ABTX Allegiance Bancshares Inc

Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $12.0 million and diluted earnings per share of $0.57 for the third quarter 2019 compared to net income of $8.9 million and diluted earnings per share of $0.65 for the third quarter 2018.  The third quarter 2019 included $1.4 million of pre-tax severance expense.  Net income for the nine months ended September 30, 2019 was $39.0 million, or $1.81 per diluted share, compared to net income of $24.1 million, or $1.77 per diluted share, for the nine months ended September 30, 2018.  The nine months ended September 30, 2019 results included $1.4 million of pre-tax severance expense and $1.3 million of pre-tax acquisition and merger-related expenses. The nine months ended September 30, 2018 results included $821 thousand of pre-tax acquisition and merger-related expenses.

“The third quarter was very productive for us and culminated with the completion of a $60 million subordinated debt offering,” said George Martinez, Allegiance’s Chairman and Chief Executive Officer.  “Securing this attractive capital, positions us well for future growth,” continued Martinez.

“We are dedicated to taking great care of our customers by building on long-lasting relationships as we help them reach their financial goals.  We are also keenly focused on developing new customer relationships and adding to our market share.  Our personalized service to all of our customers is what will continue to set us apart as the premier bank in the Houston region and what will continue to drive our long-term financial success. We are in a tremendous position of strength and are encouraged about our prospects for the remainder of the year as we work to leverage our talent and capital to produce improved returns for our shareholders,” concluded Martinez.

Third Quarter 2019 Results

Net interest income before the provision for loan losses in the third quarter 2019 increased $16.8 million, or 59.9%, to $44.8 million from $28.0 million for the third quarter 2018 primarily due to a $1.55 billion, or 56.6%, increase in average interest-earning assets for the same period.  This increase was mainly due to the Post Oak Bancshares, Inc. acquisition during the fourth quarter of 2018 as well as organic growth for the year-over-year period.  Net interest income before provision for loan losses for the third quarter 2019 decreased from $45.6 million in the second quarter 2019.  The net interest margin on a tax equivalent basis increased 6 basis points to 4.16% for the third quarter 2019 from 4.10% for the third quarter 2018 and decreased 17 basis points from 4.33% for the second quarter 2019. Core net interest margin on a tax equivalent basis excludes the impact of acquisition accounting adjustments and was 3.97% for the third quarter 2019 compared to 4.07% for the second quarter 2019. Please refer to the non-GAAP reconciliation on page 10. 

Noninterest income for the third quarter 2019 was $2.9 million, an increase of $961 thousand, or 49.8%, compared to $1.9 million for the third quarter 2018 and decreased $956 thousand, or 24.9%, compared to $3.8 million for the second quarter 2019.  Noninterest income for the second quarter 2019 included $846 thousand of gain on the sale of securities. 

Noninterest expense for the third quarter 2019 increased $10.8 million, or 56.6%, to $30.0 million from $19.2 million for the third quarter 2018, and decreased slightly compared to the second quarter 2019. The increase over the prior year quarter was primarily due to additional expenses associated with increased headcount and bank offices from the Post Oak acquisition. Additionally, the third quarter 2019 included $1.4 million of severance expense partially offset by a $676 thousand FDIC Small Bank Assessment Credit.

In the third quarter 2019, Allegiance’s efficiency ratio was 62.88% compared to 61.93% for the second quarter 2019 and 63.95% for the third quarter 2018.  Third quarter 2019 annualized returns on average assets, average equity and average tangible equity were 0.98%, 6.73% and 10.33%, respectively, compared to 1.19%, 8.10% and 12.52%, respectively, for the second quarter 2019.  Annualized returns on average assets, average equity and average tangible equity for the third quarter 2018 were 1.18%, 10.80% and 12.40%, respectively.

Nine Months Ended September 30, 2019 Results

Net interest income before provision for loan losses for the nine months ended September 30, 2019 increased $52.3 million, or 63.2%, to $135.0 million from $82.7 million for the nine months ended September 30, 2018 primarily due to a $1.56 billion, or 58.4%, increase in average interest-earning assets over the prior year associated with the Post Oak acquisition.  The net interest margin on a tax equivalent basis increased 10 basis points to 4.27% for the nine months ended September 30, 2019 from 4.17% for the nine months ended September 30, 2018. Core net interest margin on a tax equivalent basis for the nine months ended September 30, 2019 would have been 4.02%, compared to 4.17% for the nine months ended September 30, 2018. Please refer to the non-GAAP reconciliation on page 10. 

Noninterest income for the nine months ended September 30, 2019 was $10.0 million, an increase of $4.6 million, or 86.3%, compared to $5.4 million for the nine months ended September 30, 2018 due primarily to additional noninterest income resulting from the Post Oak acquisition along with the gain on sale of securities.

Noninterest expense for the nine months ended September 30, 2019 increased $33.5 million, or 58.0%, to $91.2 million from $57.7 million for the nine months ended September 30, 2018. The increase in noninterest expense over the nine months ended September 30, 2018 was primarily due to additional expenses associated with increased headcount and bank offices along with merger-related expenses from the Post Oak acquisition. Additionally, the nine months ended 2019 included $1.4 million of severance expense partially offset by a $676 thousand FDIC Small Bank Assessment Credit.

Allegiance’s efficiency ratio decreased from 65.52% for the nine months ended September 30, 2018 to 63.25% for the nine months ended September 30, 2019. For the nine months ended September 30, 2019, returns on average assets, average equity and average tangible equity were 1.09%, 7.36% and 11.35%, respectively, compared to 1.10%, 10.16% and 11.72%, respectively, for the nine months ended September 30, 2018.

Financial Condition

Total assets at September 30, 2019 increased $111.6 million to $4.91 billion compared to $4.79 billion at June 30, 2019 and increased $1.87 billion compared to $3.04 billion at September 30, 2018, primarily due to the Post Oak acquisition and organic loan growth.

Total loans at September 30, 2019 increased $28.0 million, or 2.9% (annualized), to $3.89 billion compared to $3.86 billion at June 30, 2019 and increased $1.45 billion, or 59.2%, compared to $2.44 billion at September 30, 2018, primarily due to loans acquired in the Post Oak acquisition. Core loans, which exclude the mortgage warehouse portfolio, increased $37.6 million, or 4.0% (annualized), to $3.85 billion at September 30, 2019 from $3.81 billion at June 30, 2019 and increased $1.46 billion, or 60.9%, from $2.39 billion at September 30, 2018.  Excluding loans acquired from Post Oak at acquisition of $1.16 billion, core loans at September 30, 2019 increased $297.4 million, from September 30, 2018.

Deposits at September 30, 2019 increased $36.8 million, or 3.8% (annualized), to $3.90 billion compared to $3.86 billion at June 30, 2019 and increased $1.46 billion, or 60.1%, compared to $2.43 billion at September 30, 2018, primarily related to the Post Oak acquisition.

Asset Quality

Nonperforming assets totaled $42.9 million, or 0.88% of total assets, at September 30, 2019, compared to $37.7 million, or 0.79%, of total assets, at June 30, 2019, and $16.9 million, or 0.56% of total assets, at September 30, 2018. The allowance for loan losses was 0.77% of total loans at September 30, 2019, 0.72% of total loans at June 30, 2019 and 0.97% of total loans at September 30, 2018. The decrease in the allowance for loan losses as a percentage of loans from September 30, 2018 reflects the loans acquired in the Post Oak acquisition that were recorded at fair value without an allowance for loan losses at acquisition date.

The provision for loan losses for the third quarter 2019 was $2.6 million, or 0.27% (annualized) of average loans, compared to $1.4 million, or 0.15% (annualized) of average loans, for the second quarter 2019.

Third quarter 2019 net charge-offs were $729 thousand, or 0.07% (annualized) of average loans, compared to net charge-offs of $590 thousand, or 0.06% (annualized) of average loans, for the second quarter 2019 and $245 thousand, or 0.04% (annualized) of average loans, for the third quarter 2018. Net charge-offs for the nine months ended September 30, 2019 were $1.5 million, or 0.18% (annualized) of average loans, compared to net charge-offs for the nine months ended September 30, 2018 of $1.3 million, or 0.08% (annualized) of average loans.

GAAP Reconciliation of Non-GAAP Financial Measures

Allegiance’s management uses certain non-GAAP financial measures to evaluate its performance. Please refer to the GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures on page 10 of this earnings release for a reconciliation of these non-GAAP financial measures.

Conference Call

As previously announced, Allegiance’s management team will host a conference call on Friday, October 25, 2019 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its third quarter 2019 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 1986475.  Alternatively, a simultaneous audio-only webcast may be accessed via the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Upcoming Events. If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under News and Events, Event Calendar, Past Events.

Allegiance Bancshares, Inc.

As of September 30, 2019, Allegiance was a $4.91 billion asset Houston, Texas-based bank holding company. Through its wholly owned subsidiary, Allegiance Bank, Allegiance provides a diversified range of commercial banking services primarily to small to medium-sized businesses and individual customers in the Houston region. Allegiance’s super-community banking strategy was designed to foster strong customer relationships while benefiting from a platform and scale that is competitive with larger local and regional banks.  As of September 30, 2019, Allegiance Bank operated 27 full-service banking locations in the Houston region, which we define as the Houston-The Woodlands-Sugar Land and Beaumont-Port Arthur metropolitan statistical areas, with 26 bank offices and one loan production office in the Houston metropolitan area and one bank office location in Beaumont, just outside of the Houston metropolitan area. Visit www.allegiancebank.com for more information.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This release may contain forward-looking statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, present expectations, estimates and projections about Allegiance and its subsidiaries. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “continues,” “anticipates,” “intends,” “projects,” “estimates,” “potential,” “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 words. Forward-looking statements include information concerning Allegiance’s 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. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Allegiance’s control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Allegiance can: continue to develop and maintain new and existing customer and community relationships; successfully implement its growth strategy, including identifying suitable acquisition targets and integrating the businesses of acquired companies and banks; sustain its current internal growth rate; provide quality and competitive products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its performance objectives. These and various other risk factors are discussed in Allegiance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in other reports and statements Allegiance has filed with the Securities and Exchange Commission. Copies of such filings are available for download free of charge from the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Financial Information, SEC Filings.  Any forward-looking statement made by Allegiance in this release speaks only as of the date on which it is made. Factors or events that could cause Allegiance’s actual results to differ may emerge from time to time, and it is not possible for Allegiance to predict all of them. Allegiance undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

		2019												2018
		September 30				June 30				March 31				December 31				September 30
		(Dollars in thousands)
Cash and cash equivalents		$	300,619			$	232,607			$	258,843			$	268,947			$	191,468
Available for sale securities			353,000				348,173				345,716				337,293				300,115
Total loans			3,886,004				3,857,963				3,806,161				3,708,306				2,440,926
Allowance for loan losses			(29,808	)			(27,940	)			(27,123	)			(26,331	)			(23,586	)
Loans, net			3,856,196				3,830,023				3,779,038				3,681,975				2,417,340
Goodwill			223,642				223,642				223,642				223,125				39,389
Core deposit intangibles, net			23,053				24,231				25,409				26,587				2,688
Premises and equipment, net			67,175				59,690				60,327				41,717				18,970
Other real estate owned			8,333				6,294				1,152				630				1,801
Bank owned life insurance			26,947				26,794				26,639				26,480				22,838
Other assets			46,875				42,757				48,036				48,495				40,930
Total assets		$	4,905,840			$	4,794,211			$	4,768,802			$	4,655,249			$	3,035,539
Noninterest-bearing deposits		$	1,227,839			$	1,173,423			$	1,181,920			$	1,209,300			$	789,705
Interest-bearing deposits			2,669,646				2,687,217				2,598,141				2,453,236				1,644,086
Total deposits			3,897,485				3,860,640				3,780,061				3,662,536				2,433,791
Borrowed funds			159,501				146,998				201,995				225,493				211,569
Subordinated debt			107,771				49,019				48,959				48,899				48,839
Other liabilities			34,775				32,853				34,010				15,337				13,209
Total liabilities			4,199,532				4,089,510				4,065,025				3,952,265				2,707,408
Common stock			20,737				21,147				21,484				21,938				13,397
Capital surplus			529,688				541,979				556,184				571,803				221,762
Retained earnings			149,389				137,342				123,094				112,131				98,968
Accumulated other comprehensive  income (loss)			6,494				4,233				3,015				(2,888	)			(5,996	)
Total shareholders’ equity			706,308				704,701				703,777				702,984				328,131
Total liabilities and equity		$	4,905,840			$	4,794,211			$	4,768,802			$	4,655,249			$	3,035,539

 

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

		Three Months Ended																				Year-to-Date
		2019												2018								2019				2018
		September 30				June 30				March 31				December 31				September 30				September 30				September 30
		(Dollars in thousands, except per share data)
INTEREST INCOME:
Loans, including fees		$	55,790			$	56,016			$	54,189			$	53,272			$	32,988			$	165,995			$	94,951
Securities:																						.
Taxable			2,090				1,837				982				844				636				4,909				1,881
Tax-exempt			483				692				1,290				1,445				1,447				2,465				4,357
Deposits in other financial  institutions			302				401				688				742				265				1,391				731
Total interest income			58,665				58,946				57,149				56,303				35,336				174,760				101,920
INTEREST EXPENSE:
Demand, money market and  savings deposits			4,975				4,513				3,728				3,367				1,248				13,216				3,111
Certificates and other time  deposits			6,909				7,008				6,256				5,358				4,051				20,173				10,120
Borrowed funds			1,183				1,118				1,827				1,008				1,272				4,128				3,780
Subordinated debt			761				736				735				732				729				2,232				2,168
Total interest expense			13,828				13,375				12,546				10,465				7,300				39,749				19,179
NET INTEREST INCOME			44,837				45,571				44,603				45,838				28,036				135,011				82,741
Provision for loan losses			2,597				1,407				1,002				2,964				—				5,006				1,284
Net interest income after provision  for loan losses			42,240				44,164				43,601				42,874				28,036				130,005				81,457
NONINTEREST INCOME:
Nonsufficient funds fees			168				139				162				190				175				469				565
Service charges on deposit  accounts			379				365				325				363				177				1,069				506
Gain on sale of securities			—				846				—				—				—				846			—
Gain (loss) on sales of other real  estate and repossessed assets			—				70				1				(429	)			—				71				1
Bank owned life insurance			153				155				159				163				137				467				416
Rebate from correspondent bank			900				884				896				988				613				2,680				1,621
Other			1,289				1,386				1,746				1,059				826				4,421				2,270
Total noninterest income			2,889				3,845				3,289				2,334				1,928				10,023				5,379
NONINTEREST EXPENSE:
Salaries and employee benefits			20,221				19,415				19,684				18,167				12,965				59,320				38,537
Net occupancy and equipment			1,973				2,088				2,078				1,959				1,281				6,139				3,886
Depreciation			822				756				753				802				490				2,331				1,330
Data processing and software  amortization			2,058				1,735				1,597				1,485				1,226				5,390				3,635
Professional fees			667				527				599				670				303				1,793				1,339
Regulatory assessments and  FDIC insurance			(41	)			802				728				776				505				1,489				1,533
Core deposit intangibles  amortization			1,178				1,178				1,178				1,229				195				3,534				586
Communications			455				468				430				416				262				1,353				769
Advertising			449				617				704				704				351				1,770				1,021
Acquisition and merger-related  expenses			—				153				1,173				840				196				1,326				821
Other			2,227				2,341				2,191				1,998				1,390				6,759				4,284
Total noninterest expense			30,009				30,080				31,115				29,046				19,164				91,204				57,741
INCOME BEFORE INCOME TAXES			15,120				17,929				15,775				16,162				10,800				48,824				29,095
Provision for income taxes			3,073				3,681				3,097				2,999				1,921				9,851				4,949
NET INCOME		$	12,047			$	14,248			$	12,678			$	13,163			$	8,879			$	38,973			$	24,146
EARNINGS PER SHARE
Basic		$	0.57			$	0.67			$	0.58			$	0.60			$	0.66			$	1.83			$	1.81
Diluted		$	0.57			$	0.66			$	0.58			$	0.59			$	0.65			$	1.81			$	1.77

 

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

		Three Months Ended																				Year-to-Date
		2019												2018								2019				2018
		September 30				June 30				March 31				December 31				September 30				September 30				September 30
		(Dollars and share amounts in thousands, except per share data)
Net income		$	12,047			$	14,248			$	12,678			$	13,163			$	8,879			$	38,973			$	24,146
Earnings per share, basic		$	0.57			$	0.67			$	0.58			$	0.60			$	0.66			$	1.83			$	1.81
Earnings per share, diluted		$	0.57			$	0.66			$	0.58			$	0.59			$	0.65			$	1.81			$	1.77
Return on average assets(A)			0.98	%			1.19	%			1.08	%			1.12	%			1.18	%			1.09	%			1.10	%
Return on average equity(A)			6.73	%			8.10	%			7.27	%			7.49	%			10.80	%			7.36	%			10.16	%
Return on average tangible  equity(A)(B)			10.33	%			12.52	%			11.22	%			11.66	%			12.40	%			11.35	%			11.72	%
Net interest margin  (tax equivalent)(C)			4.16	%			4.33	%			4.31	%			4.45	%			4.10	%			4.27	%			4.17	%
Core net interest margin  (tax equivalent)(B)			3.97	%			4.07	%			4.03	%			4.16	%			4.10	%			4.02	%			4.17	%
Efficiency ratio(D)			62.88	%			61.93	%			64.97	%			60.30	%			63.95	%			63.25	%			65.52	%
Capital Ratios
Allegiance Bancshares, Inc.  (Consolidated)
Equity to assets			14.40	%			14.70	%			14.76	%			15.10	%			10.81	%			14.40	%			10.81	%
Tangible equity to tangible  assets(B)			9.86	%			10.05	%			10.06	%			10.29	%			9.56	%			9.86	%			9.56	%
Estimated common equity  tier 1 capital			11.28	%			11.34	%			11.37	%			11.76	%			11.17	%			11.28	%			11.16	%
Estimated tier 1 risk-based  capital			11.51	%			11.58	%			11.61	%			12.01	%			11.53	%			11.51	%			11.51	%
Estimated total risk-based  capital			14.70	%			13.27	%			13.28	%			13.70	%			13.94	%			14.70	%			13.92	%
Estimated tier 1 leverage  capital			10.06	%			10.17	%			10.25	%			10.61	%			10.23	%			10.06	%			10.23	%
Allegiance Bank
Estimated common equity  tier 1 capital			12.28	%			12.02	%			11.67	%			11.83	%			11.24	%			12.28	%			11.23	%
Estimated tier 1 risk-based  capital			12.28	%			12.02	%			11.67	%			11.83	%			11.24	%			12.28	%			11.23	%
Estimated total risk-based  capital			14.01	%			13.71	%			13.34	%			13.53	%			13.65	%			14.01	%			13.64	%
Estimated tier 1 leverage  capital			10.73	%			10.57	%			10.31	%			10.45	%			9.98	%			10.73	%			9.98	%
Other Data
Weighted average shares:
Basic			20,981				21,257				21,733				21,908				13,371				21,321				13,320
Diluted			21,256				21,546				22,040				22,210				13,637				21,591				13,605
Period end shares  outstanding			20,737				21,147				21,484				21,938				13,397				20,737				13,397
Book value per share		$	34.06			$	33.32			$	32.76			$	32.04			$	24.49			$	34.06			$	24.49
Tangible book value per  share(B)		$	22.16			$	21.60			$	21.17			$	20.66			$	21.35			$	22.16			$	21.35

1. Interim periods annualized.
2. Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 10 of this Earnings Release.
3. Net interest margin represents net interest income divided by average interest-earning assets.
4. Represents total noninterest expense divided by the sum of net interest income plus noninterest income, excluding net gains and losses on the sale of loans, securities and assets. Additionally, taxes and provision for loan losses are not part of this calculation.

 

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

		Three Months Ended
		September 30, 2019										June 30, 2019										September 30, 2018
		Average Balance			Interest Earned/ Interest Paid			Average Yield/ Rate				Average Balance				Interest Earned/ Interest Paid			Average Yield/ Rate			Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate
		(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans		$	3,870,205		$	55,790			5.72	%		$	3,819,687			$	56,016		5.88	%		$	2,384,966			$	32,988			5.49	%
Securities			359,392			2,573			2.84	%			350,004				2,529		2.90	%			304,254				2,083			2.72	%
Deposits in other financial  institutions and other			55,070			302			2.17	%			63,962				401		2.52	%			47,518				265			2.21	%
Total interest-earning assets			4,284,667		$	58,665			5.43	%			4,233,653			$	58,946		5.58	%			2,736,738			$	35,336			5.12	%
Allowance for loan losses			(28,593	)									(27,125	)									(24,059	)
Noninterest-earning assets			600,004										586,435										276,997
Total assets		$	4,856,078									$	4,792,963									$	2,989,676
Liabilities and  Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand  deposits		$	332,652		$	943			1.13	%		$	350,147			$	1,152		1.32	%		$	181,284			$	389			0.85	%
Money market and savings  deposits			1,099,937			4,032			1.45	%			994,557				3,361		1.36	%			530,240				859			0.64	%
Certificates and other time  deposits			1,269,886			6,909			2.16	%			1,331,955				7,008		2.11	%			896,253				4,051			1.79	%
Borrowed funds			158,358			1,183			2.96	%			155,969				1,118		2.87	%			234,776				1,272			2.15	%
Subordinated debt			51,607			761			5.85	%			48,986				736		6.03	%			48,805				729			5.93	%
Total interest-bearing  liabilities			2,912,440		$	13,828			1.88	%			2,881,614			$	13,375		1.86	%			1,891,358			$	7,300			1.53	%
Noninterest-Bearing  Liabilities:
Noninterest-bearing demand  deposits			1,198,564										1,173,662										761,935
Other liabilities			35,030										32,525										10,179
Total liabilities			4,146,034										4,087,801										2,663,472
Shareholders' equity			710,044										705,162										326,204
Total liabilities and  shareholders' equity		$	4,856,078									$	4,792,963									$	2,989,676
Net interest rate spread									3.55	%									3.72	%										3.59	%
Net interest income and margin					$	44,837			4.15	%						$	45,571		4.32	%						$	28,036			4.06	%
Net interest income and net  interest margin  (tax equivalent)					$	44,924			4.16	%						$	45,684		4.33	%						$	28,292			4.10	%

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

		Nine Months Ended September 30,
		2019												2018
		Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate				Average Balance				Interest Earned/ Interest Paid				Average Yield/ Rate
		(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans		$	3,812,827			$	165,995				5.82	%		$	2,319,727			$	94,951				5.47	%
Securities			352,074				7,374				2.80	%			310,709				6,238				2.68	%
Deposits in other financial institutions			79,309				1,391				2.34	%			49,205				731				1.99	%
Total interest-earning assets			4,244,210			$	174,760				5.51	%			2,679,641			$	101,920				5.09	%
Allowance for loan losses			(27,500	)											(24,254	)
Noninterest-earning assets			581,932												276,777
Total assets		$	4,798,642											$	2,932,164
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits		$	340,310			$	3,058				1.20	%		$	190,228			$	914				0.64	%
Money market and savings deposits			992,349				10,158				1.37	%			534,925				2,197				0.55	%
Certificates and other time deposits			1,301,478				20,173				2.07	%			841,849				10,120				1.61	%
Borrowed funds			198,839				4,128				2.78	%			265,401				3,780				1.90	%
Subordinated debt			49,849				2,232				5.99	%			48,746				2,168				5.95	%
Total interest-bearing liabilities			2,882,825			$	39,749				1.84	%			1,881,149			$	19,179				1.36	%
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits			1,179,914												724,493
Other liabilities			28,270												8,742
Total liabilities			4,091,009												2,614,384
Shareholders' equity			707,633												317,780
Total liabilities and shareholders' equity		$	4,798,642											$	2,932,164
Net interest rate spread											3.67	%											3.73	%
Net interest income and margin						$	135,011				4.25	%						$	82,741				4.13	%
Net interest income and net  interest margin  (tax equivalent)						$	135,413				4.27	%						$	83,551				4.17	%

 

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

		Three Months Ended
		2019												2018
		September 30				June 30				March 31				December 31				September 30
		(Dollars in thousands)
Period-end Loan Portfolio:
Commercial and industrial		$	675,055			$	694,516			$	699,471			$	702,037			$	458,434
Mortgage warehouse			36,594				46,171				36,742				48,274				48,876
Real estate:
Commercial real estate (including  multi-family residential)			1,859,721				1,830,764				1,771,890				1,650,912				1,161,992
Commercial real estate construction and  land development			386,723				368,108				396,162				430,128				298,916
1-4 family residential (including home equity)			695,520				690,961				658,261				649,311				344,342
Residential construction			189,608				183,991				201,314				186,411				117,740
Consumer and other			42,783				43,452				42,321				41,233				10,626
Total loans		$	3,886,004			$	3,857,963			$	3,806,161			$	3,708,306			$	2,440,926
Asset Quality:
Nonaccrual loans		$	34,615			$	31,382			$	32,670			$	32,953			$	14,943
Accruing loans 90 or more days past due			—				—				—				—				—
Total nonperforming loans			34,615				31,382				32,670				32,953				14,943
Other real estate			8,333				6,294				1,152				630				1,801
Other repossessed assets			—				—				—				—				205
Total nonperforming assets		$	42,948			$	37,676			$	33,822			$	33,583			$	16,949
Net charge-offs		$	729			$	590			$	210			$	219			$	245
Nonaccrual loans:
Commercial and industrial		$	8,033			$	9,386			$	11,221			$	10,861			$	6,258
Mortgage warehouse			—				—				—				—				—
Real estate:
Commercial real estate (including  multi-family residential)			15,356				18,218				17,531				17,776				5,006
Commercial real estate construction and  land development			9,050				1,541				818				974				694
1-4 family residential (including home equity)			1,992				2,074				2,928				3,201				2,985
Residential construction			—				—				—				—				—
Consumer and other			184				163				172				141				—
Total nonaccrual loans		$	34,615			$	31,382			$	32,670			$	32,953			$	14,943
Asset Quality Ratios:
Nonperforming assets to total assets			0.88	%			0.79	%			0.71	%			0.72	%			0.56	%
Nonperforming loans to total loans			0.89	%			0.81	%			0.86	%			0.89	%			0.61	%
Allowance for loan losses to nonperforming loans			86.11	%			89.03	%			83.02	%			79.90	%			157.84	%
Allowance for loan losses to total loans			0.77	%			0.72	%			0.71	%			0.71	%			0.97	%
Net charge-offs to average loans (annualized)			0.07	%			0.06	%			0.02	%			0.02	%			0.04	%

 

Allegiance Bancshares, Inc.GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures(Unaudited)

Allegiance’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Allegiance believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and  that management and investors benefit from referring to these non-GAAP financial measures in assessing Allegiance’s performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, Allegiance reviews tangible book value per share, return on average tangible equity, the ratio of tangible equity to tangible assets and core net interest margin on a tax equivalent basis for internal planning and forecasting purposes. Allegiance has included in this Earnings Release information relating to these non-GAAP financial measures for the applicable periods presented.  These non-GAAP measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which Allegiance calculates the non-GAAP financial measures may differ from that of other companies reporting measures with similar names.

	Three Months Ended																				Year-to-Date
	2019												2018								2019				2018
	September 30				June 30				March 31				December 31				September 30				September 30				September 30
	(Dollars and share amounts in thousands, except per share data)
Total shareholders' equity	$	706,308			$	704,701			$	703,777			$	702,984			$	328,131			$	706,308			$	328,131
Less:  Goodwill and core  deposit intangibles, net		246,695				247,873				249,051				249,712				42,077				246,695				42,077
Tangible shareholders’  equity	$	459,613			$	456,828			$	454,726			$	453,272			$	286,054			$	459,613			$	286,054
Shares outstanding at end of  period		20,737				21,147				21,484				21,938				13,397				20,737				13,397
Tangible book value per share	$	22.16			$	21.60			$	21.17			$	20.66			$	21.35			$	22.16			$	21.35
Net income	$	12,047			$	14,248			$	12,678			$	13,163			$	8,879			$	38,973			$	24,146
Average shareholders' equity	$	710,044			$	705,162			$	707,666			$	697,303			$	326,204			$	707,633			$	317,780
Less:  Average goodwill and  core deposit intangibles, net		247,404				248,621				249,277				249,252				42,203				248,427				42,394
Average tangible  shareholders’ equity	$	462,640			$	456,541			$	458,389			$	448,051			$	284,001			$	459,206			$	275,386
Return on average  tangible equity		10.33	%			12.52	%			11.22	%			11.66	%			12.40	%			11.35	%			11.72	%
Total assets	$	4,905,840			$	4,794,211			$	4,768,802			$	4,655,249			$	3,035,539			$	4,905,840			$	3,035,539
Less: Goodwill and core  deposit intangibles, net		246,695				247,873				249,051				249,712				42,077				246,695				42,077
Tangible assets	$	4,659,145			$	4,546,338			$	4,519,751			$	4,405,537			$	2,993,462			$	4,659,145			$	2,993,462
Tangible equity to tangible  assets		9.86	%			10.05	%			10.06	%			10.29	%			9.56	%			9.86	%			9.56	%
Net interest income  (tax equivalent)	$	44,924			$	45,684			$	44,805			$	46,100			$	28,292			$	135,413			$	83,551
Less: Acquisition accounting  adjustments		(2,045	)			(2,755	)			(2,965	)			(3,069	)			—				(7,765	)			—
Core net interest  income (tax equivalent)	$	42,879			$	42,929			$	41,840			$	43,031			$	28,292			$	127,648			$	83,551
Average earning assets	$	4,284,667			$	4,233,653			$	4,212,669			$	4,108,645			$	2,736,738			$	4,244,210			$	2,679,641
Net interest margin  (tax equivalent)		4.16	%			4.33	%			4.31	%			4.45	%			4.10	%			4.27	%			4.17	%
Core net interest margin  (tax equivalent)		3.97	%			4.07	%			4.03	%			4.16	%			4.10	%			4.02	%			4.17	%

Allegiance Bancshares, Inc.8847 West Sam Houston Parkway N., Suite 200Houston, Texas 77040ir@allegiancebank.com