KBRA Assigns BBB Senior Unsecured Debt Rating for Allegiance Bancshares, Inc.

Kroll Bond Rating Agency (KBRA) has assigned a senior unsecured debt rating of BBB, subordinated debt rating of BBB-, and short-term debt rating of K3 to Allegiance Bancshares, Inc. ABTX ("Allegiance"), a bank holding company headquartered in Houston, TX. In addition, KBRA has assigned deposit and senior unsecured debt ratings of BBB+, a subordinated debt rating of BBB, and short-term deposit and debt ratings of K2 for its subsidiary, Allegiance Bank ("the Bank"). The Outlook for all long-term ratings is Stable.

The ratings are supported by Allegiance's relatively stable overall performance over a multi-year period and healthy net interest margin. Additionally, the experienced management team with its proficient risk management profile and strong capital management further supports the assigned ratings. The ratings are constrained by Allegiance's heavily spread reliant revenues, elevated level of construction & development loans, and the inherent risks associated with the Bank's geographic concentration within a single metro area. The Stable Outlook for the long-term ratings reflects the resilience of Allegiance's capital and earnings to KBRA's forward looking economic stress scenarios. Furthermore, the outlook assumes minimal impact on asset quality as a result of Hurricane Harvey, with earnings that return to pre-storm levels in ensuing quarters.

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KBRA is a full credit rating agency registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP). KBRA Europe is certified and registered with the European Securities and Markets Authority (ESMA).

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