allegiancebanc01.jpg
PRESS RELEASE    

Allegiance Bancshares, Inc.
8847 West Sam Houston Parkway N., Suite 200
Houston, Texas 77040
ir@allegiancebank.com                                        
ALLEGIANCE BANCSHARES, INC. REPORTS
FOURTH QUARTER AND YEAR-END 2017 RESULTS

Core loan growth of $376.8 million in 2017, or 20.7%, year over year and $83.5 million, or 15.8% (annualized), for the fourth quarter 2017 compared to the linked quarter

Net interest income for the fourth quarter 2017 increased $4.0 million, or 17.1%, compared to the fourth quarter 2016

Completed an offering of $40 million of Allegiance Bank subordinated notes to supplement total risk-based capital

HOUSTON, January 25, 2018. Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $3.2 million in the fourth quarter 2017 compared to $5.8 million in the fourth quarter 2016 and diluted earnings per share of $0.24 in the fourth quarter 2017 compared to $0.44 in the fourth quarter 2016. The fourth quarter 2017 results included a $2.6 million increase in the tax provision as a result of the revaluation of the deferred tax asset due to the enactment of the Tax Cuts and Jobs Act and $1.1 million in core technology conversion costs. Net income for the year ended December 31, 2017 was $17.6 million, or $1.31 per diluted common share, compared to net income of $22.9 million, or $1.75 per diluted common share, for the year ended December 31, 2016. The year ended December 31, 2016 included an after-tax gain of $1.3 million on the sale of two Central Texas branch locations.

"This was a sound year for Allegiance as we continued to consistently generate loan growth into the fourth quarter, while maintaining solid credit quality and a strong net interest margin," said George Martinez, Allegiance's Chairman and Chief Executive Officer.  "Our fourth quarter earnings were impacted by the recent tax reform bill enacted at the end of December which led to a revaluation of our deferred tax asset resulting in a $2.6 million tax adjustment. We remain focused on the execution of our growth strategies as we further strengthened our capital position through the successful completion of a subordinated debt offering in December.  Additionally, we made a strategic decision to implement a new core technology platform in the first half of 2018 to a more integrated technology solution reflective of our vision to better leverage technology to achieve our goals and realize operational efficiencies in our super community banking model. This new platform will not only better position us to meet the current and future needs and demands of our customers, but also enhance the user experience for customers and employees alike," continued Martinez.

"I am very pleased with our momentum and achievements over this past year. Among those achievements are robust capital, continued customer growth, and strength in asset quality. We anticipate a sustained focus and continued progress in the coming year toward attaining our strategic goals of high quality growth with improving levels of profitability. As such, I am grateful for our dedicated employees, who add value to our customer relationships and provide superior service and innovation. They ensure a consistent customer experience at Allegiance, just as they have done throughout our 10-year history, and I appreciate their hard work and loyalty," concluded Martinez.

Fourth Quarter 2017 Results

Net interest income before provision for loan losses in the fourth quarter 2017 increased $4.0 million, or 17.1%, to $27.4 million from $23.4 million for the fourth quarter 2016 primarily due to organic loan growth. Net interest income before provision for loan losses in the fourth quarter 2017 increased slightly from $27.0 million in the third quarter 2017. The net interest margin on a tax equivalent basis increased one basis point to 4.33% for the fourth quarter 2017 from 4.32% for the fourth quarter 2016 and decreased four basis points from 4.37% for the third quarter 2017.

1



Noninterest income for the fourth quarter 2017 was $1.6 million, an increase of $105 thousand, or 7.1%, compared to $1.5 million for the fourth quarter 2016 and increased $123 thousand, or 8.4%, compared to $1.5 million for the third quarter 2017.

Noninterest expense for the fourth quarter 2017 increased $3.1 million, or 19.1%, to $19.3 million from $16.2 million for the fourth quarter 2016, and increased $1.6 million, or 9.1%, from $17.7 million for the third quarter 2017. The increase in noninterest expense over the fourth quarter 2016 was primarily due to $1.1 million of expenses related to the core technology conversion and continued investment to support strategic growth initiatives.

In the fourth quarter 2017, Allegiance’s efficiency ratio increased to 66.50% from 65.09% for the fourth quarter 2016 and increased from 62.14% for the third quarter 2017. Fourth quarter 2017 annualized returns on average assets, average equity and average tangible equity were 0.45%, 4.15% and 4.82%, respectively, compared to 0.93%, 8.25% and 9.79%, respectively, for the fourth quarter 2016. Annualized returns on average assets, average equity and average tangible equity for the third quarter 2017 were 0.43%, 3.90% and 4.55%, respectively.

Year Ended December 31, 2017 Results

Net interest income before provision for loan losses for the year ended December 31, 2017 increased $13.8 million, or 15.4%, to $103.7 million from $89.9 million for the year ended December 31, 2016 primarily due to organic loan growth and an increase in the securities portfolio. The net interest margin on a tax equivalent basis decreased three basis points to 4.34% for the year ended December 31, 2017 from 4.37% for the year ended December 31, 2016.

Noninterest income for the year ended December 31, 2017 was $5.9 million, a decrease of $1.4 million, or 19.4%, compared to $7.3 million for the year ended December 31, 2016. The year ended December 31, 2016 included a pre-tax gain of $2.1 million on the sale of two Central Texas branch locations that were sold in order to focus on the Houston MSA. Excluding the gain on the sale of these branches, noninterest income would have increased $643 thousand, or 12.3%, for the year ended December 31, 2017 compared to the year ended December 31, 2016.

Noninterest expense for the year ended December 31, 2017 increased $10.7 million, or 18.1%, to $70.0 million from $59.3 million for the year ended December 31, 2016. The increase in noninterest expense over the year ended December 31, 2016 was primarily due to increased expenses related to the core technology conversion, professional fees and salaries and benefits related to supporting growth initiatives.

During the year ended December 31, 2017, Allegiance’s efficiency ratio increased to 63.89% from 62.34% for the year ended December 31, 2016.

For the year ended December 31, 2017, returns on average assets, average equity and average tangible equity were 0.65%, 5.92% and 6.93%, respectively, compared to 0.98%, 8.36% and 9.96%, respectively, for the year ended December 31, 2016. Excluding the gain on the sale of the two Central Texas branch locations during the first quarter 2016, the returns on average assets, average equity and average tangible equity for the year ended December 31, 2016 would have been 0.92%, 7.88% and 9.38%, respectively.

Financial Condition

Total assets at December 31, 2017 increased $409.3 million, or 16.7%, to $2.86 billion compared to $2.45 billion at December 31, 2016 and increased $46.8 million, or 1.7%, compared to $2.81 billion at September 31, 2017.

Total loans at December 31, 2017 increased $379.2 million, or 20.0%, to $2.27 billion compared to $1.89 billion at December 31, 2016 and increased $69.3 million, or 3.1%, compared to $2.20 billion at September 30, 2017. These increases were due to strong organic loan growth within the Bank’s loan portfolio. Core loans, which exclude the mortgage warehouse portfolio, increased $376.8 million, or 20.7%, to $2.20 billion at December 31, 2017 from $1.82 billion at December 31, 2016 and increased $83.5 million, or 3.9%, from $2.12 billion at September 30, 2017.

Deposits at December 31, 2017 increased $343.8 million, or 18.4%, to $2.21 billion compared to $1.87 billion at December 31, 2016 and decreased $72.6 million, or 3.2%, compared to $2.29 billion at September 30, 2017.

Asset Quality

Nonperforming assets totaled $13.9 million, or 0.49% of total assets, at December 31, 2017, compared to $18.5 million, or 0.75% of total assets, at December 31, 2016, and $14.6 million, or 0.52% of total assets, at September 30, 2017. The allowance for loan losses was 1.04% of total loans at December 31, 2017, 0.95% of total loans at December 31, 2016 and 1.08% of total loans at September 30, 2017.


2



The provision for loan losses for the fourth quarter 2017 was $1.9 million, or 0.35% of average loans, compared to $900 thousand, or 0.19% of average loans, for the fourth quarter 2016, and $6.9 million, or 1.28% of average loans, for the third quarter 2017. The provision for loan losses for the year ended December 31, 2017 was $13.2 million, or 0.63% of average loans, compared to $5.5 million, or 0.31% of average loans for the year ended December 31, 2016.

Fourth quarter 2017 net charge-offs were $2.0 million, or 0.36% (annualized) of average loans, compared to $174 thousand, or 0.04% (annualized) of average loans, for the fourth quarter 2016, and $4.2 million, or 0.78% (annualized) of average loans, for the third quarter 2017. Net charge-offs for the year ended December 31, 2017 were $7.5 million, or 0.36% of average loans, compared to $656 thousand, or 0.04% of average loans for the year ended December 31, 2016.

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 Thursday, January 25, 2018 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its fourth quarter and full year 2017 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 8468395. 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.

Allegiance is a $2.86 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 Houston metropolitan area-based small to medium-sized businesses and individual customers. 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. Allegiance Bank operates 16 full-service banking locations and one loan production office in 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, 2016 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.


3



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
2017
 
2016
 
 December 31
 
 September 30
 
 June 30
 
 March 31
 
 December 31
 
 (Dollars in thousands)
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
182,103

 
$
192,427

 
$
187,491

 
$
184,146

 
$
142,098

Available for sale securities
309,615

 
323,856

 
321,268

 
317,219

 
316,455

 
 
 
 
 
 
 
 
 
 
Total loans
2,270,876

 
2,201,540

 
2,114,652

 
1,986,438

 
1,891,635

Allowance for loan losses
(23,649
)
 
(23,722
)
 
(21,010
)
 
(18,687
)
 
(17,911
)
Loans, net
2,247,227

 
2,177,818

 
2,093,642

 
1,967,751

 
1,873,724

 
 
 
 
 
 
 
 
 
 
Goodwill
39,389

 
39,389

 
39,389

 
39,389

 
39,389

Core deposit intangibles, net
3,274

 
3,469

 
3,664

 
3,860

 
4,055

Premises and equipment, net
18,477

 
18,273

 
18,240

 
18,138

 
18,340

Other real estate owned
365

 
453

 
365

 
365

 
1,503

Bank owned life insurance
22,422

 
22,277

 
22,131

 
21,985

 
21,837

Other assets
37,359

 
35,472

 
38,526

 
39,477

 
33,547

Total assets
$
2,860,231

 
$
2,813,434

 
$
2,724,716

 
$
2,592,330

 
$
2,450,948

 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
683,110

 
$
712,951

 
$
662,527

 
$
615,225

 
$
593,751

Interest-bearing deposits
1,530,864

 
1,573,664

 
1,436,715

 
1,397,344

 
1,276,432

Total deposits
2,213,974

 
2,286,615

 
2,099,242

 
2,012,569

 
1,870,183

 
 
 
 
 
 
 
 
 
 
Borrowed funds
282,569

 
207,569

 
310,569

 
275,569

 
285,569

Subordinated debentures
48,659

 
9,277

 
9,249

 
9,222

 
9,196

Other liabilities
8,164

 
7,246

 
7,197

 
5,840

 
6,183

Total liabilities
2,553,366

 
2,510,707

 
2,426,257

 
2,303,200

 
2,171,131

 
 
 
 
 
 
 
 
 
 
Common stock
13,227

 
13,171

 
13,153

 
13,080

 
12,958

Capital surplus
218,408

 
216,943

 
216,158

 
215,015

 
212,649

Retained earnings
74,894

 
71,690

 
68,704

 
63,309

 
57,262

Accumulated other comprehensive income (loss)
336

 
923

 
444

 
(2,274
)
 
(3,052
)
Shareholders' equity
306,865

 
302,727

 
298,459

 
289,130

 
279,817

Total liabilities and equity
$
2,860,231

 
$
2,813,434

 
$
2,724,716

 
$
2,592,330

 
$
2,450,948



4



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
2017
 
2016
 
2017
 
2016
 
 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
$
29,747

 
$
28,588

 
$
26,736

 
$
25,260

 
$
24,232

 
$
110,331

 
$
93,356

Securities
 
 
 
 
 
 
 
 
 
 
 
 
 
    Taxable
563

 
547

 
503

 
498

 
478

 
2,111

 
1,807

    Tax-exempt
1,545

 
1,574

 
1,591

 
1,624

 
1,642

 
6,334

 
5,044

Deposits in other financial institutions
183

 
192

 
157

 
130

 
129

 
662

 
571

Total interest income
32,038

 
30,901

 
28,987

 
27,512

 
26,481

 
119,438

 
100,778

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand, money market and savings deposits
992

 
811

 
702

 
654

 
673

 
3,159

 
2,437

Certificates and other time deposits
2,521

 
2,299

 
2,283

 
1,957

 
1,947

 
9,060

 
7,044

Borrowed funds
854

 
654

 
761

 
653

 
311

 
2,922

 
945

Subordinated debt
235

 
140

 
134

 
120

 
128

 
629

 
488

Total interest expense
4,602

 
3,904

 
3,880

 
3,384

 
3,059

 
15,770

 
10,914

NET INTEREST INCOME
27,436

 
26,997

 
25,107

 
24,128

 
23,422

 
103,668

 
89,864

Provision for loan losses
1,930

 
6,908

 
3,007

 
1,343

 
900

 
13,188

 
5,469

Net interest income after provision for loan losses
25,506

 
20,089

 
22,100

 
22,785

 
22,522

 
90,480

 
84,395

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST INCOME:
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonsufficient funds fees
158

 
144

 
184

 
199

 
178

 
685

 
661

Service charges on deposit accounts
179

 
204

 
205

 
195

 
177

 
783

 
677

Gain on sale of branch assets

 

 

 

 

 

 
2,050

Gain (loss) on sale of securities
30

 
(12
)
 

 

 
30

 
18

 
30

Gain on sale of other real estate
6

 

 

 

 
206

 
6

 
266

Bank owned life insurance
146

 
146

 
146

 
148

 
153

 
586

 
626

Rebate from correspondent bank
388

 
370

 
336

 
233

 
170

 
1,327

 
650

Other
676

 
608

 
606

 
566

 
564

 
2,456

 
2,308

Total noninterest income
1,583

 
1,460

 
1,477

 
1,341

 
1,478

 
5,861

 
7,268

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE:
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
12,188

 
11,580

 
10,415

 
10,562

 
10,627

 
44,745

 
38,858

Net occupancy and equipment
1,398

 
1,325

 
1,302

 
1,427

 
1,238

 
5,452

 
4,944

Depreciation
412

 
427

 
398

 
400

 
391

 
1,637

 
1,627

Data processing and software amortization
1,850

 
783

 
719

 
695

 
703

 
4,047

 
2,633

Professional fees
222

 
822

 
987

 
895

 
857

 
2,926

 
2,234

Regulatory assessments and FDIC insurance
533

 
582

 
569

 
589

 
485

 
2,273

 
1,581

Core deposit intangibles amortization
195

 
195

 
196

 
195

 
195

 
781

 
785

Communications
252

 
251

 
233

 
247

 
237

 
983

 
1,055

Advertising
436

 
302

 
288

 
263

 
319

 
1,289

 
945

Other
1,790

 
1,409

 
1,354

 
1,276

 
1,135

 
5,829

 
4,596

Total noninterest expense
19,276

 
17,676

 
16,461

 
16,549

 
16,187

 
69,962

 
59,258

INCOME BEFORE INCOME TAXES
7,813

 
3,873

 
7,116

 
7,577

 
7,813

 
26,379

 
32,405

   Provision for income taxes
4,609

 
887

 
1,721

 
1,530

 
2,042

 
8,747

 
9,554

NET INCOME
$
3,204

 
$
2,986

 
$
5,395

 
$
6,047

 
$
5,771

 
$
17,632

 
$
22,851

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE
 
 
 
 
 
 
 
 
 
 
 
 
 
   Basic
$
0.24

 
$
0.23

 
$
0.41

 
$
0.46

 
$
0.45

 
$
1.34

 
$
1.78

   Diluted
$
0.24

 
$
0.22

 
$
0.40

 
$
0.45

 
$
0.44

 
$
1.31

 
$
1.75


5



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
 
2017
 
2016
 
2017
 
2016
 
 
 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
 
$
3,204

 
$
2,986

 
$
5,395

 
$
6,047

 
$
5,771

 
$
17,632

 
$
22,851

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share, basic
 
$
0.24

 
$
0.23

 
$
0.41

 
$
0.46

 
$
0.45

 
$
1.34

 
$
1.78

Earnings per share, diluted
 
$
0.24

 
$
0.22

 
$
0.40

 
$
0.45

 
$
0.44

 
$
1.31

 
$
1.75

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets(A)
 
0.45
%
 
0.43
%
 
0.81
%
 
0.96
%
 
0.93
%
 
0.65
%
 
0.98
%
Return on average equity(A)
 
4.15
%
 
3.90
%
 
7.32
%
 
8.61
%
 
8.25
%
 
5.92
%
 
8.36
%
Return on average tangible equity(A)(B)
 
4.82
%
 
4.55
%
 
8.57
%
 
10.15
%
 
9.79
%
 
6.93
%
 
9.96
%
Tax equivalent net interest margin(C)
 
4.33
%
 
4.37
%
 
4.29
%
 
4.38
%
 
4.32
%
 
4.34
%
 
4.37
%
Efficiency ratio(D)
 
66.50
%
 
62.14
%
 
61.92
%
 
64.98
%
 
65.09
%
 
63.89
%
 
62.34
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liquidity and Capital Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allegiance Bancshares, Inc. (Consolidated)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Equity to assets
 
10.73
%
 
10.76
%
 
10.95
%
 
11.15
%
 
11.42
%
 
10.73
%
 
11.42
%
  Tangible equity to tangible assets(B)
 
9.38
%
 
9.38
%
 
9.52
%
 
9.65
%
 
9.82
%
 
9.38
%
 
9.82
%
  Estimated common equity tier 1 capital
 
10.29
%
 
10.68
%
 
10.84
%
 
11.10
%
 
11.44
%
 
10.29
%
 
11.44
%
  Estimated tier 1 risk-based capital
 
10.65
%
 
11.07
%
 
11.24
%
 
11.51
%
 
11.87
%
 
10.65
%
 
11.87
%
  Estimated total risk-based capital
 
13.10
%
 
12.04
%
 
12.13
%
 
12.35
%
 
12.72
%
 
13.10
%
 
12.72
%
  Estimated tier 1 leverage capital
 
9.84
%
 
9.90
%
 
10.11
%
 
10.28
%
 
10.35
%
 
9.84
%
 
10.35
%
Allegiance Bank
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Estimated common equity tier 1 capital
 
10.77
%
 
10.93
%
 
10.23
%
 
10.49
%
 
10.77
%
 
10.77
%
 
10.77
%
  Estimated tier 1 risk-based capital
 
10.77
%
 
10.93
%
 
10.23
%
 
10.49
%
 
10.77
%
 
10.77
%
 
10.77
%
  Estimated total risk-based capital
 
13.29
%
 
11.91
%
 
11.12
%
 
11.32
%
 
11.61
%
 
13.29
%
 
11.61
%
  Estimated tier 1 leverage capital
 
9.67
%
 
9.77
%
 
9.20
%
 
9.37
%
 
9.50
%
 
9.67
%
 
9.50
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
13,187

 
13,165

 
13,125

 
13,021

 
12,913

 
13,125

 
12,873

Diluted
 
13,496

 
13,483

 
13,471

 
13,377

 
13,180

 
13,458

 
13,074

Period end shares outstanding
 
13,227

 
13,171

 
13,153

 
13,080

 
12,958

 
13,227

 
12,958

Book value per share
 
$
23.20

 
$
22.98

 
$
22.69

 
$
22.10

 
$
21.59

 
$
23.20

 
$
21.59

Tangible book value per share(B)
 
$
19.97

 
$
19.73

 
$
19.42

 
$
18.80

 
$
18.24

 
$
19.97

 
$
18.24


(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 on page 10 of this Earnings Release.
(C)
Net interest margin represents net interest income divided by average interest-earning assets.
(D)
Represents noninterest expense divided by the sum of net interest income plus noninterest income, excluding net gains and losses on the sale of branch assets, loans and securities. Additionally, taxes and provision for loan losses are not part of this calculation.


6



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
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
$
2,209,389

 
$
29,747

 
5.34
%
 
$
2,141,546

 
$
28,588

 
5.30
%
 
$
1,847,122

 
$
24,232

 
5.22
%
Securities
322,539

 
2,108

 
2.59
%
 
324,901

 
2,121

 
2.59
%
 
314,387

 
2,120

 
2.68
%
Deposits in other financial institutions
47,257

 
183

 
1.54
%
 
53,409

 
192

 
1.43
%
 
68,974

 
129

 
0.74
%
   Total interest-earning assets
2,579,185

 
$
32,038

 
4.93
%
 
2,519,856

 
$
30,901

 
4.87
%
 
2,230,483

 
$
26,481

 
4.72
%
Allowance for loan losses
(23,740
)
 
 
 
 
 
(20,886
)
 
 
 
 
 
(17,579
)
 
 
 
 
Noninterest-earning assets
267,611

 
 
 
 
 
261,524

 
 
 
 
 
247,465

 
 
 
 
   Total assets
$
2,823,056

 
 
 
 
 
$
2,760,494

 
 
 
 
 
$
2,460,369

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
$
214,498

 
$
252

 
0.47
%
 
$
142,429

 
$
127

 
0.35
%
 
$
107,180

 
$
84

 
0.31
%
Money market and savings deposits
599,977

 
740

 
0.49
%
 
558,087

 
684

 
0.49
%
 
507,362

 
589

 
0.46
%
Certificates and other time deposits
766,942

 
2,521

 
1.30
%
 
754,076

 
2,299

 
1.21
%
 
681,425

 
1,947

 
1.14
%
Borrowed funds
232,863

 
854

 
1.45
%
 
197,668

 
654

 
1.31
%
 
258,048

 
311

 
0.48
%
Subordinated debt
17,070

 
235

 
5.46
%
 
9,259

 
140

 
5.98
%
 
9,178

 
128

 
5.55
%
   Total interest-bearing liabilities
1,831,350

 
$
4,602

 
1.00
%
 
1,661,519

 
$
3,904

 
0.93
%
 
1,563,193

 
$
3,059

 
0.78
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
675,643

 
 
 
 
 
786,566

 
 
 
 
 
610,310

 
 
 
 
Other liabilities
9,717

 
 
 
 
 
8,960

 
 
 
 
 
8,743

 
 
 
 
   Total liabilities
2,516,710

 
 
 
 
 
2,457,045

 
 
 
 
 
2,182,246

 
 
 
 
Shareholders' equity
306,346

 
 
 
 
 
303,449

 
 
 
 
 
278,123

 
 
 
 
   Total liabilities and shareholders' equity
$
2,823,056

 
 
 
 
 
$
2,760,494

 
 
 
 
 
$
2,460,369

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest rate spread
 
 
 
 
3.93
%
 
 
 
 
 
3.94
%
 
 
 
 
 
3.94
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income and margin
 
 
$
27,436

 
4.22
%
 
 
 
$
26,997

 
4.25
%
 
 
 
$
23,422

 
4.18
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income and margin (tax equivalent)
 
 
$
28,151

 
4.33
%
 
 
 
$
27,748

 
4.37
%
 
 
 
$
24,219

 
4.32
%


7



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
 
December 31, 2017
 
December 31, 2016
 
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
$
2,081,370

 
$
110,331

 
5.30
%
 
$
1,755,319

 
$
93,356

 
5.32
%
Securities
324,926

 
8,445

 
2.60
%
 
270,789

 
6,851

 
2.53
%
Deposits in other financial institutions
50,917

 
662

 
1.30
%
 
87,485

 
571

 
0.65
%
   Total interest-earning assets
2,457,213

 
$
119,438

 
4.86
%
 
2,113,593

 
$
100,778

 
4.77
%
Allowance for loan losses
(20,536
)
 
 
 
 
 
(15,200
)
 
 
 
 
Noninterest-earning assets
262,549

 
 
 
 
 
240,202

 
 
 
 
   Total assets
$
2,699,226

 
 
 
 
 
$
2,338,595

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
$
156,527

 
$
597

 
0.38
%
 
$
104,212

 
$
334

 
0.32
%
Money market and savings deposits
536,415

 
2,562

 
0.48
%
 
465,403

 
2,103

 
0.45
%
Certificates and other time deposits
748,086

 
9,060

 
1.21
%
 
648,075

 
7,044

 
1.09
%
Borrowed funds
269,633

 
2,922

 
1.08
%
 
209,379

 
945

 
0.45
%
Subordinated debt
11,208

 
629

 
5.61
%
 
9,138

 
488

 
5.34
%
   Total interest-bearing liabilities
1,721,869

 
$
15,770

 
0.92
%
 
1,436,207

 
$
10,914

 
0.76
%
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
672,101

 
 
 
 
 
620,701

 
 
 
 
Other liabilities
7,629

 
 
 
 
 
8,476

 
 
 
 
   Total liabilities
2,401,599

 
 
 
 
 
2,065,384

 
 
 
 
Shareholders' equity
297,627

 
 
 
 
 
273,211

 
 
 
 
   Total liabilities and shareholders' equity
$
2,699,226

 
 
 
 
 
$
2,338,595

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest rate spread
 
 
 
 
3.94
%
 
 
 
 
 
4.01
%
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income and margin
 
 
$
103,668

 
4.22
%
 
 
 
$
89,864

 
4.25
%
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income and margin (tax equivalent)
 
 
$
106,669

 
4.34
%
 
 
 
$
92,330

 
4.37
%


8



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
2017
 
2016
 
 December 31
 
 September 30
 
 June 30
 
 March 31
 
 December 31
 
(Dollars in thousands)
Period-end Loan Portfolio:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
457,129

 
$
446,029

 
$
444,701

 
$
425,154

 
$
416,752

Mortgage warehouse
69,456

 
83,577

 
73,499

 
64,132

 
67,038

Real estate:
 
 
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
1,080,247

 
1,045,220

 
1,008,027

 
961,212

 
891,989

Commercial real estate construction and land development
243,389

 
225,574

 
206,024

 
175,264

 
159,247

1-4 family residential (including home equity)
301,219

 
283,399

 
267,939

 
250,881

 
246,987

Residential construction
109,116

 
106,299

 
102,832

 
99,648

 
98,657

Consumer and other
10,320

 
11,442

 
11,630

 
10,147

 
10,965

Total loans
$
2,270,876

 
$
2,201,540

 
$
2,114,652

 
$
1,986,438

 
$
1,891,635

 
 
 
 
 
 
 
 
 
 
Asset Quality:
 
 
 
 
 
 
 
 
 
Nonaccrual loans
$
13,328

 
$
13,913

 
$
19,330

 
$
19,315

 
$
15,788

Accruing loans 90 or more days past due

 

 

 

 
911

   Total nonperforming loans
13,328

 
13,913

 
19,330

 
19,315

 
16,699

Other real estate
365

 
453

 
365

 
365

 
1,503

Other repossessed assets
205

 
205

 
205

 
260

 
286

Total nonperforming assets
$
13,898

 
$
14,571

 
$
19,900

 
$
19,940

 
$
18,488

 
 
 
 
 
 
 
 
 
 
Net charge-offs
2,003

 
4,196

 
684

 
567

 
174

 
 
 
 
 
 
 
 
 
 
Nonaccrual loans:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
6,437

 
$
5,031

 
$
9,051

 
$
8,933

 
$
3,896

Mortgage warehouse

 

 

 

 

Real estate:
 
 
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
6,110

 
8,097

 
9,556

 
9,726

 
11,663

Commercial real estate construction and land development

 

 

 
70

 

1-4 family residential (including home equity)
781

 
735

 
568

 
574

 
217

Residential construction

 

 

 

 

Consumer and other

 
50

 
155

 
12

 
12

  Total nonaccrual loans
$
13,328

 
$
13,913

 
$
19,330

 
$
19,315

 
$
15,788

 
 
 
 
 
 
 
 
 
 
Asset Quality Ratios:
 
 
 
 
 
 
 
 
 
Nonperforming assets to total assets
0.49
%
 
0.52
%
 
0.73
%
 
0.77
%
 
0.75
%
Nonperforming loans to total loans
0.59
%
 
0.63
%
 
0.91
%
 
0.97
%
 
0.88
%
Allowance for loan losses to nonperforming loans
177.44
%
 
170.50
%
 
108.69
%
 
96.75
%
 
107.26
%
Allowance for loan losses to total loans
1.04
%
 
1.08
%
 
0.99
%
 
0.94
%
 
0.95
%
Net charge-offs to average loans (annualized)
0.36
%
 
0.78
%
 
0.13
%
 
0.12
%
 
0.04
%

9



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. Allegiance believes 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 common share, return on average tangible equity and the ratio of tangible equity to tangible assets for internal planning and forecasting purposes. Additionally, Allegiance excluded the one time sale of two Central Texas branch locations during the first quarter 2016 as noted within the narrative, as Allegiance believes this transaction was not indicative of its recurring operating results. 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 Ended
 
 
2017
 
2016
 
2017
 
2016
 
 
 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
 
$
306,865

 
$
302,727

 
$
298,459

 
$
289,130

 
$
279,817

 
$
306,865

 
$
279,817

Less: Goodwill and core deposit intangibles, net
 
42,663

 
42,858

 
43,053

 
43,249

 
43,444

 
42,663

 
43,444

Tangible shareholders’ equity
 
$
264,202

 
$
259,869

 
$
255,406

 
$
245,881

 
$
236,373

 
$
264,202

 
$
236,373

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares outstanding at end of period
 
13,227

 
13,171

 
13,153

 
13,080

 
12,958

 
13,227

 
12,958