Allegiance Bancshares, Inc. Reports Strong Results for the Third Quarter 2021

October 28, 2021 7:00 AM EDT

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  • Net income and diluted earnings per share of $19.1 million and $0.93 for the third quarter 2021, respectively, and $60.0 million and $2.95 for the nine months ended September 30, 2021, respectively
  • Deposit growth of 15.2% to $5.67 billion as of September 30, 2021 from $4.92 billion as of September 30, 2020, driven primarily by $435.5 million, or 13.8%, growth in interest-bearing deposits and $314.0 million, or 17.7%, growth in noninterest-bearing deposits
  • Core loans of $4.00 billion, which exclude PPP loans, as of September 30, 2021 increased $37.9 million, or 3.8% (annualized), compared to June 30, 2021 and $117.3 million, or 3.0%, from $3.88 billion at September 30, 2020
  • Board declared quarterly dividend of $0.12 per share of common stock

HOUSTON, Oct. 28, 2021 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) (Allegiance), the holding company of Allegiance Bank (the "Bank"), today reported record net income of $19.1 million and diluted earnings per share of $0.93 for the third quarter 2021 compared to net income of $16.2 million and diluted earnings per share of $0.79 for the third quarter 2020. Net income for the nine months ended September 30, 2021 was $60.0 million, or $2.95 per diluted share, compared to $29.6 million, or $1.44 per diluted share, for the nine months ended September 30, 2020. The third quarter ended September 30, 2021 results were driven by increased net interest income and an increased provision for credit losses compared to the third quarter 2020. The nine months ended September 30, 2021 results were primarily due to a lower provision for credit losses and increased net interest income driven by lower funding costs compared to the nine months ended September 30, 2020.

“This quarter was a period of outstanding focus and execution by our bankers. We continued to experience growth as we saw opportunities to grow deposit and loan volumes even though the loan market remains very competitive,” said Steve Retzloff, Allegiance’s Chief Executive Officer. “We are very pleased with our solid third quarter operating metrics and credit performance,” commented Retzloff.

“I could not be more proud of our team as I look back on a very successful 2021 so far. Their hard work has been instrumental to our growth as we welcomed and retained a significant number of our PPP customers, evidence of our ongoing dedication to customer service and the strong value proposition we offer our customers. We believe our core strength is the unwavering commitment to service that we provide to our customers and communities that consistently yields an outstanding customer experience. As we look to the future, we feel very well-positioned to execute our business model and seize the opportunity to gain market share,” concluded Retzloff.

Third Quarter 2021 Results

Net interest income before the provision for credit losses in the third quarter 2021 increased $6.3 million, or 12.1%, to $58.2 million from $51.9 million for the third quarter 2020 and increased $1.6 million, or 2.8%, from $56.6 million for the second 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 5 basis points to 3.90% for the third quarter 2021 from 3.95% for the third quarter 2020 and decreased 12 basis points from 4.02% for the second quarter 2021. The decreases in the margin were primarily due to the decrease in the average yield on interest-earning assets, driven by the increase in cash and securities, partially offset by the decrease in funding costs.

Noninterest income for the third quarter 2021 was $2.1 million, an increase of $249 thousand, or 13.5%, compared to $1.9 million for the third quarter 2020 and decreased $174 thousand, or 7.7%, compared to $2.3 million for the second quarter 2021. Third quarter 2021 noninterest income reflected higher transactional fee income when compared to the third quarter 2020 and lower correspondent bank rebates, included in other noninterest income, than the second quarter 2021.

Noninterest expense for the third quarter 2021 increased $1.7 million, or 5.3%, to $34.3 million from $32.6 million for the third quarter 2020 and increased $701 thousand, or 2.1%, compared to the second quarter of 2021. The increase over the prior year was primarily due to increases in salaries and benefits, as a result of increased performance-based bonus and profit sharing accruals, partially offset by decreased other real estate expenses as $1.9 million of other real estate write-downs were recorded in the third quarter 2020.

In the third quarter 2021, Allegiance’s efficiency ratio decreased to 56.91% compared to 60.58% for the third quarter 2020 and decreased from 57.07% for the second quarter 2021. Third quarter 2021 annualized returns on average assets, average equity and average tangible equity were 1.14%, 9.45% and 13.49%, respectively, compared to 1.09%, 8.59% and 12.72% for the third quarter 2020. Annualized returns on average assets, average equity and average tangible equity for the second quarter 2021 were 1.42%, 11.87% and 17.20%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 10.  

Nine Months Ended September 30, 2021 Results

Net interest income before provision for credit losses for the nine months ended September 30, 2021 increased $22.7 million, or 15.3%, to $170.5 million from $147.8 million for the nine months ended September 30, 2020 primarily due to lower costs related to interest-bearing liabilities as well as an $825.4 million, or 16.8%, increase in average interest-earning assets over the prior year including the impact of PPP loans. The net interest margin on a tax equivalent basis decreased 3 basis points to 4.03% for the nine months ended September 30, 2021 from 4.06% for the nine months ended September 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 nine months ended September 30, 2021 was $6.1 million, a decrease of $29 thousand, or 0.5%, compared to $6.1 million for the nine months ended September 30, 2020 due primarily to lower correspondent bank rebates and gains on the sale of securities partially offset by increased debit card and ATM card income.

Noninterest expense for the nine months ended September 30, 2021 increased $8.1 million, or 8.5%, to $102.8 million from $94.7 million for the nine months ended September 30, 2020. The increase in noninterest expense over the nine months ended September 30, 2020 was primarily due to increased performance-based bonus and profit sharing accruals along with the reduced amount of deferred PPP loan origination costs, increased other expenses and the write-down of assets related to the closure of a bank office partially offset by lower other real estate expenses as $4.1 million of other real estate write-downs were recorded during the prior year 2020.

Allegiance’s efficiency ratio decreased from 61.67% for the nine months ended September 30, 2020 to 58.24% for the nine months ended September 30, 2021. For the nine months ended September 30, 2021, returns on average assets, average equity and average tangible equity were 1.25%, 10.30% and 14.89%, respectively, compared to 0.72%, 5.43% and 8.16%, respectively, for the nine months ended September 30, 2020. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 10.

Financial Condition

Total assets at September 30, 2021 increased $792.0 million, or 13.3%, to $6.76 billion compared to $5.97 billion at September 30, 2020 and increased $251.1 million, or 15.4% (annualized), compared to $6.51 billion at June 30, 2021, primarily due to increased liquidity, growth in the securities portfolio and the origination of core loans partially offset by paydowns of PPP loans.

Total loans at September 30, 2021 decreased $302.9 million, or 6.6%, to $4.29 billion compared to $4.59 billion at September 30, 2020 and decreased $171.3 million, or 15.4% (annualized), compared to $4.46 billion at June 30, 2021, primarily due to paydowns on PPP loans. Core loans, which exclude PPP loans, increased $117.3 million, or 3.0%, to $4.00 billion at September 30, 2021 from $3.88 billion at September 30, 2020 and increased $37.9 million, or 3.8% (annualized), from $3.96 billion at June 30, 2021.

Deposits at September 30, 2021 increased $749.5 million, or 15.2%, to $5.67 billion compared to $4.92 billion at September 30, 2020 and increased $233.5 million, or 17.2% (annualized), compared to $5.43 billion at June 30, 2021.

Asset Quality

Nonperforming assets totaled $29.8 million, or 0.44%, of total assets, at September 30, 2021 compared to $46.8 million, or 0.78%, of total assets, at September 30, 2020 and $38.0 million, or 0.58%, of total assets at June 30, 2021. The allowance for credit losses on loans as a percentage of total loans was 1.18% at September 30, 2021, 1.06% at September 30, 2020 and 1.11% at June 30, 2021.

The provision for credit losses for the third quarter 2021 was $2.3 million, an increase of $1.0 million, compared to $1.3 million for the third quarter 2020 and a recapture of provision for credit losses of $2.7 million for the second quarter 2021, reflective of the current uncertainty surrounding the economic impact caused by COVID-19 compared to the prior quarter where there were improvements in economic factors.

Third quarter 2021 net charge-offs were $450 thousand, or 0.04% (annualized) of average loans, an increase from net charge-offs of $291 thousand, or 0.03% (annualized) of average loans, for the third quarter 2020 and $162 thousand, or 0.01% (annualized) of average loans, for the second quarter 2021.

Dividend

The Board of Directors of Allegiance declared a cash dividend on October 27, 2021 of $0.12 per share to be paid on December 15, 2021 to all shareholders of record as of November 30, 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 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, October 28, 2021 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its third quarter 2021 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 6951679. Alternatively, a simultaneous audio-only webcast may be accessed via the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Upcoming Events. If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under News and Events, Event Calendar, Past Events.

Allegiance Bancshares, Inc.

As of September 30, 2021, Allegiance was a $6.76 billion asset Houston, Texas-based bank holding company. Through its wholly owned subsidiary, Allegiance Bank, Allegiance provides a diversified range of commercial banking services primarily to small- to medium-sized businesses and individual customers in the Houston region. Allegiance’s super-community banking strategy was designed to foster strong customer relationships while benefiting from a platform and scale that is competitive with larger local and regional banks. As of September 30, 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 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
  September 30   June 30   March 31   December 31   September 30
 (Dollars in thousands)
ASSETS         
Cash and due from banks$23,903  $146,397  $141,947  $122,897  $327,416 
Interest-bearing deposits at other financial  institutions879,858  564,888  482,383  299,869  19,732 
Total cash and cash equivalents903,761  711,285  624,330  422,766  347,148 
Available for sale securities, at fair value1,211,476  977,282  787,516  772,890  663,301 
Loans held for investment4,289,469  4,460,743  4,659,169  4,491,764  4,592,362 
Less: allowance for credit losses on loans(50,491) (49,586) (52,758) (53,173) (48,698)
Loans, net4,238,978  4,411,157  4,606,411  4,438,591  4,543,664 
Accrued interest receivable33,523  37,075  38,632  40,053  36,996 
Premises and equipment, net65,140  65,442  66,115  70,685  69,887 
Other real estate owned1,397  1,397  576  9,196  8,876 
Federal Home Loan Bank stock8,326  8,234  7,775  7,756  9,716 
Bank owned life insurance28,101  27,976  27,825  27,686  27,542 
Goodwill223,642  223,642  223,642  223,642  223,642 
Core deposit intangibles, net15,482  16,306  17,130  17,954  18,907 
Other assets29,935  28,871  31,038  18,909  18,072 
Total assets$6,759,761  $6,508,667  $6,430,990  $6,050,128  $5,967,751 
LIABILITIES AND SHAREHOLDERS’  EQUITY         
LIABILITIES:         
Deposits:         
Noninterest-bearing$2,086,683  $1,973,042  $1,914,121  $1,704,567  $1,772,700 
Interest-bearing         
Demand594,959  553,874  480,710  437,328  409,137 
Money market and savings1,604,222  1,556,920  1,617,823  1,499,938  1,483,370 
Certificates and other time1,381,014  1,349,522  1,361,535  1,346,649  1,252,159 
Total interest-bearing deposits3,580,195  3,460,316  3,460,068  3,283,915  3,144,666 
Total deposits5,666,878  5,433,358  5,374,189  4,988,482  4,917,366 
Accrued interest payable3,296  1,940  3,862  2,701  3,082 
Borrowed funds139,954  139,951  147,517  155,515  155,512 
Subordinated debt108,715  108,584  108,453  108,322  108,191 
Other liabilities42,326  35,684  36,432  36,439  30,547 
Total liabilities5,961,169  5,719,517  5,670,453  5,291,459  5,214,698 
SHAREHOLDERS’ EQUITY:         
Common stock20,218  20,213  20,183  20,208  20,445 
Capital surplus507,948  506,810  505,307  508,794  516,151 
Retained earnings247,966  231,333  210,834  195,236  186,866 
Accumulated other comprehensive income22,460  30,794  24,213  34,431  29,591 
Total shareholders’ equity798,592  789,150  760,537  758,669  753,053 
TOTAL LIABILITIES AND  SHAREHOLDERS’ EQUITY$6,759,761  $6,508,667  $6,430,990  $6,050,128  $5,967,751 

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

 Three Months Ended Year-to-Date
 2021 2020 2021 2020
  September 30   June 30   March 31   December 31   September 30   September 30   September 30
 (Dollars in thousands, except per share data)
INTEREST INCOME:             
Loans, including fees$58,176  $57,691  $57,991  $58,496  $56,418  $173,858  $167,463 
Securities:             
Taxable2,998  2,556  2,402  2,203  2,095  7,956  6,024 
Tax-exempt2,498  2,491  2,394  2,316  2,280  7,383  4,995 
Deposits in other financial  institutions221  94  41  32  18  356  233 
Total interest income63,893  62,832  62,828  63,047  60,811  189,553  178,715 
              
INTEREST EXPENSE:             
Demand, money market and  savings deposits1,267  1,337  1,484  1,621  1,657  4,088  7,750 
Certificates and other time  deposits2,583  2,989  3,665  4,507  5,239  9,237  17,168 
Borrowed funds436  469  539  557  558  1,444  1,626 
Subordinated debt1,441  1,441  1,442  1,460  1,448  4,324  4,390 
Total interest expense5,727  6,236  7,130  8,145  8,902  19,093  30,934 
NET INTEREST INCOME58,166  56,596  55,698  54,902  51,909  170,460  147,781 
Provision for (recapture of) credit  losses2,295  (2,679) 639  4,368  1,347  255  23,006 
Net interest income after provision  for credit losses55,871  59,275  55,059  50,534  50,562  170,205  124,775 
              
NONINTEREST INCOME:             
Nonsufficient funds fees131  94  83  100  75  308  304 
Service charges on deposit  accounts425  382  388  405  325  1,195  1,125 
Gain on sale of securities    49      49  287 
(Loss) gain on sales of other real  estate and repossessed assets    (176)   117  (176) (258)
Bank owned life insurance125  151  139  144  144  415  438 
Debit card and ATM card income771  761  630  637  574  2,162  1,568 
Other647  885  623  733  615  2,155  2,673 
Total noninterest income2,099  2,273  1,736  2,019  1,850  6,108  6,137 
              
NONINTEREST EXPENSE:             
Salaries and employee benefits22,335  22,472  22,452  21,003  20,034  67,259  59,149 
Net occupancy and equipment2,335  2,225  2,390  2,079  2,057  6,950  5,890 
Depreciation1,060  1,057  1,034  1,019  946  3,151  2,697 
Data processing and software  amortization2,222  2,176  2,200  2,107  2,125  6,598  5,885 
Professional fees1,223  608  789  999  756  2,620  2,129 
Regulatory assessments and  FDIC insurance883  768  807  810  875  2,458  2,116 
Core deposit intangibles  amortization824  824  824  953  989  2,472  2,969 
Communications358  332  321  225  355  1,011  1,162 
Advertising481  432  298  347  327  1,211  1,218 
Other real estate expense137  229  113  382  2,017  479  4,780 
Other2,438  2,472  3,691  2,825  2,084  8,601  6,750 
Total noninterest expense34,296  33,595  34,919  32,749  32,565  102,810  94,745 
INCOME BEFORE INCOME  TAXES23,674  27,953  21,876  19,804  19,847  73,503  36,167 
Provision for income taxes4,614  5,028  3,866  3,863  3,677  13,508  6,574 
NET INCOME$19,060  $22,925  $18,010  $15,941  $16,170  $59,995  $29,593 
              
EARNINGS PER SHARE             
Basic$0.94  $1.13  $0.89  $0.78  $0.79  $2.97  $1.45 
Diluted$0.93  $1.12  $0.89  $0.77  $0.79  $2.95  $1.44 

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

 Three Months Ended Year-to-Date
 2021 2020 2021 2020
  September 30   June 30   March 31   December 31   September 30   September 30   September 30
 (Dollars and share amounts in thousands, except per share data)
Net income$19,060 $22,925 $18,010 $15,941 $16,170 $59,995 $29,593 
                
Earnings per share, basic$0.94 $1.13 $0.89 $0.78 $0.79 $2.97 $1.45 
Earnings per share, diluted$0.93 $1.12 $0.89 $0.77 $0.79 $2.95 $1.44 
Dividends per share$0.12 $0.12 $0.12 $0.10 $0.10 $0.36 $0.30 
              
Return on average assets(A)1.14%1.42%1.18%1.05%1.09%1.25%0.72%
Return on average equity(A)9.45%11.87%9.59%8.38%8.59%10.30%5.43%
Return on average tangible   equity(A)(B)13.49%17.20%14.03%12.32%12.72%14.89%8.16%
Net interest margin   (tax equivalent)(A)(C)3.90%4.02%4.19%4.14%3.95%4.03%4.06%
Efficiency ratio(D)56.91%57.07%60.85%57.53%60.58%58.24%61.67%
              
Capital Ratios             
Allegiance Bancshares,  Inc. (Consolidated)             
Equity to assets11.81%12.12%11.83%12.54%12.62%11.81%12.62%
Tangible equity to tangible   assets(B)8.58%8.76%8.40%8.90%8.92%8.58%8.92%
Estimated common equity   tier 1 capital12.37%12.18%11.87%11.80%11.73%12.37%11.73%
Estimated tier 1 risk-based   capital12.60%12.41%12.10%12.04%11.96%12.60%11.96%
Estimated total risk-based   capital16.13%15.98%15.72%15.71%15.56%16.13%15.56%
Estimated tier 1 leverage   capital8.76%8.56%8.57%8.51%8.70%8.76%8.70%
Allegiance Bank             
Estimated common equity   tier 1 capital12.81%13.03%13.17%13.32%13.25%12.81%13.25%
Estimated tier 1 risk-based   capital12.81%13.03%13.17%13.32%13.25%12.81%13.25%
Estimated total risk-based   capital14.98%15.22%15.37%15.55%15.41%14.98%15.41%
Estimated tier 1 leverage   capital8.91%8.99%9.33%9.41%9.64%8.91%9.64%
              
Other Data             
Weighted average shares:             
Basic20,221 20,203 20,140 20,396 20,439 20,188 20,421 
Diluted20,411 20,386 20,342 20,575 20,532 20,369 20,551 
Period end shares   outstanding20,218 20,213 20,183 20,208 20,445 20,218 20,445 
Book value per share$39.50 $39.04 $37.68 $37.54 $36.83 $39.50 $36.83 
Tangible book value per   share(B)$27.67 $27.17 $25.75 $25.59 $24.97 $27.67 $24.97 

 

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

    

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

 Three Months Ended
 September 30, 2021 June 30, 2021 September 30, 2020
 AverageBalance InterestEarned/ InterestPaid AverageYield/Rate AverageBalance InterestEarned/ InterestPaid AverageYield/Rate AverageBalance InterestEarned/InterestPaid AverageYield/Rate
 (Dollars in thousands)
Assets                 
Interest-Earning Assets:                 
Loans$4,336,443  $58,176  5.32% $4,543,142  $57,691  5.09% $4,594,333  $56,418  4.89%
Securities1,070,851  5,496  2.04% 876,099  5,047  2.31% 667,008  4,375  2.61%
Deposits in other financial  institutions and other588,859  221  0.15% 294,188  94  0.13% 20,176  18  0.35%
Total interest-earning assets5,996,153  $63,893  4.23% 5,713,429  $62,832  4.41% 5,281,517  $60,811  4.58%
Allowance for credit losses on loans(49,381)     (52,699)     (47,593)    
Noninterest-earning assets680,682      835,801      679,750     
Total assets$6,627,454      $6,496,531      $5,913,674     
                  
Liabilities and  Shareholders' Equity                 
Interest-Bearing Liabilities:                 
Interest-bearing demand  deposits$576,144  $324  0.22% $534,314  $326  0.24% $394,612  $392  0.40%
Money market and savings  deposits1,565,965  943  0.24% 1,561,987  1,011  0.26% 1,409,969  1,265  0.36%
Certificates and other time  deposits1,363,121  2,583  0.75% 1,365,881  2,989  0.88% 1,291,536  5,239  1.61%
Borrowed funds139,844  436  1.24% 144,126  469  1.31% 171,804  558  1.29%
Subordinated debt108,652  1,441  5.26% 108,523  1,441  5.33% 108,130  1,448  5.33%
Total interest-bearing  liabilities3,753,726  $5,727  0.61% 3,714,831  $6,236  0.67% 3,376,051  $8,902  1.05%
                  
Noninterest-Bearing  Liabilities:                 
Noninterest-bearing demand  deposits2,031,399      1,968,714      1,752,404     
Other liabilities42,183      38,183      36,572     
Total liabilities5,827,308      5,721,728      5,165,027     
Shareholders' equity800,146      774,803      748,647     
Total liabilities and  shareholders' equity$6,627,454      $6,496,531      $5,913,674     
                  
Net interest rate spread    3.62%     3.74%     3.53%
                  
Net interest income and margin  $58,166  3.85%   $56,596  3.97%   $51,909  3.91%
                  
Net interest income and net  interest margin (tax equivalent)  $58,873  3.90%   $57,287  4.02%   $52,446  3.95%

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

 Nine Months Ended September 30,
 2021 2020
 AverageBalance InterestEarned/ Interest Paid AverageYield/Rate AverageBalance InterestEarned/ Interest Paid AverageYield/Rate
 (Dollars in thousands)
Assets           
Interest-Earning Assets:           
Loans$4,482,684   $173,858  5.19% $4,318,564   $167,463  5.18%
Securities913,078   15,339  2.25% 550,405   11,019  2.67%
Deposits in other financial institutions328,238   356  0.15% 29,652   233  1.05%
Total interest-earning assets5,724,000   $189,553  4.43% 4,898,621   $178,715  4.87%
Allowance for credit losses  on loans(51,802)      (39,245)     
Noninterest-earning assets758,774       639,606      
Total assets$6,430,972       $5,498,982      
            
Liabilities and Shareholders' Equity           
Interest-Bearing Liabilities:           
Interest-bearing demand deposits$523,272   $1,021  0.26% $370,485   $1,659  0.60%
Money market and savings deposits1,555,791   3,067  0.26% 1,249,832   6,091  0.65%
Certificates and other time deposits1,354,000   9,237  0.91% 1,262,674   17,168  1.82%
Borrowed funds146,244   1,444  1.32% 210,902   1,626  1.03%
Subordinated debt108,522   4,324  5.33% 107,998   4,390  5.43%
Total interest-bearing liabilities3,687,829   $19,093  0.69% 3,201,891   30,934  1.29%
            
Noninterest-Bearing Liabilities:           
Noninterest-bearing demand deposits1,923,584       1,535,107      
Other liabilities40,568       33,482      
Total liabilities5,651,981       4,770,480      
Shareholders' equity778,991       728,502      
Total liabilities and shareholders' equity$6,430,972       $5,498,982      
            
Net interest rate spread    3.74%     3.58%
            
Net interest income and margin  $170,460  3.98%   $147,781  4.03%
            
Net interest income and net interest  margin (tax equivalent)  $172,477  4.03%   $148,939  4.06%

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

 Three Months Ended
 2021 2020
  September 30   June 30   March 31   December 31   September 30
 (Dollars in thousands)
Period-end Loan Portfolio:         
Commercial and industrial$728,897 $690,867 $664,792 $667,079 $650,634
Paycheck Protection Program (PPP)290,028 499,207 728,424 569,901 710,234
Real estate:         
Commercial real estate (including  multi-family residential)2,073,521 2,051,516 2,018,853 1,999,877 1,971,228
Commercial real estate construction and  land development382,610 371,732 386,637 367,213 376,877
1-4 family residential (including home equity)683,919 715,119 726,228 737,605 716,565
Residential construction104,638 111,956 119,528 127,522 148,056
Consumer and other25,856 20,346 14,707 22,567 18,768
Total loans$4,289,469 $4,460,743 $4,659,169 $4,491,764 $4,592,362
          
Asset Quality:         
Nonaccrual loans$28,369 $36,643 $35,051 $28,893 $37,928
Accruing loans 90 or more days past due    
Total nonperforming loans28,369 36,643 35,051 28,893 37,928
Other real estate1,397 1,397 576 9,196 8,876
Other repossessed assets    
Total nonperforming assets$29,766 $38,040 $35,627 $38,089 $46,804
          
Net charge-offs$450 $162 $345 $4,287 $291
          
Nonaccrual loans:         
Commercial and industrial$10,247 $12,949 $14,059 $10,747 $13,171
Real estate:         
Commercial real estate (including  multi-family residential)14,629 18,123 13,455 10,081 15,849
Commercial real estate construction and  land development53 53 1,000 3,011 3,085
1-4 family residential (including home equity)3,224 4,839 5,736 4,525 4,263
Residential construction    876
Consumer and other216 679 801 529 684
Total nonaccrual loans$28,369 $36,643 $35,051 $28,893 $37,928
          
Asset Quality Ratios:         
Nonperforming assets to total assets0.44% 0.58% 0.55% 0.63% 0.78%
Nonperforming loans to total loans0.66% 0.82% 0.75% 0.64% 0.83%
Allowance for credit losses on loans to  nonperforming loans177.98% 135.32% 150.52% 184.03% 128.40%
Allowance for credit losses on loans to total loans1.18% 1.11% 1.13% 1.18% 1.06%
Net charge-offs to average loans (annualized)0.04% 0.01% 0.03% 0.37% 0.03%

  

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
  September 30   June 30   March 31   December 31   September 30   September 30   September 30
 (Dollars and share amounts in thousands, except per share data)
Total shareholders' equity$798,592 $789,150 $760,537 $758,669 $753,053 $798,592 $753,053
Less:  Goodwill and core  deposit intangibles, net239,124 239,948 240,772 241,596 242,549 239,124 242,549
Tangible shareholders’  equity$559,468 $549,202 $519,765 $517,073 $510,504 $559,468 $510,504
              
Shares outstanding at end of  period20,218 20,213 20,183 20,208 20,445 20,218 20,445
              
Tangible book value per share$27.67 $27.17 $25.75 $25.59 $24.97 $27.67 $24.97
              
Net income$19,060 $22,925 $18,010 $15,941 $16,170 $59,995 $29,593
              
Average shareholders' equity$800,146 $774,803 $761,600 $756,699 $748,647 $778,991 $728,502
Less:  Average goodwill and  core deposit intangibles, net239,497 240,331 241,166 242,043 243,015 240,325 244,007
Average tangible  shareholders’ equity$560,649 $534,472 $520,434 $514,656 $505,632 $538,666 $484,495
              
Return on average  tangible equity(A)13.49% 17.20% 14.03% 12.32% 12.72% 14.89% 8.16%
              
Total assets$6,759,761 $6,508,667 $6,430,990 $6,050,128 $5,967,751 $6,759,761 $5,967,751
Less: Goodwill and core  deposit intangibles, net239,124 239,948 240,772 241,596 242,549 239,124 242,549
Tangible assets$6,520,637 $6,268,719 $6,190,218 $5,808,532 $5,725,202 $6,520,637 $5,725,202
              
Tangible equity to tangible  assets8.58% 8.76% 8.40% 8.90% 8.92% 8.58% 8.92%

(A)Interim periods annualized.

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

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Source: Allegiance Bancshares, Inc.


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