Allegiance Bancshares, Inc. Reports Third Quarter 2017 Results

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  • Core loan growth of $363.3 million, or 20.7%, year over year and $76.8 million, or 15.1% (annualized), for the third quarter 2017 compared to the linked quarter
     
  • Net interest income increased 15.3% year over year and 7.5% for the third quarter 2017 compared to the linked quarter
     
  • Net interest margin on a tax equivalent basis increased 8 basis points for the third quarter compared to the linked quarter

HOUSTON, Oct. 24, 2017 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. ABTX ("Allegiance"), the holding company of Allegiance Bank (the "Bank"), today reported net income of $3.0 million in the third quarter 2017 compared to $5.5 million in the third quarter 2016 and diluted earnings per share of $0.22 in the third quarter 2017 compared to $0.42 in the third quarter 2016.

"Houston experienced an unprecedented natural disaster when Hurricane Harvey struck during the quarter.  As Houstonians, we were proud to see an overwhelming outpouring of support within the community to help each other in our clean up and recovery efforts," commented George Martinez, Allegiance's Chairman and Chief Executive Officer. "Thanks to previously established processes and the extraordinary efforts of our employees to ensure that we took care of our customers and fellow employees, our banking operations were uninterrupted during the storm and most of our banking locations were fully functional within days of the Hurricane," continued Martinez.

"We are extremely proud of our consistently strong loan growth, even in the wake of the Hurricane.  Our provision expense was elevated this quarter in part due to immediate uncertainty in the Houston economy and estimated losses related to Hurricane Harvey.  Additionally, during the quarter, we charged off one energy-related loan relationship we had been monitoring for some time.  We performed a thorough assessment of the impact of the Hurricane on our customers as well as the adequacy of the allowance for loan losses for our current portfolio," added George Martinez.

"Notwithstanding the Hurricane, we delivered solid growth in pre-provision profitability during the quarter as we continue to execute our growth plans.  As Houston's largest community bank, we are dedicated to serving the dynamic Houston market through the Hurricane recovery and beyond," concluded George Martinez.

Third Quarter 2017 Results

Net interest income before provision for loan losses in the third quarter 2017 increased $3.6 million, or 15.3%, to $27.0 million from $23.4 million for the third quarter 2016 primarily due to organic loan growth.  Net interest income before provision for loan losses in the third quarter 2017 increased $1.9 million, or 7.5%, from $25.1 million in the second quarter 2017.  The net interest margin on a tax equivalent basis decreased 2 basis points to 4.37% for the third quarter 2017 from 4.39% for the third quarter 2016 and increased 8 basis points from 4.29% for the second quarter 2017.

Noninterest income for the third quarter 2017 was $1.5 million, an increase of $186 thousand, or 14.6%, compared to $1.3 million for the third quarter 2016 and slightly decreased $17 thousand compared to $1.5 million for the second quarter 2017.

Noninterest expense for the third quarter 2017 increased $2.8 million, or 18.7%, to $17.7 million from $14.9 million for the third quarter 2016, and increased $1.2 million, or 7.4%, from $16.5 million for the second quarter 2017. The increase in noninterest expense over the third quarter 2016 was primarily due to increased salaries and benefits as a result of increased headcount and professional service fees related to supporting growth initiatives.

In the third quarter 2017, Allegiance's efficiency ratio increased to 62.14% from 60.34% for the third quarter 2016 and increased from 61.92% for the second quarter 2017.

Third quarter 2017 annualized returns on average assets, average equity and average tangible equity were 0.43%, 3.90% and 4.55%, respectively, compared to 0.90%, 7.77% and 9.21%, respectively, for the third quarter 2016.  Annualized returns on average assets, average equity and average tangible equity for the second quarter 2017 were 0.81%, 7.32% and 8.57%, respectively.

Nine Months Ended September 30, 2017 Results

Net interest income before provision for loan losses for the nine months ended September 30, 2017 increased $9.8 million, or 14.7%, to $76.2 million from $66.4 million for the nine months ended September 30, 2016 primarily due to organic loan growth and an increase in the securities portfolio.  The net interest margin on a tax equivalent basis decreased 5 basis points to 4.34% for the nine months ended September 30, 2017 from 4.39% for the nine months ended September 30, 2016.

Noninterest income for the nine months ended September 30, 2017 was $4.3 million, a decrease of $1.5 million, or 26.1%, compared to $5.8 million for the nine months ended September 30, 2016. The nine months ended September 30, 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 $538 thousand, or 14.4%, for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.

Noninterest expense for the nine months ended September 30, 2017 increased $7.6 million, or 17.7%, to $50.7 million from $43.1 million for the nine months ended September 30, 2016.  The increase in noninterest expense over the nine months ended September 30, 2016 was primarily due to increases in salaries and benefits as a result of the increased headcount and professional service fees related to supporting growth initiatives.

During the nine months ended September 30, 2017, Allegiance's efficiency ratio increased to 62.97% from 61.37% for the nine months ended September 30, 2016.

For the nine months ended September 30, 2017, annualized returns on average assets, average equity and average tangible equity were 0.73%, 6.55% and 7.67%, respectively, compared to 0.99%, 8.40% and 10.03%, respectively, for the nine months ended September 30, 2016. Excluding the gain on the sale of the two Central Texas branch locations during the first quarter 2016, the annualized returns on average assets, average equity and average tangible equity for the nine months ended September 30, 2016 would have been 0.92%, 7.75% and 9.24%, respectively.

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Financial Condition

Total loans at September 30, 2017 increased $370.8 million, or 20.3%, to $2.20 billion compared to $1.83 billion at September 30, 2016 and increased $86.9 million, or 4.1%, compared to $2.11 billion at June 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 $363.3 million, or 20.7%, to $2.12 billion at September 30, 2017 from $1.75 billion at September 30, 2016 and increased $76.8 million, or 3.8%, from $2.04 billion at June 30, 2017.

Deposits at September 30, 2017 increased $385.7 million, or 20.3%, to $2.29 billion compared to $1.90 billion at September 30, 2016 and increased $187.4 million, or 8.9%, compared to $2.10 billion at June 30, 2017.

Asset Quality

Nonperforming assets totaled $14.6 million, or 0.52% of total assets, at September 30, 2017, compared to $17.1 million, or 0.69% of total assets, at September 30, 2016, and $19.9 million, or 0.73% of total assets, at June 30, 2017. The allowance for loan losses was 1.08% of total loans at September 30, 2017, 0.94% of total loans at September 30, 2016 and 0.99% of total loans at June 30, 2017.

The provision for loan losses for the third quarter 2017 was $6.9 million, or 1.28% (annualized) of average loans, compared to $2.2 million, or 0.49% (annualized) of average loans, for the third quarter 2016, and $3.0 million, or 0.59% (annualized) of average loans, for the second quarter 2017. The provision for loan losses for the nine months ended September 30, 2017 was $11.3 million, or 0.74% (annualized) of average loans, compared to $4.6 million, or 0.35% (annualized) of average loans for the nine months ended September 30, 2016.

Third quarter 2017 net charge-offs were $4.2 million, or 0.78% (annualized) of average loans, compared to net recoveries of $54 thousand, for the third quarter 2016, and $684 thousand, or 0.13% (annualized) of average loans, for the second quarter 2017. Net charge-offs for the nine months ended September 30, 2017 were $5.4 million, or 0.36% (annualized) of average loans, compared to $482 thousand, or 0.04% (annualized) of average loans for the nine months ended September 30, 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 Tuesday, October 24, 2017 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its third quarter 2017 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 95345409.  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 $2.81 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," "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; 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.


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
          
 2017 2016
  September 30  June 30  March 31  December 31  September 30
 (Dollars in thousands)
          
Cash and cash equivalents$192,427  $187,491  $184,146  $142,098  $225,082 
Available for sale securities323,856  321,268  317,219  316,455  310,033 
          
Total loans2,201,540  2,114,652  1,986,438  1,891,635  1,830,722 
Allowance for loan losses(23,722) (21,010) (18,687) (17,911) (17,185)
Loans, net2,177,818  2,093,642  1,967,751  1,873,724  1,813,537 
          
Goodwill39,389  39,389  39,389  39,389  39,389 
Core deposit intangibles, net3,469  3,664  3,860  4,055  4,250 
Premises and equipment, net18,273  18,240  18,138  18,340  17,811 
Other real estate owned453  365  365  1,503  1,138 
Bank owned life insurance22,277  22,131  21,985  21,837  21,684 
Other assets35,472  38,526  39,477  33,547  28,978 
Total assets$2,813,434  $2,724,716  $2,592,330  $2,450,948  $2,461,902 
          
Noninterest-bearing deposits$712,951  $662,527  $615,225  $593,751  $604,278 
Interest-bearing deposits1,573,664  1,436,715  1,397,344  1,276,432  1,296,601 
Total deposits2,286,615  2,099,242  2,012,569  1,870,183  1,900,879 
          
Borrowed funds207,569  310,569  275,569  285,569  261,569 
Subordinated debentures9,277  9,249  9,222  9,196  9,169 
Other liabilities7,246  7,197  5,840  6,183  9,190 
Total liabilities2,510,707  2,426,257  2,303,200  2,171,131  2,180,807 
          
Common stock13,171  13,153  13,080  12,958  12,905 
Capital surplus216,943  216,158  215,015  212,649  211,349 
Retained earnings71,690  68,704  63,309  57,262  51,491 
Accumulated other comprehensive income (loss)923  444  (2,274) (3,052) 5,350 
Shareholders' equity302,727  298,459  289,130  279,817  281,095 
Total liabilities and equity$2,813,434  $2,724,716  $2,592,330  $2,450,948  $2,461,902 


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
              
 Three Months Ended Year-to-Date
 2017 2016 2017 2016
  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$28,588  $26,736  $25,260  $24,232  $24,057  $80,584  $69,124 
Securities             
Taxable547  503  498  478  607  1,548  1,329 
Tax-exempt1,574  1,591  1,624  1,642  1,505  4,789  3,402 
Deposits in other financial institutions192  157  130  129  150  479  442 
Total interest income30,901  28,987  27,512  26,481  26,319  87,400  74,297 
              
INTEREST EXPENSE:             
Demand, money market and savings deposits811  702  654  673  651  2,167  1,764 
Certificates and other time deposits2,299  2,283  1,957  1,947  1,872  6,539  5,097 
Borrowed funds654  761  653  311  264  2,068  634 
Subordinated debt140  134  120  128  123  394  360 
Total interest expense3,904  3,880  3,384  3,059  2,910  11,168  7,855 
NET INTEREST INCOME26,997  25,107  24,128  23,422  23,409  76,232  66,442 
Provision for loan losses6,908  3,007  1,343  900  2,214  11,258  4,569 
Net interest income after provision for loan losses20,089  22,100  22,785  22,522  21,195  64,974  61,873 
              
NONINTEREST INCOME:             
Nonsufficient funds fees144  184  199  178  175  527  483 
Service charges on deposit accounts204  205  195  177  182  604  500 
Gain on sale of branch assets            2,050 
(Loss) gain on sale of securities(12)     30    (12)  
Gain on sale of other real estate      206  60    60 
Bank owned life insurance146  146  148  153  154  440  473 
Other978  942  799  734  703  2,719  2,224 
Total noninterest income1,460  1,477  1,341  1,478  1,274  4,278  5,790 
              
NONINTEREST EXPENSE:             
Salaries and employee benefits11,580  10,415  10,562  10,627  9,781  32,557  28,231 
Net occupancy and equipment1,325  1,302  1,427  1,238  1,260  4,054  3,706 
Depreciation427  398  400  391  404  1,225  1,236 
Data processing and software amortization783  719  695  703  655  2,197  1,930 
Professional fees822  987  895  857  442  2,704  1,377 
Regulatory assessments and FDIC insurance582  569  589  485  396  1,740  1,096 
Core deposit intangibles amortization195  196  195  195  196  586  590 
Communications251  233  247  237  264  731  818 
Advertising302  288  263  319  228  853  626 
Other1,409  1,354  1,276  1,135  1,269  4,039  3,461 
Total noninterest expense17,676  16,461  16,549  16,187  14,895  50,686  43,071 
INCOME BEFORE INCOME TAXES3,873  7,116  7,577  7,813  7,574  18,566  24,592 
Provision for income taxes887  1,721  1,530  2,042  2,103  4,138  7,512 
NET INCOME$2,986  $5,395  $6,047  $5,771  $5,471  $14,428  $17,080 
              
EARNINGS PER SHARE             
Basic$0.23  $0.41  $0.46  $0.45  $0.42  $1.10  $1.33 
Diluted$0.22  $0.40  $0.45  $0.44  $0.42  $1.07  $1.31 


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
               
  Three Months Ended Year-to-Date
  2017 2016 2017 2016
   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 $2,986  $5,395  $6,047  $5,771  $5,471  $14,428  $17,080 
               
Earnings per share, basic $0.23  $0.41  $0.46  $0.45  $0.42  $1.10  $1.33 
Earnings per share, diluted $0.22  $0.40  $0.45  $0.44  $0.42  $1.07  $1.31 
               
Return on average assets(A) 0.43% 0.81% 0.96% 0.93% 0.90% 0.73% 0.99%
Return on average equity(A) 3.90% 7.32% 8.61% 8.25% 7.77% 6.55% 8.40%
Return on average tangible equity(A)(B) 4.55% 8.57% 10.15% 9.79% 9.21% 7.67% 10.03%
Tax equivalent net interest margin(C) 4.37% 4.29% 4.38% 4.32% 4.39% 4.34% 4.39%
Efficiency ratio(D) 62.14% 61.92% 64.98% 65.09% 60.34% 62.97% 61.37%
               
Liquidity and Capital Ratios              
Equity to assets 10.76% 10.95% 11.15% 11.42% 11.42% 10.76% 11.42%
Common equity Tier 1 capital 10.68% 10.84% 11.10% 11.44% 11.40% 10.68% 11.40%
Tier 1 risk-based capital 11.07% 11.24% 11.51% 11.87% 11.84% 11.07% 11.84%
Total risk-based capital 12.04% 12.13% 12.35% 12.72% 12.68% 12.04% 12.68%
Tier 1 leverage capital 9.90% 10.11% 10.28% 10.35% 10.25% 9.90% 10.25%
Tangible equity to tangible assets(B) 9.38% 9.52% 9.65% 9.82% 9.82% 9.38% 9.82%
               
Other Data              
Weighted average shares:              
Basic 13,165  13,125  13,021  12,913  12,882  13,104  12,860 
Diluted 13,483  13,471  13,377  13,180  13,108  13,445  13,038 
Period end shares outstanding 13,171  13,153  13,080  12,958  12,905  13,171  12,905 
Book value per share $22.98  $22.69  $22.10  $21.59  $21.78  $22.98  $21.78 
Tangible book value per share(B) $19.73  $19.42  $18.80  $18.24  $18.40  $19.73  $18.40 

(A)  Interim periods annualized.
(B)  Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 10 of this Earnings Release.
(C)  Net interest margin represents net interest income divided by average interest-earning assets.
(D)  Represents noninterest expense divided by the sum of net interest income plus noninterest income, excluding net gains and losses on the sale of branch assets, loans and securities.  Additionally, taxes and provision for loan losses are not part of this calculation.


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
                  
 Three Months Ended
 September 30, 2017 June 30, 2017 September 30, 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$2,141,546  $28,588  5.30% $2,042,460  $26,736  5.25% $1,784,763  $24,057  5.36%
Securities324,901  2,121  2.59% 326,388  2,094  2.57% 310,769  2,112  2.70%
Deposits in other financial institutions53,409  192  1.43% 49,703  157  1.26% 92,928  150  0.64%
Total interest-earning assets2,519,856  $30,901  4.87% 2,418,551  $28,987  4.81% 2,188,460  $26,319  4.78%
Allowance for loan losses(20,886)     (19,253)     (15,575)    
Noninterest-earning assets261,524      261,668      249,363     
Total assets$2,760,494      $2,660,966      $2,422,248     
                  
Liabilities and Shareholders' Equity                 
Interest-Bearing Liabilities:                 
Interest-bearing demand deposits$142,429  $127  0.35% $137,507  $118  0.34% $111,497  $95  0.34%
Money market and savings deposits558,087  684  0.49% 499,335  584  0.47% 484,587  556  0.46%
Certificates and other time deposits754,076  2,299  1.21% 785,194  2,283  1.17% 668,092  1,872  1.11%
Borrowed funds197,668  654  1.31% 304,184  761  1.00% 244,732  264  0.43%
Subordinated debt9,259  140  5.98% 9,232  134  5.83% 9,151  123  5.35%
Total interest-bearing liabilities1,661,519  $3,904  0.93% 1,735,452  $3,880  0.90% 1,518,059  $2,910  0.76%
                  
Noninterest-Bearing Liabilities:                 
Noninterest-bearing demand deposits786,566      624,100      614,303     
Other liabilities8,960      5,890      9,821     
Total liabilities2,457,045      2,365,442      2,142,183     
Shareholders' equity303,449      295,524      280,065     
Total liabilities and shareholders' equity$2,760,494      $2,660,966      $2,422,248     
                  
Net interest rate spread    3.94%     3.91%     4.02%
                  
Net interest income and margin  $26,997  4.25%   $25,107  4.16%   $23,409  4.26%
                  
Net interest income and margin (tax equivalent)  $27,748  4.37%   $25,862  4.29%   $24,149  4.39%


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
            
 Year-to-Date
 September 30, 2017 September 30, 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$2,038,228  $80,584  5.29% $1,724,494  $69,124  5.35%
Securities325,730  6,337  2.60% 256,149  4,731  2.47%
Deposits in other financial institutions52,150  479  1.23% 93,700  442  0.63%
Total interest-earning assets2,416,108  $87,400  4.84% 2,074,343  $74,297  4.78%
Allowance for loan losses(19,456)     (14,401)    
Noninterest-earning assets260,843      237,765     
Total assets$2,657,495      $2,297,707     
            
Liabilities and Shareholders' Equity           
Interest-Bearing Liabilities:           
Interest-bearing demand deposits$136,991  $345  0.34% $103,215  $250  0.32%
Money market and savings deposits514,995  1,822  0.47% 451,314  1,514  0.45%
Certificates and other time deposits741,732  6,539  1.18% 636,877  5,097  1.07%
Borrowed funds282,024  2,068  0.98% 192,880  634  0.44%
Subordinated debt9,231  394  5.70% 9,125  360  5.27%
Total interest-bearing liabilities1,684,973  $11,168  0.89% 1,393,411  $7,855  0.75%
            
Noninterest-Bearing Liabilities:           
Noninterest-bearing demand deposits670,908      624,190     
Other liabilities6,926      8,545     
Total liabilities2,362,807      2,026,146     
Shareholders' equity294,688      271,561     
Total liabilities and shareholders' equity$2,657,495      $2,297,707     
            
Net interest rate spread    3.95%     4.03%
            
Net interest income and margin  $76,232  4.22%   $66,442  4.28%
            
Net interest income and margin (tax equivalent)  $78,517  4.34%   $68,113  4.39%


Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
          
 As of and For the Three Months Ended
 2017 2016
  September 30  June 30  March 31  December 31  September 30
 (Dollars in thousands)
Period-end Loan Portfolio:         
Commercial and industrial$446,029  $444,701  $425,154  $416,752  $402,273 
Mortgage warehouse83,577  73,499  64,132  67,038  76,043 
Real estate:         
Commercial real estate (including multi-family residential)1,045,220  1,008,027  961,212  891,989  848,939 
Commercial real estate construction and land development225,574  206,024  175,264  159,247  167,936 
1-4 family residential (including home equity)283,399  267,939  250,881  246,987  228,651 
Residential construction106,299  102,832  99,648  98,657  93,923 
Consumer and other11,442  11,630  10,147  10,965  12,957 
Total loans$2,201,540  $2,114,652  $1,986,438  $1,891,635  $1,830,722 
          
Asset Quality:         
Nonaccrual loans$13,913  $19,330  $19,315  $15,788  $15,882 
Accruing loans 90 or more days past due      911   
Total nonperforming loans13,913  19,330  19,315  16,699  15,882 
Other real estate453  365  365  1,503  1,138 
Other repossessed assets205  205  260  286  30 
Total nonperforming assets$14,571  $19,900  $19,940  $18,488  $17,050 
          
Net charge-offs (recoveries)4,196  684  567  174  (54)
          
Nonaccrual loans:         
Commercial and industrial$5,031  $9,051  $8,933  $3,896  $4,983 
Mortgage warehouse         
Real estate:         
Commercial real estate (including multi-family residential)8,097  9,556  9,726  11,663  10,495 
Commercial real estate construction and land development    70     
1-4 family residential (including home equity)735  568  574  217  11 
Residential construction         
Consumer and other50  155  12  12  393 
Total nonaccrual loans$13,913  $19,330  $19,315  $15,788  $15,882 
          
Asset Quality Ratios:         
Nonperforming assets to total assets0.52% 0.73% 0.77% 0.75% 0.69%
Nonperforming loans to total loans0.63% 0.91% 0.97% 0.88% 0.87%
Allowance for loan losses to nonperforming loans170.50% 108.69% 96.75% 107.26% 108.20%
Allowance for loan losses to total loans1.08% 0.99% 0.94% 0.95% 0.94%
Net charge-offs (recoveries) to average loans (annualized)0.78% 0.13% 0.12% 0.04% (0.01)%


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 common equity and the ratio of tangible common 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-to-Date
  2017 2016 2017 2016
   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 $302,727  $298,459  $289,130  $279,817  $281,095  $302,727  $281,095 
Less:  Goodwill and core deposit intangibles, net 42,858  43,054  43,249  43,444  43,639  42,858  43,639 
Tangible shareholders' equity $259,869  $255,405  $245,881  $236,373  $237,456  $259,869  $237,456 
               
Shares outstanding at end of period 13,171  13,153  13,080  12,958  12,905  13,171  12,905 
               
Tangible book value per share $19.73  $19.42  $18.80  $18.24  $18.40  $19.73  $18.40 
               
Net income attributable to shareholders $2,986  $5,395  $6,047  $5,771  $5,471  $14,428  $17,080 
               
Average shareholders' equity $303,449  $295,524  $284,889  $278,123  $280,065  $294,688  $271,561 
Less:  Average goodwill and core deposit intangibles, net 42,954  43,149  43,345  43,539  43,735  43,148  43,994 
Average tangible shareholders' equity $260,495  $252,375  $241,544  $234,584  $236,330  $251,540  $227,567 
               
Return on average tangible equity 4.55% 8.57% 10.15% 9.79% 9.21% 7.67% 10.03%
               
Total assets $2,813,434  $2,724,716  $2,592,330  $2,450,948  $2,461,902  $2,813,434  $2,461,902 
Less: Goodwill and core deposit intangibles, net 42,858  43,054  43,249  43,444  43,639  42,858  43,639 
Tangible assets $2,770,576  $2,681,662  $2,549,081  $2,407,504  $2,418,263  $2,770,576  $2,418,263 
               
Tangible equity to tangible assets 9.38% 9.52% 9.65% 9.82% 9.82% 9.38% 9.82%
                      

Allegiance Bancshares, Inc.
8847 West Sam Houston Parkway N., Suite 200
Houston, Texas 77040
ir@allegiancebank.com

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Posted In: EarningsPress Releases
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