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CST: 20/09/2019 21:36:12   

Allegiance Bancshares, Inc. Reports Second Quarter 2019 Results

56 Days ago

  • 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 

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