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

Attached files

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EX-99.2 - EXHIBIT 99.2 - Allegiance Bancshares, Inc.	fourthquarter2016present.htm
8-K - 8-K - Allegiance Bancshares, Inc.	a8-kearningsrelease12312016.htm

PRESS RELEASE

Allegiance Bancshares, Inc.

8847 West Sam Houston Parkway N.,

Suite 200 Houston, Texas 77040

ir@allegiancebank.com

ALLEGIANCE BANCSHARES REPORTS

FOURTH QUARTER AND YEAR-END 2016 RESULTS


•	Fourth quarter 2016 diluted earnings per common share of $0.44 compared to $0.33 for the fourth quarter 2015 and $0.42 for the third quarter 2016


•	Full year 2016 diluted earnings per common share of $1.75 compared to $1.43 for the year ended 2015


•	Core loans for the fourth quarter 2016 increased 14.5% year over year and 4.0% compared to the third quarter 2016


•	Continued shareholder value creation: tangible book value per common share grew 9.3% for the year ended 2016


•	Strong asset quality as evidenced by annualized net charge-offs of 0.04% for the fourth quarter and year ended 2016

HOUSTON, January 24, 2017. Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), reported net income attributable to common stockholders of $5.8 million in the fourth quarter 2016, a 37.0% increase over the same period in 2015, and a 5.5% increase compared to the third quarter 2016. Net income per diluted common share increased 33.3% to $0.44 in the fourth quarter 2016 compared to $0.33 for the same period in 2015 and increased 4.8% compared to $0.42 for the third quarter 2016. Net income attributable to common shareholders for the year ended December 31, 2016 increased $7.6 million to $22.9 million, or $1.75 per diluted common share, compared to net income attributable to common shareholders of $15.2 million, or $1.43 per diluted common share, for the year ended December 31, 2015. Excluding the gain on the sale of two Central Texas branch locations during the first quarter 2016, net income attributable to common shareholders would have been $21.5 million and net income per diluted common share would have been $1.65 for the year ended December 31, 2016.

"We are pleased with our overall financial performance in 2016, and the fourth quarter represented another great quarter for Allegiance," said George Martinez, Allegiance's Chairman and Chief Executive Officer. "In our first full year of being a public company, we achieved a number of successes as we continued to deliver strong organic loan growth and record earnings. We owe our achievements to the exceptional efforts of our hard working and dedicated bankers along with the support we received from our loyal shareholders and customers. Allegiance enters the year 2017 with a strong balance sheet, a stable and diversified portfolio and a continued focus on superior asset quality," continued Martinez.

"We are focused on the execution of our business plan and positioning ourselves for significant growth in the future. Over the past year, we built upon our talented lending team by hiring 12 new lenders and further enhanced our infrastructure. We are strengthening our internal processes and systems which will provide our platform the requisite technology and capacity we will need to support our ambitious growth plans. We believe these efforts position us well for continued growth and shareholder value creation in 2017 and beyond," concluded Martinez.

Fourth Quarter 2016 Results

Fourth quarter 2016 annualized returns on average assets, average common equity and average tangible common equity were 0.93%, 8.25% and 9.79%, respectively, compared to 0.81%, 6.71% and 8.19%, respectively, for the fourth quarter 2015. The initial public offering of 2.9 million shares during the fourth quarter of 2015 generated net proceeds of $57.2 million. Annualized returns on average assets, average common equity and average tangible common equity for the third quarter 2016 were 0.90%, 7.77% and 9.21%, respectively.

Net interest income before provision for loan losses in the fourth quarter 2016 increased $2.2 million, or 10.2%, to $23.4 million from $21.3 million for the fourth 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 fourth quarter 2016 increased slightly compared to the third quarter 2016. The net interest margin on a tax equivalent basis decreased 28 basis points to 4.32% for the fourth quarter 2016 from 4.60% for the fourth quarter 2015, primarily due to a higher level of securities as a percentage of our interest-earning assets. The net interest margin on a tax equivalent basis for the fourth quarter 2016 decreased 7 basis points from 4.39% for the third quarter 2016. Excluding the impact of acquisition accounting adjustments, the net interest margin in the fourth quarter 2016 would have been 4.27%, compared to 4.47% and 4.33% in the fourth quarter 2015 and third quarter 2016, respectively.

Noninterest income in the fourth quarter 2016 was $1.5 million, an increase of $500 thousand, or 51.1%, compared to $978 thousand in the fourth quarter 2015, and an increase of $204 thousand, or 16.0%, compared to $1.3 million in the third quarter 2016.

Noninterest expense in the fourth quarter 2016 increased $2.3 million, or 16.5%, to $16.2 million from $13.9 million in the fourth quarter 2015, and increased $1.3 million, or 8.7%, from $14.9 million in the third quarter 2016. The increase in noninterest expense during the fourth quarter 2016 was primarily due to increases in salaries and benefits and professional fees related to supporting growth initiatives. In the fourth quarter 2016, Allegiance’s efficiency ratio increased to 65.09% from 62.40% in the fourth quarter 2015 and 60.34% in the third quarter 2016.

Year Ended December 31, 2016 Results

For the year ended December 31, 2016, annualized returns on average assets, average common equity and average tangible common equity were 0.98%, 8.36% and 9.96%, respectively, compared to 0.81%, 7.43% and 9.52%, respectively, for the year ended December 31, 2015. Excluding the gain on the sale of two Central Texas branch locations during the first quarter 2016, the annualized returns on average assets, average common equity and average tangible common equity for the year ended December 31, 2016 would have been 0.92%, 7.88% and 9.38%, respectively.

Net interest income before provision for loan losses for the year ended December 31, 2016 increased $9.7 million, or 12.1%, to $89.9 million from $80.2 million for the year ended December 31, 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 31 basis points to 4.37% for the year ended December 31, 2016 from 4.68% for the year ended December 31, 2015. Excluding the impact of acquisition accounting adjustments, the net interest margin for the year ended December 31, 2016 would have been 4.30%, compared to 4.44% for the year ended December 31, 2015.

Noninterest income for the year ended December 31, 2016 was $7.3 million, an increase of $3.3 million, or 82.1%, when compared to $4.0 million for the year ended December 31, 2015. Noninterest income for the year ended 2016 included the gain on the sale of two Central Texas branch locations in the first quarter 2016.

Noninterest expense for the year ended December 31, 2016 increased $4.5 million, or 8.1%, to $59.3 million from $54.8 million for the year ended December 31, 2015. Allegiance’s efficiency ratio for the year ended December 31, 2016 decreased to 62.34% from 65.27% for the year ended December 31, 2015.

Financial Condition

Total loans at December 31, 2016 increased $210.6 million, or 12.5%, to $1.89 billion compared to $1.68 billion at December 31, 2015 and increased $60.9 million, or 3.3%, compared to $1.83 billion at September 30, 2016. These increases were due to strong organic loan growth within the Bank’s loan portfolio. Core loans as of December 31, 2016, excluding the mortgage warehouse portfolio and loans held for sale, increased $230.5 million, or 14.5%, to $1.82 billion from $1.59 billion at December 31, 2015 and increased $69.9 million, or 4.0%, from $1.75 billion at September 30, 2016.

Deposits at December 31, 2016 increased $111.1 million, or 6.3%, to $1.87 billion compared to $1.76 billion at December 31, 2015 and decreased $30.7 million, or 1.6%, compared to $1.90 billion at September 30, 2016.

Asset Quality

Nonperforming assets totaled $18.5 million, or 0.75% of total assets, at December 31, 2016, compared to $5.3 million, or 0.25% of total assets, at December 31, 2015, and $17.1 million, or 0.69% of total assets, at September 30, 2016. The allowance for loan losses was 0.95% of total loans at December 31, 2016, 0.78% of total loans at December 31, 2015, and 0.94% of total loans at September 30, 2016.

The provision for loan losses in the fourth quarter 2016 was $900 thousand, or 0.19% (annualized) of average loans, compared to $2.2 million, or 0.53% (annualized) of average loans, in the fourth quarter 2015, and $2.2 million, or 0.49% (annualized) of average loans, in the third quarter 2016. The provision for loan losses for the year ended December 31, 2016 was $5.5 million, or 0.31% of average loans, compared to $5.8 million, or 0.38% of average loans for the year ended December 31, 2015. Fourth quarter 2016 net charge-offs were $174 thousand, or 0.04% (annualized) of average loans, compared to net charge-offs of $51 thousand, or 0.01% (annualized) of average loans, in the fourth quarter 2015, and net recoveries of $54 thousand, in the third quarter 2016. Net charge-offs for the year ended December 31, 2016 were $656 thousand, or 0.04% of average loans, compared to $940 thousand, or 0.06% of average loans for the year ended December 31, 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, January 24, 2017 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its fourth quarter and full year 2016 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 50658288. 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 $2.45 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
	December 31			September 30			June 30			March 31			December 31
	(Dollars in thousands)

Cash and cash equivalents	$	142,098		$	225,082		$	210,863		$	183,290		$	148,431
Available for sale securities	316,455			310,033			303,463			215,401			165,097

Total loans (including loans held for sale)	1,891,635			1,830,722			1,753,683			1,717,448			1,681,052
Allowance for loan losses	(17,911		)	(17,185		)	(14,917		)	(13,757		)	(13,098		)
Loans, net	1,873,724			1,813,537			1,738,766			1,703,691			1,667,954

Goodwill	39,389			39,389			39,389			39,389			39,389
Core deposit intangibles, net	4,055			4,250			4,446			4,641			5,230
Premises and equipment, net	18,340			17,811			17,821			18,121			18,471
Other real estate owned	1,503			1,138			1,397			1,397			—
Bank owned life insurance	21,837			21,684			21,530			21,377			21,211
Other assets	33,547			28,978			29,906			23,400			18,796
Total assets	$	2,450,948		$	2,461,902		$	2,367,581		$	2,210,707		$	2,084,579

Noninterest-bearing deposits	$	593,751		$	604,278		$	630,689		$	684,245		$	620,320
Interest-bearing deposits	1,276,432			1,296,601			1,212,650			1,158,409			1,138,813
Total deposits	1,870,183			1,900,879			1,843,339			1,842,654			1,759,133

Short-term borrowings	85,000			61,000			30,000			85,000			50,000
Other borrowed funds	200,569			200,569			200,569			569			569
Subordinated debentures	9,196			9,169			9,142			9,115			9,089
Other liabilities	6,183			9,190			8,280			7,076			7,298
Total liabilities	2,171,131			2,180,807			2,091,330			1,944,414			1,826,089

Common stock	12,958			12,905			12,869			12,845			12,815
Capital surplus	212,649			211,349			210,512			209,883			209,285
Retained earnings	57,262			51,491			46,020			40,766			34,411
Accumulated other comprehensive income	(3,052		)	5,350			6,850			2,799			2,017
Less: Treasury stock	—			—			—			—			(38		)
Total stockholders’ equity	279,817			281,095			276,251			266,293			258,490
Total liabilities and equity	$	2,450,948		$	2,461,902		$	2,367,581		$	2,210,707		$	2,084,579



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	Three Months Ended											Year Ended
	2016								2015			2016		2015
	December 31		September 30		June 30		March 31		December 31			December 31		December 31
	(Dollars in thousands)

INTEREST INCOME:
Loans, including fees	$	24,232	$	24,057	$	22,839	$	22,228	$	22,431		$	93,356	$	85,443
Securities
Taxable	478		607		452		270		244			1,807		1,122
Tax-exempt	1,642		1,505		1,086		811		745			5,044		2,002
Deposits in other financial institutions	129		150		150		142		72			571		239
Total interest income	26,481		26,319		24,527		23,451		23,492			100,778		88,806

INTEREST EXPENSE:
Demand, money market and savings deposits	673		651		569		544		579			2,437		2,161
Certificates and other time deposits	1,947		1,872		1,665		1,560		1,470			7,044		5,112
Short-term borrowings	90		63		106		139		33			398		82
Subordinated debt	128		123		120		117		139			488		578
Other borrowed funds	221		201		118		7		16			547		707
Total interest expense	3,059		2,910		2,578		2,367		2,237			10,914		8,640
NET INTEREST INCOME	23,422		23,409		21,949		21,084		21,255			89,864		80,166
Provision for loan losses	900		2,214		1,645		710		2,159			5,469		5,792
Net interest income after provision for loan losses	22,522		21,195		20,304		20,374		19,096			84,395		74,374

NONINTEREST INCOME:
Nonsufficient funds fees	178		175		145		163		191			661		703
Service charges on deposit accounts	177		182		173		145		166			677		680
Gain on sale of branch assets	—		—		—		2,050		—			2,050		—
Gain (loss) on sale of securities	30		—		—		—		(37		)	30		(37		)
Gain (loss) on sale of other real estate	206		60		—		—		—			266		(5		)
Gain on sale of loans	—		—		—		—		—			—		235
Bank owned life insurance	153		154		153		166		171			626		604
Other	734		703		741		780		487			2,958		1,812
Total noninterest income	1,478		1,274		1,212		3,304		978			7,268		3,992

NONINTEREST EXPENSE:
Salaries and employee benefits	10,627		9,781		9,177		9,273		8,905			38,858		35,324
Net occupancy and equipment	1,238		1,260		1,214		1,232		1,179			4,944		4,826
Depreciation	391		404		415		417		424			1,627		1,614
Data processing and software amortization	703		655		622		653		750			2,633		3,044
Professional fees	857		442		401		534		451			2,234		1,671
Regulatory assessments and FDIC insurance	485		396		355		345		356			1,581		1,346
Core deposit intangibles amortization	195		196		195		199		208			785		830
Communications	237		264		274		280		298			1,055		1,290
Advertising	319		228		197		201		271			945		781
Other	1,135		1,269		1,073		1,119		1,054			4,596		4,079
Total noninterest expense	16,187		14,895		13,923		14,253		13,896			59,258		54,805
INCOME BEFORE INCOME TAXES	7,813		7,574		7,593		9,425		6,178			32,405		23,561
Provision for income taxes	2,042		2,103		2,339		3,070		1,966			9,554		7,775
NET INCOME	5,771		5,471		5,254		6,355		4,212			22,851		15,786
Preferred stock dividends	—		—		—		—		—			—		559
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	5,771	$	5,471	$	5,254	$	6,355	$	4,212		$	22,851	$	15,227



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	Three Months Ended															Year Ended
	2016												2015			2016			2015
	December 31			September 30			June 30			March 31			December 31			December 31			December 31
	(Dollars and share amounts in thousands, except per share data)

Net income	$	5,771		$	5,471		$	5,254		$	6,355		$	4,212		$	22,851		$	15,786

Net income attributable to common stockholders	$	5,771		$	5,471		$	5,254		$	6,355		$	4,212		$	22,851		$	15,227

Earnings per common share, basic	$	0.45		$	0.42		$	0.41		$	0.49		$	0.34		$	1.78		$	1.45
Earnings per common share, diluted	$	0.44		$	0.42		$	0.40		$	0.49		$	0.33		$	1.75		$	1.43

Return on average assets^(A)	0.93		%	0.90		%	0.91		%	1.19		%	0.81		%	0.98		%	0.81		%
Return on average common equity^(A)	8.25		%	7.77		%	7.79		%	9.70		%	6.71		%	8.36		%	7.43		%
Return on average tangible common equity^{(A) (B)}	9.79		%	9.21		%	9.30		%	11.67		%	8.19		%	9.96		%	9.52		%
Tax equivalent net interest margin^(C)	4.32		%	4.39		%	4.32		%	4.45		%	4.60		%	4.37		%	4.68		%
Efficiency ratio^(D)	65.09		%	60.34		%	60.11		%	63.80		%	62.40		%	62.34		%	65.27		%

Liquidity and Capital Ratios
Equity to assets	11.42		%	11.42		%	11.67		%	12.05		%	12.40		%	11.42		%	12.40		%
Common equity Tier 1 capital	11.44		%	11.40		%	11.50		%	11.57		%	11.72		%	11.44		%	11.72		%
Tier 1 risk-based capital	11.87		%	11.84		%	11.97		%	12.04		%	12.21		%	11.87		%	12.21		%
Total risk-based capital	12.72		%	12.68		%	12.72		%	12.76		%	12.92		%	12.72		%	12.92		%
Tier 1 leverage capital	10.35		%	10.25		%	10.43		%	10.92		%	11.02		%	10.35		%	11.02		%
Tangible common equity to tangible assets^(B)	9.82		%	9.82		%	10.00		%	10.26		%	10.48		%	9.82		%	10.48		%

Other Data
Weighted average shares:
Basic	12,913			12,882			12,857			12,840			12,390			12,873			10,470
Diluted	13,180			13,108			13,039			12,967			12,589			13,074			10,654
Period end shares outstanding	12,958			12,905			12,869			12,845			12,813			12,958			12,813
Book value per common share	$	21.59		$	21.78		$	21.47		$	20.73		$	20.17		$	21.59		$	20.17
Tangible book value per common share^(B)	$	18.24		$	18.40		$	18.06		$	17.30		$	16.69		$	18.24		$	16.69


(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 on a tax equivalent basis 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
	December 31, 2016							September 30, 2016							December 31, 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	$	1,847,122		$	24,232	5.22	%	$	1,784,763		$	24,057	5.36	%	$	1,631,068		$	22,431	5.46	%
Securities	314,387			2,120		2.68	%	310,769			2,112		2.70	%	161,245			989		2.43	%
Deposits in other financial institutions	68,974			129		0.74	%	92,928			150		0.64	%	72,262			72		0.40	%
Total interest-earning assets	2,230,483			26,481		4.72	%	2,188,460			26,319		4.78	%	1,864,575			23,492		5.00	%
Allowance for loan losses	(17,579		)					(15,575		)					(11,598		)
Noninterest-earning assets	247,465							249,363							222,624
Total assets	$	2,460,369						$	2,422,248						$	2,075,601

Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	107,180		$	84	0.31	%	$	111,497		$	95	0.34	%	$	95,696		$	67	0.28	%
Money market and savings deposits	507,362			589		0.46	%	484,587			556		0.46	%	456,867			512		0.44	%
Certificates and other time deposits	681,425			1,947		1.14	%	668,092			1,872		1.11	%	591,403			1,470		0.99	%
Short-term borrowings	57,478			90		0.63	%	44,163			63		0.57	%	63,587			33		0.20	%
Subordinated debt	9,178			128		5.55	%	9,151			123		5.35	%	9,072			139		6.06	%
Other borrowed funds	200,570			221		0.44	%	200,569			201		0.40	%	5,053			16		1.24	%
Total interest-bearing liabilities	1,563,193			3,059		0.78	%	1,518,059			2,910		0.76	%	1,221,678			2,237		0.73	%

Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits	610,310							614,303							596,854
Other liabilities	8,743							9,821							8,144
Total liabilities	2,182,246							2,142,183							1,826,676
Stockholders' equity	278,123							280,065							248,925
Total liabilities and stockholders' equity	$	2,460,369						$	2,422,248						$	2,075,601

Net interest rate spread						3.94	%						4.02	%						4.27	%

Net interest income and margin				$	23,422	4.18	%				$	23,409	4.26	%				$	21,255	4.52	%

Net interest income and margin (tax equivalent)				$	24,219	4.32	%				$	24,149	4.39	%				$	21,623	4.60	%



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	Year Ended
	December 31, 2016							December 31, 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	$	1,755,319		$	93,356	5.32	%	$	1,525,325		$	85,443	5.60	%
Securities	270,789			6,851		2.53	%	136,277			3,124		2.29	%
Deposits in other financial institutions	87,485			571		0.65	%	73,995			239		0.32	%
Total interest-earning assets	2,113,593			100,778		4.77	%	1,735,597			88,806		5.12	%
Allowance for loan losses	(15,200		)					(10,004		)
Noninterest-earning assets	240,202							211,419
Total assets	$	2,338,595						$	1,937,012

Liabilities and Stockholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits	$	104,212		$	334	0.32	%	$	100,139		$	323	0.32	%
Money market and savings deposits	465,403			2,103		0.45	%	429,153			1,838		0.43	%
Certificates and other time deposits	648,075			7,044		1.09	%	559,247			5,112		0.91	%
Short-term borrowings	78,910			398		0.50	%	43,989			82		0.19	%
Subordinated debt	9,138			488		5.34	%	9,004			578		6.42	%
Other borrowed funds	130,469			547		0.42	%	22,354			707		3.16	%
Total interest-bearing liabilities	1,436,207			10,914		0.76	%	1,163,886			8,640		0.74	%

Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits	620,701							554,704
Other liabilities	8,476							7,316
Total liabilities	2,065,384							1,725,906
Stockholders' equity	273,211							211,106
Total liabilities and stockholders' equity	$	2,338,595						$	1,937,012

Net interest rate spread						4.01	%						4.38	%

Net interest income and margin				$	89,864	4.25	%				$	80,166	4.62	%

Net interest income and margin (tax equivalent)				$	92,330	4.37	%				$	81,156	4.68	%



Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

	Three Months Ended
	2016												2015
	December 31			September 30			June 30			March 31			December 31
	(Dollars in thousands)

Period-end Loan Portfolio:
Loans held for sale	$	—		$	—		$	—		$	—		$	27,887
Commercial and industrial	416,752			402,273			382,795			372,056			383,044
Mortgage warehouse	67,038			76,043			75,554			86,157			59,071
Real Estate:
Commercial real estate (including multi-family residential)	891,989			848,939			806,771			770,252			745,595
Commercial real estate construction and land development	159,247			167,936			161,572			167,810			154,646
1-4 family residential (including home equity)	246,987			228,651			214,442			209,704			205,200
Residential construction	98,657			93,923			101,677			100,611			93,848
Consumer and other	10,965			12,957			10,872			10,858			11,761
Total loans	$	1,891,635		$	1,830,722		$	1,753,683		$	1,717,448		$	1,681,052

Asset Quality:
Nonaccrual loans	$	15,788		$	15,882		$	7,124		$	6,979		$	5,184
Accruing loans 90 or more days past due	911			—			—			—			—
Total nonperforming loans	16,699			15,882			7,124			6,979			5,184
Other real estate	1,503			1,138			1,397			1,397			—
Other repossessed assets	286			30			128			131			131
Total nonperforming assets	$	18,488		$	17,050		$	8,649		$	8,507		$	5,315

Net charge-offs (recoveries)	$	174		$	(54	)	$	485		$	51		$	265

Nonaccrual loans:
Loans held for sale	$	—		$	—		$	—		$	—		$	209
Commercial and industrial	5,939			4,983			2,723			2,700			2,664
Mortgage warehouse	—			—			—			—			—
Real Estate:
Commercial real estate (including multi-family residential)	9,579			10,495			4,141			3,293			2,006
Commercial real estate construction and land development	—			—			—			—			—
1-4 family residential (including home equity)	8			11			227			934			239
Residential construction	—			—			—			—			—
Consumer and other	262			393			33			52			66
Total nonaccrual loans	$	15,788		$	15,882		$	7,124		$	6,979		$	5,184

Asset Quality Ratios:
Nonperforming assets to total assets	0.75		%	0.69		%	0.37		%	0.38		%	0.25		%
Nonperforming loans to total loans	0.88		%	0.87		%	0.41		%	0.41		%	0.31		%
Allowance for loan losses to nonperforming loans	107.26		%	108.20		%	209.39		%	197.12		%	252.66		%
Allowance for loan losses to total loans	0.95		%	0.94		%	0.85		%	0.80		%	0.78		%
Net charge-offs (recoveries) to average loans (annualized)	0.04		%	(0.01		)%	0.11		%	0.01		%	0.06		%

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 Ended
	2016												2015			2016			2015
	December 31			September 30			June 30			March 31			December 31			December 31			December 31
	(Dollars and share amounts in thousands, except per share data)

Total Stockholders' equity	$	279,817		$	281,095		$	276,251		$	266,293		$	258,490		$	279,817		$	258,490
Less: Goodwill and core deposit intangibles, net	43,444			43,639			43,835			44,030			44,619			43,444			44,619
Tangible stockholders’ equity	$	236,373		$	237,456		$	232,416		$	222,263		$	213,871		$	236,373		$	213,871

Less: Preferred Stock	—			—			—			—			—			—			—
Tangible common stockholders’ equity	$	236,373		$	237,456		$	232,416		$	222,263		$	213,871		$	236,373		$	213,871

Shares outstanding at end of period	12,958			12,905			12,869			12,845			12,813			12,958			12,813

Tangible book value per common share	$	18.24		$	18.40		$	18.06		$	17.30		$	16.69		$	18.24		$	16.69

Net income attributable to common stockholders	$	5,771		$	5,471		$	5,254		$	6,355		$	4,212		$	22,851		$	15,227

Average common stockholders' equity	$	278,123		$	280,065		$	271,128		$	263,397		$	248,925		$	273,211		$	204,935
Less: Average goodwill and core deposit intangibles, net	43,539			43,735			43,930			44,319			44,886			43,880			45,055
Average tangible common stockholders’ equity	$	234,584		$	236,330		$	227,198		$	219,078		$	204,039		$	229,331		$	159,880

Return on average tangible common equity	9.79		%	9.21		%	9.30		%	11.67		%	8.19		%	9.96		%	9.52		%

Total assets	$	2,450,948		$	2,461,902		$	2,367,581		$	2,210,707		$	2,084,579		$	2,450,948		$	2,084,579
Less: Goodwill and core deposit intangibles, net	43,444			43,639			43,835			44,030			44,619			43,444			44,619
Tangible assets	$	2,407,504		$	2,418,263		$	2,323,746		$	2,166,677		$	2,039,960		$	2,407,504		$	2,039,960

Tangible common equity to tangible assets	9.82		%	9.82		%	10.00		%	10.26		%	10.48		%	9.82		%	10.48		%

Allegiance Bancshares, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 24, 2017

Attached files

Allegiance Bancshares, Inc. Reports