Allegiance Bancshares, Inc. Reports Solid Third Quarter 2015 Earnings

  • Diluted earnings per common share of $0.40 for the third quarter 2015 compared to $0.36 for the second quarter 2015
  • Core loans, excluding mortgage warehouse loans and loans held for sale, increased 4.7% for the third quarter 2015 from the second quarter 2015
  • Completed successful Initial Public Offering on October 7, 2015

HOUSTON, Oct. 30, 2015 (GLOBE NEWSWIRE) — Allegiance Bancshares, Inc. (NASDAQ:ABTX), the holding company of Allegiance Bank (collectively, “Allegiance”), reported net income attributable to common stockholders for the quarter ended September 30, 2015 of $4.0 million or $0.40 per diluted common share, compared with $3.6 million or $0.36 per diluted common share for June 30, 2015, an increase in net income attributable to common stockholders of 11.7% and diluted earnings per common share of 11.1%.

“We are extremely proud to have recently completed an initial public offering of 2,990,000 million shares generating net proceeds of approximately $57.2 million. We are delighted with the support we received from investors during the IPO process and with the quality of our new stockholders,” said George Martinez, Allegiance’s Chairman and Chief Executive Officer.

“We are also pleased to report strong third quarter earnings and continued organic growth. Our super-community banking strategy remains our engine of growth in providing an exceptional customer experience to our owner-operated businesses,” concluded Martinez.

Results of operations for the three months ended September 30, 2015

For the three months ended September 30, 2015, net income increased 8.7% to $4.2 million compared to net income of $3.9 million for the three months ended June 30, 2015. Net income attributable to common stockholders for the three months ended September 30, 2015 increased 11.7% to $4.0 million compared to net income attributable to common stockholders of $3.6 million for the linked quarter June 30, 2015. Net income attributable to common stockholders for the three months ended September 30, 2015 increased $2.0 million, or 100.2% compared with the same period in 2014. Diluted earnings per common share increased 42.9% to $0.40 for the three months ended September 30, 2015 from $0.28 for the same period in 2014. Excluding $173 thousand in final dividends paid on our Series A and B preferred stock, redeemed in July 2015, our diluted earnings per common share would have been $0.42 for the third quarter of 2015.

Annualized returns on average assets, average common equity and average tangible common equity for the three months ended September 30, 2015 were 0.85%, 8.27% and 10.77%, respectively. Allegiance’s efficiency ratio increased to 65.04% for the three months ended September 30, 2015 compared to 64.90% for the three months ended June 30, 2015 and decreased from 68.65% for the same period in 2014.

Net interest income before provision for loan losses increased 3.4% to $20.4 million for the three months ended September 30, 2015, compared with $19.7 million during the three months ended June 30, 2015, primarily due to a $119.6 million or 7.2% increase in average interest-earning assets. Net interest income before provision for loan losses for the three months ended September 30, 2015 increased $8.3 million, or 68.0%, from $12.1 million for the same period in 2014. This increase was primarily due to a 60.8% increase in average interest-earning assets as a result of the acquisition of F&M Bancshares, Inc. (“F&M”) on January 1, 2015, as well as organic growth within Allegiance’s loan portfolio. The net interest margin on a tax equivalent basis for the three months ended September 30, 2015 decreased to 4.61% (or 4.44% excluding acquisition accounting adjustments) from 4.79% (or 4.49% excluding acquisition accounting adjustments) for the three months ended June 30, 2015 primarily due to a decrease in acquisition accounting adjustments recorded during the third quarter of 2015 compared to the second quarter 2015. The net interest margin on a tax equivalent basis increased for the third quarter of 2015 compared with 4.35% for the same period in 2014.

On a linked quarter basis, noninterest income increased $254 thousand or 26.8% primarily due to gains on the sale of loans during the third quarter of 2015. Noninterest income increased $596 thousand or 98.5% to $1.2 million for the three months ended September 30, 2015, compared with $605 thousand for the same period in 2014. This increase was primarily due to increased fees and service charges resulting from the additional accounts acquired in the F&M acquisition consummated at the beginning of the first quarter of 2015.

Noninterest expense for the three months ended September 30, 2015 increased $479 thousand or 3.6% compared to the linked quarter primarily due to additional salaries and benefits related to the recent hiring of several key income-producing employees. Noninterest expense increased $5.1 million or 58.8% to $13.9 million for the three months ended September 30, 2015, compared with $8.8 million for the same period in 2014. This increase was primarily due to additional noninterest expenses associated with the acquisition of F&M during the first quarter of 2015.

Financial Condition

Total loans increased $54.8 million or 3.5% to $1.62 billion at September 30, 2015 from $1.56 billion at June 30, 2015 due to strong organic loan growth within Allegiance’s loan portfolio. During the third quarter of 2015, core loans, which exclude the mortgage warehouse portfolio and loans held for sale, increased $68.7 million, but were partially offset by a decrease of $15.3 million in the mortgage warehouse portfolio, compared to the second quarter of 2015. Total loans at September 30, 2015 increased $651.5 million or 67.5%, compared with $964.9 million at September 30, 2014, primarily due to loans acquired in the F&M acquisition as well as organic growth within Allegiance’s portfolio.

Average loans increased $93.7 million or 6.3% to $1.57 billion for the quarter ended September 30, 2015 from $1.48 billion for the quarter ended June 30, 2015. Average loans increased $632.2 million or 67.2% for the quarter ended September 30, 2015 from $940.3 million for the same period in 2014.

Deposits increased $31.2 million or 1.9% to $1.66 billion at September 30, 2015 from $1.63 billion at June 30, 2015. Deposits at September 30, 2015 increased $550.8 million or 49.8%, compared with $1.11 billion at September 30, 2014, primarily due to the deposits acquired in the F&M acquisition.

Average deposits increased $28.3 million or 1.8% to $1.63 billion for the quarter ended September 30, 2015 from $1.60 billion for the quarter ended June 30, 2015. Average deposits increased $549.7 million or 50.7% for the quarter ended September 30, 2015 from $1.08 billion for the same period of 2014.

During the third quarter of 2015, Allegiance redeemed all of the preferred stock outstanding pursuant to the U.S. Treasury’s Troubled Asset Relief Program inherited in the F&M acquisition for an aggregate redemption price of $11.7 million.

Asset Quality

Nonperforming assets totaled $6.3 million or 0.31% of total assets at September 30, 2015, compared with $6.2 million or 0.32% of total assets at June 30, 2015, and $2.6 million or 0.21% of total assets at September 30, 2014. The allowance for loan losses was 0.69% of total loans at September 30, 2015, 0.66% of total loans at June 30, 2015 and 0.80% of total loans at September 30, 2014.

The provision for loan losses was $1.5 million, or 0.39% of average loans, for the three months ended September 30, 2015, compared with $1.4 million, or 0.39% of average loans, for the three months ended June 30, 2015 and $750 thousand, or 0.32% of average loans, for the three months ended September 30, 2014.

Net charge offs were $638 thousand, or 0.16% of average loans, for the three months ended September 30, 2015, compared with $48 thousand, or 0.01% of average loans, for the three months ended June 30, 2015 and $470 thousand, or 0.20% of average loans, for the three months ended September 30, 2014.

GAAP Reconciliation of Non-GAAP Financial Measures

Allegiance’s management uses certain non-GAAP financial measures to evaluate its performance. Specifically, Allegiance reviews tangible book value per common share, return on average tangible common equity and the tangible common equity to tangible assets ratio. Please refer to the GAAP Reconciliation and Management’s Explanation of non-GAAP Financial Measures at the end 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 Monday, November 2, 2015 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its third quarter 2015 earnings. Individuals and investment professionals may participate in the call by dialing (855) 717-7672. The conference ID number is 64020597.

Alternatively, a simultaneous webcast may be accessed via the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Upcoming Events.

Allegiance Bancshares, Inc.

As of September 30, 2015, Allegiance Bancshares Inc. is a $2.01 billion 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 Bank operates 16 full-service banking locations in the Houston metropolitan area and two full-service banking locations in Central Texas. Visit www.allegiancebank.com for more information.

Forward Looking Statements

“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 based on various facts and derived utilizing important assumptions, present expectations, estimates and projections about Allegiance and its subsidiaries. These statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “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. Forward-looking statements include the 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; continue to 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 factors are discussed in Allegiance’s Final Prospectus dated October 7, 2015, filed pursuant to Rule 424(b)(4) and other reports and statements Allegiance has filed with the SEC. Copies of such filings are available for download free of charge from the Investor Relations section of the website at www.allegiancebank.com, under Financial Information, SEC Filings.

Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
     
  2015 2014
   September 30   June 30   March 31   December 31   September 30 
   (Dollars in thousands) 
           
Cash and cash equivalents  $ 144,590  $ 138,685  $ 252,558  $ 167,540  $ 159,737
Available for sale securities  154,546  151,662  96,910  84,962  88,914
Total Loans (including loans held for sale)  1,616,416  1,561,657  1,444,732  1,002,054  964,923
Allowance for loan losses  (11,204)  (10,312)  (8,940)  (8,246)  (7,740)
Loans, net  1,605,212  1,551,345  1,435,792  993,808  957,183
Goodwill  39,389  39,389  39,389  11,144  11,144
Core deposit intangibles, net  5,438  5,645  5,852  1,747  1,822
Premises and equipment, net  18,838  18,887  18,510  10,969  11,091
Bank owned life insurance  21,040  20,872  20,699  —   — 
Other assets  23,297  18,671  15,176  9,838  8,434
Total assets  $ 2,012,350  $ 1,945,156  $ 1,884,886  $ 1,280,008  $ 1,238,325
           
Noninterest-bearing deposits  $ 560,773  $ 556,502  $ 554,624  $ 373,795  $ 365,604
Interest-bearing deposits  1,095,775  1,068,822  1,089,095  759,889  740,139
Total deposits  1,656,548  1,625,324  1,643,719  1,133,684  1,105,743
Short-term borrowings  115,000  75,000  —   —   — 
Subordinated debentures  9,062  9,032  8,953  —   — 
Other borrowed funds  28,069  28,069  28,069  10,069  10,000
Other liabilities  7,628  5,901  5,121  4,477  4,192
Total liabilities  1,816,307  1,743,326  1,685,862  1,148,230  1,119,935
Preferred equity  —   11,550  11,550  —   — 
Common equity  196,043  190,280  187,474  131,778  118,390
Stockholders’ equity  196,043  201,830  199,024  131,778  118,390
Total liabilities and equity  $ 2,012,350  $ 1,945,156  $ 1,884,886  $ 1,280,008  $ 1,238,325
 
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
               
  Three Months Ended Year-to-Date
  2015 2014 2015 2014
   September 30   June 30   March 31   December 31   September 30   September 30   September 30 
  (Dollars in thousands)
               
INTEREST INCOME:              
Loans, including fees  $ 21,627  $ 21,079  $ 20,306  $ 13,534  $ 13,011  $ 63,012  $ 36,709
Securities  975  721  439  450  472  2,135  1,401
Deposits in other financial institutions  43  50  74  68  70  167  243
Total interest income  22,645  21,850  20,819  14,052  13,553  65,314  38,353
               
INTEREST EXPENSE:              
Demand, money market and savings deposits  508  482  456  338  307  1,446  923
Certificates and other time deposits  1,324  1,254  1,200  1,046  1,026  3,778  3,034
Short-term borrowings  47  2  —   —   —   49  — 
Subordinated debt  114  162  163  —   —   439  — 
Other borrowed funds  245  216  230  78  76  691  151
Total interest expense  2,238  2,116  2,049  1,462  1,409  6,403  4,108
NET INTEREST INCOME  20,407  19,734  18,770  12,590  12,144  58,911  34,245
Provision for loan losses  1,530  1,420  683  500  750  3,633  1,650
Net interest income after provision for loan losses  18,877  18,314  18,087  12,090  11,394  55,278  32,595
               
NONINTEREST INCOME:              
Nonsufficient funds fees  179  168  165  120  118  512  335
Service charges on deposit accounts  163  176  175  112  125  514  378
Gains (losses) on sales of other real estate  1  —   (6)  —   —   (5)  188
Gains on sales of loans  235  —   —   —   —   235  — 
Other   623  603  532  449  362  1,758  1,025
Total noninterest income  1,201  947  866  681  605  3,014  1,926
               
NONINTEREST EXPENSE:              
Salaries and employee benefits   8,996  8,481  8,942  5,682  4,994  26,419  14,497
Net occupancy and equipment  1,289  1,274  1,084  847  888  3,647  2,469
Data processing and software amortization  841  827  626  428  397  2,294  1,230
Professional fees  343  397  480  794  973  1,220  1,502
Regulatory assessments and FDIC insurance   296  320  374  211  214  990  636
Core deposit intangibles amortization   208  207  208  74  74  623  222
Depreciation   414  409  367  295  286  1,190  789
Communications  300  358  334  224  154  992  460
Advertising  188  184  138  207  116  510  394
Other   1,026  965  1,033  676  656  3,024  1,822
Total noninterest expense   13,901  13,422  13,586  9,438  8,752  40,909  24,021
INCOME BEFORE INCOME TAXES   6,177  5,839  5,367  3,333  3,247  17,383  10,500
Provision for income taxes  1,957  1,956  1,896  1,033  1,226  5,809  3,795
NET INCOME   4,220  3,883  3,471  2,300  2,021  11,574  6,705
Preferred stock dividends  173  260  126  —   —   559  — 
               
 NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS  $ 4,047  $ 3,623  $ 3,345  $ 2,300  $ 2,021  $ 11,015  $ 6,705
 
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
               
  Three Months Ended Year-to-Date
  2015 2014 2015 2014
   September 30   June 30   March 31   December 31   September 30   September 30   September 30 
  (Dollars and share amounts in thousands)
               
Net income  $ 4,220  $ 3,883  $ 3,471  $ 2,300  $ 2,021  $ 11,574  $ 6,705
               
Net income attributable to common stockholders  $ 4,047  $ 3,623  $ 3,345  $ 2,300  $ 2,021  $ 11,015  $ 6,705
               
Earnings per common share, basic  $ 0.41  $ 0.37  $ 0.34  $ 0.33  $ 0.29  $ 1.12  $ 0.96
Earnings per common share, diluted  $ 0.40  $ 0.36  $ 0.33  $ 0.32  $ 0.28  $ 1.10  $ 0.94
               
Return on average assets (A)  0.85% 0.84% 0.77% 0.73% 0.64% 0.82% 0.76%
Return on average common equity (A)  8.27% 8.20% 7.56% 7.56% 6.82% 7.75% 7.79%
Return on average tangible common equity (A) (B) 10.77% 10.04% 9.62% 8.46% 7.67% 10.16% 8.79%
Tax equivalent net interest margin (C) 4.61% 4.79% 4.72% 4.37% 4.35% 4.71% 4.30%
Efficiency ratio(D) 65.04% 64.90% 69.19% 71.12% 68.65% 66.31% 66.41%
               
Liquidity and Capital Ratios              
Equity to assets 9.74% 10.38% 10.56% 10.30% 9.56% 9.74% 9.56%
Common equity Tier 1 capital 8.61% 8.68% 8.98% N/A N/A 8.61% N/A
Tier 1 risk-based capital 9.12% 9.88% 10.25% 11.96% 10.85% 9.12% 10.85%
Total risk-based capital 9.75% 10.48% 10.80% 12.80% 11.65% 9.75% 11.65%
Tier 1 leverage capital 8.37% 9.34% 9.22% 9.55% 8.73% 8.37% 8.73%
Tangible common equity to tangible assets(B) 7.69% 7.64% 7.73% 9.38% 8.60% 7.69% 8.60%
               
Other Data              
Shares used in computed earnings per common share              
Basic  9,823  9,825  9,823  6,995  6,979  9,823  6,972
Diluted  10,003  10,004  9,999  7,169  7,154  10,001  7,133
Period end shares outstanding  9,823  9,823  9,824  7,477  6,981  9,823  6,981
Book value per common share  $ 19.96  $ 19.37  $ 19.08  $ 17.62  $ 16.96  $ 19.96  $ 16.96
Tangible book value per common share(B)  $ 15.39  $ 14.79  $ 14.48  $ 15.90  $ 15.10  $ 15.39  $ 15.10
               
               
(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 at the end 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 assets and securities. Additionally, taxes and provision for loan losses are not part of this calculation. 
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
                   
  Three Months Ended
  September 30, 2015 June 30, 2015 September 30, 2014
  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  $ 1,572,441  $ 21,627 5.46%  $ 1,478,752  $ 21,079 5.72%  $ 940,284  $ 13,011 5.49%
Securities  162,308  975 2.38%  127,882  721 2.26%  97,079  472 1.93%
Deposits in other financial institutions  53,759  43 0.31%  62,247  50 0.32%  74,935  70 0.37%
Total interest-earning assets   1,788,508  $ 22,645 5.02%  1,668,881  $ 21,850 5.25%  1,112,298  $ 13,553 4.83%
Allowance for loan losses   (10,618)      (9,265)      (7,617)    
Noninterest-earning assets   201,952      195,341      110,369    
Total assets  $ 1,979,842      $ 1,854,957      $ 1,215,050    
                   
Liabilities and Stockholders’ Equity                  
Interest-Bearing Liabilities:                   
Interest-bearing demand deposits  $ 97,488  $ 40 0.16%  $ 101,029  $ 40 0.16%  $ 69,967  $ 29 0.16%
Money market and savings deposits  432,654  468 0.43%  420,992  442 0.42%  264,720  278 0.42%
Certificates and other time deposits  547,884  1,324 0.96%  548,075  1,254 0.92%  402,088  1,026 1.01%
Short-term borrowings  106,533  47 0.17%  4,451  2 0.16%  —   —  0.00%
Subordinated debt  9,060  114 5.01%  8,981  162 7.23%  —   —  0.00%
Other borrowed funds  28,069  245 3.46%  28,415  216 3.04%  10,000  76 3.00%
Total interest-bearing liabilities   1,221,688  $ 2,238 0.73%  1,111,943  $ 2,116 0.76%  746,775  $ 1,409 0.75%
                   
Noninterest-Bearing liabilities:                   
Noninterest-bearing demand deposits  555,060      534,688      346,616    
Other liabilities   7,292      6,869      4,104    
Total liabilities  1,784,040      1,653,500      1,097,495    
Stockholders’ equity   195,802      201,457      117,555    
Total liabilities and stockholders’ equity   $ 1,979,842      $ 1,854,957      $ 1,215,050    
                   
Net interest rate spread     4.29%     4.49%     4.08%
                   
Net interest income and margin     $ 20,407 4.53%    $ 19,734 4.74%    $ 12,144 4.33%
                   
Net interest income and margin (tax equivalent)    $ 20,770 4.61%    $ 19,923 4.79%    $ 12,207 4.35%
 
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
             
  Year-to-Date
  September 30, 2015 September 30, 2014
  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  $ 1,489,690  $ 63,012 5.66%  $ 895,774  $ 36,709 5.48%
Securities  127,863  2,135 2.23%  92,034  1,401 2.04%
Deposits in other financial institutions  72,182  167 0.31%  82,765  243 0.39%
Total interest-earning assets   1,689,735  $ 65,314 5.17%  1,070,573  $ 38,353 4.79%
Allowance for loan losses   (9,466)      (7,037)    
Noninterest-earning assets   210,039      109,543    
Total assets  $ 1,890,308      $ 1,173,079    
             
Liabilities and Stockholders’ Equity            
Interest-Bearing Liabilities:             
Interest-bearing demand deposits  $ 101,636  $ 120 0.16%  $ 65,588  $ 105 0.21%
Money market and savings deposits  419,814  1,326 0.42%  253,725  818 0.43%
Certificates and other time deposits  548,411  3,778 0.92%  407,718  3,034 0.99%
Short-term borrowings  37,384  49 0.17%  —   —  0.00%
Subordinated debt  8,981  439 6.54%  —   —  0.00%
Other borrowed funds  28,069  691 3.29%  6,844  151 2.94%
Total interest-bearing liabilities   1,144,295  $ 6,403 0.75%  733,875  $ 4,108 0.75%
             
Noninterest-Bearing liabilities:             
Noninterest-bearing demand deposits  540,499      320,897    
Other liabilities   7,153      3,278    
Total liabilities  1,691,947      1,058,050    
Stockholders’ equity   198,361      115,029    
Total liabilities and stockholders’ equity   $ 1,890,308      $ 1,173,079    
             
Net interest rate spread     4.42%     4.04%
             
Net interest income and margin     $ 58,911 4.66%    $ 34,245 4.28%
             
Net interest income and margin (tax equivalent)    $ 59,533 4.71%    $ 34,399 4.30%
 
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
           
  Three Months Ended
  2015 2014
   September 30   June 30   March 31   December 31   September 30 
  (Dollars in thousands)
Period-end Loan Portfolio:          
Loans held for sale  $ 27,004  $ 25,629  $ 33,409  $ —   $ — 
           
Commercial and industrial  367,341  346,703  325,598  242,034  212,648
Mortgage warehouse  65,928  81,255  36,912  28,329  29,456
Real Estate:          
Commercial real estate (including multi-family residential)  710,857  678,979  640,391  429,986  432,787
Commercial real estate construction and land development  151,369  140,437  135,760  85,484  86,647
1-4 family residential (including home equity)  185,473  178,635  174,070  135,127  126,477
Residential construction  95,212  94,167  86,412  72,402  67,852
Consumer and other  13,232  15,852  12,180  8,692  9,056
Total loans  $ 1,616,416  $ 1,561,657  $ 1,444,732  $ 1,002,054  $ 964,923
           
Asset Quality:          
Nonaccrual loans  $ 6,185  $ 5,722  $ 6,852  $ 3,184  $ 2,616
Accruing loans 90 or more days past due  —   —   —   —   —
Total nonperforming loans  6,185  5,722  6,852  3,184  2,616
Other real estate  —  21  —  —  —
Other repossessed assets  131  491  —  —  —
Total nonperforming assets  $ 6,316  $ 6,234  $ 6,852  $ 3,184  $ 2,616
           
Net charge-offs (recoveries)  $ 638  $ 48  $ (11)  $ (7)  $ 473
           
Nonaccrual loans:          
Loans held for sale  $ 498  $ 1,130  $ 782  $ —   $ — 
Commercial and industrial  3,477  3,186  4,204  1,527  1,666
Warehouse lending  —   —   —   —   — 
Real Estate:          
Commercial real estate (including multi-family residential)  1,783  974  1,293  1,653  945
Commercial real estate construction and land development  —   —   246  —   — 
1-4 family residential (including home equity)  341  343  296  —   — 
Residential construction  —   —   —   —   — 
Consumer and other  86  89  31  4  5
Total nonaccrual loans  $ 6,185  $ 5,722  $ 6,852  $ 3,184  $ 2,616
           
Asset Quality Ratios:          
Nonperforming assets to total assets 0.31% 0.32% 0.36% 0.25% 0.21%
Nonperforming loans to total loans 0.38% 0.37% 0.47% 0.32% 0.27%
Allowance for loan losses to nonperforming loans 181.15% 180.22% 130.47% 258.98% 295.89%
Allowance for loan losses to total loans 0.69% 0.66% 0.62% 0.82% 0.80%
Provision for loan losses to average loans (annualized) 0.39% 0.39% 0.20% 0.20% 0.32%
Net charge-offs to average loans (annualized) 0.16% 0.01% 0.00% 0.00% 0.20%

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. Specifically, Allegiance reviews tangible book value per common share, return on average tangible common equity and the tangible common equity to tangible assets ratio 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. Allegiance believes these non-GAAP financial measures provide information useful to management and investors that is supplementary to our financial condition and results of operations computed in accordance with GAAP. 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
  2015 2014 2015 2014
   September 30   June 30   March 31   December 31   September 30   September 30   September 30 
  (Dollars and share amounts in thousands)
               
Total Stockholders’ equity  $ 196,043  $ 201,830  $ 199,024  $ 131,778  $ 118,390  $ 196,043  $ 118,390
Less: Goodwill and core deposit intangibles, net  44,827  45,034  45,241  12,891  12,966  44,827  12,966
Tangible stockholders’ equity  $ 151,216  $ 156,796  $ 153,783  $ 118,887  $ 105,424  $ 151,216  $ 105,424
               
Less: Preferred Stock  —   11,550  11,550  —   —   —   — 
Tangible common stockholders’ equity  $ 151,216  $ 145,246  $ 142,233  $ 118,887  $ 105,424  $ 151,216  $ 105,424
               
Shares outstanding at end of period  9,823  9,823  9,824  7,477  6,981  9,823  6,981
               
Tangible book value per common share  $ 15.39  $ 14.79  $ 14.48  $ 15.90  $ 15.10  $ 15.39  $ 15.10
               
Net income attributable to common stockholders  $ 4,047  $ 3,623  $ 3,345  $ 2,300  $ 2,021  $ 11,015  $ 6,705
               
Average common stockholders equity  194,045  189,907  186,294  120,706  117,555  190,111  115,029
Less: Average goodwill and core deposit intangibles, net  44,929  45,150  45,260  12,927  13,005  45,112  13,034
Average tangible common stockholders’ equity  $ 149,116  $ 144,757  $ 141,034  $ 107,779  $ 104,550  $ 144,999  $ 101,995
               
Return on average tangible common equity 10.77% 10.04% 9.62% 8.46% 7.67% 10.16% 8.79%
               
Total assets  $ 2,012,350  $ 1,945,156  $ 1,884,886  $ 1,280,008  $ 1,238,325  $ 2,012,350  $ 1,238,325
Less: Goodwill and core deposit intangibles, net  44,827  45,034  45,241  12,891  12,966  44,827  12,966
Tangible assets  $ 1,967,523  $ 1,900,122  $ 1,839,645  $ 1,267,117  $ 1,225,359  $ 1,967,523  $ 1,225,359
               
Tangible common equity to tangible assets 7.69% 7.64% 7.73% 9.38% 8.60% 7.69% 8.60%
CONTACT: Allegiance Bancshares, Inc.
         ir@allegiancebank.com

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