allegiancebanc02.jpg
PRESS RELEASE    

Allegiance Bancshares, Inc.
8847 West Sam Houston Parkway N., Suite 200
Houston, Texas 77040
ir@allegiancebank.com                                        
ALLEGIANCE BANCSHARES, INC. REPORTS
SECOND QUARTER 2018 RESULTS

Core loan growth of $266.0 million, or 13.0%, year over year and $58.2 million, or 10.4% (annualized), for the second quarter 2018 compared to the linked quarter

Deposit growth of $214.5 million, or 10.2%, year over year and $29.0 million, or 5.1% (annualized), for the second quarter 2018 compared to the linked quarter

Announced the pending acquisition of Post Oak Bancshares, Inc. headquartered in Houston, Texas

HOUSTON, July 26, 2018. Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $7.6 million and diluted earnings per share of $0.55 for the second quarter 2018 compared to $5.4 million and diluted earnings per share of $0.40 for the second quarter 2017. The second quarter 2018 results include $1.1 million and $625 thousand of core system conversion and merger related expenses, respectively. Net income for the six months ended June 30, 2018 was $15.3 million, or $1.12 per diluted share, compared to $11.4 million, or $0.85 per diluted share, for the six months ended June 30, 2017.

"This quarter was an exciting one for us as we further executed our growth strategies. We generated continued organic loan and deposit growth, successfully completed our core technology conversion and advanced our acquisition strategy by announcing a transaction with Post Oak Bancshares, Inc. headquartered in Houston, Texas," said George Martinez, Allegiance's Chairman and Chief Executive Officer. "Allegiance and Post Oak share the same tradition of customer, employee and community bank focus and we continue to anticipate that the acquisition will close in the fourth quarter of 2018. We are excited about this partnership and the opportunities that will further enhance our value as Houston's largest community bank," commented Martinez.

"I would like to thank our outstanding team of dedicated employees for a remarkable job well done as we effectively enhanced our core system during the quarter. Our employees continue to ensure an outstanding customer experience every day to help our bank grow and innovate while working diligently to deliver great results. We believe that this quarter's results reflect our commitment to our customers and the enhancement of shareholder value," concluded Martinez.

Second Quarter 2018 Results

Net interest income before provision for loan losses in the second quarter 2018 increased $2.7 million, or 10.8%, to $27.8 million from $25.1 million for the second quarter 2017 primarily due to organic loan growth partially offset by interest expense on the subordinated debt that was issued in December 2017. Net interest income before provision for loan losses in the second quarter 2018 increased slightly from $26.9 million in the first quarter 2018. The net interest margin on a tax equivalent basis decreased eight basis points to 4.21% for the second quarter 2018 from 4.29% for the second quarter 2017 and increased one basis point from 4.20% for the first quarter 2018. The decrease from the prior year is primarily due to the increase in interest expense on interest-bearing liabilities driven in part by the subordinated debt issuance in December 2017.

Noninterest income for the second quarter 2018 was $1.8 million, an increase of $328 thousand, or 22.2%, compared to $1.5 million for the second quarter 2017 and increased $159 thousand compared to $1.6 million for the first quarter 2018.


1



Noninterest expense for the second quarter 2018 increased $3.4 million, or 20.4%, to $19.9 million from $16.5 million for the second quarter 2017, and increased $1.1 million, or 6.1%, from $18.7 million for the first quarter 2018. The increases in noninterest expense over the second quarter 2017 and the linked quarter were primarily due to expenses of $1.1 million related to the core system conversion and $625 thousand of merger related expenses. In the second quarter 2018, Allegiance’s efficiency ratio increased to 67.05% from 61.92% for the second quarter 2017 and increased from 65.59% for the first quarter 2018. Second quarter 2018 annualized returns on average assets, average equity and average tangible equity were 1.03%, 9.55% and 11.02%, respectively, compared to 0.81%, 7.32% and 8.57%, respectively, for the second quarter 2017. Annualized returns on average assets, average equity and average tangible equity for the first quarter 2018 were 1.09%, 10.10% and 11.71%, respectively.

Six Months Ended June 30, 2018 Results

Net interest income before provision for loan losses for the six months ended June 30, 2018 increased $5.5 million, or 11.1%, to $54.7 million from $49.2 million for the six months ended June 30, 2017 primarily due to organic loan growth partially offset by the increased interest expense on interest-bearing liabilities. The net interest margin on a tax equivalent basis decreased 13 basis points to 4.20% for the six months ended June 30, 2018 from 4.33% for the six months ended June 30, 2017 primarily due to the increase in interest expense on interest-bearing liabilities driven in part by the subordinated debt issuance in December 2017

Noninterest income for the six months ended June 30, 2018 was $3.5 million, an increase of $633 thousand, or 22.5%, compared to $2.8 million for the six months ended June 30, 2017.

Noninterest expense for the six months ended June 30, 2018 increased $5.6 million, or 16.9%, to $38.6 million from $33.0 million for the six months ended June 30, 2017. The increase in noninterest expense over the six months ended June 30, 2017 was primarily due to expenses related to the core system conversion of $1.5 million and the merger related expenses of $625 thousand during the six months ended June 30, 2018.

During the six months ended June 30, 2018, Allegiance’s efficiency ratio increased to 66.33% from 63.41% for the six months ended June 30, 2017.

For the six months ended June 30, 2018, annualized returns on average assets, average equity and average tangible equity were 1.06%, 9.82% and 11.36%, respectively, compared to 0.89%, 7.95% and 9.34%, respectively, for the six months ended June 30, 2017.

Financial Condition

Total assets at June 30, 2018 increased $241.7 million, or 8.9%, to $2.97 billion compared to $2.72 billion at June 30, 2017 and increased $79.9 million, or 2.8%, compared to $2.89 billion at March 31, 2018.

Total loans at June 30, 2018 increased $244.0 million, or 11.5%, to $2.36 billion compared to $2.11 billion at June 30, 2017 and increased $68.2 million, or 3.0%, compared to $2.29 billion at March 31, 2018. These increases were due to strong organic loan growth within the Bank’s loan portfolio. Core loans, which exclude the mortgage warehouse portfolio, increased $266.0 million, or 13.0%, to $2.31 billion at June 30, 2018 from $2.04 billion at June 30, 2017 and increased $58.2 million, or 2.6%, from $2.25 billion at March 31, 2018.

Deposits at June 30, 2018 increased $214.5 million, or 10.2%, to $2.31 billion compared to $2.10 billion at June 30, 2017 and increased $29.0 million, or 1.3%, compared to $2.28 billion at March 31, 2018.

Asset Quality

Nonperforming assets totaled $14.6 million, or 0.49% of total assets, at June 30, 2018, compared to $19.9 million, or 0.73% of total assets, at June 30, 2017, and $14.2 million, or 0.49% of total assets, at March 31, 2018. The allowance for loan losses was 1.01% of total loans at June 30, 2018, 0.99% of total loans at June 30, 2017 and 1.08% of total loans at March 31, 2018.

The provision for loan losses for the second quarter 2018 was $631 thousand, or 0.11% (annualized) of average loans, compared to $3.0 million, or 0.59% (annualized) of average loans, for the second quarter 2017, and $653 thousand, or 0.12% (annualized) of average loans, for the first quarter 2018.

Second quarter 2018 net charge-offs were $1.4 million compared to net charge-offs of $684 thousand for the second quarter 2017 and net recoveries of $326 thousand for the first quarter 2018.


2



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, July 26, 2018 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its second quarter 2018 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 8558406. 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 $2.97 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, 2017 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)
 
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
 June 30
 
 March 31
 
 December 31
 
 September 30
 
 June 30
 
 (Dollars in thousands)
Cash and cash equivalents
$
200,645

 
$
190,088

 
$
182,103

 
$
192,427

 
$
187,491

Available for sale securities
300,897

 
307,411

 
309,615

 
323,856

 
321,268

 
 
 
 
 
 
 
 
 
 
Total loans
2,358,675

 
2,290,494

 
2,270,876

 
2,201,540

 
2,114,652

Allowance for loan losses
(23,831
)
 
(24,628
)
 
(23,649
)
 
(23,722
)
 
(21,010
)
Loans, net
2,334,844

 
2,265,866

 
2,247,227

 
2,177,818

 
2,093,642

 
 
 
 
 
 
 
 
 
 
Goodwill
39,389

 
39,389

 
39,389

 
39,389

 
39,389

Core deposit intangibles, net
2,883

 
3,079

 
3,274

 
3,469

 
3,664

Premises and equipment, net
19,049

 
18,605

 
18,477

 
18,273

 
18,240

Other real estate owned
1,710

 
365

 
365

 
453

 
365

Bank owned life insurance
22,701

 
22,563

 
22,422

 
22,277

 
22,131

Other assets
44,308

 
39,118

 
37,359

 
35,472

 
38,526

Total assets
$
2,966,426

 
$
2,886,484

 
$
2,860,231

 
$
2,813,434

 
$
2,724,716

 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
749,787

 
$
694,880

 
$
683,110

 
$
712,951

 
$
662,527

Interest-bearing deposits
1,563,999

 
1,589,922

 
1,530,864

 
1,573,664

 
1,436,715

Total deposits
2,313,786

 
2,284,802

 
2,213,974

 
2,286,615

 
2,099,242

 
 
 
 
 
 
 
 
 
 
Borrowed funds
275,569

 
232,569

 
282,569

 
207,569

 
310,569

Subordinated debt
48,779

 
48,719

 
48,659

 
9,277

 
9,249

Other liabilities
8,404

 
8,406

 
8,164

 
7,246

 
7,197

Total liabilities
2,646,538

 
2,574,496

 
2,553,366

 
2,510,707

 
2,426,257

 
 
 
 
 
 
 
 
 
 
Common stock
13,341

 
13,302

 
13,227

 
13,171

 
13,153

Capital surplus
220,665

 
219,760

 
218,408

 
216,943

 
216,158

Retained earnings
90,089

 
82,533

 
74,894

 
71,690

 
68,704

Accumulated other comprehensive (loss) income
(4,207
)
 
(3,607
)
 
336

 
923

 
444

Shareholders' equity
319,888

 
311,988

 
306,865

 
302,727

 
298,459

Total liabilities and equity
$
2,966,426

 
$
2,886,484

 
$
2,860,231

 
$
2,813,434

 
$
2,724,716



4



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year-to-Date
 
2018
 
2017
 
2018
 
2017
 
 June 30
 
 March 31
 
 December 31
 
 September 30
 
 June 30
 
 June 30
 
 June 30
 
(Dollars in thousands, except per share data)
INTEREST INCOME:
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans, including fees
$
31,846

 
$
30,117

 
$
29,747

 
$
28,588

 
$
26,736

 
$
61,963

 
$
51,996

Securities
 
 
 
 
 
 
 
 
 
 
 
 
 
    Taxable
646

 
599

 
563

 
547

 
503

 
1,245

 
1,001

    Tax-exempt
1,451

 
1,459

 
1,545

 
1,574

 
1,591

 
2,910

 
3,215

Deposits in other financial institutions
250

 
216

 
183

 
192

 
157

 
466

 
287

Total interest income
34,193

 
32,391

 
32,038

 
30,901

 
28,987

 
66,584

 
56,499

 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST EXPENSE:
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand, money market and savings deposits
887

 
976

 
992

 
811

 
702

 
1,863

 
1,356

Certificates and other time deposits
3,284

 
2,785

 
2,521

 
2,299

 
2,283

 
6,069

 
4,240

Borrowed funds
1,472

 
1,036

 
854

 
654

 
761

 
2,508

 
1,414

Subordinated debt
734

 
705

 
235

 
140

 
134

 
1,439

 
254

Total interest expense
6,377

 
5,502

 
4,602

 
3,904

 
3,880

 
11,879

 
7,264

NET INTEREST INCOME
27,816

 
26,889

 
27,436

 
26,997

 
25,107

 
54,705

 
49,235

Provision for loan losses
631

 
653

 
1,930

 
6,908

 
3,007

 
1,284

 
4,350

Net interest income after provision for loan losses
27,185

 
26,236

 
25,506

 
20,089

 
22,100

 
53,421

 
44,885

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST INCOME:
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonsufficient funds fees
214

 
176

 
158

 
144

 
184

 
390

 
383

Service charges on deposit accounts
106

 
223

 
179

 
204

 
205

 
329

 
400

Gain (loss) on sale of securities

 

 
30

 
(12
)
 

 

 

Gain on sale of other real estate
1

 

 
6

 

 

 
1

 

Bank owned life insurance
138

 
141

 
145

 
146

 
146

 
279

 
294

Rebate from correspondent bank
564

 
444

 
388

 
370

 
336

 
1,008

 
569

Other
782

 
662

 
677

 
608

 
606

 
1,444

 
1,172

Total noninterest income
1,805

 
1,646

 
1,583

 
1,460

 
1,477

 
3,451

 
2,818

 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE:
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
12,778

 
12,794

 
12,188

 
11,580

 
10,415

 
25,572

 
20,977

Net occupancy and equipment
1,367

 
1,272

 
1,398

 
1,325

 
1,302

 
2,639

 
2,729

Depreciation
433

 
407

 
412

 
427

 
398

 
840

 
798

Data processing and software amortization
1,356

 
1,053

 
1,850

 
783

 
719

 
2,409

 
1,414

Professional fees
1,126

 
469

 
222

 
822

 
987

 
1,595

 
1,882

Regulatory assessments and FDIC insurance
509

 
534

 
533

 
582

 
569

 
1,043

 
1,158

Core deposit intangibles amortization
196

 
195

 
195

 
195

 
196

 
391

 
391

Communications
259

 
248

 
252

 
251

 
233

 
507

 
480

Advertising
342

 
330

 
436

 
302

 
288

 
672

 
551

Other
1,494

 
1,415

 
1,790

 
1,409

 
1,354

 
2,909

 
2,630

Total noninterest expense
19,860

 
18,717

 
19,276

 
17,676

 
16,461

 
38,577

 
33,010

INCOME BEFORE INCOME TAXES
9,130

 
9,165

 
7,813

 
3,873

 
7,116

 
18,295

 
14,693

   Provision for income taxes
1,574

 
1,454

 
4,609

 
887

 
1,721

 
3,028

 
3,251

NET INCOME
$
7,556

 
$
7,711

 
$
3,204

 
$
2,986

 
$
5,395

 
$
15,267

 
$
11,442

 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE
 
 
 
 
 
 
 
 
 
 
 
 
 
   Basic
$
0.57

 
$
0.58

 
$
0.24

 
$
0.23

 
$
0.41

 
$
1.15

 
$
0.88

   Diluted
$
0.55

 
$
0.57

 
$
0.24

 
$
0.22

 
$
0.40

 
$
1.12

 
$
0.85


5



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year-to-Date
 
 
2018
 
2017
 
2018
 
2017
 
 
 June 30
 
 March 31
 
 December 31
 
 September 30
 
 June 30
 
 June 30
 
 June 30
 
 
(Dollars and share amounts in thousands, except per share data)
Net income
 
$
7,556

 
$
7,711

 
$
3,204

 
$
2,986

 
$
5,395

 
$
15,267

 
$
11,442

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per share, basic
 
$
0.57

 
$
0.58

 
$
0.24

 
$
0.23

 
$
0.41

 
$
1.15

 
$
0.88

Earnings per share, diluted
 
$
0.55

 
$
0.57

 
$
0.24

 
$
0.22

 
$
0.40

 
$
1.12

 
$
0.85

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets(A)
 
1.03
%
 
1.09
%
 
0.45
%
 
0.43
%
 
0.81
%
 
1.06
%
 
0.89
%
Return on average equity(A)
 
9.55
%
 
10.10
%
 
4.15
%
 
3.90
%
 
7.32
%
 
9.82
%
 
7.95
%
Return on average tangible equity(A)(B)
 
11.02
%
 
11.71
%
 
4.82
%
 
4.55
%
 
8.57
%
 
11.36
%
 
9.34
%
Tax equivalent net interest margin(C)
 
4.21
%
 
4.20
%
 
4.33
%
 
4.37
%
 
4.29
%
 
4.20
%
 
4.33
%
Efficiency ratio(D)
 
67.05
%
 
65.59
%
 
66.50
%
 
62.14
%
 
61.92
%
 
66.33
%
 
63.41
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liquidity and Capital Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allegiance Bancshares, Inc. (Consolidated)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Equity to assets
 
10.78
%
 
10.81
%
 
10.73
%
 
10.76
%
 
10.95
%
 
10.78
%
 
10.95
%
  Tangible equity to tangible assets(B)
 
9.49
%
 
9.48
%
 
9.38
%
 
9.38
%
 
9.52
%
 
9.49
%
 
9.52
%
  Estimated common equity tier 1 capital
 
10.60
%
 
10.82
%
 
10.54
%
 
10.68
%
 
10.85
%
 
10.32
%
 
10.85
%
  Estimated tier 1 risk-based capital
 
10.97
%
 
11.19
%
 
10.92
%
 
11.07
%
 
11.24
%
 
10.67
%
 
11.24
%
  Estimated total risk-based capital
 
13.42
%
 
13.72
%
 
13.43
%
 
12.04
%
 
12.13
%
 
13.06
%
 
12.13
%
  Estimated tier 1 leverage capital
 
9.78
%
 
9.98
%
 
9.84
%
 
9.90
%
 
10.11
%
 
9.78
%
 
10.11
%
Allegiance Bank
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Estimated common equity tier 1 capital
 
11.04
%
 
10.95
%
 
10.72
%
 
10.93
%
 
10.23
%
 
10.74
%
 
10.23
%
  Estimated tier 1 risk-based capital
 
11.04
%
 
10.95
%
 
10.72
%
 
10.93
%
 
10.23
%
 
10.74
%
 
10.23
%
  Estimated total risk-based capital
 
13.49
%
 
13.49
%
 
13.24
%
 
11.91
%
 
11.12
%
 
13.13
%
 
11.12
%
  Estimated tier 1 leverage capital
 
9.84
%
 
9.77
%
 
9.67
%
 
9.77
%
 
9.20
%
 
9.84
%
 
9.20
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
13,327

 
13,262

 
13,187

 
13,165

 
13,125

 
13,294

 
13,073

Diluted
 
13,634

 
13,542

 
13,496

 
13,483

 
13,471

 
13,588

 
13,425

Period end shares outstanding
 
13,341

 
13,301

 
13,227

 
13,171

 
13,153

 
13,341

 
13,153

Book value per share
 
$
23.98

 
$
23.46

 
$
23.20

 
$
22.98

 
$
22.69

 
$
23.98

 
$
22.69

Tangible book value per share(B)
 
$
20.81

 
$
20.26

 
$
19.97

 
$
19.73

 
$
19.42

 
$
20.81

 
$
19.42


(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 securities. Additionally, taxes and provision for loan losses are not part of this calculation.


6



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
June 30, 2018
 
March 31, 2018
 
June 30, 2017
 
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
$
2,312,725

 
$
31,846

 
5.52
%
 
$
2,260,119

 
$
30,117

 
5.40
%
 
$
2,042,460

 
$
26,736

 
5.25
%
Securities
315,198

 
2,097

 
2.67
%
 
312,769

 
2,058

 
2.67
%
 
326,388

 
2,094

 
2.57
%
Deposits in other financial institutions
50,227

 
250

 
2.00
%
 
49,897

 
216

 
1.75
%
 
49,703

 
157

 
1.26
%
   Total interest-earning assets
2,678,150

 
$
34,193

 
5.12
%
 
2,622,785

 
$
32,391

 
5.01
%
 
2,418,551

 
$
28,987

 
4.81
%
Allowance for loan losses
(24,753
)
 
 
 
 
 
(23,949
)
 
 
 
 
 
(19,253
)
 
 
 
 
Noninterest-earning assets
280,852

 
 
 
 
 
272,430

 
 
 
 
 
261,668

 
 
 
 
   Total assets
$
2,934,249

 
 
 
 
 
$
2,871,266

 
 
 
 
 
$
2,660,966

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
$
157,588

 
$
208

 
0.53
%
 
$
232,375

 
$
317

 
0.55
%
 
$
137,507

 
$
118

 
0.34
%
Money market and savings deposits
522,381

 
679

 
0.52
%
 
552,396

 
659

 
0.48
%
 
499,335

 
584

 
0.47
%
Certificates and other time deposits
827,897

 
3,284

 
1.59
%
 
800,343

 
2,785

 
1.41
%
 
785,194

 
2,283

 
1.17
%
Borrowed funds
311,185

 
1,472

 
1.90
%
 
250,414

 
1,036

 
1.68
%
 
304,184

 
761

 
1.00
%
Subordinated debt
48,746

 
734

 
6.04
%
 
48,684

 
705

 
5.87
%
 
9,232

 
134

 
5.83
%
   Total interest-bearing liabilities
1,867,797

 
$
6,377

 
1.37
%
 
1,884,212

 
$
5,502

 
1.18
%
 
1,735,452

 
$
3,880

 
0.90
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
741,266

 
 
 
 
 
669,258

 
 
 
 
 
624,100

 
 
 
 
Other liabilities
7,778

 
 
 
 
 
8,251

 
 
 
 
 
5,890

 
 
 
 
   Total liabilities
2,616,841

 
 
 
 
 
2,561,721

 
 
 
 
 
2,365,442

 
 
 
 
Shareholders' equity
317,408

 
 
 
 
 
309,545

 
 
 
 
 
295,524

 
 
 
 
   Total liabilities and shareholders' equity
$
2,934,249

 
 
 
 
 
$
2,871,266

 
 
 
 
 
$
2,660,966

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest rate spread
 
 
 
 
3.75
%
 
 
 
 
 
3.83
%
 
 
 
 
 
3.91
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income and margin
 
 
$
27,816

 
4.17
%
 
 
 
$
26,889

 
4.16
%
 
 
 
$
25,107

 
4.16
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income and margin (tax equivalent)
 
 
$
28,086

 
4.21
%
 
 
 
$
27,174

 
4.20
%
 
 
 
$
25,862

 
4.29
%


7



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
2018
 
2017
 
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
$
2,286,567

 
$
61,963

 
5.46
%
 
$
1,985,715

 
$
51,996

 
5.28
%
Securities
313,990

 
4,155

 
2.67
%
 
326,151

 
4,216

 
2.61
%
Deposits in other financial institutions
50,063

 
466

 
1.88
%
 
51,511

 
287

 
1.12
%
   Total interest-earning assets
2,650,620

 
$
66,584

 
5.07
%
 
2,363,374

 
$
56,499

 
4.82
%
Allowance for loan losses
(24,353
)
 
 
 
 
 
(18,729
)
 
 
 
 
Noninterest-earning assets
276,664

 
 
 
 
 
260,497

 
 
 
 
   Total assets
$
2,902,931

 
 
 
 
 
$
2,605,142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
 
 
 
 
 
 
 
Interest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits
$
194,774

 
$
525

 
0.54
%
 
$
134,226

 
$
218

 
0.33
%
Money market and savings deposits
537,305

 
1,338

 
0.50
%
 
493,092

 
1,138

 
0.47
%
Certificates and other time deposits
814,196

 
6,069

 
1.50
%
 
735,458

 
4,240

 
1.16
%
Borrowed funds
280,967

 
2,508

 
1.80
%
 
324,901

 
1,414

 
0.88
%
Subordinated debt
48,716

 
1,439

 
5.96
%
 
9,218

 
254

 
5.56
%
   Total interest-bearing liabilities
1,875,958

 
$
11,879

 
1.28
%
 
1,696,895

 
$
7,264

 
0.86
%
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-Bearing Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand deposits
705,461

 
 
 
 
 
612,120

 
 
 
 
Other liabilities
8,014

 
 
 
 
 
5,891

 
 
 
 
   Total liabilities
2,589,433

 
 
 
 
 
2,314,906

 
 
 
 
Shareholders' equity
313,498

 
 
 
 
 
290,236

 
 
 
 
   Total liabilities and shareholders' equity
$
2,902,931

 
 
 
 
 
$
2,605,142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest rate spread
 
 
 
 
3.79
%
 
 
 
 
 
3.96
%
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income and margin
 
 
$
54,705

 
4.16
%
 
 
 
$
49,235

 
4.20
%
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income and margin (tax equivalent)
 
 
$
55,260

 
4.20
%
 
 
 
$
50,770

 
4.33
%


8



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
2018
 
2017
 
 June 30
 
 March 31
 
 December 31
 
 September 30
 
 June 30
 
(Dollars in thousands)
Period-end Loan Portfolio:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
452,307

 
$
447,168

 
$
457,129

 
$
446,029

 
$
444,701

Mortgage warehouse
51,552

 
41,572

 
69,456

 
83,577

 
73,499

Real estate:
 
 
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
1,134,903

 
1,108,537

 
1,080,247

 
1,045,220

 
1,008,027

Commercial real estate construction and land development
270,965

 
257,566

 
243,389

 
225,574

 
206,024

1-4 family residential (including home equity)
330,053

 
317,842

 
301,219

 
283,399

 
267,939

Residential construction
109,962

 
108,882

 
109,116

 
106,299

 
102,832

Consumer and other
8,933

 
8,927

 
10,320

 
11,442

 
11,630

Total loans
$
2,358,675

 
$
2,290,494

 
$
2,270,876

 
$
2,201,540

 
$
2,114,652

 
 
 
 
 
 
 
 
 
 
Asset Quality:
 
 
 
 
 
 
 
 
 
Nonaccrual loans
$
12,137

 
$
13,373

 
$
13,328

 
$
13,913

 
$
19,330

Accruing loans 90 or more days past due

 

 

 

 

   Total nonperforming loans
12,137

 
13,373

 
13,328

 
13,913

 
19,330

Other real estate
1,710

 
365

 
365

 
453

 
365

Other repossessed assets
740

 
443

 
205

 
205

 
205

Total nonperforming assets
$
14,587

 
$
14,181

 
$
13,898

 
$
14,571

 
$
19,900

 
 
 
 
 
 
 
 
 
 
Net charge-offs (recoveries)
$
1,428

 
$
(326
)
 
$
2,003

 
$
4,196

 
$
684

 
 
 
 
 
 
 
 
 
 
Nonaccrual loans:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
5,983

 
$
6,153

 
$
6,437

 
$
5,031

 
$
9,051

Mortgage warehouse

 

 

 

 

Real estate:
 
 
 
 
 
 
 
 
 
Commercial real estate (including multi-family residential)
4,917

 
6,466

 
6,110

 
8,097

 
9,556

Commercial real estate construction and land development

 

 

 

 

1-4 family residential (including home equity)
1,237

 
754

 
781

 
735

 
568

Residential construction

 

 

 

 

Consumer and other

 

 

 
50

 
155

  Total nonaccrual loans
$
12,137

 
$
13,373

 
$
13,328

 
$
13,913

 
$
19,330

 
 
 
 
 
 
 
 
 
 
Asset Quality Ratios:
 
 
 
 
 
 
 
 
 
Nonperforming assets to total assets
0.49
%
 
0.49
 %
 
0.49
%
 
0.52
%
 
0.73
%
Nonperforming loans to total loans
0.51
%
 
0.58
 %
 
0.59
%
 
0.63
%
 
0.91
%
Allowance for loan losses to nonperforming loans
196.35
%
 
184.16
 %
 
177.44
%
 
170.50
%
 
108.69
%
Allowance for loan losses to total loans
1.01
%
 
1.08
 %
 
1.04
%
 
1.08
%
 
0.99
%
Net charge-offs (recoveries) to average loans (annualized)
0.25
%
 
(0.06
)%
 
0.36
%
 
0.78
%
 
0.13
%

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. 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
 
2018
 
2017
 
2018
 
2017
 
 June 30
 
 March 31
 
 December 31
 
 September 30
 
 June 30
 
 June 30
 
 June 30
 
(Dollars and share amounts in thousands, except per share data)
Total shareholders' equity
$
319,888

 
$
311,988

 
$
306,865

 
$
302,727

 
$
298,459

 
$
319,888

 
$
298,459

Less: Goodwill and core deposit intangibles, net
42,272

 
42,468

 
42,663

 
42,858

 
43,053

 
42,272

 
43,054

Tangible shareholders’ equity
$
277,616

 
$
269,520

 
$
264,202

 
$
259,869

 
$
255,406

 
$
277,616

 
$
255,405

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares outstanding at end of period
13,341

 
13,301

 
13,227

 
13,171

 
13,153

 
13,341

 
13,153

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible book value per share
$
20.81

 
$
20.26

 
$
19.97

 
$
19.73

 
$
19.42

 
$
20.81

 
$
19.42

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
7,556

 
$
7,711

 
$
3,204

 
$
2,986

 
$
5,395

 
$
15,267