Attached files
| file | filename |
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| EX-99.2 - EXHIBIT 99.2-EARNINGS PRESENTATION - Allegiance Bancshares, Inc. | investorpresentation4thq.htm |
| 8-K - 8-K - Allegiance Bancshares, Inc. | a8-kearningsrelease12312017.htm |
PRESS RELEASE
Allegiance Bancshares, Inc.
8847 West Sam Houston Parkway N., Suite 200
Houston, Texas 77040
ir@allegiancebank.com
ALLEGIANCE BANCSHARES, INC. REPORTS
FOURTH QUARTER AND YEAR-END 2017 RESULTS
• | Core loan growth of $376.8 million in 2017, or 20.7%, year over year and $83.5 million, or 15.8% (annualized), for the fourth quarter 2017 compared to the linked quarter |
• | Net interest income for the fourth quarter 2017 increased $4.0 million, or 17.1%, compared to the fourth quarter 2016 |
• | Completed an offering of $40 million of Allegiance Bank subordinated notes to supplement total risk-based capital |
HOUSTON, January 25, 2018. Allegiance Bancshares, Inc. (NASDAQ: ABTX) ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $3.2 million in the fourth quarter 2017 compared to $5.8 million in the fourth quarter 2016 and diluted earnings per share of $0.24 in the fourth quarter 2017 compared to $0.44 in the fourth quarter 2016. The fourth quarter 2017 results included a $2.6 million increase in the tax provision as a result of the revaluation of the deferred tax asset due to the enactment of the Tax Cuts and Jobs Act and $1.1 million in core technology conversion costs. Net income for the year ended December 31, 2017 was $17.6 million, or $1.31 per diluted common share, compared to net income of $22.9 million, or $1.75 per diluted common share, for the year ended December 31, 2016. The year ended December 31, 2016 included an after-tax gain of $1.3 million on the sale of two Central Texas branch locations.
"This was a sound year for Allegiance as we continued to consistently generate loan growth into the fourth quarter, while maintaining solid credit quality and a strong net interest margin," said George Martinez, Allegiance's Chairman and Chief Executive Officer. "Our fourth quarter earnings were impacted by the recent tax reform bill enacted at the end of December which led to a revaluation of our deferred tax asset resulting in a $2.6 million tax adjustment. We remain focused on the execution of our growth strategies as we further strengthened our capital position through the successful completion of a subordinated debt offering in December. Additionally, we made a strategic decision to implement a new core technology platform in the first half of 2018 to a more integrated technology solution reflective of our vision to better leverage technology to achieve our goals and realize operational efficiencies in our super community banking model. This new platform will not only better position us to meet the current and future needs and demands of our customers, but also enhance the user experience for customers and employees alike," continued Martinez.
"I am very pleased with our momentum and achievements over this past year. Among those achievements are robust capital, continued customer growth, and strength in asset quality. We anticipate a sustained focus and continued progress in the coming year toward attaining our strategic goals of high quality growth with improving levels of profitability. As such, I am grateful for our dedicated employees, who add value to our customer relationships and provide superior service and innovation. They ensure a consistent customer experience at Allegiance, just as they have done throughout our 10-year history, and I appreciate their hard work and loyalty," concluded Martinez.
Fourth Quarter 2017 Results
Net interest income before provision for loan losses in the fourth quarter 2017 increased $4.0 million, or 17.1%, to $27.4 million from $23.4 million for the fourth quarter 2016 primarily due to organic loan growth. Net interest income before provision for loan losses in the fourth quarter 2017 increased slightly from $27.0 million in the third quarter 2017. The net interest margin on a tax equivalent basis increased one basis point to 4.33% for the fourth quarter 2017 from 4.32% for the fourth quarter 2016 and decreased four basis points from 4.37% for the third quarter 2017.
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Noninterest income for the fourth quarter 2017 was $1.6 million, an increase of $105 thousand, or 7.1%, compared to $1.5 million for the fourth quarter 2016 and increased $123 thousand, or 8.4%, compared to $1.5 million for the third quarter 2017.
Noninterest expense for the fourth quarter 2017 increased $3.1 million, or 19.1%, to $19.3 million from $16.2 million for the fourth quarter 2016, and increased $1.6 million, or 9.1%, from $17.7 million for the third quarter 2017. The increase in noninterest expense over the fourth quarter 2016 was primarily due to $1.1 million of expenses related to the core technology conversion and continued investment to support strategic growth initiatives.
In the fourth quarter 2017, Allegiance’s efficiency ratio increased to 66.50% from 65.09% for the fourth quarter 2016 and increased from 62.14% for the third quarter 2017. Fourth quarter 2017 annualized returns on average assets, average equity and average tangible equity were 0.45%, 4.15% and 4.82%, respectively, compared to 0.93%, 8.25% and 9.79%, respectively, for the fourth quarter 2016. Annualized returns on average assets, average equity and average tangible equity for the third quarter 2017 were 0.43%, 3.90% and 4.55%, respectively.
Year Ended December 31, 2017 Results
Net interest income before provision for loan losses for the year ended December 31, 2017 increased $13.8 million, or 15.4%, to $103.7 million from $89.9 million for the year ended December 31, 2016 primarily due to organic loan growth and an increase in the securities portfolio. The net interest margin on a tax equivalent basis decreased three basis points to 4.34% for the year ended December 31, 2017 from 4.37% for the year ended December 31, 2016.
Noninterest income for the year ended December 31, 2017 was $5.9 million, a decrease of $1.4 million, or 19.4%, compared to $7.3 million for the year ended December 31, 2016. The year ended December 31, 2016 included a pre-tax gain of $2.1 million on the sale of two Central Texas branch locations that were sold in order to focus on the Houston MSA. Excluding the gain on the sale of these branches, noninterest income would have increased $643 thousand, or 12.3%, for the year ended December 31, 2017 compared to the year ended December 31, 2016.
Noninterest expense for the year ended December 31, 2017 increased $10.7 million, or 18.1%, to $70.0 million from $59.3 million for the year ended December 31, 2016. The increase in noninterest expense over the year ended December 31, 2016 was primarily due to increased expenses related to the core technology conversion, professional fees and salaries and benefits related to supporting growth initiatives.
During the year ended December 31, 2017, Allegiance’s efficiency ratio increased to 63.89% from 62.34% for the year ended December 31, 2016.
For the year ended December 31, 2017, returns on average assets, average equity and average tangible equity were 0.65%, 5.92% and 6.93%, respectively, compared to 0.98%, 8.36% and 9.96%, respectively, for the year ended December 31, 2016. Excluding the gain on the sale of the two Central Texas branch locations during the first quarter 2016, the returns on average assets, average equity and average tangible equity for the year ended December 31, 2016 would have been 0.92%, 7.88% and 9.38%, respectively.
Financial Condition
Total assets at December 31, 2017 increased $409.3 million, or 16.7%, to $2.86 billion compared to $2.45 billion at December 31, 2016 and increased $46.8 million, or 1.7%, compared to $2.81 billion at September 31, 2017.
Total loans at December 31, 2017 increased $379.2 million, or 20.0%, to $2.27 billion compared to $1.89 billion at December 31, 2016 and increased $69.3 million, or 3.1%, compared to $2.20 billion at September 30, 2017. These increases were due to strong organic loan growth within the Bank’s loan portfolio. Core loans, which exclude the mortgage warehouse portfolio, increased $376.8 million, or 20.7%, to $2.20 billion at December 31, 2017 from $1.82 billion at December 31, 2016 and increased $83.5 million, or 3.9%, from $2.12 billion at September 30, 2017.
Deposits at December 31, 2017 increased $343.8 million, or 18.4%, to $2.21 billion compared to $1.87 billion at December 31, 2016 and decreased $72.6 million, or 3.2%, compared to $2.29 billion at September 30, 2017.
Asset Quality
Nonperforming assets totaled $13.9 million, or 0.49% of total assets, at December 31, 2017, compared to $18.5 million, or 0.75% of total assets, at December 31, 2016, and $14.6 million, or 0.52% of total assets, at September 30, 2017. The allowance for loan losses was 1.04% of total loans at December 31, 2017, 0.95% of total loans at December 31, 2016 and 1.08% of total loans at September 30, 2017.
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The provision for loan losses for the fourth quarter 2017 was $1.9 million, or 0.35% of average loans, compared to $900 thousand, or 0.19% of average loans, for the fourth quarter 2016, and $6.9 million, or 1.28% of average loans, for the third quarter 2017. The provision for loan losses for the year ended December 31, 2017 was $13.2 million, or 0.63% of average loans, compared to $5.5 million, or 0.31% of average loans for the year ended December 31, 2016.
Fourth quarter 2017 net charge-offs were $2.0 million, or 0.36% (annualized) of average loans, compared to $174 thousand, or 0.04% (annualized) of average loans, for the fourth quarter 2016, and $4.2 million, or 0.78% (annualized) of average loans, for the third quarter 2017. Net charge-offs for the year ended December 31, 2017 were $7.5 million, or 0.36% of average loans, compared to $656 thousand, or 0.04% of average loans for the year ended December 31, 2016.
GAAP Reconciliation of Non-GAAP Financial Measures
Allegiance’s management uses certain non-GAAP financial measures to evaluate its performance. 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 Thursday, January 25, 2018 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its fourth quarter and full year 2017 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 8468395. Alternatively, a simultaneous audio-only webcast may be accessed via the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under Upcoming Events. If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Allegiance’s website at www.allegiancebank.com, under News and Events, Event Calendar, Past Events.
Allegiance Bancshares, Inc.
Allegiance is a $2.86 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 super-community banking strategy was designed to foster strong customer relationships while benefiting from a platform and scale that is competitive with larger local and regional banks. Allegiance Bank operates 16 full-service banking locations and one loan production office 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,” “continues,” “anticipates,” “intends,” “projects,” “estimates,” “potential,” “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; 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, 2016 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.
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Allegiance Bancshares, Inc. | |||||||||||||||||||
Financial Highlights | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
2017 | 2016 | ||||||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 182,103 | $ | 192,427 | $ | 187,491 | $ | 184,146 | $ | 142,098 | |||||||||
Available for sale securities | 309,615 | 323,856 | 321,268 | 317,219 | 316,455 | ||||||||||||||
Total loans | 2,270,876 | 2,201,540 | 2,114,652 | 1,986,438 | 1,891,635 | ||||||||||||||
Allowance for loan losses | (23,649 | ) | (23,722 | ) | (21,010 | ) | (18,687 | ) | (17,911 | ) | |||||||||
Loans, net | 2,247,227 | 2,177,818 | 2,093,642 | 1,967,751 | 1,873,724 | ||||||||||||||
Goodwill | 39,389 | 39,389 | 39,389 | 39,389 | 39,389 | ||||||||||||||
Core deposit intangibles, net | 3,274 | 3,469 | 3,664 | 3,860 | 4,055 | ||||||||||||||
Premises and equipment, net | 18,477 | 18,273 | 18,240 | 18,138 | 18,340 | ||||||||||||||
Other real estate owned | 365 | 453 | 365 | 365 | 1,503 | ||||||||||||||
Bank owned life insurance | 22,422 | 22,277 | 22,131 | 21,985 | 21,837 | ||||||||||||||
Other assets | 37,359 | 35,472 | 38,526 | 39,477 | 33,547 | ||||||||||||||
Total assets | $ | 2,860,231 | $ | 2,813,434 | $ | 2,724,716 | $ | 2,592,330 | $ | 2,450,948 | |||||||||
Noninterest-bearing deposits | $ | 683,110 | $ | 712,951 | $ | 662,527 | $ | 615,225 | $ | 593,751 | |||||||||
Interest-bearing deposits | 1,530,864 | 1,573,664 | 1,436,715 | 1,397,344 | 1,276,432 | ||||||||||||||
Total deposits | 2,213,974 | 2,286,615 | 2,099,242 | 2,012,569 | 1,870,183 | ||||||||||||||
Borrowed funds | 282,569 | 207,569 | 310,569 | 275,569 | 285,569 | ||||||||||||||
Subordinated debentures | 48,659 | 9,277 | 9,249 | 9,222 | 9,196 | ||||||||||||||
Other liabilities | 8,164 | 7,246 | 7,197 | 5,840 | 6,183 | ||||||||||||||
Total liabilities | 2,553,366 | 2,510,707 | 2,426,257 | 2,303,200 | 2,171,131 | ||||||||||||||
Common stock | 13,227 | 13,171 | 13,153 | 13,080 | 12,958 | ||||||||||||||
Capital surplus | 218,408 | 216,943 | 216,158 | 215,015 | 212,649 | ||||||||||||||
Retained earnings | 74,894 | 71,690 | 68,704 | 63,309 | 57,262 | ||||||||||||||
Accumulated other comprehensive income (loss) | 336 | 923 | 444 | (2,274 | ) | (3,052 | ) | ||||||||||||
Shareholders' equity | 306,865 | 302,727 | 298,459 | 289,130 | 279,817 | ||||||||||||||
Total liabilities and equity | $ | 2,860,231 | $ | 2,813,434 | $ | 2,724,716 | $ | 2,592,330 | $ | 2,450,948 | |||||||||
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Allegiance Bancshares, Inc. | |||||||||||||||||||||||||||
Financial Highlights | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | December 31 | December 31 | |||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||||||
INTEREST INCOME: | |||||||||||||||||||||||||||
Loans, including fees | $ | 29,747 | $ | 28,588 | $ | 26,736 | $ | 25,260 | $ | 24,232 | $ | 110,331 | $ | 93,356 | |||||||||||||
Securities | |||||||||||||||||||||||||||
Taxable | 563 | 547 | 503 | 498 | 478 | 2,111 | 1,807 | ||||||||||||||||||||
Tax-exempt | 1,545 | 1,574 | 1,591 | 1,624 | 1,642 | 6,334 | 5,044 | ||||||||||||||||||||
Deposits in other financial institutions | 183 | 192 | 157 | 130 | 129 | 662 | 571 | ||||||||||||||||||||
Total interest income | 32,038 | 30,901 | 28,987 | 27,512 | 26,481 | 119,438 | 100,778 | ||||||||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||||||||||
Demand, money market and savings deposits | 992 | 811 | 702 | 654 | 673 | 3,159 | 2,437 | ||||||||||||||||||||
Certificates and other time deposits | 2,521 | 2,299 | 2,283 | 1,957 | 1,947 | 9,060 | 7,044 | ||||||||||||||||||||
Borrowed funds | 854 | 654 | 761 | 653 | 311 | 2,922 | 945 | ||||||||||||||||||||
Subordinated debt | 235 | 140 | 134 | 120 | 128 | 629 | 488 | ||||||||||||||||||||
Total interest expense | 4,602 | 3,904 | 3,880 | 3,384 | 3,059 | 15,770 | 10,914 | ||||||||||||||||||||
NET INTEREST INCOME | 27,436 | 26,997 | 25,107 | 24,128 | 23,422 | 103,668 | 89,864 | ||||||||||||||||||||
Provision for loan losses | 1,930 | 6,908 | 3,007 | 1,343 | 900 | 13,188 | 5,469 | ||||||||||||||||||||
Net interest income after provision for loan losses | 25,506 | 20,089 | 22,100 | 22,785 | 22,522 | 90,480 | 84,395 | ||||||||||||||||||||
NONINTEREST INCOME: | |||||||||||||||||||||||||||
Nonsufficient funds fees | 158 | 144 | 184 | 199 | 178 | 685 | 661 | ||||||||||||||||||||
Service charges on deposit accounts | 179 | 204 | 205 | 195 | 177 | 783 | 677 | ||||||||||||||||||||
Gain on sale of branch assets | — | — | — | — | — | — | 2,050 | ||||||||||||||||||||
Gain (loss) on sale of securities | 30 | (12 | ) | — | — | 30 | 18 | 30 | |||||||||||||||||||
Gain on sale of other real estate | 6 | — | — | — | 206 | 6 | 266 | ||||||||||||||||||||
Bank owned life insurance | 146 | 146 | 146 | 148 | 153 | 586 | 626 | ||||||||||||||||||||
Rebate from correspondent bank | 388 | 370 | 336 | 233 | 170 | 1,327 | 650 | ||||||||||||||||||||
Other | 676 | 608 | 606 | 566 | 564 | 2,456 | 2,308 | ||||||||||||||||||||
Total noninterest income | 1,583 | 1,460 | 1,477 | 1,341 | 1,478 | 5,861 | 7,268 | ||||||||||||||||||||
NONINTEREST EXPENSE: | |||||||||||||||||||||||||||
Salaries and employee benefits | 12,188 | 11,580 | 10,415 | 10,562 | 10,627 | 44,745 | 38,858 | ||||||||||||||||||||
Net occupancy and equipment | 1,398 | 1,325 | 1,302 | 1,427 | 1,238 | 5,452 | 4,944 | ||||||||||||||||||||
Depreciation | 412 | 427 | 398 | 400 | 391 | 1,637 | 1,627 | ||||||||||||||||||||
Data processing and software amortization | 1,850 | 783 | 719 | 695 | 703 | 4,047 | 2,633 | ||||||||||||||||||||
Professional fees | 222 | 822 | 987 | 895 | 857 | 2,926 | 2,234 | ||||||||||||||||||||
Regulatory assessments and FDIC insurance | 533 | 582 | 569 | 589 | 485 | 2,273 | 1,581 | ||||||||||||||||||||
Core deposit intangibles amortization | 195 | 195 | 196 | 195 | 195 | 781 | 785 | ||||||||||||||||||||
Communications | 252 | 251 | 233 | 247 | 237 | 983 | 1,055 | ||||||||||||||||||||
Advertising | 436 | 302 | 288 | 263 | 319 | 1,289 | 945 | ||||||||||||||||||||
Other | 1,790 | 1,409 | 1,354 | 1,276 | 1,135 | 5,829 | 4,596 | ||||||||||||||||||||
Total noninterest expense | 19,276 | 17,676 | 16,461 | 16,549 | 16,187 | 69,962 | 59,258 | ||||||||||||||||||||
INCOME BEFORE INCOME TAXES | 7,813 | 3,873 | 7,116 | 7,577 | 7,813 | 26,379 | 32,405 | ||||||||||||||||||||
Provision for income taxes | 4,609 | 887 | 1,721 | 1,530 | 2,042 | 8,747 | 9,554 | ||||||||||||||||||||
NET INCOME | $ | 3,204 | $ | 2,986 | $ | 5,395 | $ | 6,047 | $ | 5,771 | $ | 17,632 | $ | 22,851 | |||||||||||||
EARNINGS PER SHARE | |||||||||||||||||||||||||||
Basic | $ | 0.24 | $ | 0.23 | $ | 0.41 | $ | 0.46 | $ | 0.45 | $ | 1.34 | $ | 1.78 | |||||||||||||
Diluted | $ | 0.24 | $ | 0.22 | $ | 0.40 | $ | 0.45 | $ | 0.44 | $ | 1.31 | $ | 1.75 | |||||||||||||
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Allegiance Bancshares, Inc. | ||||||||||||||||||||||||||||
Financial Highlights | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
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 | $ | 3,204 | $ | 2,986 | $ | 5,395 | $ | 6,047 | $ | 5,771 | $ | 17,632 | $ | 22,851 | ||||||||||||||
Earnings per share, basic | $ | 0.24 | $ | 0.23 | $ | 0.41 | $ | 0.46 | $ | 0.45 | $ | 1.34 | $ | 1.78 | ||||||||||||||
Earnings per share, diluted | $ | 0.24 | $ | 0.22 | $ | 0.40 | $ | 0.45 | $ | 0.44 | $ | 1.31 | $ | 1.75 | ||||||||||||||
Return on average assets(A) | 0.45 | % | 0.43 | % | 0.81 | % | 0.96 | % | 0.93 | % | 0.65 | % | 0.98 | % | ||||||||||||||
Return on average equity(A) | 4.15 | % | 3.90 | % | 7.32 | % | 8.61 | % | 8.25 | % | 5.92 | % | 8.36 | % | ||||||||||||||
Return on average tangible equity(A)(B) | 4.82 | % | 4.55 | % | 8.57 | % | 10.15 | % | 9.79 | % | 6.93 | % | 9.96 | % | ||||||||||||||
Tax equivalent net interest margin(C) | 4.33 | % | 4.37 | % | 4.29 | % | 4.38 | % | 4.32 | % | 4.34 | % | 4.37 | % | ||||||||||||||
Efficiency ratio(D) | 66.50 | % | 62.14 | % | 61.92 | % | 64.98 | % | 65.09 | % | 63.89 | % | 62.34 | % | ||||||||||||||
Liquidity and Capital Ratios | ||||||||||||||||||||||||||||
Allegiance Bancshares, Inc. (Consolidated) | ||||||||||||||||||||||||||||
Equity to assets | 10.73 | % | 10.76 | % | 10.95 | % | 11.15 | % | 11.42 | % | 10.73 | % | 11.42 | % | ||||||||||||||
Tangible equity to tangible assets(B) | 9.38 | % | 9.38 | % | 9.52 | % | 9.65 | % | 9.82 | % | 9.38 | % | 9.82 | % | ||||||||||||||
Estimated common equity tier 1 capital | 10.29 | % | 10.68 | % | 10.84 | % | 11.10 | % | 11.44 | % | 10.29 | % | 11.44 | % | ||||||||||||||
Estimated tier 1 risk-based capital | 10.65 | % | 11.07 | % | 11.24 | % | 11.51 | % | 11.87 | % | 10.65 | % | 11.87 | % | ||||||||||||||
Estimated total risk-based capital | 13.10 | % | 12.04 | % | 12.13 | % | 12.35 | % | 12.72 | % | 13.10 | % | 12.72 | % | ||||||||||||||
Estimated tier 1 leverage capital | 9.84 | % | 9.90 | % | 10.11 | % | 10.28 | % | 10.35 | % | 9.84 | % | 10.35 | % | ||||||||||||||
Allegiance Bank | ||||||||||||||||||||||||||||
Estimated common equity tier 1 capital | 10.77 | % | 10.93 | % | 10.23 | % | 10.49 | % | 10.77 | % | 10.77 | % | 10.77 | % | ||||||||||||||
Estimated tier 1 risk-based capital | 10.77 | % | 10.93 | % | 10.23 | % | 10.49 | % | 10.77 | % | 10.77 | % | 10.77 | % | ||||||||||||||
Estimated total risk-based capital | 13.29 | % | 11.91 | % | 11.12 | % | 11.32 | % | 11.61 | % | 13.29 | % | 11.61 | % | ||||||||||||||
Estimated tier 1 leverage capital | 9.67 | % | 9.77 | % | 9.20 | % | 9.37 | % | 9.50 | % | 9.67 | % | 9.50 | % | ||||||||||||||
Other Data | ||||||||||||||||||||||||||||
Weighted average shares: | ||||||||||||||||||||||||||||
Basic | 13,187 | 13,165 | 13,125 | 13,021 | 12,913 | 13,125 | 12,873 | |||||||||||||||||||||
Diluted | 13,496 | 13,483 | 13,471 | 13,377 | 13,180 | 13,458 | 13,074 | |||||||||||||||||||||
Period end shares outstanding | 13,227 | 13,171 | 13,153 | 13,080 | 12,958 | 13,227 | 12,958 | |||||||||||||||||||||
Book value per share | $ | 23.20 | $ | 22.98 | $ | 22.69 | $ | 22.10 | $ | 21.59 | $ | 23.20 | $ | 21.59 | ||||||||||||||
Tangible book value per share(B) | $ | 19.97 | $ | 19.73 | $ | 19.42 | $ | 18.80 | $ | 18.24 | $ | 19.97 | $ | 18.24 | ||||||||||||||
(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. |
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Allegiance Bancshares, Inc. | ||||||||||||||||||||||||||||||||
Financial Highlights | ||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||
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 | $ | 2,209,389 | $ | 29,747 | 5.34 | % | $ | 2,141,546 | $ | 28,588 | 5.30 | % | $ | 1,847,122 | $ | 24,232 | 5.22 | % | ||||||||||||||
Securities | 322,539 | 2,108 | 2.59 | % | 324,901 | 2,121 | 2.59 | % | 314,387 | 2,120 | 2.68 | % | ||||||||||||||||||||
Deposits in other financial institutions | 47,257 | 183 | 1.54 | % | 53,409 | 192 | 1.43 | % | 68,974 | 129 | 0.74 | % | ||||||||||||||||||||
Total interest-earning assets | 2,579,185 | $ | 32,038 | 4.93 | % | 2,519,856 | $ | 30,901 | 4.87 | % | 2,230,483 | $ | 26,481 | 4.72 | % | |||||||||||||||||
Allowance for loan losses | (23,740 | ) | (20,886 | ) | (17,579 | ) | ||||||||||||||||||||||||||
Noninterest-earning assets | 267,611 | 261,524 | 247,465 | |||||||||||||||||||||||||||||
Total assets | $ | 2,823,056 | $ | 2,760,494 | $ | 2,460,369 | ||||||||||||||||||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 214,498 | $ | 252 | 0.47 | % | $ | 142,429 | $ | 127 | 0.35 | % | $ | 107,180 | $ | 84 | 0.31 | % | ||||||||||||||
Money market and savings deposits | 599,977 | 740 | 0.49 | % | 558,087 | 684 | 0.49 | % | 507,362 | 589 | 0.46 | % | ||||||||||||||||||||
Certificates and other time deposits | 766,942 | 2,521 | 1.30 | % | 754,076 | 2,299 | 1.21 | % | 681,425 | 1,947 | 1.14 | % | ||||||||||||||||||||
Borrowed funds | 232,863 | 854 | 1.45 | % | 197,668 | 654 | 1.31 | % | 258,048 | 311 | 0.48 | % | ||||||||||||||||||||
Subordinated debt | 17,070 | 235 | 5.46 | % | 9,259 | 140 | 5.98 | % | 9,178 | 128 | 5.55 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 1,831,350 | $ | 4,602 | 1.00 | % | 1,661,519 | $ | 3,904 | 0.93 | % | 1,563,193 | $ | 3,059 | 0.78 | % | |||||||||||||||||
Noninterest-Bearing Liabilities: | ||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 675,643 | 786,566 | 610,310 | |||||||||||||||||||||||||||||
Other liabilities | 9,717 | 8,960 | 8,743 | |||||||||||||||||||||||||||||
Total liabilities | 2,516,710 | 2,457,045 | 2,182,246 | |||||||||||||||||||||||||||||
Shareholders' equity | 306,346 | 303,449 | 278,123 | |||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,823,056 | $ | 2,760,494 | $ | 2,460,369 | ||||||||||||||||||||||||||
Net interest rate spread | 3.93 | % | 3.94 | % | 3.94 | % | ||||||||||||||||||||||||||
Net interest income and margin | $ | 27,436 | 4.22 | % | $ | 26,997 | 4.25 | % | $ | 23,422 | 4.18 | % | ||||||||||||||||||||
Net interest income and margin (tax equivalent) | $ | 28,151 | 4.33 | % | $ | 27,748 | 4.37 | % | $ | 24,219 | 4.32 | % | ||||||||||||||||||||
7
Allegiance Bancshares, Inc. | |||||||||||||||||||||
Financial Highlights | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Year Ended | |||||||||||||||||||||
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||
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 | $ | 2,081,370 | $ | 110,331 | 5.30 | % | $ | 1,755,319 | $ | 93,356 | 5.32 | % | |||||||||
Securities | 324,926 | 8,445 | 2.60 | % | 270,789 | 6,851 | 2.53 | % | |||||||||||||
Deposits in other financial institutions | 50,917 | 662 | 1.30 | % | 87,485 | 571 | 0.65 | % | |||||||||||||
Total interest-earning assets | 2,457,213 | $ | 119,438 | 4.86 | % | 2,113,593 | $ | 100,778 | 4.77 | % | |||||||||||
Allowance for loan losses | (20,536 | ) | (15,200 | ) | |||||||||||||||||
Noninterest-earning assets | 262,549 | 240,202 | |||||||||||||||||||
Total assets | $ | 2,699,226 | $ | 2,338,595 | |||||||||||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||||
Interest-Bearing Liabilities: | |||||||||||||||||||||
Interest-bearing demand deposits | $ | 156,527 | $ | 597 | 0.38 | % | $ | 104,212 | $ | 334 | 0.32 | % | |||||||||
Money market and savings deposits | 536,415 | 2,562 | 0.48 | % | 465,403 | 2,103 | 0.45 | % | |||||||||||||
Certificates and other time deposits | 748,086 | 9,060 | 1.21 | % | 648,075 | 7,044 | 1.09 | % | |||||||||||||
Borrowed funds | 269,633 | 2,922 | 1.08 | % | 209,379 | 945 | 0.45 | % | |||||||||||||
Subordinated debt | 11,208 | 629 | 5.61 | % | 9,138 | 488 | 5.34 | % | |||||||||||||
Total interest-bearing liabilities | 1,721,869 | $ | 15,770 | 0.92 | % | 1,436,207 | $ | 10,914 | 0.76 | % | |||||||||||
Noninterest-Bearing Liabilities: | |||||||||||||||||||||
Noninterest-bearing demand deposits | 672,101 | 620,701 | |||||||||||||||||||
Other liabilities | 7,629 | 8,476 | |||||||||||||||||||
Total liabilities | 2,401,599 | 2,065,384 | |||||||||||||||||||
Shareholders' equity | 297,627 | 273,211 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,699,226 | $ | 2,338,595 | |||||||||||||||||
Net interest rate spread | 3.94 | % | 4.01 | % | |||||||||||||||||
Net interest income and margin | $ | 103,668 | 4.22 | % | $ | 89,864 | 4.25 | % | |||||||||||||
Net interest income and margin (tax equivalent) | $ | 106,669 | 4.34 | % | $ | 92,330 | 4.37 | % | |||||||||||||
8
Allegiance Bancshares, Inc. | |||||||||||||||||||
Financial Highlights | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
2017 | 2016 | ||||||||||||||||||
December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Period-end Loan Portfolio: | |||||||||||||||||||
Commercial and industrial | $ | 457,129 | $ | 446,029 | $ | 444,701 | $ | 425,154 | $ | 416,752 | |||||||||
Mortgage warehouse | 69,456 | 83,577 | 73,499 | 64,132 | 67,038 | ||||||||||||||
Real estate: | |||||||||||||||||||
Commercial real estate (including multi-family residential) | 1,080,247 | 1,045,220 | 1,008,027 | 961,212 | 891,989 | ||||||||||||||
Commercial real estate construction and land development | 243,389 | 225,574 | 206,024 | 175,264 | 159,247 | ||||||||||||||
1-4 family residential (including home equity) | 301,219 | 283,399 | 267,939 | 250,881 | 246,987 | ||||||||||||||
Residential construction | 109,116 | 106,299 | 102,832 | 99,648 | 98,657 | ||||||||||||||
Consumer and other | 10,320 | 11,442 | 11,630 | 10,147 | 10,965 | ||||||||||||||
Total loans | $ | 2,270,876 | $ | 2,201,540 | $ | 2,114,652 | $ | 1,986,438 | $ | 1,891,635 | |||||||||
Asset Quality: | |||||||||||||||||||
Nonaccrual loans | $ | 13,328 | $ | 13,913 | $ | 19,330 | $ | 19,315 | $ | 15,788 | |||||||||
Accruing loans 90 or more days past due | — | — | — | — | 911 | ||||||||||||||
Total nonperforming loans | 13,328 | 13,913 | 19,330 | 19,315 | 16,699 | ||||||||||||||
Other real estate | 365 | 453 | 365 | 365 | 1,503 | ||||||||||||||
Other repossessed assets | 205 | 205 | 205 | 260 | 286 | ||||||||||||||
Total nonperforming assets | $ | 13,898 | $ | 14,571 | $ | 19,900 | $ | 19,940 | $ | 18,488 | |||||||||
Net charge-offs | 2,003 | 4,196 | 684 | 567 | 174 | ||||||||||||||
Nonaccrual loans: | |||||||||||||||||||
Commercial and industrial | $ | 6,437 | $ | 5,031 | $ | 9,051 | $ | 8,933 | $ | 3,896 | |||||||||
Mortgage warehouse | — | — | — | — | — | ||||||||||||||
Real estate: | |||||||||||||||||||
Commercial real estate (including multi-family residential) | 6,110 | 8,097 | 9,556 | 9,726 | 11,663 | ||||||||||||||
Commercial real estate construction and land development | — | — | — | 70 | — | ||||||||||||||
1-4 family residential (including home equity) | 781 | 735 | 568 | 574 | 217 | ||||||||||||||
Residential construction | — | — | — | — | — | ||||||||||||||
Consumer and other | — | 50 | 155 | 12 | 12 | ||||||||||||||
Total nonaccrual loans | $ | 13,328 | $ | 13,913 | $ | 19,330 | $ | 19,315 | $ | 15,788 | |||||||||
Asset Quality Ratios: | |||||||||||||||||||
Nonperforming assets to total assets | 0.49 | % | 0.52 | % | 0.73 | % | 0.77 | % | 0.75 | % | |||||||||
Nonperforming loans to total loans | 0.59 | % | 0.63 | % | 0.91 | % | 0.97 | % | 0.88 | % | |||||||||
Allowance for loan losses to nonperforming loans | 177.44 | % | 170.50 | % | 108.69 | % | 96.75 | % | 107.26 | % | |||||||||
Allowance for loan losses to total loans | 1.04 | % | 1.08 | % | 0.99 | % | 0.94 | % | 0.95 | % | |||||||||
Net charge-offs to average loans (annualized) | 0.36 | % | 0.78 | % | 0.13 | % | 0.12 | % | 0.04 | % | |||||||||
9
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. Allegiance believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance. Allegiance believes that management and investors benefit from referring to these non-GAAP financial measures in assessing Allegiance’s performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, Allegiance reviews tangible book value per common share, return on average tangible equity and the ratio of tangible equity to tangible assets for internal planning and forecasting purposes. Additionally, Allegiance excluded the one time sale of two Central Texas branch locations during the first quarter 2016 as noted within the narrative, as Allegiance believes this transaction was not indicative of its recurring operating results. Allegiance has included in this Earnings Release information relating to these non-GAAP financial measures for the applicable periods presented. 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 | |||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
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 shareholders' equity | $ | 306,865 | $ | 302,727 | $ | 298,459 | $ | 289,130 | $ | 279,817 | $ | 306,865 | $ | 279,817 | ||||||||||||||
Less: Goodwill and core deposit intangibles, net | 42,663 | 42,858 | 43,053 | 43,249 | 43,444 | 42,663 | 43,444 | |||||||||||||||||||||
Tangible shareholders’ equity | $ | 264,202 | $ | 259,869 | $ | 255,406 | $ | 245,881 | $ | 236,373 | $ | 264,202 | $ | 236,373 | ||||||||||||||
Shares outstanding at end of period | 13,227 | 13,171 | 13,153 | 13,080 | 12,958 | 13,227 | 12,958 | |||||||||||||||||||||
Tangible book value per share | $ | 19.97 | $ | 19.73 | $ | 19.42 | $ | 18.80 | $ | 18.24 | $ | 19.97 | $ | 18.24 | ||||||||||||||
Net income attributable to shareholders | $ | 3,204 | $ | 2,986 | $ | 5,395 | $ | 6,047 | $ | 5,771 | $ | 17,632 | $ | 22,851 | ||||||||||||||
Average shareholders' equity | $ | 306,346 | $ | 303,449 | $ | 295,524 | $ | 284,889 | $ | 278,123 | $ | 297,627 | $ | 273,211 | ||||||||||||||
Less: Average goodwill and core deposit intangibles, net | 42,758 | 42,954 | 43,149 | 43,345 | 43,539 | 43,050 | 43,880 | |||||||||||||||||||||
Average tangible shareholders’ equity | $ | 263,588 | $ | 260,495 | $ | 252,375 | $ | 241,544 | $ | 234,584 | $ | 254,577 | $ | 229,331 | ||||||||||||||
Return on average tangible equity | 4.82 | % | 4.55 | % | 8.57 | % | 10.15 | % | 9.79 | % | 6.93 | % | 9.96 | % | ||||||||||||||
Total assets | $ | 2,860,231 | $ | 2,813,434 | $ | 2,724,716 | $ | 2,592,330 | $ | 2,450,948 | $ | 2,860,231 | $ | 2,450,948 | ||||||||||||||
Less: Goodwill and core deposit intangibles, net | 42,663 | 42,858 | 43,053 | 43,249 | 43,444 | 42,663 | 43,444 | |||||||||||||||||||||
Tangible assets | $ | 2,817,568 | $ | 2,770,576 | $ | 2,681,663 | $ | 2,549,081 | $ | 2,407,504 | $ | 2,817,568 | $ | 2,407,504 | ||||||||||||||
Tangible equity to tangible assets | 9.38 | % | 9.38 | % | 9.52 | % | 9.65 | % | 9.82 | % | 9.38 | % | 9.82 | % | ||||||||||||||
10