Allegiance Bancshares, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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EX-99.2 - EXHIBIT 99.2 - Allegiance Bancshares, Inc.	thirdquarter2016presenta.htm
8-K - 8-K - Allegiance Bancshares, Inc.	a8-kearningsrelease9302016.htm

PRESS RELEASE

Allegiance Bancshares, Inc.

8847 West Sam Houston Parkway N.,

Suite 200 Houston, Texas 77040

ir@allegiancebank.com

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, October 25, 2016. 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 securities	310,033			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, net	1,813,537			1,738,766			1,703,691			1,667,954			1,605,212

Goodwill	39,389			39,389			39,389			39,389			39,389
Core deposit intangibles, net	4,250			4,446			4,641			5,230			5,437
Premises and equipment, net	17,811			17,821			18,121			18,471			18,838
Other real estate owned	1,138			1,397			1,397			—			—
Bank owned life insurance	21,684			21,530			21,377			21,211			21,040
Other assets	28,978			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 deposits	1,296,601			1,212,650			1,158,409			1,138,813			1,095,775
Total deposits	1,900,879			1,843,339			1,842,654			1,759,133			1,656,548

Short-term borrowings	61,000			30,000			85,000			50,000			115,000
Other borrowed funds	200,569			200,569			569			569			28,069
Subordinated debentures	9,169			9,142			9,115			9,089			9,062
Other liabilities	9,190			8,280			7,076			7,298			7,628
Total liabilities	2,180,807			2,091,330			1,944,414			1,826,089			1,816,307
Preferred equity	—			—			—			—			—
Common equity	281,095			276,251			266,293			258,490			196,043
Stockholders' equity	281,095			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
Securities	2,112		1,538		1,081		989			975		4,731		2,135
Deposits in other financial institutions	150		150		142		72			43		442		167
Total interest income	26,319		24,527		23,451		23,492			22,645		74,297		65,314

INTEREST EXPENSE:
Demand, money market and savings deposits	651		569		544		579			545		1,764		1,582
Certificates and other time deposits	1,872		1,665		1,560		1,470			1,287		5,097		3,642
Short-term borrowings	63		106		139		33			47		308		49
Subordinated debt	123		120		117		139			114		360		439
Other borrowed funds	201		118		7		16			245		326		691
Total interest expense	2,910		2,578		2,367		2,237			2,238		7,855		6,403
NET INTEREST INCOME	23,409		21,949		21,084		21,255			20,407		66,442		58,911
Provision for loan losses	2,214		1,645		710		2,159			1,530		4,569		3,633
Net interest income after provision for loan losses	21,195		20,304		20,374		19,096			18,877		61,873		55,278

NONINTEREST INCOME:
Nonsufficient funds fees	175		145		163		191			179		483		512
Service charges on deposit accounts	182		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 estate	60		—		—		—			1		60		(5		)
Gain on sale of loans	—		—		—		—			235		—		235
Bank owned life insurance	153		153		166		171			167		472		433
Other	704		741		780		487			456		2,225		1,325
Total noninterest income	1,274		1,212		3,304		978			1,201		5,790		3,014

NONINTEREST EXPENSE:
Salaries and employee benefits	9,781		9,177		9,273		8,905			8,996		28,231		26,419
Net occupancy and equipment	1,260		1,214		1,232		1,179			1,289		3,706		3,647
Depreciation	404		415		417		424			414		1,236		1,190
Data processing and software amortization	655		622		653		750			841		1,930		2,294
Professional fees	442		401		534		451			343		1,377		1,220
Regulatory assessments and FDIC insurance	396		355		345		356			296		1,096		990
Core deposit intangibles amortization	195		195		199		208			207		589		622
Communications	264		274		280		298			300		818		992
Advertising	228		197		201		271			188		626		510
Other	1,270		1,073		1,119		1,054			1,027		3,462		3,025
Total noninterest expense	14,895		13,923		14,253		13,896			13,901		43,071		40,909
INCOME BEFORE INCOME TAXES	7,574		7,593		9,425		6,178			6,177		24,592		17,383
Provision for income taxes	2,103		2,339		3,070		1,966			1,957		7,512		5,809
NET INCOME	5,471		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 assets	11.42		%	11.67		%	12.05		%	12.40		%	9.74		%	11.42		%	9.74		%
Common equity Tier 1 capital	11.40		%	11.50		%	11.57		%	11.71		%	8.61		%	11.40		%	8.61		%
Tier 1 risk-based capital	11.84		%	11.97		%	12.04		%	12.20		%	9.12		%	11.84		%	9.12		%
Total risk-based capital	12.68		%	12.72		%	12.76		%	12.92		%	9.75		%	12.68		%	9.75		%
Tier 1 leverage capital	10.25		%	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:
Basic	12,882			12,857			12,840			12,390			9,823			12,860			9,823
Diluted	13,108			13,039			12,967			12,589			10,003			13,038			10,001
Period end shares outstanding	12,905			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	%
Securities	310,769			2,112		2.70	%	270,619			1,538		2.29	%	162,308			975		2.38	%
Deposits in other financial institutions	92,928			150		0.64	%	96,358			150		0.62	%	53,759			43		0.31	%
Total interest-earning assets	2,188,460			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 assets	249,363							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 deposits	484,587			556		0.46	%	435,851			481		0.44	%	432,654			468		0.43	%
Certificates and other time deposits	668,092			1,872		1.11	%	627,982			1,665		1.07	%	547,884			1,287		0.93	%
Short-term borrowings	44,163			63		0.57	%	88,242			106		0.48	%	106,533			47		0.17	%
Subordinated debt	9,151			123		5.35	%	9,125			120		5.28	%	9,060			114		5.01	%
Other borrowed funds	200,569			201		0.40	%	118,629			118		0.40	%	28,069			245		3.46	%
Total interest-bearing liabilities	1,518,059			2,910		0.76	%	1,382,379			2,578		0.75	%	1,221,688			2,238		0.73	%

Noninterest-Bearing liabilities:
Noninterest-bearing demand deposits	614,303							652,405							555,060
Other liabilities	9,821							8,139							7,292
Total liabilities	2,142,183							2,042,923							1,784,040
Stockholders' equity	280,065							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	%
Securities	256,149			4,731		2.47	%	127,863			2,135		2.23	%
Deposits in other financial institutions	93,700			442		0.63	%	72,182			167		0.31	%
Total interest-earning assets	2,074,343			74,297		4.78	%	1,689,735			65,314		5.17	%
Allowance for loan losses	(14,401		)					(9,466		)
Noninterest-earning assets	237,765							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 deposits	451,314			1,514		0.45	%	419,814			1,326		0.42	%
Certificates and other time deposits	636,877			5,097		1.07	%	548,411			3,642		0.89	%
Short-term borrowings	86,106			308		0.48	%	37,384			49		0.17	%
Subordinated debt	9,125			360		5.27	%	8,981			439		6.54	%
Other borrowed funds	106,774			326		0.41	%	28,069			691		3.29	%
Total interest-bearing liabilities	1,393,411			7,855		0.75	%	1,144,295			6,403		0.75	%

Noninterest-Bearing liabilities:
Noninterest-bearing demand deposits	624,190							540,499
Other liabilities	8,545							7,153
Total liabilities	2,026,146							1,691,947
Stockholders' equity	271,561							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 industrial	402,273			382,795			372,056			383,044			367,341
Mortgage warehouse	76,043			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 development	167,936			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 construction	93,923			101,677			100,611			93,848			95,212
Consumer and other	12,957			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 loans	15,882			7,124			6,979			5,184			6,185
Other real estate	1,138			1,397			1,397			—			—
Other repossessed assets	30			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 industrial	4,983			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 other	393			33			52			66			86
Total nonaccrual loans	$	15,882		$	7,124		$	6,979		$	5,184		$	6,185

Asset Quality Ratios:
Nonperforming assets to total assets	0.69		%	0.37		%	0.38		%	0.25		%	0.31		%
Nonperforming loans to total loans	0.87		%	0.41		%	0.41		%	0.31		%	0.38		%
Allowance for loan losses to nonperforming loans	108.20		%	209.39		%	197.12		%	252.66		%	181.15		%
Allowance for loan losses to total loans	0.94		%	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. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - October 25, 2016

Attached files

Allegiance Bancshares, Inc. Reports