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CST: 13/11/2019 19:22:12   

Allegiance Bancshares, Inc. Reports Third Quarter 2019 Results

19 Days ago

HOUSTON, Oct. 25, 2019 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $12.0 million and diluted earnings per share of $0.57 for the third quarter 2019 compared to net income of $8.9 million and diluted earnings per share of $0.65 for the third quarter 2018.  The third quarter 2019 included $1.4 million of pre-tax severance expense.  Net income for the nine months ended September 30, 2019 was $39.0 million, or $1.81 per diluted share, compared to net income of $24.1 million, or $1.77 per diluted share, for the nine months ended September 30, 2018.  The nine months ended September 30, 2019 results included $1.4 million of pre-tax severance expense and $1.3 million of pre-tax acquisition and merger-related expenses. The nine months ended September 30, 2018 results included $821 thousand of pre-tax acquisition and merger-related expenses.

“The third quarter was very productive for us and culminated with the completion of a $60 million subordinated debt offering,” said George Martinez, Allegiance’s Chairman and Chief Executive Officer.  “Securing this attractive capital, positions us well for future growth,” continued Martinez.

“We are dedicated to taking great care of our customers by building on long-lasting relationships as we help them reach their financial goals.  We are also keenly focused on developing new customer relationships and adding to our market share.  Our personalized service to all of our customers is what will continue to set us apart as the premier bank in the Houston region and what will continue to drive our long-term financial success. We are in a tremendous position of strength and are encouraged about our prospects for the remainder of the year as we work to leverage our talent and capital to produce improved returns for our shareholders,” concluded Martinez.

Third Quarter 2019 Results

Net interest income before the provision for loan losses in the third quarter 2019 increased $16.8 million, or 59.9%, to $44.8 million from $28.0 million for the third quarter 2018 primarily due to a $1.55 billion, or 56.6%, increase in average interest-earning assets for the same period.  This increase was 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 third quarter 2019 decreased from $45.6 million in the second quarter 2019.  The net interest margin on a tax equivalent basis increased 6 basis points to 4.16% for the third quarter 2019 from 4.10% for the third quarter 2018 and decreased 17 basis points from 4.33% for the second quarter 2019. Core net interest margin on a tax equivalent basis excludes the impact of acquisition accounting adjustments and was 3.97% for the third quarter 2019 compared to 4.07% for the second quarter 2019. Please refer to the non-GAAP reconciliation on page 10. 

Noninterest income for the third quarter 2019 was $2.9 million, an increase of $961 thousand, or 49.8%, compared to $1.9 million for the third quarter 2018 and decreased $956 thousand, or 24.9%, compared to $3.8 million for the second quarter 2019.  Noninterest income for the second quarter 2019 included $846 thousand of gain on the sale of securities. 

Noninterest expense for the third quarter 2019 increased $10.8 million, or 56.6%, to $30.0 million from $19.2 million for the third quarter 2018, and decreased slightly compared to the second quarter 2019. The increase over the prior year quarter was primarily due to additional expenses associated with increased headcount and bank offices from the Post Oak acquisition. Additionally, the third quarter 2019 included $1.4 million of severance expense partially offset by a $676 thousand FDIC Small Bank Assessment Credit.

In the third quarter 2019, Allegiance’s efficiency ratio was 62.88% compared to 61.93% for the second quarter 2019 and 63.95% for the third quarter 2018.  Third quarter 2019 annualized returns on average assets, average equity and average tangible equity were 0.98%, 6.73% and 10.33%, respectively, compared to 1.19%, 8.10% and 12.52%, respectively, for the second quarter 2019.  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.

Nine Months Ended September 30, 2019 Results

Net interest income before provision for loan losses for the nine months ended September 30, 2019 increased $52.3 million, or 63.2%, to $135.0 million from $82.7 million for the nine months ended September 30, 2018 primarily due to a $1.56 billion, or 58.4%, 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 10 basis points to 4.27% for the nine months ended September 30, 2019 from 4.17% for the nine months ended September 30, 2018. Core net interest margin on a tax equivalent basis for the nine months ended September 30, 2019 would have been 4.02%, compared to 4.17% for the nine months ended September 30, 2018. Please refer to the non-GAAP reconciliation on page 10. 

Noninterest income for the nine months ended September 30, 2019 was $10.0 million, an increase of $4.6 million, or 86.3%, compared to $5.4 million for the nine months ended September 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 nine months ended September 30, 2019 increased $33.5 million, or 58.0%, to $91.2 million from $57.7 million for the nine months ended September 30, 2018. The increase in noninterest expense over the nine months ended September 30, 2018 was primarily due to additional expenses associated with increased headcount and bank offices along with merger-related expenses from the Post Oak acquisition. Additionally, the nine months ended 2019 included $1.4 million of severance expense partially offset by a $676 thousand FDIC Small Bank Assessment Credit.

Allegiance’s efficiency ratio decreased from 65.52% for the nine months ended September 30, 2018 to 63.25% for the nine months ended September 30, 2019. For the nine months ended September 30, 2019, returns on average assets, average equity and average tangible equity were 1.09%, 7.36% and 11.35%, respectively, compared to 1.10%, 10.16% and 11.72%, respectively, for the nine months ended September 30, 2018.

Financial Condition

Total assets at September 30, 2019 increased $111.6 million to $4.91 billion compared to $4.79 billion at June 30, 2019 and increased $1.87 billion compared to $3.04 billion at September 30, 2018, primarily due to the Post Oak acquisition and organic loan growth.

Total loans at September 30, 2019 increased $28.0 million, or 2.9% (annualized), to $3.89 billion compared to $3.86 billion at June 30, 2019 and increased $1.45 billion, or 59.2%, 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 $37.6 million, or 4.0% (annualized), to $3.85 billion at September 30, 2019 from $3.81 billion at June 30, 2019 and increased $1.46 billion, or 60.9%, from $2.39 billion at September 30, 2018.  Excluding loans acquired from Post Oak at acquisition of $1.16 billion, core loans at September 30, 2019 increased $297.4 million, from September 30, 2018.

Deposits at September 30, 2019 increased $36.8 million, or 3.8% (annualized), to $3.90 billion compared to $3.86 billion at June 30, 2019 and increased $1.46 billion, or 60.1%, compared to $2.43 billion at September 30, 2018, primarily related to the Post Oak acquisition.

Asset Quality

Nonperforming assets totaled $42.9 million, or 0.88% of total assets, at September 30, 2019, compared to $37.7 million, or 0.79%, of total assets, at June 30, 2019, and $16.9 million, or 0.56% of total assets, at September 30, 2018. The allowance for loan losses was 0.77% of total loans at September 30, 2019, 0.72% of total loans at June 30, 2019 and 0.97% of total loans at September 30, 2018. The decrease in the allowance for loan losses as a percentage of loans from September 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 third quarter 2019 was $2.6 million, or 0.27% (annualized) of average loans, compared to $1.4 million, or 0.15% (annualized) of average loans, for the second quarter 2019.

Third quarter 2019 net charge-offs were $729 thousand, or 0.07% (annualized) of average loans, compared to net charge-offs of $590 thousand, or 0.06% (annualized) of average loans, for the second quarter 2019 and $245 thousand, or 0.04% (annualized) of average loans, for the third quarter 2018. Net charge-offs for the nine months ended September 30, 2019 were $1.5 million, or 0.18% (annualized) of average loans, compared to net charge-offs for the nine months ended September 30, 2018 of $1.3 million, or 0.08% (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, October 25, 2019 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its third quarter 2019 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 1986475.  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 September 30, 2019, Allegiance was a $4.91 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 September 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  
    September 30     June 30     March 31     December 31     September 30  
                               
    (Dollars in thousands)  
Cash and cash equivalents   $ 300,619     $ 232,607     $ 258,843     $ 268,947     $ 191,468  
Available for sale securities     353,000       348,173       345,716       337,293       300,115  
                                         
Total loans     3,886,004       3,857,963       3,806,161       3,708,306       2,440,926  
Allowance for loan losses     (29,808 )     (27,940 )     (27,123 )     (26,331 )     (23,586 )
Loans, net     3,856,196       3,830,023       3,779,038       3,681,975       2,417,340  
                                         
Goodwill     223,642       223,642       223,642       223,125       39,389  
Core deposit intangibles, net     23,053       24,231       25,409       26,587       2,688  
Premises and equipment, net     67,175       59,690       60,327       41,717       18,970  
Other real estate owned     8,333       6,294       1,152       630       1,801  
Bank owned life insurance     26,947       26,794       26,639       26,480       22,838  
Other assets     46,875       42,757       48,036       48,495       40,930  
Total assets   $ 4,905,840     $ 4,794,211     $ 4,768,802     $ 4,655,249     $ 3,035,539  
                                         
Noninterest-bearing deposits   $ 1,227,839     $ 1,173,423     $ 1,181,920     $ 1,209,300     $ 789,705  
Interest-bearing deposits     2,669,646       2,687,217       2,598,141       2,453,236       1,644,086  
Total deposits     3,897,485       3,860,640       3,780,061       3,662,536       2,433,791  
                                         
Borrowed funds     159,501       146,998       201,995       225,493       211,569  
Subordinated debt     107,771       49,019       48,959       48,899       48,839  
Other liabilities     34,775       32,853       34,010       15,337       13,209  
Total liabilities     4,199,532       4,089,510       4,065,025       3,952,265       2,707,408  
                                         
Common stock     20,737       21,147       21,484       21,938       13,397  
Capital surplus     529,688       541,979       556,184       571,803       221,762  
Retained earnings     149,389       137,342       123,094       112,131       98,968  
Accumulated other comprehensive
  income (loss)
    6,494       4,233       3,015       (2,888 )     (5,996 )
Total shareholders’ equity     706,308       704,701       703,777       702,984       328,131  
Total liabilities and equity   $ 4,905,840     $ 4,794,211     $ 4,768,802     $ 4,655,249     $ 3,035,539  

 

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended     Year-to-Date  
    2019     2018     2019     2018  
    September   30     June 30     March 31     December   31     September   30     September   30     September   30  
                                           
    (Dollars in thousands, except per share data)  
INTEREST INCOME:                                                        
  Loans, including fees   $ 55,790     $ 56,016     $ 54,189     $ 53,272     $ 32,988     $ 165,995     $ 94,951  
  Securities:                                           .          
  Taxable     2,090       1,837       982       844       636       4,909       1,881  
  Tax-exempt     483       692       1,290       1,445       1,447       2,465       4,357  
  Deposits in other financial
  institutions
    302       401       688       742       265       1,391       731  
  Total interest income     58,665       58,946       57,149       56,303       35,336       174,760       101,920  
                                                         
INTEREST EXPENSE:                                                        
  Demand, money market and
  savings deposits
    4,975       4,513       3,728       3,367       1,248       13,216       3,111  
  Certificates and other time
  deposits
    6,909       7,008       6,256       5,358       4,051       20,173       10,120  
  Borrowed funds     1,183       1,118       1,827       1,008       1,272       4,128       3,780  
  Subordinated debt     761       736       735       732       729       2,232       2,168  
  Total interest expense     13,828       13,375       12,546       10,465       7,300       39,749       19,179  
NET INTEREST INCOME     44,837       45,571       44,603       45,838       28,036       135,011       82,741  
Provision for loan losses     2,597       1,407       1,002       2,964             5,006       1,284  
Net interest income after provision
  for loan losses
    42,240       44,164       43,601       42,874       28,036       130,005       81,457  
                                                         
NONINTEREST INCOME:                                                        
  Nonsufficient funds fees     168       139       162       190       175       469       565  
  Service charges on deposit
  accounts
    379       365       325       363       177       1,069       506  
  Gain on sale of securities           846                         846      
  Gain (loss) on sales of other real
  estate and repossessed assets
          70       1       (429 )           71       1  
  Bank owned life insurance     153       155       159       163       137       467       416  
  Rebate from correspondent bank     900       884       896       988       613       2,680       1,621  
  Other     1,289       1,386       1,746       1,059       826       4,421       2,270  
  Total noninterest income     2,889       3,845       3,289       2,334       1,928       10,023       5,379  
                                                         
NONINTEREST EXPENSE:                                                        
  Salaries and employee benefits     20,221       19,415       19,684       18,167       12,965       59,320       38,537  
  Net occupancy and equipment     1,973       2,088       2,078       1,959       1,281       6,139       3,886  
  Depreciation     822       756       753       802       490       2,331       1,330  
  Data processing and software
  amortization
    2,058       1,735       1,597       1,485       1,226       5,390       3,635  
  Professional fees     667       527       599       670       303       1,793       1,339  
  Regulatory assessments and
  FDIC insurance
    (41 )     802       728       776       505       1,489       1,533  
  Core deposit intangibles
  amortization
    1,178       1,178       1,178       1,229       195       3,534       586  
  Communications     455       468       430       416       262       1,353       769  
  Advertising     449       617       704       704       351       1,770       1,021  
  Acquisition and merger-related
  expenses
          153       1,173       840       196       1,326       821  
  Other     2,227       2,341       2,191       1,998       1,390       6,759       4,284  
  Total noninterest expense     30,009       30,080       31,115       29,046       19,164       91,204       57,741  
INCOME BEFORE INCOME TAXES     15,120       17,929       15,775       16,162       10,800       48,824       29,095  
  Provision for income taxes     3,073       3,681       3,097       2,999       1,921       9,851       4,949  
NET INCOME   $ 12,047     $ 14,248     $ 12,678     $ 13,163     $ 8,879     $ 38,973     $ 24,146  
                                                         
EARNINGS PER SHARE                                                        
  Basic   $ 0.57     $ 0.67     $ 0.58     $ 0.60     $ 0.66     $ 1.83     $ 1.81  
  Diluted   $ 0.57     $ 0.66     $ 0.58     $ 0.59     $ 0.65     $ 1.81     $ 1.77  

 

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended     Year-to-Date  
    2019     2018     2019     2018  
    September   30     June 30     March 31     December   31     September   30     September   30     September   30  
                                           
    (Dollars and share amounts in thousands, except per share data)  
Net income   $ 12,047     $ 14,248     $ 12,678     $ 13,163     $ 8,879     $ 38,973     $ 24,146  
                                                         
Earnings per share, basic   $ 0.57     $ 0.67     $ 0.58     $ 0.60     $ 0.66     $ 1.83     $ 1.81  
Earnings per share, diluted   $ 0.57     $ 0.66     $ 0.58     $ 0.59     $ 0.65     $ 1.81     $ 1.77  
                                                         
Return on average assets(A)     0.98 %     1.19 %     1.08 %     1.12 %     1.18 %     1.09 %     1.10 %
Return on average equity(A)     6.73 %     8.10 %     7.27 %     7.49 %     10.80 %     7.36 %     10.16 %
Return on average tangible
  equity(A)(B)
    10.33 %     12.52 %     11.22 %     11.66 %     12.40 %     11.35 %     11.72 %
Net interest margin
  (tax equivalent)(C)
    4.16 %     4.33 %     4.31 %     4.45 %     4.10 %     4.27 %     4.17 %
Core net interest margin
  (tax equivalent)(B)
    3.97 %     4.07 %     4.03 %     4.16 %     4.10 %     4.02 %     4.17 %
Efficiency ratio(D)     62.88 %     61.93 %     64.97 %     60.30 %     63.95 %     63.25 %     65.52 %
                                                         
Capital Ratios                                                        
Allegiance Bancshares, Inc.
  (Consolidated)
                                                       
  Equity to assets     14.40 %     14.70 %     14.76 %     15.10 %     10.81 %     14.40 %     10.81 %
  Tangible equity to tangible
  assets(B)
    9.86 %     10.05 %     10.06 %     10.29 %     9.56 %     9.86 %     9.56 %
  Estimated common equity
  tier 1 capital
    11.28 %     11.34 %     11.37 %     11.76 %     11.17 %     11.28 %     11.16 %
  Estimated tier 1 risk-based
  capital
    11.51 %     11.58 %     11.61 %     12.01 %     11.53 %     11.51 %     11.51 %
  Estimated total risk-based
  capital
    14.70 %     13.27 %     13.28 %     13.70 %     13.94 %     14.70 %     13.92 %
  Estimated tier 1 leverage
  capital
    10.06 %     10.17 %     10.25 %     10.61 %     10.23 %     10.06 %     10.23 %
Allegiance Bank                                                        
  Estimated common equity
  tier 1 capital
    12.28 %     12.02 %     11.67 %     11.83 %     11.24 %     12.28 %     11.23 %
  Estimated tier 1 risk-based
  capital
    12.28 %     12.02 %     11.67 %     11.83 %     11.24 %     12.28 %     11.23 %
  Estimated total risk-based
  capital
    14.01 %     13.71 %     13.34 %     13.53 %     13.65 %     14.01 %     13.64 %
  Estimated tier 1 leverage
  capital
    10.73 %     10.57 %     10.31 %     10.45 %     9.98 %     10.73 %     9.98 %
                                                         
Other Data                                                        
Weighted average shares:                                                        
  Basic     20,981       21,257       21,733       21,908       13,371       21,321       13,320  
  Diluted     21,256       21,546       22,040       22,210       13,637       21,591       13,605  
Period end shares
  outstanding
    20,737       21,147       21,484       21,938       13,397       20,737       13,397  
Book value per share   $ 34.06     $ 33.32     $ 32.76     $ 32.04     $ 24.49     $ 34.06     $ 24.49  
Tangible book value per
  share(B)
  $ 22.16     $ 21.60     $ 21.17     $ 20.66     $ 21.35     $ 22.16     $ 21.35  
  1. Interim periods annualized.
  2. Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 10 of this Earnings Release.
  3. Net interest margin represents net interest income divided by average interest-earning assets.
  4. Represents 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  
    September 30, 2019     June 30, 2019     September 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   $ 3,870,205   $ 55,790     5.72 %   $ 3,819,687     $ 56,016   5.88 %   $ 2,384,966     $ 32,988     5.49 %
Securities     359,392     2,573     2.84 %     350,004       2,529   2.90 %     304,254       2,083     2.72 %
Deposits in other financial
  institutions and other
    55,070     302     2.17 %     63,962       401   2.52 %     47,518       265     2.21 %
Total interest-earning assets     4,284,667   $ 58,665     5.43 %     4,233,653     $ 58,946   5.58 %     2,736,738     $ 35,336     5.12 %
Allowance for loan losses     (28,593 )                 (27,125 )                 (24,059 )              
Noninterest-earning assets     600,004                   586,435                   276,997                
Total assets   $ 4,856,078                 $ 4,792,963                 $ 2,989,676                
                                                               
Liabilities and
  Shareholders' Equity
                                                             
Interest-Bearing Liabilities:                                                              
Interest-bearing demand
  deposits
  $ 332,652   $ 943     1.13 %   $ 350,147     $ 1,152   1.32 %   $ 181,284     $ 389     0.85 %
Money market and savings
  deposits
    1,099,937     4,032     1.45 %     994,557       3,361   1.36 %     530,240       859     0.64 %
Certificates and other time
  deposits
    1,269,886     6,909     2.16 %     1,331,955       7,008   2.11 %     896,253       4,051     1.79 %
Borrowed funds     158,358     1,183     2.96 %     155,969       1,118   2.87 %     234,776       1,272     2.15 %
Subordinated debt     51,607     761     5.85 %     48,986       736   6.03 %     48,805       729     5.93 %
  Total interest-bearing
  liabilities
    2,912,440   $ 13,828     1.88 %     2,881,614     $ 13,375   1.86 %     1,891,358     $ 7,300     1.53 %
                                                               
Noninterest-Bearing
  Liabilities:
                                                             
Noninterest-bearing demand
  deposits
    1,198,564                   1,173,662                   761,935                
Other liabilities     35,030                   32,525                   10,179                
  Total liabilities     4,146,034                   4,087,801                   2,663,472                
Shareholders' equity     710,044                   705,162                   326,204                
  Total liabilities and
  shareholders' equity
  $ 4,856,078                 $ 4,792,963                 $ 2,989,676                
                                                               
Net interest rate spread                 3.55 %                 3.72 %                   3.59 %
                                                               
Net interest income and margin         $ 44,837     4.15 %           $ 45,571   4.32 %           $ 28,036     4.06 %
                                                               
Net interest income and net
  interest margin
  (tax equivalent)
        $ 44,924     4.16 %           $ 45,684   4.33 %           $ 28,292     4.10 %


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Nine Months Ended September 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   $ 3,812,827     $ 165,995       5.82 %   $ 2,319,727     $ 94,951       5.47 %
Securities     352,074       7,374       2.80 %     310,709       6,238       2.68 %
Deposits in other financial institutions     79,309       1,391       2.34 %     49,205       731       1.99 %
Total interest-earning assets     4,244,210     $ 174,760       5.51 %     2,679,641     $ 101,920       5.09 %
Allowance for loan losses     (27,500 )                     (24,254 )                
Noninterest-earning assets     581,932                       276,777                  
Total assets   $ 4,798,642                     $ 2,932,164                  
                                                 
Liabilities and Shareholders' Equity                                                
Interest-Bearing Liabilities:                                                
Interest-bearing demand deposits   $ 340,310     $ 3,058       1.20 %   $ 190,228     $ 914       0.64 %
Money market and savings deposits     992,349       10,158       1.37 %     534,925       2,197       0.55 %
Certificates and other time deposits     1,301,478       20,173       2.07 %     841,849       10,120       1.61 %
Borrowed funds     198,839       4,128       2.78 %     265,401       3,780       1.90 %
Subordinated debt     49,849       2,232       5.99 %     48,746       2,168       5.95 %
Total interest-bearing liabilities     2,882,825     $ 39,749       1.84 %     1,881,149     $ 19,179       1.36 %
                                                 
Noninterest-Bearing Liabilities:                                                
Noninterest-bearing demand deposits     1,179,914                       724,493                  
Other liabilities     28,270                       8,742                  
Total liabilities     4,091,009                       2,614,384                  
Shareholders' equity     707,633                       317,780                  
Total liabilities and shareholders' equity   $ 4,798,642                     $ 2,932,164                  
                                                 
Net interest rate spread                     3.67 %                     3.73 %
                                                 
Net interest income and margin           $ 135,011       4.25 %           $ 82,741       4.13 %
                                                 
Net interest income and net
  interest margin
  (tax equivalent)
          $ 135,413       4.27 %           $ 83,551       4.17 %

 

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

    Three Months Ended  
    2019     2018  
    September   30     June 30     March 31     December   31     September   30  
                               
    (Dollars in thousands)  
Period-end Loan Portfolio:                                        
Commercial and industrial   $ 675,055     $ 694,516     $ 699,471     $ 702,037     $ 458,434  
Mortgage warehouse     36,594       46,171       36,742       48,274       48,876  
Real estate:                                        
  Commercial real estate (including
  multi-family residential)
    1,859,721       1,830,764       1,771,890       1,650,912       1,161,992  
  Commercial real estate construction and
  land development
    386,723       368,108       396,162       430,128       298,916  
  1-4 family residential (including home equity)     695,520       690,961       658,261       649,311       344,342  
  Residential construction     189,608       183,991       201,314       186,411       117,740  
Consumer and other     42,783       43,452       42,321       41,233       10,626  
Total loans   $ 3,886,004     $ 3,857,963     $ 3,806,161     $ 3,708,306     $ 2,440,926  
                                         
Asset Quality:                                        
Nonaccrual loans   $ 34,615     $ 31,382     $ 32,670     $ 32,953     $ 14,943  
Accruing loans 90 or more days past due                              
Total nonperforming loans     34,615       31,382       32,670       32,953       14,943  
Other real estate     8,333       6,294       1,152       630       1,801  
Other repossessed assets                             205  
Total nonperforming assets   $ 42,948     $ 37,676     $ 33,822     $ 33,583     $ 16,949  
                                         
Net charge-offs   $ 729     $ 590     $ 210     $ 219     $ 245  
                                         
Nonaccrual loans:                                        
Commercial and industrial   $ 8,033     $ 9,386     $ 11,221     $ 10,861     $ 6,258  
Mortgage warehouse                              
Real estate:                                        
  Commercial real estate (including
  multi-family residential)
    15,356       18,218       17,531       17,776       5,006  
  Commercial real estate construction and
  land development
    9,050       1,541       818       974       694  
  1-4 family residential (including home equity)     1,992       2,074       2,928       3,201       2,985  
  Residential construction                              
Consumer and other     184       163       172       141        
Total nonaccrual loans   $ 34,615     $ 31,382     $ 32,670     $ 32,953     $ 14,943  
                                         
Asset Quality Ratios:                                        
Nonperforming assets to total assets     0.88 %     0.79 %     0.71 %     0.72 %     0.56 %
Nonperforming loans to total loans     0.89 %     0.81 %     0.86 %     0.89 %     0.61 %
Allowance for loan losses to nonperforming loans     86.11 %     89.03 %     83.02 %     79.90 %     157.84 %
Allowance for loan losses to total loans     0.77 %     0.72 %     0.71 %     0.71 %     0.97 %
Net charge-offs to average loans (annualized)     0.07 %     0.06 %     0.02 %     0.02 %     0.04 %

 

Allegiance Bancshares, Inc.
GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures
(Unaudited)

Allegiance’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Allegiance believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and  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, the ratio of tangible equity to tangible assets and core net interest margin on a tax equivalent basis 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  
  September   30     June 30     March 31     December   31     September   30     September   30     September   30  
                                         
  (Dollars and share amounts in thousands, except per share data)  
Total shareholders' equity $ 706,308     $ 704,701     $ 703,777     $ 702,984     $ 328,131     $ 706,308     $ 328,131  
Less:  Goodwill and core
  deposit intangibles, net
  246,695       247,873       249,051       249,712       42,077       246,695       42,077  
Tangible shareholders
  equity
$ 459,613     $ 456,828     $ 454,726     $ 453,272     $ 286,054     $ 459,613     $ 286,054  
                                                       
Shares outstanding at end of
  period
  20,737       21,147       21,484       21,938       13,397       20,737       13,397  
                                                       
Tangible book value per share $ 22.16     $ 21.60     $ 21.17     $ 20.66     $ 21.35     $ 22.16     $ 21.35  
                                                       
Net income $ 12,047     $ 14,248     $ 12,678     $ 13,163     $ 8,879     $ 38,973     $ 24,146  
                                                       
Average shareholders' equity $ 710,044     $ 705,162     $ 707,666     $ 697,303     $ 326,204     $ 707,633     $ 317,780  
Less:  Average goodwill and
  core deposit intangibles, net
  247,404       248,621       249,277       249,252       42,203       248,427       42,394  
Average tangible
  shareholders’ equity
$ 462,640     $ 456,541     $ 458,389     $ 448,051     $ 284,001     $ 459,206     $ 275,386  
                                                       
Return on average
  tangible equity
  10.33 %     12.52 %     11.22 %     11.66 %     12.40 %     11.35 %     11.72 %
                                                       
Total assets $ 4,905,840     $ 4,794,211     $ 4,768,802     $ 4,655,249     $ 3,035,539     $ 4,905,840     $ 3,035,539  
Less: Goodwill and core
  deposit intangibles, net
  246,695       247,873       249,051       249,712       42,077       246,695       42,077  
Tangible assets $ 4,659,145     $ 4,546,338     $ 4,519,751     $ 4,405,537     $ 2,993,462     $ 4,659,145     $ 2,993,462  
                                                       
Tangible equity to tangible
  assets
  9.86 %     10.05 %     10.06 %     10.29 %     9.56 %     9.86 %     9.56 %
                                                       
Net interest income
  (tax equivalent)
$ 44,924     $ 45,684     $ 44,805     $ 46,100     $ 28,292     $ 135,413     $ 83,551  
Less: Acquisition accounting
  adjustments
  (2,045 )     (2,755 )     (2,965 )     (3,069 )           (7,765 )      
Core net interest
  income (tax equivalent)
$ 42,879     $ 42,929     $ 41,840     $ 43,031     $ 28,292     $ 127,648     $ 83,551  
                                                       
Average earning assets $ 4,284,667     $ 4,233,653     $ 4,212,669     $ 4,108,645     $ 2,736,738     $ 4,244,210     $ 2,679,641  
                                                       
Net interest margin
  (tax equivalent)
  4.16 %     4.33 %     4.31 %     4.45 %     4.10 %     4.27 %     4.17 %
Core net interest margin
  (tax equivalent)
  3.97 %     4.07 %     4.03 %     4.16 %     4.10 %     4.02 %     4.17 %

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

 

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