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CST: 18/08/2019 07:50:53   

Allegiance Bancshares, Inc. Reports First Quarter 2019 Results

114 Days ago

  • Net income increased 64.4% to $12.7 million for the first quarter 2019 compared to $7.7 million for the first quarter 2018

  • Completed the LoweryBank branch acquisition in Sugar Land, Texas with approximately $45.0 million in loans and $16.0 million in customer deposits

  • Core loan growth of $1.52 billion year over year, or 67.6%, and $109.4 million for the first quarter 2019 compared to the fourth quarter 2018, or 12.0% (annualized)

  • Net charge-offs to average loans of 0.02% (annualized) for each of the first quarter 2019 and fourth quarter 2018

HOUSTON, April 26, 2019 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $12.7 million and diluted earnings per share of $0.58 for the first quarter 2019 compared to $7.7 million and diluted earnings per share of $0.57 for the first quarter 2018.  The first quarter 2019 results included $1.2 million of pre-tax acquisition and merger-related expenses.

“2019 has already proven to be a productive year for Allegiance,” said George Martinez, Allegiance’s Chairman and Chief Executive Officer. “We successfully completed the integration of Post Oak Bank, including the full rebrand and systems conversion along with the continued cultural integration process; completed the branch acquisition of LoweryBank in Sugar Land; and rebalanced our footprint by consolidating two bank offices. We could not be more proud of our employees for their tireless efforts and commitment to Allegiance Bank. We believe we are well-positioned to support new and existing customers, who now have direct access to all of our comprehensive products and services, with 27 bank offices across the Houston region,” continued Martinez.

“We are pleased with our first quarter results as they reflect our continued focus on relationship banking and our ability to generate loans in a highly competitive environment. We continue to execute on our growth plans and generate solid returns for our shareholders. Our focus remains on attracting the best bankers in our markets to support organic growth. We hired 6 loan and deposit producers thus far in 2019 and anticipate that our bankers will continue to earn the trust of great customers and our shareholders will continue to reap the rewards. We are off to a strong start and look forward to another successful year,” concluded Martinez.

First Quarter 2019 Results

Net interest income before the provision for loan losses in the first quarter 2019 increased $17.7 million, or 65.9%, to $44.6 million from $26.9 million for the first quarter 2018 primarily due to a $1.59 billion, or 60.6%, increase in average interest-earning assets for the same period primarily 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 of $44.6 million for the first quarter 2019 decreased slightly from $45.8 million in the fourth quarter 2018 primarily due to the increase in interest expense as a result of higher funding costs on interest-bearing liabilities.  The net interest margin on a tax equivalent basis increased 11 basis points to 4.31% for the first quarter 2019 from 4.20% for the first quarter 2018 and decreased 14 basis points from 4.45% for the fourth quarter 2018. Excluding the impact of acquisition accounting adjustments, the net interest margin on a tax equivalent basis for the first quarter 2019 would have been 4.03% compared to 4.20% and 4.16% for the first quarter 2018 and fourth quarter 2018, respectively.

Noninterest income for the first quarter 2019 was $3.3 million, an increase of $1.6 million, or 99.8%, compared to $1.6 million for the first quarter 2018 and increased $955 thousand, or 40.9%, compared to $2.3 million for the fourth quarter 2018.  Noninterest income for the fourth quarter 2018 included $429 thousand of loss on the sales of other real estate and repossessed assets. 

Noninterest expense for the first quarter 2019 increased $12.4 million, or 66.2%, to $31.1 million from $18.7 million for the first quarter 2018, and increased $2.1 million, or 7.1%, from $29.0 million for the fourth quarter 2018. These increases were primarily due to additional noninterest expenses associated with the Post Oak acquisition, of which $1.2 million was attributable to acquisition and merger-related expenses.

In the first quarter 2019, Allegiance’s efficiency ratio was 64.97% compared to 65.59% for the first quarter 2018 and 60.30% for the fourth quarter 2018.  First quarter 2019 annualized returns on average assets, average equity and average tangible equity were 1.08%, 7.27% and 11.22%, respectively, compared to 1.09%, 10.10% and 11.71%, respectively, for the first quarter 2018.  Annualized returns on average assets, average equity and average tangible equity for the fourth quarter 2018 were 1.12%, 7.49% and 11.66%, respectively.

Financial Condition

Total assets at March 31, 2019 increased $113.6 million, or 2.4%, to $4.77 billion compared to $4.66 billion at December 31, 2018 and increased $1.88 billion, or 65.2%, compared to $2.89 billion at March 31, 2018, primarily due to the Post Oak acquisition and organic loan growth.

Total loans at March 31, 2019 increased $97.9 million, or 10.6% (annualized), to $3.81 billion compared to $3.71 billion at December 31, 2018 and increased $1.52 billion, or 66.2%, compared to $2.29 billion at March 31, 2018, primarily due to loans acquired in the Post Oak acquisition. Core loans, which exclude the mortgage warehouse portfolio, increased $109.4 million, or 3.0%, to $3.77 billion at March 31, 2019 from $3.66 billion at December 31, 2018 and increased $1.52 billion, or 67.6%, from $2.25 billion at March 31, 2018.  Excluding loans acquired from Post Oak of $1.16 billion, core loans at March 31, 2019 increased $360.5 million, from March 31, 2018.

Deposits at March 31, 2019 increased $117.5 million, or 3.2%, to $3.78 billion compared to $3.66 billion at December 31, 2018 and increased $1.50 billion, or 65.4%, compared to $2.28 billion at March 31, 2018, primarily related to the Post Oak acquisition.

Asset Quality

Nonperforming assets totaled $33.8 million, or 0.71% of total assets, at March 31, 2019, compared to $33.6 million, or 0.72%, of total assets, at December 31, 2018, and $14.2 million, or 0.49% of total assets, at March 31, 2018. The allowance for loan losses was 0.71% of total loans at March 31, 2019, 0.71% of total loans at December 31, 2018 and 1.08 % of total loans at March 31, 2018. The decrease in the allowance for loan losses as a percentage of loans from prior periods 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 first quarter 2019 was $1.0 million, or 0.11% (annualized) of average loans, compared to $3.0 million, 0.32% (annualized), of average loans, for the fourth quarter 2018 and $653 thousand, or 0.12% (annualized) of average loans, for the first quarter 2018.

First quarter 2019 net charge-offs were $210 thousand compared to net charge-offs of $219 thousand for the fourth quarter 2018 and net recoveries of $326 thousand for the first quarter 2018.

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 9 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, April 26, 2019 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its first quarter 2019 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 8668328.  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 March 31, 2019, Allegiance was a $4.77 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 March 31, 2019, Allegiance Bank operated 27 full-service banking locations, 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  
    March 31     December 31     September 30     June 30     March 31  
                               
    (Dollars in thousands)  
Cash and cash equivalents   $ 258,843     $ 268,947     $ 191,468     $ 200,645     $ 190,088  
Available for sale securities     345,716       337,293       300,115       300,897       307,411  
                                         
Total loans     3,806,161       3,708,306       2,440,926       2,358,675       2,290,494  
Allowance for loan losses     (27,123 )     (26,331 )     (23,586 )     (23,831 )     (24,628 )
Loans, net     3,779,038       3,681,975       2,417,340       2,334,844       2,265,866  
                                         
Goodwill     223,642       223,125       39,389       39,389       39,389  
Core deposit intangibles, net     25,409       26,587       2,688       2,883       3,079  
Premises and equipment, net     60,327       41,717       18,970       19,049       18,605  
Other real estate owned     1,152       630       1,801       1,710       365  
Bank owned life insurance     26,639       26,480       22,838       22,701       22,563  
Other assets     48,036       48,495       40,930       44,308       39,118  
Total assets   $ 4,768,802     $ 4,655,249     $ 3,035,539     $ 2,966,426     $ 2,886,484  
                                         
Noninterest-bearing deposits   $ 1,181,920     $ 1,209,300     $ 789,705     $ 749,787     $ 694,880  
Interest-bearing deposits     2,598,141       2,453,236       1,644,086       1,563,999       1,589,922  
Total deposits     3,780,061       3,662,536       2,433,791       2,313,786       2,284,802  
                                         
Borrowed funds     201,995       225,493       211,569       275,569       232,569  
Subordinated debt     48,959       48,899       48,839       48,779       48,719  
Other liabilities     34,010       15,337       13,209       8,404       8,406  
Total liabilities     4,065,025       3,952,265       2,707,408       2,646,538       2,574,496  
                                         
Common stock     21,484       21,938       13,397       13,341       13,302  
Capital surplus     556,184       571,803       221,762       220,665       219,760  
Retained earnings     123,094       112,131       98,968       90,089       82,533  
Accumulated other comprehensive income (loss)     3,015       (2,888 )     (5,996 )     (4,207 )     (3,607 )
Total shareholders’ equity     703,777       702,984       328,131       319,888       311,988  
Total liabilities and equity   $ 4,768,802     $ 4,655,249     $ 3,035,539     $ 2,966,426     $ 2,886,484  
                                         

  

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended
    2019     2018
    March 31     December   31     September   30     June 30     March 31
                             
    (Dollars in thousands, except per share data)
INTEREST INCOME:                                      
Loans, including fees   $ 54,189     $ 53,272     $ 32,988     $ 31,846     $ 30,117
Securities:                                      
Taxable     982       844       636       646       599
Tax-exempt     1,290       1,445       1,447       1,451       1,459
Deposits in other financial institutions     688       742       265       250       216
Total interest income     57,149       56,303       35,336       34,193       32,391
                                       
INTEREST EXPENSE:                                      
Demand, money market and savings deposits     3,728       3,367       1,248       887       976
Certificates and other time deposits     6,256       5,358       4,051       3,284       2,785
Borrowed funds     1,827       1,008       1,272       1,472       1,036
Subordinated debt     735       732       729       734       705
Total interest expense     12,546       10,465       7,300       6,377       5,502
NET INTEREST INCOME     44,603       45,838       28,036       27,816       26,889
Provision for loan losses     1,002       2,964             631       653
Net interest income after provision for loan losses     43,601       42,874       28,036       27,185       26,236
                                       
NONINTEREST INCOME:                                      
Nonsufficient funds fees     162       190       175       214       176
Service charges on deposit accounts     325       363       177       106       223
Gain (loss) on sales of other real estate and repossessed assets     1       (429 )           1      
Bank owned life insurance     159       163       137       138       141
Rebate from correspondent bank     896       988       613       564       444
Other     1,746       1,059       826       782       662
Total noninterest income     3,289       2,334       1,928       1,805       1,646
                                       
NONINTEREST EXPENSE:                                      
Salaries and employee benefits     19,684       18,167       12,965       12,778       12,794
Net occupancy and equipment     2,078       1,959       1,281       1,333       1,272
Depreciation     753       802       490       433       407
Data processing and software amortization     1,597       1,485       1,226       1,356       1,053
Professional fees     599       670       303       567       469
Regulatory assessments and FDIC insurance     728       776       505       494       534
Core deposit intangibles amortization     1,178       1,229       195       196       195
Communications     430       416       262       259       248
Advertising     704       704       351       340       330
Acquisition and merger-related expenses     1,173       840       196       625      
Other     2,191       1,998       1,390       1,479       1,415
Total noninterest expense     31,115       29,046       19,164       19,860       18,717
INCOME BEFORE INCOME TAXES     15,775       16,162       10,800       9,130       9,165
Provision for income taxes     3,097       2,999       1,921       1,574       1,454
NET INCOME   $ 12,678     $ 13,163     $ 8,879     $ 7,556     $ 7,711
                                       
EARNINGS PER SHARE                                      
Basic   $ 0.58     $ 0.60     $ 0.66     $ 0.57     $ 0.58
Diluted   $ 0.58     $ 0.59     $ 0.65     $ 0.55     $ 0.57
                                       


 Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended  
    2019     2018  
    March 31     December   31     September   30     June 30     March 31  
                               
    (Dollars and share amounts in thousands, except per share data)  
Net income   $ 12,678     $ 13,163     $ 8,879     $ 7,556     $ 7,711  
                                         
Earnings per share, basic   $ 0.58     $ 0.60     $ 0.66     $ 0.57     $ 0.58  
Earnings per share, diluted   $ 0.58     $ 0.59     $ 0.65     $ 0.55     $ 0.57  
                                         
Return on average assets(A)     1.08 %     1.12 %     1.18 %     1.03 %     1.09 %
Return on average equity(A)     7.27 %     7.49 %     10.80 %     9.55 %     10.10 %
Return on average tangible equity(A)(B)     11.22 %     11.66 %     12.40 %     11.02 %     11.71 %
Tax equivalent net interest margin(C)     4.31 %     4.45 %     4.10 %     4.21 %     4.20 %
Tax equivalent net interest margin-adjusted for acquisition accounting adjustments(D)     4.03 %     4.16 %     4.10 %     4.21 %     4.20 %
Efficiency ratio(E)     64.97 %     60.30 %     63.95 %     67.05 %     65.59 %
                                         
Capital Ratios                                        
Allegiance Bancshares, Inc. (Consolidated)                                        
Equity to assets     14.76 %     15.10 %     10.81 %     10.78 %     10.81 %
Tangible equity to tangible assets(B)     10.06 %     10.29 %     9.56 %     9.49 %     9.48 %
Estimated common equity tier 1 capital     11.37 %     11.76 %     11.17 %     10.60 %     10.82 %
Estimated tier 1 risk-based capital     11.61 %     12.01 %     11.53 %     10.97 %     11.19 %
Estimated total risk-based capital     13.28 %     13.70 %     13.94 %     13.42 %     13.72 %
Estimated tier 1 leverage capital     10.25 %     10.61 %     10.23 %     9.78 %     9.98 %
Allegiance Bank                                        
Estimated common equity tier 1 capital     11.67 %     11.83 %     11.24 %     11.04 %     10.95 %
Estimated tier 1 risk-based capital     11.67 %     11.83 %     11.24 %     11.04 %     10.95 %
Estimated total risk-based capital     13.34 %     13.53 %     13.65 %     13.49 %     13.49 %
Estimated tier 1 leverage capital     10.31 %     10.45 %     9.98 %     9.84 %     9.77 %
                                         
Other Data                                        
Weighted average shares:                                        
Basic     21,733       21,908       13,371       13,327       13,262  
Diluted     22,040       22,210       13,637       13,634       13,542  
Period end shares outstanding     21,484       21,938       13,397       13,341       13,302  
Book value per share   $ 32.76     $ 32.04     $ 24.49     $ 23.98     $ 23.46  
Tangible book value per share(B)   $ 21.17     $ 20.66     $ 21.35     $ 20.81     $ 20.26  


(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 9 of this Earnings Release.
(C) Net interest margin represents net interest income divided by average interest-earning assets.
(D) Non-GAAP financial measure.  Excludes income recognized on acquisition accounting adjustments of $3.0 million, $3.1 million, $0 thousand, $33 thousand and $68 thousand, respectively.
(E) Represents noninterest expense divided by the sum of net interest income plus noninterest income, excluding net gains and losses on the sale of securities. Additionally, taxes and provision for loan losses are not part of this calculation.
   



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended  
    March 31, 2019     December 31, 2018     March 31, 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   $ 3,747,234     $ 54,189       5.86 %   $ 3,639,390     $ 53,272       5.81 %   $ 2,260,119     $ 30,117       5.40 %
Securities     346,686       2,272       2.66 %     336,974       2,289       2.70 %     312,769       2,058       2.67 %
Deposits in other financial institutions and other     118,749       688       2.35 %     132,281       742       2.23 %     49,897       216       1.75 %
Total interest-earning assets     4,212,669     $ 57,149       5.50 %     4,108,645     $ 56,303       5.44 %     2,622,785     $ 32,391       5.01 %
Allowance for loan losses     (26,760 )                     (23,554 )                     (23,949 )                
Noninterest-earning assets     559,763                       564,934                       272,430                  
Total assets   $ 4,745,672                     $ 4,650,025                     $ 2,871,266                  
                                                                         
Liabilities and  Shareholders' Equity                                                                        
Interest-Bearing Liabilities:                                                                        
Interest-bearing demand deposits   $ 338,193     $ 963       1.16 %   $ 325,046     $ 920       1.12 %   $ 232,375     $ 317       0.55 %
Money market and savings deposits     880,138       2,765       1.27 %     942,764       2,447       1.03 %     552,396       659       0.48 %
Certificates and other time deposits     1,302,958       6,256       1.95 %     1,232,666       5,358       1.72 %     800,343       2,785       1.41 %
Borrowed funds     283,566       1,827       2.61 %     168,403       1,008       2.37 %     250,414       1,036       1.68 %
Subordinated debt     48,925       735       6.09 %     48,865       732       5.94 %     48,684       705       5.87 %
Total interest-bearing liabilities     2,853,780     $ 12,546       1.78 %     2,717,744     $ 10,465       1.53 %     1,884,212     $ 5,502       1.18 %
                                                                         
Noninterest-Bearing Liabilities:                                                                        
Noninterest-bearing demand deposits     1,167,172                       1,215,589                       669,258                  
Other liabilities     17,054                       19,389                       8,251                  
Total liabilities     4,038,006                       3,952,722                       2,561,721                  
Shareholders' equity     707,666                       697,303                       309,545                  
Total liabilities and shareholders' equity   $ 4,745,672                     $ 4,650,025                     $ 2,871,266                  
                                                                         
Net interest rate spread                     3.72 %                     3.91 %                     3.83 %
                                                                         
Net interest income and margin           $ 44,603       4.29 %           $ 45,838       4.43 %           $ 26,889       4.16 %
                                                                         
Net interest income and tax equivalent net interest margin           $ 44,805       4.31 %           $ 46,100       4.45 %           $ 27,174       4.20 %
                                                                         


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended  
    2019     2018  
    March 31     December   31     September   30     June 30     March 31  
                               
    (Dollars in thousands)  
Period-end Loan Portfolio:                                        
Commercial and industrial   $ 699,471     $ 702,037     $ 458,434     $ 452,307     $ 447,168  
Mortgage warehouse     36,742       48,274       48,876       51,552       41,572  
Real estate:                                        
Commercial real estate (including multi-family residential)     1,771,890       1,650,912       1,161,992       1,134,903       1,108,537  
Commercial real estate construction and land development     396,162       430,128       298,916       270,965       257,566  
1-4 family residential (including home equity)     658,261       649,311       344,342       330,053       317,842  
Residential construction     201,314       186,411       117,740       109,962       108,882  
Consumer and other     42,321       41,233       10,626       8,933       8,927  
Total loans   $ 3,806,161     $ 3,708,306     $ 2,440,926     $ 2,358,675     $ 2,290,494  
                                         
Asset Quality:                                        
Nonaccrual loans   $ 32,670     $ 32,953     $ 14,943     $ 12,137     $ 13,373  
Accruing loans 90 or more days past due                              
Total nonperforming loans     32,670       32,953       14,943       12,137       13,373  
Other real estate     1,152       630       1,801       1,710       365  
Other repossessed assets                 205       740       443  
Total nonperforming assets   $ 33,822     $ 33,583     $ 16,949     $ 14,587     $ 14,181  
                                         
Net charge-offs (recoveries)   $ 210     $ 219     $ 245     $ 1,428     $ (326 )
                                         
Nonaccrual loans:                                        
Commercial and industrial   $ 11,221     $ 10,861     $ 6,258     $ 5,983     $ 6,153  
Mortgage warehouse                              
Real estate:                                        
Commercial real estate (including multi-family residential)     17,531       17,776       5,006       4,917       6,466  
Commercial real estate construction and land development     818       974       694              
1-4 family residential (including home equity)     2,928       3,201       2,985       1,237       754  
Residential construction                              
Consumer and other     172       141                    
Total nonaccrual loans   $ 32,670     $ 32,953     $ 14,943     $ 12,137     $ 13,373  
                                         
Asset Quality Ratios:                                        
Nonperforming assets to total assets     0.71 %     0.72 %     0.56 %     0.49 %     0.49 %
Nonperforming loans to total loans     0.86 %     0.89 %     0.61 %     0.51 %     0.58 %
Allowance for loan losses to nonperforming loans     83.02 %     79.90 %     157.84 %     196.35 %     184.16 %
Allowance for loan losses to total loans     0.71 %     0.71 %     0.97 %     1.01 %     1.08 %
Net charge-offs (recoveries) to average loans (annualized)     0.02 %     0.02 %     0.04 %     0.25 %   (0.06 )%
                                       


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  
    2019     2018  
    March 31     December   31     September   30     June 30     March 31  
                               
    (Dollars and share amounts in thousands, except per share data)  
Total Shareholders' equity   $ 703,777     $ 702,984     $ 328,131     $ 319,888     $ 311,988  
Less:  Goodwill and core deposit intangibles, net     249,051       249,712       42,077       42,272       42,468  
Tangible shareholders equity   $ 454,726     $ 453,272     $ 286,054     $ 277,616     $ 269,520  
                                         
Shares outstanding at end of period     21,484       21,938       13,397       13,341       13,302  
                                         
Tangible book value per share   $ 21.17     $ 20.66     $ 21.35     $ 20.81     $ 20.26  
                                         
Net income   $ 12,678     $ 13,163     $ 8,879     $ 7,556     $ 7,711  
                                         
Average shareholders' equity   $ 707,666     $ 697,303     $ 326,204     $ 317,408     $ 309,545  
Less:  Average goodwill and core deposit intangibles, net     249,277       249,252       42,203       42,393       42,589  
Average tangible shareholders’ equity   $ 458,389     $ 448,051     $ 284,001     $ 275,015     $ 266,956  
                                         
Return on average tangible equity     11.22 %     11.66 %     12.40 %     11.02 %     11.71 %
                                         
Total assets   $ 4,768,802     $ 4,655,249     $ 3,035,539     $ 2,966,426     $ 2,886,484  
Less: Goodwill and core deposit intangibles, net     249,051       249,712       42,077       42,272       42,468  
Tangible assets   $ 4,519,751     $ 4,405,537     $ 2,993,462     $ 2,924,154     $ 2,844,016  
                                         
Tangible equity to tangible assets     10.06 %     10.29 %     9.56 %     9.49 %     9.48 %
                                         

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

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