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Allegiance Bancshares, Inc. Reports Record Fourth Quarter and Full Year 2019 Results

  • Record diluted earnings per share of $0.67 for the fourth quarter 2019 and $2.47 for the year 2019

  • Deposit growth of $405.6 million, or 11.1%, for the year 2019

  • Declared first quarterly dividend of $0.10 per share

HOUSTON, Jan. 29, 2020 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $14.0 million and diluted earnings per share of $0.67 for the fourth quarter 2019 compared to net income of $13.2 million and diluted earnings per share of $0.59 for the fourth quarter 2018. Net income for the year ended December 31, 2019 was $53.0 million, or $2.47 per diluted share, compared to net income of $37.3 million, or $2.37 per diluted share, for the year ended December 31, 2018. The year ended December 31, 2019 results included $1.4 million of pre-tax severance expense and $1.3 million of pre-tax acquisition and merger-related expenses. The year ended December 31, 2018 results included $1.7 million of pre-tax acquisition and merger-related expenses.

“2019 was another successful year for Allegiance,” said Steve Retzloff, Allegiance’s Chief Executive Officer. “We reported record quarterly and annual diluted earnings per share driven by core loan growth, deposit growth and continued excellent asset quality. The results are indicative of the dedication, hard work and commitment of our bankers to enhance our business capabilities and technology to best serve our customers and communities in which we operate,” commented Retzloff.

“We are excited to announce Allegiance’s first quarterly cash dividend of $0.10 per share to our shareholders. This dividend represents a significant milestone for Allegiance and along with the continuation of our share repurchase program highlights the profitability and solid capital position that we have achieved since our founding and reflects our commitment to long-term shareholder value,” continued Retzloff.

“As Houston’s largest locally-headquartered community bank, we feel very well positioned for 2020. We entered the year with strong fundamentals, momentum and a clear focus on our priorities. We are confident that our experienced team of bankers are the best in the business who will continue to execute our strategy and generate great customer relationships while driving solid returns for Allegiance and our shareholders," concluded Retzloff.

Fourth Quarter 2019 Results

Net interest income before the provision for loan losses in the fourth quarter 2019 decreased $1.3 million, or 2.9%, to $44.5 million from $45.8 million for the fourth quarter 2018. Net interest income before provision for loan losses for the fourth quarter 2019 decreased from $44.8 million in the third quarter 2019. These decreases were primarily due to changes in market interest rates, acquisition accounting accretion as well as changes in the volume and relative mix of the underlying assets and liabilities. The net interest margin on a tax equivalent basis decreased 34 basis points to 4.11% for the fourth quarter 2019 from 4.45% for the fourth quarter 2018 and decreased 5 basis points from 4.16% for the third quarter 2019. Core net interest margin on a tax equivalent basis excludes the impact of acquisition accounting adjustments and was 3.94% for the fourth quarter 2019 compared to 4.16% for the fourth quarter 2018 and 3.97% for the third quarter 2019. Please refer to the non-GAAP reconciliation at the end of the release.

Noninterest income for the fourth quarter 2019 was $3.4 million, an increase of $1.1 million, or 45.7%, compared to $2.3 million for the fourth quarter 2018 and increased $511 thousand, or 17.7%, compared to $2.9 million for the third quarter 2019. Noninterest income for the fourth quarter 2019 included $613 thousand of gain on the sale of securities.

Noninterest expense for the fourth quarter 2019 increased $385 thousand, or 1.3%, to $29.4 million from $29.0 million for the fourth quarter 2018 and decreased $578 thousand compared to the third quarter 2019.

In the fourth quarter 2019, Allegiance’s efficiency ratio was 62.20% compared to 62.88% for the third quarter 2019 and 60.30% for the fourth quarter 2018. Fourth quarter 2019 annualized returns on average assets, average equity and average tangible equity were 1.13%, 7.81% and 11.96%, respectively, compared to 0.98%, 6.73% and 10.33%, respectively, for the third quarter 2019. Annualized returns on average assets, average equity and average tangible equity for the fourth quarter 2018 were 1.12%, 7.49% and 11.66%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation at the end of the release.

Year Ended December 31, 2019 Results

Net interest income before provision for loan losses for the year ended December 31, 2019 increased $51.0 million, or 39.6%, to $179.5 million from $128.6 million for the year ended December 31, 2018 primarily due to a $1.22 billion, or 40.2%, 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 decreased 5 basis points to 4.22% for the year ended December 31, 2019 from 4.27% for the year ended December 31, 2018. Core net interest margin on a tax equivalent basis for the year ended December 31, 2019 would have been 4.00%, compared to 4.17% for the year ended December 31, 2018. Please refer to the non-GAAP reconciliation at the end of the release.

Noninterest income for the year ended December 31, 2019 was $13.4 million, an increase of $5.7 million, or 74.0%, compared to $7.7 million for the year ended December 31, 2018 due primarily to additional noninterest income resulting from the Post Oak acquisition along with the gain of $1.5 million on the sale of securities.

Noninterest expense for the year ended December 31, 2019 increased $33.8 million, or 39.0%, to $120.6 million from $86.8 million for the year ended December 31, 2018. The increase in noninterest expense over the year ended December 31, 2018 was primarily due to additional expenses associated with increased headcount and bank offices from the Post Oak acquisition.

Allegiance’s efficiency ratio decreased from 63.68% for the year ended December 31, 2018 to 62.99% for the year ended December 31, 2019. For the year ended December 31, 2019, returns on average assets, average equity and average tangible equity were 1.10%, 7.48% and 11.50%, respectively, compared to 1.11%, 9.02% and 11.20%, respectively, for the year ended December 31, 2018. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation at the end of the release.

Financial Condition

Total assets at December 31, 2019 increased $86.8 million to $4.99 billion compared to $4.91 billion at September 30, 2019 and increased $337.4 million compared to $4.66 billion at December 31, 2018, primarily due to organic loan growth.

Total loans at December 31, 2019 increased $29.3 million, or 3.0% (annualized), to $3.92 billion compared to $3.89 billion at September 30, 2019 and increased $207.0 million, or 5.6%, compared to $3.71 billion at December 31, 2018, primarily due to organic loan growth. Core loans, which exclude the mortgage warehouse portfolio, increased $57.6 million, or 5.9% (annualized), to $3.91 billion at December 31, 2019 from $3.85 billion at September 30, 2019 and increased $247.0 million, or 6.7%, from $3.66 billion at December 31, 2018.

Deposits at December 31, 2019 increased $170.6 million, or 17.4% (annualized), to $4.07 billion compared to $3.90 billion at September 30, 2019 and increased $405.6 million, or 11.1%, compared to $3.66 billion at December 31, 2018.

Asset Quality

Nonperforming assets totaled $36.7 million, or 0.74% of total assets, at December 31, 2019, compared to $42.9 million, or 0.88%, of total assets, at September 30, 2019, and $33.6 million, or 0.72% of total assets, at December 31, 2018. The allowance for loan losses was 0.75% of total loans at December 31, 2019, 0.77% of total loans at September 30, 2019 and 0.71% of total loans at December 31, 2018.

The provision for loan losses for the fourth quarter 2019 was $933 thousand, or 0.10% (annualized) of average loans, compared to $2.6 million, or 0.27% (annualized) of average loans, for the third quarter 2019. The provision for loan losses for the year ended 2019 was $5.9 million, or 0.15% of average loans, compared to $4.2 million, or 0.16% of average loans, for the year ended 2018.

Fourth quarter 2019 net charge-offs were $1.3 million, or 0.13% (annualized) of average loans, compared to net charge-offs of $729 thousand, or 0.07% (annualized) of average loans, for the third quarter 2019 and $219 thousand, or 0.02% (annualized) of average loans, for the fourth quarter 2018. Net charge-offs for the year ended December 31, 2019 were $2.8 million, or 0.07% of average loans, compared to net charge-offs for the year ended December 31, 2018 of $1.6 million, or 0.06% of average loans.

Dividend

The Board of Directors of Allegiance declared its first cash dividend of $0.10 per share to be paid on March 16, 2020 to all shareholders of record as of February 28, 2020. The amount and timing of any future dividend payments to shareholders will be subject to the discretion of Allegiance’s Board of Directors.

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 at the end 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 Wednesday, January 29, 2020 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its fourth quarter 2019 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 4427269. 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 December 31, 2019, Allegiance was a $4.99 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 December 31, 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.
8847 West Sam Houston Parkway N., Suite 200
Houston, Texas 77040
ir@allegiancebank.com

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

2019

2018

December 31

September 30

June 30

March 31

December 31

(Dollars in thousands)

Cash and cash equivalents

$

346,248

$

300,619

$

232,607

$

258,843

$

268,947

Available for sale securities

372,545

353,000

348,173

345,716

337,293

Total loans

3,915,310

3,886,004

3,857,963

3,806,161

3,708,306

Allowance for loan losses

(29,438

)

(29,808

)

(27,940

)

(27,123

)

(26,331

)

Loans, net

3,885,872

3,856,196

3,830,023

3,779,038

3,681,975

Goodwill

223,642

223,642

223,642

223,642

223,125

Core deposit intangibles, net

21,876

23,053

24,231

25,409

26,587

Premises and equipment, net

66,790

67,175

59,690

60,327

41,717

Other real estate owned

8,337

8,333

6,294

1,152

630

Bank owned life insurance

27,104

26,947

26,794

26,639

26,480

Other assets

40,240

46,875

42,757

48,036

48,495

Total assets

$

4,992,654

$

4,905,840

$

4,794,211

$

4,768,802

$

4,655,249

Noninterest-bearing deposits

$

1,252,232

$

1,227,839

$

1,173,423

$

1,181,920

$

1,209,300

Interest-bearing deposits

2,815,869

2,669,646

2,687,217

2,598,141

2,453,236

Total deposits

4,068,101

3,897,485

3,860,640

3,780,061

3,662,536

Borrowed funds

75,503

159,501

146,998

201,995

225,493

Subordinated debt

107,799

107,771

49,019

48,959

48,899

Other liabilities

31,386

34,775

32,853

34,010

15,337

Total liabilities

4,282,789

4,199,532

4,089,510

4,065,025

3,952,265

Common stock

20,524

20,737

21,147

21,484

21,938

Capital surplus

521,066

529,688

541,979

556,184

571,803

Retained earnings

163,375

149,389

137,342

123,094

112,131

Accumulated other comprehensive income (loss)

4,900

6,494

4,233

3,015

(2,888

)

Total shareholders’ equity

709,865

706,308

704,701

703,777

702,984

Total liabilities and equity

$

4,992,654

$

4,905,840

$

4,794,211

$

4,768,802

$

4,655,249


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

Three Months Ended

Years Ended

2019

2018

2019

2018

December 31

September 30

June 30

March 31

December 31

December 31

December 31

(Dollars in thousands, except per share data)

INTEREST INCOME:

Loans, including fees

$

55,368

$

55,790

$

56,016

$

54,189

$

53,272

$

221,363

$

148,223

Securities:

Taxable

2,066

2,090

1,837

982

844

6,975

2,725

Tax-exempt

469

483

692

1,290

1,445

2,934

5,802

Deposits in other financial institutions

244

302

401

688

742

1,635

1,473

Total interest income

58,147

58,665

58,946

57,149

56,303

232,907

158,223

INTEREST EXPENSE:

Demand, money market and savings deposits

5,091

4,975

4,513

3,728

3,367

18,307

6,478

Certificates and other time deposits

6,483

6,909

7,008

6,256

5,358

26,656

15,478

Borrowed funds

547

1,183

1,118

1,827

1,008

4,675

4,788

Subordinated debt

1,500

761

736

735

732

3,732

2,900

Total interest expense

13,621

13,828

13,375

12,546

10,465

53,370

29,644

NET INTEREST INCOME

44,526

44,837

45,571

44,603

45,838

179,537

128,579

Provision for loan losses

933

2,597

1,407

1,002

2,964

5,939

4,248

Net interest income after provision for loan losses

43,593

42,240

44,164

43,601

42,874

173,598

124,331

NONINTEREST INCOME:

Nonsufficient funds fees

189

168

139

162

190

658

755

Service charges on deposit accounts

403

379

365

325

363

1,472

869

Gain on sale of securities

613

846

1,459

(Loss) gain on sales of other real estate and repossessed assets

(45

)

70

1

(429

)

26

(428

)

Bank owned life insurance

157

153

155

159

163

624

579

Rebate from correspondent bank

900

900

884

896

988

3,580

2,609

Other

1,183

1,289

1,386

1,746

1,059

5,604

3,329

Total noninterest income

3,400

2,889

3,845

3,289

2,334

13,423

7,713

NONINTEREST EXPENSE:

Salaries and employee benefits

18,273

20,221

19,415

19,684

18,167

77,593

56,704

Net occupancy and equipment

1,994

1,973

2,114

2,098

1,959

8,179

5,845

Depreciation

861

822

756

753

802

3,192

2,132

Data processing and software amortization

2,120

2,058

1,709

1,577

1,485

7,464

5,120

Professional fees

540

667

527

599

670

2,333

2,009

Regulatory assessments and FDIC insurance

216

(41

)

802

728

776

1,705

2,309

Core deposit intangibles amortization

1,177

1,178

1,178

1,178

1,229

4,711

1,815

Communications

486

455

468

430

416

1,839

1,185

Advertising

597

449

617

704

704

2,367

1,725

Acquisition and merger-related expenses

153

1,173

840

1,326

1,661

Other

3,167

2,227

2,341

2,191

1,998

9,926

6,282

Total noninterest expense

29,431

30,009

30,080

31,115

29,046

120,635

86,787

INCOME BEFORE INCOME TAXES

17,562

15,120

17,929

15,775

16,162

66,386

45,257

Provision for income taxes

3,576

3,073

3,681

3,097

2,999

13,427

7,948

NET INCOME

$

13,986

$

12,047

$

14,248

$

12,678

$

13,163

$

52,959

$

37,309

EARNINGS PER SHARE

Basic

$

0.68

$

0.57

$

0.67

$

0.58

$

0.60

$

2.50

$

2.41

Diluted

$

0.67

$

0.57

$

0.66

$

0.58

$

0.59

$

2.47

$

2.37


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

Three Months Ended

Years Ended

2019

2018

2019

2018

December 31

September 30

June 30

March 31

December 31

December 31

December 31

(Dollars and share amounts in thousands, except per share data)

Net income

$

13,986

$

12,047

$

14,248

$

12,678

$

13,163

$

52,959

$

37,309

Earnings per share, basic

$

0.68

$

0.57

$

0.67

$

0.58

$

0.60

$

2.50

$

2.41

Earnings per share, diluted

$

0.67

$

0.57

$

0.66

$

0.58

$

0.59

$

2.47

$

2.37

Return on average assets(A)

1.13

%

0.98

%

1.19

%

1.08

%

1.12

%

1.10

%

1.11

%

Return on average equity(A)

7.81

%

6.73

%

8.10

%

7.27

%

7.49

%

7.48

%

9.02

%

Return on average tangible equity(A)(B)

11.96

%

10.33

%

12.52

%

11.22

%

11.66

%

11.50

%

11.20

%

Net interest margin (tax equivalent)(C)

4.11

%

4.16

%

4.33

%

4.31

%

4.45

%

4.22

%

4.27

%

Core net interest margin (tax equivalent)(B)

3.94

%

3.97

%

4.07

%

4.03

%

4.16

%

4.00

%

4.17

%

Efficiency ratio(D)

62.20

%

62.88

%

61.93

%

64.97

%

60.30

%

62.99

%

63.68

%

Capital Ratios

Allegiance Bancshares, Inc. (Consolidated)

Equity to assets

14.22

%

14.40

%

14.70

%

14.76

%

15.10

%

14.22

%

15.10

%

Tangible equity to tangible assets(B)

9.78

%

9.86

%

10.05

%

10.06

%

10.29

%

9.78

%

10.29

%

Estimated common equity tier 1 capital

11.43

%

11.28

%

11.34

%

11.37

%

11.76

%

11.43

%

11.76

%

Estimated tier 1 risk-based capital

11.67

%

11.51

%

11.58

%

11.61

%

12.01

%

11.67

%

12.01

%

Estimated total risk-based capital

14.85

%

14.70

%

13.27

%

13.28

%

13.70

%

14.85

%

13.70

%

Estimated tier 1 leverage capital

10.02

%

10.06

%

10.17

%

10.25

%

10.61

%

10.02

%

10.61

%

Allegiance Bank

Estimated common equity tier 1 capital

12.68

%

12.28

%

12.02

%

11.67

%

11.83

%

12.68

%

11.83

%

Estimated tier 1 risk-based capital

12.68

%

12.28

%

12.02

%

11.67

%

11.83

%

12.68

%

11.83

%

Estimated total risk-based capital

14.40

%

14.01

%

13.71

%

13.34

%

13.53

%

14.40

%

13.53

%

Estimated tier 1 leverage capital

10.90

%

10.73

%

10.57

%

10.31

%

10.45

%

10.90

%

10.45

%

Other Data

Weighted average shares:

Basic

20,652

20,981

21,257

21,733

21,908

21,152

15,485

Diluted

20,930

21,256

21,546

22,040

22,210

21,424

15,773

Period end shares outstanding

20,524

20,737

21,147

21,484

21,938

20,524

21,938

Book value per share

$

34.59

$

34.06

$

33.32

$

32.76

$

32.04

$

34.59

$

32.04

Tangible book value per share(B)

$

22.62

$

22.16

$

21.60

$

21.17

$

20.66

$

22.62

$

20.66


(A)

Interim periods annualized.

(B)

Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures at the end of this Earnings Release.

(C)

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

(D)

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

December 31, 2019

September 30, 2019

December 31, 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

$

3,888,476

$

55,368

5.65

%

$

3,870,205

$

55,790

5.72

%

$

3,639,390

$

53,272

5.81

%

Securities

364,605

2,535

2.76

%

359,392

2,573

2.84

%

336,974

2,289

2.70

%

Deposits in other financial
institutions and other

54,947

244

1.76

%

55,070

302

2.17

%

132,281

742

2.23

%

Total interest-earning assets

4,308,028

$

58,147

5.35

%

4,284,667

$

58,665

5.43

%

4,108,645

$

56,303

5.44

%

Allowance for loan losses

(29,997

)

(28,593

)

(23,554

)

Noninterest-earning assets

639,601

600,004

564,934

Total assets

$

4,917,632

$

4,856,078

$

4,650,025

Liabilities and
Shareholders' Equity

Interest-Bearing Liabilities:

Interest-bearing demand
deposits

$

361,666

$

952

1.04

%

$

332,652

$

943

1.13

%

$

325,046

$

920

1.12

%

Money market and savings
deposits

1,169,996

4,139

1.40

%

1,099,937

4,032

1.45

%

942,764

2,447

1.03

%

Certificates and other time
deposits

1,203,110

6,483

2.14

%

1,269,886

6,909

2.16

%

1,232,666

5,358

1.72

%

Borrowed funds

86,372

547

2.51

%

158,358

1,183

2.96

%

168,403

1,008

2.37

%

Subordinated debt

107,782

1,500

5.52

%

51,607

761

5.85

%

48,865

732

5.94

%

Total interest-bearing
liabilities

2,928,926

$

13,621

1.85

%

2,912,440

$

13,828

1.88

%

2,717,744

$

10,465

1.53

%

Noninterest-Bearing
Liabilities:

Noninterest-bearing demand
deposits

1,237,770

1,198,564

1,215,589

Other liabilities

40,781

35,030

19,389

Total liabilities

4,207,477

4,146,034

3,952,722

Shareholders' equity

710,155

710,044

697,303

Total liabilities and
shareholders' equity

$

4,917,632

$

4,856,078

$

4,650,025

Net interest rate spread

3.50

%

3.55

%

3.91

%

Net interest income and margin

$

44,526

4.10

%

$

44,837

4.15

%

$

45,838

4.43

%

Net interest income and net
interest margin (tax equivalent)

$

44,623

4.11

%

$

44,924

4.16

%

$

46,100

4.45

%


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

Years Ended December 31,

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

$

3,831,894

$

221,363

5.78

%

$

2,652,355

$

148,223

5.59

%

Securities

355,233

9,909

2.79

%

317,329

8,527

2.69

%

Deposits in other financial institutions

74,655

1,635

2.19

%

70,145

1,473

2.10

%

Total interest-earning assets

4,261,782

$

232,907

5.47

%

3,039,829

$

158,223

5.21

%

Allowance for loan losses

(28,129

)

(24,077

)

Noninterest-earning assets

594,981

349,408

Total assets

$

4,828,634

$

3,365,160

Liabilities and Shareholders' Equity

Interest-Bearing Liabilities:

Interest-bearing demand deposits

$

345,693

$

4,010

1.16

%

$

224,210

$

1,834

0.82

%

Money market and savings deposits

1,037,126

14,297

1.38

%

637,722

4,644

0.73

%

Certificates and other time deposits

1,276,684

26,656

2.09

%

940,356

15,478

1.65

%

Borrowed funds

127,138

4,675

3.68

%

240,952

4,788

1.99

%

Subordinated debt

64,451

3,732

5.79

%

48,776

2,900

5.95

%

Total interest-bearing liabilities

2,851,092

$

53,370

1.87

%

2,092,016

$

29,644

1.42

%

Noninterest-Bearing Liabilities:

Noninterest-bearing demand deposits

1,194,496

848,276

Other liabilities

74,777

11,427

Total liabilities

4,120,365

2,951,719

Shareholders' equity

708,269

413,441

Total liabilities and shareholders' equity

$

4,828,634

$

3,365,160

Net interest rate spread

3.60

%

3.79

%

Net interest income and margin

$

179,537

4.21

%

$

128,579

4.23

%

Net interest income and net interest
margin (tax equivalent)

$

180,036

4.22

%

$

129,652

4.27

%


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

Three Months Ended

2019

2018

December 31

September 30

June 30

March 31

December 31

(Dollars in thousands)

Period-end Loan Portfolio:

Commercial and industrial

$

689,360

$

675,055

$

694,516

$

699,471

$

702,037

Mortgage warehouse

8,304

36,594

46,171

36,742

48,274

Real estate:

Commercial real estate (including multi-family residential)

1,873,782

1,859,721

1,830,764

1,771,890

1,650,912

Commercial real estate construction and land development

410,471

386,723

368,108

396,162

430,128

1-4 family residential (including home equity)

698,957

695,520

690,961

658,261

649,311

Residential construction

192,515

189,608

183,991

201,314

186,411

Consumer and other

41,921

42,783

43,452

42,321

41,233

Total loans

$

3,915,310

$

3,886,004

$

3,857,963

$

3,806,161

$

3,708,306

Asset Quality:

Nonaccrual loans

$

28,371

$

34,615

$

31,382

$

32,670

$

32,953

Accruing loans 90 or more days past due

Total nonperforming loans

28,371

34,615

31,382

32,670

32,953

Other real estate

8,337

8,333

6,294

1,152

630

Other repossessed assets

Total nonperforming assets

$

36,708

$

42,948

$

37,676

$

33,822

$

33,583

Net charge-offs

$

1,303

$

729

$

590

$

210

$

219

Nonaccrual loans:

Commercial and industrial

$

8,388

$

8,033

$

9,386

$

11,221

$

10,861

Mortgage warehouse

Real estate:

Commercial real estate (including multi-family residential)

6,741

15,356

18,218

17,531

17,776

Commercial real estate construction and land development

9,050

9,050

1,541

818

974

1-4 family residential (including home equity)

3,294

1,992

2,074

2,928

3,201

Residential construction

746

Consumer and other

152

184

163

172

141

Total nonaccrual loans

$

28,371

$

34,615

$

31,382

$

32,670

$

32,953

Asset Quality Ratios:

Nonperforming assets to total assets

0.74

%

0.88

%

0.79

%

0.71

%

0.72

%

Nonperforming loans to total loans

0.72

%

0.89

%

0.81

%

0.86

%

0.89

%

Allowance for loan losses to nonperforming loans

103.76

%

86.11

%

89.03

%

83.02

%

79.90

%

Allowance for loan losses to total loans

0.75

%

0.77

%

0.72

%

0.71

%

0.71

%

Net charge-offs to average loans (annualized)

0.13

%

0.07

%

0.06

%

0.02

%

0.02

%


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

Years Ended

2019

2018

2019

2018

December 31

September 30

June 30

March 31

December 31

December 31

December 31

(Dollars and share amounts in thousands, except per share data)

Total shareholders' equity

$

709,865

$

706,308

$

704,701

$

703,777

$

702,984

$

709,865

$

702,984

Less: Goodwill and core deposit intangibles, net

245,518

246,695

247,873

249,051

249,712

245,518

249,712

Tangible shareholders’ equity

$

464,347

$

459,613

$

456,828

$

454,726

$

453,272

$

464,347

$

453,272

Shares outstanding at end of period

20,524

20,737

21,147

21,484

21,938

20,524

21,938

Tangible book value per share

$

22.62

$

22.16

$

21.60

$

21.17

$

20.66

$

22.62

$

20.66

Net income

$

13,986

$

12,047

$

14,248

$

12,678

$

13,163

$

52,959

$

37,309

Average shareholders' equity

$

710,155

$

710,044

$

705,162

$

707,666

$

697,303

$

708,269

$

413,441

Less: Average goodwill and core deposit intangibles, net

246,154

247,404

248,621

249,277

249,252

247,854

80,384

Average tangible shareholders’ equity

$

464,001

$

462,640

$

456,541

$

458,389

$

448,051

$

460,415

$

333,057

Return on average tangible equity

11.96

%

10.33

%

12.52

%

11.22

%

11.66

%

11.50

%

11.20

%

Total assets

$

4,992,654

$

4,905,840

$

4,794,211

$

4,768,802

$

4,655,249

$

4,992,654

$

4,655,249

Less: Goodwill and core deposit intangibles, net

245,518

246,695

247,873

249,051

249,712

245,518

249,712

Tangible assets

$

4,747,136

$

4,659,145

$

4,546,338

$

4,519,751

$

4,405,537

$

4,747,136

$

4,405,537

Tangible equity to tangible assets

9.78

%

9.86

%

10.05

%

10.06

%

10.29

%

9.78

%

10.29

%

Net interest income (tax equivalent)

$

44,623

$

44,924

$

45,684

$

44,805

$

46,100

$

180,036

$

129,652

Less: Acquisition accounting adjustments

(1,860

)

(2,045

)

(2,755

)

(2,965

)

(3,069

)

(9,625

)

(3,069

)

Core net interest income (tax equivalent)

$

42,763

$

42,879

$

42,929

$

41,840

$

43,031

$

170,411

$

126,583

Average earning assets

$

4,308,028

$

4,284,667

$

4,233,653

$

4,212,669

$

4,108,645

$

4,261,782

$

3,039,829

Net interest margin (tax equivalent)

4.11

%

4.16

%

4.33

%

4.31

%

4.45

%

4.22

%

4.27

%

Core net interest margin (tax equivalent)

3.94

%

3.97

%

4.07

%

4.03

%

4.16

%

4.00

%

4.17

%