Allegiance Bancshares, Inc. Reports Record Results for the Second Quarter 2021

  • Record net income and diluted earnings per share of $22.9 million and $1.12 for the second quarter 2021, respectively, and $40.9 million and $2.01 for the six months ended June 30, 2021, respectively

  • Deposit growth of 15.6% to $5.43 billion as of June 30, 2021 from $4.70 billion as of June 30, 2020, driven primarily by $513.7 million, or 17.4%, growth in interest-bearing deposits and $218.9 million, or 12.5%, growth in noninterest-bearing deposits

  • Board declared quarterly dividend of $0.12 per share of common stock

HOUSTON, July 29, 2021 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) (Allegiance), the holding company of Allegiance Bank (the "Bank"), today reported record net income of $22.9 million and diluted earnings per share of $1.12 for the second quarter 2021 compared to net income of $9.9 million and diluted earnings per share of $0.48 for the second quarter 2020. Net income for the six months ended June 30, 2021 was $40.9 million, or $2.01 per diluted share, compared to $13.4 million, or $0.65 per diluted share, for the six months ended June 30, 2020. The second quarter and six months ended June 30, 2021 results were primarily due to a recapture of provision for credit losses and increased net interest income driven by lower funding costs.

“We are excited to announce yet another record quarter for Allegiance, which came with core loan and deposit gains, and we enter the third quarter positioned for growth,” said Steve Retzloff, Allegiance’s Chief Executive Officer. “We maintained solid asset quality while economic factors improved which led us to a release of reserves for credit losses” commented Retzloff.

“The positive energy across Allegiance coupled with the outstanding determination of our employees continues to reinforce the execution of our business strategies with precision. The company-wide coordination of efforts has provided powerful momentum within our Treasury Management group as we continue to integrate new customers and focus on building both new and deepening existing customer relationships,” continued Retzloff.

“As we appreciate our successes in the first half of 2021, we believe we are in an excellent position of strength as we prepare for the remainder of the year. We have proven our ability to succeed in a highly competitive market and are well-positioned to support the growing needs of the communities we serve,” concluded Retzloff.

Second Quarter 2021 Results

Net interest income before the provision for credit losses in the second quarter 2021 increased $5.7 million, or 11.3%, to $56.6 million from $50.8 million for the second quarter 2020 and increased $898 thousand, or 1.6%, from $55.7 million in the first quarter 2021. These increases were primarily due to changes in the volume and relative mix of the underlying assets and liabilities, the impact of loans within the Small Business Administration Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) as well as lower costs on interest-bearing liabilities. The net interest margin on a tax equivalent basis decreased 8 basis points to 4.02% for the second quarter 2021 from 4.10% for the second quarter 2020 and decreased 17 basis points from 4.19% for the first quarter 2021. The decreases in the margin were primarily due to the decrease in the average yield on interest-earning assets partially offset by the decrease in funding costs.

Noninterest income for the second quarter 2021 was $2.3 million, an increase of $711 thousand, or 45.5%, compared to $1.6 million for the second quarter 2020 and increased $537 thousand, or 30.9%, compared to $1.7 million for the first quarter 2021. Second quarter 2021 noninterest income reflected higher transactional fee income and no losses on sales of other real estate when compared to first quarter 2020.  

Noninterest expense for the second quarter 2021 increased $3.8 million, or 12.8%, to $33.6 million from $29.8 million for the second quarter 2020 and decreased $1.3 million, or 3.8%, compared to the second quarter of 2020 and the first quarter 2021. The increase over the prior year was primarily due to increases in salaries and benefits and the reduced amount of deferred PPP loan origination costs compared to the second quarter of 2020.

In the second quarter 2021, Allegiance’s efficiency ratio increased to 57.07% compared to 56.92% for the second quarter 2020 and decreased from 60.85% for the first quarter 2021. Second quarter 2021 annualized returns on average assets, average equity and average tangible equity were 1.42%, 11.87% and 17.20%, respectively, compared to 0.71%, 5.51% and 8.32%, respectively, for the second quarter 2020. Annualized returns on average assets, average equity and average tangible equity for the first quarter 2021 were 1.18%, 9.59% and 14.03%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.  

Six Months Ended June 30, 2021 Results

Net interest income before provision for credit losses for the six months ended June 30, 2021 increased $16.4 million, or 17.1%, to $112.3 million from $95.9 million for the six months ended June 30, 2020 primarily due to a $880.6 million, or 18.7%, increase in average interest-earning assets over the prior year including the impact of PPP loans as well as lower costs related to interest-bearing liabilities. The net interest margin on a tax equivalent basis decreased 2 basis points to 4.10% for the six months ended June 30, 2021 from 4.12% for the six months ended June 30, 2020. The decrease in the margin over the prior year was primarily due to the decrease in the average yield on interest-earning assets partially offset by decreased funding costs.

Noninterest income for the six months ended June 30, 2021 was $4.0 million, a decrease of $278 thousand, or 6.5%, compared to $4.3 million for the six months ended June 30, 2020 due primarily to lower correspondent bank rebates and gains on the sale of securities.

Noninterest expense for the six months ended June 30, 2021 increased $6.3 million, or 10.2%, to $68.5 million from $62.2 million for the six months ended June 30, 2020. The increase in noninterest expense over the six months ended June 30, 2020 was primarily due increased accruals for bonus and profit sharing due to increased net income along with the reduced amount of deferred PPP loan origination costs compared to the prior year.

Allegiance’s efficiency ratio decreased from 62.26% for the six months ended June 30, 2020 to 58.93% for the six months ended June 30, 2021. For the six months ended June 30, 2021, returns on average assets, average equity and average tangible equity were 1.30%, 10.75% and 15.65%, respectively, compared to 0.51%, 3.76% and 5.70%, respectively, for the six months ended June 30, 2020. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Financial Condition

Total assets at June 30, 2021 increased $77.7 million, or 4.8% (annualized), to $6.51 billion compared to $6.43 billion at March 31, 2021 and increased $671.8 million, or 11.5%, compared to $5.84 billion at June 30, 2020, primarily due to the origination and paydowns of PPP loans, origination of core loans and growth within the securities portfolio.

Total loans at June 30, 2021 decreased $198.4 million, or 17.0% (annualized), to $4.46 billion compared to $4.66 billion at March 31, 2021, primarily due to $271.9 million of paydowns on PPP loans partially offset by the origination of $42.7 million of PPP loans. Total loans at June 30, 2021 decreased $122.9 million, or 2.7%, compared to $4.58 billion at June 30, 2020. Core loans, which exclude PPP loans, increased $30.8 million, or 3.1% (annualized), to $3.96 billion at June 30, 2021 from $3.93 billion at March 31, 2021 and increased $73.7 million, or 1.9%, from $3.89 billion at June 30, 2020.

Deposits at June 30, 2021 increased $59.2 million, or 4.4% (annualized), to $5.43 billion compared to $5.37 billion at March 31, 2021 and increased $732.6 million, or 15.6%, compared to $4.70 billion at June 30, 2020.

Asset Quality

Nonperforming assets totaled $38.0 million, or 0.58%, of total assets, at June 30, 2021 compared to $35.6 million, or 0.55%, of total assets at March 31, 2021 and $45.1 million, or 0.77%, of total assets, at June 30, 2020. The allowance for credit losses on loans as a percentage of total loans was 1.11% at June 30, 2021 and 1.13% at March 31, 2021.

The recapture of provision for credit losses for the second quarter 2021 was $2.7 million compared to the provision for credit losses of $639 thousand for the first quarter 2021 and $10.7 million for the second quarter 2020 reflecting recent improvements in economic factors compared to prior quarters where there was more uncertainty surrounding unemployment, COVID-19 and effects related to sustained lower crude oil prices.  

Second quarter 2021 net charge-offs were $162 thousand, or 0.01% (annualized) of average loans, a decrease from net charge-offs of $345 thousand, or 0.03% (annualized) of average loans, for the first quarter 2021 and $538 thousand, or 0.05% (annualized) of average loans, for the second 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 $128.5 million, or 2.9% of total loans, at June 30, 2021, of which $10.5 million were on nonaccrual. At June 30, 2021, restaurant and bar industry loans, excluding PPP loans, totaled $114.3 million, or 2.6%, of total loans, of which $301 thousand were on nonaccrual. At June 30, 2021, the Company’s allowance for credit losses on loans allocated to its hotel portfolio was 3.7% 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 $73.0 million, or 1.6%, of total loans at June 30, 2021, of which $3.5 million were on nonaccrual. At June 30, 2021, the allowance for credit losses on loans allocated to the oil and gas loan portfolio was 2.3% 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 June 30, 2021, 43 loans with outstanding loan balances of $47.4 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 September 15, 2021 to all shareholders of record as of August 31, 2021. The amount and timing of any future dividend payments to shareholders will be subject to the discretion of Allegiance’s Board of Directors.

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 11 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, July 29, 2021 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its second quarter 2021 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 5047167. 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, 2021, Allegiance was a $6.51 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, 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 continues to evolve 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 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 
  June 30  March 31  December 31  September 30  June 30 
  (Dollars in thousands) 
ASSETS                    
Cash and due from banks $146,397  $141,947  $122,897  $327,416  $237,585 
Interest-bearing deposits at other financial institutions  564,888   482,383   299,869   19,732   28,815 
Total cash and cash equivalents  711,285   624,330   422,766   347,148   266,400 
Available for sale securities, at fair value  977,282   787,516   772,890   663,301   618,751 
Loans held for investment  4,460,743   4,659,169   4,491,764   4,592,362   4,583,656 
Less: allowance for credit losses on loans  (49,586)  (52,758)  (53,173)  (48,698)  (47,642)
Loans, net  4,411,157   4,606,411   4,438,591   4,543,664   4,536,014 
Accrued interest receivable  37,075   38,632   40,053   36,996   32,795 
Premises and equipment, net  65,442   66,115   70,685   69,887   67,229 
Other real estate owned  1,397   576   9,196   8,876   11,847 
Federal Home Loan Bank stock  8,234   7,775   7,756   9,716   14,844 
Bank owned life insurance  27,976   27,825   27,686   27,542   27,398 
Goodwill  223,642   223,642   223,642   223,642   223,642 
Core deposit intangibles, net  16,306   17,130   17,954   18,907   19,896 
Other assets  28,871   31,038   18,909   18,072   18,065 
Total assets $6,508,667  $6,430,990  $6,050,128  $5,967,751  $5,836,881 
LIABILITIES AND SHAREHOLDERS’ EQUITY                    
LIABILITIES:                    
Deposits:                    
Noninterest-bearing $1,973,042  $1,914,121  $1,704,567  $1,772,700  $1,754,128 
Interest-bearing                    
Demand  553,874   480,710   437,328   409,137   375,353 
Money market and savings  1,556,920   1,617,823   1,499,938   1,483,370   1,270,437 
Certificates and other time  1,349,522   1,361,535   1,346,649   1,252,159   1,300,793 
     Total interest-bearing deposits  3,460,316   3,460,068   3,283,915   3,144,666   2,946,583 
          Total deposits  5,433,358   5,374,189   4,988,482   4,917,366   4,700,711 
Accrued interest payable  1,940   3,862   2,701   3,082   3,293 
Borrowed funds  139,951   147,517   155,515   155,512   255,509 
Subordinated debt  108,584   108,453   108,322   108,191   108,061 
Other liabilities  35,684   36,432   36,439   30,547   33,164 
Total liabilities  5,719,517   5,670,453   5,291,459   5,214,698   5,100,738 
SHAREHOLDERS’ EQUITY:                    
Common stock  20,213   20,183   20,208   20,445   20,431 
Capital surplus  506,810   505,307   508,794   516,151   515,045 
Retained earnings  231,333   210,834   195,236   186,866   172,723 
Accumulated other comprehensive income  30,794   24,213   34,431   29,591   27,944 
Total shareholders’ equity  789,150   760,537   758,669   753,053   736,143 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $6,508,667  $6,430,990  $6,050,128  $5,967,751  $5,836,881 
 
 

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  Three Months Ended  Year-to-Date 
  2021  2020  2021  2020 
  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 $57,691  $57,991  $58,496  $56,418  $56,421  $115,682  $111,045 
Securities:                            
Taxable  2,556   2,402   2,203   2,095   1,842   4,958   3,929 
Tax-exempt  2,491   2,394   2,316   2,280   2,169   4,885   2,715 
Deposits in other financial institutions  94   41   32   18   20   135   215 
Total interest income  62,832   62,828   63,047   60,811   60,452   125,660   117,904 
                             
INTEREST EXPENSE:                            
Demand, money market and savings deposits  1,337   1,484   1,621   1,657   1,729   2,821   6,093 
Certificates and other time deposits  2,989   3,665   4,507   5,239   5,845   6,654   11,929 
Borrowed funds  469   539   557   558   562   1,008   1,068 
Subordinated debt  1,441   1,442   1,460   1,448   1,469   2,883   2,942 
Total interest expense  6,236   7,130   8,145   8,902   9,605   13,366   22,032 
NET INTEREST INCOME  56,596   55,698   54,902   51,909   50,847   112,294   95,872 
(Recapture of) provision for credit losses  (2,679)  639   4,368   1,347   10,669   (2,040)  21,659 
Net interest income after provision for credit losses  59,275   55,059   50,534   50,562   40,178   114,334   74,213 
                             
NONINTEREST INCOME:                            
Nonsufficient funds fees  94   83   100   75   60   177   229 
Service charges on deposit accounts  382   388   405   325   343   770   800 
(Loss) gain on sale of securities     49         93   49   287 
(Loss) gain on sales of other real estate and repossessed assets     (176)     117   (306)  (176)  (375)
Bank owned life insurance  151   139   144   144   143   290   294 
Debit card and ATM card income  761   630   637   574   510   1,391   994 
Rebate from correspondent bank  73   132   196   98   89   205   582 
Other  812   491   537   517   630   1,303   1,476 
Total noninterest income  2,273   1,736   2,019   1,850   1,562   4,009   4,287 
                             
NONINTEREST EXPENSE:                            
Salaries and employee benefits  22,472   22,452   21,003   20,034   19,334   44,924   39,115 
Net occupancy and equipment  2,225   2,390   2,079   2,057   1,926   4,615   3,833 
Depreciation  1,057   1,034   1,019   946   885   2,091   1,751 
Data processing and software amortization  2,176   2,200   2,107   2,125   1,934   4,376   3,760 
Professional fees  608   789   999   756   800   1,397   1,373 
Regulatory assessments and FDIC insurance  768   807   810   875   609   1,575   1,241 
Core deposit intangibles amortization  824   824   953   989   990   1,648   1,980 
Communications  332   321   225   355   390   653   807 
Advertising  432   298   347   327   370   730   891 
Other real estate expense  229   113   382   2,017   114   342   2,762 
Other  2,472   3,691   2,825   2,084   2,427   6,163   4,667 
Total noninterest expense  33,595   34,919   32,749   32,565   29,779   68,514   62,180 
INCOME BEFORE INCOME TAXES  27,953   21,876   19,804   19,847   11,961   49,829   16,320 
Provision for income taxes  5,028   3,866   3,863   3,677   2,054   8,894   2,897 
NET INCOME $22,925  $18,010  $15,941  $16,170  $9,907  $40,935  $13,423 
                             
EARNINGS PER SHARE                            
Basic $1.13  $0.89  $0.78  $0.79  $0.49  $2.03  $0.66 
Diluted $1.12  $0.89  $0.77  $0.79  $0.48  $2.01  $0.65 
                             
                             

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  Three Months Ended  Year-to-Date 
  2021  2020  2021  2020 
  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 $22,925  $18,010  $15,941  $16,170  $9,907  $40,935  $13,423 
                             
Earnings per share, basic $1.13  $0.89  $0.78  $0.79  $0.49  $2.03  $0.66 
Earnings per share, diluted $1.12  $0.89  $0.77  $0.79  $0.48  $2.01  $0.65 
Dividends per share $0.12  $0.12  $0.10  $0.10  $0.10  $0.24  $0.20 
                             
Return on average assets(A)  1.42%  1.18%  1.05%  1.09%  0.71%  1.30%  0.51%
Return on average equity(A)  11.87%  9.59%  8.38%  8.59%  5.51%  10.75%  3.76%
Return on average tangible equity(A)(B)  17.20%  14.03%  12.32%  12.72%  8.32%  15.65%  5.70%
Net interest margin (tax equivalent)(A)(C)  4.02%  4.19%  4.14%  3.95%  4.10%  4.10%  4.12%
Efficiency ratio(D)  57.07%  60.85%  57.53%  60.58%  56.92%  58.93%  62.26%
                             
Capital Ratios                            
Allegiance Bancshares, Inc. (Consolidated)                            
Equity to assets  12.12%  11.83%  12.54%  12.62%  12.61%  12.12%  12.61%
Tangible equity to tangible assets(B)  8.76%  8.40%  8.90%  8.92%  8.81%  8.76%  8.81%
Estimated common equity tier 1 capital  12.18%  11.87%  11.80%  11.73%  11.36%  12.18%  11.36%
Estimated tier 1 risk-based capital  12.41%  12.10%  12.04%  11.96%  11.60%  12.41%  11.60%
Estimated total risk-based capital  15.98%  15.72%  15.71%  15.56%  15.17%  15.98%  15.17%
Estimated tier 1 leverage capital  8.56%  8.57%  8.51%  8.70%  8.83%  8.56%  8.83%
Allegiance Bank                            
Estimated common equity tier 1 capital  13.03%  13.17%  13.32%  13.25%  12.84%  13.03%  12.84%
Estimated tier 1 risk-based capital  13.03%  13.17%  13.32%  13.25%  12.84%  13.03%  12.84%
Estimated total risk-based capital  15.22%  15.37%  15.55%  15.41%  14.97%  15.22%  14.97%
Estimated tier 1 leverage capital  8.99%  9.33%  9.41%  9.64%  9.77%  8.99%  9.77%
                             
Other Data                            
Weighted average shares:                            
Basic  20,203   20,140   20,396   20,439   20,414   20,171   20,413 
Diluted  20,386   20,342   20,575   20,532   20,514   20,359   20,572 
Period end shares outstanding  20,213   20,183   20,208   20,445   20,431   20,213   20,431 
Book value per share $39.04  $37.68  $37.54  $36.83  $36.03  $39.04  $36.03 
Tangible book value per share(B) $27.17  $25.75  $25.59  $24.97  $24.11  $27.17  $24.11 

(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 11 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 (recapture of) provision for loan losses are not part of this calculation.


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  Three Months Ended 
  June 30, 2021  March 31, 2021  June 30, 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 $4,543,142  $57,691   5.09% $4,571,045  $57,991   5.15% $4,425,036  $56,421   5.13%
Securities  876,099   5,047   2.31%  789,188   4,796   2.46%  594,205   4,011   2.71%
Deposits in other financial institutions and other  294,188   94   0.13%  96,212   41   0.17%  18,173   20   0.44%
Total interest-earning assets  5,713,429  $62,832   4.41%  5,456,445  $62,828   4.67%  5,037,414  $60,452   4.83%
Allowance for credit losses on loans  (52,699)          (53,370)          (41,334)        
Noninterest-earning assets  835,801           760,762           637,608         
Total assets $6,496,531          $6,163,837          $5,633,688         
                                     
Liabilities and Shareholders' Equity                                    
Interest-Bearing Liabilities:                                    
Interest-bearing demand deposits $534,314  $326   0.24% $458,063  $371   0.33% $353,252  $421   0.48%
Money market and savings deposits  1,561,987   1,011   0.26%  1,539,127   1,113   0.29%  1,169,225   1,308   0.45%
Certificates and other time deposits  1,365,881   2,989   0.88%  1,332,663   3,665   1.12%  1,302,743   5,845   1.80%
Borrowed funds  144,126   469   1.31%  154,927   539   1.41%  320,332   562   0.71%
Subordinated debt  108,523   1,441   5.33%  108,387   1,442   5.40%  107,998   1,469   5.47%
Total interest-bearing liabilities  3,714,831  $6,236   0.67%  3,593,167  $7,130   0.80%  3,253,550  $9,605   1.19%
                                     
Noninterest-Bearing Liabilities:                                    
Noninterest-bearing demand deposits  1,968,714           1,767,740           1,624,641         
Other liabilities  38,183           41,330           32,393         
Total liabilities  5,721,728           5,402,237           4,910,584         
Shareholders' equity  774,803           761,600           723,104         
Total liabilities and shareholders' equity $6,496,531          $6,163,837          $5,633,688         
                                     
Net interest rate spread          3.74%          3.87%          3.64%
                                     
Net interest income and margin     $56,596   3.97%     $55,698   4.14%     $50,847   4.06%
                                     
Net interest income and net interest margin (tax equivalent)     $57,287   4.02%     $56,317   4.19%     $51,342   4.10%
 
 

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  Six Months Ended June 30, 
  2021  2020 
  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 $4,557,016  $115,682   5.12% $4,179,164  $111,045   5.34%
Securities  832,884   9,843   2.38%  491,463   6,644   2.72%
Deposits in other financial institutions  195,768   135   0.14%  34,442   215   1.26%
Total interest-earning assets  5,585,668  $125,660   4.54%  4,705,069  $117,904   5.04%
Allowance for credit losses on loans  (53,033)          (35,026)        
Noninterest-earning assets  798,468           619,315         
Total assets $6,331,103          $5,289,358         
                         
Liabilities and Shareholders' Equity                        
Interest-Bearing Liabilities:                        
Interest-bearing demand deposits $496,399  $697   0.28% $358,289  $1,267   0.71%
Money market and savings deposits  1,550,620   2,124   0.28%  1,168,883   4,826   0.83%
Certificates and other time deposits  1,349,364   6,654   0.99%  1,248,085   11,929   1.92%
Borrowed funds  149,496   1,008   1.36%  230,666   1,068   0.93%
Subordinated debt  108,455   2,883   5.36%  107,931   2,942   5.48%
Total interest-bearing liabilities  3,654,334  $13,366   0.74%  3,113,854  $22,032   1.42%
                         
Noninterest-Bearing Liabilities:                        
Noninterest-bearing demand deposits  1,868,783           1,425,265         
Other liabilities  39,748           31,919         
Total liabilities  5,562,865           4,571,038         
Shareholders' equity  768,238           718,320         
Total liabilities and shareholders' equity $6,331,103          $5,289,358         
                         
Net interest rate spread          3.80%          3.62%
                         
Net interest income and margin     $112,294   4.05%     $95,872   4.10%
                         
Net interest income and net interest margin (tax equivalent)     $113,604   4.10%     $96,493   4.12%
 
 

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

  Three Months Ended 
  2021  2020 
  June 30  March 31  December 31  September 30  June 30 
  (Dollars in thousands) 
Period-end Loan Portfolio:                    
Commercial and industrial $690,867  $664,792  $667,079  $650,634  $651,430 
Paycheck Protection Program (PPP)  499,207   728,424   569,901   710,234   695,772 
Real estate:                    
Commercial real estate (including multi-family residential)  2,051,516   2,018,853   1,999,877   1,971,228   1,956,116 
Commercial real estate construction and land development  371,732   386,637   367,213   376,877   386,865 
1-4 family residential (including home equity)  715,119   726,228   737,605   716,565   703,513 
Residential construction  111,956   119,528   127,522   148,056   171,656 
Consumer and other  20,346   14,707   22,567   18,768   18,304 
Total loans $4,460,743  $4,659,169  $4,491,764  $4,592,362  $4,583,656 
                     
Asset Quality:                    
Nonaccrual loans $36,643  $35,051  $28,893  $37,928  $33,223 
Accruing loans 90 or more days past due               
Total nonperforming loans  36,643   35,051   28,893   37,928   33,223 
Other real estate  1,397   576   9,196   8,876   11,847 
Other repossessed assets               
Total nonperforming assets $38,040  $35,627  $38,089  $46,804  $45,070 
                     
Net charge-offs $162  $345  $4,287  $291  $538 
                     
Nonaccrual loans:                    
Commercial and industrial $12,949  $14,059  $10,747  $13,171  $12,578 
Real estate:                    
Commercial real estate (including multi-family residential)  18,123   13,455   10,081   15,849   16,127 
Commercial real estate construction and land development  53   1,000   3,011   3,085   53 
1-4 family residential (including home equity)  4,839   5,736   4,525   4,263   3,434 
Residential construction           876   898 
Consumer and other  679   801   529   684   133 
Total nonaccrual loans $36,643  $35,051  $28,893  $37,928  $33,223 
                     
Asset Quality Ratios:                    
Nonperforming assets to total assets  0.58%  0.55%  0.63%  0.78%  0.77%
Nonperforming loans to total loans  0.82%  0.75%  0.64%  0.83%  0.72%
Allowance for credit losses on loans to nonperforming loans  135.32%  150.52%  184.03%  128.40%  143.40%
Allowance for credit losses on loans to total loans  1.11%  1.13%  1.18%  1.06%  1.04%
Net charge-offs to average loans (annualized)  0.01%  0.03%  0.37%  0.03%  0.05%
                     
                     

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  Year-to-Date 
 2021  2020  2021  2020 
 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$789,150  $760,537  $758,669  $753,053  $736,143  $789,150  $736,143 
Less: Goodwill and core deposit intangibles, net 239,948   240,772   241,596   242,549   243,538   239,948   243,538 
Tangible shareholders’ equity$549,202  $519,765  $517,073  $510,504  $492,605  $549,202  $492,605 
                            
Shares outstanding at end of period 20,213   20,183   20,208   20,445   20,431   20,213   20,431 
                            
Tangible book value per share$27.17  $25.75  $25.59  $24.97  $24.11  $27.17  $24.11 
                            
Net income$22,925  $18,010  $15,941  $16,170  $9,907  $40,935  $13,423 
                            
Average shareholders' equity$774,803  $761,600  $756,699  $748,647  $723,104  $768,238  $718,320 
Less: Average goodwill and core deposit intangibles, net 240,331   241,166   242,043   243,015   244,010   240,746   244,508 
Average tangible shareholders’ equity$534,472  $520,434  $514,656  $505,632  $479,094  $527,492  $473,812 
                            
Return on average tangible equity(A) 17.20%  14.03%  12.32%  12.72%  8.32%  15.65%  5.70%
                            
Total assets$6,508,667  $6,430,990  $6,050,128  $5,967,751  $5,836,881  $6,508,667  $5,836,881 
Less: Goodwill and core deposit intangibles, net 239,948   240,772   241,596   242,549   243,538   239,948   243,538 
Tangible assets$6,268,719  $6,190,218  $5,808,532  $5,725,202  $5,593,343  $6,268,719  $5,593,343 
                            
Tangible equity to tangible assets 8.76%  8.40%  8.90%  8.92%  8.81%  8.76%  8.81%

(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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