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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

Source:Allegiance Bancshares, Inc.