, including public company transactions. There are approximately 500 banks headquartered in Texas, approximately 150 of which are headquartered in our target markets. Of these 150 banks, 85 reported total assets between $100 million and $1.5 billion as of December 31, 2013. These banks provide us with opportunities to selectively pursue strategic transactions that meet our stringent financial, cultural and risk criteria to support our continued growth. We believe that becoming a publicly traded company will further enhance our ability to execute on our acquisition strategy since we will be able to offer publicly traded stock as consideration.

        Strong and experienced management team.    We are managed by a team of banking executives with complementary experience and personal attributes who have a history of managing large teams, leading acquisition and divestiture projects and managing significant growth in diverse markets and economic climates. Our four executive management team members are career bankers and each has over 25 years of banking experience, including significant experience within large, nationally recognized financial institutions. As a result, our executive management team has substantial expertise with numerous sophisticated banking products, extensive knowledge of the bank regulatory landscape, significant experience throughout numerous interest rate and credit cycles and a range of experience with banks of all sizes. We believe that this varied experience has resulted in a diverse and adaptive culture that enhances our ability to attract driven, entrepreneurial bankers as well as seasoned and capable credit professionals.

Our Market Areas

        We believe that a key factor contributing to our ability to achieve our business objectives and to create shareholder value is the attractiveness of the Texas market, including the favorable demographic and economic characteristics of our target markets within Texas.

        Texas is the second most populous state in the country with an estimated population in 2013 of 26.4 million. Population within the state grew 5.2% from April 1, 2010 to July 1, 2013, compared to growth of 2.4% for the nation as a whole during the same period according to the U.S. Census Bureau. According to SNL Financial, the five-year population growth rate for the period from 2013 to 2018 is projected to be 7.6%, compared to a 3.6% projected growth rate for the nation as a whole during the

 

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same period, and the five-year household income growth rate for the period from 2013 to 2018 is projected to be 21.7% compared to 16.1% for the nation as a whole during the same period. According to the Federal Reserve Bank of Dallas (the "Dallas Fed"), Texas led the nation in job growth for the period from 2000 to 2013, with employment increasing 24.9% compared to an increase of 4.7% for the rest of the nation. According to the Dallas Fed, a significant number of Texas jobs created during this period were in the top half of the pay scale, with 55% of new jobs falling within the two highest wage quartiles, substantially outpacing growth among these quartiles for the rest of the nation. In addition, as illustrated below, job losses resulting from the recent economic recession were substantially less severe in Texas than for the nation as a whole and Texas was among the first states to emerge from the recession, surpassing its pre-recession employment peak in 2011. By contrast, the nation as a whole has yet to restore all of the jobs lost in the recession, remaining over a million jobs short of its pre-recession high as of December 2013, according to the Dallas Fed.


Total Nonagricultural Employment in Selected
States Since the Recession Began


GRAPHIC

                      Source: The Dallas Fed

        Our primary markets are the Houston, Dallas and Austin MSAs, which we consider to be among the most attractive markets in the United States. The 2013 median household income and the projected five-year population and median household income growth rates for these MSAs are substantially greater than the nation as a whole. The following map illustrates the projected 2018 population and

 

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projected annual percentage growth in population for the period from 2013 to 2018 among Texas MSAs according to SNL Financial:

GRAPHIC

        The table below summarizes certain key demographic information relating to our target markets and our presence within these markets:

 
  Number
of
Branches(1)
  Number
of
Portfolio
Bankers(1)
  Total
Loans(1)
  Total
Deposits(1)
  2013 Total
Population(2)
  2013 - 2018
Projected
Population
Growth(3)
  2013 - 2018
Projected
Household
Income
Growth(3)
 
 
  (Dollars in millions)
 

Houston MSA

    7     25   $ 937.3   $ 983.8     6,313,158     9.1 %   28.6 %

Dallas MSA

   
4
   
20
   
344.5
   
444.6
   
6,810,913
   
8.2

%
 
26.7

%

Austin MSA

   
1
   
5
   
122.5
   
58.0
   
1,883,051
   
12.9

%
 
28.3

%

Texas

                           
26,448,193
   
7.6

%
 
21.7

%

United States

                           
316,128,839
   
3.6

%
 
16.1

%

(1)
As of March 31, 2014; excludes branches to be acquired in the SharePlus acquisition.

(2)
As of July 1, 2013, according to U.S. Census Bureau estimates.

(3)
According to SNL Financial.

 

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        Houston.    Houston ranks second in the nation as a home to Fortune 500 company headquarters, including Phillips 66, ConocoPhillips, Marathon Oil and Sysco, along with the Texas Medical Center, which is the largest health complex in the world, and benefits from a vibrant and diverse economy underpinned by a strong energy sector. The Houston MSA is the fifth largest in the country and the city of Houston is the fourth most populous city in the United States, according to 2012 U.S. Census Bureau estimates. The Houston MSA had the second highest percentage employment growth of the 12 most populous MSAs during the 12 months ended October 2013, according to the U.S. Bureau of Labor Statistics.

        Dallas.    Dallas ranks third in the nation as a home to Fortune 500 company headquarters, including ExxonMobil, AT&T, Texas Instruments and Southwest Airlines. The Dallas MSA is the fourth largest in the country and the city of Dallas is the ninth most populous city in the United States, according to 2012 U.S. Census Bureau estimates. The Dallas MSA had the highest percentage employment growth of the 12 most populous MSAs during the 12 months ended October 2013, according to the U.S. Bureau of Labor Statistics.

        Austin.    Austin is the capital of Texas, home to the University of Texas, and a major national cultural, arts, film and media center and a home to numerous company headquarters including Dell and Whole Foods Markets. The Austin MSA ranked ninth among the nation's 10 fastest growing MSAs with a 37.3% population increase between 2000 and 2010, according to 2010 U.S. Census data. The city of Austin experienced 11.8% private sector job growth over the five-year period ending October 2013, and was the only city in the nation to post double-digit percentage growth during that period. Austin was recently ranked first among the best cities for future job growth by Forbes.com.

Recent Developments

        On May 5, 2014, we entered into a definitive agreement to acquire SP Bancorp, Inc., which owns SharePlus Bank, a Texas chartered state bank headquartered in the Dallas MSA for aggregate cash consideration of $46.2 million, subject to adjustment. SharePlus operates as a full-service commercial bank, providing services that include the acceptance of checking and savings deposits and the origination of one- to four-family residential mortgage, mortgage warehouse, commercial real estate, commercial business, home equity, automobile and personal loans. SharePlus' business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in loans and securities. As of March 31, 2014, SharePlus had four branches (three in the Dallas MSA and one in Kentucky), $33.1 million in stockholders' equity, $273.5 million in deposits and $228.7 million in loans, and $177.5 million, or 77.6%, of its total loan portfolio was comprised of residential and commercial real estate loans. Subject to satisfaction of certain conditions, including receipt of SharePlus shareholder approval and customary regulatory approvals, the acquisition is expected to close in the third quarter of 2014. This offering and our proposed acquisition of SharePlus are not conditioned on one another.

        Other than SharePlus, we have no current plans, arrangements or understandings to make any acquisitions. However, at any given time we may be evaluating other acquisition candidates, conducting due diligence and may have entered into one or more letters of intent. We cannot assure you that we will enter into any definitive agreements in respect of any such transaction.

Our Corporate Information

        Our principal executive offices are located at 4000 Greenbriar, Houston, Texas 77098, and our telephone number is (713) 275-8220. Our website is www.greenbank.com. The information contained on or accessible from our website does not constitute a part of this prospectus and is not incorporated by reference herein.

 

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The Offering

Common stock we are offering

            shares (          shares if the underwriters exercise their option to purchase additional shares in full).

Common stock the selling shareholders are offering

 

          shares.

Common stock to be outstanding after this offering

 

          shares (          shares if the underwriters exercise their option to purchase additional shares in full).

Use of proceeds

 

We estimate that our net proceeds from the sale of the shares of common stock by us will be approximately $          million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, based on an assumed initial public offering price of $          per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus. If the underwriters exercise their option to purchase additional shares in full, the net proceeds to us will be approximately $          million. We will not receive any of the proceeds from the sale of shares by the selling shareholders. We intend to use $8.0 million of the net proceeds from this offering received by us to pay a portion of the purchase price of SharePlus (see "—Recent Developments" for a description of the terms of the transaction), and to contribute all but $5.0 million of the remaining net proceeds to the Bank to be used for general corporate purposes. Other than SharePlus, we have no current plans, arrangements or understandings to make any acquisitions. However, at any given time we may be evaluating other acquisition candidates, conducting due diligence and may have entered into one or more letters of intent. We cannot assure you that we will enter into any definitive agreements in respect of any such transaction.

Dividend policy

 

We have not declared or paid any dividends on our common stock. We currently intend to retain all of our future earnings, if any, for use in our business and do not anticipate paying any cash dividends on our common stock in the foreseeable future. See "Dividend Policy."

Risk factors

 

See "Risk Factors" for a discussion of factors you should carefully consider before deciding to invest in our common stock.

 

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Registration Rights

 

Although certain of our existing shareholders currently have the ability to cause us to register the resale of their shares pursuant to a registration rights agreement, such shareholders have agreed with the underwriters not to exercise such rights for a period of at least 180 days from the date of this prospectus, subject to certain exceptions. See "Certain Relationships and Related Party Transactions—Registration Rights Agreement" and "Underwriting—Lock-Up Agreements."

Stock exchange symbol

 

We intend to apply to have our common stock listed on the            under the symbol "GNBC."



        Except as otherwise indicated, all of the information in this prospectus:

    assumes no exercise of the underwriters' option to purchase up to            additional shares of common stock from us;

    excludes            shares of common stock issuable upon exercise of outstanding stock options at a weighted average exercise price of $          per share as of                        , 2014;

    excludes            shares of our common stock issuable under our stock option plans as of                        , 2014; and

    assumes an initial offering price of $            per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus.

 

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Summary Consolidated Financial Data

        The summary consolidated financial data as of March 31, 2014 and for the three months ended March 31, 2014 and 2013 presented below have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The summary consolidated financial data set forth below as of December 31, 2013 and 2012 and for the years ended December 31, 2013, 2012 and 2011 have been derived from our audited financial statements included elsewhere in this prospectus. The summary consolidated balance sheet data as of December 31, 2011 has been derived from our audited financial statements not included in this prospectus.

        You should read the summary consolidated financial data set forth below in conjunction with the sections entitled "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus.

 
  As of March 31,   As of December 31,  
 
  2014   2013   2012   2011  
 
  (Dollars in thousands, except per share amounts)
 

Summary Period End Balance Sheet Data:

                         

Cash and cash equivalents

  $ 42,561   $ 34,757   $ 178,492   $ 151,190  

Investment securities

    250,878     255,515     242,261     250,526  

Goodwill

    15,672     15,672     15,672     15,672  

Core deposit intangibles, net of accumulated amortization

    923     984     1,230     1,245  

Loans held for investment

    1,404,275     1,359,415     1,204,689     891,489  

Allowance for loan losses

    15,119     16,361     14,151     10,574  

Total assets

    1,751,563     1,703,127     1,674,800     1,335,376  

Deposits

    1,486,440     1,447,372     1,461,451     1,157,634  

Other borrowed funds

    46,846     46,858     15,037     15,544  

Total shareholders' equity

    203,600     199,218     188,211     153,423  

 
  As of and for the
Three Months
Ended March 31,
  As of and for the
Years Ended December 31,
 
 
  2014   2013   2013   2012   2011  
 
  (Dollars in thousands, except per share amounts)
 

Summary Income Statement Data:

                               

Net interest income

  $ 15,676   $ 13,291   $ 57,042   $ 51,608   $ 34,662  

Provision for loan losses

    1,223     781     2,373     8,060     8,391  

Net interest income after provision for loan losses

    14,453     12,510     54,669     43,548     26,271  

Noninterest income

    1,607     1,068     4,812     5,109     2,087  

Noninterest expense

    10,597     9,415     39,965     35,742     26,459  

Net income

    3,488     2,649     12,610     8,535     1,017  

Per Share Data:

   
 
   
 
   
 
   
 
   
 
 

Earnings per common share, basic

  $ 0.17   $ 0.13   $ 0.61   $ 0.44   $ 0.06  

Earnings per common share, diluted

    0.17     0.13     0.60     0.44     0.06  

Book value per common share

    9.80     9.20     9.59     9.07     8.54  

Tangible book value per common share(1)

    9.00     8.39     8.79     8.26     7.60  

 

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  As of and for the
Three Months
Ended March 31,
  As of and for the
Years Ended December 31,
 
 
  2014   2013   2013   2012   2011  
 
  (Dollars in thousands, except per share amounts)
 

Weighted average common shares outstanding, basic

    20,775,162     20,748,173     20,748,299     19,382,053     17,970,395  

Weighted average common shares outstanding, diluted

    20,907,108     20,772,253     20,880,187     19,405,404     17,989,424  

Summary Performance Metrics:

   
 
   
 
   
 
   
 
   
 
 

Return on average assets(2)

    0.82 %   0.65 %   0.75 %   0.59 %   0.10 %

Return on average equity(2)

    7.04     5.68     6.53     5.01     0.67  

Net interest margin(3)

    3.79     3.35     3.49     3.68     3.47  

Efficiency ratio(4)

    61.31     65.57     64.61     63.67     72.00  

Loans to deposits ratio

    94.47     83.32     93.92     82.43     77.17  

Noninterest expense to average assets(2)

    2.49     2.30     2.37     2.46     2.57  

Summary Credit Quality Ratios:

   
 
   
 
   
 
   
 
   
 
 

Nonperforming assets to total assets

    1.10 %   1.77 %   1.38 %   1.70 %   0.81 %

Nonperforming loans to total loans

    0.90     1.99     1.23     1.87     0.81  

Total classified assets to total regulatory capital

    9.61     16.38     11.87     20.10     26.56  

Allowance for loan losses to total loans

    1.08     1.26     1.20     1.17     1.19  

Net charge-offs to average loans outstanding

    0.18     (0.04 )   0.01     0.43     0.72  

Capital Ratios:

   
 
   
 
   
 
   
 
   
 
 

Tier 1 capital to average assets(2)

    10.5 %   10.1 %   10.3 %   10.3 %   10.5 %

Tier 1 capital to risk-weighted assets

    11.6     12.5     11.4     12.3     12.9  

Total capital to risk-weighted assets

    12.6     13.7     12.5     13.3     14.0  

Tangible common equity to tangible assets(5)

    10.8     10.5     10.8     10.3     10.4  

Average shareholders' equity to average total assets(2)

    11.6     11.4     11.4     11.7     14.7  

(1)
We calculate tangible book value per common share as total shareholders' equity less goodwill and core deposit intangibles, net of accumulated amortization at the end of the relevant period, divided by the outstanding number of shares of our common stock at the end of the relevant period. Tangible book value per common share is a financial measure not reported in accordance with the accounting principles generally accepted in the United States ("GAAP") (a "non-GAAP financial measure"), and, as we calculate tangible book value per common share, the most directly comparable GAAP financial measure is book value per common share. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

(2)
We calculate our average assets and average equity for a period by dividing the sum of our total assets or total shareholders' equity, as the case may be, as of the close of business on each day in the relevant period, by the number of days in the period. We have calculated our return on

 

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    average assets and return on average equity for a period by dividing net income for that period (annualized) by our average assets and average equity, as the case may be, for that period.

(3)
Net interest margin represents net interest income divided by average interest-earning assets.

(4)
Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income, excluding bargain purchase gain from acquisitions. Efficiency ratio, as we calculate it, is a non-GAAP financial measure. The GAAP-based efficiency ratio is noninterest expenses divided by net interest income plus noninterest income. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

(5)
We calculate tangible common equity as total shareholders' equity less goodwill and core deposit intangibles, net of accumulated amortization, and we calculate tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization. Tangible common equity to tangible assets is a non-GAAP financial measure, and, as we calculate tangible common equity to tangible assets, the most directly comparable GAAP financial measure is total shareholders' equity to total assets. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

 

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. Before you decide to invest in our common stock, you should carefully consider the risks described below, together with all other information included in this prospectus, including our consolidated financial statements and the related notes included elsewhere in this prospectus. We believe the risks described below are the risks that are material to us as of the date of this prospectus. If any of the following risks actually occur, our business, financial condition, results of operations and growth prospects could be materially and adversely affected. In that case, you could experience a partial or complete loss of your investment.

Risks Related to Our Business

We conduct our operations almost exclusively in Texas which imposes risks and may magnify the consequences of any regional or local economic downturn affecting Texas, including any downturn in the energy, technology or real estate sectors.

        We conduct our operations almost exclusively in Texas and, as of March 31, 2014, the substantial majority of the loans in our loan portfolio were made to borrowers who live and/or conduct business in Texas. Likewise, as of such date, the substantial majority of our secured loans were secured by collateral located in Texas. Accordingly, we are exposed to risks associated with a lack of geographic diversification. The economic conditions in Texas significantly affect our business, financial condition, results of operations and future prospects, and any adverse economic developments, among other things, could negatively affect the volume of loan originations, increase the level of non-performing assets, increase the rate of foreclosure losses on loans and reduce the value of our loans and loan servicing portfolio. Any regional or local economic downturn that affects Texas, our existing or prospective borrowers or property values in our market areas may affect us and our profitability more significantly and more adversely than our competitors whose operations are less geographically focused.

        In addition, the economies in our target markets are highly dependent on the energy sector as well as the technology and real estate sectors. In particular, a decline in the prices of crude oil or natural gas could adversely affect many of our customers. Any downturn or adverse development in the energy, technology or real estate sectors could have a material adverse impact on our business, financial condition and results of operations.

We may not be able to implement aspects of our growth strategy, which may affect our ability to maintain our historical earnings trends.

        Our strategy focuses on organic growth, supplemented by acquisitions. We may not be able to execute on aspects of our growth strategy to sustain our historical rate of growth or may not be able to grow at all. More specifically, we may not be able to generate sufficient new loans and deposits within acceptable risk and expense tolerances, obtain the personnel or funding necessary for additional growth or find suitable acquisition candidates. Various factors, such as economic conditions and competition, may impede or prohibit the growth of our operations, the opening of new branches and the consummation of acquisitions. Further, we may be unable to attract and retain experienced portfolio bankers, which could adversely affect our growth. The success of our strategy also depends on our ability to effectively manage growth, which is dependent upon a number of factors, including our ability to adapt our credit, operational, technology and governance infrastructure to accommodate expanded operations. If we fail to implement one or more aspects of our strategy, we may be unable to maintain our historical earnings trends, which could have an adverse effect on our business.

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Difficult market conditions and economic trends have adversely affected the banking industry and could adversely affect our business, financial condition and results of operations.

        We are operating in a challenging and uncertain economic environment, including generally uncertain conditions nationally and locally in our industry and markets. Although economic conditions have improved in recent years, financial institutions continue to be affected by volatility in the real estate market in some parts of the country and uncertain regulatory and interest rate conditions. We retain direct exposure to the residential and commercial real estate markets in Texas and are affected by these events.

        Our ability to assess the creditworthiness of customers and to estimate the losses inherent in our loan portfolio is made more complex by uncertain market and economic conditions. Another national economic recession or deterioration of conditions in our markets could drive losses beyond that which is provided for in our allowance for loan losses and result in the following consequences:

        While economic conditions in Texas and the U.S. continue to show signs of recovery, there can be no assurance that these conditions will continue to improve. Although real estate markets have stabilized in portions of the U.S., a resumption of declines in real estate values, home sales volumes and financial stress on borrowers as a result of the uncertain economic environment, including job losses, could have an adverse effect on our borrowers or their customers, which could adversely affect our business, financial condition and results of operations.

Our strategy of pursuing acquisitions exposes us to financial, execution and operational risks that could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

        We intend to continue pursuing a strategy that includes acquisitions. An acquisition strategy involves significant risks, including the following:

        The market for acquisition targets is highly competitive, which may adversely affect our ability to find acquisition candidates that fit our strategy and standards. To the extent that we are unable to find suitable acquisition targets, an important component of our growth strategy may not be realized. Acquisitions will be subject to regulatory approvals, and we may be unable to obtain such approvals. Acquisitions of financial institutions also involve operational risks and uncertainties, and acquired

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companies may have unknown or contingent liabilities with no available manner of recourse, exposure to unexpected problems such as asset quality, the retention of key employees and customers and other issues that could negatively affect our business. We may not be able to complete future acquisitions or, if completed, we may not be able to successfully integrate the operations, technology platforms, management, products and services of the entities that we acquire and to realize our attempts to eliminate redundancies. The integration process may also require significant time and attention from our management that they would otherwise be directed toward servicing existing business and developing new business. Acquisitions typically involve the payment of a premium over book and market values and, therefore, some dilution of our tangible book value and net income per common share may occur in connection with any future acquisition of a financial service company, and the carrying amount of any goodwill that we acquire may be subject to impairment in future periods. Failure to successfully integrate the entities we acquire into our existing operations may increase our operating costs significantly and adversely affect our business, financial condition and results of operations.

Our ability to retain our portfolio bankers and recruit additional successful portfolio bankers is critical to the success of our business strategy, and any failure to do so may adversely affect our business, financial condition and results of operations.

        Our ability to retain and grow our loans, deposits and fee income depends upon the business generation capabilities, reputation and relationship management skills of our portfolio bankers. If we were to lose the services of any of our portfolio bankers, including any successful bankers employed by acquired businesses, to a new or existing competitor or otherwise, we may not be able to retain valuable relationships and some of our customers could choose to use the services of a competitor instead of our services. Our growth strategy also relies on our ability to attract and retain profitable portfolio bankers and on the ability of our existing portfolio bankers to achieve what we believe to be their full capacity in terms of customer relationships and profitability. We may face difficulties in recruiting and retaining portfolio bankers of our desired caliber, including as a result of competition from other financial institutions. In particular, many of our competitors are significantly larger with greater financial resources, and may be able to offer more attractive compensation packages and broader career opportunities. Additionally, we may incur significant expenses and expend significant time and resources on training, integration and business development before we are able to determine whether a new portfolio banker will be profitable or effective. If we are unable to attract and retain successful portfolio bankers, or if our portfolio bankers fail to meet our expectations in terms of customer relationships and profitability, we may be unable to execute our business strategy and our business, financial condition and results of operations may be negatively affected.

The small to medium-sized businesses that we lend to may have fewer resources to weather adverse business developments, which may impair a borrower's ability to repay a loan, and such impairment could adversely affect our results of operations and financial condition.

        We focus our business development and marketing strategy primarily on small to medium-sized businesses. Small to medium-sized businesses frequently have smaller market shares than their competition, may be more vulnerable to economic downturns, often need substantial additional capital to expand or compete and may experience substantial volatility in operating results, any of which may impair a borrower's ability to repay a loan. In addition, the success of a small and medium-sized business often depends on the management talents and efforts of one or two people or a small group of people, and the death, disability or resignation of one or more of these people could have a material adverse impact on the business and its ability to repay its loan. If general economic conditions negatively impact the Texas markets in which we operate and small to medium-sized businesses are adversely affected or our borrowers are otherwise affected by adverse business developments, our business, financial condition and results of operations may be negatively affected.

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A large portion of our loan portfolio is comprised of commercial and industrial loans secured by receivables, inventory, equipment or other commercial collateral, the deterioration in value of which could increase the potential for future losses.

        As of March 31, 2014, $675.8 million, or 48.1% of our total loans, was comprised of commercial and industrial loans to businesses collateralized by general business assets including, among other things, accounts receivable, inventory and equipment and generally backed by a personal guaranty of the borrower or principal. These commercial and industrial loans are typically larger in amount than loans to individuals and, therefore, have the potential for larger losses on a single loan basis. Additionally, the repayment of commercial and industrial loans is subject to the ongoing business operations of the borrower. The collateral securing such loans generally includes moveable property such as equipment and inventory, which may decline in value more rapidly than we anticipate, exposing us to increased credit risk. Significant adverse changes in the economy or local market conditions in which our commercial lending customers operate could cause rapid declines in loan collectability and the values associated with general business assets, resulting in inadequate collateral coverage that may expose us to credit losses and could adversely affect our business, financial condition and results of operations.

Our commercial real estate and real estate construction loan portfolios expose us to credit risks that may be greater than the risks related to other types of loans.

        As of March 31, 2014, $462.9 million, or 33.0% of our total loans, was comprised of commercial real estate loans (including owner occupied commercial real estate loans) and $152.3 million, or 10.8% of our total loans, was comprised of real estate construction loans. These loans typically involve repayment dependent upon income generated, or expected to be generated, by the property securing the loan in amounts sufficient to cover operating expenses and debt service. The availability of such income for repayment may be adversely affected by changes in the economy or local market conditions. These loans expose a lender to greater credit risk than loans secured by other types of collateral because the collateral securing these loans is typically more difficult to liquidate. Additionally, non-owner occupied commercial real estate loans generally involve relatively large balances to single borrowers or related groups of borrowers. Unexpected deterioration in the credit quality of our non-owner occupied commercial real estate loan portfolio could require us to increase our allowance for loan losses, which would reduce our profitability and may have a material adverse effect on our business, financial condition and results of operations.

        Construction loans involve risks attributable to the fact that loan funds are secured by a project under construction, and the project is of uncertain value prior to its completion. It can be difficult to accurately evaluate the total funds required to complete a project, and construction lending often involves the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project rather than the ability of a borrower or guarantor to repay the loan. If we are forced to foreclose on a project prior to completion, we may be unable to recover the entire unpaid portion of the loan. In addition, we may be required to fund additional amounts to complete a project and may have to hold the property for an indeterminate period of time, any of which could adversely affect our business, financial condition and results of operations.

Because a significant portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loan and other losses.

        As of March 31, 2014, $722.6 million, or 51.5% of our total loans, was comprised of loans with real estate as a primary or secondary component of collateral. As a result, adverse developments affecting real estate values in our market areas could increase the credit risk associated with our real estate loan portfolio. Real estate values in many Texas markets have experienced periods of fluctuation

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over the last five years. The market value of real estate can fluctuate significantly in a short period of time. Adverse changes affecting real estate values and the liquidity of real estate in one or more of our markets could increase the credit risk associated with our loan portfolio, and could result in losses that would adversely affect credit quality, financial condition and results of operation. Negative changes in the economy affecting real estate values and liquidity in our market areas could significantly impair the value of property pledged as collateral on loans and affect our ability to sell the collateral upon foreclosure without a loss or additional losses. Collateral may have to be sold for less than the outstanding balance of the loan, which could result in losses on such loans. Such declines and losses could have a material adverse impact on our business, results of operations and growth prospects. If real estate values decline, it is also more likely that we would be required to increase our allowance for loan losses, which could adversely affect our business, financial condition and results of operations.

Our allowance for loan losses may prove to be insufficient to absorb potential losses in our loan portfolio, which may adversely affect our business, financial condition and results of operations.

        We establish our allowance for loan losses and maintain it at a level considered adequate by management to absorb probable loan losses based on our analysis of our portfolio and market environment. The allowance for loan losses represents our estimate of probable losses in the portfolio at each balance sheet date and is based upon relevant information available to us. Our allowance for loan losses consists of a general component based upon probable but unidentified losses inherent in the portfolio and a specific component based on individual loans that are considered impaired. The general component is based on various factors including our historical loss experience, historical loss experience for peer banks, growth trends, loan concentrations, migration trends between internal loan risk ratings, current economic conditions and other qualitative factors. The specific component of the allowance for loan losses is calculated based on a review of individual loans considered impaired. The analysis of impaired losses may be based on the present value of expected future cash flows discounted at the effective loan rate, an observable market price or the fair value of the underlying collateral on collateral dependent loans. In determining the collectability of certain loans, management also considers the fair value of any underlying collateral. The amount ultimately realized may differ from the carrying value of these assets because of economic, operating or other conditions beyond our control, and any such differences may be material. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Allowance for loan losses."

        As of March 31, 2014, our allowance for loan losses was 1.08% of our total loans. Loans acquired are initially recorded at fair value, which includes an estimate of credit losses expected to be realized over the remaining lives of the loans, and therefore no corresponding allowance for loan losses is recorded for these loans at acquisition. Additional loan losses will likely occur in the future and may occur at a rate greater than we have previously experienced. We may be required to take additional provisions for loan losses in the future to further supplement the allowance for loan losses, either due to management's decision to do so or requirements by our banking regulators. In addition, bank regulatory agencies will periodically review our allowance for loan losses and the value attributed to non-accrual loans or to real estate acquired through foreclosure. Such regulatory agencies may require us to recognize future charge-offs. These adjustments may adversely affect our business, financial condition and results of operations.

The relatively unseasoned nature of a significant portion of our loan portfolio may expose us to increased credit risks.

        Our loan portfolio has grown to $1.4 billion as of March 31, 2014, from $373.0 million as of December 31, 2009. A significant portion of this increase is the result of new loans originated by us during that period. It is difficult to assess the future performance of these recently originated loans

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because our relatively limited experience with such loans does not provide us with a significant payment history from which to judge future collectability. These loans may experience higher delinquency or charge-off levels than our historical loan portfolio experience, which could adversely affect our business, financial condition and results of operations.

We have a significant amount of loans outstanding to a limited number of borrowers, which may increase our risk of loss.

        We have extended significant amounts of credit to a limited number of borrowers, and at March 31, 2014, the aggregate amount of loans to our 10 and 25 largest borrowers (including related entities) amounted to approximately $147.7 million, or 10.5% of total loans and $287.8 million, or 20.5% of total loans, respectively. At such date, none of these loans were nonperforming loans. A high amount of credit extended to a limited number of borrowers increases the risk in our loan portfolio. In the event that one or more of these borrowers is not able to make payments of interest and principal in respect of such loans, the potential loss to us is more likely to have a material adverse impact on our business, financial condition and results of operations.

A lack of liquidity could adversely affect our operations and jeopardize our business, financial condition and results of operations.

        Liquidity is essential to our business. We rely on our ability to generate deposits and effectively manage the repayment and maturity schedules of our loans and investment securities, respectively, to ensure that we have adequate liquidity to fund our operations. An inability to raise funds through deposits, borrowings, the sale of our investment securities, the sale of loans and other sources could have a substantial negative effect on our liquidity. Our most important source of funds is deposits. Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff. If customers move money out of bank deposits and into other investments such as money market funds, we would lose a relatively low-cost source of funds, increasing our funding costs and reducing our net interest income and net income.

        Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities, and proceeds from the issuance and sale of our equity and debt securities to investors. Additional liquidity is provided by the ability to borrow from the Dallas Fed and the Federal Home Loan Bank of Dallas (the "FHLB"). We also may borrow funds from third-party lenders, such as other financial institutions. Our access to funding sources in amounts adequate to finance or capitalize our activities, or on terms that are acceptable to us, could be impaired by factors that affect us directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry. Our access to funding sources could also be affected by a decrease in the level of our business activity as a result of a downturn in our target markets or by one or more adverse regulatory actions against us.

        Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses, or to fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.

We may need to raise additional capital in the future, and if we fail to maintain sufficient capital, whether due to losses, an inability to raise additional capital or otherwise, our financial condition, liquidity and results of operations, as well as our ability to maintain regulatory compliance, could be adversely affected.

        We face significant capital and other regulatory requirements as a financial institution. We may need to raise additional capital in the future to provide us with sufficient capital resources and liquidity to meet our commitments and business needs, which could include the possibility of financing

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acquisitions. In addition, the Company, on a consolidated basis, and the Bank, on a stand-alone basis, must meet certain regulatory capital requirements and maintain sufficient liquidity. Importantly, regulatory capital requirements could increase from current levels, which could require us to raise additional capital or contract our operations. Our ability to raise additional capital depends on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry, market conditions and governmental activities, and on our financial condition and performance. Accordingly, we cannot assure you that we will be able to raise additional capital if needed or on terms acceptable to us. If we fail to maintain capital to meet regulatory requirements, our liquidity, business, financial condition and results of operations could be materially and adversely affected.

Interest rate shifts may reduce net interest income and otherwise negatively impact our financial condition and results of operations.

        The majority of our banking assets are monetary in nature and subject to risk from changes in interest rates. Like most financial institutions, our earnings and cash flows depend to a great extent upon the level of our net interest income, or the difference between the interest income we earn on loans, investments and other interest-earning assets, and the interest we pay on interest-bearing liabilities, such as deposits and borrowings. Changes in interest rates can increase or decrease our net interest income, because different types of assets and liabilities may react differently, and at different times, to market interest rate changes. When interest-bearing liabilities mature or reprice more quickly, or to a greater degree than interest-earning assets in a period, an increase in interest rates could reduce net interest income. Similarly, when interest-earning assets mature or reprice more quickly, or to a greater degree than interest-bearing liabilities, falling interest rates could reduce net interest income. Additionally, an increase in interest rates may, among other things, reduce the demand for loans and our ability to originate loans and decrease loan repayment rates. A decrease in the general level of interest rates may affect us through, among other things, increased prepayments on our loan portfolio and increased competition for deposits. Accordingly, changes in the level of market interest rates affect our net yield on interest-earning assets, loan origination volume, loan portfolio and our overall results. Although our asset-liability management strategy is designed to control and mitigate exposure to the risks related to changes in market interest rates, those rates are affected by many factors outside of our control, including governmental monetary policies, inflation, deflation, recession, changes in unemployment, the money supply, international disorder and instability in domestic and foreign financial markets.

If we fail to maintain an effective system of disclosure controls and procedures and internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud.

        Ensuring that we have adequate disclosure controls and procedures, including internal controls over financial reporting, in place so that we can produce accurate financial statements on a timely basis is costly and time-consuming and needs to be re-evaluated frequently. Although we are currently required to provide an auditor attestation as to our internal control over financial reporting in accordance with applicable bank regulatory standards, we are in the process of documenting, reviewing and, if appropriate, improving our internal controls and procedures in anticipation of being a public company and being subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), which will require annual management assessments of the effectiveness of our internal controls over financial reporting and, when we cease to be an emerging growth company under the JOBS Act, a report by our independent auditors addressing these assessments. Our management may conclude that our internal controls over financial reporting are not effective due to our failure to cure any identified material weakness or otherwise. Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may not conclude that our internal controls over financial reporting are effective.

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Although no material weaknesses were identified in connection with our internal controls over financial reporting in accordance with applicable bank regulatory standards for the year ended December 31, 2013, a significant deficiency was identified in relation to certain aspects of our internal controls in 2013. We are in the process of remediating this deficiency. Going forward, our independent registered public accounting firm may not be satisfied with our internal controls over financial reporting or the level at which our controls are documented, designed, operated or reviewed, or it may interpret the relevant requirements differently from us. In addition, during the course of the evaluation, documentation and testing of our internal controls over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Securities and Exchange Commission (the "SEC") for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. Any such deficiencies may also subject us to adverse regulatory consequences in connection with our required submission of audited financial statements and an auditor attestation as to our internal control over financial reporting to certain of our regulators. If we fail to achieve and maintain the adequacy of our internal controls over financial reporting, as these standards are modified, supplemented or amended from time to time, we may be unable to report our financial information on a timely basis, we may not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with the Sarbanes-Oxley Act, and we may suffer adverse regulatory consequences or violations of listing standards. There could also be a negative reaction in the financial markets due to a loss of investor confidence in the reliability of our financial statements.

We face strong competition from financial services companies and other companies that offer banking services, which could impact our business.

        We conduct our operations almost exclusively in Texas. Many of our competitors offer the same, or a wider variety of, banking services within our market areas. These competitors include banks with nationwide operations, regional banks and other community banks. We also face competition from many other types of financial institutions, including savings banks, credit unions, finance companies, mutual funds, insurance companies, brokerage and investment banking firms, asset-based non-bank lenders and certain other non-financial entities, such as retail stores which may maintain their own credit programs and certain governmental organizations which may offer more favorable financing or deposit terms than we can. In addition, a number of out-of-state financial intermediaries have opened production offices, or otherwise solicit deposits, in our market areas. Increased competition in our markets may result in reduced loans and deposits, as well as reduced net interest margin, fee income and profitability. Ultimately, we may not be able to compete successfully against current and future competitors. If we are unable to attract and retain banking customers, we may be unable to continue to grow our loan and deposit portfolios, and our business, financial condition and results of operations may be adversely affected.

        Our ability to compete successfully depends on a number of factors, including, among other things:

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        We also face competition for acquisition opportunities in connection with the implementation of our acquisition strategy. Because there are a limited number of acquisition opportunities in our target markets, we face competition from other banks and financial institutions, many of which possess greater financial, human, technical and other resources than we do. Our ability to compete in acquiring target institutions will depend on our available financial resources to fund the acquisitions, including the amount of cash and cash equivalents we have and the liquidity and market price of our common stock. In addition, increased competition may also drive up the acquisition consideration that we will be required to pay in order to successfully capitalize on attractive acquisition opportunities.

        Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could have a material adverse effect on our business, financial condition and results of operations.

We could recognize losses on securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate.

        While we attempt to invest a significant percentage of our assets in loans (our loan to deposit ratio was 94.5% as of March 31, 2014), we invest a percentage of our total assets (14.3% as of March 31, 2014) in investment securities with the primary objectives of providing a source of liquidity, providing an appropriate return on funds invested, managing interest rate risk, meeting pledging requirements and meeting regulatory capital requirements. As of March 31, 2014, the book value of our securities portfolio was $250.9 million. Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities. For example, fixed-rate securities are generally subject to decreases in market value when interest rates rise. Additional factors include, but are not limited to, rating agency downgrades of the securities, defaults by the issuer or individual borrowers with respect to the underlying securities, and continued instability in the credit markets. Any of the foregoing factors could cause an other-than-temporary impairment in future periods and result in realized losses. The process for determining whether impairment is other-than-temporary usually requires difficult, subjective judgments about the future financial performance of the issuer and any collateral underlying the security in order to assess the probability of receiving all contractual principal and interest payments on the security. Because of changing economic and market conditions affecting interest rates, the financial condition of issuers of the securities and the performance of the underlying collateral, we may recognize realized and/or unrealized losses in future periods, which could have an adverse effect on our business, financial condition and results of operations.

Loss of our executive officers or other key employees could impair our relationship with our customers and adversely affect our business.

        Our success is dependent upon the continued service and skills of our executive management team. Our goals, strategies and marketing efforts are closely tied to the banking philosophy and strengths of our executive management, including our Chairman and Chief Executive Officer. The loss of services of any of these key personnel could have a negative impact on our business because of their skills, years of industry experience and the difficulty of promptly finding qualified replacement personnel. While we have employment agreements with our executive officers, we cannot guarantee that these executive officers or key employees will continue to be employed with us in the future.

If the goodwill that we have recorded or may record in connection with a business acquisition becomes impaired, it could require charges to earnings, which would have a negative impact on our financial condition and results of operations.

        Goodwill represents the amount by which the cost of an acquisition exceeds the fair value of net assets we acquire in connection with the purchase of another financial institution. We review goodwill for impairment at least annually, or more frequently if a triggering event occurs which indicates that the carrying value of the asset might be impaired.

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        Our goodwill impairment test involves a two-step process. Under the first step, the estimation of fair value of the reporting unit is compared with its carrying value including goodwill. If step one indicates a potential impairment, the second step is performed to measure the amount of impairment, if any. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. Any such adjustments are reflected in our results of operations in the periods in which they become known. As of March 31, 2014, our goodwill totaled $15.7 million. While we have not recorded any impairment charges since we initially recorded the goodwill, there can be no assurance that our future evaluations of our existing goodwill, or goodwill we may acquire in the future, will not result in findings of impairment and related write-downs, which may have a material adverse effect on our business, financial condition and results of operations.

System failure or breaches of our network security could subject us to increased operating costs as well as litigation and other liabilities.

        The computer systems and network infrastructure we use, including the systems and infrastructure of our third-party service providers, could be vulnerable to unforeseen problems. Our operations are dependent upon our ability to protect our computer equipment, and the information stored therein, against damage from physical theft, fire, power loss, telecommunications failure or a similar catastrophic event, as well as from security breaches, denial of service attacks, viruses, worms and other disruptive problems caused by hackers. Any damage or failure that causes breakdowns or disruptions in our general ledger, deposit, loan and other systems could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, including enforcement action that could restrict our operations, or expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on us. Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmitted through our computer systems and network infrastructure, which may result in significant liability to us and may cause existing and potential customers to refrain from doing business with us. In addition, advances in computer capabilities could result in a compromise or breach of the systems we and our third-party service providers use to encrypt and protect customer transaction data. A failure of such security measures could have a material adverse effect on our business, financial condition and results of operations.

We have a continuing need for technological change, and we may not have the resources to effectively implement new technology, or we may experience operational challenges when implementing new technology.

        The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services. In addition to better serving customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs. Our future success will depend, at least in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience as well as to create additional efficiencies in our operations as we continue to grow and expand our products and service offerings. We may experience operational challenges as we implement these new technology enhancements or products, which could result in us not fully realizing the anticipated benefits from such new technology or require us to incur significant costs to remedy any such challenges in a timely manner.

        Many of our larger competitors have substantially greater resources to invest in technological improvements. As a result, they may be able to offer additional or superior products to those that we will be able to provide, which would put us at a competitive disadvantage. Accordingly, we may lose customers seeking new technology-driven products and services to the extent we are unable to provide such products and services.

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Our operations could be interrupted if our third-party service providers experience difficulty, terminate their services or fail to comply with banking regulations.

        We depend on a number of relationships with third-party service providers. Specifically, we receive certain third-party services including, but not limited to, core systems processing, essential web hosting and other Internet systems, our online banking services, deposit processing and other processing services. If these third-party service providers experience difficulties, or terminate their services, and we are unable to replace them with other service providers on a timely basis, our operations could be interrupted. If an interruption were to continue for a significant period of time, our business, financial condition and results of operations could be adversely affected, perhaps materially. Even if we are able to replace third-party service providers, it may be at a higher cost to us, which could adversely affect our business, financial condition and results of operations.

We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors.

        Employee errors and employee or customer misconduct could subject us to financial losses or regulatory sanctions and seriously harm our reputation. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of our customers or improper use of confidential information. It is not always possible to prevent employee errors and misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. Employee errors could also subject us to financial claims for negligence.

        We maintain a system of internal controls to mitigate against operational risks, including data processing system failures and errors and customer or employee fraud, as well as insurance coverage designed to protect us from material losses associated with these risks, including losses resulting from any associated business interruption. If our internal controls fail to prevent or detect an occurrence, or if any resulting loss is not insured or exceeds applicable insurance limits, it could have a material adverse effect on our business, financial condition and results of operations.

        In addition, we rely heavily upon information supplied by third parties, including the information contained in credit applications, property appraisals, title information, equipment pricing and valuation and employment and income documentation, in deciding which loans we will originate, as well as the terms of those loans. If any of the information upon which we rely is misrepresented, either fraudulently or inadvertently, and the misrepresentation is not detected prior to loan funding, the value of the loan may be significantly lower than expected, or we may fund a loan that we would not have funded or on terms we would not have extended. Whether a misrepresentation is made by the applicant or another third-party, we generally bear the risk of loss associated with the misrepresentation. A loan subject to a material misrepresentation is typically unsellable or subject to repurchase if it is sold prior to detection of the misrepresentation. The sources of the misrepresentations are often difficult to locate, and it is often difficult to recover any of the resulting monetary losses we may suffer.

We may be subject to environmental liabilities in connection with the foreclosure on real estate assets securing our loan portfolio.

        Hazardous or toxic substances or other environmental hazards may be located on the properties that secure our loans. If we acquire such properties as a result of foreclosure or otherwise, we could become subject to various environmental liabilities. For example, we could be held liable for the cost of cleaning up or otherwise addressing contamination at or from these properties. We could also be held liable to a governmental entity or third-party for property damage, personal injury or other claims relating to any environmental contamination at or from these properties. In addition, we own and operate certain properties that may be subject to similar environmental liability risks. Although we have policies and procedures that are designed to mitigate against certain environmental risks, we may not detect all environmental hazards associated with these properties. If we ever became subject to

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significant environmental liabilities, our business, financial condition and results of operations could be adversely affected.

Risks Related to Our Industry and Regulation

The ongoing implementation of the Dodd-Frank Act may have a material effect on our operations.

        On July 21, 2010, the Dodd-Frank Act was signed into law, and the process of implementation is ongoing. The Dodd-Frank Act imposes significant regulatory and compliance changes on many industries, including ours. There remains significant uncertainty surrounding the manner in which the provisions of the Dodd-Frank Act will ultimately be implemented by the various regulatory agencies, and the full extent of the impact of the requirements on our operations is unclear. The legal and regulatory changes resulting from the Dodd-Frank Act may impact the profitability of our business activities, require changes to certain of our business practices, require the development of new compliance infrastructure, impose upon us more stringent capital, liquidity and leverage requirements or otherwise adversely affect our business. These changes may also require us to invest significant management attention and resources to evaluate and make any changes necessary to comply with new statutory and regulatory requirements. Failure to comply with the new requirements or with any future changes in laws or regulations may negatively impact our business, financial condition and results of operations. For a more detailed description of the Dodd-Frank Act, see "Regulation and Supervision—The Dodd-Frank Act."

We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation and accounting principles, or changes in them, or our failure to comply with them, may adversely affect us.

        We are subject to extensive regulation, supervision and legal requirements that govern almost all aspects of our operations. Intended to protect customers, depositors, the Deposit Insurance Fund (the "DIF"), and the overall financial stability of the United States, these laws and regulations, among other matters, prescribe minimum capital requirements, impose limitations on the business activities in which we can engage, limit the dividend or distributions that the Bank can pay to us, restrict the ability of institutions to guarantee our debt, and impose certain specific accounting requirements on us that may be more restrictive and may result in greater or earlier charges to earnings or reductions in our capital than generally accepted accounting principles would require. Compliance with laws and regulations can be difficult and costly, and changes to laws and regulations often impose additional compliance costs. Our failure to comply with these laws and regulations, even if the failure follows good faith effort or reflects a difference in interpretation, could subject us to restrictions on our business activities, fines and other penalties, any of which could adversely affect our results of operations, capital base and the price of our securities. Further, any new laws, rules and regulations could make compliance more difficult or expensive or otherwise adversely affect our business, financial condition and results of operations.

Federal banking agencies periodically conduct examinations of our business, including compliance with laws and regulations, and our failure to comply with any supervisory actions to which we are or become subject as a result of such examinations may adversely affect us.

        Federal banking agencies, including the Office of the Comptroller of the Currency (the "OCC") and Federal Reserve, periodically conduct examinations of our business, including compliance with laws and regulations. If, as a result of an examination, a federal banking agency were to determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that the Company, the Bank or their respective management were in violation of any law or regulation, it may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin "unsafe or unsound" practices, to require affirmative actions to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in the

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Company's and/or the Bank's capital, to restrict our growth, to assess civil monetary penalties against the Company, the Bank or their respective officers or directors, to remove officers and directors, and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate the Bank's deposit insurance. If we become subject to such regulatory actions, our business, financial condition, results of operations, cash flows and reputation may be negatively impacted.

Many of our new activities and expansion plans require regulatory approvals, and failure to obtain them may restrict our growth.

        We intend to complement and expand our business by pursuing strategic acquisitions of financial institutions and other complementary businesses. Generally, we must receive federal regulatory approval before we can acquire an FDIC-insured depository institution or related business. In determining whether to approve a proposed acquisition, federal banking regulators will consider, among other factors, the effect of the acquisition on competition, our financial condition, our future prospects and the impact of the proposal on U.S. financial stability. The regulators also review current and projected capital ratios and levels, the competence, experience and integrity of management, and its record of compliance with laws and regulations, the convenience and needs of the communities to be served (including the acquiring institution's record of compliance under the Community Reinvestment Act (the "CRA")) and the effectiveness of the acquiring institution in combating money laundering activities. Such regulatory approvals may not be granted on terms that are acceptable to us, or at all. We may also be required to sell branches as a condition to receiving regulatory approval, which condition may not be acceptable to us or, if acceptable to us, may reduce the benefit of any acquisition.

        In addition to the acquisition of existing financial institutions, as opportunities arise, we plan to continue de novo branching as a part of our organic growth strategy. De novo branching and any acquisitions carry with them numerous risks, including the inability to obtain all required regulatory approvals. The failure to obtain these regulatory approvals for potential future strategic acquisitions and de novo branches may impact our business plans and restrict our growth.

Financial institutions, such as the Bank, face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations.

        The federal Bank Secrecy Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate. The federal Financial Crimes Enforcement Network, established by the U.S. Department of the Treasury ("U.S. Treasury Department") to administer the Bank Secrecy Act, is authorized to impose significant civil money penalties for violations of those requirements, and has recently engaged in coordinated enforcement efforts with the individual federal banking regulators, as well as the U.S. Department of Justice ("U.S. Justice Department"), Drug Enforcement Administration and Internal Revenue Service. There is also increased scrutiny of compliance with the sanctions programs and rules administered and enforced by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC").

        In order to comply with regulations, guidelines and examination procedures in this area, we have dedicated significant resources to our anti-money laundering program. If our policies, procedures and systems are deemed deficient, we could be subject to liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plans, including acquisitions and de novo branching.

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We are subject to the CRA and fair lending laws, and failure to comply with these laws could lead to material penalties.

        The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. The Consumer Financial Protection Bureau ("CFPB"), the U.S. Justice Department and other federal agencies are responsible for enforcing these laws and regulations. A successful challenge to an institution's performance under the CRA or fair lending laws and regulations could result in a wide variety of sanctions, including the required payment of damages and civil money penalties, injunctive relief, imposition of restrictions on mergers and acquisitions activity and restrictions on expansion activity. Private parties may also have the ability to challenge an institution's performance under fair lending laws in private class action litigation.

The FDIC's restoration plan and the related increased assessment rate could adversely affect our earnings.

        As a result of economic conditions and the enactment of the Dodd-Frank Act, the FDIC has increased the deposit insurance assessment rates and thus raised deposit premiums for insured depository institutions. If these increases are insufficient for the DIF to meet its funding requirements, further special assessments or increases in deposit insurance premiums may be required. We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance. If there are additional financial institution failures that affect the DIF, we may be required to pay FDIC premiums higher than current levels. Our FDIC insurance related costs were $0.3 million for the three months ended March 31, 2014 and March 31, 2013. Our FDIC insurance related costs were $1.2 million for the year ended December 31, 2013, compared with $1.0 million for the year ended December 31, 2012, and $0.9 million for the year ended December 31, 2011. Any future additional assessments, increases or required prepayments in FDIC insurance premiums may materially adversely affect our business, financial condition and results of operations.

We may become subject to more stringent capital requirements.

        The Dodd-Frank Act requires the federal banking agencies to establish stricter risk-based capital requirements and leverage limits to apply to banks and bank and savings and loan holding companies. In July 2013, the federal banking agencies published the final Basel III Capital Rules (as defined below) that revised their risk-based and leverage capital requirements and their method for calculating risk-weighted assets. The Basel III Capital Rules will apply to banking organizations, including the Company and the Bank.

        As a result of the enactment of the Basel III Capital Rules, the Company and the Bank will become subject to increased required capital levels. The Basel III Capital Rules become effective as applied to the Company and the Bank on January 1, 2015, with a phase-in period that generally extends from January 1, 2015 through January 1, 2019. See "Regulation and Supervision—Regulatory Capital Requirements and Capital Adequacy—US Implementation of Basel III."

The Federal Reserve may require us to commit capital resources to support the Bank.

        The Federal Reserve, which examines the Company, requires a bank holding company to act as a source of financial and managerial strength to its subsidiary banks and to commit resources to support its subsidiary banks. Under the "source of strength" doctrine, the Federal Reserve may require a bank holding company to make capital injections into a troubled subsidiary bank and may charge the bank holding company with engaging in unsafe and unsound practices for failure to commit resources to such a subsidiary bank. Under these requirements, in the future, we could be required to provide financial assistance to the Bank if it experiences financial distress.

        Such a capital injection may be required at a time when our resources are limited and we may be required to borrow the funds to make the required capital injection. In the event of a bank holding company's bankruptcy, the bankruptcy trustee will assume any commitment by the holding company to

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a federal bank regulatory agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of the holding company's general unsecured creditors, including the holders of any note obligations. Thus, any borrowing that must be done by the holding company in order to make the required capital injection becomes more difficult and expensive and will adversely impact the holding company's business, financial condition and results of operations.

We may be adversely affected by the soundness of other financial institutions.

        Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships. We have exposure to many different industries and counterparties, and routinely execute transactions with counterparties in the financial services industry, including commercial banks, broker-dealers, investment banks and other institutional clients. Many of these transactions expose us to credit risk in the event of a default by a counterparty or client. In addition, our credit risk may be exacerbated if our collateral cannot be foreclosed upon or is liquidated at prices not sufficient to recover the full amount of the credit or cover the derivative exposure due. Any such losses could have a material adverse effect on our business, financial condition and results of operations.

Monetary policies and regulations of the Federal Reserve could adversely affect our business, financial condition and results of operations.

        In addition to being affected by general economic conditions, our earnings and growth are affected by the regulations and policies of the Federal Reserve. An important function of the Federal Reserve is to regulate the U.S. money supply and credit conditions. Among the instruments used by the Federal Reserve to implement these objectives are open market operations in U.S. government securities, adjustments of both the discount rate and the federal funds rate and changes in reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.

        The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. Although we cannot determine the effects of such policies on us at this time, such policies could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to this Offering and an Investment in our Common Stock

An active trading market for our common stock may not develop, and you may not be able to sell your common stock at or above the initial public offering price.

        Prior to this offering there has been no public market for our common stock. An active trading market for shares of our common stock may never develop or be sustained following this offering. If an active trading market does not develop, you may have difficulty selling your shares of common stock at an attractive price, or at all. The initial public offering price for our common stock will be determined by negotiations between us, the selling shareholders and the representatives of the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell your common stock at or above the initial public offering price or at any other price or at the time that you would like to sell. An inactive market may also impair our ability to raise capital by selling our common stock and may impair our ability to expand our business by using our common stock as consideration in an acquisition.

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The market price of our common stock may fluctuate significantly.

        The market price of our common stock could fluctuate significantly due to a number of factors, including, but not limited to:

        In particular, the realization of any of the risks described in this "Risk Factors" section could have a material adverse effect on the market price of our common stock and cause the value of your investment to decline. In addition, the stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock over the short, medium or long term, regardless of our actual performance. If the market price of our common stock reaches an elevated level following this offering, it may materially and rapidly decline. In the past, following periods of volatility in the market price of a company's securities, shareholders have often instituted securities class action litigation. If we were to be involved in a class action lawsuit, it could divert the attention of senior management and have a material adverse effect on our business, financial condition and results of operations.

The obligations associated with being a public company will require significant resources and management attention.

        As a public company, we will face increased legal, accounting, administrative and other costs and expenses that we have not incurred as a private company, particularly after we are no longer an emerging growth company. We expect to incur incremental costs related to operating as a public company of approximately $940,000 annually, although there can be no assurance that these costs will not be higher, particularly when we no longer qualify as an emerging growth company. After the completion of this offering, we will be subject to the reporting requirements of the Exchange Act, which requires that we file annual, quarterly and current reports with respect to our business and financial condition and proxy and other information statements, and the rules and regulations

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implemented by the SEC, the Sarbanes-Oxley Act, the Dodd-Frank Act, the PCAOB and the                        , each of which imposes additional reporting and other obligations on public companies. As a public company, we will be required to:

        We expect these rules and regulations and changes in laws, regulations and standards relating to corporate governance and public disclosure, which have created uncertainty for public companies, to increase legal and financial compliance costs and make some activities more time consuming and costly. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. Our investment in compliance with existing and evolving regulatory requirements will result in increased administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities, which could have a material adverse effect on our business, financial condition and results of operations. These increased costs may require us to divert a significant amount of money that we could otherwise use to expand our business and achieve our strategic objectives.

You will incur immediate dilution as a result of this offering.

        If you purchase our common stock in this offering, you will pay more for your shares than the net tangible book value per share immediately prior to consummation of this offering. As a result, you will incur immediate dilution of $          per share representing the difference between the offering price of $          and our net tangible book value per share as of March 31, 2014 of $9.00. Accordingly, if we are liquidated at our book value, you would not receive the full amount of your investment. See "Dilution."

If securities or industry analysts change their recommendations regarding our stock or if our operating results do not meet their expectations, our stock price could decline.

        The trading market for our common stock could be influenced by the research and reports that industry or securities analysts may publish about us or our business. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock or if our operating results do not meet their expectations, either absolutely or relative to our competitors, our stock price could decline significantly.

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Future sales or the possibility of future sales of a substantial amount of our common stock may depress the price of shares of our common stock.

        Future sales or the availability for sale of substantial amounts of our common stock in the public market could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through future sales of equity securities.

        At the time of this offering, we expect that our certificate of formation will authorize us to issue                shares of common stock,                 of which will be outstanding upon consummation of this offering. This number includes                shares that we are selling in this offering and                shares that the selling shareholders are selling in this offering, which will be freely transferable without restriction or further registration under the Securities Act of 1933, as amended (the "Securities Act"). Substantially all of the remaining                 shares of our common stock outstanding, including the shares of common stock retained by the selling shareholders and members of our management, will be restricted from immediate resale under the federal securities laws and the lock-up agreements between our executive officers, directors, the selling shareholders and certain other current shareholders and the underwriters which generally provide for a lock-up period of 180 days following this offering (unless the representatives of the underwriters waive such lock-up period), but may be sold in the near future. See "Underwriting." Following the expiration of the applicable lock-up period, all these shares of our common stock will be eligible for resale under Rule 144 of the Securities Act, subject to volume limitations and applicable holding period requirements. In addition, certain shareholders will have the ability to cause us to register the resale of their shares pursuant to a registration rights agreement. See "Shares Eligible for Future Sale" for a discussion of the shares of our common stock that may be sold into the public market in the future and "Certain Relationships and Related Party Transactions—Registration Rights Agreement" for a description of the registration rights agreement.

        We may issue shares of our common stock or other securities from time to time as consideration for future acquisitions and investments and pursuant to compensation and incentive plans. If any such acquisition or investment is significant, the number of shares of our common stock, or the number or aggregate principal amount, as the case may be, of other securities that we may issue may in turn be substantial. We may also grant registration rights covering those shares of our common stock or other securities in connection with any such acquisitions and investments.

        We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares of our common stock issued in connection with an acquisition or under a compensation or incentive plan), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock and could impair our ability to raise capital through future sales of our securities.

We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common stock, which could depress the price of our common stock.

        At the time of this offering, we expect that our certificate of formation will authorize us to issue up to                shares of one or more series of preferred stock. Our board of directors will have the authority to determine the preferences, limitations and relative rights of shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our shareholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our common stock at a premium over the market price, and materially adversely affect the market price and the voting and other rights of the holders of our common stock.

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We are an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

        We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. These exemptions allow us to, among other things, present only two years of audited financial statements and discuss only our results of operations for two years in related Management's Discussions and Analyses; to not provide an auditor attestation of our internal control over financial reporting; to choose not to comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and our audited financial statements; to provide reduced disclosure regarding our executive compensation arrangements pursuant to the rules applicable to smaller reporting companies, which means we do not have to include a compensation discussion and analysis and certain other disclosure regarding our executive compensation; and to not seek a non-binding advisory vote on executive compensation or golden parachute arrangements. In addition, even if we comply with the greater obligations of public companies that are not emerging growth companies immediately after this offering, we may avail ourselves of these reduced requirements applicable to emerging growth companies from time to time in the future, so long as we are an emerging growth company. We will remain an emerging growth company for up to five years, though we may cease to be an emerging growth company earlier under certain circumstances, including if, before the end of such five years, we are deemed to be a large accelerated filer under the rules of the SEC (which depends on, among other things, having a market value of common stock held by non-affiliates in excess of $700 million). Investors and securities analysts may find it more difficult to evaluate our common stock because we may rely on one or more of these exemptions, and, as a result, investor confidence and the market price of our common stock may be materially and adversely affected.

An investment in our common stock is not an insured deposit and is not guaranteed by the FDIC, so you could lose some or all of your investment.

        An investment in our common stock is not a bank deposit and, therefore, is not insured against loss or guaranteed by the FDIC, any other deposit insurance fund or by any other public or private entity. An investment in our common stock is inherently risky for the reasons described herein. As a result, if you acquire our common stock, you could lose some or all of your investment.

We currently have no plans to pay dividends on our common stock, so you may not receive funds without selling your common stock.

        We do not anticipate paying any dividends on our common stock in the foreseeable future. Our ability to pay dividends on our common stock is dependent on the Bank's ability to pay dividends to the Company, which is limited by applicable laws and banking regulations, and may in the future be restricted by the terms of any debt or preferred securities we may incur or issue. Payments of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion and any legal or contractual limitations on our ability to pay dividends. See "Dividend Policy."

        Our primary tangible asset is the Bank. As such, we depend upon the Bank for cash distributions (through dividends on the Bank's stock) that we use to pay our operating expenses and satisfy our obligations (including debt obligations). There are numerous laws and banking regulations that limit the Bank's ability to pay dividends to the Company. If the Bank is unable to pay dividends to the Company, we will not be able to satisfy our obligations. Federal statutes and regulations restrict the Bank's ability to make cash distributions to the Company. These statutes and regulations require, among other things, that the Bank maintain certain levels of capital in order to pay a dividend. Further,

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federal banking authorities have the ability to restrict the Bank's payment of dividends through supervisory action. See "Regulation and Supervision—Regulatory Limits on Dividends and Distributions."

Our corporate organizational documents and the provisions of Texas law to which we are subject contain certain provisions that could have an anti-takeover effect and may delay, make more difficult or prevent an attempted acquisition of the Company that you may favor.

        We intend to amend and restate our certificate of formation and bylaws prior to the consummation of this offering. As a result, certain provisions, yet to be determined, may have an anti-takeover effect and may delay, discourage or prevent an attempted acquisition or change of control of the Company. These provisions may include:

        At the time of this offering, we expect our certificate of formation will provide for non-cumulative voting for directors and authorize the board of directors to issue shares of its preferred stock without shareholder approval and upon such terms as the board of directors may determine. The issuance of our preferred stock, while providing desirable flexibility in connection with possible acquisitions, financings and other corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or of discouraging a third-party from acquiring, a controlling interest in us. In addition, certain provisions of Texas law, including a provision which restricts certain business combinations between a Texas corporation and certain affiliated shareholders, may delay, discourage or prevent an attempted acquisition or change in control of the Company. At the time of this offering, we expect our certificate of formation will prohibit shareholder action by less than unanimous written consent. See "Description of Capital Stock."

        Furthermore, banking laws impose notice, approval and ongoing regulatory requirements on any shareholder or other party that seeks to acquire direct or indirect "control" of an FDIC-insured depository institution. These laws include the Bank Holding Company Act of 1956 (the "BHC Act"), the Change in Bank Control Act and the Savings and Loan Holding Company Act. These laws could delay or prevent an acquisition. See "Regulation and Supervision—Notice and Approval Requirements Related to Control."

Shareholders may be deemed to be acting in concert or otherwise in control of us, which could impose notice, approval and ongoing regulatory requirements and result in adverse regulatory consequences for such holders.

        We are a bank holding company regulated by the Federal Reserve. Banking laws impose notice, approval and ongoing regulatory requirements on any shareholder or other party that seeks to acquire direct or indirect "control" of an FDIC-insured depository institution or a company that controls an FDIC-insured depository institution, such as a bank holding company. These laws include the BHC Act, the Change in Bank Control Act and the Savings and Loan Holding Company Act. The determination

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whether an investor "controls" a depository institution or holding company is based on all of the facts and circumstances surrounding the investment.

        As a general matter, a party is deemed to control a depository institution or other company if the party (i) owns or controls 25% or more of any class of voting stock of the bank or other company, (ii) controls the election of a majority of the directors of the bank or other company or (iii) has the power to exercise a controlling influence over the management or policies of the bank or other company. In addition, subject to rebuttal, a party may be presumed to control a depository institution or other company if the investor owns or controls 10% or more of any class of voting stock. Ownership by affiliated parties, or parties acting in concert, is typically aggregated for these purposes. "Acting in concert" generally means knowing participation in a joint activity or parallel action towards the common goal of acquiring control of a bank or a parent company, whether or not pursuant to an express agreement. The manner in which this definition is applied in individual circumstances can vary and cannot always be predicted with certainty.

        Any shareholder that is deemed to "control" us for regulatory purposes would become subject to notice, approval and ongoing regulatory requirements and may be subject to adverse regulatory consequences. Potential investors are advised to consult with their legal counsel regarding the applicable regulations and requirements.

We have several large non-controlling shareholders, and such shareholders may independently vote their shares in a manner that you may not consider to be consistent with your best interest or the best interest of our shareholders as a whole.

        Investment funds affiliated with Friedman Fleischer & Lowe, LLC, Harvest Partners, LP and Pine Brook Road Partners, LLC each currently beneficially own approximately 24.1% of our outstanding common stock, and are expected to beneficially own, following the completion of this offering, approximately         %,        % and        %, respectively, of our outstanding common stock, or        %,        % and        %, respectively, if the underwriters exercise their option to purchase additional shares in full. Each of these shareholders is currently subject to passivity commitments made to the Federal Reserve in connection with their investment in us in which they agreed not to, without the prior approval of the Federal Reserve, among other things, exercise or attempt to exercise a controlling influence over our management or policies, have or seek to have more than one representative serve on our board of directors or permit any representative to serve as the chairman of our board of directors or any committee thereof. However, subject to those commitments, each of these shareholders will continue to have the ability following the completion of this offering to independently vote a meaningful percentage of our outstanding common stock on all matters put to a vote of our shareholders, including the election of our board of directors and certain other significant corporate transactions, such as a merger or acquisition transaction. On any such matter, the interests of any one of these shareholders may not coincide with the interests of the other holders of our common stock and any such difference in interests may result in that shareholder voting its shares in a manner inconsistent with the interest of other shareholders.

        In addition, in connection with this offering, we will enter into a director nomination agreement with each of these shareholders that will provide for the rights of such shareholders to nominate individuals for election to our board of directors. See "Certain Relationships and Related Party Transactions—Director Nomination Agreement." Furthermore, following the termination of the lock-up period discussed under "Underwriting—Lock-Up Agreements," it is possible that one or more of these shareholders may choose to sell or otherwise dispose of all or a significant portion of the remaining shares they hold following this offering, which could adversely affect the market price of our common stock and the value of your investment in us may decrease.

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USE OF PROCEEDS

        We estimate that the net proceeds from the sale of the shares of common stock by us will be approximately $             million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, based on an assumed initial public offering price of $            per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus. If the underwriters exercise their option to purchase additional shares in full, the net proceeds to us will be approximately $             million. We will not receive any of the proceeds from the sale of shares by the selling shareholders. We intend to use $8.0 million of the net proceeds from this offering received by us to pay a portion of the purchase price of SharePlus (see "Summary—Recent Developments" for a description of the terms of the transaction), and to contribute all but $5.0 million of the remaining net proceeds to the Bank to be used for general corporate purposes. Other than SharePlus, we have no current plans, arrangements or understandings to make any acquisitions. However, at any given time we may be evaluating other acquisition candidates, conducting due diligence and may have entered into one or more letters of intent. We cannot assure you that we will enter into any definitive agreements in respect of any such transaction.

        A $1.00 increase (decrease) in the assumed initial public offering price of $            per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds from the sale of the shares of common stock by us by approximately $            , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

        A 1,000,000 share increase (decrease) in the number of shares of common stock offered by us would increase (decrease) the net proceeds from the sale of the shares of common stock by us by approximately $            , assuming an initial public offering price of $            per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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CAPITALIZATION

        The following table sets forth our capitalization as of March 31, 2014:

        This table should be read in conjunction with "Use of Proceeds," "Selected Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus.

 
  As of March 31, 2014  
 
  Actual   As Adjusted  
 
  (in millions)
 

Shareholders' equity:

             

Preferred stock, par value $0.01 per share; authorized—10,000,000 shares
actual; issued and outstanding—no shares actual, no shares as adjusted

  $   $               

Common stock, par value $0.01 per share; authorized—90,000,000 shares actual;
issued and outstanding—20,780,254 shares actual,              shares as adjusted

    208        

Capital surplus

    179,344        

Retained earnings

    23,406        

Accumulated other comprehensive income (loss), net

    642        
           

Total shareholders' equity

  $ 203,600   $    
           

Total capitalization

  $ 203,600   $    
           
           

Capital Ratios

             

Tier 1 capital to average assets

    10.5 %     %

Tier 1 capital to risk-weighted assets

    11.6        

Total capital to risk-weighted assets

    12.6        

Tangible common equity to tangible assets(1)

    10.8        

Per Share Data

             

Book value per common share

  $ 9.80   $    

Tangible book value per common share(2)

    9.00        

(1)
We calculate tangible common equity as total shareholders' equity less goodwill and core deposit intangibles, net of accumulated amortization, and we calculate tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization. Tangible common equity to tangible assets is a non-GAAP financial measure, and, as we calculate tangible common equity to tangible assets, the most directly comparable GAAP financial measure is total shareholders' equity to total assets. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

(2)
We calculate tangible book value per common share as total shareholders' equity less goodwill and core deposit intangibles, net of accumulated amortization at the end of the relevant period, divided by the outstanding number of shares of our common stock at the end of the relevant period. Tangible book value per common share is a non-GAAP financial measure, and, as we calculate tangible book value per common share, the most directly comparable GAAP financial measure is

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    book value per common share. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

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DILUTION

Assumed initial public offering price per share of common stock

        $           

Historical net tangible book value per share as of March 31, 2014

  $ 9.00        

Increase per share attributable to this offering

             
             

As adjusted net tangible book value per share after this offering

             
             

Dilution in net tangible book value per share to new investors(1)

        $           
             
             

(1)
Dilution is determined by subtracting net tangible book value per share after giving effect to this offering from the initial public offering price paid by a new investor.

        A $1.00 increase (decrease) in the assumed initial public offering price of $            per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, would increase (decrease) the as adjusted net tangible book value per share after this offering by approximately $            , and dilution in net tangible book value per share to new investors by approximately $            , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters exercise in full their option to purchase additional shares of our common stock in this offering, the as adjusted net tangible book value after this offering would be $            per share, the increase in net tangible book value to existing shareholders would be $            per share and the dilution to new investors would be $            per share, in each case assuming an initial public offering price of $            per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus.

        The following table summarizes, as of March 31, 2014, the differences between our existing shareholders and new investors with respect to the number of shares of our common stock purchased from us, the total consideration paid and the average price per share paid. The calculations with respect to shares purchased by new investors in this offering reflect the initial public offering price of $            per share, which is the midpoint of the estimated initial public offering price range set forth

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on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:

 
  Shares Purchased   Total Consideration    
 
 
  Average
Price Per
Share
 
 
  Number   Percentage   Amount   Percentage  

Existing shareholders

    20,780,254            % $ 183,790,218            % $ 8.84  

New investors

                               
                       

Total

          100 % $       100 % $       
                         
                         

        Except as otherwise indicated, the discussion and tables above assume no exercise of the underwriters' option to purchase additional shares, no exercise of any outstanding options and no sale of common stock by the selling shareholders. The sale of            shares of common stock to be sold by the selling shareholders in this offering will reduce the number of shares held by existing shareholders to            , or            % of the total shares outstanding, and will increase the number of shares held by investors participating in this offering to             , or            % of the total shares outstanding. In addition, if the underwriters' option to purchase additional shares is exercised in full, the number of shares of common stock held by existing shareholders will be further reduced to            % of the total number of shares of common stock to be outstanding upon the closing of this offering, and the number of shares of common stock held by investors participating in this offering will be further increased to            shares or            % of the total number of shares of common stock to be outstanding upon the closing of this offering.

        The discussion and tables above exclude            shares of our common stock issuable upon the exercise of outstanding stock options at a weighted average exercise price of $            per share and            shares of common stock reserved for issuance under our stock option plans in each case as of                    , 2014. To the extent any of these options are exercised, there will be further dilution to investors participating in this offering.

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DIVIDEND POLICY

        We have not declared or paid any dividends on our common stock. We currently intend to retain all of our future earnings, if any, for use in our business and do not anticipate paying cash dividends on our common stock in the foreseeable future. Payments of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion and any legal or contractual limitations on our ability to pay dividends.

        As a bank holding company, our ability to pay dividends is affected by the policies and enforcement powers of the Federal Reserve. In addition, because we are a holding company, we are dependent upon the payment of dividends by the Bank to us as our principal source of funds to pay dividends in the future, if any, and to make other payments. The Bank is also subject to various legal, regulatory and other restrictions on its ability to pay dividends and make other distributions and payments to us. See "Regulation and Supervision—Regulatory Limits on Dividends and Distributions." In addition, in the future we may enter into borrowing or other contractual arrangements that restrict our ability to pay dividends.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The selected consolidated financial data for the three months ended March 31, 2014 and 2013 and as of March 31, 2014 presented below have been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The selected consolidated financial data for the years ended December 31, 2013, 2012 and 2011 and the selected consolidated financial data as of December 31, 2013 and 2012 presented below have been derived from our audited financial statements included elsewhere in this prospectus. The selected consolidated financial data as of and for the years ended December 31, 2010 and 2009 and the selected balance sheet data as of December 31, 2011 presented below have been derived from our audited financial statements not included in this prospectus.

        You should read the selected consolidated financial data set forth below in conjunction with the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus.

 
  As of
March 31,
  As of December 31,  
 
  2014   2013   2012   2011   2010   2009  
 
  (Dollars in thousands, except per share amounts)
 

Selected Period End Balance
Sheet Data:

                                     

Cash and cash equivalents

  $ 42,561   $ 34,757   $ 178,492   $ 151,190   $ 163,983   $ 97,193  

Investment securities

    250,878     255,515     242,261     250,526     125,312     52,304  

Goodwill

    15,672     15,672     15,672     15,672     8,522     6,933  

Core deposit intangibles, net of
accumulated amortization

    923     984     1,230     1,245     313      

Loans held for investment

    1,404,275     1,359,415     1,204,689     891,489     555,872     372,976  

Allowance for loan losses

    15,119     16,361     14,151     10,574     7,132     4,833  

Total assets

    1,751,563     1,703,127     1,674,800     1,335,376     874,115     545,441  

Deposits

    1,486,440     1,447,372     1,461,451     1,157,634     702,318     466,710  

Other borrowed funds

    46,846     46,858     15,037     15,544     16,032     16,501  

Total shareholders' equity

    203,600     199,218     188,211     153,423     150,525     53,598  

 
  As of and for the Three Months Ended March 31,   As of and for the Years Ended December 31,  
 
  2014   2013   2013   2012   2011   2010   2009  
 
  (Dollars in thousands, except per share amounts)
 

Selected Income
Statement Data:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Net interest income

  $ 15,676   $ 13,291   $ 57,042   $ 51,608   $ 34,662   $ 21,559   $ 13,893  

Provision for loan
losses

    1,223     781     2,373     8,060     8,391     2,940     4,467  

Net interest income
after provision for
loan losses

    14,453     12,510     54,669     43,548     26,271     18,619     9,426  

Noninterest income

    1,607     1,068     4,812     5,109     2,087     1,835     571  

Noninterest expense

    10,597     9,415     39,965     35,742     26,459     17,797     14,960  

Net income (loss)

    3,488     2,649     12,610     8,535     1,017     1,659     (3,294 )

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  As of and for the Three Months Ended March 31,   As of and for the Years Ended December 31,  
 
  2014   2013   2013   2012   2011   2010   2009  
 
  (Dollars in thousands, except per share amounts)
 

Per Share Data
(Common Stock):

                                           

Earnings (loss) per
common share,
basic

  $ 0.17   $ 0.13   $ 0.61   $ 0.44   $ 0.06   $ 0.14   $ (0.57 )

Earnings (loss) per
common share,
diluted

    0.17     0.13     0.60     0.44     0.06     0.14     (0.57 )

Book value per
common share

    9.80     9.20     9.59     9.07     8.54     8.38     9.35  

Tangible book value per
common share(1)

    9.00     8.39     8.79     8.26     7.60     7.85     8.14  

Weighted average
common shares
outstanding, basic

    20,775,162     20,748,172     20,748,299     19,382,053     17,970,395     11,933,893     5,729,881  

Weighted average
common shares
outstanding, diluted

    20,907,108     20,772,253     20,880,187     19,405,404     17,989,424     11,936,153     5,757,473  

Selected Performance
Metrics:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Return (loss) on
average assets(2)

    0.82 %   0.65 %   0.75 %   0.59 %   0.10 %   0.26 %   (0.73 )%

Return (loss) on
average equity(2)

    7.04     5.68     6.53     5.01     0.67     1.52     (6.04 )

Net interest margin(3)

    3.79     3.35     3.49     3.68     3.47     3.50     3.24  

Efficiency ratio(4)

    61.31     65.57     64.61     63.67     72.00     76.08     103.43  

Loans to deposits ratio

    94.47     83.32     93.92     82.43     77.17     79.14     79.91  

Noninterest expense to
average assets(2)

    2.49     2.30     2.37     2.46     2.57     2.74     3.29  

Selected Credit Quality
Ratios:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Nonperforming assets
to total assets

    1.10 %   1.77 %   1.38 %   1.70 %   0.81 %   1.81 %   0.45 %

Nonperforming loans to
total loans

    0.90     1.99     1.23     1.87     0.81     2.85     0.66  

Total classified assets to
total regulatory capital

    9.61     16.38     11.87     20.10     26.56     26.21     25.76  

Allowance for loan
losses to total loans

    1.08     1.26     1.20     1.17     1.19     1.28     1.30  

Net charge-offs to
average loans
outstanding

    0.18     (0.04 )   0.01     0.43     0.72     0.15     0.86  

Capital Ratios:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Tier 1 capital to
average assets(2)

    10.5 %   10.1 %   10.3 %   10.3 %   10.5 %   17.3 %   8.2 %

Tier 1 capital to
risk-weighted assets

    11.6     12.5     11.4     12.3     12.9     22.4     10.9  

Total capital to
risk-weighted assets

    12.6     13.7     12.5     13.3     14.0     23.6     12.2  

Tangible common
equity to tangible
assets(5)

    10.8     10.5     10.8     10.3     10.4     16.4     8.7  

Average shareholders'
equity to average
total assets(2)

    11.6     11.4     11.4     11.7     14.7     16.8     12.0  

(1)
We calculate tangible book value per common share as total shareholders' equity less goodwill and core deposit intangibles, net of accumulated amortization at the end of the relevant period, divided by the

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    outstanding number of shares of our common stock at the end of the relevant period. Tangible book value per common share is a non-GAAP financial measure, and, as we calculate tangible book value per common share, the most directly comparable GAAP financial measure is book value per common share. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

(2)
We calculate our average assets and average equity for a period by dividing the sum of our total assets or total shareholders' equity, as the case may be, as of the close of business on each day in the relevant period, by the number of days in the period. We have calculated our return on average assets and return on average equity for a period by dividing net income for that period (annualized) by our average assets and average equity, as the case may be, for that period.

(3)
Net interest margin represents net interest income divided by average interest-earning assets.

(4)
Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income, excluding bargain purchase gain from acquisitions. Efficiency ratio, as we calculate it, is a non-GAAP financial measure. The GAAP-based efficiency ratio is noninterest expenses divided by net interest income plus noninterest income. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

(5)
We calculate tangible common equity as total shareholders' equity less goodwill and core deposit intangibles, net of accumulated amortization, and we calculate tangible assets as total assets less goodwill and core deposit intangibles, net of accumulated amortization. Tangible common equity to tangible assets is a non-GAAP financial measure, and, as we calculate tangible common equity to tangible assets, the most directly comparable GAAP financial measure is total shareholders' equity to total assets. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures."

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion and analysis of our financial condition and results of operations should be read in conjunction with "Selected Consolidated Financial Data" and our consolidated financial statements and the accompanying notes included elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that we believe are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under "Forward-Looking Statements," "Risk Factors" and elsewhere in this prospectus, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. We assume no obligation to update any of these forward-looking statements.

Overview

        We are a Texas focused bank holding company headquartered in Houston, Texas. Our wholly owned subsidiary, Green Bank, N.A., a nationally chartered commercial bank, provides commercial and private banking services primarily to Texas based customers through twelve full service branches in the Houston, Dallas and Austin MSAs. The Houston, Dallas and Austin MSAs are our target markets, and we believe their growing economies and attractive demographics, together with our scalable platform, provide us with opportunities for long-term and sustainable growth. As of March 31, 2014, we had consolidated total assets of $1.8 billion, total loans of $1.4 billion (of which $1.39 billion were originated by us and $18.8 million were acquired), total deposits of $1.5 billion and total shareholders' equity of $203.6 million.

        Our emphasis is on continuing to expand our existing business by executing on our proven portfolio banker driven business model as well as pursuing select strategic acquisitions and attracting additional talented portfolio bankers. During 2012 and 2011, we completed the following acquisitions:

        In addition, we recently entered into a definitive agreement for the acquisition of SharePlus. As of March 31, 2014, SharePlus had four branches (three in the Dallas MSA and one in Kentucky), $33.1 million in stockholders' equity, $273.5 million in deposits and $228.7 million in loans. See "—Recent Developments" below for more information.

        We generate most of our revenues from interest income on loans, customer service and loan fees and interest income from securities. We incur interest expense on deposits and other borrowed funds and noninterest expense such as salaries and employee benefits and occupancy expenses. Net interest income is the difference between interest income on earning assets such as loans and securities and interest expense on liabilities such as deposits and borrowings which are used to fund those assets. Net interest income is our largest source of revenue. To evaluate net interest income, we measure and monitor (1) yields on our loans and other interest-earning assets, (2) the costs of our deposits and other funding sources, (3) our net interest spread and (4) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and shareholders' equity also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources.

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        Changes in the market interest rates and interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and shareholders' equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international conditions and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in Texas and in the Houston, Dallas and Austin MSAs, as well as developments affecting the energy, technology and real estate sectors within these markets.

        Factors affecting the volume and cost of our deposits include changes in market interest rates and economic conditions in our target markets, as well as the ongoing execution of our balance sheet management strategy. For example, we experienced significant year over year deposit growth of 26.2% in 2012 and 64.8% in 2011, and average rates on deposits were 0.74% in 2012 and 0.86% in 2011, in part reflecting increased marketing initiatives during these periods as part of our strategic focus on deposit growth to fund future loans as opposed to cost reduction. Conversely, our deposits as of December 31, 2013 decreased by 1.0% compared to our deposits as of December 31, 2012, reflecting a shift in our focus as we sought to deploy our existing deposit-driven liquidity into loans.

        Net income was $12.6 million, $8.5 million and $1.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. The change in net income during 2013 was principally due to increased interest income resulting from growth in loans and reduced provision for loan losses resulting from minimal net loan charge-offs during the period.

        Our efficiency ratio, which represents noninterest expense divided by the sum of net interest income and noninterest income, excluding bargain purchase gain from acquisitions, was 64.6% in 2013, 63.7% in 2012 and 72.0% in 2011. An increase in the efficiency ratio indicates that more resources are being utilized to generate the same volume of income, while a decrease would indicate a more efficient allocation of resources. We also monitor the efficiency ratio in comparison with changes in our total assets and loans, and we believe that maintaining or reducing the efficiency ratio during periods of growth demonstrates the scalability of our operating platform. We expect to continue to benefit from our scalable platform in future periods as we believe we have already incurred a significant portion of the additional overhead expense necessary to support growth as we continue to execute our business strategy.

        Total assets were $1.8 billion as of March 31, 2014 and $1.7 billion as of December 31, 2013. Total deposits were $1.5 billion at March 31, 2014 and $1.4 billion at December 31, 2013. Total loans were $1.4 billion at March 31, 2014, an increase of $44.9 million or 3.3% compared with December 31, 2013. At March 31, 2014 and December 31, 2013, we had $8.7 million and $11.4 million, respectively, of non-accrual loans, and our allowance for loan losses was $15.1 million and $16.4 million, respectively. Shareholders' equity was $203.6 million and $199.2 million at March 31, 2014 and December 31, 2013, respectively.

Recent Developments

        On May 5, 2014, we entered into a definitive agreement to acquire SP Bancorp, Inc., which owns SharePlus Bank, a Texas chartered state bank headquartered in the Dallas MSA for aggregate cash consideration of $46.2 million, subject to adjustment. SharePlus operates as a full-service commercial bank, providing services that include the acceptance of checking and savings deposits and the origination of one- to four-family residential mortgage, mortgage warehouse, commercial real estate, commercial business, home equity, automobile and personal loans. SharePlus' business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in loans and securities. As of March 31, 2014, SharePlus

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had four branches (three in the Dallas MSA and one in Kentucky), $33.1 million in stockholders' equity, $273.5 million in deposits and $228.7 million in loans, and $177.5 million, or 77.6%, of its total loan portfolio was comprised of residential and commercial real estate loans. Subject to satisfaction of certain conditions, including receipt of SharePlus shareholder approval and customary regulatory approvals, the acquisition is expected to close in the third quarter of 2014. This offering and our proposed acquisition of SharePlus are not conditioned on one another.

        Other than SharePlus, we have no current plans, arrangements or understandings to make any acquisitions. However, at any given time we may be evaluating other acquisition candidates, conducting due diligence and may have entered into one or more letters of intent. We cannot assure you that we will enter into any definitive agreements in respect of any such transaction.

Critical Accounting Policies

        Our significant accounting policies are integral to understanding the results reported. Our accounting policies are described in detail in Note 1 to the consolidated financial statements included elsewhere is this prospectus. We believe that of our significant accounting policies, the following may involve a higher degree of judgment and complexity:

        Loans Held for Investment—Loans held for investment are stated at the principal amount outstanding, net of the unearned discount and deferred loan fees or costs. Interest income for loans is recognized principally by the simple interest method.

        Acquired loans are recorded at fair value as of the date of acquisition. Determining the fair value of the acquired loans involves estimating the amount and timing of future expected cash flows and discounting those cash flows at a market rate of interest. The excess of cash flows expected at acquisition over the estimated fair value is considered the accretable discount and is recognized in interest income over the remaining life of the loan on a level yield basis.

        Acquired loans with evidence of credit deterioration and the probability that all contractually required payments will not be collected as of the date of acquisition are accounted for in accordance with ASC 310-30. The difference between contractually required payments at acquisition and the cash flows expected to be collected is considered the non-accretable discount. The non-accretable discount represents the future credit losses expected to be incurred over the life of the loan. Subsequent increases in the expected cash flows will result in a recovery of any previously recorded allowance for loan losses and a reclassification from non-accretable discount to accretable discount.

        Allowance for loan losses—The allowance for loan losses is maintained at a level that management estimates to be appropriate to absorb probable credit losses in the portfolio as of the balance sheet date. This estimate involves numerous assumptions and judgments. Management utilizes a calculation methodology that includes both quantitative and qualitative factors and applies judgment when establishing the factors utilized in the methodology and in assessing the overall adequacy of the calculated results.

        The allowance for loan losses is a valuation allowance for losses incurred on loans. All losses are charged to the allowance when the loss actually occurs or when a determination is made that a loss is probable. Recoveries are credited to the allowance at the time of recovery. Our allowance for loan losses consists of two components, including a general component based upon probable but unidentified losses inherent in the portfolio and a specific component on individual loans that are considered impaired.

        The general component of the allowance for loan losses related to probable but unidentified losses inherent in the portfolio is based on various factors, including our historical loss experience, historical loss experience for peer banks, growth trends, loan concentrations, migration trends between internal loan risk ratings, current economic conditions and other qualitative factors. The other qualitative

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factors considered may include changes in lending policies and procedures, changes in the experience and ability of lending and credit staff and management, changes in the quality of the loan review system and other factors.

        To arrive at the general component of the allowance, loans are first separated into originated and acquired groups and then further separated by loan type for each group. The factors described above are calculated for the applicable loan groups and for each loan type within the applicable group and then applied to the loan balance by type to calculate the general reserve. The actual loss factor is based on our actual three year loss history as a percentage of loans by type. A peer loss factor is calculated by weighting our actual loss history and that of our peer banks as a percentage of loans by type for the same historical three year period. A peer loss factor is added to increase the allowance if our actual loss history is less than the calculated peer loss factor. Additional factors are evaluated based on our loan growth when compared to prior year growth, loan concentrations in groups of similar loan types, migration in our loans by internal risk grade and the level of monitored and classified loans to capital. Management also evaluates various economic indicators, such as state and national unemployment, initial jobless claims, consumer confidence, natural gas price, GDP and a composite city home price index, to establish an economic factor.

        The specific component of the allowance for loan losses is calculated based on a review of individual loans considered impaired. The analysis of impaired loans may be based on the present value of expected future cash flows discounted at the effective loan rate, an observable market price or the fair value of the underlying collateral on collateral dependent loans. In determining the collectability of certain loans, management also considers the fair value of any underlying collateral. The amount ultimately realized may differ from the carrying value of these assets because of economic, operating or other conditions beyond our control.

        Throughout the year, management estimates the probable level of losses to determine whether the allowance for loan losses is adequate to absorb inherent losses in the existing portfolio. Based on these estimates, an amount is charged to the provision for loan losses and credited to the allowance for loan losses in order to adjust the allowance to a level determined to be adequate to absorb inherent losses. If economic conditions or borrower behavior deviate substantially from the assumptions utilized in the allowance calculation, increases in the allowance may be required.

        Estimates of loan losses involve an exercise of judgment. While it is reasonably possible that in the near term we may sustain losses which are substantial relative to the allowance for loan losses, it is the judgment of management that the allowance for loan losses reflected in the most recent consolidated balance sheet is adequate to absorb probable losses that exist in the current loan portfolio.

        Goodwill and Other Intangibles—Goodwill has an indefinite useful life and is subject to an annual impairment test and more frequently if a triggering event occurs indicating that it is more likely than not that the fair value of the Company, which is our only reporting unit, is below the carrying value of its equity. We completed our annual impairment analysis of goodwill as of December 31, 2013, and based on this analysis, we do not believe any of our goodwill is impaired as of such date because the fair value of our equity substantially exceeded its carrying value. The goodwill impairment test involves a two-step process. Under the first step, the estimation of fair value of the reporting unit is compared with its carrying value, including goodwill. If step one indicates a potential impairment, the second step is performed to measure the amount of impairment, if any. Goodwill impairment exists when the implied fair value of goodwill is less than its carrying value. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. As part of our impairment analysis, we use a variety of methodologies in determining the fair value of the reporting unit, including cash flow analyses that are consistent with the assumptions management believes hypothetical marketplace participants would use.

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        Core deposit intangibles are amortized on an accelerated basis over the years expected to be benefited, which we estimate to be approximately six to eight years.

        Emerging Growth Company—Pursuant to the JOBS Act, an emerging growth company can elect to opt in to any new or revised accounting standards that may be issued by the Financial Accounting Standards Board ("FASB") or the SEC otherwise applicable to non-emerging growth companies. We have elected to opt in to such standards, which election is irrevocable.

        Although we are still evaluating the JOBS Act, we may take advantage of some of the reduced regulatory and reporting requirements that are available to us so long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments.

Recently Issued Accounting Pronouncements

        FASB Accounting Standards Update ("ASU") 2011-02, "A Creditor's Determination of Whether a Restructuring is a Troubled Debt Restructuring." ASU 2011-02 was issued on April 5, 2011 and provides additional guidance or clarification to help determine whether a creditor has granted a concession and whether a debtor is experiencing financial difficulties for purposes of determining whether a restructuring constitutes a troubled debt restructuring. Disclosures that relate to activity during a reporting period were required for our financial statements that include periods beginning on or after January 1, 2012. The required disclosures are presented in Note 5 to our audited financial statements included elsewhere in this prospectus.

        FASB ASU No. 2011-05, "Comprehensive Income (Topic 220)—Presentation of Comprehensive Income." Under ASU 2011-05, an entity has the option to present the total of comprehensive income the components of net income and the components of other operating income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income and a total of other comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as a part of the statement of changes in shareholders' equity. ASU 2011-05 does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. ASU 2011-05 was effective for us on January 1, 2012. We elected to prepare separate consolidated statements of comprehensive income.

        FASB ASU No. 2011-08, "Testing Goodwill for Impairment," amends the guidance in FASB ASC 350-20. Under the revised guidance, entities testing goodwill for impairment have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e., step one of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that the fair value of the reporting unit is, more likely than not, to be less than the carrying amount, the two-step impairment test would be required. The adoption of ASU 2011-08 became effective for us on January 1, 2012, and our adoption did not have a significant impact on our financial statements.

        FASB ASU No. 2013-02, "Comprehensive Income (Topic 220)—Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income," amends recent guidance related to the reporting of comprehensive income to enhance the reporting of reclassifications out of accumulated other comprehensive income. The adoption of ASU 2013-02 becomes effective prospectively for us for reporting periods beginning after December 15, 2013.

        FASB ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists," updates prior guidance. The

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update requires that an unrecognized tax benefit be presented in the statements of financial condition as a reduction to a deferred tax asset for a net operating loss carryforward or a tax credit carryforward, except as follows: to the extent a net operating loss carryforward or tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position, or the tax law of the applicable jurisdiction does not require the entity to use and the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the statements of financial condition as a liability and should not be combined with deferred tax assets. The adoption of this ASU becomes effective for us for reporting periods beginning after December 15, 2013.

        FASB ASU No. 2014-04, "Receivables—Troubled Debt Restructuring by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure," clarifies when an in substance foreclosure occurs, that is, when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. This is the point when the consumer mortgage loan should be derecognized and the real property recognized. The adoption of the ASU becomes effective for us for reporting periods beginning after December 31, 2014 and early adoption is permitted.

Results of Operations

Net Interest Income

        Our operating results depend primarily on our net interest income, which is the difference between interest income on interest-earning assets, including loans and securities, and interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds. Interest rate fluctuations, as well as changes in the amount and type of interest-earning assets and interest-bearing liabilities, combine to affect net interest income. Our net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as a "volume change." It is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds, referred to as a "rate change."

        Three months ended March 31, 2014 compared with three months ended March 31, 2013.    Net interest income before the provision for loan losses for the three months ended March 31, 2014 was $15.7 million compared with $13.3 million for the three months ended March 31, 2013, an increase of $2.4 million or 18.0%. The increase in net interest income was primarily due to an increase in average loans outstanding of $193.7 million, or 16.4%, the 3.81% decrease in the average rate on other borrowed funds, the 22 basis point decrease in the rate on interest-bearing demand and savings deposits, and the decrease in average interest-bearing demand and savings deposits of $67.8 million, or 10.1%, partially offset by the 24 basis point decrease in the average yield on the loan portfolio. The increase in average loans outstanding was due to the execution of our growth strategy and the continued strength of our target markets. The decrease in the rate on and volume of interest-bearing demand and savings deposits were due to efforts to reduce cost of funding. The decrease in the average yield on the loan portfolio was due to lower rates on new and renewed loans as a result of market conditions.

        Interest income was $18.1 million in the three months ended March 31, 2014, an increase of $1.9 million over the three months ended March 31, 2013. Interest income on loans was $17.0 million for the first quarter of 2014, an increase of $1.7 million or 11.0% compared with the first quarter of 2013 due to the increase in average loans outstanding, slightly offset by the decrease in the average yield on the loan portfolio. Interest income on securities was $1.0 million during the first quarter of 2014, an increase of $0.3 million over the first quarter of 2013 due to an increase of $19.1 million in the average securities portfolio and a 34 basis point increase in the average yield on the securities portfolio.

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        Interest expense was $2.4 million for the first quarter of 2014, a decrease of $0.5 million over the first quarter of 2013. Average interest-bearing demand deposits increased $7.7 million for the first quarter of 2014 compared to the first quarter of 2013 and the average rate on interest-bearing demand deposits decreased from 0.26% to 0.22% for the same period, resulting in a less than $0.1 million increase in related interest expense. Average money market and savings deposits decreased $75.4 million for the first quarter of 2014 compared to the first quarter of 2013 and the average rate on money market and savings deposits decreased from 0.65% to 0.41%, resulting in a decrease of interest expenses of $0.4 million. Average certificates and other time deposits increased $34.6 million for the first quarter of 2014 compared to the first quarter of 2013 and the average rate decreased from 1.35% to 1.28% for the same period, resulting in an increase in related interest expense of less than $0.1 million. During the first quarter of 2014, average noninterest-bearing deposits increased $36.1 million from $239.5 million during the first quarter of 2013 to $275.6 million. Total cost of funds decreased 17 basis points to 0.65% for the first quarter of 2014 from 0.82% for the first quarter of 2013.

        Net interest margin, defined as net interest income divided by average interest-earning assets, for the first quarter of 2014 was 3.79%, an increase of 44 basis points compared with 3.35% for the first quarter of 2013.

        Year ended December 31, 2013 compared with year ended December 31, 2012.    Net interest income before the provision for loan losses for 2013 was $57.0 million compared with $51.6 million for 2012, an increase of $5.4 million or 10.5%. The increase in net interest income was primarily due to the increase in average loans outstanding of $181.7 million, or 17.1%, partially offset by a 28 basis point decrease in the average yield on the loan portfolio and the increase in average interest-bearing deposits outstanding of $180.2 million. The increase in average loans outstanding was due to the execution of our growth strategy and the continued strength of our target markets. The decrease in the average yield on the loan portfolio was primarily due to lower interest rates on new and renewed loans due to market factors. The increase in average interest-bearing deposits included $89.2 million in money market deposits, $58.6 million in time deposits and approximately $33.1 million resulting from acquired deposits.

        Interest income was $68.5 million in 2013, an increase of $6.9 million over 2012. Interest income on loans was $64.4 million for 2013, an increase of $6.4 million or 11.0% compared with 2012 due to the increase in average loans outstanding, partially offset by the decrease in the average yield on the loan portfolio. Interest income on securities was $3.4 million during 2013, an increase of $0.4 million over 2012 due to an 8 basis point increase in the average yield on the securities portfolio and an increase in the average securities portfolio of $14.2 million.

        Interest expense was $11.4 million for 2013, an increase of $1.4 million over 2012. Average interest-bearing demand deposits increased $103.8 million for 2013 compared to 2012 (approximately $15.3 million of the increase resulted from acquired interest-bearing demand deposits) and the average rate on interest-bearing demand deposits decreased from 0.55% to 0.50% for the same time period, resulting in a $0.2 million increase in related interest expense. Average certificates and other time deposits increased $76.4 million for 2013 compared to 2012 (approximately $17.8 million of the increase resulted from acquired certificates and other time deposits) and the average rate increased from 1.28% to 1.36% for the same time period resulting in an increase in related interest expense of $1.4 million. During 2013, average noninterest-bearing deposits increased $36.0 million from $224.4 million during 2012 to $260.4 million during 2013 (approximately $3.1 million of the increase resulted from acquired non-interest-bearing deposits). Total cost of funds decreased one basis point to 0.77% for the year ended December 31, 2013 from 0.78% for the year ended December 31, 2012.

        Net interest margin, defined as net interest income divided by average interest-earning assets, for 2013 was 3.49%, a decrease of 19 basis points compared with 3.68% for 2012.

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        Year ended December 31, 2012 compared with year ended December 31, 2011.    Net interest income before the provision for loan losses for 2012 was $51.6 million compared with $34.7 million for 2011, an increase of $16.9 million or 48.9%. The increase in net interest income was primarily due to an increase in average loans outstanding of $370.6 million, or 53.6%, and the decrease in the average rate on interest-bearing liabilities from 1.11% to 0.95%, partially offset by a 26 basis point decrease in the average yield on the loan portfolio and a $332.1 million increase in average interest-bearing deposits. The increase in average loans outstanding was due to the execution of our growth strategy and the continued strength of our target markets. The decrease in the average rate on interest-bearing liabilities was primarily due to declines in rates paid on deposit accounts. The decrease in the average yield on the loan portfolio was primarily due to lower interest rates on new and renewed loans due to market factors. The increase in average interest-bearing deposits included $126.3 million resulting from acquired deposits, $124.5 million in money market deposits and $87.1 million in time deposits.

        Interest income was $61.6 million in 2012, an increase of $18.9 million over 2011. Interest income on loans was $58.0 million for 2012, an increase of $18.5 million or 46.7% compared with 2011 due to the increase in average loans outstanding, slightly offset by the decrease in the average yield on the loan portfolio. Interest income on securities was $3.0 million during 2012, an increase of $0.6 million over 2011 due to an increase of $82.7 million in the average securities portfolio, partially offset by a 32 basis point decrease in the average yield on the securities portfolio.

        Interest expense was $10.0 million in 2012, an increase of $1.9 million over 2011. Average interest-bearing demand deposits increased $173.7 million for 2012 compared to 2011 (approximately $55.0 million of the increase resulted from acquired interest-bearing demand deposits) notwithstanding a decrease in the average rate on interest-bearing demand deposits from 0.67% to 0.55% for the same time period resulting in a $0.5 million increase in related interest expense. Average certificates and other time deposits increased $158.4 million for 2012 compared to 2011 (approximately $71.3 million of the increase resulted from acquired certificates and other time deposits) and the average rate decreased from 1.46% to 1.28% for the same time period resulting in an increase in related interest expense of $1.4 million. During 2012, average noninterest-bearing deposits increased $70.6 million (approximately $16.9 million of the increase resulted from acquired noninterest-bearing deposits) from $153.8 million during 2011 to $224.4 million during 2012. This increase in noninterest-bearing funds contributed to a decrease in total cost of funds to 0.78% during 2012 from 0.92% during 2011.

        Net interest margin, defined as net interest income divided by average interest-earning assets, for 2012 was 3.68%, an increase of 21 basis points compared with 3.47% for 2011.

        The following table presents, for the periods indicated, the total dollar amount of average balances, interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. All average

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balances are daily average balances. Any nonaccruing loans have been included in the table as loans carrying a zero yield.

 
  For the Three Months Ended March 31,  
 
  2014   2013  
 
  Average
Outstanding
Balance
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
  Average
Outstanding
Balance
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
 
 
  (Dollars in thousands)
 

Assets

                                     

Interest-earning assets:

                                     

Loans, including fees

  $ 1,374,230   $ 16,976     5.01 % $ 1,180,529   $ 15,288     5.25 %

Securities

    255,039     1,029     1.64     235,944     758     1.30  

Other investments

    9,021     78     3.51     6,343     78     4.99  

Federal funds sold

    596         0.00     781         0.00  

Interest-earning deposits in financial institutions        

    36,621     24     0.27     184,470     121     0.27  
                           

Total interest-earning assets

    1,675,507     18,107     4.38 %   1,608,067     16,245     4.10 %
                           

Allowance for loan losses

    (16,792 )               (14,566 )            

Noninterest-earning assets

    69,815                 66,034              
                                   

Total assets

  $ 1,728,530               $ 1,659,535              
                                   
                                   

Liabilities and Shareholders' Equity

                                     

Interest-bearing liabilities:

                                     

Interest-bearing demand and savings deposits

  $ 603,653   $ 577     0.39 % $ 671,410   $ 1,017     0.61 %

Certificates and other time deposits

    572,389     1,810     1.28     537,831     1,786     1.35  

Securities sold under agreements to repurchase

    6,234     2     0.13     2,171     1     0.19  

Other borrowed funds

    64,338     42     0.26     14,951     150     4.07  
                           

Total interest-bearing liabilities

    1,246,614     2,431     0.79 %   1,226,363     2,954     0.98 %
                           

Noninterest-bearing liabilities:

                                     

Noninterest-bearing demand deposits

    275,584                 239,464              

Other liabilities

    5,314                 4,601              
                                   

Total liabilities

    1,527,512                 1,470,428              
                                   

Shareholders' equity

    201,018                 189,107              
                                   

Total liabilities and shareholders' equity

  $ 1,728,530               $ 1,659,535              
                                   
                                   

Net interest rate spread

                3.59 %               3.12 %

Net interest income and margin(1)

        $ 15,676     3.79 %       $ 13,291     3.35 %
                                   
                                   

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  For the Years Ended December 31,  
 
  2013   2012   2011  
 
  Average
Outstanding
Balance
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
  Average
Outstanding
Balance
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
  Average
Outstanding
Balance
  Interest
Earned/
Interest
Paid
  Average
Yield/
Rate
 
 
  (Dollars in thousands)
 

Assets

                                                       

Interest-earning assets:

                                                       

Loans, including fees

  $ 1,244,106   $ 64,404     5.18 % $ 1,062,431   $ 58,037     5.46 % $ 691,847   $ 39,561     5.72 %

Securities

    247,114     3,371     1.36     232,924     2,977     1.28     150,236     2,408     1.60  

Other investments

    6,315     313     4.96     6,057     285     4.71     5,147     246     4.78  

Federal funds sold

    1,127     1     0.09     1,479     2     0.14     1,326     2     0.15  

Interest-earning deposits in financial institutions        

    137,106     370     0.27     100,997     280     0.28     150,281     482     0.32  
                                       

Total interest-earning assets

    1,635,768     68,459     4.19 %   1,403,888     61,581     4.39 %   998,837     42,699     4.27 %
                                       

Allowance for loan losses

    (14,974 )               (12,907 )               (9,301 )            

Noninterest-earning assets

    67,047                 61,634                 41,764              
                                                   

Total assets

  $ 1,687,841               $ 1,452,615               $ 1,031,300              
                                                   
                                                   

Liabilities and Shareholders' Equity

                                                       

Interest-bearing liabilities:

                                                       

Interest-bearing demand and savings deposits

  $ 640,448   $ 3,210     0.50 % $ 536,669   $ 2,973     0.55 % $ 362,920   $ 2,447     0.67 %

Certificates and other time deposits

    574,294     7,789     1.36     497,923     6,381     1.28     339,536     4,949     1.46  

Securities sold under agreements to repurchase

    3,203     5     0.16     3,109     5     0.16     4,514     6     0.13  

Other borrowed funds

    10,593     413     3.90     15,330     614     4.01     15,770     635     4.03  
                                       

Total interest-bearing liabilities

    1,228,538     11,417     0.93 %   1,053,031     9,973     0.95 %   722,740     8,037     1.11 %
                                       

Noninterest-bearing liabilities:

                                                       

Noninterest-bearing demand deposits

    260,446                 224,441                 153,827              

Other liabilities

    5,723                 4,624                 2,940              
                                                   

Total liabilities

    1,494,707                 1,282,096                 879,507              
                                                   

Shareholders' equity

    193,134                 170,519                 151,793              
                                                   

Total liabilities and shareholders' equity

  $ 1,687,841               $ 1,452,615               $ 1,031,300              
                                                   
                                                   

Net interest rate spread

                3.26 %               3.44 %               3.16 %

Net interest income and margin(1)

        $ 57,042     3.49 %       $ 51,608     3.68 %       $ 34,662     3.47 %
                                                   
                                                   

(1)
The net interest margin is equal to net interest income divided by average interest-earning assets.

        The following table presents information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in

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volume and changes attributable to changes in interest rates. For purposes of this table, changes attributable to both rate and volume which cannot be segregated have been allocated to rate.

 
  For the Three Months Ended March 31,   For the Years Ended December 31,  
 
  2014 vs. 2013   2013 vs. 2012   2012 vs. 2011  
 
  Increase
(Decrease)
Due to Change in
   
  Increase
(Decrease)
Due to Change in
   
  Increase
(Decrease)
Due to Change in
   
 
 
  Volume   Rate   Total   Volume   Rate   Total   Volume   Rate   Total  
 
  (Dollars in thousands)
 

Interest-earning assets:

                                                       

Loans, including fees

  $ 2,508   $ (820 ) $ 1,688   $ 9,924   $ (3,557 ) $ 6,367   $ 21,191   $ (2,715 ) $ 18,476  

Securities

    61     210     271     181     213     394     1,325     (756 )   569  

Other investments

    33     (33 )       12     16     28     43     (4 )   39  

Federal funds sold

                    (1 )   (1 )            

Interest-earning deposits in financial institutions

    (97 )       (97 )   100     (10 )   90     (158 )   (44 )   (202 )
                                       

Total increase (decrease) in interest income

    2,505     (643 )   1,862     10,217     (3,339 )   6,878     22,401     (3,519 )   18,882  
                                       
                                       

Interest-bearing liabilities:

                                                       

Interest-bearing demand and savings deposits

    (103 )   (337 )   (440 )   575     (338 )   237     1,172     (646 )   526  

Certificates and other time deposits

    115     (91 )   24     979     429     1,408     2,309     (877 )   1,432  

Securities sold under agreements to repurchase

    2     (1 )   1                 (2 )   1     (1 )

Other borrowings

    495     (603 )   (108 )   (190 )   (11 )   (201 )   (18 )   (3 )   (21 )
                                       

Total increase (decrease) in interest expense

    509     (1,032 )   (523 )   1,364     80     1,444     3,461     (1,525 )   1,936  
                                       

Increase (decrease) in net interest income

  $ 1,996   $ 389   $ 2,385   $ 8,853   $ (3,419 ) $ 5,434   $ 18,940   $ (1,994 ) $ 16,946  
                                       
                                       

Provision for loan losses

        Our provision for loan losses is established through charges to income in the form of the provision in order to bring our allowance for loan losses to a level deemed appropriate by management based on the factors discussed under "—Financial Condition—Allowance for loan losses." The allowance for loan losses at March 31, 2014 was $15.1 million, representing 1.08% of total loans as of such date. Loans acquired were recorded at fair value based on a discounted cash flow valuation methodology.

        The provision for loan losses for the three months ended March 31, 2014 was $1.2 million compared with $0.8 million for the three months ended March 31, 2013. This increase was due to loan growth and the change in net charge-offs described below. Net charge-offs for the three months ended March 31, 2014 were $2.5 million compared to net recoveries of $0.5 million for the three months ended March 31, 2013. This increase reflected an increase in gross charge-offs from $0.2 million for the three months ended March 31, 2013 to $2.5 million for the three months ended March 31, 2014 and a decrease in recoveries from $0.7 million for the three months ended March 31, 2013 to less than

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$0.1 million for the three months ended March 31, 2014. The gross charge-offs recorded during 2014 are principally related to one relationship which was fully reserved at December 31, 2013 comprised of a $1.2 million commercial and industrial loan and two consumer loans totaling $1.3 million.

        The provision for loan losses for the year ended December 31, 2013 was $2.4 million compared with $8.1 million for the year ended December 31, 2012. This decrease was due to minimal loan losses during the period. Net charge-offs for the years ended December 31, 2013 and 2012 were $0.2 million and $4.5 million, respectively. This decrease of 96.4% reflected a decrease in gross charge-offs from $4.6 million for the year ended December 31, 2012 to $1.5 million for the year ended December 31, 2013 and an increase in recoveries from $0.1 million for the year ended December 31, 2012 to $1.3 million for the year ended December 31, 2013. Of the gross charge-offs recorded during 2012, $2.3 million is comprised of partial charge-offs at the time of foreclosure of two commercial real estate loans. The increase in recoveries in 2013 is due to management's ongoing recovery efforts post charge-off, which resulted in recoveries in three commercial and industrial loans totaling $0.9 million. The provision for loan losses and net charge-offs for the year ended December 31, 2011 were $8.4 million and $4.9 million, respectively.

Noninterest Income

        Our primary sources of recurring noninterest income are customer service fees, loan fees, gains on the sale of loans and available-for-sale securities and other service fees. Noninterest income does not include loan origination fees which are recognized over the life of the related loan as an adjustment to yield using the interest method.

        For the three months ended March 31, 2014, noninterest income totaled $1.6 million, an increase of $0.5 million or 50.5% compared with the three months ended March 31, 2013. This increase was primarily due to increases in loan fees, gains on sale of guaranteed portion of SBA loans and customer service fees.

        For the year ended December 31, 2013, noninterest income totaled $4.8 million, a decrease of $0.3 million or 5.8% compared with 2012. This decrease was primarily due to non-recurring gains on the sale of available-for-sale securities and a bargain purchase gain realized in 2012, partially offset by gain on the sale of the guaranteed portion of SBA loans and increases in loan and customer service fees. For the year ended December 31, 2012, noninterest income totaled $5.1 million, an increase of $3.0 million or 144.8% compared with $2.1 million in 2011. The increase was primarily due to increased gain on the sale of available-for-sale securities, an increase in customer service fees principally resulting from an increase in the volume of bankruptcy trustee accounts and debit card transactions, bargain purchase gain recognized in connection with the Opportunity Bancshares acquisition and an increase in other noninterest income including increases in swap fees and referral fees.

        The following table presents, for the periods indicated, the major categories of noninterest income:

 
  For the Three Months Ended March, 31   For the Years Ended
December 31,
 
 
  2014   2013   2013   2012   2011  
 
  (Dollars in thousands)
 

Customer service fees

  $ 531   $ 430   $ 1,826   $ 1,699   $ 1,048  

Loan fees

    550     309     1,270     930     543  

Gain (loss) on sale of available-for-sale securities, net

            (7 )   950     95  

Gain on sale of guaranteed portion of loans

    430     257     1,229         95  

Bargain purchase gain

                578      

Other

    96     72     494     952     306  
                       

Total noninterest income

  $ 1,607   $ 1,068   $ 4,812   $ 5,109   $ 2,087  
                       
                       

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Noninterest Expense

        For the three months ended March 31, 2014, noninterest expense totaled $10.6 million, an increase of $1.2 million or 12.6% compared with the three months ended March 31, 2013. This increase was primarily due to an increase of $0.7 million in salaries and employee benefits, and an increase of $0.2 million in expense related to real estate acquired by foreclosure.

        For the year ended December 31, 2013, noninterest expense totaled $40.0 million, an increase of $4.2 million or 11.8% compared with 2012. This increase was primarily due to an increase of $3.6 million in salaries and employee benefits, and an increase of $0.5 million in occupancy expense. For the year ended December 31, 2012, noninterest expense totaled $35.7 million, an increase of $9.3 million or 35.1% compared with $26.5 million for the same period in 2011. This increase was primarily related to an increase of $5.8 million in salaries and employee benefits, an increase of $1.1 million in occupancy expense, and an increase of $1.0 million in professional and regulatory fees. These items and other changes in the various components of noninterest expense are discussed in more detail below.

        The following table presents, for the periods indicated, the major categories of noninterest expense:

 
  For the Three
Months Ended
March 31,
  For the Years Ended
December 31,
 
 
  2014   2013   2013   2012   2011  
 
  (Dollars in thousands)
 

Salaries and employee benefits(1)

  $ 6,931   $ 6,230   $ 25,618   $ 22,021   $ 16,271  

Non-staff expenses:

                               

Occupancy

    1,133     1,132     4,725     4,194     3,130  

Professional and regulatory fees

    780     763     3,224     3,506     2,493  

Data processing

    388     360     1,429     1,826     1,142  

Software license and maintenance

    315     197     965     750     413  

Marketing

    172     131     605     626     512  

Loan related

    117     95     813     584     888  

Real estate acquired by foreclosure

    169     (63 )   (595 )   107     69  

Other

    592     570     3,181     2,128     1,541  
                       

Total noninterest expense

  $ 10,597   $ 9,415   $ 39,965   $ 35,742   $ 26,459  
                       
                       

(1)
Total salaries and employee benefits include less than $0.1 million and $0.1 million for the three months ended March 31, 2014 and 2013, respectively, in stock based compensation expense. Total salaries and employee benefits includes $0.4 million, $0.3 million and $0.4 million in 2013, 2012 and 2011, respectively, in stock based compensation expense.

        Salaries and Employee Benefits.    Salaries and benefits were $6.9 million for the three months ended March 31, 2014, an increase of $0.7 million compared with the three months ended March 31, 2013. This increase was primarily due to an increase of 15 employees at March 31, 2014 compared to March 31, 2013. Total salaries and benefits for the three months ended March 31, 2014 included less than $0.1 million in stock based compensation expenses compared with $0.1 million recorded for the three months ended March 31, 2013.

        Salaries and benefits were $25.6 million for the year ended December 31, 2013, an increase of $3.6 million compared to 2012. This increase was primarily due to an increase of 21 employees during 2013, the full year impact of the prior year staffing additions and an increase in compensation resulting

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from our portfolio banker compensation program and general merit compensation increases. Salaries and employee benefits increased $5.8 million to $22.0 million for 2012, compared with $16.3 million for 2011, primarily due to an increase of 39 employees during 2012. Total salaries and benefits for the year ended December 31, 2013 included $0.4 million in stock based compensation expense compared with $0.3 million and $0.4 million recorded for each of the years ended December 31, 2012 and 2011, respectively.

        Occupancy.    Occupancy expenses were $1.1 million for the three months ended March 31, 2014 and 2013. Occupancy expenses were $4.7 million, $4.2 million and $3.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. The increase of $0.5 million or 12.7% for 2013 compared with 2012 was due primarily to the full year impact of the relocation of our operations center to the larger Brookhollow location during 2012, the full year impact of the Richardson branch acquired in the Opportunity Bancshares acquisition and the opening of a de novo branch in Addison, Texas in July 2013. The increase of $1.1 million or 34.0% for 2012 compared with 2011 was due primarily to the full year impact of 2011 facilities additions including the Cleveland, Eagle Springs and Kingwood branches acquired from Main Street Bank and the opening of our Dallas Uptown de novo branch, the acquisition of the Richardson branch of Opportunity Bancshares in May 2012 and the relocation and expansion of our operations center.

        Professional and regulatory fees.    Professional and regulatory fees expenses were $0.8 million for the three months ended March 31, 2014 and 2013. Professional and regulatory fees expenses were $3.2 million, $3.5 million and $2.5 million for the years ended December 31, 2013, 2012 and 2011, respectively. The decrease of $0.3 million or 8.0% for 2013 compared with 2012 was due primarily to the prior year one-time costs of $0.3 million related to the Opportunity Bancshares acquisition. The increase of $1.0 million or 40.6% for 2012 compared with 2011 was due primarily to one-time costs of $0.3 million related to the Opportunity Bancshares acquisition, an increase of $0.3 million in audit, tax and accounting fees, an increase of $0.2 million in regulatory assessments and an increase of $0.1 million in recruiting services.

        Data processing.    Data processing expenses were $0.4 million for the three months ended March 31, 2014 and 2013. Data processing expenses were $1.4 million, $1.8 million and $1.1 million for the years ended December 31, 2013, 2012 and 2011, respectively. The decrease of $0.4 million or 21.7% for 2013 compared with 2012 was due primarily to the prior year one-time cost of $0.5 million related to the Opportunity Bancshares acquisition. The increase of $0.7 million or 59.9% for 2012 compared with 2011 was due primarily to the one-time cost related to the Opportunity Bancshares acquisition.

        Real estate acquired by foreclosure.    Real estate acquired by foreclosure expenses were $0.2 million for the three months ended March 31, 2014 compared to a gain of $0.1 million for the three months ended March 31, 2013. The increase in real estate acquired by foreclosure expenses was primarily due to an increase in net operating expenses.

        Real estate acquired by foreclosure expenses decreased by $0.7 million, or 656.1%, from an expense of $0.1 million for the year ended December 31, 2012 to a gain of $0.6 million for the year ended December 31, 2013, due primarily to an increase in gains on sale of real estate acquired by foreclosure of $0.4 million (primarily due to a $0.5 million gain on the sale of one commercial real estate property), a decrease in expenses of $0.2 million and an increase in rental income of $0.1 million.

        Other.    Other noninterest expenses, which consist of subscription, membership and dues; employee expenses including travel, meals, entertainment and education; postage and delivery; amortization of intangibles; supplies, printing and reproduction; insurance; account related losses; correspondent bank fees; customer program expenses; and other operating expenses such as settlement of claims, were $0.6 million for the three months ended March 31, 2014 and 2013.

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        Other noninterest expenses were $3.2 million, $2.1 million and $1.5 million for the years ended December 31, 2013, 2012 and 2011, respectively. The increase of $1.1 million or 49.5% for 2013 compared with 2012 was due primarily to $0.4 million to settle claims primarily related to an acquired loan and $0.2 million provision for credit losses on off-balance sheet exposure. The increase of $0.6 million or 38.1% for 2012 compared with 2011 was due primarily to an increase of $0.2 million in amortization of intangibles resulting from the Opportunity Bancshares acquisition and the full year of the Main Street Bank acquisition, and an increase of $0.2 million in postage and delivery resulting principally from the increased branch count and the increase in account volume.

        Efficiency Ratio.    The efficiency ratio is a supplemental financial measure utilized in our internal evaluation of our performance and is not defined under GAAP. Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income, excluding bargain purchase gain from acquisitions. An increase in the efficiency ratio indicates that more resources are being utilized to generate the same volume of income, while a decrease would indicate a more efficient allocation of resources. Our efficiency ratio was 61.3% for the three months ended March 31, 2014, compared with 65.6% for the three months ended March 31, 2013. The decrease was primarily due to increased net interest income and noninterest income.

        Our efficiency ratio was 64.6% for the year ended December 31, 2013, compared with 63.7% for the year ended December 31, 2012. This increase was primarily due to the full year impact of expense increases originating in 2012. Our efficiency ratio was 72.0% for the year ended December 31, 2011.

Income Taxes

        The amount of income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income and the amount of other non-deductible expenses. For the three months ended March 31, 2014, income tax expense was $2.0 million compared with $1.5 million for the three months ended March 31, 2013. The increase was primarily attributable to higher pre-tax net earnings. The effective income tax rate for the three months ended March 31, 2014 and 2013 was 36%, as compared to U.S. statutory rate of 35%. The effective income tax rate differed from the U.S. statutory rate primarily due to non-deductible expenses.

        For the year ended December 31, 2013, income tax expense was $6.9 million compared with $4.4 million for the year ended December 31, 2012 and $0.9 million for the year ended December 31, 2011. The increases were primarily attributable to higher pre-tax net earnings. The effective income tax rates for the years ended December 31, 2013, 2012 and 2011 was 35%, 34% and 46%, respectively, as compared to U.S. statutory rates of 35%, 34% and 34%, respectively. The effective income tax rate for the year ended December 31, 2011 differed from the U.S. statutory rate of 34% primarily due to the effect of state tax expense and non-deductible expenses on a relatively low level of pre-tax income.

Impact of Inflation

        Our consolidated financial statements and related notes included elsewhere in this prospectus have been prepared in accordance with GAAP. These require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative value of money over time due to inflation or recession.

        Unlike many industrial companies, substantially all of our assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation.

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Financial Condition

Loan Portfolio

        At March 31, 2014, total loans were $1.4 billion, an increase of $44.9 million or 3.3% compared with December 31, 2013. This increase was primarily due to the execution of our growth strategy and the continued strength of our target markets. None of our loans were classified as held for sale at March 31, 2014.

        At December 31, 2013, total loans were $1.4 billion, an increase of $154.7 million or 12.8% compared with $1.2 billion at December 31, 2012. This increase was primarily due to the execution of our growth strategy and the continued strength of our target markets. None of our loans were classified as held for sale at December 31, 2013.

        At December 31, 2012, total loans were $1.2 billion, an increase of $311.4 million or 34.9% compared with $893.3 million at December 31, 2011. Loans at December 31, 2011 included $1.8 million of loans held for sale. Loan growth in 2012 was primarily due to the execution of our growth strategy and the continued strength of our target markets, and was impacted by the completion of the Opportunity Bancshares acquisition during the year.

        At March 31, 2014, total loans were 94.5% of deposits and 80.2% of total assets. At December 31, 2013, total loans were 93.9% of deposits and 79.8% of total assets. At December 31, 2012, total loans were 82.4% of deposits and 71.9% of total assets.

        Lending activities originate from the efforts of our portfolio bankers, with an emphasis on lending to individuals, professionals, small to medium-sized businesses and commercial companies located in the Houston, Dallas and Austin MSAs.

        We provide commercial lines of credit, working capital loans, commercial real estate-backed loans (including loans secured by owner occupied commercial properties), reserve-based energy loans, mortgage-warehouse lines, term loans, equipment financing, acquisition, expansion and development loans, borrowing base loans, real estate construction loans, homebuilder loans, SBA loans, purchased receivables financing, letters of credit and other loan products to national and regional companies, oil and gas producers, real estate developers, mortgage lenders, manufacturing and industrial companies and other businesses.

        The types of loans we make to consumers include residential real estate loans, home equity loans, home equity lines of credit ("HELOCs"), installment loans, unsecured and secured personal lines of credit, overdraft protection and letters of credit.

        See "Business—Our Banking Services—Lending Activities—Loan Types" for further information about the types of loans we offer.

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        The following table summarizes our loan portfolio by type of loan as of the dates indicated:

 
  March 31,   December 31,  
 
  2014   2013   2012  
 
  Amount   Percent   Amount   Percent   Amount   Percent  
 
  (Dollars in thousands)
 

Commercial:

                                     

Commercial and industrial

  $ 675,812     48.1 % $ 681,290     50.1 % $ 637,769     52.9 %

Owner occupied commercial real estate

    152,515     10.9     156,961     11.6     114,287     9.5  

Commercial real estate

    310,379     22.1     267,011     19.6     213,250     17.7  

Construction, land & land development

    152,327     10.8     140,067     10.3     135,858     11.3  
                           

Total commercial

    1,291,033     91.9     1,245,329     91.6     1,101,164     91.4  
                           

Consumer:

                                     

Residential mortgage

    107,408     7.7     106,362     7.8     94,996     7.9  

Other consumer

    5,834     0.4     7,724     0.6     8,529     0.7  
                           

Total consumer

    113,242     8.1     114,086     8.4     103,525     8.6  
                           

Total loans held for investment

  $ 1,404,275     100.0 % $ 1,359,415     100.0 % $ 1,204,689     100.0 %
                           
                           

Total loans held for sale

                         

 

 
  December 31,  
 
  2011   2010   2009  
 
  Amount   Percent   Amount   Percent   Amount   Percent  
 
  (Dollars in thousands)
 

Commercial:

                                     

Commercial and industrial

  $ 405,298     45.5 % $ 250,800     45.1 % $ 136,570     36.6 %

Owner occupied commercial real estate

    119,354     13.4     90,610     16.3     46,492     12.5  

Commercial real estate

    170,492     19.1     100,426     18.1     76,205     20.4  

Construction, land & land development

    99,398     11.1     51,871     9.3     48,360     13.0  
                           

Total commercial

    794,542     89.1     493,707     88.8     307,627     82.5  
                           

Consumer:

                                     

Residential mortgage

    84,252     9.5     55,274     10.0     55,890     15.0  

Other consumer

    12,695     1.4     6,891     1.2     9,459     2.5  
                           

Total consumer

    96,947     10.9     62,165     11.2     65,349     17.5  
                           

Total loans held for investment

  $ 891,489     100.0 % $ 555,872     100.0 % $ 372,976     100.0 %
                           
                           

Total loans held for sale

  $ 1,811     100.0 %                

        Our owner occupied commercial real estate loans were $152.5 million at March 31, 2014, a decrease of $4.4 million or 2.8% compared to December 31, 2013. This decrease was primarily related to repayments. Our owner occupied commercial real estate loans increased $42.7 million or 37.3% to $157.0 million at December 31, 2013 from $114.3 million at December 31, 2012. This increase was primarily related to the execution of our growth strategy and the continued strength of our target markets. Our owner occupied commercial real estate loans decreased $5.1 million or 4.2% to $114.3 million at December 31, 2012 from $119.4 million at December 31, 2011. This decrease was primarily related to repayments.

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        Our commercial real estate loans were $310.4 million at March 31, 2014, an increase of $43.4 million or 16.2% compared to December 31, 2013. This increase was primarily related to the execution of our growth strategy and the continued strength of our target markets. Our commercial real estate loans increased $53.8 million or 25.2% to $267.0 million at December 31, 2013 from $213.3 million at December 31, 2012. This increase was primarily related to the execution of our growth strategy and the continued strength of our target markets. Our commercial real estate loans increased $42.8 million or 25.1% to $213.3 million at December 31, 2012 from $170.5 million at December 31, 2011. This increase was primarily related to the execution of our growth strategy and the continued strength of our target markets.

        The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with predetermined interest rates and floating rates in each maturity range as of March 31, 2014 are summarized in the following table:

 
  Due in
One Year
or Less
  Due After
One Year
Through
Five Years
  Due After
Five Years
  Total  
 
  (Dollars in thousands)
 

Commercial:

                         

Commercial and industrial

  $ 206,300   $ 426,146   $ 43,366   $ 675,812  

Owner occupied commercial real estate

    7,015     97,658     47,842     152,515  

Commercial real estate

    14,406     228,182     67,791     310,379  

Construction, land & land development

    24,691     83,768     43,868     152,327  

Consumer:

                         

Residential mortgage

    5,573     64,213     37,622     107,408  

Other consumer

    4,911     885     38     5,834  
                   

Total

  $ 262,896   $ 900,852   $ 240,527   $ 1,404,275  
                   
                   

Loans with a predetermined interest rate

  $ 23,563   $ 243,852   $ 57,126   $ 324,541  

Loans with a floating interest rate

    239,333     657,000     183,401     1,079,734  
                   

Total

  $ 262,896   $ 900,852   $ 240,527   $ 1,404,275