Allegiance Bancshares Reports Second Quarter 2016 Results

  • Core loans increased 15.4% year over year and 2.9% for the second quarter 2016 compared to the first quarter 2016
  • Strong asset quality as evidenced by annualized net charge-offs of 0.11% and a nonperforming assets to total assets ratio of 0.37% for the second quarter 2016

HOUSTON, July 26, 2016 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ:ABTX), the holding company of Allegiance Bank (collectively, “Allegiance”), reported net income attributable to common stockholders of $5.3 million in the second quarter 2016, a 45.0% increase over the second quarter 2015 and a 17.3% decrease compared to the first quarter 2016. Net income per diluted common share increased 11.1% to $0.40 in the second quarter 2016 compared to net income per diluted common share of $0.36 for the second quarter 2015 and decreased 18.4% compared to $0.49 for the first quarter 2016. Excluding the after tax gain of $1.3 million on the sale of the two Central Texas branch locations during the first quarter 2016, net income attributable to common stockholders would have been $5.0 million and net income per diluted common share would have been $0.39 for the first quarter 2016.

“Allegiance Bank delivered another strong quarter,” said George Martinez, Allegiance’s Chairman and Chief Executive Officer. “We benefited from continued growth in our loan portfolio during the quarter, and our asset quality remains very high. We achieved solid gains across the board when compared to last year’s second quarter.”

“Allegiance Bank’s credit quality and our outlook remain strong. Our second quarter performance reflects our emphasis on core loans and demonstrates the growth potential of the Bank. Most importantly, it underscores our ability to prudently grow our loan portfolio and high-quality asset base and increase returns to our shareholders. The Bank’s growing pool of talented bankers intends to maintain this momentum by remaining focused on our super-community banking strategy across Houston,” continued Martinez.

Second Quarter 2016 Results

Second quarter 2016 annualized returns on average assets, average common equity and average tangible common equity were 0.91%, 7.79% and 9.30%, respectively, compared to annualized returns on average assets, average common equity and average tangible common equity of 0.84%, 8.20% and 10.04%, respectively, for the second quarter 2015. Annualized returns on average assets, average common equity and average tangible common equity for the first quarter 2016 were 1.19%, 9.70% and 11.67%, respectively. Excluding the gain on the sale of the two Central Texas branch locations, the annualized returns on average assets, average common equity and average tangible common equity for the first quarter 2016 would have been 0.94%, 7.67% and 9.22%, respectively.

Allegiance’s efficiency ratio in the second quarter 2016 decreased to 60.11% from 64.90% in the second quarter 2015 and from 63.80% in the first quarter 2016.

Net interest income before provision for loan losses in the second quarter 2016 increased $2.2 million, or 11.2%, to $21.9 million from $19.7 million for the second quarter 2015, as a result of a 25.3% increase in average interest-earning assets primarily due to organic loan growth and the increase in the securities portfolio. Net interest income before provision for loan losses in the second quarter 2016 increased $865 thousand, or 4.1%, from $21.1 million in the first quarter 2016. The net interest margin on a tax equivalent basis decreased 47 basis points to 4.32% for the second quarter 2016 from 4.79% for the second quarter 2015, and decreased 13 basis points from 4.45% for the first quarter 2016. Excluding the impact of acquisition accounting adjustments, the net interest margin in the second quarter 2016 would have been 4.24%, compared to 4.49% and 4.35% in the second quarter 2015 and first quarter 2016, respectively.

Noninterest income in the second quarter 2016 was $1.2 million, an increase of $265 thousand, or 28.0%, compared to $947 thousand in the second quarter 2015 and a decrease of $2.1 million, or 63.3%, compared to $3.3 million in the first quarter 2016. The first quarter 2016 included the gain on the sale of two Central Texas branch locations.

Noninterest expense in the second quarter 2016 increased $501 thousand, or 3.7%, to $13.9 million from $13.4 million in the second quarter 2015, and decreased $330 thousand, or 2.3%, from $14.3 million in the first quarter 2016.

Six Months Ended June 30, 2016 Results

For the six months ended June 30, 2016 annualized returns on average assets, average common equity and average tangible common equity were 1.04%, 8.74% and 10.46%, respectively, compared to annualized returns on average assets, average common equity and average tangible common equity of 0.80%, 7.47% and 9.83%, respectively, for the six months ended June 30, 2015. Excluding the gain on the sale of the two Central Texas branch locations, the annualized returns on average assets, average common equity and average tangible common equity for the six months ended June 30, 2016 would have been 0.92%, 7.73% and 9.26%, respectively.

Allegiance’s efficiency ratio for the six months ended June 30, 2016 decreased to 61.93% from 66.99% for the six months ended June 30, 2015.

Net interest income before provision for loan losses for the six months ended June 30, 2016 increased $4.5 million, or 11.8%, to $43.0 million from $38.5 million for the six months ended June 30, 2015, as a result of a 22.7% increase in average interest-earning assets primarily due to organic growth within the loan portfolio and the increase in the securities portfolio. The net interest margin on a tax equivalent basis decreased 38 basis points to 4.38% for the six months ended June 30, 2016 from 4.76% for the six months ended June 30, 2015. Excluding the impact of acquisition accounting adjustments, the net interest margin for the six months ended June 30, 2016 would have been 4.29%, compared to 4.43% for the six months ended June 30, 2015.

Noninterest income for the six months ended June 30, 2016 was $4.5 million, an increase of $2.7 million, or 149.1%, when compared to $1.8 million for the six months ended June 30, 2015. The first quarter 2016 included the gain on the sale of two Central Texas branch locations. Noninterest expense for the six months ended June 30, 2016 increased $1.2 million, or 4.3%, to $28.2 million from $27.0 million for the six months ended June 30, 2015.

Financial Condition

Total loans at June 30, 2016 increased $192.0 million, or 12.3%, to $1.75 billion compared to $1.56 billion at June 30, 2015 and increased $36.2 million, or 2.1%, compared to $1.72 billion at March 31, 2016. These increases were due to strong organic loan growth within Allegiance Bank’s loan portfolio. Second quarter 2016 core loans, excluding the mortgage warehouse portfolio and loans held for sale, increased $223.4 million, or 15.4%, to $1.68 billion from $1.45 billion in the second quarter 2015 and increased $46.8 million, or 2.9%, from $1.63 billion in the first quarter 2016.

Deposits at June 30, 2016 increased $218.0 million, or 13.4%, to $1.84 billion compared to $1.63 billion at June 30, 2015 and increased slightly compared to deposits at March 31, 2016.

Asset Quality

Nonperforming assets totaled $8.6 million, or 0.37% of total assets, at June 30, 2016, compared to $6.2 million, or 0.32% of total assets, at June 30, 2015, and $8.5 million, or 0.38% of total assets, at March 31, 2016. The allowance for loan losses was 0.85% of total loans at June 30, 2016, 0.66% of total loans at June 30, 2015, and 0.80% of total loans at March 31, 2016.

The provision for loan losses in the second quarter 2016 was $1.6 million, or 0.38% (annualized) of average loans, compared to $1.4 million, or 0.39% (annualized) of average loans, in the second quarter 2015, and $710 thousand, or 0.17% (annualized) of average loans, in the first quarter 2016. The provision for loan losses for the six months ended June 30, 2016 was $2.4 million, or 0.28% (annualized) of average loans, compared to $2.1 million, or 0.29% (annualized) of average loans for the six months ended June 30, 2015.

Second quarter 2016 net charge-offs were $485 thousand, or 0.11% (annualized) of average loans, compared to $48 thousand, or 0.01% (annualized) of average loans, in the second quarter 2015, and $51 thousand, or 0.01% (annualized) of average loans, in the first quarter 2016. Net charge-offs for the six months ended June 30, 2016 were $536 thousand, or 0.06% (annualized) of average loans, compared to $37 thousand, or 0.01% (annualized) of average loans for the six months ended June 30, 2015.

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 ratio of tangible common equity to tangible assets. 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 Tuesday, July 26, 2016 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its second quarter 2016 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 31469081. 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.

Allegiance Bancshares, Inc. is a $2.37 billion asset Houston, Texas-based bank holding company. Through its wholly owned subsidiary, Allegiance Bank, Allegiance provides a diversified range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses and individual customers. Allegiance’s unique super-community banking strategy was designed to foster strong customer relationships while benefitting from a platform and scale that is competitive with larger local and regional banks. Allegiance Bank operates 16 full-service banking locations in the Houston metropolitan area. Visit www.allegiancebank.com for more information.

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

This release may contain forward-looking statements within the meaning of the securities laws that are based on various facts and derived utilizing important assumptions, present expectations, estimates and projections about Allegiance and its subsidiaries. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “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 words. Forward-looking statements include information concerning Allegiance’s future financial performance, business and growth strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Allegiance’s control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Allegiance can: continue to develop and maintain new and existing customer and community relationships; successfully implement its growth strategy, including identifying suitable acquisition targets and integrating the businesses of acquired companies and banks; 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 risk factors are discussed in Allegiance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and in other reports and statements Allegiance has filed with the Securities and Exchange Commission. Copies of such filings are available for download free of charge from the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Financial Information, SEC Filings. Any forward-looking statement made by Allegiance in this release speaks only as of the date on which it is made. Factors or events that could cause Allegiance’s actual results to differ may emerge from time to time, and it is not possible for Allegiance to predict all of them. Allegiance undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
2016 2015
June 30 March 31 December 31 September 30 June 30
(Dollars in thousands)
Cash and cash equivalents$ 210,863 $ 183,290 $ 148,431 $ 144,590 $ 138,685
Available for sale securities 303,463 215,401 165,097 154,546 151,662
Total Loans (including loans held for sale) 1,753,683 1,717,448 1,681,052 1,616,416 1,561,657
Allowance for loan losses (14,917) (13,757) (13,098) (11,204) (10,312)
Loans, net 1,738,766 1,703,691 1,667,954 1,605,212 1,551,345
Goodwill 39,389 39,389 39,389 39,389 39,389
Core deposit intangibles, net 4,446 4,641 5,230 5,437 5,645
Premises and equipment, net 17,821 18,121 18,471 18,838 18,887
Other real estate owned 1,397 1,397 - - -
Bank owned life insurance 21,530 21,377 21,211 21,040 20,872
Other assets 29,906 23,400 18,796 23,298 18,671
Total assets$ 2,367,581 $ 2,210,707 $ 2,084,579 $ 2,012,350 $ 1,945,156
Noninterest-bearing deposits$ 630,689 $ 684,245 $ 620,320 $ 560,773 $ 556,502
Interest-bearing deposits 1,212,650 1,158,409 1,138,813 1,095,775 1,068,822
Total deposits 1,843,339 1,842,654 1,759,133 1,656,548 1,625,324
Short-term borrowings 30,000 85,000 50,000 115,000 75,000
Other borrowed funds 200,569 569 569 28,069 28,069
Subordinated debentures 9,142 9,115 9,089 9,062 9,032
Other liabilities 8,280 7,076 7,298 7,628 5,901
Total liabilities 2,091,330 1,944,414 1,826,089 1,816,307 1,743,326
Preferred equity - - - - 11,550
Common equity 276,251 266,293 258,490 196,043 190,280
Stockholders' equity 276,251 266,293 258,490 196,043 201,830
Total liabilities and equity$ 2,367,581 $ 2,210,707 $ 2,084,579 $ 2,012,350 $ 1,945,156


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months Ended Year-to-Date
2016 2015 2016 2015
June 30 March 31 December 31 September 30 June 30 June 30 June 30
(Dollars in thousands)
INTEREST INCOME:
Loans, including fees$ 22,839 $ 22,228 $ 22,431 $ 21,627 $ 21,079 $ 45,067 $ 41,385
Securities 1,538 1,081 989 975 721 2,619 1,160
Deposits in other financial institutions 150 142 72 43 50 292 124
Total interest income 24,527 23,451 23,492 22,645 21,850 47,978 42,669
INTEREST EXPENSE:
Demand, money market and savings deposits 569 544 579 545 525 1,113 1,037
Certificates and other time deposits 1,665 1,560 1,470 1,287 1,211 3,225 2,355
Short-term borrowings 106 139 33 47 2 245 2
Subordinated debt 120 117 139 114 162 237 325
Other borrowed funds 118 7 16 245 216 125 446
Total interest expense 2,578 2,367 2,237 2,238 2,116 4,945 4,165
NET INTEREST INCOME 21,949 21,084 21,255 20,407 19,734 43,033 38,504
Provision for loan losses 1,645 710 2,159 1,530 1,420 2,355 2,103
Net interest income after provision for loan losses 20,304 20,374 19,096 18,877 18,314 40,678 36,401
NONINTEREST INCOME:
Nonsufficient funds fees 145 163 191 179 168 308 333
Service charges on deposit accounts 173 145 166 163 176 318 351
Gain on sale of branch assets - 2,050 - - - 2,050 -
Loss on sale of securities - - (37) - - - -
Gain (loss) on sales of other real estate - - - 1 - - (6)
Gain on sale of loans - - - 235 - - -
Bank owned life insurance 154 166 171 167 174 320 266
Other 740 780 487 456 429 1,520 869
Total noninterest income 1,212 3,304 978 1,201 947 4,516 1,813
NONINTEREST EXPENSE:
Salaries and employee benefits 9,177 9,273 8,905 8,996 8,481 18,450 17,423
Net occupancy and equipment 1,214 1,232 1,179 1,289 1,274 2,446 2,358
Depreciation 415 417 424 414 409 832 776
Data processing and software amortization 622 653 750 841 827 1,275 1,453
Professional fees 401 534 451 343 397 935 877
Regulatory assessments and FDIC insurance 355 345 356 296 320 700 694
Core deposit intangibles amortization 195 199 208 207 207 394 415
Communications 274 280 298 300 358 554 692
Advertising 197 201 271 188 184 398 322
Other 1,073 1,119 1,054 1,027 965 2,192 1,998
Total noninterest expense 13,923 14,253 13,896 13,901 13,422 28,176 27,008
INCOME BEFORE INCOME TAXES 7,593 9,425 6,178 6,177 5,839 17,018 11,206
Provision for income taxes 2,339 3,070 1,966 1,957 1,956 5,409 3,852
NET INCOME 5,254 6,355 4,212 4,220 3,883 11,609 7,354
Preferred stock dividends - - - 173 260 - 386
NET INCOME ATTRIBUTABLE TO COMMON
STOCKHOLDERS$ 5,254 $ 6,355 $ 4,212 $ 4,047 $ 3,623 $ 11,609 $ 6,968


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months Ended Year-to-Date
2016 2015 2016 2015
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$ 5,254 $ 6,355 $ 4,212 $ 4,220 $ 3,883 $ 11,609 $ 7,354
Net income attributable to common stockholders$ 5,254 $ 6,355 $ 4,212 $ 4,047 $ 3,623 $ 11,609 $ 6,968
Earnings per common share, basic$ 0.41 $ 0.49 $ 0.34 $ 0.41 $ 0.37 $ 0.90 $ 0.71
Earnings per common share, diluted$ 0.40 $ 0.49 $ 0.33 $ 0.40 $ 0.36 $ 0.89 $ 0.70
Return on average assets (A) 0.91% 1.19% 0.81% 0.85% 0.84% 1.04% 0.80%
Return on average common equity (A) 7.79% 9.70% 6.71% 8.27% 8.20% 8.74% 7.47%
Return on average tangible common equity (A) (B) 9.30% 11.67% 8.19% 10.77% 10.04% 10.46% 9.83%
Tax equivalent net interest margin (C) 4.32% 4.45% 4.60% 4.61% 4.79% 4.38% 4.76%
Efficiency ratio(D) 60.11% 63.80% 62.40% 65.04% 64.90% 61.93% 66.99%
Liquidity and Capital Ratios
Equity to assets 11.67% 12.05% 12.40% 9.74% 10.38% 11.67% 10.38%
Common equity Tier 1 capital 11.69% 11.57% 11.71% 8.61% 8.68% 11.69% 8.68%
Tier 1 risk-based capital 12.16% 12.04% 12.20% 9.12% 9.88% 12.16% 9.88%
Total risk-based capital 12.92% 12.76% 12.92% 9.75% 10.48% 12.92% 10.48%
Tier 1 leverage capital 10.43% 10.92% 11.02% 8.37% 9.34% 10.43% 9.34%
Tangible common equity to tangible assets(B) 10.00% 10.26% 10.48% 7.69% 7.64% 10.00% 7.64%
Other Data
Weighted average shares:
Basic 12,857 12,840 12,390 9,823 9,825 12,849 9,824
Diluted 13,039 12,967 12,589 10,003 10,004 13,003 10,001
Period end shares outstanding 12,869 12,845 12,813 9,823 9,823 12,869 9,823
Book value per common share$ 21.47 $ 20.73 $ 20.17 $ 19.96 $ 19.37 $ 21.47 $ 19.37
Tangible book value per common share(B)$ 18.06 $ 17.30 $ 16.69 $ 15.39 $ 14.79 $ 18.06 $ 14.79
(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 noninterest expense divided by the sum of net interest income plus noninterest income, excluding net gains and losses on the sale of branch assets, loans and securities
Additionally, taxes and provision for loan losses are not part of this calculation.


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
June 30, 2016 March 31, 2016 June 30, 2015
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$ 1,724,346 $ 22,839 5.33% $ 1,663,711 $ 22,228 5.37% $ 1,478,752 $ 21,079 5.72%
Securities 270,619 1,538 2.29% 186,460 1,081 2.33% 127,882 721 2.26%
Deposits in other financial institutions 96,358 150 0.62% 91,824 142 0.62% 62,247 50 0.32%
Total interest-earning assets 2,091,323 $ 24,527 4.72% 1,941,995 $ 23,451 4.86% 1,668,881 $ 21,850 5.25%
Allowance for loan losses (14,129) (13,487) (9,265)
Noninterest-earning assets 236,857 226,946 195,341
Total assets$ 2,314,051 $ 2,155,454 $ 1,854,957
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits$ 102,550 $ 88 0.34% $ 95,506 $ 67 0.28% $ 101,029 $ 83 0.33%
Money market and savings deposits 435,851 481 0.44% 433,139 477 0.44% 420,992 442 0.42%
Certificates and other time deposits 627,982 1,665 1.07% 614,216 1,560 1.02% 548,076 1,211 0.89%
Short-term borrowings 88,242 106 0.48% 126,374 139 0.44% 4,451 2 0.16%
Subordinated debt 9,125 120 5.28% 9,098 117 5.19% 8,981 162 7.24%
Other borrowed funds 118,629 118 0.40% 569 7 5.23% 28,415 216 3.05%
Total interest-bearing liabilities 1,382,379 $ 2,578 0.75% 1,278,902 $ 2,367 0.74% 1,111,944 $ 2,116 0.76%
Noninterest-Bearing liabilities:
Noninterest-bearing demand deposits 652,405 605,969 534,688
Other liabilities 8,139 7,186 6,868
Total liabilities 2,042,923 1,892,057 1,653,500
Stockholders' equity 271,128 263,397 201,457
Total liabilities and stockholders' equity $ 2,314,051 $ 2,155,454 $ 1,854,957
Net interest rate spread 3.97% 4.12% 4.49%
Net interest income and margin $ 21,949 4.22% $ 21,084 4.37% $ 19,734 4.74%
Net interest income and margin (tax equivalent) $ 22,481 4.32% $ 21,483 4.45% $ 19,923 4.79%


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Year-to-Date
June 30, 2016 June 30, 2015
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$ 1,694,029 $ 45,067 5.35% $ 1,447,629 $ 41,385 5.77%
Securities 228,540 2,619 2.30% 110,355 1,160 2.12%
Deposits in other financial institutions 94,091 292 0.62% 85,162 124 0.29%
Total interest-earning assets 2,016,660 $ 47,978 4.78% 1,643,146 $ 42,669 5.24%
Allowance for loan losses (13,808) (8,881)
Noninterest-earning assets 231,901 210,533
Total assets$ 2,234,753 $ 1,844,798
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits$ 99,028 $ 155 0.31% $ 103,744 $ 179 0.35%
Money market and savings deposits 434,495 958 0.44% 413,287 858 0.42%
Certificates and other time deposits 621,099 3,225 1.04% 548,679 2,355 0.87%
Short-term borrowings 107,308 245 0.46% 2,238 2 0.16%
Subordinated debt 9,111 237 5.23% 8,940 325 7.33%
Other borrowed funds 59,599 125 0.42% 28,243 446 3.18%
Total interest-bearing liabilities 1,330,640 $ 4,945 0.75% 1,105,131 $ 4,165 0.76%
Noninterest-Bearing liabilities:
Noninterest-bearing demand deposits 629,187 533,098
Other liabilities 7,663 6,907
Total liabilities 1,967,490 1,645,136
Stockholders' equity 267,263 199,662
Total liabilities and stockholders' equity $ 2,234,753 $ 1,844,798
Net interest rate spread 4.03% 4.48%
Net interest income and margin $ 43,033 4.29% $ 38,504 4.73%
Net interest income and margin (tax equivalent) $ 43,964 4.38% $ 38,762 4.76%


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
2016 2015
June 30 March 31 December 31 September 30 June 30
(Dollars in thousands)
Period-end Loan Portfolio:
Loans held for sale$ - $ - $ 27,887 $ 27,004 $ 25,629
Commercial and industrial 382,795 372,056 383,044 367,341 346,703
Mortgage warehouse 75,554 86,157 59,071 65,928 81,255
Real Estate:
Commercial real estate (including multi-family residential) 806,771 770,252 745,595 710,857 678,979
Commercial real estate construction and land development 161,572 167,810 154,646 151,369 140,437
1-4 family residential (including home equity) 214,442 209,704 205,200 185,473 178,635
Residential construction 101,677 100,611 93,848 95,212 94,167
Consumer and other 10,872 10,858 11,761 13,232 15,852
Total loans$ 1,753,683 $ 1,717,448 $ 1,681,052 $ 1,616,416 $ 1,561,657
Asset Quality:
Nonaccrual loans$ 7,124 $ 6,979 $ 5,184 $ 6,185 $ 5,722
Accruing loans 90 or more
days past due - - - - -
Total nonperforming loans 7,124 6,979 5,184 6,185 5,722
Other real estate 1,397 1,397 - - 21
Other repossessed assets 128 131 131 131 491
Total nonperforming assets$ 8,649 $ 8,507 $ 5,315 $ 6,316 $ 6,234
Net charge-offs (recoveries)$ 485 $ 51 $ 265 $ 638 $ 48
Nonaccrual loans:
Loans held for sale$ - $ - $ 209 $ 498 $ 1,130
Commercial and industrial 2,723 2,700 2,664 3,477 3,186
Mortgage warehouse - - - - -
Real Estate:
Commercial real estate (including multi-family residential) 4,141 3,293 2,006 1,783 974
Commercial real estate construction and land development - - - - -
1-4 family residential (including home equity) 227 934 239 341 343
Residential construction - - - - -
Consumer and other 33 52 66 86 89
Total nonaccrual loans$ 7,124 $ 6,979 $ 5,184 $ 6,185 $ 5,722
Asset Quality Ratios:
Nonperforming assets to total assets 0.37% 0.38% 0.25% 0.31% 0.32%
Nonperforming loans to total loans 0.41% 0.41% 0.31% 0.38% 0.37%
Allowance for loan losses to nonperforming loans 209.39% 197.12% 252.66% 181.15% 180.22%
Allowance for loan losses to total loans 0.85% 0.80% 0.78% 0.69% 0.66%
Net charge-offs to average loans (annualized) 0.11% 0.01% 0.06% 0.16% 0.01%


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 ratio of tangible common 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. 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
2016 2015 2016 2015
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 Stockholders' equity $ 276,251 $ 266,293 $ 258,490 $ 196,043 $ 201,830 $ 276,251 $ 201,830
Less: Goodwill and core deposit intangibles, net 43,835 44,030 44,619 44,826 45,034 43,835 45,034
Tangible stockholders’ equity $ 232,416 $ 222,263 $ 213,871 $ 151,217 $ 156,796 $ 232,416 $ 156,796
Less: Preferred Stock - - - - 11,550 - 11,550
Tangible common stockholders’ equity $ 232,416 $ 222,263 $ 213,871 $ 151,217 $ 145,246 $ 232,416 $ 145,246
Shares outstanding at end of period 12,869 12,845 12,813 9,823 9,823 12,869 9,823
Tangible book value per common share $ 18.06 $ 17.30 $ 16.69 $ 15.39 $ 14.79 $ 18.06 $ 14.79
Net income attributable to common stockholders $ 5,254 $ 6,355 $ 4,212 $ 4,047 $ 3,623 $ 11,609 $ 6,968
Average common stockholders equity $ 271,128 $ 263,397 $ 248,925 $ 194,045 $ 189,907 $ 267,263 $ 188,112
Less: Average goodwill and core deposit intangibles, net 43,930 44,319 44,886 44,929 45,150 44,124 45,205
Average tangible common stockholders’ equity $ 227,198 $ 219,078 $ 204,039 $ 149,116 $ 144,757 $ 223,139 $ 142,907
Return on average tangible common equity 9.30% 11.67% 8.19% 10.77% 10.04% 10.46% 9.83%
Total assets $ 2,367,581 $ 2,210,707 $ 2,084,579 $ 2,012,350 $ 1,945,156 $ 2,367,581 $ 1,945,156
Less: Goodwill and core deposit intangibles, net 43,835 44,030 44,619 44,826 45,034 43,835 45,034
Tangible assets $ 2,323,746 $ 2,166,677 $ 2,039,960 $ 1,967,524 $ 1,900,122 $ 2,323,746 $ 1,900,122
Tangible common equity to tangible assets 10.00% 10.26% 10.48% 7.69% 7.64% 10.00% 7.64%


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

Source:Allegiance Bancshares, Inc.