Allegiance Bancshares, Inc. Reports First Quarter 2021 Record Results

  • Record net income and diluted earnings per share of $18.0 million and $0.89, respectively

  • Funded in excess of $1.04 billion in loans over the last year within the Small Business Administration Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act (CARES Act)

  • Deposit growth of 35.9% to $5.37 billion as of March 31, 2021 from $3.95 billion as of March 31, 2020, driven by $696.6 million, or 57.2%, growth in noninterest-bearing deposits

  • Board declared quarterly dividend of $0.12 per share of common stock and authorized repurchases of up to 1 million shares

HOUSTON, April 29, 2021 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) (Allegiance), the holding company of Allegiance Bank (the "Bank"), today reported record net income of $18.0 million and diluted earnings per share of $0.89 for the first quarter 2021 compared to net income of $3.5 million and diluted earnings per share of $0.17 for the first quarter 2020.   The first quarter 2021 results were primarily driven by increased net interest income primarily due to lower funding costs and lower provision expense.

“Allegiance is off to a very productive start in 2021. We are proud to report record quarterly earnings results while continuing to maintain stable asset quality,” said Steve Retzloff, Allegiance’s Chief Executive Officer. “We reached record highs in terms of net income, diluted earnings per share, return on average assets and preserved a solid net interest margin all due to the successful execution of our core strategies,” continued Retzloff.

“These exceptional results highlight our team’s unparalleled and coordinated effort to assist our customers during the PPP process by funding over $1.04 billion of loans since the beginning of the pandemic. A high percentage of these loans were to businesses who were not previously customers and who experienced, first hand, the value of our high service culture. We look forward to solidifying these relationships over the coming months. Our team is excited about the future of Allegiance and continues to believe that providing remarkable service to our customers and our community sets us apart as the Houston region’s premier community bank and will continue to drive future value,” concluded Retzloff.

First Quarter 2021 Results

Net interest income before the provision for credit losses in the first quarter 2021 increased $10.7 million, or 23.7%, to $55.7 million from $45.0 million for the first quarter 2020 and increased $796 thousand, or 1.4%, from $54.9 million in the fourth quarter 2020. These increases were primarily due to changes in the volume and relative mix of the underlying assets and liabilities, the impact of PPP loans as well as lower costs on interest-bearing liabilities. The net interest margin on a tax equivalent basis increased 4 basis points to 4.19% for the first quarter 2021 from 4.15% for the first quarter 2020 and increased 5 basis points from 4.14% for the fourth quarter 2020.

Noninterest income for the first quarter 2021 was $1.7 million, a decrease of $989 thousand, or 36.3%, compared to $2.7 million for the first quarter 2020 and decreased $283 thousand, or 14.0%, compared to $2.0 million for the fourth quarter 2020. First quarter 2021 noninterest income reflected lower transactional fee income, significantly lower correspondent bank rebates, lower gains on sales of securities and higher losses on sales of other real estate when compared to first quarter 2020.  

Noninterest expense for the first quarter 2021 increased $2.5 million, or 7.8%, to $34.9 million from $32.4 million for the first quarter 2020 and increased $2.2 million, or 6.6%, compared to the fourth quarter 2020 primarily due to increases in salaries and benefits.

In the first quarter 2021, Allegiance’s efficiency ratio decreased to 60.85% compared to 68.13% for the first quarter 2020 and increased from 57.53% for the fourth quarter 2020. First quarter 2021 annualized returns on average assets, average equity and average tangible equity were 1.18%, 9.59% and 14.03%, respectively, compared to 0.29%, 1.98% and 3.02%, respectively, for the first quarter 2020. Annualized returns on average assets, average equity and average tangible equity for the fourth quarter 2020 were 1.05%, 8.38% and 12.32%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 9.  

Financial Condition

Total assets at March 31, 2021 increased $380.9 million, or 25.2% (annualized), to $6.43 billion compared to $6.05 billion at December 31, 2020 and increased $1.43 billion, or 28.6%, compared to $5.00 billion at March 31, 2020, primarily due to the origination of PPP loans and growth in the securities portfolio.

Total loans at March 31, 2021 increased $167.4 million, or 14.9% (annualized), to $4.66 billion compared to $4.49 billion at December 31, 2020, primarily due to the origination of $331.9 million of PPP loans, and increased $703.6 million, or 17.8%, compared to $3.96 billion at March 31, 2020. Core loans, which exclude the mortgage warehouse portfolio and PPP loans, increased $8.9 million, or 0.9% (annualized), to $3.93 billion at March 31, 2021 from $3.92 billion at December 31, 2020 and decreased $23.8 million, or 0.6%, from $3.95 billion at March 31, 2020.

Deposits at March 31, 2021 increased $385.7 million, or 30.9% (annualized), to $5.37 billion compared to $4.99 billion at December 31, 2020 and increased $1.42 billion, or 35.9%, compared to $3.95 billion at March 31, 2020.

Asset Quality

Nonperforming assets totaled $35.6 million, or 0.55% of total assets, at March 31, 2021, compared to $38.1 million, or 0.63% of total assets, at December 31, 2020 and $34.2 million, or 0.68% of total assets, at March 31, 2020. The allowance for credit losses on loans as a percentage of total loans was 1.13% at March 31, 2021 and 1.18% at December 31, 2020.

The provision for credit losses for the first quarter 2021 was $639 thousand compared to $4.4 million for the fourth quarter 2020 and $11.0 million for the first quarter 2020. The increased provision during 2020 reflected the uncertainty surrounding unemployment, the economic impact caused by COVID-19 and the economic effects related to the sustained lower crude oil prices.

First quarter 2021 net charge-offs were $345 thousand, or 0.03% (annualized) of average loans, a decrease from net charge-offs of $4.3 million, or 0.37% (annualized) of average loans, for the fourth quarter 2020 and $2.9 million, or 0.30% (annualized) of average loans, for the first quarter 2020.

The Company is carefully monitoring the hotel, restaurant and bar, and oil and gas portfolios, which it believes are at heightened risk due to the current economic environment. Loan balances in the hotel industry, excluding PPP loans, totaled $125.2 million, or 2.7% of total loans, at March 31, 2021, of which $6.2 million were on nonaccrual. At March 31, 2021, restaurant and bar industry loans, excluding PPP loans, totaled $116.2 million, or 2.5%, of total loans, of which $486 thousand were on nonaccrual. At March 31, 2021, the Company’s allowance for credit losses on loans allocated to its hotel portfolio was 3.5% of total hotel loans and its restaurant and bar portfolio was 1.3% of total restaurant and bar loans. The oil and gas portfolio, excluding PPP loans, totaled $72.5 million, or 1.6%, of total loans at March 31, 2021, of which $3.6 million were on nonaccrual. At March 31, 2021, the allowance for credit losses on loans allocated to the oil and gas loan portfolio was 3.4% of total oil and gas loans.

The Company granted initial principal and interest deferrals on outstanding loan balances to borrowers in connection with the COVID-19 relief provided by the CARES Act and subsequent deferrals upon request and after meeting certain conditions. These deferrals were generally no more than 90 days in duration. As of March 31, 2021, 65 loans with outstanding loan balances of $62.1 million remained on deferral.

Dividend

The Board of Directors of Allegiance has declared a cash dividend of $0.12 per share to be paid on June 15, 2021 to all shareholders of record as of May 28, 2021. The amount and timing of any future dividend payments to shareholders will be subject to the discretion of Allegiance’s Board of Directors.

Share Repurchase Authorization

The Board of Directors of Allegiance approved a stock repurchase authorization, under which Allegiance may repurchase up to one million shares of its outstanding common stock at the discretion of management through April 30, 2022. Repurchases under this program may be made from time to time through open market purchases, privately negotiated transactions or such other manners as will comply with applicable laws and regulations. Allegiance’s previously announced share repurchase program recently expired on March 31, 2021.

GAAP Reconciliation of Non-GAAP Financial Measures

Allegiance’s management uses certain non-GAAP financial measures to evaluate its performance. Please refer to the GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures on page 9 of this earnings release for a reconciliation of these non-GAAP financial measures.

Conference Call

As previously announced, Allegiance’s management team will host a conference call on Thursday, April 29, 2021 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its first quarter 2021 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 3792638. Alternatively, a simultaneous audio-only webcast may be accessed via the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Upcoming Events. If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under News and Events, Event Calendar, Past Events.

Allegiance Bancshares, Inc.

As of March 31, 2021, Allegiance was a $6.43 billion asset Houston, Texas-based bank holding company. Through its wholly owned subsidiary, Allegiance Bank, Allegiance provides a diversified range of commercial banking services primarily to small- to medium-sized businesses and individual customers in the Houston region. Allegiance’s super-community banking strategy was designed to foster strong customer relationships while benefiting from a platform and scale that is competitive with larger local and regional banks. As of March 31, 2021, 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 in the Houston metropolitan area and one bank office 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 contains forward-looking statements within the meaning of the securities laws that are derived utilizing 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 expected 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. Additionally, the impact of the COVID-19 pandemic is rapidly evolving and its future effects on Allegiance are difficult to predict. These and various other risk factors are discussed in Allegiance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 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. Because of these uncertainties, readers should not place undue reliance on any forward-looking statement. Allegiance disclaims any 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)

 2021  2020 
 March 31  December 31  September 30  June 30  March 31 
               
 (Dollars in thousands) 
ASSETS                   
Cash and due from banks$141,947  $122,897  $327,416  $237,585  $156,700 
Interest-bearing deposits at other financial institutions 482,383   299,869   19,732   28,815   18,189 
Total cash and cash equivalents 624,330   422,766   347,148   266,400   174,889 
Available for sale securities, at fair value 787,516   772,890   663,301   618,751   508,250 
Loans held for investment 4,659,169   4,491,764   4,592,362   4,583,656   3,955,546 
Less: allowance for credit losses on loans (52,758)  (53,173)  (48,698)  (47,642)  (37,511)
Loans, net 4,606,411   4,438,591   4,543,664   4,536,014   3,918,035 
Accrued interest receivable 38,632   40,053   36,996   32,795   17,203 
Premises and equipment, net 66,115   70,685   69,887   67,229   66,798 
Other real estate owned 576   9,196   8,876   11,847   12,617 
Federal Home Loan Bank stock 7,775   7,756   9,716   14,844   12,798 
Bank owned life insurance 27,825   27,686   27,542   27,398   27,255 
Goodwill 223,642   223,642   223,642   223,642   223,642 
Core deposit intangibles, net 17,130   17,954   18,907   19,896   20,886 
Other assets 31,038   18,909   18,072   18,065   20,056 
Total assets$6,430,990  $6,050,128  $5,967,751  $5,836,881  $5,002,429 
LIABILITIES AND SHAREHOLDERS’ EQUITY                   
LIABILITIES:                   
Deposits:                   
Noninterest-bearing$1,914,121  $1,704,567  $1,772,700  $1,754,128  $1,217,532 
Interest-bearing                   
Demand 480,710   437,328   409,137   375,353   341,524 
Money market and savings 1,617,823   1,499,938   1,483,370   1,270,437   1,110,631 
Certificates and other time 1,361,535   1,346,649   1,252,159   1,300,793   1,283,887 
Total interest-bearing deposits 3,460,068   3,283,915   3,144,666   2,946,583   2,736,042 
Total deposits 5,374,189   4,988,482   4,917,366   4,700,711   3,953,574 
Accrued interest payable 3,862   2,701   3,082   3,293   3,821 
Borrowed funds 147,517   155,515   155,512   255,509   190,506 
Subordinated debt 108,453   108,322   108,191   108,061   107,930 
Other liabilities 36,432   36,439   30,547   33,164   40,005 
Total liabilities 5,670,453   5,291,459   5,214,698   5,100,738   4,295,836 
SHAREHOLDERS’ EQUITY:                   
Common stock 20,183   20,208   20,445   20,431   20,355 
Capital surplus 505,307   508,794   516,151   515,045   513,894 
Retained earnings 210,834   195,236   186,866   172,723   164,858 
Accumulated other comprehensive income 24,213   34,431   29,591   27,944   7,486 
Total shareholders’ equity 760,537   758,669   753,053   736,143   706,593 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$6,430,990  $6,050,128  $5,967,751  $5,836,881  $5,002,429 

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

 Three Months Ended 
 2021  2020 
               
 March 31  December 31  September 30  June 30  March 31 
               
 (Dollars in thousands, except per share data) 
INTEREST INCOME:                   
Loans, including fees$57,991  $58,496  $56,418  $56,421  $54,624 
Securities:                   
Taxable 2,402   2,203   2,095   1,842   2,087 
Tax-exempt 2,394   2,316   2,280   2,169   546 
Deposits in other financial institutions 41   32   18   20   195 
Total interest income 62,828   63,047   60,811   60,452   57,452 
                    
INTEREST EXPENSE:                   
Demand, money market and savings deposits 1,484   1,621   1,657   1,729   4,364 
Certificates and other time deposits 3,665   4,507   5,239   5,845   6,084 
Borrowed funds 539   557   558   562   506 
Subordinated debt 1,442   1,460   1,448   1,469   1,473 
Total interest expense 7,130   8,145   8,902   9,605   12,427 
NET INTEREST INCOME 55,698   54,902   51,909   50,847   45,025 
Provision for credit losses 639   4,368   1,347   10,669   10,990 
Net interest income after provision for credit losses 55,059   50,534   50,562   40,178   34,035 
                    
NONINTEREST INCOME:                   
Nonsufficient funds fees 83   100   75   60   169 
Service charges on deposit accounts 388   405   325   343   457 
Gain on sale of securities 49         93   194 
(Loss) gain on sales of other real estate and repossessed assets (176)     117   (306)  (69)
Bank owned life insurance 139   144   144   143   151 
Rebate from correspondent bank 132   196   98   89   493 
Other 1,121   1,174   1,091   1,140   1,330 
Total noninterest income 1,736   2,019   1,850   1,562   2,725 
                    
NONINTEREST EXPENSE:                   
Salaries and employee benefits 22,452   21,003   20,034   19,334   19,781 
Net occupancy and equipment 2,390   2,079   2,057   1,926   1,907 
Depreciation 1,034   1,019   946   885   866 
Data processing and software amortization 2,200   2,107   2,125   1,934   1,826 
Professional fees 789   999   756   800   573 
Regulatory assessments and FDIC insurance 807   810   875   609   632 
Core deposit intangibles amortization 824   953   989   990   990 
Communications 321   225   355   390   417 
Advertising 298   347   327   370   521 
Other real estate expense 113   382   2,017   114   2,649 
Other 3,691   2,825   2,084   2,427   2,239 
Total noninterest expense 34,919   32,749   32,565   29,779   32,401 
INCOME BEFORE INCOME TAXES 21,876   19,804   19,847   11,961   4,359 
Provision for income taxes 3,866   3,863   3,677   2,054   843 
NET INCOME$18,010  $15,941  $16,170  $9,907  $3,516 
                    
EARNINGS PER SHARE                   
Basic$0.89  $0.78  $0.79  $0.49  $0.17 
Diluted$0.89  $0.77  $0.79  $0.48  $0.17 

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

 Three Months Ended 
 2021  2020 
 March 31  December 31  September 30  June 30  March 31 
               
 (Dollars and share amounts in thousands, except per share data) 
Net income$18,010  $15,941  $16,170  $9,907  $3,516 
                    
Earnings per share, basic$0.89  $0.78  $0.79  $0.49  $0.17 
Earnings per share, diluted$0.89  $0.77  $0.79  $0.48  $0.17 
Dividends per share$0.12  $0.10  $0.10  $0.10  $0.10 
                    
Return on average assets(A) 1.18%  1.05%  1.09%  0.71%  0.29%
Return on average equity(A) 9.59%  8.38%  8.59%  5.51%  1.98%
Return on average tangible equity(A)(B) 14.03%  12.32%  12.72%  8.32%  3.02%
Net interest margin (tax equivalent)(A)(C) 4.19%  4.14%  3.95%  4.10%  4.15%
Efficiency ratio(D) 60.85%  57.53%  60.58%  56.92%  68.13%
                    
Capital Ratios                   
Allegiance Bancshares, Inc. (Consolidated)                   
Equity to assets 11.83%  12.54%  12.62%  12.61%  14.12%
Tangible equity to tangible assets(B) 8.40%  8.90%  8.92%  8.81%  9.71%
Estimated common equity tier 1 capital 11.87%  11.80%  11.73%  11.36%  11.15%
Estimated tier 1 risk-based capital 12.10%  12.04%  11.96%  11.60%  11.38%
Estimated total risk-based capital 15.72%  15.71%  15.56%  15.17%  14.72%
Estimated tier 1 leverage capital 8.57%  8.51%  8.70%  8.83%  9.89%
Allegiance Bank                   
Estimated common equity tier 1 capital 13.17%  13.32%  13.25%  12.84%  12.58%
Estimated tier 1 risk-based capital 13.17%  13.32%  13.25%  12.84%  12.58%
Estimated total risk-based capital 15.37%  15.55%  15.41%  14.97%  14.48%
Estimated tier 1 leverage capital 9.33%  9.41%  9.64%  9.77%  10.94%
                    
Other Data                   
Weighted average shares:                   
Basic 20,140   20,396   20,439   20,414   20,411 
Diluted 20,342   20,575   20,532   20,514   20,690 
Period end shares outstanding 20,183   20,208   20,445   20,431   20,355 
Book value per share$37.68  $37.54  $36.83  $36.03  $34.71 
Tangible book value per share(B)$25.75  $25.59  $24.97  $24.11  $22.70 

(A)    Interim periods annualized.
(B)    Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 9 of this Earnings Release.
(C)    Net interest margin represents net interest income divided by average interest-earning assets.
(D)    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 
 March 31, 2021  December 31, 2020  March 31, 2020 
 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$4,571,045  $57,991   5.15% $4,569,210  $58,496   5.09% $3,933,291  $54,624   5.59%
Securities 789,188   4,796   2.46%  701,233   4,519   2.56%  388,721   2,633   2.72%
Deposits in other financial institutions and other 96,212   41   0.17%  58,664   32   0.22%  50,711   195   1.55%
Total interest-earning assets 5,456,445  $62,828   4.67%  5,329,107  $63,047   4.71%  4,372,723  $57,452   5.28%
Allowance for credit losses on loans (53,370)          (53,260)          (28,718)        
Noninterest-earning assets 760,762           783,200           602,778         
Total assets$6,163,837          $6,059,047          $4,946,783         
                                    
Liabilities and Shareholders' Equity                                   
Interest-Bearing Liabilities:                                   
Interest-bearing demand deposits$458,063  $371   0.33% $430,145  $386   0.36% $363,326  $846   0.94%
Money market and savings deposits 1,539,127   1,113   0.29%  1,513,816   1,235   0.32%  1,168,541   3,518   1.21%
Certificates and other time deposits 1,332,663   3,665   1.12%  1,284,181   4,507   1.40%  1,193,427   6,084   2.05%
Borrowed funds 154,927   539   1.41%  157,687   557   1.41%  140,999   506   1.44%
Subordinated debt 108,387   1,442   5.40%  108,259   1,460   5.37%  107,865   1,473   5.49%
Total interest-bearing liabilities 3,593,167  $7,130   0.80%  3,494,088  $8,145   0.93%  2,974,158  $12,427   1.68%
                                    
Noninterest-Bearing Liabilities:                                   
Noninterest-bearing demand deposits 1,767,740           1,766,826           1,225,888         
Other liabilities 41,330           41,434           33,202         
Total liabilities 5,402,237           5,302,348           4,233,248         
Shareholders' equity 761,600           756,699           713,535         
Total liabilities and shareholders' equity$6,163,837          $6,059,047          $4,946,783         
                                    
Net interest rate spread         3.87%          3.78%          3.60%
                                    
Net interest income and margin    $55,698   4.14%     $54,902   4.10%     $45,025   4.14%
                                    
Net interest income and net interest margin (tax equivalent)    $56,317   4.19%     $55,477   4.14%     $45,152   4.15%

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

 Three Months Ended 
 2021  2020 
 March 31  December 31  September 30  June 30  March 31 
               
 (Dollars in thousands) 
Period-end Loan Portfolio:                   
Commercial and industrial$664,792  $667,079  $650,634  $651,430  $702,267 
Mortgage warehouse             1,051 
Paycheck Protection Program (PPP) 728,424   569,901   710,234   695,772    
Real estate:                   
Commercial real estate (including multi-family residential) 2,018,853   1,999,877   1,971,228   1,956,116   1,951,080 
Commercial real estate construction and land development 386,637   367,213   376,877   386,865   378,987 
1-4 family residential (including home equity) 726,228   737,605   716,565   703,513   704,212 
Residential construction 119,528   127,522   148,056   171,656   177,025 
Consumer and other 14,707   22,567   18,768   18,304   40,924 
Total loans$4,659,169  $4,491,764  $4,592,362  $4,583,656  $3,955,546 
                    
Asset Quality:                   
Nonaccrual loans$35,051  $28,893  $37,928  $33,223  $21,621 
Accruing loans 90 or more days past due              
Total nonperforming loans 35,051   28,893   37,928   33,223   21,621 
Other real estate 576   9,196   8,876   11,847   12,617 
Other repossessed assets              
Total nonperforming assets$35,627  $38,089  $46,804  $45,070  $34,238 
                    
Net charge-offs$345  $4,287  $291  $538  $2,917 
                    
Nonaccrual loans:                   
Commercial and industrial$14,059  $10,747  $13,171  $12,578  $8,669 
Mortgage warehouse              
Real estate:                   
Commercial real estate (including multi-family residential) 13,455   10,081   15,849   16,127   7,024 
Commercial real estate construction and land development 1,000   3,011   3,085   53   1,958 
1-4 family residential (including home equity) 5,736   4,525   4,263   3,434   2,845 
Residential construction       876   898   982 
Consumer and other 801   529   684   133   143 
Total nonaccrual loans$35,051  $28,893  $37,928  $33,223  $21,621 
                    
Asset Quality Ratios:                   
Nonperforming assets to total assets 0.55%  0.63%  0.78%  0.77%  0.68%
Nonperforming loans to total loans 0.75%  0.64%  0.83%  0.72%  0.55%
Allowance for credit losses on loans to nonperforming loans 150.52%  184.03%  128.40%  143.40%  173.49%
Allowance for credit losses on loans to total loans 1.13%  1.18%  1.06%  1.04%  0.95%
Net charge-offs to average loans (annualized) 0.03%  0.37%  0.03%  0.05%  0.30%

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 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 
 2021  2020 
 March 31  December 31  September 30  June 30  March 31 
               
 (Dollars and share amounts in thousands, except per share data) 
Total shareholders' equity$760,537  $758,669  $753,053  $736,143  $706,593 
Less: Goodwill and core deposit intangibles, net 240,772   241,596   242,549   243,538   244,528 
Tangible shareholders’ equity$519,765  $517,073  $510,504  $492,605  $462,065 
                    
Shares outstanding at end of period 20,183   20,208   20,445   20,431   20,355 
                    
Tangible book value per share$25.75  $25.59  $24.97  $24.11  $22.70 
                    
Net income$18,010  $15,941  $16,170  $9,907  $3,516 
                    
Average shareholders' equity$761,600  $756,699  $748,647  $723,104  $713,535 
Less: Average goodwill and core deposit intangibles, net 241,166   242,043   243,015   244,010   245,007 
Average tangible shareholders’ equity$520,434  $514,656  $505,632  $479,094  $468,528 
                    
Return on average tangible equity(A) 14.03%  12.32%  12.72%  8.32%  3.02%
                    
Total assets$6,430,990  $6,050,128  $5,967,751  $5,836,881  $5,002,429 
Less: Goodwill and core deposit intangibles, net 240,772   241,596   242,549   243,538   244,528 
Tangible assets$6,190,218  $5,808,532  $5,725,202  $5,593,343  $4,757,901 
                    
Tangible equity to tangible assets 8.40%  8.90%  8.92%  8.81%  9.71%

(A)    Interim periods annualized.

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


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