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

Rhea-AI Summary

Allegiance Bancshares (NASDAQ: ABTX) reported record net income of $22.9 million and diluted earnings per share of $1.12 for Q2 2021, significantly up from $9.9 million and $0.48, respectively, in Q2 2020. For the first half of 2021, net income reached $40.9 million, nearly tripling year-over-year. Deposits grew 15.6% to $5.43 billion, driven by a substantial increase in both interest-bearing and noninterest-bearing deposits. The board declared a quarterly dividend of $0.12 per share. Despite increasing expenses, the bank maintained a solid efficiency ratio of 57.07% for Q2 2021.

Positive

• Record net income of $22.9 million for Q2 2021, up from $9.9 million year-over-year.
• Diluted earnings per share increased to $1.12 in Q2 2021 from $0.48.
• Deposits grew 15.6% to $5.43 billion, fueled by $513.7 million increase in interest-bearing deposits.
• Noninterest income rose 45.5% to $2.3 million compared to Q2 2020.
• Efficiency ratio improved to 57.07%, showing operational effectiveness.

Negative

• Noninterest expenses rose 12.8% to $33.6 million, driven by higher salaries.
• Net interest margin decreased to 4.02%, down from 4.10% year-over-year.

• 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 

FAQ

What were Allegiance Bancshares' earnings for Q2 2021?

Allegiance Bancshares reported a net income of $22.9 million and diluted earnings per share of $1.12 for Q2 2021.

How did Allegiance Bancshares perform in the first half of 2021?

In the first half of 2021, Allegiance reported net income of $40.9 million, nearly tripling compared to $13.4 million in the same period of 2020.

What growth did Allegiance Bancshares see in deposits as of June 30, 2021?

Deposits at Allegiance Bancshares increased by 15.6% to $5.43 billion as of June 30, 2021.

What dividend did Allegiance Bancshares declare in July 2021?

The board declared a quarterly dividend of $0.12 per share to be paid on September 15, 2021.

What was the efficiency ratio for Allegiance Bancshares in Q2 2021?

Allegiance Bancshares reported an efficiency ratio of 57.07% for Q2 2021.