Investor Relations

Investor Relations

Press Release

Allegiance Bancshares, Inc. Reports Second Quarter 2019 Results

Company Release - 7/26/2019 7:00 AM ET
  • Record earnings of $14.2 million and diluted earnings per share of $0.66 for the second quarter 2019
     
  • Net interest margin increased to 4.33% for the second quarter 2019 from 4.31% for the first quarter 2019 (4.07% for the second quarter 2019 from 4.03% for the first quarter 2019 excluding purchase accounting adjustments on a Non-GAAP basis)
     
  • Completed share repurchase authorization of one million shares of common stock and approved a new one million share  repurchase authorization

HOUSTON, July 26, 2019 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $14.2 million and diluted earnings per share of $0.66 for the second quarter 2019 compared to $7.6 million and diluted earnings per share of $0.55 for the second quarter 2018.  Net income for the six months ended June 30, 2019 was $26.9 million, or $1.24 per diluted share, compared to $15.3 million, or $1.12 per diluted share, for the six months ended June 30, 2018.  The six months ended June 30, 2019 and 2018 results included $1.3 million and $625 thousand, respectively, of pre-tax acquisition and merger-related expenses.

“We are extremely pleased with our second quarter results, highlighting a period of execution on our strategic initiatives by Allegiance bankers that resulted in record quarterly earnings of $14.2 million,” said George Martinez, Allegiance’s Chairman and Chief Executive Officer.  “Our solid performance was driven by our talented Allegiance bankers, creating new and deepening existing relationships with our customers and achieving great results for our shareholders.  In addition, our experienced credit team has made significant progress toward the integration of one credit culture across Allegiance,” continued Martinez.

“We continue to maintain strong asset quality, capital levels and solid operating results, allowing us to invest in opportunities that drive future performance. During the first half of the year, our ongoing recruitment efforts added ten revenue producers as we continue to invest in future organic and market share growth.  Additionally, we completed our current stock buyback program of one million shares and authorized a new program of another one million shares, to provide flexibility as we work to optimize our capital structure.  We also made the strategic decision to exit the mortgage warehouse lending program which allows us to redirect operational resources to focus on our core lending. All of this points to the confidence we have in our employees and their ongoing ability to succeed in a highly competitive market, serve the growing needs of both customers and businesses of all sizes, and generate solid returns for our shareholders,” concluded Martinez.

Second Quarter 2019 Results

Net interest income before the provision for loan losses in the second quarter 2019 increased $17.8 million, or 63.8%, to $45.6 million from $27.8 million for the second quarter 2018 primarily due to a $1.56 billion, or 58.1%, increase in average interest-earning assets for the same period mainly due to the Post Oak Bancshares, Inc. acquisition during the fourth quarter of 2018 as well as organic growth for the year-over-year period.  Net interest income before provision for loan losses for the second quarter 2019 increased from $44.6 million in the first quarter 2019.  The net interest margin on a tax equivalent basis increased 12 basis points to 4.33% for the second quarter 2019 from 4.21% for the second quarter 2018 and increased 2 basis points from 4.31% for the first quarter 2019. Excluding the impact of acquisition accounting adjustments, the net interest margin on a tax equivalent basis for the second quarter 2019 would have been 4.07% compared to 4.03% for the first quarter 2019 and 4.18% for the second quarter 2018.

Noninterest income for the second quarter 2019 was $3.8 million, an increase of $2.0 million, or 113.0%, compared to $1.8 million for the second quarter 2018 and increased $556 thousand, or 16.9%, compared to $3.3 million for the first quarter 2019.  Noninterest income for the second quarter 2019 included $846 thousand of gain on the sale of securities and noninterest income associated with additional accounts from the Post Oak acquisition. 

Noninterest expense for the second quarter 2019 increased $10.2 million, or 51.5%, to $30.1 million from $19.9 million for the second quarter 2018, and decreased $1.0 million, or 3.3%, from $31.1 million for the first quarter 2019. The increase over the prior year quarter was primarily due to additional expenses associated with increased headcount and branches from the Post Oak acquisition.

In the second quarter 2019, Allegiance’s efficiency ratio was 61.93% compared to 64.97% for the first quarter 2019 and 67.05% for the second quarter 2018.  Second quarter 2019 annualized returns on average assets, average equity and average tangible equity were 1.19%, 8.10% and 12.52%, respectively, compared to 1.08%, 7.27% and 11.22%, respectively, for the first quarter 2019.  Annualized returns on average assets, average equity and average tangible equity for the second quarter 2018 were 1.03%, 9.55% and 11.02%, respectively.

Six Months Ended June 30, 2019 Results

Net interest income before provision for loan losses for the six months ended June 30, 2019 increased $35.5 million, or 64.8%, to $90.2 million from $54.7 million for the six months ended June 30, 2018 primarily due to a $1.57 billion, or 59.3%, increase in average interest-earning assets over the prior year associated with the Post Oak acquisition.  The net interest margin on a tax equivalent basis increased 12 basis points to 4.32% for the six months ended June 30, 2019 from 4.20% for the six months ended June 30, 2018. Excluding the impact of acquisition accounting adjustments, the net interest margin for the six months ended June 30, 2019 would have been 4.05%, compared to 4.19% for the six months ended June 30, 2018.

Noninterest income for the six months ended June 30, 2019 was $7.1 million, an increase of $3.7 million, or 106.7%, compared to $3.5 million for the six months ended June 30, 2018 due primarily to additional noninterest income resulting from the Post Oak acquisition along with the gain on sale of securities.

Noninterest expense for the six months ended June 30, 2019 increased $22.6 million, or 58.6%, to $61.2 million from $38.6 million for the six months ended June 30, 2018.  The increase in noninterest expense over the six months ended June 30, 2018 was primarily due to additional expenses associated with increased headcount and branches along with merger-related expenses from the Post Oak acquisition.

Allegiance’s efficiency ratio decreased from 66.33% for the six months ended June 30, 2018 to 63.44% for the six months ended June 30, 2019. For the six months ended June 30, 2019, returns on average assets, average equity and average tangible equity were 1.14%, 7.69% and 11.87%, respectively, compared to 1.06%, 9.82% and 11.36%, respectively, for the six months ended June 30, 2018.

Financial Condition

Total assets at June 30, 2019 increased $25.4 million, or 0.5%, to $4.79 billion compared to $4.77 billion at March 31, 2019 and increased $1.83 billion, or 61.6%, compared to $2.97 billion at June 30, 2018, primarily due to the Post Oak acquisition and organic loan growth.

Total loans at June 30, 2019 increased $51.8 million, or 5.4% (annualized), to $3.86 billion compared to $3.81 billion at March 31, 2019 and increased $1.50 billion, or 63.6%, compared to $2.36 billion at June 30, 2018, primarily due to loans acquired in the Post Oak acquisition. Core loans, which exclude the mortgage warehouse portfolio, increased $42.4 million, or 4.5% (annualized), to $3.81 billion at June 30, 2019 from $3.77 billion at March 31, 2019 and increased $1.50 billion, or 65.2%, from $2.31 billion at June 30, 2018.  Excluding loans acquired from Post Oak at acquisition of $1.16 billion, core loans at June 30, 2019 increased $344.7 million, from June 30, 2018.

Deposits at June 30, 2019 increased $80.6 million, or 2.1%, to $3.86 billion compared to $3.78 billion at March 31, 2019 and increased $1.55 billion, or 66.9%, compared to $2.31 billion at June 30, 2018, primarily related to the Post Oak acquisition.

Asset Quality

Nonperforming assets totaled $37.7 million, or 0.79% of total assets, at June 30, 2019, compared to $33.8 million, or 0.71%, of total assets, at March 31, 2019, and $14.6 million, or 0.49% of total assets, at June 30, 2018. The allowance for loan losses was 0.72% of total loans at June 30, 2019, 0.71% of total loans at March 31, 2019 and 1.01% of total loans at June 30, 2018. The decrease in the allowance for loan losses as a percentage of loans from June 30, 2018 reflects the loans acquired in the Post Oak acquisition that were recorded at fair value without an allowance for loan losses at acquisition date.

The provision for loan losses for the second quarter 2019 was $1.4 million, or 0.15% (annualized) of average loans, compared to $1.0 million, 0.11% (annualized) of average loans, for the first quarter 2019 and $631 thousand, or 0.11% (annualized) of average loans, for the second quarter 2018.

Second quarter 2019 net charge-offs were $589 thousand, or 0.06% (annualized) of average loans, compared to net charge-offs of $210 thousand, or 0.02% (annualized) of average loans, for the first quarter 2019 and $1.4 million, or 0.25% (annualized) of average loans, for the second quarter 2018. Net charge-offs for the six months ended June 30, 2019 were $799 thousand, or 0.04% (annualized) of average loans, compared to net charge-offs for the six months ended June 30, 2018 of $1.1 million, or 0.06% (annualized) of average loans.

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 Friday, July 26, 2019 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its second quarter 2019 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 9254608.  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 June 30, 2019, Allegiance was a $4.79 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 June 30, 2019, Allegiance Bank operated 27 full-service banking locations in the Houston region, which we define as the Houston-The Woodlands-Sugar Land and Beaumont-Port Arthur metropolitan statistical areas, with 26 bank offices and one loan production office in the Houston metropolitan area and one bank office location in Beaumont, just outside of the Houston metropolitan area. Visit www.allegiancebank.com for more information.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This release may contain forward-looking statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, present expectations, estimates and projections about Allegiance and its subsidiaries. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “continues,” “anticipates,” “intends,” “projects,” “estimates,” “potential,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Forward-looking statements include information concerning Allegiance’s future financial performance, business and growth strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Allegiance’s control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Allegiance can: continue to develop and maintain new and existing customer and community relationships; successfully implement its growth strategy, including identifying suitable acquisition targets and integrating the businesses of acquired companies and banks; sustain its current internal growth rate; provide quality and competitive products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its performance objectives. These and various other risk factors are discussed in Allegiance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in other reports and statements Allegiance has filed with the Securities and Exchange Commission. Copies of such filings are available for download free of charge from the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Financial Information, SEC Filings.  Any forward-looking statement made by Allegiance in this release speaks only as of the date on which it is made. Factors or events that could cause Allegiance’s actual results to differ may emerge from time to time, and it is not possible for Allegiance to predict all of them. Allegiance undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  2019  2018 
  June 30  March 31  December 31  September 30  June 30 
  (Dollars in thousands) 
Cash and cash equivalents $232,607  $258,843  $268,947  $191,468  $200,645 
Available for sale securities  348,173   345,716   337,293   300,115   300,897 
                     
Total loans  3,857,963   3,806,161   3,708,306   2,440,926   2,358,675 
Allowance for loan losses  (27,940)  (27,123)  (26,331)  (23,586)  (23,831)
Loans, net  3,830,023   3,779,038   3,681,975   2,417,340   2,334,844 
                     
Goodwill  223,642   223,642   223,125   39,389   39,389 
Core deposit intangibles, net  24,231   25,409   26,587   2,688   2,883 
Premises and equipment, net  59,690   60,327   41,717   18,970   19,049 
Other real estate owned  6,294   1,152   630   1,801   1,710 
Bank owned life insurance  26,794   26,639   26,480   22,838   22,701 
Other assets  42,757   48,036   48,495   40,930   44,308 
Total assets $4,794,211  $4,768,802  $4,655,249  $3,035,539  $2,966,426 
                     
Noninterest-bearing deposits $1,173,423  $1,181,920  $1,209,300  $789,705  $749,787 
Interest-bearing deposits  2,687,217   2,598,141   2,453,236   1,644,086   1,563,999 
Total deposits  3,860,640   3,780,061   3,662,536   2,433,791   2,313,786 
                     
Borrowed funds  146,998   201,995   225,493   211,569   275,569 
Subordinated debt  49,019   48,959   48,899   48,839   48,779 
Other liabilities  32,853   34,010   15,337   13,209   8,404 
Total liabilities  4,089,510   4,065,025   3,952,265   2,707,408   2,646,538 
                     
Common stock  21,147   21,484   21,938   13,397   13,341 
Capital surplus  541,979   556,184   571,803   221,762   220,665 
Retained earnings  137,342   123,094   112,131   98,968   90,089 
Accumulated other comprehensive
  income (loss)
  4,233   3,015   (2,888)  (5,996)  (4,207)
Total shareholders’ equity  704,701   703,777   702,984   328,131   319,888 
Total liabilities and equity $4,794,211  $4,768,802  $4,655,249  $3,035,539  $2,966,426 


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  Three Months Ended  Year-to-Date 
  2019  2018  2019  2018 
  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 $56,016  $54,189  $53,272  $32,988  $31,846  $110,205  $61,963 
  Securities:                            
  Taxable  1,837   982   844   636   646   2,819   1,245 
  Tax-exempt  692   1,290   1,445   1,447   1,451   1,982   2,910 
  Deposits in other financial
  institutions
  401   688   742   265   250   1,089   466 
  Total interest income  58,946   57,149   56,303   35,336   34,193   116,095   66,584 
                             
INTEREST EXPENSE:                            
  Demand, money market and
  savings deposits
  4,513   3,728   3,367   1,248   887   8,241   1,863 
  Certificates and other time
  deposits
  7,008   6,256   5,358   4,051   3,284   13,264   6,069 
  Borrowed funds  1,118   1,827   1,008   1,272   1,472   2,945   2,508 
  Subordinated debt  736   735   732   729   734   1,471   1,439 
  Total interest expense  13,375   12,546   10,465   7,300   6,377   25,921   11,879 
NET INTEREST INCOME  45,571   44,603   45,838   28,036   27,816   90,174   54,705 
Provision for loan losses  1,407   1,002   2,964      631   2,409   1,284 
Net interest income after provision
  for loan losses
  44,164   43,601   42,874   28,036   27,185   87,765   53,421 
                             
NONINTEREST INCOME:                            
  Nonsufficient funds fees  139   162   190   175   214   301   390 
  Service charges on deposit
  accounts
  365   325   363   177   106   690   329 
  Gain on sale of securities  846               846    
  Gain (loss) on sales of other real
  estate and repossessed assets
  70   1   (429)     1   71   1 
  Bank owned life insurance  155   159   163   137   138   314   279 
  Rebate from correspondent bank  884   896   988   613   564   1,780   1,008 
  Other  1,386   1,746   1,059   826   782   3,132   1,444 
  Total noninterest income  3,845   3,289   2,334   1,928   1,805   7,134   3,451 
                             
NONINTEREST EXPENSE:                            
  Salaries and employee benefits  19,415   19,684   18,167   12,965   12,778   39,099   25,572 
  Net occupancy and equipment  2,088   2,078   1,959   1,281   1,333   4,166   2,605 
  Depreciation  756   753   802   490   433   1,509   840 
  Data processing and software
  amortization
  1,735   1,597   1,485   1,226   1,356   3,332   2,409 
  Professional fees  527   599   670   303   567   1,126   1,036 
  Regulatory assessments and
   FDIC insurance
  802   728   776   505   494   1,530   1,028 
  Core deposit intangibles
  amortization
  1,178   1,178   1,229   195   196   2,356   391 
  Communications  468   430   416   262   259   898   507 
  Advertising  617   704   704   351   340   1,321   670 
  Acquisition and merger-related
  expenses
  153   1,173   840   196   625   1,326   625 
  Other  2,341   2,191   1,998   1,390   1,479   4,532   2,894 
  Total noninterest expense  30,080   31,115   29,046   19,164   19,860   61,195   38,577 
INCOME BEFORE INCOME TAXES  17,929   15,775   16,162   10,800   9,130   33,704   18,295 
  Provision for income taxes  3,681   3,097   2,999   1,921   1,574   6,778   3,028 
NET INCOME $14,248  $12,678  $13,163  $8,879  $7,556  $26,926  $15,267 
                             
EARNINGS PER SHARE                            
  Basic $0.67  $0.58  $0.60  $0.66  $0.57  $1.25  $1.15 
  Diluted $0.66  $0.58  $0.59  $0.65  $0.55  $1.24  $1.12 


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  Three Months Ended  Year-to-Date 
  2019  2018  2019  2018 
  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 $14,248  $12,678  $13,163  $8,879  $7,556  $26,926  $15,267 
                             
Earnings per share, basic $0.67  $0.58  $0.60  $0.66  $0.57  $1.25  $1.15 
Earnings per share, diluted $0.66  $0.58  $0.59  $0.65  $0.55  $1.24  $1.12 
                             
Return on average assets(A)  1.19%  1.08%  1.12%  1.18%  1.03%  1.14%  1.06%
Return on average equity(A)  8.10%  7.27%  7.49%  10.80%  9.55%  7.69%  9.82%
Return on average tangible
  equity(A)(B)
  12.52%  11.22%  11.66%  12.40%  11.02%  11.87%  11.36%
Tax equivalent net interest
  margin(C)
  4.33%  4.31%  4.45%  4.10%  4.21%  4.32%  4.20%
Tax equivalent net interest
  margin-adjusted for
  acquisition accounting
  adjustments(D)
  4.07%  4.03%  4.16%  4.10%  4.18%  4.05%  4.19%
Efficiency ratio(E)  61.93%  64.97%  60.30%  63.95%  67.05%  63.44%  66.33%
                             
Capital Ratios                            
Allegiance Bancshares, Inc.
  (Consolidated)
                            
  Equity to assets  14.70%  14.76%  15.10%  10.81%  10.78%  14.70%  10.78%
  Tangible equity to tangible
  assets(B)
  10.05%  10.06%  10.29%  9.56%  9.49%  10.05%  9.49%
  Estimated common equity
  tier 1 capital
  11.34%  11.37%  11.76%  11.17%  10.59%  11.34%  10.59%
  Estimated tier 1 risk-based
  capital
  11.58%  11.61%  12.01%  11.53%  10.96%  11.58%  10.96%
  Estimated total risk-based
  capital
  13.27%  13.28%  13.70%  13.94%  13.41%  13.27%  13.41%
  Estimated tier 1 leverage
  capital
  10.17%  10.25%  10.61%  10.23%  9.78%  10.17%  9.78%
Allegiance Bank                            
  Estimated common equity
  tier 1 capital
  12.02%  11.67%  11.83%  11.24%  11.03%  12.02%  11.03%
  Estimated tier 1 risk-based
  capital
  12.02%  11.67%  11.83%  11.24%  11.03%  12.02%  11.03%
  Estimated total risk-based
  capital
  13.71%  13.34%  13.53%  13.65%  13.48%  13.71%  13.48%
  Estimated tier 1 leverage
  capital
  10.57%  10.31%  10.45%  9.98%  9.84%  10.57%  9.84%
                             
Other Data                            
Weighted average shares:                            
  Basic  21,257   21,733   21,908   13,371   13,327   21,494   13,294 
  Diluted  21,546   22,040   22,210   13,637   13,634   21,780   13,588 
Period end shares outstanding  21,147   21,484   21,938   13,397   13,341   21,147   13,341 
Book value per share $33.32  $32.76  $32.04  $24.49  $23.98  $33.32  $23.98 
Tangible book value per
  share(B)
 $21.60  $21.17  $20.66  $21.35  $20.81  $21.60  $20.81 
  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. Non-GAAP financial measure.  Excludes income recognized on acquisition accounting adjustments of $2.8 million, $3.0 million, $3.1 million, $0 and $147 thousand, respectively, for the three months ended and $5.7 million and $207 thousand, respectively, for the year-to-date.
  5. 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 
  June 30, 2019  March 31, 2019  June 30, 2018 
  Average
Balance
  Interest
Earned/
Interest
Paid
 Average
Yield/
Rate
  Average
Balance
 Interest
Earned/
Interest
Paid
 Average
Yield/
Rate
  Average
Balance
  Interest
Earned/
Interest
Paid
 Average
Yield/
Rate
 
  (Dollars in thousands) 
Assets                                
Interest-Earning Assets:                                
Loans $3,819,687  $56,016  5.88% $3,747,234 $54,189  5.86% $2,312,725  $31,846  5.52%
Securities  350,004   2,529  2.90%  346,686  2,272  2.66%  315,198   2,097  2.67%
Deposits in other financial
  institutions and other
  63,962   401  2.52%  118,749  688  2.35%  50,227   250  2.00%
Total interest-earning assets  4,233,653  $58,946  5.58%  4,212,669 $57,149  5.50%  2,678,150  $34,193  5.12%
Allowance for loan losses  (27,125)         (26,760)        (24,753)       
Noninterest-earning assets  586,435          559,763         280,852        
Total assets $4,792,963         $4,745,672        $2,934,249        
                                 
Liabilities and
  Shareholders' Equity
                                
Interest-Bearing Liabilities:                                
Interest-bearing demand
  deposits
 $350,147  $1,152  1.32% $338,193 $963  1.16% $157,588  $208  0.53%
Money market and savings
  deposits
  994,557   3,361  1.36%  880,138  2,765  1.27%  522,381   679  0.52%
Certificates and other time
  deposits
  1,331,955   7,008  2.11%  1,302,958  6,256  1.95%  827,897   3,284  1.59%
Borrowed funds  155,969   1,118  2.87%  283,566  1,827  2.61%  311,185   1,472  1.90%
Subordinated debt  48,986   736  6.03%  48,925  735  6.09%  48,746   734  6.04%
  Total interest-bearing
  liabilities
  2,881,614  $13,375  1.86%  2,853,780 $12,546  1.78%  1,867,797  $6,377  1.37%
                                 
Noninterest-Bearing
  Liabilities:
                                
Noninterest-bearing demand
  deposits
  1,173,662          1,167,172         741,266        
Other liabilities  32,525          17,054         7,778        
  Total liabilities  4,087,801          4,038,006         2,616,841        
Shareholders' equity  705,162          707,666         317,408        
  Total liabilities and
  shareholders' equity
 $4,792,963         $4,745,672        $2,934,249        
                                 
Net interest rate spread         3.72%        3.72%         3.75%
                                 
Net interest income and margin     $45,571  4.32%    $44,603  4.29%     $27,816  4.17%
                                 
Net interest income and tax
  equivalent net interest
  margin
     $45,684  4.33%    $44,805  4.31%     $28,086  4.21%


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  Six Months Ended June 30, 
  2019  2018 
  Average
Balance
  Interest
Earned/
Interest
Paid
  Average
Yield/ Rate
  Average
Balance
  Interest
Earned/
Interest
Paid
  Average
Yield/ Rate
 
  (Dollars in thousands) 
Assets                        
Interest-Earning Assets:                        
Loans $3,783,662  $110,205   5.87% $2,286,567  $61,963   5.46%
Securities  348,354   4,801   2.78%  313,990   4,155   2.67%
Deposits in other financial institutions  91,628   1,089   2.40%  50,063   466   1.88%
Total interest-earning assets  4,223,644  $116,095   5.54%  2,650,620  $66,584   5.07%
Allowance for loan losses  (26,944)          (24,353)        
Noninterest-earning assets  572,748           276,664         
Total assets $4,769,448          $2,902,931         
                         
Liabilities and Shareholders' Equity                        
Interest-Bearing Liabilities:                        
Interest-bearing demand deposits $344,203  $2,115   1.24% $194,774  $525   0.54%
Money market and savings deposits  937,664   6,126   1.32%  537,305   1,338   0.50%
Certificates and other time deposits  1,317,536   13,264   2.03%  814,196   6,069   1.50%
Borrowed funds  219,415   2,945   2.71%  280,967   2,508   1.80%
Subordinated debt  48,956   1,471   6.06%  48,716   1,439   5.96%
Total interest-bearing liabilities  2,867,774  $25,921   1.82%  1,875,958  $11,879   1.28%
                         
Noninterest-Bearing Liabilities:                        
Noninterest-bearing demand deposits  1,170,435           705,461         
Other liabilities  24,832           8,014         
Total liabilities  4,063,041           2,589,433         
Shareholders' equity  706,407           313,498         
Total liabilities and shareholders' equity $4,769,448          $2,902,931         
                         
Net interest rate spread          3.72%          3.79%
                         
Net interest income and margin     $90,174   4.31%     $54,705   4.16%
                         
Net interest income and tax equivalent
  net interest margin
     $90,489   4.32%     $55,260   4.20%


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  Three Months Ended 
  2019  2018 
  June 30  March 31  December 31  September 30  June 30 
  (Dollars in thousands) 
Period-end Loan Portfolio:                    
Commercial and industrial $694,516  $699,471  $702,037  $458,434  $452,307 
Mortgage warehouse  46,171   36,742   48,274   48,876   51,552 
Real estate:                    
  Commercial real estate (including
  multi-family residential)
  1,830,764   1,771,890   1,650,912   1,161,992   1,134,903 
  Commercial real estate construction and
  land development
  368,108   396,162   430,128   298,916   270,965 
  1-4 family residential (including home equity)  690,961   658,261   649,311   344,342   330,053 
  Residential construction  183,991   201,314   186,411   117,740   109,962 
Consumer and other  43,452   42,321   41,233   10,626   8,933 
Total loans $3,857,963  $3,806,161  $3,708,306  $2,440,926  $2,358,675 
                     
Asset Quality:                    
Nonaccrual loans $31,382  $32,670  $32,953  $14,943  $12,137 
Accruing loans 90 or more days past due               
Total nonperforming loans  31,382   32,670   32,953   14,943   12,137 
Other real estate  6,294   1,152   630   1,801   1,710 
Other repossessed assets           205   740 
Total nonperforming assets $37,676  $33,822  $33,583  $16,949  $14,587 
                     
Net charge-offs $590  $210  $219  $245  $1,428 
                     
Nonaccrual loans:                    
Commercial and industrial $9,386  $11,221  $10,861  $6,258  $5,983 
Mortgage warehouse               
Real estate:                    
  Commercial real estate (including
  multi-family residential)
  18,218   17,531   17,776   5,006   4,917 
  Commercial real estate construction and
  land development
  1,541   818   974   694    
  1-4 family residential (including home equity)  2,074   2,928   3,201   2,985   1,237 
  Residential construction               
Consumer and other  163   172   141       
Total nonaccrual loans $31,382  $32,670  $32,953  $14,943  $12,137 
                     
Asset Quality Ratios:                    
Nonperforming assets to total assets  0.79%  0.71%  0.72%  0.56%  0.49%
Nonperforming loans to total loans  0.81%  0.86%  0.89%  0.61%  0.51%
Allowance for loan losses to nonperforming loans  89.03%  83.02%  79.90%  157.84%  196.35%
Allowance for loan losses to total loans  0.72%  0.71%  0.71%  0.97%  1.01%
Net charge-offs to average loans (annualized)  0.06%  0.02%  0.02%  0.04%  0.25%


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 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 
 2019  2018  2019  2018 
 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$704,701  $703,777  $702,984  $328,131  $319,888  $704,701  $319,888 
Less:  Goodwill and core
  deposit intangibles, net
 247,873   249,051   249,712   42,077   42,272   247,873   42,272 
Tangible shareholders
  equity
$456,828  $454,726  $453,272  $286,054  $277,616  $456,828  $277,616 
                            
Shares outstanding at end of
  period
 21,147   21,484   21,938   13,397   13,341   21,147   13,341 
                            
Tangible book value per share$21.60  $21.17  $20.66  $21.35  $20.81  $21.60  $20.81 
                            
Net income$14,248  $12,678  $13,163  $8,879  $7,556  $26,926  $15,267 
                            
Average shareholders' equity$705,162  $707,666  $697,303  $326,204  $317,408  $706,407  $313,498 
Less:  Average goodwill and
  core deposit intangibles, net
 248,621   249,277   249,252   42,203   42,393   248,947   42,491 
Average tangible
  shareholders’ equity
$456,541  $458,389  $448,051  $284,001  $275,015  $457,460  $271,007 
                            
Return on average
  tangible equity
 12.52%  11.22%  11.66%  12.40%  11.02%  11.87%  11.36%
                            
Total assets$4,794,211  $4,768,802  $4,655,249  $3,035,539  $2,966,426  $4,794,211  $2,966,426 
Less: Goodwill and core
  deposit intangibles, net
 247,873   249,051   249,712   42,077   42,272   247,873   42,272 
Tangible assets$4,546,338  $4,519,751  $4,405,537  $2,993,462  $2,924,154  $4,546,338  $2,924,154 
                            
Tangible equity to tangible
  assets
 10.05%  10.06%  10.29%  9.56%  9.49%  10.05%  9.49%


CONTACT: Allegiance Bancshares, Inc.
ir@allegiancebank.com 

Allegiance Bank - BancsharesOneLineHorizontalWithRegMark.jpg

Source: Allegiance Bancshares, Inc.

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