Allegiance Bancshares, Inc. Reports Fourth Quarter and Full Year 2020 Results

  • Asset growth of 21.2% to $6.05 billion as of December 31, 2020 from $4.99 billion as of December 31, 2019
  • Net income of $15.9 million and diluted earnings per share of $0.77, representing 13.9% net income growth and 14.9% diluted earnings per share growth from the fourth quarter of 2019

  • Declared quarterly dividend of $0.12 per share of common stock up from $0.10 per share of common stock

HOUSTON, Jan. 28, 2021 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) (Allegiance), the holding company of Allegiance Bank (the "Bank"), today reported net income of $15.9 million and diluted earnings per share of $0.77 for the fourth quarter 2020 compared to net income of $14.0 million and diluted earnings per share of $0.67 for the fourth quarter 2019. Net income for the year ended December 31, 2020 was $45.5 million, or $2.22 per diluted share, compared to $53.0 million, or $2.47 per diluted share, for the year ended December 31, 2019.   The year ended December 31, 2020 results were primarily impacted by the increased provision for credit losses in response to COVID-19-related uncertainties in the current economic environment partially offset by increased net interest income.

“We are pleased to report solid quarter and full-year earnings during a very challenging economic environment which has further evidenced the resiliency of our business model,” said Steve Retzloff, Allegiance’s Chief Executive Officer. “Our results reflect several meaningful accomplishments achieved by our team,” continued Retzloff.

“We are extremely proud of the continued hard work and dedication of our Allegiance bankers as our team helped a tremendous number of customers enabling us to post impressive 2020 PPP results for an institution of our size and we expect continued success with the 2021 PPP. As further validation of our outstanding service culture and performance, we received recognition as a Top Workplace in Houston by the Houston Chronicle and this year ranked number six in the large company category with 500 plus employees. We are one of only three companies that has been recognized as a Top Workplace for eleven consecutive years,” commented Retzloff.

“We are also pleased to announce an increase in our quarterly dividend, reflecting our continued commitment to enhancing shareholder value. As Houston’s largest locally-headquartered community bank, we expect to build on our strong core fundamentals. We are excited about the future and look forward to the year ahead where we will embrace the opportunity to remain focused on our customers and the communities we serve,” concluded Retzloff.

Fourth Quarter 2020 Results

Net interest income before the provision for credit losses in the fourth quarter 2020 increased $10.4 million, or 23.3%, to $54.9 million from $44.5 million for the fourth quarter 2019 and increased $3.0 million, or 5.8%, from $51.9 million in the third quarter 2020. These increases were primarily due to changes in the volume and relative mix of the underlying assets and liabilities, the impact of PPP loans as well as lower costs on interest-bearing liabilities. The net interest margin on a tax equivalent basis increased 3 basis points to 4.14% for the fourth quarter 2020 from 4.11% for the fourth quarter 2019 and increased 19 basis points from 3.95% for the third quarter 2020. Excluding the impact of acquisition accounting adjustments, adjusted net interest margin on a tax equivalent basis was 4.12% for the fourth quarter 2020 compared to 3.94% for the fourth quarter 2019 and 3.91% for the third quarter 2020. Adjusted net interest margin is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Noninterest income for the fourth quarter 2020 was $2.0 million, a decrease of $1.4 million, or 40.6%, compared to $3.4 million for the fourth quarter 2019 and an increase of $169 thousand, or 9.1%, compared to $1.9 million for the third quarter 2020. Fourth quarter 2020 noninterest income reflected lower transactional fee income and significantly lower correspondent bank rebates when compared to fourth quarter 2019.  

Noninterest expense for the fourth quarter 2020 increased $3.3 million, or 11.3%, to $32.7 million from $29.4 million for the fourth quarter 2019 and increased $184 thousand, or 0.6%, compared to the third quarter 2020.

In the fourth quarter 2020, Allegiance’s efficiency ratio decreased to 57.53% compared to 62.20% for the fourth quarter 2019 and 60.58% for the third quarter 2020. Fourth quarter 2020 annualized returns on average assets, average equity and average tangible equity were 1.05%, 8.38% and 12.32%, respectively, compared to 1.13%, 7.81% and 11.96%, respectively, for the fourth quarter 2019. Annualized returns on average assets, average equity and average tangible equity for the third quarter 2020 were 1.09%, 8.59% and 12.72%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Year Ended December 31, 2020 Results

Net interest income before provision for credit losses for the year ended December 31, 2020 increased $23.1 million, or 12.9%, to $202.7 million from $179.5 million for the year ended December 31, 2019 primarily due to a $746.9 million, or 17.5%, increase in average interest-earning assets over the prior year, the impact of PPP loans as well as lower costs related to interest-bearing liabilities. The net interest margin on a tax equivalent basis decreased 14 basis points to 4.08% for the year ended December 31, 2020 from 4.22% for the year ended December 31, 2019. Excluding the impact of acquisition accounting adjustments, the adjusted net interest margin for the year ended December 31, 2020 was 4.02%, compared to 4.00% for the year ended December 31, 2019. Adjusted net interest margin is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Noninterest income for the year ended December 31, 2020 was $8.2 million, a decrease of $5.3 million, or 39.2%, compared to $13.4 million for the year ended December 31, 2019 due primarily to significantly lower correspondent bank rebates and losses on the sales of other real estate owned of $258 thousand. Additionally, noninterest income for the year ended December 31, 2020 included $287 thousand of gains on the sale of securities compared to $1.5 million for the year ended December 31, 2019.

Noninterest expense for the year ended December 31, 2020 increased $6.9 million, or 5.7%, to $127.5 million from $120.6 million for the year ended December 31, 2019. The increase in noninterest expense during the year ended December 31, 2020 was primarily due to $4.1 million of other real estate write-downs partially offset by having no merger-related expenses incurred compared to $1.3 million during the year ended December 31, 2019.

Allegiance’s efficiency ratio decreased from 62.99% for the year ended December 31, 2019 to 60.55% for the year ended December 31, 2020. For the year ended December 31, 2020, returns on average assets, average equity and average tangible equity were 0.81%, 6.22% and 9.33%, respectively, compared to 1.10%, 7.48% and 11.50%, respectively, for the year ended December 31, 2019. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.  

Financial Condition

Total assets at December 31, 2020 increased $1.06 billion, or 21.2%, to $6.05 billion compared to $4.99 billion at December 31, 2019, primarily due to the origination of PPP loans and growth in the securities portfolio, and increased $82.4 million, or 5.5% (annualized), compared to $5.97 billion at September 30, 2020.

Total loans at December 31, 2020 increased $576.5 million, or 14.7%, to $4.49 billion compared to $3.92 billion at December 31, 2019, primarily due to the origination of $710.2 million of PPP loans, and decreased $100.6 million, or 8.8% (annualized), compared to $4.59 billion at September 30, 2020. Core loans, which exclude the mortgage warehouse portfolio and PPP loans, increased $14.9 million, or 0.4%, to $3.92 billion at December 31, 2020 from $3.91 billion at December 31, 2019 and increased $39.7 million, or 4.1% (annualized), from $3.88 billion at September 30, 2020.

Deposits at December 31, 2020 increased $920.4 million, or 22.6%, to $4.99 billion compared to $4.07 billion at December 31, 2019 and increased $71.1 million, or 5.8% (annualized), compared to $4.92 billion at September 30, 2020.

Asset Quality

Nonperforming assets totaled $38.1 million, or 0.63% of total assets, at December 31, 2020, compared to $36.7 million, or 0.74% of total assets, at December 31, 2019 and $46.8 million, or 0.78% of total assets, at September 30, 2020. Accounting Standards Update (ASU) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (CECL), was effective for the Company on January 1, 2020; however, Section 4014 of the CARES Act included an option for entities to delay the implementation of CECL until the earlier of the termination date of the national emergency declaration by the President or December 31, 2020. Due to the uncertainty of the impact of COVID-19, the Company chose to delay its implementation of CECL until the fourth quarter of 2020, at which point the standard was adopted retrospectively to January 1, 2020. The allowance for loan losses for the quarter ending December 31, 2020 was calculated under the CECL methodology and as a percentage of total loans was 1.18%. Other quarter-end periods presented for the allowance for loan losses were not restated for CECL adoption and were calculated under the incurred loss methodology. The allowance for loan losses as a percentage of total loans was 0.75% at December 31, 2019 and 1.06% at September 30, 2020.

The provision for credit losses for the fourth quarter 2020 was $4.4 million, or 0.38% (annualized) of average loans, compared to $933 thousand, or 0.10% (annualized) of average loans, for the fourth quarter 2019 and $1.3 million, or 0.12% (annualized) of average loans, for the third quarter 2020 primarily due to economic risks and uncertainties related to the COVID-19 pandemic. The Company’s $21.4 million of increased provision for credit losses during the year ended December 31, 2020 compared to the same period in 2019 reflects the uncertainty surrounding unemployment, the economic impact caused by COVID-19 and the economic effects related to the sustained lower crude oil prices.

Fourth quarter 2020 net charge-offs were $4.3 million, or 0.37% (annualized) of average loans, an increase from net charge-offs of $1.3 million, or 0.13% (annualized) of average loans, for the fourth quarter 2019 and $291 thousand, or 0.03% (annualized) of average loans, for the third quarter 2020. Net charge-offs for the year ended December 31, 2020 were $8.0 million, or 0.12% (annualized) of average loans, compared to net charge-offs for the year ended December 31, 2019 of $2.8 million, or 0.07% (annualized) of average loans.

The Company believes the largest risks within its loan portfolio are in the hotel, restaurant and bar, and oil and gas portfolios. Loan balances in the hotel industry, excluding PPP loans, totaled $127.3 million, or 2.8% of total loans, at December 31, 2020, of which $1.4 million were on nonaccrual. At December 31, 2020, restaurant and bar industry loans, excluding PPP loans, totaled $116.7 million, or 2.6%, of total loans, of which $494 thousand were on nonaccrual. At December 31, 2020, the Company’s allowance for loan losses allocated to its hotel portfolio was 3.2% of total hotel loans and its restaurant and bar portfolio was 1.3% of total restaurant and bar loans. The oil and gas portfolio, excluding PPP loans, totaled $74.8 million, or 1.7%, of total loans at December 31, 2020, of which $494 thousand were on nonaccrual. At December 31, 2020, the allowance for loan losses allocated to the oil and gas loan portfolio was 2.3% of total oil and gas loans.

During the year ended December 31, 2020, the Company granted initial principal and interest deferrals on outstanding loan balances to borrowers in connection with the COVID-19 relief provided by the CARES Act and subsequent deferrals upon request and after meeting certain conditions. These deferrals were generally no more than 90 days in duration. As of December 31, 2020, 164 loans with outstanding loan balances of $161.3 million remained on deferral.  

Dividend

On January 27, 2021, the Board of Directors of Allegiance declared a cash dividend of $0.12 per share, an increase in the quarterly dividend of 20%, to be paid on March 15, 2021 to all shareholders of record as of February 26, 2021. 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 on page 11 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 28, 2021 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its fourth quarter and year-end 2020 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 6884418. 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, 2020, Allegiance was a $6.05 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, 2020, Allegiance Bank operated 28 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 27 bank offices in the Houston metropolitan area and one bank office 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 contains forward-looking statements within the meaning of the securities laws that are derived utilizing 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 expected 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. Additionally, the impact of the COVID-19 pandemic is rapidly evolving and its future effects on Allegiance are difficult to predict. These and various other risk factors are discussed in Allegiance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020 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. Because of these uncertainties, readers should not place undue reliance on any forward-looking statement. Allegiance disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  2020  2019 
  December 31  September 30  June 30  March 31  December 31 
  (Dollars in thousands) 
ASSETS                    
Cash and due from banks $122,897  $327,416  $237,585  $156,700  $213,347 
Interest-bearing deposits at other financial
institutions
  299,869   19,732   28,815   18,189   132,901 
Total cash and cash equivalents  422,766   347,148   266,400   174,889   346,248 
Available for sale securities, at fair value  772,890   663,301   618,751   508,250   372,545 
Loans held for investment  4,491,764   4,592,362   4,583,656   3,955,546   3,915,310 
Less: allowance for loan losses  (53,173)  (48,698)  (47,642)  (37,511)  (29,438)
Loans, net  4,438,591   4,543,664   4,536,014   3,918,035   3,885,872 
Accrued interest receivable  40,053   36,996   32,795   17,203   15,468 
Premises and equipment, net  70,685   69,887   67,229   66,798   66,790 
Other real estate owned  9,196   8,876   11,847   12,617   8,337 
Federal Home Loan Bank stock  7,756   9,716   14,844   12,798   6,242 
Bank owned life insurance  27,686   27,542   27,398   27,255   27,104 
Goodwill  223,642   223,642   223,642   223,642   223,642 
Core deposit intangibles, net  17,954   18,907   19,896   20,886   21,876 
Other assets  18,909   18,072   18,065   20,056   18,530 
Total assets $6,050,128  $5,967,751  $5,836,881  $5,002,429  $4,992,654 
LIABILITIES AND SHAREHOLDERS’
EQUITY
                    
LIABILITIES:                    
Deposits:                    
Noninterest-bearing $1,704,567  $1,772,700  $1,754,128  $1,217,532  $1,252,232 
Interest-bearing                    
Demand  437,328   409,137   375,353   341,524   367,278 
Money market and savings  1,499,938   1,483,370   1,270,437   1,110,631   1,258,008 
Certificates and other time  1,346,649   1,252,159   1,300,793   1,283,887   1,190,583 
Total interest-bearing deposits  3,283,915   3,144,666   2,946,583   2,736,042   2,815,869 
Total deposits  4,988,482   4,917,366   4,700,711   3,953,574   4,068,101 
Accrued interest payable  2,701   3,082   3,293   3,821   4,326 
Borrowed funds  155,515   155,512   255,509   190,506   75,503 
Subordinated debt  108,322   108,191   108,061   107,930   107,799 
Other liabilities  36,439   30,547   33,164   40,005   27,060 
Total liabilities  5,291,459   5,214,698   5,100,738   4,295,836   4,282,789 
SHAREHOLDERS’ EQUITY:                    
Common stock  20,208   20,445   20,431   20,355   20,524 
Capital surplus  508,794   516,151   515,045   513,894   521,066 
Retained earnings  195,236   186,866   172,723   164,858   163,375 
Accumulated other comprehensive
income
  34,431   29,591   27,944   7,486   4,900 
Total shareholders’ equity  758,669   753,053   736,143   706,593   709,865 
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY
 $6,050,128  $5,967,751  $5,836,881  $5,002,429  $4,992,654 
                     



Allegiance Bancshares, Inc.

Financial Highlights
(Unaudited)

  Three Months Ended  Year-to-Date 
  2020  2019  2020  2019 
  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 $58,496  $56,418  $56,421  $54,624  $55,368  $225,959  $221,363 
Securities:                            
Taxable  2,203   2,095   1,842   2,087   2,066   8,227   6,975 
Tax-exempt  2,316   2,280   2,169   546   469   7,311   2,934 
Deposits in other financial
institutions
  32   18   20   195   244   265   1,635 
Total interest income  63,047   60,811   60,452   57,452   58,147   241,762   232,907 
                             
INTEREST EXPENSE:                            
Demand, money market and
savings deposits
  1,621   1,657   1,729   4,364   5,091   9,371   18,307 
Certificates and other time
deposits
  4,507   5,239   5,845   6,084   6,483   21,675   26,656 
Borrowed funds  557   558   562   506   547   2,183   4,675 
Subordinated debt  1,460   1,448   1,469   1,473   1,500   5,850   3,732 
Total interest expense  8,145   8,902   9,605   12,427   13,621   39,079   53,370 
NET INTEREST INCOME  54,902   51,909   50,847   45,025   44,526   202,683   179,537 
Provision for credit losses  4,368   1,347   10,669   10,990   933   27,374   5,939 
Net interest income after provision
for credit losses
  50,534   50,562   40,178   34,035   43,593   175,309   173,598 
                             
NONINTEREST INCOME:                            
Nonsufficient funds fees  100   75   60   169   189   404   658 
Service charges on deposit
accounts
  405   325   343   457   403   1,530   1,472 
Gain on sale of securities        93   194   613   287   1,459 
Gain (loss) on sales of other real
estate and repossessed assets
     117   (306)  (69)  (45)  (258)  26 
Bank owned life insurance  144   144   143   151   157   582   624 
Rebate from correspondent bank  196   98   89   493   900   876   3,580 
Other  1,174   1,091   1,140   1,330   1,183   4,735   5,604 
Total noninterest income  2,019   1,850   1,562   2,725   3,400   8,156   13,423 
                             
NONINTEREST EXPENSE:                            
Salaries and employee benefits  21,003   20,034   19,334   19,781   18,273   80,152   77,593 
Net occupancy and equipment  2,079   2,057   1,926   1,907   1,994   7,969   8,179 
Depreciation  1,019   946   885   866   861   3,716   3,192 
Data processing and software
amortization
  2,107   2,125   1,934   1,826   2,120   7,992   7,464 
Professional fees  999   756   800   573   540   3,128   2,333 
Regulatory assessments and
FDIC insurance
  810   875   609   632   216   2,926   1,705 
Core deposit intangibles
amortization
  953   989   990   990   1,177   3,922   4,711 
Communications  225   355   390   417   486   1,387   1,839 
Advertising  347   327   370   521   597   1,565   2,367 
Other real estate expense  382   2,017   114   2,649   164   5,162   614 
Acquisition and merger-related
expenses
                    1,326 
Other  2,825   2,084   2,427   2,239   3,003   9,575   9,312 
Total noninterest expense  32,749   32,565   29,779   32,401   29,431   127,494   120,635 
INCOME BEFORE INCOME
TAXES
  19,804   19,847   11,961   4,359   17,562   55,971   66,386 
Provision for income taxes  3,863   3,677   2,054   843   3,576   10,437   13,427 
NET INCOME $15,941  $16,170  $9,907  $3,516  $13,986  $45,534  $52,959 
                             
EARNINGS PER SHARE                            
Basic $0.78  $0.79  $0.49  $0.17  $0.68  $2.23  $2.50 
Diluted $0.77  $0.79  $0.48  $0.17  $0.67  $2.22  $2.47 



Allegiance Bancshares, Inc.

Financial Highlights
(Unaudited)

  Three Months Ended  Year-to-Date 
  2020  2019  2020  2019 
  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 $15,941  $16,170  $9,907  $3,516  $13,986  $45,534  $52,959 
                             
Earnings per share, basic $0.78  $0.79  $0.49  $0.17  $0.68  $2.23  $2.50 
Earnings per share, diluted $0.77  $0.79  $0.48  $0.17  $0.67  $2.22  $2.47 
                             
Return on average assets(A)  1.05%  1.09%  0.71%  0.29%  1.13%  0.81%  1.10%
Return on average equity(A)  8.38%  8.59%  5.51%  1.98%  7.81%  6.22%  7.48%
Return on average tangible
equity(A)(B)
  12.32%  12.72%  8.32%  3.02%  11.96%  9.33%  11.50%
Net interest margin
(tax equivalent)(C)
  4.14%  3.95%  4.10%  4.15%  4.11%  4.08%  4.22%
Adjusted net interest margin
(tax equivalent)(B)
  4.12%  3.91%  4.05%  4.04%  3.94%  4.02%  4.00%
Efficiency ratio(D)  57.53%  60.58%  56.92%  68.13%  62.20%  60.55%  62.99%
                             
Capital Ratios                            
Allegiance Bancshares, Inc.
(Consolidated)
                            
Equity to assets  12.54%  12.62%  12.61%  14.12%  14.22%  12.54%  14.22%
Tangible equity to tangible
assets(B)
  8.90%  8.92%  8.81%  9.71%  9.78%  8.90%  9.78%
Estimated common equity
tier 1 capital
  11.80%  11.73%  11.36%  11.15%  11.42%  11.80%  11.42%
Estimated tier 1 risk-based
capital
  12.04%  11.96%  11.60%  11.38%  11.66%  12.04%  11.66%
Estimated total risk-based
capital
  15.71%  15.56%  15.17%  14.72%  14.83%  15.71%  14.83%
Estimated tier 1 leverage
capital
  8.51%  8.70%  8.83%  9.89%  10.02%  8.51%  10.02%
Allegiance Bank                            
Estimated common equity
tier 1 capital
  13.32%  13.25%  12.84%  12.58%  12.67%  13.32%  12.67%
Estimated tier 1 risk-based
capital
  13.32%  13.25%  12.84%  12.58%  12.67%  13.32%  12.67%
Estimated total risk-based
capital
  15.55%  15.41%  14.97%  14.48%  14.39%  15.55%  14.39%
Estimated tier 1 leverage
capital
  9.41%  9.64%  9.77%  10.94%  10.89%  9.41%  10.89%
                             
Other Data                            
Weighted average shares:                            
Basic  20,396   20,439   20,414   20,411   20,652   20,415   21,152 
Diluted  20,575   20,532   20,514   20,690   20,930   20,546   21,424 
Period end shares
outstanding
  20,208   20,445   20,431   20,355   20,524   20,208   20,524 
Book value per share $37.54  $36.83  $36.03  $34.71  $34.59  $37.54  $34.59 
Tangible book value per
share(B)
 $25.59  $24.97  $24.11  $22.70  $22.62  $25.59  $22.62 

(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 11 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, 2020  September 30, 2020  December 31, 2019 
  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 $4,569,210  $58,496   5.09% $4,594,333  $56,418   4.89% $3,888,476  $55,368   5.65%
Securities  701,233   4,519   2.56%  667,008   4,375   2.61%  364,605   2,535   2.76%
Deposits in other financial
institutions and other
  58,664   32   0.22%  20,176   18   0.35%  54,947   244   1.76%
Total interest-earning assets  5,329,107  $63,047   4.71%  5,281,517  $60,811   4.58%  4,308,028  $58,147   5.35%
Allowance for loan losses  (53,260)          (47,593)          (29,997)        
Noninterest-earning assets  783,200           679,750           639,601         
Total assets $6,059,047          $5,913,674          $4,917,632         
                                     
Liabilities and
Shareholders' Equity
                                    
Interest-Bearing Liabilities:                                    
Interest-bearing demand
deposits
 $430,145  $386   0.36% $394,612  $392   0.40% $361,666  $952   1.04%
Money market and savings
deposits
  1,513,816   1,235   0.32%  1,409,969   1,265   0.36%  1,169,996   4,139   1.40%
Certificates and other time
deposits
  1,284,181   4,507   1.40%  1,291,536   5,239   1.61%  1,203,110   6,483   2.14%
Borrowed funds  157,687   557   1.41%  171,804   558   1.29%  86,372   547   2.51%
Subordinated debt  108,259   1,460   5.37%  108,130   1,448   5.33%  107,782   1,500   5.52%
Total interest-bearing
liabilities
  3,494,088  $8,145   0.93%  3,376,051  $8,902   1.05%  2,928,926  $13,621   1.85%
                                     
Noninterest-Bearing
Liabilities:
                                    
Noninterest-bearing demand
deposits
  1,766,826           1,752,404           1,237,770         
Other liabilities  41,434           36,572           40,781         
Total liabilities  5,302,348           5,165,027           4,207,477         
Shareholders' equity  756,699           748,647           710,155         
Total liabilities and
shareholders' equity
 $6,059,047          $5,913,674          $4,917,632         
                                     
Net interest rate spread          3.78%          3.53%          3.50%
                                     
Net interest income and margin     $54,902   4.10%     $51,909   3.91%     $44,526   4.10%
                                     
Net interest income and net
interest margin (tax equivalent)
     $55,477   4.14%     $52,446   3.95%     $44,623   4.11%
                                     



Allegiance Bancshares, Inc.

Financial Highlights
(Unaudited)

  Years Ended December 31, 
  2020  2019 
  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 $4,383,375  $225,959   5.15% $3,831,894  $221,363   5.78%
Securities  588,318   15,538   2.64%  355,233   9,909   2.79%
Deposits in other financial institutions  36,945   265   0.72%  74,655   1,635   2.19%
Total interest-earning assets  5,008,638  $241,762   4.83%  4,261,782  $232,907   5.47%
Allowance for loan losses  (46,680)          (28,129)        
Noninterest-earning assets  675,701           594,981         
Total assets $5,637,659          $4,828,634         
                         
Liabilities and Shareholders' Equity                        
Interest-Bearing Liabilities:                        
Interest-bearing demand deposits $385,482  $2,045   0.53% $345,693  $4,010   1.16%
Money market and savings deposits  1,316,188   7,326   0.56%  1,037,126   14,297   1.38%
Certificates and other time deposits  1,268,080   21,675   1.71%  1,276,684   26,656   2.09%
Borrowed funds  197,525   2,183   1.11%  127,138   4,675   3.68%
Subordinated debt  108,064   5,850   5.41%  64,451   3,732   5.79%
Total interest-bearing liabilities  3,275,339  $39,079   1.19%  2,851,092  $53,370   1.87%
                         
Noninterest-Bearing Liabilities:                        
Noninterest-bearing demand deposits  1,593,354           1,194,496         
Other liabilities  37,278           74,777         
Total liabilities  4,905,971           4,120,365         
Shareholders' equity  731,688           708,269         
Total liabilities and shareholders' equity $5,637,659          $4,828,634         
                         
Net interest rate spread          3.64%          3.60%
                         
Net interest income and margin     $202,683   4.05%     $179,537   4.21%
                         
Net interest income and net interest
margin (tax equivalent)
     $204,416   4.08%     $180,036   4.22%
                         



Allegiance Bancshares, Inc.

Financial Highlights
(Unaudited)

  Three Months Ended 
  2020  2019 
  December 31  September 30  June 30  March 31  December 31 
  (Dollars in thousands) 
Period-end Loan Portfolio:                    
Commercial and industrial $667,079  $650,634  $651,430  $702,267  $689,360 
Mortgage warehouse           1,051   8,304 
Paycheck Protection Program (PPP)  569,901   710,234   695,772       
Real estate:                    
Commercial real estate (including
multi-family residential)
  1,999,877   1,971,228   1,956,116   1,951,080   1,873,782 
Commercial real estate construction and
land development
  367,213   376,877   386,865   378,987   410,471 
1-4 family residential (including home equity)  737,605   716,565   703,513   704,212   698,957 
Residential construction  127,522   148,056   171,656   177,025   192,515 
Consumer and other  22,567   18,768   18,304   40,924   41,921 
Total loans $4,491,764  $4,592,362  $4,583,656  $3,955,546  $3,915,310 
                     
Asset Quality:                    
Nonaccrual loans $28,893  $37,928  $33,223  $21,621  $28,371 
Accruing loans 90 or more days past due               
Total nonperforming loans  28,893   37,928   33,223   21,621   28,371 
Other real estate  9,196   8,876   11,847   12,617   8,337 
Other repossessed assets               
Total nonperforming assets $38,089  $46,804  $45,070  $34,238  $36,708 
                     
Net charge-offs $4,287  $291  $538  $2,917  $1,303 
                     
Nonaccrual loans:                    
Commercial and industrial $10,747  $13,171  $12,578  $8,669  $8,388 
Mortgage warehouse               
Real estate:                    
Commercial real estate (including
multi-family residential)
  10,081   15,849   16,127   7,024   6,741 
Commercial real estate construction and
land development
  3,011   3,085   53   1,958   9,050 
1-4 family residential (including home equity)  4,525   4,263   3,434   2,845   3,294 
Residential construction     876   898   982   746 
Consumer and other  529   684   133   143   152 
Total nonaccrual loans $28,893  $37,928  $33,223  $21,621  $28,371 
                     
Asset Quality Ratios:                    
Nonperforming assets to total assets  0.63%  0.78%  0.77%  0.68%  0.74%
Nonperforming loans to total loans  0.64%  0.83%  0.72%  0.55%  0.72%
Allowance for loan losses to nonperforming loans  184.03%  128.40%  143.40%  173.49%  103.76%
Allowance for loan losses to total loans  1.18%  1.06%  1.04%  0.95%  0.75%
Net charge-offs to average loans (annualized)  0.37%  0.03%  0.05%  0.30%  0.13%



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 adjusted net interest margin on a tax equivalent basis for internal planning and forecasting purposes. Allegiance has included in this Earnings Release information relating to these non-GAAP financial measures for the applicable periods presented. These non-GAAP measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which Allegiance calculates the non-GAAP financial measures may differ from that of other companies reporting measures with similar names.

 Three Months Ended  Year-to-Date 
 2020  2019  2020  2019 
 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$758,669  $753,053  $736,143  $706,593  $709,865  $758,669  $709,865 
Less: Goodwill and core
deposit intangibles, net
 241,596   242,549   243,538   244,528   245,518   241,596   245,518 
Tangible shareholders’
equity
$517,073  $510,504  $492,605  $462,065  $464,347  $517,073  $464,347 
                            
Shares outstanding at end of
period
 20,208   20,445   20,431   20,355   20,524   20,208   20,524 
                            
Tangible book value per share$25.59  $24.97  $24.11  $22.70  $22.62  $25.59  $22.62 
                            
Net income$15,941  $16,170  $9,907  $3,516  $13,986  $45,534  $52,959 
                            
Average shareholders' equity$756,699  $748,647  $723,104  $713,535  $710,155  $731,688  $708,269 
Less: Average goodwill and
core deposit intangibles, net
 242,043   243,015   244,010   245,007   246,154   243,513   247,854 
Average tangible
shareholders’ equity
$514,656  $505,632  $479,094  $468,528  $464,001  $488,175  $460,415 
                            
Return on average
tangible equity
 12.32%  12.72%  8.32%  3.02%  11.96%  9.33%  11.50%
                            
Total assets$6,050,128  $5,967,751  $5,836,881  $5,002,429  $4,992,654  $6,050,128  $4,992,654 
Less: Goodwill and core
deposit intangibles, net
 241,596   242,549   243,538   244,528   245,518   241,596   245,518 
Tangible assets$5,808,532  $5,725,202  $5,593,343  $4,757,901  $4,747,136  $5,808,532  $4,747,136 
                            
Tangible equity to tangible
assets
 8.90%  8.92%  8.81%  9.71%  9.78%  8.90%  9.78%
                            
Net interest income
(tax equivalent)
$55,477  $52,446  $51,342  $45,152  $44,623  $204,416  $180,036 
Less: Acquisition accounting
adjustments
 (342)  (598)  (665)  (1,259)  (1,860)  (2,864)  (9,625)
Adjusted net interest
income (tax equivalent)
$55,135  $51,848  $50,677  $43,893  $42,763  $201,552  $170,411 
                            
Average earning assets$5,329,107  $5,281,517  $5,037,414  $4,372,723  $4,308,028  $5,008,638  $4,261,782 
                            
Net interest margin
(tax equivalent)
 4.14%  3.95%  4.10%  4.15%  4.11%  4.08%  4.22%
Adjusted net interest margin
(tax equivalent)
 4.12%  3.91%  4.05%  4.04%  3.94%  4.02%  4.00%

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


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