Allegiance Bancshares, Inc. Reports Strong Results for the Third Quarter 2021
10/28/2021 - 07:00 AM
Net income and diluted earnings per share of $19.1 million and $0.93 for the third quarter 2021, respectively, and $60.0 million and $2.95 for the nine months ended September 30, 2021, respectively Deposit growth of 15.2% to $5.67 billion as of September 30, 2021 from $4.92 billion as of September 30, 2020, driven primarily by $435.5 million, or 13.8%, growth in interest-bearing deposits and $314.0 million, or 17.7%, growth in noninterest-bearing deposits Core loans of $4.00 billion, which exclude PPP loans, as of September 30, 2021 increased $37.9 million, or 3.8% (annualized), compared to June 30, 2021 and $117.3 million, or 3.0%, from $3.88 billion at September 30, 2020 Board declared quarterly dividend of $0.12 per share of common stock HOUSTON, Oct. 28, 2021 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) (Allegiance), the holding company of Allegiance Bank (the "Bank"), today reported record net income of $19.1 million and diluted earnings per share of $0.93 for the third quarter 2021 compared to net income of $16.2 million and diluted earnings per share of $0.79 for the third quarter 2020. Net income for the nine months ended September 30, 2021 was $60.0 million, or $2.95 per diluted share, compared to $29.6 million, or $1.44 per diluted share, for the nine months ended September 30, 2020. The third quarter ended September 30, 2021 results were driven by increased net interest income and an increased provision for credit losses compared to the third quarter 2020. The nine months ended September 30, 2021 results were primarily due to a lower provision for credit losses and increased net interest income driven by lower funding costs compared to the nine months ended September 30, 2020.
“This quarter was a period of outstanding focus and execution by our bankers. We continued to experience growth as we saw opportunities to grow deposit and loan volumes even though the loan market remains very competitive,” said Steve Retzloff, Allegiance’s Chief Executive Officer. “We are very pleased with our solid third quarter operating metrics and credit performance,” commented Retzloff.
“I could not be more proud of our team as I look back on a very successful 2021 so far. Their hard work has been instrumental to our growth as we welcomed and retained a significant number of our PPP customers, evidence of our ongoing dedication to customer service and the strong value proposition we offer our customers. We believe our core strength is the unwavering commitment to service that we provide to our customers and communities that consistently yields an outstanding customer experience. As we look to the future, we feel very well-positioned to execute our business model and seize the opportunity to gain market share,” concluded Retzloff.
Third Quarter 2021 Results
Net interest income before the provision for credit losses in the third quarter 2021 increased $6.3 million, or 12.1%, to $58.2 million from $51.9 million for the third quarter 2020 and increased $1.6 million, or 2.8%, from $56.6 million for the second quarter 2021.These increases were primarily due to changes in the volume and relative mix of the underlying assets and liabilities, the impact of loans within the Small Business Administration Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) as well as lower costs on interest-bearing liabilities. The net interest margin on a tax equivalent basis decreased 5 basis points to 3.90% for the third quarter 2021 from 3.95% for the third quarter 2020 and decreased 12 basis points from 4.02% for the second quarter 2021. The decreases in the margin were primarily due to the decrease in the average yield on interest-earning assets, driven by the increase in cash and securities, partially offset by the decrease in funding costs.
Noninterest income for the third quarter 2021 was $2.1 million, an increase of $249 thousand, or 13.5%, compared to $1.9 million for the third quarter 2020 and decreased $174 thousand, or 7.7%, compared to $2.3 million for the second quarter 2021. Third quarter 2021 noninterest income reflected higher transactional fee income when compared to the third quarter 2020 and lower correspondent bank rebates, included in other noninterest income, than the second quarter 2021.
Noninterest expense for the third quarter 2021 increased $1.7 million, or 5.3%, to $34.3 million from $32.6 million for the third quarter 2020 and increased $701 thousand, or 2.1%, compared to the second quarter of 2021. The increase over the prior year was primarily due to increases in salaries and benefits, as a result of increased performance-based bonus and profit sharing accruals, partially offset by decreased other real estate expenses as $1.9 million of other real estate write-downs were recorded in the third quarter 2020.
In the third quarter 2021, Allegiance’s efficiency ratio decreased to 56.91% compared to 60.58% for the third quarter 2020 and decreased from 57.07% for the second quarter 2021. Third quarter 2021 annualized returns on average assets, average equity and average tangible equity were 1.14%, 9.45% and 13.49%, respectively, compared to 1.09%, 8.59% and 12.72% for the third quarter 2020. Annualized returns on average assets, average equity and average tangible equity for the second quarter 2021 were 1.42%, 11.87% and 17.20%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 10.
Nine Months Ended September 30, 2021 Results
Net interest income before provision for credit losses for the nine months ended September 30, 2021 increased $22.7 million, or 15.3%, to $170.5 million from $147.8 million for the nine months ended September 30, 2020 primarily due to lower costs related to interest-bearing liabilities as well as an $825.4 million, or 16.8%, increase in average interest-earning assets over the prior year including the impact of PPP loans. The net interest margin on a tax equivalent basis decreased 3 basis points to 4.03% for the nine months ended September 30, 2021 from 4.06% for the nine months ended September 30, 2020. The decrease in the margin over the prior year was primarily due to the decrease in the average yield on interest-earning assets partially offset by decreased funding costs.
Noninterest income for the nine months ended September 30, 2021 was $6.1 million, a decrease of $29 thousand, or 0.5%, compared to $6.1 million for the nine months ended September 30, 2020 due primarily to lower correspondent bank rebates and gains on the sale of securities partially offset by increased debit card and ATM card income.
Noninterest expense for the nine months ended September 30, 2021 increased $8.1 million, or 8.5%, to $102.8 million from $94.7 million for the nine months ended September 30, 2020. The increase in noninterest expense over the nine months ended September 30, 2020 was primarily due to increased performance-based bonus and profit sharing accruals along with the reduced amount of deferred PPP loan origination costs, increased other expenses and the write-down of assets related to the closure of a bank office partially offset by lower other real estate expenses as $4.1 million of other real estate write-downs were recorded during the prior year 2020.
Allegiance’s efficiency ratio decreased from 61.67% for the nine months ended September 30, 2020 to 58.24% for the nine months ended September 30, 2021. For the nine months ended September 30, 2021, returns on average assets, average equity and average tangible equity were 1.25%, 10.30% and 14.89%, respectively, compared to 0.72%, 5.43% and 8.16%, respectively, for the nine months ended September 30, 2020. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 10.
Financial Condition
Total assets at September 30, 2021 increased $792.0 million, or 13.3%, to $6.76 billion compared to $5.97 billion at September 30, 2020 and increased $251.1 million, or 15.4% (annualized), compared to $6.51 billion at June 30, 2021, primarily due to increased liquidity, growth in the securities portfolio and the origination of core loans partially offset by paydowns of PPP loans.
Total loans at September 30, 2021 decreased $302.9 million, or 6.6%, to $4.29 billion compared to $4.59 billion at September 30, 2020 and decreased $171.3 million, or 15.4% (annualized), compared to $4.46 billion at June 30, 2021, primarily due to paydowns on PPP loans. Core loans, which exclude PPP loans, increased $117.3 million, or 3.0%, to $4.00 billion at September 30, 2021 from $3.88 billion at September 30, 2020 and increased $37.9 million, or 3.8% (annualized), from $3.96 billion at June 30, 2021.
Deposits at September 30, 2021 increased $749.5 million, or 15.2%, to $5.67 billion compared to $4.92 billion at September 30, 2020 and increased $233.5 million, or 17.2% (annualized), compared to $5.43 billion at June 30, 2021.
Asset Quality
Nonperforming assets totaled $29.8 million, or 0.44%, of total assets, at September 30, 2021 compared to $46.8 million, or 0.78%, of total assets, at September 30, 2020 and $38.0 million, or 0.58%, of total assets at June 30, 2021. The allowance for credit losses on loans as a percentage of total loans was 1.18% at September 30, 2021, 1.06% at September 30, 2020 and 1.11% at June 30, 2021.
The provision for credit losses for the third quarter 2021 was $2.3 million, an increase of $1.0 million, compared to $1.3 million for the third quarter 2020 and a recapture of provision for credit losses of $2.7 million for the second quarter 2021, reflective of the current uncertainty surrounding the economic impact caused by COVID-19 compared to the prior quarter where there were improvements in economic factors.
Third quarter 2021 net charge-offs were $450 thousand, or 0.04% (annualized) of average loans, an increase from net charge-offs of $291 thousand, or 0.03% (annualized) of average loans, for the third quarter 2020 and $162 thousand, or 0.01% (annualized) of average loans, for the second quarter 2021.
Dividend
The Board of Directors of Allegiance declared a cash dividend on October 27, 2021 of $0.12 per share to be paid on December 15, 2021 to all shareholders of record as of November 30, 2021. The amount and timing of any future dividend payments to shareholders will be subject to the discretion of Allegiance’s Board of Directors.
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, October 28, 2021 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its third quarter 2021 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 6951679. 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.
As of September 30, 2021, Allegiance was a $6.76 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 small- to medium-sized businesses and individual customers in the Houston region. 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. As of September 30, 2021, Allegiance Bank operated 27 full-service banking locations in the Houston region, which we define as the Houston-The Woodlands-Sugar Land and Beaumont-Port Arthur metropolitan statistical areas, with 26 bank offices in the Houston metropolitan area and one bank office in Beaumont, just outside of 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 contains forward-looking statements within the meaning of the securities laws that are derived utilizing 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 expected 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. Additionally, the impact of the COVID-19 pandemic continues to evolve and its future effects on Allegiance are difficult to predict. These and various other risk factors are discussed in Allegiance’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 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. Because of these uncertainties, readers should not place undue reliance on any forward-looking statement. Allegiance disclaims any 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)
2021 2020 September 30 June 30 March 31 December 31 September 30 (Dollars in thousands) ASSETS Cash and due from banks $ 23,903 $ 146,397 $ 141,947 $ 122,897 $ 327,416 Interest-bearing deposits at other financial institutions 879,858 564,888 482,383 299,869 19,732 Total cash and cash equivalents 903,761 711,285 624,330 422,766 347,148 Available for sale securities, at fair value 1,211,476 977,282 787,516 772,890 663,301 Loans held for investment 4,289,469 4,460,743 4,659,169 4,491,764 4,592,362 Less: allowance for credit losses on loans (50,491 ) (49,586 ) (52,758 ) (53,173 ) (48,698 ) Loans, net 4,238,978 4,411,157 4,606,411 4,438,591 4,543,664 Accrued interest receivable 33,523 37,075 38,632 40,053 36,996 Premises and equipment, net 65,140 65,442 66,115 70,685 69,887 Other real estate owned 1,397 1,397 576 9,196 8,876 Federal Home Loan Bank stock 8,326 8,234 7,775 7,756 9,716 Bank owned life insurance 28,101 27,976 27,825 27,686 27,542 Goodwill 223,642 223,642 223,642 223,642 223,642 Core deposit intangibles, net 15,482 16,306 17,130 17,954 18,907 Other assets 29,935 28,871 31,038 18,909 18,072 Total assets $ 6,759,761 $ 6,508,667 $ 6,430,990 $ 6,050,128 $ 5,967,751 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES: Deposits: Noninterest-bearing $ 2,086,683 $ 1,973,042 $ 1,914,121 $ 1,704,567 $ 1,772,700 Interest-bearing Demand 594,959 553,874 480,710 437,328 409,137 Money market and savings 1,604,222 1,556,920 1,617,823 1,499,938 1,483,370 Certificates and other time 1,381,014 1,349,522 1,361,535 1,346,649 1,252,159 Total interest-bearing deposits 3,580,195 3,460,316 3,460,068 3,283,915 3,144,666 Total deposits 5,666,878 5,433,358 5,374,189 4,988,482 4,917,366 Accrued interest payable 3,296 1,940 3,862 2,701 3,082 Borrowed funds 139,954 139,951 147,517 155,515 155,512 Subordinated debt 108,715 108,584 108,453 108,322 108,191 Other liabilities 42,326 35,684 36,432 36,439 30,547 Total liabilities 5,961,169 5,719,517 5,670,453 5,291,459 5,214,698 SHAREHOLDERS’ EQUITY: Common stock 20,218 20,213 20,183 20,208 20,445 Capital surplus 507,948 506,810 505,307 508,794 516,151 Retained earnings 247,966 231,333 210,834 195,236 186,866 Accumulated other comprehensive income 22,460 30,794 24,213 34,431 29,591 Total shareholders’ equity 798,592 789,150 760,537 758,669 753,053 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 6,759,761 $ 6,508,667 $ 6,430,990 $ 6,050,128 $ 5,967,751
Allegiance Bancshares, Inc. Financial Highlights (Unaudited)
Three Months Ended Year-to-Date 2021 2020 2021 2020 September 30 June 30 March 31 December 31 September 30 September 30 September 30 (Dollars in thousands, except per share data) INTEREST INCOME: Loans, including fees $ 58,176 $ 57,691 $ 57,991 $ 58,496 $ 56,418 $ 173,858 $ 167,463 Securities: Taxable 2,998 2,556 2,402 2,203 2,095 7,956 6,024 Tax-exempt 2,498 2,491 2,394 2,316 2,280 7,383 4,995 Deposits in other financial institutions 221 94 41 32 18 356 233 Total interest income 63,893 62,832 62,828 63,047 60,811 189,553 178,715 INTEREST EXPENSE: Demand, money market and savings deposits 1,267 1,337 1,484 1,621 1,657 4,088 7,750 Certificates and other time deposits 2,583 2,989 3,665 4,507 5,239 9,237 17,168 Borrowed funds 436 469 539 557 558 1,444 1,626 Subordinated debt 1,441 1,441 1,442 1,460 1,448 4,324 4,390 Total interest expense 5,727 6,236 7,130 8,145 8,902 19,093 30,934 NET INTEREST INCOME 58,166 56,596 55,698 54,902 51,909 170,460 147,781 Provision for (recapture of) credit losses 2,295 (2,679 ) 639 4,368 1,347 255 23,006 Net interest income after provision for credit losses 55,871 59,275 55,059 50,534 50,562 170,205 124,775 NONINTEREST INCOME: Nonsufficient funds fees 131 94 83 100 75 308 304 Service charges on deposit accounts 425 382 388 405 325 1,195 1,125 Gain on sale of securities — — 49 — — 49 287 (Loss) gain on sales of other real estate and repossessed assets — — (176 ) — 117 (176 ) (258 ) Bank owned life insurance 125 151 139 144 144 415 438 Debit card and ATM card income 771 761 630 637 574 2,162 1,568 Other 647 885 623 733 615 2,155 2,673 Total noninterest income 2,099 2,273 1,736 2,019 1,850 6,108 6,137 NONINTEREST EXPENSE: Salaries and employee benefits 22,335 22,472 22,452 21,003 20,034 67,259 59,149 Net occupancy and equipment 2,335 2,225 2,390 2,079 2,057 6,950 5,890 Depreciation 1,060 1,057 1,034 1,019 946 3,151 2,697 Data processing and software amortization 2,222 2,176 2,200 2,107 2,125 6,598 5,885 Professional fees 1,223 608 789 999 756 2,620 2,129 Regulatory assessments and FDIC insurance 883 768 807 810 875 2,458 2,116 Core deposit intangibles amortization 824 824 824 953 989 2,472 2,969 Communications 358 332 321 225 355 1,011 1,162 Advertising 481 432 298 347 327 1,211 1,218 Other real estate expense 137 229 113 382 2,017 479 4,780 Other 2,438 2,472 3,691 2,825 2,084 8,601 6,750 Total noninterest expense 34,296 33,595 34,919 32,749 32,565 102,810 94,745 INCOME BEFORE INCOME TAXES 23,674 27,953 21,876 19,804 19,847 73,503 36,167 Provision for income taxes 4,614 5,028 3,866 3,863 3,677 13,508 6,574 NET INCOME $ 19,060 $ 22,925 $ 18,010 $ 15,941 $ 16,170 $ 59,995 $ 29,593 EARNINGS PER SHARE Basic $ 0.94 $ 1.13 $ 0.89 $ 0.78 $ 0.79 $ 2.97 $ 1.45 Diluted $ 0.93 $ 1.12 $ 0.89 $ 0.77 $ 0.79 $ 2.95 $ 1.44
Allegiance Bancshares, Inc. Financial Highlights (Unaudited)
Three Months Ended Year-to-Date 2021 2020 2021 2020 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 $ 19,060 $ 22,925 $ 18,010 $ 15,941 $ 16,170 $ 59,995 $ 29,593 Earnings per share, basic $ 0.94 $ 1.13 $ 0.89 $ 0.78 $ 0.79 $ 2.97 $ 1.45 Earnings per share, diluted $ 0.93 $ 1.12 $ 0.89 $ 0.77 $ 0.79 $ 2.95 $ 1.44 Dividends per share $ 0.12 $ 0.12 $ 0.12 $ 0.10 $ 0.10 $ 0.36 $ 0.30 Return on average assets(A) 1.14 % 1.42 % 1.18 % 1.05 % 1.09 % 1.25 % 0.72 % Return on average equity(A) 9.45 % 11.87 % 9.59 % 8.38 % 8.59 % 10.30 % 5.43 % Return on average tangible equity(A)(B) 13.49 % 17.20 % 14.03 % 12.32 % 12.72 % 14.89 % 8.16 % Net interest margin (tax equivalent)(A)(C) 3.90 % 4.02 % 4.19 % 4.14 % 3.95 % 4.03 % 4.06 % Efficiency ratio(D) 56.91 % 57.07 % 60.85 % 57.53 % 60.58 % 58.24 % 61.67 % Capital Ratios Allegiance Bancshares, Inc. (Consolidated) Equity to assets 11.81 % 12.12 % 11.83 % 12.54 % 12.62 % 11.81 % 12.62 % Tangible equity to tangible assets(B) 8.58 % 8.76 % 8.40 % 8.90 % 8.92 % 8.58 % 8.92 % Estimated common equity tier 1 capital 12.37 % 12.18 % 11.87 % 11.80 % 11.73 % 12.37 % 11.73 % Estimated tier 1 risk-based capital 12.60 % 12.41 % 12.10 % 12.04 % 11.96 % 12.60 % 11.96 % Estimated total risk-based capital 16.13 % 15.98 % 15.72 % 15.71 % 15.56 % 16.13 % 15.56 % Estimated tier 1 leverage capital 8.76 % 8.56 % 8.57 % 8.51 % 8.70 % 8.76 % 8.70 % Allegiance Bank Estimated common equity tier 1 capital 12.81 % 13.03 % 13.17 % 13.32 % 13.25 % 12.81 % 13.25 % Estimated tier 1 risk-based capital 12.81 % 13.03 % 13.17 % 13.32 % 13.25 % 12.81 % 13.25 % Estimated total risk-based capital 14.98 % 15.22 % 15.37 % 15.55 % 15.41 % 14.98 % 15.41 % Estimated tier 1 leverage capital 8.91 % 8.99 % 9.33 % 9.41 % 9.64 % 8.91 % 9.64 % Other Data Weighted average shares: Basic 20,221 20,203 20,140 20,396 20,439 20,188 20,421 Diluted 20,411 20,386 20,342 20,575 20,532 20,369 20,551 Period end shares outstanding 20,218 20,213 20,183 20,208 20,445 20,218 20,445 Book value per share $ 39.50 $ 39.04 $ 37.68 $ 37.54 $ 36.83 $ 39.50 $ 36.83 Tangible book value per share(B) $ 27.67 $ 27.17 $ 25.75 $ 25.59 $ 24.97 $ 27.67 $ 24.97
(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 total noninterest expense divided by the sum of net interest income plus noninterest income, excluding net gains and losses on the sale of loans, securities and assets. Additionally, taxes and provision for (recapture of) loan losses are not part of this calculation.
Allegiance Bancshares, Inc. Financial Highlights (Unaudited)
Three Months Ended September 30, 2021 June 30, 2021 September 30, 2020 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 $ 4,336,443 $ 58,176 5.32 % $ 4,543,142 $ 57,691 5.09 % $ 4,594,333 $ 56,418 4.89 % Securities 1,070,851 5,496 2.04 % 876,099 5,047 2.31 % 667,008 4,375 2.61 % Deposits in other financial institutions and other 588,859 221 0.15 % 294,188 94 0.13 % 20,176 18 0.35 % Total interest-earning assets 5,996,153 $ 63,893 4.23 % 5,713,429 $ 62,832 4.41 % 5,281,517 $ 60,811 4.58 % Allowance for credit losses on loans (49,381 ) (52,699 ) (47,593 ) Noninterest-earning assets 680,682 835,801 679,750 Total assets $ 6,627,454 $ 6,496,531 $ 5,913,674 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-bearing demand deposits $ 576,144 $ 324 0.22 % $ 534,314 $ 326 0.24 % $ 394,612 $ 392 0.40 % Money market and savings deposits 1,565,965 943 0.24 % 1,561,987 1,011 0.26 % 1,409,969 1,265 0.36 % Certificates and other time deposits 1,363,121 2,583 0.75 % 1,365,881 2,989 0.88 % 1,291,536 5,239 1.61 % Borrowed funds 139,844 436 1.24 % 144,126 469 1.31 % 171,804 558 1.29 % Subordinated debt 108,652 1,441 5.26 % 108,523 1,441 5.33 % 108,130 1,448 5.33 % Total interest-bearing liabilities 3,753,726 $ 5,727 0.61 % 3,714,831 $ 6,236 0.67 % 3,376,051 $ 8,902 1.05 % Noninterest-Bearing Liabilities: Noninterest-bearing demand deposits 2,031,399 1,968,714 1,752,404 Other liabilities 42,183 38,183 36,572 Total liabilities 5,827,308 5,721,728 5,165,027 Shareholders' equity 800,146 774,803 748,647 Total liabilities and shareholders' equity $ 6,627,454 $ 6,496,531 $ 5,913,674 Net interest rate spread 3.62 % 3.74 % 3.53 % Net interest income and margin $ 58,166 3.85 % $ 56,596 3.97 % $ 51,909 3.91 % Net interest income and net interest margin (tax equivalent) $ 58,873 3.90 % $ 57,287 4.02 % $ 52,446 3.95 %
Allegiance Bancshares, Inc. Financial Highlights (Unaudited)
Nine Months Ended September 30, 2021 2020 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 $ 4,482,684 $ 173,858 5.19 % $ 4,318,564 $ 167,463 5.18 % Securities 913,078 15,339 2.25 % 550,405 11,019 2.67 % Deposits in other financial institutions 328,238 356 0.15 % 29,652 233 1.05 % Total interest-earning assets 5,724,000 $ 189,553 4.43 % 4,898,621 $ 178,715 4.87 % Allowance for credit losses on loans (51,802 ) (39,245 ) Noninterest-earning assets 758,774 639,606 Total assets $ 6,430,972 $ 5,498,982 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-bearing demand deposits $ 523,272 $ 1,021 0.26 % $ 370,485 $ 1,659 0.60 % Money market and savings deposits 1,555,791 3,067 0.26 % 1,249,832 6,091 0.65 % Certificates and other time deposits 1,354,000 9,237 0.91 % 1,262,674 17,168 1.82 % Borrowed funds 146,244 1,444 1.32 % 210,902 1,626 1.03 % Subordinated debt 108,522 4,324 5.33 % 107,998 4,390 5.43 % Total interest-bearing liabilities 3,687,829 $ 19,093 0.69 % 3,201,891 30,934 1.29 % Noninterest-Bearing Liabilities: Noninterest-bearing demand deposits 1,923,584 1,535,107 Other liabilities 40,568 33,482 Total liabilities 5,651,981 4,770,480 Shareholders' equity 778,991 728,502 Total liabilities and shareholders' equity $ 6,430,972 $ 5,498,982 Net interest rate spread 3.74 % 3.58 % Net interest income and margin $ 170,460 3.98 % $ 147,781 4.03 % Net interest income and net interest margin (tax equivalent) $ 172,477 4.03 % $ 148,939 4.06 %
Allegiance Bancshares, Inc. Financial Highlights (Unaudited)
Three Months Ended 2021 2020 September 30 June 30 March 31 December 31 September 30 (Dollars in thousands) Period-end Loan Portfolio: Commercial and industrial $ 728,897 $ 690,867 $ 664,792 $ 667,079 $ 650,634 Paycheck Protection Program (PPP) 290,028 499,207 728,424 569,901 710,234 Real estate: Commercial real estate (including multi-family residential) 2,073,521 2,051,516 2,018,853 1,999,877 1,971,228 Commercial real estate construction and land development 382,610 371,732 386,637 367,213 376,877 1-4 family residential (including home equity) 683,919 715,119 726,228 737,605 716,565 Residential construction 104,638 111,956 119,528 127,522 148,056 Consumer and other 25,856 20,346 14,707 22,567 18,768 Total loans $ 4,289,469 $ 4,460,743 $ 4,659,169 $ 4,491,764 $ 4,592,362 Asset Quality: Nonaccrual loans $ 28,369 $ 36,643 $ 35,051 $ 28,893 $ 37,928 Accruing loans 90 or more days past due — — — — — Total nonperforming loans 28,369 36,643 35,051 28,893 37,928 Other real estate 1,397 1,397 576 9,196 8,876 Other repossessed assets — — — — — Total nonperforming assets $ 29,766 $ 38,040 $ 35,627 $ 38,089 $ 46,804 Net charge-offs $ 450 $ 162 $ 345 $ 4,287 $ 291 Nonaccrual loans: Commercial and industrial $ 10,247 $ 12,949 $ 14,059 $ 10,747 $ 13,171 Real estate: Commercial real estate (including multi-family residential) 14,629 18,123 13,455 10,081 15,849 Commercial real estate construction and land development 53 53 1,000 3,011 3,085 1-4 family residential (including home equity) 3,224 4,839 5,736 4,525 4,263 Residential construction — — — — 876 Consumer and other 216 679 801 529 684 Total nonaccrual loans $ 28,369 $ 36,643 $ 35,051 $ 28,893 $ 37,928 Asset Quality Ratios: Nonperforming assets to total assets 0.44% 0.58% 0.55% 0.63% 0.78% Nonperforming loans to total loans 0.66% 0.82% 0.75% 0.64% 0.83% Allowance for credit losses on loans to nonperforming loans 177.98% 135.32% 150.52% 184.03% 128.40% Allowance for credit losses on loans to total loans 1.18% 1.11% 1.13% 1.18% 1.06% Net charge-offs to average loans (annualized) 0.04% 0.01% 0.03% 0.37% 0.03%
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 and 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 share, return on average tangible equity and the ratio of tangible 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. 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 2021 2020 2021 2020 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 shareholders' equity $ 798,592 $ 789,150 $ 760,537 $ 758,669 $ 753,053 $ 798,592 $ 753,053 Less: Goodwill and core deposit intangibles, net 239,124 239,948 240,772 241,596 242,549 239,124 242,549 Tangible shareholders’ equity $ 559,468 $ 549,202 $ 519,765 $ 517,073 $ 510,504 $ 559,468 $ 510,504 Shares outstanding at end of period 20,218 20,213 20,183 20,208 20,445 20,218 20,445 Tangible book value per share $ 27.67 $ 27.17 $ 25.75 $ 25.59 $ 24.97 $ 27.67 $ 24.97 Net income $ 19,060 $ 22,925 $ 18,010 $ 15,941 $ 16,170 $ 59,995 $ 29,593 Average shareholders' equity $ 800,146 $ 774,803 $ 761,600 $ 756,699 $ 748,647 $ 778,991 $ 728,502 Less: Average goodwill and core deposit intangibles, net 239,497 240,331 241,166 242,043 243,015 240,325 244,007 Average tangible shareholders’ equity $ 560,649 $ 534,472 $ 520,434 $ 514,656 $ 505,632 $ 538,666 $ 484,495 Return on average tangible equity (A) 13.49% 17.20% 14.03% 12.32% 12.72% 14.89% 8.16% Total assets $ 6,759,761 $ 6,508,667 $ 6,430,990 $ 6,050,128 $ 5,967,751 $ 6,759,761 $ 5,967,751 Less: Goodwill and core deposit intangibles, net 239,124 239,948 240,772 241,596 242,549 239,124 242,549 Tangible assets $ 6,520,637 $ 6,268,719 $ 6,190,218 $ 5,808,532 $ 5,725,202 $ 6,520,637 $ 5,725,202 Tangible equity to tangible assets 8.58% 8.76% 8.40% 8.90% 8.92% 8.58% 8.92%
(A) Interim periods annualized.
Allegiance Bancshares, Inc. 8847 West Sam Houston Parkway N., Suite 200 Houston, Texas 77040ir@allegiancebank.com