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CST: 17/06/2019 04:36:37   

Allegiance Bancshares, Inc. Reports Record Year-End 2018 Results

142 Days ago

  • Total assets of $4.66 billion after the completion of the acquisition of Post Oak Bancshares, Inc. on October 1, 2018
  • Record earnings of $37.3 million and diluted earnings per common share of $2.37 for the year 2018
  • Core loan growth of $1.46 billion year over year, or 66.3%, and $1.27 billion for the fourth quarter 2018 compared to the linked quarter, or 53.0%
  • Net charge-offs of 0.02% and 0.06% for the fourth quarter and year 2018, respectively

HOUSTON, Jan. 25, 2019 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $13.2 million and diluted earnings per share of $0.59 for the fourth quarter 2018 compared to $3.2 million and diluted earnings per share of $0.24 for the fourth quarter 2017.  Net income for the year ended December 31, 2018 was $37.3 million, or $2.37 per diluted share, compared to $17.6 million, or $1.31 per diluted share, for the year ended December 31, 2017. The year ended December 31, 2018 results include $1.8 million and $1.7 million of core system conversion and merger-related expenses, respectively.

“2018 was a year of significant accomplishments for Allegiance, from our core technology platform conversion in the second quarter to the successful completion of the Post Oak acquisition in the fourth quarter,” said George Martinez, Allegiance’s Chairman and Chief Executive Officer.  “We are extremely proud of the phenomenal results our team has achieved.  We reported record earnings and diluted earnings per share in 2018 and we are well-positioned to deliver strong growth and performance in 2019.   Our combination with Post Oak further distinguishes Allegiance as Houston’s largest community bank exclusively focused on the Houston area, and we look forward to continuing our track record of growth serving the local business community.  Excluding loans acquired from Post Oak, core loans grew $294.3 million over the prior year. This is a tremendous accomplishment and is attributable to our experienced and highly dedicated lenders and back office support team.  Also, we are pleased to have delivered such strong growth with minimal net charge-offs totaling only 6 basis points on average loans during the year,” continued Martinez.

“We are particularly excited about our prospects as we head into 2019. We have begun the operational integration with Post Oak during the first quarter and look forward to further enhancing our already large Houston area footprint.  Early in 2019, we received regulatory approvals for the previously announced acquisition of a branch office in Sugar Land, a suburb of Houston, which we plan to complete in February 2019, and the much anticipated opening of a de novo bank office on the east side of downtown Houston, in early 2020.  Our commitment to being Houston’s premier super-community bank that delivers personalized service to our customers and serves our communities and shareholders could only be accomplished with the tireless work of our outstanding employees for whom we are very grateful,” concluded Martinez.

Fourth Quarter 2018 Results

Net interest income before the provision for loan losses in the fourth quarter 2018 increased $18.4 million, or 67.1%, to $45.8 million from $27.4 million for the fourth quarter 2017 primarily due to a $1.53 billion, or 59.3%, increase in average interest-earning assets for the same period primarily due to the Post Oak Bancshares, Inc. acquisition as well as organic growth for the year over year period.  Net interest income before provision for loan losses in the fourth quarter 2018 increased 63.5% or $17.8 million to $45.8 million from $28.0 million in the third quarter 2018, primarily due to the Post Oak acquisition and $2.7 million in acquisition accounting adjustments recorded during the fourth quarter of 2018.  The net interest margin on a tax equivalent basis increased 12 basis points to 4.45% for the fourth quarter 2018 from 4.33% for the fourth quarter 2017 and increased 35 basis points from 4.10% for the third quarter 2018. Excluding the impact of acquisition accounting adjustments, the net interest margin on a tax equivalent basis for the fourth quarter 2018 would have been 4.16% compared to 4.33% and 4.10% for the fourth quarter 2017 and third quarter 2018, respectively.

Noninterest income for the fourth quarter 2018 was $2.3 million, an increase of $751 thousand, or 47.4%, compared to $1.6 million for the fourth quarter 2017 and increased $406 thousand, or 21.1%, compared to $1.9 million for the third 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 fourth quarter 2018 increased $9.8 million, or 50.7%, to $29.0 million from $19.3 million for the fourth quarter 2017, and increased $9.9 million, or 51.6%, from $19.2 million for the third quarter 2018. These increases were primarily due to additional noninterest expenses associated with the Post Oak acquisition, of which $840 thousand was attributable to acquisition and merger-related expenses.

In the fourth quarter 2018, Allegiance’s efficiency ratio decreased to 60.30% from 66.50% for the fourth quarter 2017 and 63.95% for the third quarter 2018.  Fourth quarter 2018 annualized returns on average assets, average equity and average tangible equity were 1.12%, 7.49% and 11.66%, respectively, compared to 0.45%, 4.15% and 4.82%, respectively, for the fourth quarter 2017.  Annualized returns on average assets, average equity and average tangible equity for the third quarter 2018 were 1.18%, 10.80% and 12.40%, respectively.

Year-End December 31, 2018 Results

Net interest income before provision for loan losses for the year ended 2018 increased $24.9 million, or 24.0%, to $128.6 million from $103.7 million for the year ended December 31, 2017 primarily due to a $582.6 million, or 23.7%, 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 decreased 7 basis points to 4.27% for the year ended December 31, 2018 from 4.34% for the year ended December 31, 2017. Excluding the impact of acquisition accounting adjustments, the net interest margin for the year ended December 31, 2018 would have been 4.17%, compared to 4.32% for the year ended December 31, 2017.

Noninterest income for the year ended December 31, 2018 was $7.7 million, an increase of $1.9 million, or 31.6%, compared to $5.9 million for the year ended December 31, 2017.

Noninterest expense for the year ended December 31, 2018 increased $16.8 million, or 24.0%, to $86.8 million from $70.0 million for the year ended December 31, 2017.  The increase in noninterest expense over the year ended December 31, 2017 was primarily due to core system conversion expenses of $1.8 million, merger-related expenses of $1.7 million and additional expenses related to additional headcount and branches from the Post Oak acquisition during the year ended December 31, 2018.

Allegiance’s efficiency ratio decreased from 63.89% for the year ended December 31, 2017 to 63.68% for the year ended December 31, 2018. For the year ended December 31, 2018, returns on average assets, average equity and average tangible equity were 1.11%, 9.02% and 11.20%, respectively, compared to 0.65%, 5.92% and 6.93%, respectively, for the year ended December 31, 2017.

Financial Condition

Total assets at December 31, 2018 increased $1.79 billion, or 62.8%, to $4.66 billion compared to $2.86 billion at December 31, 2017 and increased $1.62 billion, or 53.4%, compared to $3.04 billion at September 30, 2018, primarily due to the Post Oak acquisition and organic loan growth.

Total loans at December 31, 2018 increased $1.44 billion, or 63.3%, to $3.71 billion compared to $2.27 billion at December 31, 2017 and increased $1.27 billion, or 51.9%, compared to $2.44 billion at September 30, 2018, primarily due to loans acquired in the Post Oak acquisition. Core loans, which exclude the mortgage warehouse portfolio, increased $1.46 billion, or 66.3%, to $3.66 billion at December 31, 2018 from $2.20 billion at December 31, 2017 and increased $1.27 billion, or 53.0%, from $2.39 billion at September 30, 2018.  Excluding loans acquired from Post Oak of $1.16 billion, core loans increased $294.3 million, from December 31, 2017 and $103.7 million, from September 30, 2018.

Deposits at December 31, 2018 increased $1.45 billion, or 65.4%, to $3.66 billion compared to $2.21 billion at December 31, 2017 and increased $1.23 billion, or 50.5%, compared to $2.43 billion at September 30, 2018, primarily related to the Post Oak acquisition.

Asset Quality

Nonperforming assets totaled $33.6 million, or 0.72% of total assets, at December 31, 2018, compared to $13.9 million, or 0.49%, of total assets, at December 31, 2017, and $16.9 million, or 0.56% of total assets, at September 30, 2018. The allowance for loan losses was 0.71% of total loans at December 31, 2018, 1.04% of total loans at December 31, 2017 and 0.97% of total loans at September 30, 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 fourth quarter 2018 was $3.0 million, or 0.32% (annualized) of average loans, compared to $1.9 million, 0.49%, of average loans, for the fourth quarter 2017.

Fourth quarter 2018 net charge-offs were $219 thousand compared to net charge-offs of $2.0 million for the fourth quarter 2017 and $245 thousand for the third quarter 2018.  Net charge-offs for the year 2018 were $1.6 million down from $7.5 million for the year 2017.

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, January 25, 2019 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its fourth quarter and year-end 2018 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 4644835.  Alternatively, a simultaneous audio-only webcast may be accessed via the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Upcoming Events. If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under News and Events, Event Calendar, Past Events.

Allegiance Bancshares, Inc.

As of December 31, 2018, Allegiance was a $4.66 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.  As of December 31, 2018, Allegiance Bank operated 28 full-service banking locations, with 27 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, 2017 and in other reports and statements Allegiance has filed with the Securities and Exchange Commission. Copies of such filings are available for download free of charge from the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Financial Information, SEC Filings.  Any forward-looking statement made by Allegiance in this release speaks only as of the date on which it is made. Factors or events that could cause Allegiance’s actual results to differ may emerge from time to time, and it is not possible for Allegiance to predict all of them. Allegiance undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    2018     2017  
    December 31     September 30     June 30     March 31     December 31  
       
    (Dollars in thousands)  
Cash and cash equivalents   $ 268,947     $ 191,468     $ 200,645     $ 190,088     $ 182,103  
Available for sale securities     337,293       300,115       300,897       307,411       309,615  
                                         
Total loans     3,708,306       2,440,926       2,358,675       2,290,494       2,270,876  
Allowance for loan losses     (26,331 )     (23,586 )     (23,831 )     (24,628 )     (23,649 )
Loans, net     3,681,975       2,417,340       2,334,844       2,265,866       2,247,227  
                                         
Goodwill     223,125       39,389       39,389       39,389       39,389  
Core deposit intangibles, net     26,587       2,688       2,883       3,079       3,274  
Premises and equipment, net     41,717       18,970       19,049       18,605       18,477  
Other real estate owned     630       1,801       1,710       365       365  
Bank owned life insurance     26,480       22,838       22,701       22,563       22,422  
Other assets     48,495       40,930       44,308       39,118       37,359  
Total assets   $ 4,655,249     $ 3,035,539     $ 2,966,426     $ 2,886,484     $ 2,860,231  
                                         
Noninterest-bearing deposits   $ 1,209,300     $ 789,705     $ 749,787     $ 694,880     $ 683,110  
Interest-bearing deposits     2,453,236       1,644,086       1,563,999       1,589,922       1,530,864  
Total deposits     3,662,536       2,433,791       2,313,786       2,284,802       2,213,974  
                                         
Borrowed funds     225,493       211,569       275,569       232,569       282,569  
Subordinated debt     48,899       48,839       48,779       48,719       48,659  
Other liabilities     15,337       13,209       8,404       8,406       8,164  
Total liabilities     3,952,265       2,707,408       2,646,538       2,574,496       2,553,366  
                                         
Common stock     21,938       13,397       13,341       13,302       13,227  
Capital surplus     571,803       221,762       220,665       219,760       218,408  
Retained earnings     112,131       98,968       90,089       82,533       74,894  
Accumulated other comprehensive
  (loss) income
    (2,888 )     (5,996 )     (4,207 )     (3,607 )     336  
Total shareholders’ equity     702,984       328,131       319,888       311,988       306,865  
Total liabilities and equity   $ 4,655,249     $ 3,035,539     $ 2,966,426     $ 2,886,484     $ 2,860,231  
   


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended     Year-to-Date  
    2018     2017     2018     2017  
    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   $ 53,272     $ 32,988     $ 31,846     $ 30,117     $ 29,747     $ 148,223     $ 110,331  
Securities:                                                        
Taxable     2,464       636       646       599       563       4,345       2,111  
Tax-exempt     (175 )     1,447       1,451       1,459       1,545       4,182       6,334  
Deposits in other financial institutions     742       265       250       216       183       1,473       662  
Total interest income     56,303       35,336       34,193       32,391       32,038       158,223       119,438  
       
       
INTEREST EXPENSE:      
Demand, money market and
  savings deposits
    3,367       1,248       887       976       992       6,478       3,159  
Certificates and other time deposits     5,358       4,051       3,284       2,785       2,521       15,478       9,060  
Borrowed funds     1,008       1,272       1,472       1,036       854       4,788       2,922  
Subordinated debt     732       729       734       705       235       2,900       629  
Total interest expense     10,465       7,300       6,377       5,502       4,602       29,644       15,770  
NET INTEREST INCOME     45,838       28,036       27,816       26,889       27,436       128,579       103,668  
Provision for loan losses     2,964             631       653       1,930       4,248       13,188  
Net interest income after provision
  for loan losses
    42,874       28,036       27,185       26,236       25,506       124,331       90,480  
     
     
NONINTEREST INCOME:    
Nonsufficient funds fees     190       175       214       176       158       755       685  
Service charges on deposit accounts     363       177       106       223       179       869       783  
Gain on sale of securities                             30             18  
(Loss) gain on sales of other real
   estate and repossessed assets
    (429 )           1             6       (428 )     6  
Bank owned life insurance     163       137       138       141       145       579       585  
Rebate from correspondent bank     988       613       564       444       388       2,609       1,327  
Other     1,059       826       782       662       677       3,329       2,457  
Total noninterest income     2,334       1,928       1,805       1,646       1,583       7,713       5,861  
                                                         
NONINTEREST EXPENSE:      
Salaries and employee benefits     18,167       12,965       12,778       12,794       12,188       56,704       44,745  
Net occupancy and equipment     1,959       1,281       1,333       1,272       1,398       5,845       5,452  
Depreciation     802       490       433       407       412       2,132       1,637  
Data processing and software
  amortization
    1,485       1,226       1,356       1,053       1,850       5,120       4,047  
Professional fees     670       303       567       469       222       2,009       2,926  
Regulatory assessments and
   FDIC insurance
    776       505       494       534       533       2,309       2,273  
Core deposit intangibles amortization     1,229       195       196       195       195       1,815       781  
Communications     416       262       259       248       252       1,185       983  
Advertising     704       351       340       330       436       1,725       1,289  
Acquisition and merger-related
   expenses
    840       196       625                   1,661        
Other     1,998       1,390       1,479       1,415       1,790       6,282       5,829  
Total noninterest expense     29,046       19,164       19,860       18,717       19,276       86,787       69,962  
INCOME BEFORE INCOME TAXES     16,162       10,800       9,130       9,165       7,813       45,257       26,379  
Provision for income taxes     2,999       1,921       1,574       1,454       4,609       7,948       8,747  
NET INCOME   $ 13,163     $ 8,879     $ 7,556     $ 7,711     $ 3,204     $ 37,309     $ 17,632  
                                                         
EARNINGS PER SHARE                                                        
Basic   $ 0.60     $ 0.66     $ 0.57     $ 0.58     $ 0.24     $ 2.41     $ 1.34  
Diluted   $ 0.59     $ 0.65     $ 0.55     $ 0.57     $ 0.24     $ 2.37     $ 1.31  
                                                         


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended     Year-to-Date  
    2018     2017     2018     2017  
    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   $ 13,163     $ 8,879     $ 7,556     $ 7,711     $ 3,204     $ 37,309     $ 17,632  
                                                         
Earnings per share, basic   $ 0.60     $ 0.66     $ 0.57     $ 0.58     $ 0.24     $ 2.41     $ 1.34  
Earnings per share, diluted   $ 0.59     $ 0.65     $ 0.55     $ 0.57     $ 0.24     $ 2.37     $ 1.31  
                                                         
Return on average assets(A)     1.12 %     1.18 %     1.03 %     1.09 %     0.45 %     1.11 %     0.65 %
Return on average equity(A)     7.49 %     10.80 %     9.55 %     10.10 %     4.15 %     9.02 %     5.92 %
Return on average tangible
  equity(A)(B)
    11.66 %     12.40 %     11.02 %     11.71 %     4.82 %     11.20 %     6.93 %
Tax equivalent net interest
  margin(C)
    4.45 %     4.10 %     4.21 %     4.20 %     4.33 %     4.27 %     4.34 %
Tax equivalent net interest
  margin-adjusted for
  acquisition accounting
  adjustments(D)
    4.16 %     4.10 %     4.21 %     4.20 %     4.32 %     4.17 %     4.32 %
Efficiency ratio(E)     60.30 %     63.95 %     67.05 %     65.59 %     66.50 %     63.68 %     63.89 %
                                                         
Liquidity and Capital Ratios                                                        
Allegiance Bancshares, Inc.
  (Consolidated)
                                                       
Equity to assets     15.10 %     10.81 %     10.78 %     10.81 %     10.73 %     15.10 %     10.73 %
Tangible equity to tangible
  assets(B)
    10.29 %     9.56 %     9.49 %     9.48 %     9.38 %     10.29 %     9.38 %
Estimated common equity
  tier 1 capital
    11.78 %     11.17 %     10.60 %     10.82 %     10.54 %     11.78 %     10.54 %
Estimated tier 1 risk-based
  capital
    12.02 %     11.53 %     10.97 %     11.19 %     10.92 %     12.02 %     10.92 %
Estimated total risk-based
  capital
    13.72 %     13.94 %     13.42 %     13.72 %     13.43 %     13.72 %     13.43 %
Estimated tier 1 leverage
  capital
    9.16 %     10.23 %     9.78 %     9.98 %     9.84 %     9.16 %     9.84 %
Allegiance Bank                                                        
Estimated common equity
  tier 1 capital
    11.85 %     11.24 %     11.04 %     10.95 %     10.72 %     11.85 %     10.72 %
Estimated tier 1 risk-based
  capital
    11.85 %     11.24 %     11.04 %     10.95 %     10.72 %     11.85 %     10.72 %
Estimated total risk-based
  capital
    13.55 %     13.65 %     13.49 %     13.49 %     13.24 %     13.55 %     13.24 %
Estimated tier 1 leverage
  capital
    10.46 %     9.98 %     9.84 %     9.77 %     9.67 %     10.46 %     9.67 %
                                                         
Other Data                                                        
Weighted average shares:                                                        
Basic     21,908       13,371       13,327       13,262       13,187       15,485       13,125  
Diluted     22,210       13,637       13,634       13,542       13,496       15,773       13,458  
Period end shares outstanding     21,938       13,397       13,341       13,301       13,227       21,938       13,227  
Book value per share   $ 32.04     $ 24.49     $ 23.98     $ 23.46     $ 23.20     $ 32.04     $ 23.20  
Tangible book value per
  share(B)
  $ 20.66     $ 21.35     $ 20.81     $ 20.26     $ 19.97     $ 20.66     $ 19.97  
  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 $3.1 million, $0, $0, $33 thousand, $68 thousand, $3.1 million and $527 thousand, respectively.
  5. 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  
    December 31, 2018     September 30, 2018     December 31, 2017  
    Average
Balance
    Interest
Earned/
Interest
Paid
    Average
Yield/
Rate
    Average
Balance
    Interest
Earned/
Interest
Paid
    Average
Yield/
Rate
    Average
Balance
    Interest
Earned/
Interest
Paid
    Average
Yield/
Rate
 
       
    (Dollars in thousands)  
Assets                                                                        
Interest-Earning Assets:                                                                        
Loans   $ 3,639,390     $ 53,272       5.81 %   $ 2,384,966     $ 32,988       5.49 %   $ 2,209,389     $ 29,747       5.34 %
Securities     336,974       2,289       2.70 %     304,254       2,083       2.72 %     322,539       2,108       2.59 %
Deposits in other financial
  institutions and other
    132,281       742       2.23 %     47,518       265       2.21 %     47,257       183       1.54 %
Total interest-earning assets     4,108,645     $ 56,303       5.44 %     2,736,738     $ 35,336       5.12 %     2,579,185     $ 32,038       4.93 %
Allowance for loan losses     (23,554 )                     (24,059 )                     (23,740 )                
Noninterest-earning assets     564,934                       276,997                       267,611                  
Total assets   $ 4,650,025                     $ 2,989,676                     $ 2,823,056                  
                                                                         
Liabilities and Shareholders'
  Equity
                                                                       
Interest-Bearing Liabilities:                                                                        
Interest-bearing demand deposits   $ 325,046     $ 920       1.12 %   $ 181,284     $ 389       0.85 %   $ 214,498     $ 252       0.47 %
Money market and savings
  deposits
    942,764       2,447       1.03 %     530,240       859       0.64 %     599,977       740       0.49 %
Certificates and other time
  deposits
    1,232,666       5,358       1.72 %     896,253       4,051       1.79 %     766,942       2,521       1.30 %
Borrowed funds     168,403       1,008       2.37 %     234,776       1,272       2.15 %     232,863       854       1.45 %
Subordinated debt     48,865       732       5.94 %     48,805       729       5.93 %     17,070       235       5.46 %
Total interest-bearing
  liabilities
    2,717,744     $ 10,465       1.53 %     1,891,358     $ 7,300       1.53 %     1,831,350     $ 4,602       1.00 %
     
     
Noninterest-Bearing Liabilities:                                                                        
Noninterest-bearing demand
  deposits
    1,215,589                       761,935                       675,643                  
Other liabilities     19,389                       10,179                       9,717                  
Total liabilities     3,952,722                       2,663,472                       2,516,710                  
Shareholders' equity     697,303                       326,204                       306,346                  
Total liabilities and
  shareholders' equity
  $ 4,650,025                     $ 2,989,676                     $ 2,823,056                  
                                                                         
Net interest rate spread                     3.91 %                     3.59 %                     3.93 %
                                                                         
Net interest income and margin(1)           $ 45,838       4.43 %           $ 28,036       4.06 %           $ 27,436       4.22 %
                                                                         
Net interest income and margin
  (tax equivalent)(2)
          $ 46,100       4.45 %           $ 28,292       4.10 %           $ 28,151       4.33 %
     
     


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Years Ended December 31,  
    2018     2017  
    Average
Balance
    Interest
Earned/
Interest
Paid
    Average
Yield/
Rate
    Average
Balance
    Interest
Earned/
Interest
Paid
    Average
Yield/
Rate
 
       
    (Dollars in thousands)  
Assets                                                
Interest-Earning Assets:                                                
Loans   $ 2,652,355     $ 148,223       5.59 %   $ 2,081,370     $ 110,331       5.30 %
Securities     317,329       8,527       2.69 %     324,926       8,445       2.60 %
Deposits in other financial institutions     70,145       1,473       2.10 %     50,917       662       1.30 %
Total interest-earning assets     3,039,829     $ 158,223       5.21 %     2,457,213     $ 119,438       4.86 %
Allowance for loan losses     (24,077 )                     (20,536 )                
Noninterest-earning assets     349,408                       262,549                  
Total assets   $ 3,365,160                     $ 2,699,226                  
                                                 
Liabilities and Shareholders' Equity                                                
Interest-Bearing Liabilities:                                                
Interest-bearing demand deposits   $ 224,210     $ 1,834       0.82 %   $ 156,527     $ 597       0.38 %
Money market and savings deposits     637,722       4,644       0.73 %     536,415       2,562       0.48 %
Certificates and other time deposits     940,356       15,478       1.65 %     748,086       9,060       1.21 %
Borrowed funds     240,952       4,788       1.99 %     269,633       2,922       1.08 %
Subordinated debt     48,776       2,900       5.95 %     11,208       629       5.61 %
Total interest-bearing liabilities     2,092,016     $ 29,644       1.42 %     1,721,869     $ 15,770       0.92 %
                                                 
Noninterest-Bearing Liabilities:                                                
Noninterest-bearing demand deposits     848,276                       672,101                  
Other liabilities     11,427                       7,629                  
Total liabilities     2,951,719                       2,401,599                  
Shareholders' equity     413,441                       297,627                  
Total liabilities and shareholders' equity   $ 3,365,160                     $ 2,699,226                  
                                                 
Net interest rate spread                     3.79 %                     3.94 %
                                                 
Net interest income and margin           $ 128,579       4.23 %           $ 103,668       4.22 %
                                                 
Net interest income and margin (tax equivalent)           $ 129,652       4.27 %           $ 106,669       4.34 %
                                                 


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended  
    2018     2017  
    December   31     September   30     June 30     March 31     December   31  
       
    (Dollars in thousands)  
Period-end Loan Portfolio:                                        
Commercial and industrial   $ 702,037     $ 458,434     $ 452,307     $ 447,168     $ 457,129  
Mortgage warehouse     48,274       48,876       51,552       41,572       69,456  
Real estate:                                        
Commercial real estate (including
  multi-family residential)
    1,650,912       1,161,992       1,134,903       1,108,537       1,080,247  
Commercial real estate construction
  and land development
    430,128       298,916       270,965       257,566       243,389  
1-4 family residential (including home
  equity)
    649,311       344,342       330,053       317,842       301,219  
Residential construction     186,411       117,740       109,962       108,882       109,116  
Consumer and other     41,233       10,626       8,933       8,927       10,320  
Total loans   $ 3,708,306     $ 2,440,926     $ 2,358,675     $ 2,290,494     $ 2,270,876  
                                         
Asset Quality:                                        
Nonaccrual loans   $ 32,953     $ 14,943     $ 12,137     $ 13,373     $ 13,328  
Accruing loans 90 or more days past due                              
Total nonperforming loans     32,953       14,943       12,137       13,373       13,328  
Other real estate     630       1,801       1,710       365       365  
Other repossessed assets           205       740       443       205  
Total nonperforming assets   $ 33,583     $ 16,949     $ 14,587     $ 14,181     $ 13,898  
                                         
Net charge-offs (recoveries)   $ 219     $ 245     $ 1,428     $ (326 )   $ 2,003  
                                         
Nonaccrual loans:                                        
Commercial and industrial   $ 10,861     $ 6,258     $ 5,983     $ 6,153     $ 6,437  
Mortgage warehouse                              
Real estate:                                        
Commercial real estate (including
  multi-family residential)
    17,776       5,006       4,917       6,466       6,110  
Commercial real estate construction
  and land development
    974       694                    
1-4 family residential (including
  home equity)
    3,201       2,985       1,237       754       781  
Residential construction                              
Consumer and other     141                          
Total nonaccrual loans   $ 32,953     $ 14,943     $ 12,137     $ 13,373     $ 13,328  
                                         
Asset Quality Ratios:                                        
Nonperforming assets to total assets     0.72 %     0.56 %     0.49 %     0.49 %     0.49 %
Nonperforming loans to total loans     0.89 %     0.61 %     0.51 %     0.58 %     0.59 %
Allowance for loan losses to
  nonperforming loans
    79.90 %     157.84 %     196.35 %     184.16 %     177.44 %
Allowance for loan losses to total loans     0.71 %     0.97 %     1.01 %     1.08 %     1.04 %
Net charge-offs (recoveries) to average
  loans (annualized)
    0.02 %     0.04 %     0.25 %   (0.06 )%      0.36 %
                                       


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     Years Ended  
    2018     2017     2018     2017  
    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   $ 702,984     $ 328,131     $ 319,888     $ 311,988     $ 306,865     $ 702,984     $ 306,865  
Less:  Goodwill and core
  deposit intangibles, net
    249,712       42,077       42,272       42,468       42,663       249,712       42,663  
Tangible shareholders equity   $ 453,272     $ 286,054     $ 277,616     $ 269,520     $ 264,202     $ 453,272     $ 264,202  
                                                         
Shares outstanding at end
  of period
    21,938       13,397       13,341       13,301       13,227       21,938       13,227  
                                                         
Tangible book value per
  share
  $ 20.66     $ 21.35     $ 20.81     $ 20.26     $ 19.97     $ 20.66     $ 19.97  
                                                         
Net income   $ 13,163     $ 8,879     $ 7,556     $ 7,711     $ 3,204     $ 37,309     $ 17,632  
                                                         
Average shareholders' equity   $ 697,303     $ 326,204     $ 317,408     $ 309,545     $ 306,346     $ 413,441     $ 297,627  
Less:  Average goodwill and
  core deposit intangibles, net
    249,252       42,203       42,393       42,589       42,758       80,384       43,050  
Average tangible shareholders’
  equity
  $ 448,051     $ 284,001     $ 275,015     $ 266,954     $ 263,588     $ 333,057     $ 254,577  
                                                         
Return on average tangible
  equity
    11.66 %     12.40 %     11.02 %     11.71 %     4.82 %     11.20 %     6.93 %
                                                         
Total assets   $ 4,655,249     $ 3,035,539     $ 2,966,426     $ 2,886,484     $ 2,860,231     $ 4,655,249     $ 2,860,231  
Less: Goodwill and core
  deposit intangibles, net
    249,712       42,077       42,272       42,468       42,663       249,712       42,663  
Tangible assets   $ 4,405,537     $ 2,993,462     $ 2,924,154     $ 2,844,016     $ 2,817,568     $ 4,405,537     $ 2,817,568  
                                                         
Tangible equity to tangible
  assets
    10.29 %     9.56 %     9.49 %     9.48 %     9.38 %     10.29 %     9.38 %
                                                         


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

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