Allegiance Bancshares, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

Attached files

file	filename
EX-99.2 - EXHIBIT 99.2 - Allegiance Bancshares, Inc.	secondquarter2018earning.htm
8-K - 8-K - Allegiance Bancshares, Inc.	a8-kearningsrelease6302018.htm

PRESS RELEASE

Allegiance Bancshares, Inc.

8847 West Sam Houston Parkway N., Suite 200

Houston, Texas 77040

ir@allegiancebank.com

ALLEGIANCE BANCSHARES, INC. REPORTS

SECOND QUARTER 2018 RESULTS


•	Core loan growth of $266.0 million, or 13.0%, year over year and $58.2 million, or 10.4% (annualized), for the second quarter 2018 compared to the linked quarter


•	Deposit growth of $214.5 million, or 10.2%, year over year and $29.0 million, or 5.1% (annualized), for the second quarter 2018 compared to the linked quarter


•	Announced the pending acquisition of Post Oak Bancshares, Inc. headquartered in Houston, Texas

HOUSTON, July 26, 2018. Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $7.6 million and diluted earnings per share of $0.55 for the second quarter 2018 compared to $5.4 million and diluted earnings per share of $0.40 for the second quarter 2017. The second quarter 2018 results include $1.1 million and $625 thousand of core system conversion and merger related expenses, respectively. Net income for the six months ended June 30, 2018 was $15.3 million, or $1.12 per diluted share, compared to $11.4 million, or $0.85 per diluted share, for the six months ended June 30, 2017.

"This quarter was an exciting one for us as we further executed our growth strategies. We generated continued organic loan and deposit growth, successfully completed our core technology conversion and advanced our acquisition strategy by announcing a transaction with Post Oak Bancshares, Inc. headquartered in Houston, Texas," said George Martinez, Allegiance's Chairman and Chief Executive Officer. "Allegiance and Post Oak share the same tradition of customer, employee and community bank focus and we continue to anticipate that the acquisition will close in the fourth quarter of 2018. We are excited about this partnership and the opportunities that will further enhance our value as Houston's largest community bank," commented Martinez.

"I would like to thank our outstanding team of dedicated employees for a remarkable job well done as we effectively enhanced our core system during the quarter. Our employees continue to ensure an outstanding customer experience every day to help our bank grow and innovate while working diligently to deliver great results. We believe that this quarter's results reflect our commitment to our customers and the enhancement of shareholder value," concluded Martinez.

Second Quarter 2018 Results

Net interest income before provision for loan losses in the second quarter 2018 increased $2.7 million, or 10.8%, to $27.8 million from $25.1 million for the second quarter 2017 primarily due to organic loan growth partially offset by interest expense on the subordinated debt that was issued in December 2017. Net interest income before provision for loan losses in the second quarter 2018 increased slightly from $26.9 million in the first quarter 2018. The net interest margin on a tax equivalent basis decreased eight basis points to 4.21% for the second quarter 2018 from 4.29% for the second quarter 2017 and increased one basis point from 4.20% for the first quarter 2018. The decrease from the prior year is primarily due to the increase in interest expense on interest-bearing liabilities driven in part by the subordinated debt issuance in December 2017.

Noninterest income for the second quarter 2018 was $1.8 million, an increase of $328 thousand, or 22.2%, compared to $1.5 million for the second quarter 2017 and increased $159 thousand compared to $1.6 million for the first quarter 2018.

Noninterest expense for the second quarter 2018 increased $3.4 million, or 20.4%, to $19.9 million from $16.5 million for the second quarter 2017, and increased $1.1 million, or 6.1%, from $18.7 million for the first quarter 2018. The increases in noninterest expense over the second quarter 2017 and the linked quarter were primarily due to expenses of $1.1 million related to the core system conversion and $625 thousand of merger related expenses. In the second quarter 2018, Allegiance’s efficiency ratio increased to 67.05% from 61.92% for the second quarter 2017 and increased from 65.59% for the first quarter 2018. Second quarter 2018 annualized returns on average assets, average equity and average tangible equity were 1.03%, 9.55% and 11.02%, respectively, compared to 0.81%, 7.32% and 8.57%, respectively, for the second quarter 2017. Annualized returns on average assets, average equity and average tangible equity for the first quarter 2018 were 1.09%, 10.10% and 11.71%, respectively.

Six Months Ended June 30, 2018 Results

Net interest income before provision for loan losses for the six months ended June 30, 2018 increased $5.5 million, or 11.1%, to $54.7 million from $49.2 million for the six months ended June 30, 2017 primarily due to organic loan growth partially offset by the increased interest expense on interest-bearing liabilities. The net interest margin on a tax equivalent basis decreased 13 basis points to 4.20% for the six months ended June 30, 2018 from 4.33% for the six months ended June 30, 2017 primarily due to the increase in interest expense on interest-bearing liabilities driven in part by the subordinated debt issuance in December 2017

Noninterest income for the six months ended June 30, 2018 was $3.5 million, an increase of $633 thousand, or 22.5%, compared to $2.8 million for the six months ended June 30, 2017.

Noninterest expense for the six months ended June 30, 2018 increased $5.6 million, or 16.9%, to $38.6 million from $33.0 million for the six months ended June 30, 2017. The increase in noninterest expense over the six months ended June 30, 2017 was primarily due to expenses related to the core system conversion of $1.5 million and the merger related expenses of $625 thousand during the six months ended June 30, 2018.

During the six months ended June 30, 2018, Allegiance’s efficiency ratio increased to 66.33% from 63.41% for the six months ended June 30, 2017.

For the six months ended June 30, 2018, annualized returns on average assets, average equity and average tangible equity were 1.06%, 9.82% and 11.36%, respectively, compared to 0.89%, 7.95% and 9.34%, respectively, for the six months ended June 30, 2017.

Financial Condition

Total assets at June 30, 2018 increased $241.7 million, or 8.9%, to $2.97 billion compared to $2.72 billion at June 30, 2017 and increased $79.9 million, or 2.8%, compared to $2.89 billion at March 31, 2018.

Total loans at June 30, 2018 increased $244.0 million, or 11.5%, to $2.36 billion compared to $2.11 billion at June 30, 2017 and increased $68.2 million, or 3.0%, compared to $2.29 billion at March 31, 2018. These increases were due to strong organic loan growth within the Bank’s loan portfolio. Core loans, which exclude the mortgage warehouse portfolio, increased $266.0 million, or 13.0%, to $2.31 billion at June 30, 2018 from $2.04 billion at June 30, 2017 and increased $58.2 million, or 2.6%, from $2.25 billion at March 31, 2018.

Deposits at June 30, 2018 increased $214.5 million, or 10.2%, to $2.31 billion compared to $2.10 billion at June 30, 2017 and increased $29.0 million, or 1.3%, compared to $2.28 billion at March 31, 2018.

Asset Quality

Nonperforming assets totaled $14.6 million, or 0.49% of total assets, at June 30, 2018, compared to $19.9 million, or 0.73% of total assets, at June 30, 2017, and $14.2 million, or 0.49% of total assets, at March 31, 2018. The allowance for loan losses was 1.01% of total loans at June 30, 2018, 0.99% of total loans at June 30, 2017 and 1.08% of total loans at March 31, 2018.

The provision for loan losses for the second quarter 2018 was $631 thousand, or 0.11% (annualized) of average loans, compared to $3.0 million, or 0.59% (annualized) of average loans, for the second quarter 2017, and $653 thousand, or 0.12% (annualized) of average loans, for the first quarter 2018.

Second quarter 2018 net charge-offs were $1.4 million compared to net charge-offs of $684 thousand for the second quarter 2017 and net recoveries of $326 thousand for the first quarter 2018.

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 Thursday, July 26, 2018 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its second quarter 2018 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 8558406. 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.

Allegiance is a $2.97 billion asset Houston, Texas-based bank holding company. Through its wholly owned subsidiary, Allegiance Bank, Allegiance provides a diversified range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses and individual customers. Allegiance’s super-community banking strategy was designed to foster strong customer relationships while benefiting from a platform and scale that is competitive with larger local and regional banks. Allegiance Bank operates 16 full-service banking locations and one loan production office in the Houston metropolitan area. Visit www.allegiancebank.com for more information.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

This release may contain forward-looking statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, present expectations, estimates and projections about Allegiance and its subsidiaries. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “continues,” “anticipates,” “intends,” “projects,” “estimates,” “potential,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing words. Forward-looking statements include information concerning Allegiance’s future financial performance, business and growth strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Allegiance’s control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Allegiance can: continue to develop and maintain new and existing customer and community relationships; successfully implement its growth strategy, including identifying suitable acquisition targets and integrating the businesses of acquired companies and banks; sustain its current internal growth rate; provide quality and competitive products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its performance objectives. These and various other risk factors are discussed in Allegiance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in other reports and statements Allegiance has filed with the Securities and Exchange Commission. Copies of such filings are available for download free of charge from the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Financial Information, SEC Filings. Any forward-looking statement made by Allegiance in this release speaks only as of the date on which it is made. Factors or events that could cause Allegiance’s actual results to differ may emerge from time to time, and it is not possible for Allegiance to predict all of them. Allegiance undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	2018						2017
	June 30			March 31			December 31			September 30			June 30
	(Dollars in thousands)
Cash and cash equivalents	$	200,645		$	190,088		$	182,103		$	192,427		$	187,491
Available for sale securities	300,897			307,411			309,615			323,856			321,268

Total loans	2,358,675			2,290,494			2,270,876			2,201,540			2,114,652
Allowance for loan losses	(23,831		)	(24,628		)	(23,649		)	(23,722		)	(21,010		)
Loans, net	2,334,844			2,265,866			2,247,227			2,177,818			2,093,642

Goodwill	39,389			39,389			39,389			39,389			39,389
Core deposit intangibles, net	2,883			3,079			3,274			3,469			3,664
Premises and equipment, net	19,049			18,605			18,477			18,273			18,240
Other real estate owned	1,710			365			365			453			365
Bank owned life insurance	22,701			22,563			22,422			22,277			22,131
Other assets	44,308			39,118			37,359			35,472			38,526
Total assets	$	2,966,426		$	2,886,484		$	2,860,231		$	2,813,434		$	2,724,716

Noninterest-bearing deposits	$	749,787		$	694,880		$	683,110		$	712,951		$	662,527
Interest-bearing deposits	1,563,999			1,589,922			1,530,864			1,573,664			1,436,715
Total deposits	2,313,786			2,284,802			2,213,974			2,286,615			2,099,242

Borrowed funds	275,569			232,569			282,569			207,569			310,569
Subordinated debt	48,779			48,719			48,659			9,277			9,249
Other liabilities	8,404			8,406			8,164			7,246			7,197
Total liabilities	2,646,538			2,574,496			2,553,366			2,510,707			2,426,257

Common stock	13,341			13,302			13,227			13,171			13,153
Capital surplus	220,665			219,760			218,408			216,943			216,158
Retained earnings	90,089			82,533			74,894			71,690			68,704
Accumulated other comprehensive (loss) income	(4,207		)	(3,607		)	336			923			444
Shareholders' equity	319,888			311,988			306,865			302,727			298,459
Total liabilities and equity	$	2,966,426		$	2,886,484		$	2,860,231		$	2,813,434		$	2,724,716



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	Three Months Ended											Year-to-Date
	2018				2017							2018		2017
	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	$	31,846	$	30,117	$	29,747	$	28,588		$	26,736	$	61,963	$	51,996
Securities
Taxable	646		599		563		547			503		1,245		1,001
Tax-exempt	1,451		1,459		1,545		1,574			1,591		2,910		3,215
Deposits in other financial institutions	250		216		183		192			157		466		287
Total interest income	34,193		32,391		32,038		30,901			28,987		66,584		56,499

INTEREST EXPENSE:
Demand, money market and savings deposits	887		976		992		811			702		1,863		1,356
Certificates and other time deposits	3,284		2,785		2,521		2,299			2,283		6,069		4,240
Borrowed funds	1,472		1,036		854		654			761		2,508		1,414
Subordinated debt	734		705		235		140			134		1,439		254
Total interest expense	6,377		5,502		4,602		3,904			3,880		11,879		7,264
NET INTEREST INCOME	27,816		26,889		27,436		26,997			25,107		54,705		49,235
Provision for loan losses	631		653		1,930		6,908			3,007		1,284		4,350
Net interest income after provision for loan losses	27,185		26,236		25,506		20,089			22,100		53,421		44,885

NONINTEREST INCOME:
Nonsufficient funds fees	214		176		158		144			184		390		383
Service charges on deposit accounts	106		223		179		204			205		329		400
Gain (loss) on sale of securities	—		—		30		(12		)	—		—		—
Gain on sale of other real estate	1		—		6		—			—		1		—
Bank owned life insurance	138		141		145		146			146		279		294
Rebate from correspondent bank	564		444		388		370			336		1,008		569
Other	782		662		677		608			606		1,444		1,172
Total noninterest income	1,805		1,646		1,583		1,460			1,477		3,451		2,818

NONINTEREST EXPENSE:
Salaries and employee benefits	12,778		12,794		12,188		11,580			10,415		25,572		20,977
Net occupancy and equipment	1,367		1,272		1,398		1,325			1,302		2,639		2,729
Depreciation	433		407		412		427			398		840		798
Data processing and software amortization	1,356		1,053		1,850		783			719		2,409		1,414
Professional fees	1,126		469		222		822			987		1,595		1,882
Regulatory assessments and FDIC insurance	509		534		533		582			569		1,043		1,158
Core deposit intangibles amortization	196		195		195		195			196		391		391
Communications	259		248		252		251			233		507		480
Advertising	342		330		436		302			288		672		551
Other	1,494		1,415		1,790		1,409			1,354		2,909		2,630
Total noninterest expense	19,860		18,717		19,276		17,676			16,461		38,577		33,010
INCOME BEFORE INCOME TAXES	9,130		9,165		7,813		3,873			7,116		18,295		14,693
Provision for income taxes	1,574		1,454		4,609		887			1,721		3,028		3,251
NET INCOME	$	7,556	$	7,711	$	3,204	$	2,986		$	5,395	$	15,267	$	11,442

EARNINGS PER SHARE
Basic	$	0.57	$	0.58	$	0.24	$	0.23		$	0.41	$	1.15	$	0.88
Diluted	$	0.55	$	0.57	$	0.24	$	0.22		$	0.40	$	1.12	$	0.85



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	Three Months Ended															Year-to-Date
	2018						2017									2018			2017
	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	$	7,556		$	7,711		$	3,204		$	2,986		$	5,395		$	15,267		$	11,442

Earnings per share, basic	$	0.57		$	0.58		$	0.24		$	0.23		$	0.41		$	1.15		$	0.88
Earnings per share, diluted	$	0.55		$	0.57		$	0.24		$	0.22		$	0.40		$	1.12		$	0.85

Return on average assets^(A)	1.03		%	1.09		%	0.45		%	0.43		%	0.81		%	1.06		%	0.89		%
Return on average equity^(A)	9.55		%	10.10		%	4.15		%	3.90		%	7.32		%	9.82		%	7.95		%
Return on average tangible equity^(A)(B)	11.02		%	11.71		%	4.82		%	4.55		%	8.57		%	11.36		%	9.34		%
Tax equivalent net interest margin^(C)	4.21		%	4.20		%	4.33		%	4.37		%	4.29		%	4.20		%	4.33		%
Efficiency ratio^(D)	67.05		%	65.59		%	66.50		%	62.14		%	61.92		%	66.33		%	63.41		%

Liquidity and Capital Ratios
Allegiance Bancshares, Inc. (Consolidated)
Equity to assets	10.78		%	10.81		%	10.73		%	10.76		%	10.95		%	10.78		%	10.95		%
Tangible equity to tangible assets^(B)	9.49		%	9.48		%	9.38		%	9.38		%	9.52		%	9.49		%	9.52		%
Estimated common equity tier 1 capital	10.60		%	10.82		%	10.54		%	10.68		%	10.85		%	10.32		%	10.85		%
Estimated tier 1 risk-based capital	10.97		%	11.19		%	10.92		%	11.07		%	11.24		%	10.67		%	11.24		%
Estimated total risk-based capital	13.42		%	13.72		%	13.43		%	12.04		%	12.13		%	13.06		%	12.13		%
Estimated tier 1 leverage capital	9.78		%	9.98		%	9.84		%	9.90		%	10.11		%	9.78		%	10.11		%
Allegiance Bank
Estimated common equity tier 1 capital	11.04		%	10.95		%	10.72		%	10.93		%	10.23		%	10.74		%	10.23		%
Estimated tier 1 risk-based capital	11.04		%	10.95		%	10.72		%	10.93		%	10.23		%	10.74		%	10.23		%
Estimated total risk-based capital	13.49		%	13.49		%	13.24		%	11.91		%	11.12		%	13.13		%	11.12		%
Estimated tier 1 leverage capital	9.84		%	9.77		%	9.67		%	9.77		%	9.20		%	9.84		%	9.20		%

Other Data
Weighted average shares:
Basic	13,327			13,262			13,187			13,165			13,125			13,294			13,073
Diluted	13,634			13,542			13,496			13,483			13,471			13,588			13,425
Period end shares outstanding	13,341			13,301			13,227			13,171			13,153			13,341			13,153
Book value per share	$	23.98		$	23.46		$	23.20		$	22.98		$	22.69		$	23.98		$	22.69
Tangible book value per share^(B)	$	20.81		$	20.26		$	19.97		$	19.73		$	19.42		$	20.81		$	19.42


(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 10 of this Earnings Release.


(C)	Net interest margin represents net interest income divided by average interest-earning assets.


(D)	Represents noninterest expense divided by the sum of net interest income plus noninterest income, excluding net gains and losses on the sale of securities. Additionally, taxes and provision for loan losses are not part of this calculation.



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	Three Months Ended
	June 30, 2018							March 31, 2018							June 30, 2017
	Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate
	(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans	$	2,312,725		$	31,846	5.52	%	$	2,260,119		$	30,117	5.40	%	$	2,042,460		$	26,736	5.25	%
Securities	315,198			2,097		2.67	%	312,769			2,058		2.67	%	326,388			2,094		2.57	%
Deposits in other financial institutions	50,227			250		2.00	%	49,897			216		1.75	%	49,703			157		1.26	%
Total interest-earning assets	2,678,150			$	34,193	5.12	%	2,622,785			$	32,391	5.01	%	2,418,551			$	28,987	4.81	%
Allowance for loan losses	(24,753		)					(23,949		)					(19,253		)
Noninterest-earning assets	280,852							272,430							261,668
Total assets	$	2,934,249						$	2,871,266						$	2,660,966

Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	157,588		$	208	0.53	%	$	232,375		$	317	0.55	%	$	137,507		$	118	0.34	%
Money market and savings deposits	522,381			679		0.52	%	552,396			659		0.48	%	499,335			584		0.47	%
Certificates and other time deposits	827,897			3,284		1.59	%	800,343			2,785		1.41	%	785,194			2,283		1.17	%
Borrowed funds	311,185			1,472		1.90	%	250,414			1,036		1.68	%	304,184			761		1.00	%
Subordinated debt	48,746			734		6.04	%	48,684			705		5.87	%	9,232			134		5.83	%
Total interest-bearing liabilities	1,867,797			$	6,377	1.37	%	1,884,212			$	5,502	1.18	%	1,735,452			$	3,880	0.90	%

Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits	741,266							669,258							624,100
Other liabilities	7,778							8,251							5,890
Total liabilities	2,616,841							2,561,721							2,365,442
Shareholders' equity	317,408							309,545							295,524
Total liabilities and shareholders' equity	$	2,934,249						$	2,871,266						$	2,660,966

Net interest rate spread						3.75	%						3.83	%						3.91	%

Net interest income and margin				$	27,816	4.17	%				$	26,889	4.16	%				$	25,107	4.16	%

Net interest income and margin (tax equivalent)				$	28,086	4.21	%				$	27,174	4.20	%				$	25,862	4.29	%



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	Six Months Ended June 30,
	2018							2017
	Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate		Average Balance			Interest Earned/ Interest Paid		Average Yield/ Rate
	(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans	$	2,286,567		$	61,963	5.46	%	$	1,985,715		$	51,996	5.28	%
Securities	313,990			4,155		2.67	%	326,151			4,216		2.61	%
Deposits in other financial institutions	50,063			466		1.88	%	51,511			287		1.12	%
Total interest-earning assets	2,650,620			$	66,584	5.07	%	2,363,374			$	56,499	4.82	%
Allowance for loan losses	(24,353		)					(18,729		)
Noninterest-earning assets	276,664							260,497
Total assets	$	2,902,931						$	2,605,142

Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	194,774		$	525	0.54	%	$	134,226		$	218	0.33	%
Money market and savings deposits	537,305			1,338		0.50	%	493,092			1,138		0.47	%
Certificates and other time deposits	814,196			6,069		1.50	%	735,458			4,240		1.16	%
Borrowed funds	280,967			2,508		1.80	%	324,901			1,414		0.88	%
Subordinated debt	48,716			1,439		5.96	%	9,218			254		5.56	%
Total interest-bearing liabilities	1,875,958			$	11,879	1.28	%	1,696,895			$	7,264	0.86	%

Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits	705,461							612,120
Other liabilities	8,014							5,891
Total liabilities	2,589,433							2,314,906
Shareholders' equity	313,498							290,236
Total liabilities and shareholders' equity	$	2,902,931						$	2,605,142

Net interest rate spread						3.79	%						3.96	%

Net interest income and margin				$	54,705	4.16	%				$	49,235	4.20	%

Net interest income and margin (tax equivalent)				$	55,260	4.20	%				$	50,770	4.33	%



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	Three Months Ended
	2018						2017
	June 30			March 31			December 31			September 30			June 30
	(Dollars in thousands)
Period-end Loan Portfolio:
Commercial and industrial	$	452,307		$	447,168		$	457,129		$	446,029		$	444,701
Mortgage warehouse	51,552			41,572			69,456			83,577			73,499
Real estate:
Commercial real estate (including multi-family residential)	1,134,903			1,108,537			1,080,247			1,045,220			1,008,027
Commercial real estate construction and land development	270,965			257,566			243,389			225,574			206,024
1-4 family residential (including home equity)	330,053			317,842			301,219			283,399			267,939
Residential construction	109,962			108,882			109,116			106,299			102,832
Consumer and other	8,933			8,927			10,320			11,442			11,630
Total loans	$	2,358,675		$	2,290,494		$	2,270,876		$	2,201,540		$	2,114,652

Asset Quality:
Nonaccrual loans	$	12,137		$	13,373		$	13,328		$	13,913		$	19,330
Accruing loans 90 or more days past due	—			—			—			—			—
Total nonperforming loans	12,137			13,373			13,328			13,913			19,330
Other real estate	1,710			365			365			453			365
Other repossessed assets	740			443			205			205			205
Total nonperforming assets	$	14,587		$	14,181		$	13,898		$	14,571		$	19,900

Net charge-offs (recoveries)	$	1,428		$	(326	)	$	2,003		$	4,196		$	684

Nonaccrual loans:
Commercial and industrial	$	5,983		$	6,153		$	6,437		$	5,031		$	9,051
Mortgage warehouse	—			—			—			—			—
Real estate:
Commercial real estate (including multi-family residential)	4,917			6,466			6,110			8,097			9,556
Commercial real estate construction and land development	—			—			—			—			—
1-4 family residential (including home equity)	1,237			754			781			735			568
Residential construction	—			—			—			—			—
Consumer and other	—			—			—			50			155
Total nonaccrual loans	$	12,137		$	13,373		$	13,328		$	13,913		$	19,330

Asset Quality Ratios:
Nonperforming assets to total assets	0.49		%	0.49		%	0.49		%	0.52		%	0.73		%
Nonperforming loans to total loans	0.51		%	0.58		%	0.59		%	0.63		%	0.91		%
Allowance for loan losses to nonperforming loans	196.35		%	184.16		%	177.44		%	170.50		%	108.69		%
Allowance for loan losses to total loans	1.01		%	1.08		%	1.04		%	1.08		%	0.99		%
Net charge-offs (recoveries) to average loans (annualized)	0.25		%	(0.06		)%	0.36		%	0.78		%	0.13		%

Allegiance Bancshares, Inc.

GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures

(Unaudited)

Allegiance’s management uses certain non−GAAP (generally accepted accounting principles) financial measures to evaluate its performance. Allegiance believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance. Allegiance believes that management and investors benefit from referring to these non-GAAP financial measures in assessing Allegiance’s performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, Allegiance reviews tangible book value per common 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
	2018						2017									2018			2017
	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	$	319,888		$	311,988		$	306,865		$	302,727		$	298,459		$	319,888		$	298,459
Less: Goodwill and core deposit intangibles, net	42,272			42,468			42,663			42,858			43,053			42,272			43,054
Tangible shareholders’ equity	$	277,616		$	269,520		$	264,202		$	259,869		$	255,406		$	277,616		$	255,405

Shares outstanding at end of period	13,341			13,301			13,227			13,171			13,153			13,341			13,153

Tangible book value per share	$	20.81		$	20.26		$	19.97		$	19.73		$	19.42		$	20.81		$	19.42

Net income	$	7,556		$	7,711		$	3,204		$	2,986		$	5,395		$	15,267		$	11,442

Average shareholders' equity	$	317,408		$	309,545		$	306,346		$	303,449		$	295,524		$	313,498		$	290,236
Less: Average goodwill and core deposit intangibles, net	42,393			42,589			42,758			42,954			43,149			42,491			43,246
Average tangible shareholders’ equity	$	275,015		$	266,954		$	263,588		$	260,495		$	252,375		$	271,007		$	246,990

Return on average tangible equity	11.02		%	11.71		%	4.82		%	4.55		%	8.57		%	11.36		%	9.34		%

Total assets	$	2,966,426		$	2,886,484		$	2,860,231		$	2,813,434		$	2,724,716		$	2,966,426		$	2,724,716
Less: Goodwill and core deposit intangibles, net	42,272			42,468			42,663			42,858			43,053			42,272			43,054
Tangible assets	$	2,924,154		$	2,844,016		$	2,817,568		$	2,770,576		$	2,681,663		$	2,924,154		$	2,681,662

Tangible equity to tangible assets	9.49		%	9.48		%	9.38		%	9.38		%	9.52		%	9.49		%	9.52		%

Allegiance Bancshares, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - July 26, 2018

Attached files

Allegiance Bancshares, Inc. Reports