Investor Relations

Investor Relations

Press Release

Allegiance Bancshares, Inc. Reports Fourth Quarter and Year-End 2017 Results

Company Release - 1/25/2018 7:00 AM ET
  • 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, Jan. 25, 2018 (GLOBE NEWSWIRE) -- 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.

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.

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.


 
 
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 securities309,615  323,856  321,268  317,219  316,455 
          
Total loans2,270,876  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, net2,247,227  2,177,818  2,093,642  1,967,751  1,873,724 
          
Goodwill39,389  39,389  39,389  39,389  39,389 
Core deposit intangibles, net3,274  3,469  3,664  3,860  4,055 
Premises and equipment, net18,477  18,273  18,240  18,138  18,340 
Other real estate owned365  453  365  365  1,503 
Bank owned life insurance22,422  22,277  22,131  21,985  21,837 
Other assets37,359  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 deposits1,530,864  1,573,664  1,436,715  1,397,344  1,276,432 
Total deposits2,213,974  2,286,615  2,099,242  2,012,569  1,870,183 
          
Borrowed funds282,569  207,569  310,569  275,569  285,569 
Subordinated debentures48,659  9,277  9,249  9,222  9,196 
Other liabilities8,164  7,246  7,197  5,840  6,183 
Total liabilities2,553,366  2,510,707  2,426,257  2,303,200  2,171,131 
          
Common stock13,227  13,171  13,153  13,080  12,958 
Capital surplus218,408  216,943  216,158  215,015  212,649 
Retained earnings74,894  71,690  68,704  63,309  57,262 
Accumulated other comprehensive income (loss)336  923  444  (2,274) (3,052)
Shareholders' equity306,865  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 


 
 
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             
  Taxable563  547  503  498  478  2,111  1,807 
  Tax-exempt1,545  1,574  1,591  1,624  1,642  6,334  5,044 
Deposits in other financial institutions183  192  157  130  129  662  571 
Total interest income32,038  30,901  28,987  27,512  26,481  119,438  100,778 
              
INTEREST EXPENSE:             
Demand, money market and savings deposits992  811  702  654  673  3,159  2,437 
Certificates and other time deposits2,521  2,299  2,283  1,957  1,947  9,060  7,044 
Borrowed funds854  654  761  653  311  2,922  945 
Subordinated debt235  140  134  120  128  629  488 
Total interest expense4,602  3,904  3,880  3,384  3,059  15,770  10,914 
NET INTEREST INCOME27,436  26,997  25,107  24,128  23,422  103,668  89,864 
Provision for loan losses1,930  6,908  3,007  1,343  900  13,188  5,469 
Net interest income after provision for loan losses25,506  20,089  22,100  22,785  22,522  90,480  84,395 
              
NONINTEREST INCOME:             
Nonsufficient funds fees158  144  184  199  178  685  661 
Service charges on deposit accounts179  204  205  195  177  783  677 
Gain on sale of branch assets            2,050 
Gain (loss) on sale of securities30  (12)     30  18  30 
Gain on sale of other real estate6        206  6  266 
Bank owned life insurance146  146  146  148  153  586  626 
Rebate from correspondent bank388  370  336  233  170  1,327  650 
Other676  608  606  566  564  2,456  2,308 
Total noninterest income1,583  1,460  1,477  1,341  1,478  5,861  7,268 
              
NONINTEREST EXPENSE:             
Salaries and employee benefits12,188  11,580  10,415  10,562  10,627  44,745  38,858 
Net occupancy and equipment1,398  1,325  1,302  1,427  1,238  5,452  4,944 
Depreciation412  427  398  400  391  1,637  1,627 
Data processing and software amortization1,850  783  719  695  703  4,047  2,633 
Professional fees222  822  987  895  857  2,926  2,234 
Regulatory assessments and FDIC insurance533  582  569  589  485  2,273  1,581 
Core deposit intangibles amortization195  195  196  195  195  781  785 
Communications252  251  233  247  237  983  1,055 
Advertising436  302  288  263  319  1,289  945 
Other1,790  1,409  1,354  1,276  1,135  5,829  4,596 
Total noninterest expense19,276  17,676  16,461  16,549  16,187  69,962  59,258 
INCOME BEFORE INCOME TAXES7,813  3,873  7,116  7,577  7,813  26,379  32,405 
  Provision for income taxes4,609  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 


 
 
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 
  1. Interim periods annualized.
  2. Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 10 of this Earnings Release.
  3. Net interest margin represents net interest income divided by average interest-earning assets.
  4. Represents 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.


 
 
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%
Securities322,539  2,108  2.59% 324,901  2,121  2.59% 314,387  2,120  2.68%
Deposits in other financial institutions47,257  183  1.54% 53,409  192  1.43% 68,974  129  0.74%
Total interest-earning assets2,579,185  $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 assets267,611      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 deposits599,977  740  0.49% 558,087  684  0.49% 507,362  589  0.46%
Certificates and other time deposits766,942  2,521  1.30% 754,076  2,299  1.21% 681,425  1,947  1.14%
Borrowed funds232,863  854  1.45% 197,668  654  1.31% 258,048  311  0.48%
Subordinated debt17,070  235  5.46% 9,259  140  5.98% 9,178  128  5.55%
Total interest-bearing liabilities1,831,350  $4,602  1.00% 1,661,519  $3,904  0.93% 1,563,193  $3,059  0.78%
                  
Noninterest-Bearing Liabilities:                 
Noninterest-bearing demand deposits675,643      786,566      610,310     
Other liabilities9,717      8,960      8,743     
Total liabilities2,516,710      2,457,045      2,182,246     
Shareholders' equity306,346      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%


 
 
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%
Securities324,926  8,445  2.60% 270,789  6,851  2.53%
Deposits in other financial institutions50,917  662  1.30% 87,485  571  0.65%
Total interest-earning assets2,457,213  $119,438  4.86% 2,113,593  $100,778  4.77%
Allowance for loan losses(20,536)     (15,200)    
Noninterest-earning assets262,549      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 deposits536,415  2,562  0.48% 465,403  2,103  0.45%
Certificates and other time deposits748,086  9,060  1.21% 648,075  7,044  1.09%
Borrowed funds269,633  2,922  1.08% 209,379  945  0.45%
Subordinated debt11,208  629  5.61% 9,138  488  5.34%
Total interest-bearing liabilities1,721,869  $15,770  0.92% 1,436,207  $10,914  0.76%
            
Noninterest-Bearing Liabilities:           
Noninterest-bearing demand deposits672,101      620,701     
Other liabilities7,629      8,476     
Total liabilities2,401,599      2,065,384     
Shareholders' equity297,627      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%


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 warehouse69,456  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 development243,389  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 construction109,116  106,299  102,832  99,648  98,657 
Consumer and other10,320  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 loans13,328  13,913  19,330  19,315  16,699 
Other real estate365  453  365  365  1,503 
Other repossessed assets205  205  205  260  286 
Total nonperforming assets$13,898  $14,571  $19,900  $19,940  $18,488 
          
Net charge-offs2,003  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 assets0.49% 0.52% 0.73% 0.77% 0.75%
Nonperforming loans to total loans0.59% 0.63% 0.91% 0.97% 0.88%
Allowance for loan losses to nonperforming loans177.44% 170.50% 108.69% 96.75% 107.26%
Allowance for loan losses to total loans1.04% 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%
               


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 
               
Tangible book value per share $19.97  $19.73  $19.42  $18.80  $18.24  $19.97  $18.24 
               
Net income attributable to shareholders $3,204  $2,986  $5,395  $6,047  $5,771  $17,632  $22,851 
               
Average shareholders' equity $306,346  $303,449  $295,524  $284,889  $278,123  $297,627  $273,211 
Less:  Average goodwill and core deposit intangibles, net 42,758  42,954  43,149  43,345  43,539  43,050  43,880 
Average tangible shareholders’ equity $263,588  $260,495  $252,375  $241,544  $234,584  $254,577  $229,331 
               
Return on average tangible equity 4.82% 4.55% 8.57% 10.15% 9.79% 6.93% 9.96%
               
Total assets $2,860,231  $2,813,434  $2,724,716  $2,592,330  $2,450,948  $2,860,231  $2,450,948 
Less: Goodwill and core deposit intangibles, net 42,663  42,858  43,053  43,249  43,444  42,663  43,444 
Tangible assets $2,817,568  $2,770,576  $2,681,663  $2,549,081  $2,407,504  $2,817,568  $2,407,504 
               
Tangible equity to tangible assets 9.38% 9.38% 9.52% 9.65% 9.82% 9.38% 9.82%
                      

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

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Source: Allegiance Bancshares, Inc.

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