cshares, Inc.

Fixed Income Investor Presentation

September 2020

[Month] [Day], 2019

Investor Presentation Update

Safe Harbor Statement and Non-GAAP Financial Measures

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements within the meaning of the securities laws that are derived utilizing assumptions, present expectations, estimates and projections about Allegiance. These 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. 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 is rapidly evolving and its future effects on Allegiance are difficult to predict. These and various other factors are discussed in Allegiance's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarter ended June 30, 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 presentation 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.

GAAP Reconciliation of Non-GAAP Financial Measures

We use certain non-GAAP financial measures to evaluate our performance. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, we review return on average tangible common equity, the ratio of tangible equity to tangible assets and core net interest margin on a tax equivalent basis for internal planning and forecasting purposes. We have included in this presentation 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 we calculate these non-GAAP financial measures may differ from that of other companies reporting measures with similar names. A reconciliation of the non-GAAP financial measures is in the appendix.

2

Allegiance Bancshares, Inc. Overview

Franchise Footprint

Holding Company for Allegiance Bank; Headquartered in Houston, Texas

45

Beaumont

10

10

Houston

45

Galveston

ABTX Branch Locations (28)

Houston-TheWoodlands-Sugar Land MSA

Beaumont-Port Arthur MSA

Company Overview

Providing full-service banking services for owner-operated businesses

Operational History

  • 28 full-service banking locations
    • 27 in the Houston-TheWoodlands-Sugar Land MSA
    • 1 in the Beaumont-Port Arthur MSA, just outside of Houston
  • Since opening in 2007, we have completed three whole bank acquisitions and one branch transaction:
    • 2019: LoweryBank branch acquisition with $45.0 million in loans and $16.0 million in deposits
    • 2018: Post Oak Bank, N.A. (Post Oak Bancshares, Inc.) with $1.5 billion in total assets
    • 2015: Enterprise Bank (F&M Bancshares, Inc.) with $569.7 million in total assets
    • 2013: Independence Bank, N.A. with $222.1 million in total assets

Financial Highlights

($ in millions)

6/30/2020

12/31/2019

12/31/2018

12/31/2017

12/31/2016

Sheet

Total Assets

$

5,836.9

$

4,992.7

$

4,655.2

$

2,860.2

$

2,450.9

Total Loans

4,583.7

3,915.3

3,708.3

2,270.9

1,891.6

Balance

Total Deposits

4,700.7

4,068.1

3,662.5

2,214.0

1,870.2

Total Equity

736.1

709.9

703.0

306.9

279.8

Profitability

Loans/Deposits

97.51%

96.24%

101.25%

102.57%

101.10%

NPAs/Assets

0.77%

0.74%

0.72%

0.49%

0.75%

&

TCE/TA

8.81%

9.78%

10.29%

9.38%

9.82%

Credit

NIM (tax equivalent)

4.10%

4.22%

4.27%

4.34%

4.37%

Capital,

ROAA*

0.71%

1.10%

1.11%

0.65%

0.98%

ROATCE*

8.32%

11.50%

11.20%

6.93%

9.96%

3

Financial Highlights - Second Quarter 2020

Balance Sheet Growth

  • Assets of $5.84 billion, loans of $4.58 billion, deposits of $4.70 billion and shareholder's equity of $736.1 million at June 30, 2020
    • Funded over 5,800 loans totaling in excess of $695 million during the second quarter 2020
    • Deposit growth of $840.1 million, or 21.2%, from the second quarter 2019

Profitability

  • Net income of $9.9 million for the second quarter 2020 compared to $3.5 million for the first quarter 2020 and $14.2 million for the second quarter 2019
  • Second quarter 2020 earnings were impacted by:
    • Record net interest income of $50.8 million, or 12.9% growth, from the first quarter 2020
    • Increased provision expense, totaling $10.7 million, in response to COVID-19 related uncertainties in the current economic environment
    • $306 thousand of loss on sale of ORE and a $93 thousand gain on sale of securities

Net Interest Margin

  • Net interest income increased to $50.8 million for second quarter 2020 compared to $45.0 million for the first quarter 2020 and increased from $45.6 million for the second quarter 2019
    • Net interest margin on a tax equivalent basis decreased to 4.10% for the second quarter 2020 from 4.15% for the first quarter 2020 and decreased from 4.33% for the second quarter 2019 primarily due to effect of the PPP loans on the yield
    • Adjusted net interest margin(1) on a tax equivalent basis excludes the impact of acquisition accounting adjustments of $669 thousand and was 4.05% for the second quarter 2020 compared to 4.04% for the first quarter 2020 and 4.07% for the second quarter 2019

Recognitions and Awards

  • Ranked #2 out of Top 10 PPP Lenders in Houston Metro of all loans $150,000 or more according to Houston Business Journal.
  • Contributed $150,000 plus $100,000 matching opportunity to Houston Food Bank to provide over one million meals across its Houston footprint.
  • Proud to be named one of the 100 Best Companies to Work for in Texas by the collaboration of the Texas Association of Business, Texas SHRM, Best Companies Group and Texas Monthly and ranked #18 in the large business category.
  • Recognized by the Houston Chronicle as one of Houston's 100 leading companies based on 2019 performance criteria, such as total revenues,

annual growth in earnings per share, annual revenue growth and one-year total return

_____________________

  1. Please refer to the non-GAAP reconciliation in the appendix.

4

Our Super-Community Banking Strategy

Strategy

Focus on Small

and Medium-Sized

Owner-Operated

Businesses

Responsive

Decision-Making

by Empowered

Lenders

Full-Service Bank

Locations

Centralized Credit

Administration

Experienced

Central Operations

Staff

Structure

Scalable Platform

Effective Centralized Operations

Results

Extraordinary

Customer

Experience

Favorable Loan

Yields and Deposit

Relationships

High Net Interest

Margin

Strong Credit

Quality

Enhanced

Efficiency and

Profitability

5

Deposit Market Share - Houston-TheWoodlands-Sugar Land MSA

2019

2018

2019

2018

Number of

Total Deposits(1)Total Market

% of Company

Total Deposits In

Total Market

Size

Institution (ST)

Rank

Rank

Branches

In Market ($000)

Share (%)

Deposits

Market ($000)(1)

Share (%)

Profile(2)

Houston-TheWoodlands-Sugar Land, TX

JPMorgan Chase & Co. (NY)

1

1

186

$

109,965,045

44.93

8.4%

$

103,057,848

43.11

>$1T

Wells Fargo & Co. (CA)

2

2

175

24,434,154

9.98

1.9%

26,411,254

11.05

>$1T

Bank of America Corporation (NC)

3

3

111

23,786,677

9.72

1.8%

22,254,082

9.31

>$1T

BBVA

4

4

75

14,210,493

5.81

19.5%

15,021,735

6.28

>$100B

Zions Bancorp. NA (UT)

5

5

62

10,172,740

4.16

18.7%

9,824,855

4.11

>$50B

Capital One Financial Corp. (VA)

6

7

35

4,965,521

2.03

2.0%

4,544,163

1.90

>$100B

Prosperity Bancshares Inc. (TX)

7

6

58

4,631,023

1.89

19.3%

4,976,127

2.08

>$30B

Cadence Bancorp. (TX)

8

9

12

4,481,925

1.83

30.8%

4,080,689

1.71

>$10B

Woodforest Financial Grp Inc. (TX)

9

10

105

4,409,143

1.80

76.6%

4,038,486

1.69

>$5B

Cullen/Frost Bankers Inc. (TX)

10

8

43

4,405,713

1.80

16.9%

4,483,002

1.88

>$30B

Allegiance Bancshares Inc. (TX)

11

12

26

3,756,314

1.53

97.2%

3,485,441

1.46

~$4.8B

Texas Capital Bancshares Inc. (TX)

12

11

15

3,469,591

1.42

9.0%

3,774,535

1.58

>$20B

Comerica Inc. (TX)

13

13

48

2,773,341

1.13

4.9%

3,000,429

1.26

>$50B

BOK Financial Corp. (OK)

14

15

11

1,684,815

0.69

6.6%

1,763,568

0.74

>$30B

Veritex Holdings Inc. (TX)

15

14

13

1,648,921

0.67

26.7%

2,155,544

0.90

~$8.0B

CBTX Inc. (TX)

16

18

17

1,586,058

0.65

57.0%

1,493,699

0.62

>$3B

First Horizon National Corp.(TN)

17

16

8

1,356,534

0.55

4.2%

1,739,127

0.73

>$30B

Truist Financial Corp. (NC)

18

19

22

1,352,952

0.55

0.4%

1,383,185

0.58

>$100B

Regions Financial Corp. (AL)

19

20

46

1,239,592

0.51

5.1%

1,307,352

0.55

>$30B

Texas Independent Bcshs Inc. (TX)

20

21

25

1,150,415

0.47

1.3%

1,155,809

0.48

>$100B

Total For Institutions In Market

1,420

$

244,743,521

$

239,052,549

_____________________

Source: S&P Global Intelligence as of June 30, 2019.

  1. As of June 30 of the year shown, on a pro forma basis reflecting any announced acquisition.
  2. To date, on a pro forma basis reflecting any announced acquisition.

6

Historical Balance Sheet Growth

Total Assets

Assets

Acquired Assets

$6,000

$5,837

$4,993 (4)

$5,000

$4,655

(1)

$4,000

$3,000

$2,451

$2,860

$2,000

$2,085

$1,000

$0

2015

2016

2017

2018

2019

2020 Q2

Total Loans

Loans

Acquired Loans

$4,584

(2)

$3,915

(4)

$4,000

$3,708

$3,000

$1,892

$2,271

$2,000

$1,681

$1,000

$0

2015

2016

2017

2018

2019

2020 Q2

Total Deposits

Total Equity

Deposits

Acquired Deposits

$5,000

$4,068 (5)

$4,701

$4,000

$3,663(3)

$3,000

$2,214

$1,870

$2,000

$1,759

$1,000

$0

2015

2016

2017

2018

2019

2020 Q2

$800

$703

$710

$736

$600

$400

$307

$258

$280

$200

$0

2015

2016

2017

2018

2019

2020 Q2

_____________________

Note: Dollars in millions.

(3)

Includes $1.29

billion of acquired deposits on October 1, 2018.

(1)

Includes $1.50

billion in assets acquired on October 1, 2018.

(4)

Includes $45.0

million of loans acquired on February 1, 2019.

(2)

Includes $1.16

billion of acquired loans at fair value on October 1, 2018.

(5)

Includes $16.0

million of deposits acquired on February 1, 2019.

7

Earnings Performance

Net Income and Earnings per Share

Net Income

Earnings per Share (Diluted)

$60.0

$3.00

$50.0

$2.37

$2.50

$2.47

$40.0

$2.00

($)

per Share

Income

$1.75

$30.0

$1.43

$1.50

Net

Earnings

$1.22

$1.26

$53.0

$1.31

$20.0

$37.3

$1.00

$0.66

$22.9

$0.48

$10.0

$0.50

$17.6

$15.8

$14.2

$6.8

$9.0

$9.9

$0.0

(1)

(2)

(3)

$0.00

2013

2014

2015

2016

2017

2018

2019

2019

2020

_____________________

Q2

Q2

Note: Dollars in millions, except per share numbers.

(1) Includes a one-time gain from sale of branches of $1.3 million (after-tax).

(2) Includes $1.8 million and $1.7 million of core system conversion and acquisition and merger-related expenses,

respectively, and $3.1 million of acquisition accounting adjustments.

(3) Includes $9.6 million of acquisition accounting adjustments, $1.4 million of pre-tax severance expense and a $1.1 million

FDIC Small Bank Assessment Credit.

Net Interest Income and Net Interest Margin

Net Interest Income

Net Interest Margin (TE)

$200.0

5.00%

4.68%

$180.0

$160.0

4.31%

4.34% 4.27% 4.22%

4.33%

4.50%

Equivalent)

4.19%

4.37%

4.10%

$140.0

4.00%

Net Interest Income

Interest Margin (Tax

$120.0

$100.0

3.50%

$179.5

$80.0

Net

$128.6

3.00%

$60.0

$103.7

$40.0

$80.2

$89.9

2.50%

$20.0

$46.8

$45.6

$50.8

$33.9

$0.0

(4)

(5)

2.00%

2013

2014

2015

2016

2017

2018

2019

2019

2020

Q2

Q2

  1. Includes $3.1 million of acquisition accounting adjustments; Adjusted net interest margin (tax equivalent) adjusted for acquisition accounting adjustments was 4.17%. Please refer to the non-GAAP reconciliation in the appendix.
  2. Includes $9.6 million of acquisition accounting adjustments; Adjusted net interest margin (tax equivalent) adjusted for acquisition accounting adjustments was 4.00%. Please refer to the non-GAAP reconciliation in the appendix.

8

Earnings Performance, continued

Return on Average Assets

Return on Average Tangible Common Equity(1)

1.11%1.10%

1.19%

11.50% 12.52%

0.98%

9.52% 9.96%

11.20%

9.22%

0.78%

0.75%

0.81%

8.70%

8.32%

0.60% 0.65%

0.65%

7.38%

6.93%

0.71%

0.53%

6.30%

4.76%

(2)

(3)(4)

(5)

(5)

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2019

2020

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2019

2020

Q2

Q2

Q2

Q2

Efficiency Ratio(6)

Noninterest Expense to Average Assets

77.6%

3.30% 3.26%

74.4%

69.0% 69.2% 67.8%

2.99%

65.3%

2.82% 2.80% 2.83%

63.9%

63.7%

63.0% 61.9%

2.59% 2.58%

62.3%

2.53%

2.52%

2.50%

56.9%

2.13%

2010

2011

2012

2013

2014

2015

(2)

2017

(3)(4)

(5)

2019

2020

2010

2011

2012

2013

2014

2015

2016

2017

(3)

2019

2019

2020

2016

2018

2019

2018

_____________________

Q2

Q2

Q2

Q2

(5)

Includes $9.6 million of acquisition accounting adjustments, $1.3 million of acquisition and merger related expenses, $1.4 million of pre-tax

(1) Please refer to the non-GAAP reconciliation in the appendix.

severance expense, $1.1 million FDIC Small Bank Assessment Credit, $1.5 million of gain on sales of securities offset by $572 thousand of

(2) Includes a one-time gain from sale of branches of $1.3 million (after-tax).

prepayment penalties and $376 thousand of SBIC income.

(3) Includes $1.8 million and $1.7 million of core system conversion and merger-related expenses, respectively.

(6)

Represents total noninterest expense divided by the sum of net interest income plus noninterest income, excluding net gains and losses on

(4) Includes $3.1 million of acquisition accounting adjustments.

the sale of loans, securities and assets. Additionally, taxes and provision for loan losses are not part of this calculation.

9

Yields and Cost Analysis

Loan Portfolio Reported Yields and Total Deposit Costs

Net Interest Margin

Yield on Loans

Yield on Loans (excl. PPP)

Cost of Deposits

6.25%

2.00%

5.88%

5.72%

1.60%

5.75%

5.65%

5.59%

5.44%

Yield on Loans

1.21%

1.20%

Cost of Deposits

1.20%

1.16%

5.25%

1.06%

5.13%

0.80%

0.68%

4.75%

0.40%

4.25%

0.00%

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

_____________________

(1) Adjusted net interest margin excludes acquisition accounting adjustments. Please refer to the non-GAAP reconciliation in the appendix.

Net Interest Margin (TE)

Adjusted Net Interest Margin (TE) (1)

4.50%

4.35%

4.33%

4.20%

4.16%

4.15%

4.11%

4.10%

4.05%

4.07%

4.05%

4.04%

3.97%

3.90%

3.94%

3.75%

2019Q2

2019Q3

2019Q4

2020Q1

2020Q2

10

Capital Position

Tangible Equity / Tangible Assets(1)

Tier 1 Leverage Ratio

10.48%

10.29%

11.02%

10.61%

9.82%

9.78%

10.35%

9.38%

8.81%

10.02%

9.84%

8.83%

2015

2016

2017

2018

2019

2020 Q2

2015

2016

2017

2018

2019

2020 Q2

Tier 1 Risk-Based Ratio

Total Risk-Based Ratio

14.83%

15.17%

12.21%

13.70%

12.01%

12.92%

13.43%

12.57%

11.73%

11.66%

11.60%

10.92%

2015

2016

2017

2018

2019

2020 Q2

2015

2016

2017

2018

2019

2020 Q2

_____________________

  1. Please refer to the non-GAAP reconciliation in the appendix.

11

Deposit Composition and Growth

Deposit Composition

Deposit Growth Trend

Deposits Noninterest-bearing (%)

Interest-

$5,000

37.3%

40.0%

bearing

35.3%

Demand

8.0%

33.0%

31.7%

Money Market

$4,000

30.9%

30.8%

Deposits

37.3%

and Savings

30.0%

Noninterest-bearing

27.0%

Deposits

to

bearingDeposits

$3,000

Certificates

20.0%

and Other

$4,701

Time

$2,000

$4,068

27.7%

-

$3,663

10.0%

Noninterest

Deposit Category

($)

(%)

$1,000

$1,870

$2,214

$1,759

Noninterest-bearing

$

1,754.1

37.3%

Interest-bearing Demand

375.4

8.0%

Money Market and Savings

1,270.4

27.0%

Certificates and Other Time

1,300.8

27.7%

$0

0.0%

Total

$

4,700.7

100.0%

2015

2016

2017

2018

2019

2020

Q2

_____________________

Note: Dollars in millions. As of the quarter ended June 30, 2020.

12

Loan Portfolio Composition

Total Loan Portfolio Composition

CRE (incl. multi-family) by Property Type

CRE Construction by Property Type

53.8% of CRE is Owner-Occupied

Residential

CRE C&D

Construction

CRE (incl.

3.7%

8.4%

multifamily)

42.7%

1-4 family

residential

Paycheck

15.4%

Protection

C &I

Program

14.2%

(PPP)

Consumer &

15.2%

Other

0.4%

Loan Category

($)

(%)

C&I

$

651.4

14.2%

Mortgage Warehouse

-

0.0%

Paycheck Protection Program (PPP)

695.8

15.2%

CRE (incl. multifamily)

1,956.1

42.7%

CRE C&D

386.9

8.4%

1-4 family residential

703.5

15.4%

Residential construction

171.7

3.7%

Consumer & Other

18.3

0.4%

Total

$

4,583.7

100.0%

_____________________

Note: Dollars in millions, unless otherwise noted. As of the quarter ended June 30, 2020.

(1) Includes classifications less than 2.0% of total composition.

Hotel / Motel

Resi. Vacant Land-Future

Unimproved

Restaurant / Bar

Constr.

Land /

6.4%

4.1%

5.6%

Farmland

Office

4.9%

C -Store

Multi-Family

Retail /

5.7%

Wholesale

Office

13.6%

3.7%

Church Facility

8.8%

4.4%

14.0%

C -Store

Church

10.9%

Industrial /

Facility

Warehouse

3.6%

Industrial

4.2%

Warehouse

Service

Vacant Land-

Improved

14.7%

Center

Land

3.4%

Near Term

3.5%

16.2%

Mini Storage

Residential

2.8%

Vacant Land-

Retail

Other(1)

Day Care

Other(1)

Vacant Land-Future

Near Term

17.2%

9.1%

2.7%

Construction

8.8%

2.7%

Auto Sales / Repair

19.6%

Recrearional

2.4%

2.7%

Unimproved Land / Farmland

Service Center

2.3%

2.0%

Property Type

($)

(%)

Property Type

($)

(%)

Retail

$

337.3

17.2%

Vacant Land-Future Construction

$

75.8

19.6%

Industrial Warehouse

287.9

14.7%

Vacant Land-Near Term

62.7

16.2%

Office

274.0

14.0%

C -Store

42.1

10.9%

C-Store

267.0

13.6%

Retail / Wholesale

33.9

8.8%

Hotel / Motel

125.1

6.4%

Office

22.2

5.7%

Restaurant / Bar

80.2

4.1%

Resi. Vacant Land-Future Constr.

21.8

5.6%

Multi-Family

73.1

3.7%

Unimproved Land / Farmland

18.9

4.9%

Church Facility

70.2

3.6%

Church Facility

16.9

4.4%

Service Center

66.8

3.4%

Industrial / Warehouse

16.1

4.2%

Mini Storage

54.5

2.8%

Improved Land

13.5

3.5%

(1)

53.4

2.7%

Residential Vacant Land-Near Term

10.3

2.7%

Day Care

Recrearional

10.3

2.7%

Auto Sales / Repair

46.0

2.4%

Service Center

7.8

2.0%

Unimproved Land / Farmland

44.9

2.3%

13

PPP Loan Composition as of June 30, 2020

Total PPP Loan Composition

Industry

($)mm

(%)

Services

$

166.9

24.0%

Commercial Construction

118.4

17.0%

Manufacturing

93.0

13.4%

Retail / Wholesale Trade

58.8

8.5%

Restaurants / Bars

48.9

7.0%

Health Care / Social Assistance

44.9

6.5%

Real Estate, Rental, Leasing

28.7

4.1%

Oil and Gas

25.8

3.7%

Transportation

17.9

2.6%

Finance / Insurance

17.5

2.5%

Other(1)

75.0

10.7%

Total

$

695.8

100.0%

PPP Highlights

Total Loans

5,876

Average Funded Loan Balance ($ in thousands)

$

118.4

Balance of Loans Under $150,000 ($ in millions)

$

188.3

Weighted Average Fee

3.75%

New Customers Stats:

Loans to New Customers

3,274

PPP Loan Balance of New Customers ($ in millions)

$

240.1

_____________________

(1) Includes classifications less than 2.0% of total composition.

Manufacturing

Retail

/

13.4%

Wholesale

Trade

8.5%

Commercial

Restaurants / Bars

Construction

7.0%

17.0%

Health Care /

Real Estate,

Social Assistance

Rental,

6.5%

Leasing

4.1%

Serv ices

24.0%

Oil and Gas

Other(1)

3.7%

10.7%

Transportation

2.6%

Finance / Insurance

2.5%

14

Loan Deferral Update

  • As of 8/31/2020, $879 million, or 74.1%, of $1.19 billion of 1st deferral loan balances at 6/30/2020 have returned to making payments and $187 million in loan balances have received a 2nd deferral, representing a redeferral rate of 15.8%.
  • Our higher-risk portfolios below represent 46% of 2nd deferral loan balances:
    • Hotel loans represented $134 million(1), or 2.9%, of total loans at 6/30/2020, of which $117 million had received a deferral. As of 8/31/2020, $43 million, or 37.0%, have returned to making payments and $67 million have received a 2nd deferral, representing a redeferral rate of 57.6%.
    • Restaurant loans represented $111 million(1), or 2.4%, of total loans at 6/30/2020, of which $77 million had received a deferral. As of 8/31/2020, $56 million, or 72.3%, have returned to making payments and $15 million have received a 2nd deferral, representing a redeferral rate of 19.9%.
    • Oil and Gas loans represented $75 million(1), or 1.6%, of total loans at 6/30/2020, of which $18 million had received a deferral. As of 8/31/2020, $14 million, or 74.2%, have returned to making payments and $4 million have received a 2nd deferral, representing a redeferral rate of 20.6%.

(1) Excluding PPP loans

Note: Remaining loan balances are comprised primarily of loans on 1st deferral, loans pending return to payment or a potential 2nd deferral

1st Deferrals as of June 30,2020

2nd Deferrals as of August 31, 2020

Loan Balance

Number of

Loan Balance

Percentage

Loan Balance

Number of

Loan Balance

Percentage

Redeferral

Loans

of Loan

Loans

of Loan

at 6/30/2020

of Deferral

at 8/31/2020

of Deferral

Rate

Loan Category

Deferred

Category

Deferred

Category

Commercial and industrial

$

651,430

711

$

134,073

20.6%

$

654,915

83

$

18,600

2.8%

13.9%

Mortgage warehouse

-

-

-

0.0%

-

-

-

0.0%

0.0%

Paycheck Protection Program (PPP)

695,772

-

-

0.0%

710,180

-

-

0.0%

0.0%

Real estate:

Commercial real estate (including multi-family residential)

1,956,116

763

793,115

40.5%

1,966,611

79

135,719

6.9%

17.1%

Commercial real estate construction and land development

386,865

127

101,456

26.2%

398,029

18

17,007

4.3%

16.8%

1-4 family residential (including home equity)

703,513

425

139,565

19.8%

705,375

26

14,824

2.1%

10.6%

Residential construction

171,656

30

18,017

10.5%

164,585

4

1,139

2.8%

6.3%

Consumer and other

18,304

55

1,197

6.5%

15,514

5

140

2.8%

11.7%

Total loans

$

4,583,656

2,111

$

1,187,423

25.9%

$

4,615,209

215

$

187,429

2.8%

15.8%

_____________________

Note: Dollars in thousands

15

Strong Asset Quality

Allowance / Nonperforming Loans

300.0%

258.8% 259.0%252.7%

211.3%

177.4%

143.4%

121.0%

107.3%

79.9%

103.8%

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Q2

Nonperforming Loans / Total Loans

Allowance / Total Loans

1.25%

1.20%

1.13%

1.04%

1.04%

0.95%

0.80%

0.82%

0.78%

0.71%

0.75%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Q2

Net Charge-offs / Average Loans(1)

0.94%

0.88%

0.89%

0.72%

0.72%

0.59%

0.59%

0.31%

0.32%

0.31%

0.29%

0.36%

0.25% 0.25%

0.02%

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Q2

_____________________

(1) Annualized for each respective quarter.

0.02%

0.06%

0.06%

0.04%

0.06%

0.07%

0.05%

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Q2

16

Appendix: Non-GAAP Reconciliation

Our management uses certain non-GAAP financial measures in its analysis of our performance:

  • "Tangible Shareholders' Equity" is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Tangible shareholders' equity is defined as total shareholders' equity reduced by goodwill and core deposit intangibles, net of accumulated amortization. This measure is important to investors interested in changes from period to period in shareholders' equity, exclusive of changes in intangible assets. For tangible shareholders' equity, the most directly comparable financial measure calculated in accordance with GAAP is total shareholders' equity. Goodwill and other intangible assets have the effect of increasing total shareholders' equity while not increasing our tangible shareholders' equity.
  • "Tangible Equity to Tangible Assets" is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Tangible equity to tangible assets is defined as total shareholders' equity reduced by goodwill and core deposit intangibles, net of accumulated amortization, divided by tangible assets, which are total assets reduced by goodwill and core deposit intangibles, net of accumulated amortization. This measure is important to investors interested in changes from period to period in equity and total assets, each exclusive of changes in intangible assets. For tangible equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total shareholders' equity to total assets. Goodwill and other intangible assets have the effect of increasing both total shareholders' equity and assets while not increasing our tangible common equity or tangible assets.

For the Years Ended December 31,

For the Quarters Ended June 30,

2015

2016

2017

2018

2019

2019

2020

Total Shareholders' Equity

$

258,490

$

279,817

$

306,865

$

702,984

$

709,865

$

704,701

$

736,143

Less: Goodwill and Core Deposit Intangibles, net

44,619

43,444

42,663

249,712

245,518

247,873

243,538

Tangible Shareholders' Equity

$

213,871

$

236,373

$

264,202

$

453,272

$

464,347

$

456,828

$

492,605

Total Assets

$

2,084,579

$

2,450,948

$

2,860,231

$

4,655,249

$

4,992,654

$

4,794,211

$

5,836,881

Less: Goodwill and Core Deposit Intangibles, net

44,619

43,444

42,663

249,712

245,518

247,873

243,538

Tangible Assets

$

2,039,960

$

2,407,504

$

2,817,568

$

4,405,537

$

4,747,136

$

4,546,338

$

5,593,343

Tangible Equity to Tangible Assets

10.48%

9.82%

9.38%

10.29%

9.78%

10.05%

8.81%

For the Year Ended December 31,

For the Quarters Ended June 30,

2015

2016

2017

2018

2019

2019

2020

Net Income Attributable to Shareholders

$

15,227

$

22,851

$

17,632

$

37,309

$

52,959

$

14,248

$

9,907

Average Shareholders' Equity

204,935

273,211

297,627

413,441

708,269

705,162

723,104

Less: Average Goodwill and Core Deposit Intangibles, net

45,055

43,880

43,050

80,384

247,854

248,621

244,010

Average Tangible Common Shareholders' Equity

$

159,880

$

229,331

$

254,577

$

333,057

$

460,415

$

456,541

$

479,094

Return on Average Tangible Common Equity

9.52%

9.96%

6.93%

11.20%

11.50%

12.52%

8.32%

_____________________

Note: Dollars in thousands..

17

Non-GAAP Reconciliation, continued

  • "Adjusted Net Interest Margin (TE)" is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Adjusted net interest margin is defined as net interest income, net of related acquisition accounting adjustments, divided average earnings assets. This measure is important to investors interested in changes from period to period in net interest income, exclusive of the impact from related acquisition accounting adjustments. For adjusted net interest margin, the most directly comparable financial measure calculated in accordance with GAAP is net interest margin.

For the Three Months Ended,

6/30/2019

9/30/2019

12/31/2019

3/31/2020

6/30/2020

Interest Income

$

58,946

$

58,665

$

58,147

$

57,452

$

60,452

Interest Expense

13,375

13,828

13,621

12,427

9,605

Tax Equivalent Adjustment

113

87

97

127

495

Net Interest Income (TE)

45,684

44,924

44,623

45,152

51,342

Less: Acquisition Accounting Adjustments

(2,755)

(2,045)

(1,860)

(1,259)

(669)

Adjusted Net Interest Income (TE)

$

42,929

$

42,879

$

42,763

$

43,893

$

50,673

Average Earning Assets

$

4,233,653

$

4,284,667

$

4,308,028

$

4,372,723

$

5,037,414

Net Interest Margin (TE) (1)

4.33%

4.16%

4.11%

4.15%

4.10%

Adjusted Net Interest Margin (TE) (1)

4.07%

3.97%

3.94%

4.04%

4.05%

_____________________

Note: Dollars in thousands.

  1. Annualized for each respective quarter.

18

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Allegiance Bancshares Inc. published this content on 09 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 September 2020 15:04:05 UTC