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Allegiance Bancshares Reports Third Quarter 2016 Results

  • Core loans increased 15.2% year over year and 4.6% for the third quarter 2016 compared to the linked quarter

  • Deposits increased 14.7% year over year and 3.1% for the third quarter 2016 compared to the linked quarter

HOUSTON, Oct. 25, 2016 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ:ABTX), the holding company of Allegiance Bank (collectively, “Allegiance” or the "Bank"), reported net income attributable to common stockholders of $5.5 million in the third quarter 2016, a 35.2% increase over the same period in 2015, and a 4.1% increase compared to the second quarter 2016. Net income per diluted common share increased 5.0% to $0.42 in the third quarter 2016 compared to $0.40 for the same period in 2015 and increased 5.0% compared to $0.40 for the second quarter 2016.

"Our outstanding team of bankers has delivered another strong quarter of well-managed growth," said George Martinez, Allegiance's Chairman and Chief Executive Officer. "We are pleased with our third quarter results despite an increase in our provision for loan losses, which signifies the strength of our Bank. Allegiance's credit quality continues to be strong despite today's challenging market. Our third quarter results reflect solid organic loan and deposit growth as we continue to focus on serving our customers and executing on our super-community bank growth strategy.

"October marks Allegiance's one-year anniversary as a public company. We have achieved a lot in the past year, including generating strong internal growth and positioning ourselves for continued growth by adding exceptional bankers. We are well on track to complete another outstanding year of increasing value to our shareholders leading into 2017," continued Martinez.

Third Quarter 2016 Results

Third quarter 2016 annualized returns on average assets, average common equity and average tangible common equity were 0.90%, 7.77% and 9.21%, respectively, compared to annualized returns on average assets, average common equity and average tangible common equity of 0.85%, 8.27% and 10.77%, respectively, for the third quarter 2015. The initial public offering of 2.9 million shares generated net proceeds of $57.2 million during the fourth quarter of 2015. Annualized returns on average assets, average common equity and average tangible common equity for the second quarter 2016 were 0.91%, 7.79% and 9.30%, respectively.

In the third quarter 2016, Allegiance’s efficiency ratio decreased to 60.34% from 65.04% in the third quarter 2015 and increased slightly from 60.11% in the second quarter 2016.

Net interest income before provision for loan losses in the third quarter 2016 increased $3.0 million, or 14.7%, to $23.4 million from $20.4 million for the third quarter 2015 primarily due to organic loan growth and an increase in our securities portfolio. Net interest income before provision for loan losses in the third quarter 2016 increased $1.5 million, or 6.7%, from $21.9 million in the second quarter 2016. The net interest margin on a tax equivalent basis decreased 22 basis points to 4.39% for the third quarter 2016 from 4.61% for the third quarter 2015, and increased 7 basis points from 4.32% for the second quarter 2016. Excluding the impact of acquisition accounting adjustments, the net interest margin in the third quarter 2016 would have been 4.33%, compared to 4.44% and 4.24% in the third quarter 2015 and second quarter 2016, respectively.

Noninterest income in the third quarter 2016 was $1.3 million, an increase of $73 thousand, or 6.1%, compared to $1.2 million in the third quarter 2015 and an increase of $62 thousand, or 5.1%, compared to $1.2 million in the second quarter 2016.

Noninterest expense in the third quarter 2016 increased $994 thousand, or 7.2%, to $14.9 million from $13.9 million in the third quarter 2015, and increased $972 thousand, or 7.0%, from $13.9 million in the second quarter 2016.

Nine Months Ended September 30, 2016 Results

For the nine months ended September 30, 2016, annualized returns on average assets, average common equity and average tangible common equity were 0.99%, 8.40% and 10.03%, respectively, compared to annualized returns on average assets, average common equity and average tangible common equity of 0.82%, 7.75% and 10.16%, respectively, for the nine months ended September 30, 2015. Excluding the gain on the sale of two Central Texas branch locations during the first quarter of 2016, the annualized returns on average assets, average common equity and average tangible common equity for the nine months ended September 30, 2016 would have been 0.92%, 7.75% and 9.24%, respectively.

Allegiance’s efficiency ratio for the nine months ended September 30, 2016 decreased to 61.37% from 66.31% for the nine months ended September 30, 2015.

Net interest income before provision for loan losses for the nine months ended September 30, 2016 increased $7.5 million, or 12.8%, to $66.4 million from $58.9 million for the nine months ended September 30, 2015 primarily due to organic growth within the loan portfolio and an increase in our securities portfolio. The net interest margin on a tax equivalent basis decreased 32 basis points to 4.39% for the nine months ended September 30, 2016 from 4.71% for the nine months ended September 30, 2015. Excluding the impact of acquisition accounting adjustments, the net interest margin for the nine months ended September 30, 2016 would have been 4.31%, compared to 4.44% for the nine months ended September 30, 2015.

Noninterest income for the nine months ended September 30, 2016 was $5.8 million, an increase of $2.8 million, or 92.1%, when compared to $3.0 million for the nine months ended September 30, 2015. Noninterest income for the first quarter 2016 included the gain on the sale of two Central Texas branch locations. Noninterest expense for the nine months ended September 30, 2016 increased $2.2 million, or 5.3%, to $43.1 million from $40.9 million for the nine months ended September 30, 2015.

Financial Condition

Total loans at September 30, 2016 increased $214.3 million, or 13.3%, to $1.83 billion compared to $1.62 billion at September 30, 2015 and increased $77.0 million, or 4.4%, compared to $1.75 billion at June 30, 2016. These increases were due to strong organic loan growth within Allegiance Bank’s loan portfolio. Third quarter 2016 core loans, excluding the mortgage warehouse portfolio and loans held for sale, increased $231.2 million, or 15.2%, to $1.75 billion from $1.52 billion in the third quarter 2015 and increased $76.6 million, or 4.6%, from $1.68 billion in the second quarter 2016.

Deposits at September 30, 2016 increased $244.3 million, or 14.7%, to $1.90 billion compared to $1.66 billion at September 30, 2015 and increased $57.5 million compared to $1.84 billion at June 30, 2016.

Asset Quality

Nonperforming assets totaled $17.1 million, or 0.69% of total assets, at September 30, 2016, compared to $6.3 million, or 0.31% of total assets, at September 30, 2015, and $8.6 million, or 0.37% of total assets, at June 30, 2016. The allowance for loan losses was 0.94% of total loans at September 30, 2016, 0.69% of total loans at September 30, 2015, and 0.85% of total loans at June 30, 2016.

The provision for loan losses in the third quarter 2016 was $2.2 million, or 0.49% (annualized) of average loans, compared to $1.5 million, or 0.39% (annualized) of average loans, in the third quarter 2015, and $1.6 million, or 0.38% (annualized) of average loans, in the second quarter 2016. The provision for loan losses for the nine months ended September 30, 2016 was $4.6 million, or 0.35% (annualized) of average loans, compared to $3.6 million, or 0.33% (annualized) of average loans for the nine months ended September 30, 2015.

Third quarter 2016 net recoveries were $54 thousand, compared to net charge-offs of $638 thousand, or 0.16% (annualized) of average loans, in the third quarter 2015, and $485 thousand, or 0.11% (annualized) of average loans, in the second quarter 2016. Net charge-offs for the nine months ended September 30, 2016 were $482 thousand, or 0.04% (annualized) of average loans, compared to $675 thousand, or 0.06% (annualized) of average loans for the nine months ended September 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 10 of this Earnings Release for a reconciliation of these non-GAAP financial measures.

Conference Call

As previously announced, Allegiance’s management team will host a conference call on Tuesday, October 25, 2016 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its third quarter 2016 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 84384942. 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 $2.46 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
September 30 June 30 March 31 December 31 September 30
(Dollars in thousands)
Cash and cash equivalents$225,082 $210,863 $183,290 $148,431 $144,590
Available for sale securities310,033 303,463 215,401 165,097 154,546
Total Loans (including loans held for sale)1,830,722 1,753,683 1,717,448 1,681,052 1,616,416
Allowance for loan losses(17,185) (14,917) (13,757) (13,098) (11,204)
Loans, net1,813,537 1,738,766 1,703,691 1,667,954 1,605,212
Goodwill39,389 39,389 39,389 39,389 39,389
Core deposit intangibles, net4,250 4,446 4,641 5,230 5,437
Premises and equipment, net17,811 17,821 18,121 18,471 18,838
Other real estate owned1,138 1,397 1,397
Bank owned life insurance21,684 21,530 21,377 21,211 21,040
Other assets28,978 29,906 23,400 18,796 23,298
Total assets$2,461,902 $2,367,581 $2,210,707 $2,084,579 $2,012,350
Noninterest-bearing deposits$604,278 $630,689 $684,245 $620,320 $560,773
Interest-bearing deposits1,296,601 1,212,650 1,158,409 1,138,813 1,095,775
Total deposits1,900,879 1,843,339 1,842,654 1,759,133 1,656,548
Short-term borrowings61,000 30,000 85,000 50,000 115,000
Other borrowed funds200,569 200,569 569 569 28,069
Subordinated debentures9,169 9,142 9,115 9,089 9,062
Other liabilities9,190 8,280 7,076 7,298 7,628
Total liabilities2,180,807 2,091,330 1,944,414 1,826,089 1,816,307
Preferred equity
Common equity281,095 276,251 266,293 258,490 196,043
Stockholders' equity281,095 276,251 266,293 258,490 196,043
Total liabilities and equity$2,461,902 $2,367,581 $2,210,707 $2,084,579 $2,012,350


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months Ended Year-to-Date
2016 2015 2016 2015
September 30 June 30 March 31 December 31 September 30 September 30 September 30
(Dollars in thousands)
INTEREST INCOME:
Loans, including fees$24,057 $22,839 $22,228 $22,431 $21,627 $69,124 $63,012
Securities2,112 1,538 1,081 989 975 4,731 2,135
Deposits in other financial institutions150 150 142 72 43 442 167
Total interest income26,319 24,527 23,451 23,492 22,645 74,297 65,314
INTEREST EXPENSE:
Demand, money market and savings deposits651 569 544 579 545 1,764 1,582
Certificates and other time deposits1,872 1,665 1,560 1,470 1,287 5,097 3,642
Short-term borrowings63 106 139 33 47 308 49
Subordinated debt123 120 117 139 114 360 439
Other borrowed funds201 118 7 16 245 326 691
Total interest expense2,910 2,578 2,367 2,237 2,238 7,855 6,403
NET INTEREST INCOME23,409 21,949 21,084 21,255 20,407 66,442 58,911
Provision for loan losses2,214 1,645 710 2,159 1,530 4,569 3,633
Net interest income after provision for loan losses21,195 20,304 20,374 19,096 18,877 61,873 55,278
NONINTEREST INCOME:
Nonsufficient funds fees175 145 163 191 179 483 512
Service charges on deposit accounts182 173 145 166 163 500 514
Gain on sale of branch assets 2,050 2,050
Loss on sale of securities (37)
Gain (loss) on sales of other real estate60 1 60 (5)
Gain on sale of loans 235 235
Bank owned life insurance153 153 166 171 167 472 433
Other704 741 780 487 456 2,225 1,325
Total noninterest income1,274 1,212 3,304 978 1,201 5,790 3,014
NONINTEREST EXPENSE:
Salaries and employee benefits9,781 9,177 9,273 8,905 8,996 28,231 26,419
Net occupancy and equipment1,260 1,214 1,232 1,179 1,289 3,706 3,647
Depreciation404 415 417 424 414 1,236 1,190
Data processing and software amortization655 622 653 750 841 1,930 2,294
Professional fees442 401 534 451 343 1,377 1,220
Regulatory assessments and FDIC insurance396 355 345 356 296 1,096 990
Core deposit intangibles amortization195 195 199 208 207 589 622
Communications264 274 280 298 300 818 992
Advertising228 197 201 271 188 626 510
Other1,270 1,073 1,119 1,054 1,027 3,462 3,025
Total noninterest expense14,895 13,923 14,253 13,896 13,901 43,071 40,909
INCOME BEFORE INCOME TAXES7,574 7,593 9,425 6,178 6,177 24,592 17,383
Provision for income taxes2,103 2,339 3,070 1,966 1,957 7,512 5,809
NET INCOME5,471 5,254 6,355 4,212 4,220 17,080 11,574
Preferred stock dividends 173 559
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS$5,471 $5,254 $6,355 $4,212 $4,047 $17,080 $11,015



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months Ended Year-to-Date
2016 2015 2016 2015
September 30 June 30 March 31 December 31 September 30 September 30 September 30
(Dollars and share amounts in thousands, except per share data)
Net income$5,471 $5,254 $6,355 $4,212 $4,220 $17,080 $11,574
Net income attributable to common stockholders$5,471 $5,254 $6,355 $4,212 $4,047 $17,080 $11,015
Earnings per common share, basic$0.42 $0.41 $0.49 $0.34 $0.41 $1.33 $1.12
Earnings per common share, diluted$0.42 $0.40 $0.49 $0.33 $0.40 $1.31 $1.10
Return on average assets(A)0.90% 0.91% 1.19% 0.81% 0.85% 0.99% 0.82%
Return on average common equity(A)7.77% 7.79% 9.70% 6.71% 8.27% 8.40% 7.75%
Return on average tangible common equity(A) (B)9.21% 9.30% 11.67% 8.19% 10.77% 10.03% 10.16%
Tax equivalent net interest margin(C)4.39% 4.32% 4.45% 4.60% 4.61% 4.39% 4.71%
Efficiency ratio(D)60.34% 60.11% 63.80% 62.40% 65.04% 61.37% 66.31%
Liquidity and Capital Ratios
Equity to assets11.42% 11.67% 12.05% 12.40% 9.74% 11.42% 9.74%
Common equity Tier 1 capital11.40% 11.50% 11.57% 11.71% 8.61% 11.40% 8.61%
Tier 1 risk-based capital11.84% 11.97% 12.04% 12.20% 9.12% 11.84% 9.12%
Total risk-based capital12.68% 12.72% 12.76% 12.92% 9.75% 12.68% 9.75%
Tier 1 leverage capital10.25% 10.43% 10.92% 11.02% 8.37% 10.25% 8.37%
Tangible common equity to tangible assets(B)9.82% 10.00% 10.26% 10.48% 7.69% 9.82% 7.69%
Other Data
Weighted average shares:
Basic12,882 12,857 12,840 12,390 9,823 12,860 9,823
Diluted13,108 13,039 12,967 12,589 10,003 13,038 10,001
Period end shares outstanding12,905 12,869 12,845 12,813 9,823 12,905 9,823
Book value per common share$21.78 $21.47 $20.73 $20.17 $19.96 $21.78 $19.96
Tangible book value per common share(B)$18.40 $18.06 $17.30 $16.69 $15.39 $18.40 $15.39
(A) Interim periods annualized.
(B) Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 10 of this Earnings Release.
(C) Net interest margin represents net interest income divided by average interest-earning assets.
(D) Represents 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
September 30, 2016 June 30, 2016 September 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$1,784,763 $24,057 5.36% $1,724,346 $22,839 5.33% $1,572,441 $21,627 5.46%
Securities310,769 2,112 2.70% 270,619 1,538 2.29% 162,308 975 2.38%
Deposits in other financial institutions92,928 150 0.64% 96,358 150 0.62% 53,759 43 0.31%
Total interest-earning assets2,188,460 26,319 4.78% 2,091,323 24,527 4.72% 1,788,508 22,645 5.02%
Allowance for loan losses(15,575) (14,129) (10,618)
Noninterest-earning assets249,363 236,857 201,952
Total assets$2,422,248 $2,314,051 $1,979,842
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits$111,497 $95 0.34% $102,550 $88 0.34% $97,488 $77 0.31%
Money market and savings deposits484,587 556 0.46% 435,851 481 0.44% 432,654 468 0.43%
Certificates and other time deposits668,092 1,872 1.11% 627,982 1,665 1.07% 547,884 1,287 0.93%
Short-term borrowings44,163 63 0.57% 88,242 106 0.48% 106,533 47 0.17%
Subordinated debt9,151 123 5.35% 9,125 120 5.28% 9,060 114 5.01%
Other borrowed funds200,569 201 0.40% 118,629 118 0.40% 28,069 245 3.46%
Total interest-bearing liabilities1,518,059 2,910 0.76% 1,382,379 2,578 0.75% 1,221,688 2,238 0.73%
Noninterest-Bearing liabilities:
Noninterest-bearing demand deposits614,303 652,405 555,060
Other liabilities9,821 8,139 7,292
Total liabilities2,142,183 2,042,923 1,784,040
Stockholders' equity280,065 271,128 195,802
Total liabilities and stockholders' equity$2,422,248 $2,314,051 $1,979,842
Net interest rate spread 4.02% 3.97% 4.29%
Net interest income and margin $23,409 4.26% $21,949 4.22% $20,407 4.53%
Net interest income and margin (tax equivalent) $24,149 4.39% $22,481 4.32% $20,770 4.61%



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Year-to-Date
September 30, 2016 September 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$1,724,494 $69,124 5.35% $1,489,690 $63,012 5.66%
Securities256,149 4,731 2.47% 127,863 2,135 2.23%
Deposits in other financial institutions93,700 442 0.63% 72,182 167 0.31%
Total interest-earning assets2,074,343 74,297 4.78% 1,689,735 65,314 5.17%
Allowance for loan losses(14,401) (9,466)
Noninterest-earning assets237,765 210,039
Total assets$2,297,707 $1,890,308
Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits$103,215 $250 0.32% $101,636 $256 0.34%
Money market and savings deposits451,314 1,514 0.45% 419,814 1,326 0.42%
Certificates and other time deposits636,877 5,097 1.07% 548,411 3,642 0.89%
Short-term borrowings86,106 308 0.48% 37,384 49 0.17%
Subordinated debt9,125 360 5.27% 8,981 439 6.54%
Other borrowed funds106,774 326 0.41% 28,069 691 3.29%
Total interest-bearing liabilities1,393,411 7,855 0.75% 1,144,295 6,403 0.75%
Noninterest-Bearing liabilities:
Noninterest-bearing demand deposits624,190 540,499
Other liabilities8,545 7,153
Total liabilities2,026,146 1,691,947
Stockholders' equity271,561 198,361
Total liabilities and stockholders' equity$2,297,707 $1,890,308
Net interest rate spread 4.03% 4.42%
Net interest income and margin $66,442 4.28% $58,911 4.66%
Net interest income and margin (tax equivalent) $68,113 4.39% $59,533 4.71%


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
2016 2015
September 30 June 30 March 31 December 31 September 30
(Dollars in thousands)
Period-end Loan Portfolio:
Loans held for sale$ $ $ $27,887 $27,004
Commercial and industrial402,273 382,795 372,056 383,044 367,341
Mortgage warehouse76,043 75,554 86,157 59,071 65,928
Real Estate:
Commercial real estate (including multi-family residential)848,939 806,771 770,252 745,595 710,857
Commercial real estate construction and land development167,936 161,572 167,810 154,646 151,369
1-4 family residential (including home equity)228,651 214,442 209,704 205,200 185,473
Residential construction93,923 101,677 100,611 93,848 95,212
Consumer and other12,957 10,872 10,858 11,761 13,232
Total loans$1,830,722 $1,753,683 $1,717,448 $1,681,052 $1,616,416
Asset Quality:
Nonaccrual loans$15,882 $7,124 $6,979 $5,184 $6,185
Accruing loans 90 or more days past due
Total nonperforming loans15,882 7,124 6,979 5,184 6,185
Other real estate1,138 1,397 1,397
Other repossessed assets30 128 131 131 131
Total nonperforming assets$17,050 $8,649 $8,507 $5,315 $6,316
Net (recoveries) charge-offs$(54) $485 $51 $265 $638
Nonaccrual loans:
Loans held for sale$ $ $ $209 $498
Commercial and industrial4,983 2,723 2,700 2,664 3,477
Mortgage warehouse
Real Estate:
Commercial real estate (including multi-family residential)10,495 4,141 3,293 2,006 1,783
Commercial real estate construction and land development
1-4 family residential (including home equity)11 227 934 239 341
Residential construction
Consumer and other393 33 52 66 86
Total nonaccrual loans$15,882 $7,124 $6,979 $5,184 $6,185
Asset Quality Ratios:
Nonperforming assets to total assets0.69% 0.37% 0.38% 0.25% 0.31%
Nonperforming loans to total loans0.87% 0.41% 0.41% 0.31% 0.38%
Allowance for loan losses to nonperforming loans108.20% 209.39% 197.12% 252.66% 181.15%
Allowance for loan losses to total loans0.94% 0.85% 0.80% 0.78% 0.69%
Net (recoveries) charge-offs to average loans (annualized)(0.01)% 0.11% 0.01% 0.06% 0.16%


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
September 30 June 30 March 31 December 31 September 30 September 30 September 30
(Dollars and share amounts in thousands, except per share data)
Total Stockholders' equity $281,095 $276,251 $266,293 $258,490 $196,043 $281,095 $196,043
Less: Goodwill and core deposit intangibles, net 43,639 43,835 44,030 44,619 44,826 43,639 44,826
Tangible stockholders’ equity $237,456 $232,416 $222,263 $213,871 $151,217 $237,456 $151,217
Less: Preferred Stock
Tangible common stockholders’ equity $237,456 $232,416 $222,263 $213,871 $151,217 $237,456 $151,217
Shares outstanding at end of period 12,905 12,869 12,845 12,813 9,823 12,905 9,823
Tangible book value per common share $18.40 $18.06 $17.30 $16.69 $15.39 $18.40 $15.39
Net income attributable to common stockholders $5,471 $5,254 $6,355 $4,212 $4,047 $17,080 $11,015
Average common stockholders' equity $280,065 $271,128 $263,397 $248,925 $194,045 $271,561 $190,111
Less: Average goodwill and core deposit intangibles, net 43,735 43,930 44,319 44,886 44,929 43,994 45,112
Average tangible common stockholders’ equity $236,330 $227,198 $219,078 $204,039 $149,116 $227,567 $144,999
Return on average tangible common equity 9.21% 9.30% 11.67% 8.19% 10.77% 10.03% 10.16%
Total assets $2,461,902 $2,367,581 $2,210,707 $2,084,579 $2,012,350 $2,461,902 $2,012,350
Less: Goodwill and core deposit intangibles, net 43,639 43,835 44,030 44,619 44,826 43,639 44,826
Tangible assets $2,418,263 $2,323,746 $2,166,677 $2,039,960 $1,967,524 $2,418,263 $1,967,524
Tangible common equity to tangible assets 9.82% 10.00% 10.26% 10.48% 7.69% 9.82% 7.69%



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

Source:Allegiance Bancshares, Inc.