- Record net income of
$16.2 million and diluted earnings per share of$0.79 , representing 34.2% net income growth and 38.6% diluted earnings per share growth from the third quarter of 2019
- Net charge-offs to average loans of 0.03% (annualized) for the third quarter 2020
- Deposits increased 4.6%, or 18.4% annualized, over the second quarter 2020
- Declared quarterly dividend of
$0.10 per share of common stock
“Given the continuing economic slowdown and uncertainties due to the pandemic, we are very pleased with our level of loan and deposit production and core earnings that contributed to a record level of net income for the third quarter. Our team continues to work diligently to support our customers and the communities we serve. The experience we have with our long established customer relationships and disciplined underwriting are key strengths that guide and serve us well during this extended period of recovery,” said
“We believe our strong liquidity, solid capital and focus on expense management, as well as the tradition of community banking, experience and continued commitment of the entire Allegiance team, will help ensure that our core business is solid and resilient. We remain focused on achieving our goals as we strategically position Allegiance to provide long-term value to our shareholders, and continue to be a source of strength for our customers, employees and community as we all navigate toward a more normalized economic environment,” concluded Retzloff.
Third Quarter 2020 Results
Net interest income before the provision for loan losses in the third quarter 2020 increased
Noninterest income for the third quarter 2020 was
Noninterest expense for the third quarter 2020 increased
In the third quarter 2020, Allegiance’s efficiency ratio was 60.58% compared to 56.92% for the second quarter 2020 and 62.88% for the third quarter 2019. Third quarter 2020 annualized returns on average assets, average equity and average tangible equity were 1.09%, 8.59% and 12.72%, respectively, compared to 0.71%, 5.51% and 8.32%, respectively, for the second quarter 2020. Annualized returns on average assets, average equity and average tangible equity for the third quarter 2019 were 0.98%, 6.73% and 10.33%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.
Nine Months Ended September 30, 2020 Results
Net interest income before provision for loan losses for the nine months ended
Noninterest income for the nine months ended
Noninterest expense for the nine months ended
Allegiance’s efficiency ratio decreased from 63.25% for the nine months ended
Financial Condition
Total assets at
Total loans at
Deposits at
Asset Quality
Nonperforming assets totaled
The provision for loan losses for the third quarter 2020 was
Third quarter 2020 net charge-offs were
The Company believes the largest risks within its loan portfolio are in the hotel, restaurant and bar, and oil and gas portfolios. Loan balances in the hotel industry, excluding PPP loans, totaled
During the nine months ended
Dividend
On
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 11 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
As of
“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 is rapidly evolving 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
Financial Highlights
(Unaudited)
2020 | 2019 | |||||||||||||||||||
September 30 | June 30 | March 31 | December 31 | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 327,416 | $ | 237,585 | $ | 156,700 | $ | 213,347 | $ | 246,312 | ||||||||||
Interest-bearing deposits at other financial institutions | 19,732 | 28,815 | 18,189 | 132,901 | 54,307 | |||||||||||||||
Total cash and cash equivalents | 347,148 | 266,400 | 174,889 | 346,248 | 300,619 | |||||||||||||||
Available for sale securities, at fair value | 663,301 | 618,751 | 508,250 | 372,545 | 353,000 | |||||||||||||||
Loans held for investment | 4,592,362 | 4,583,656 | 3,955,546 | 3,915,310 | 3,886,004 | |||||||||||||||
Less: allowance for loan losses | (48,698 | ) | (47,642 | ) | (37,511 | ) | (29,438 | ) | (29,808 | ) | ||||||||||
Loans, net | 4,543,664 | 4,536,014 | 3,918,035 | 3,885,872 | 3,856,196 | |||||||||||||||
Accrued interest receivable | 36,996 | 32,795 | 17,203 | 15,468 | 15,201 | |||||||||||||||
Premises and equipment, net | 69,887 | 67,229 | 66,798 | 66,790 | 67,175 | |||||||||||||||
Other real estate owned | 8,876 | 11,847 | 12,617 | 8,337 | 8,333 | |||||||||||||||
9,716 | 14,844 | 12,798 | 6,242 | 14,138 | ||||||||||||||||
Bank owned life insurance | 27,542 | 27,398 | 27,255 | 27,104 | 26,947 | |||||||||||||||
223,642 | 223,642 | 223,642 | 223,642 | 223,642 | ||||||||||||||||
Core deposit intangibles, net | 18,907 | 19,896 | 20,886 | 21,876 | 23,053 | |||||||||||||||
Other assets | 18,072 | 18,065 | 20,056 | 18,530 | 17,536 | |||||||||||||||
Total assets | $ | 5,967,751 | $ | 5,836,881 | $ | 5,002,429 | $ | 4,992,654 | $ | 4,905,840 | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing | $ | 1,772,700 | $ | 1,754,128 | $ | 1,217,532 | $ | 1,252,232 | $ | 1,227,839 | ||||||||||
Interest-bearing | ||||||||||||||||||||
Demand | 409,137 | 375,353 | 341,524 | 367,278 | 340,754 | |||||||||||||||
Money market and savings | 1,483,370 | 1,270,437 | 1,110,631 | 1,258,008 | 1,114,233 | |||||||||||||||
Certificates and other time | 1,252,159 | 1,300,793 | 1,283,887 | 1,190,583 | 1,214,659 | |||||||||||||||
Total interest-bearing deposits | 3,144,666 | 2,946,583 | 2,736,042 | 2,815,869 | 2,669,646 | |||||||||||||||
Total deposits | 4,917,366 | 4,700,711 | 3,953,574 | 4,068,101 | 3,897,485 | |||||||||||||||
Accrued interest payable | 3,082 | 3,293 | 3,821 | 4,326 | 4,915 | |||||||||||||||
Borrowed funds | 155,512 | 255,509 | 190,506 | 75,503 | 159,501 | |||||||||||||||
Subordinated debt | 108,191 | 108,061 | 107,930 | 107,799 | 107,771 | |||||||||||||||
Other liabilities | 30,547 | 33,164 | 40,005 | 27,060 | 29,860 | |||||||||||||||
Total liabilities | 5,214,698 | 5,100,738 | 4,295,836 | 4,282,789 | 4,199,532 | |||||||||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||||||||||||
Common stock | 20,445 | 20,431 | 20,355 | 20,524 | 20,737 | |||||||||||||||
Capital surplus | 516,151 | 515,045 | 513,894 | 521,066 | 529,688 | |||||||||||||||
Retained earnings | 186,866 | 172,723 | 164,858 | 163,375 | 149,389 | |||||||||||||||
Accumulated other comprehensive income | 29,591 | 27,944 | 7,486 | 4,900 | 6,494 | |||||||||||||||
Total shareholders’ equity | 753,053 | 736,143 | 706,593 | 709,865 | 706,308 | |||||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 5,967,751 | $ | 5,836,881 | $ | 5,002,429 | $ | 4,992,654 | $ | 4,905,840 |
Financial Highlights
(Unaudited)
Three Months Ended | Year-to-Date | |||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
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 | $ | 56,418 | $ | 56,421 | $ | 54,624 | $ | 55,368 | $ | 55,790 | $ | 167,463 | $ | 165,995 | ||||||||||||||
Securities: | ||||||||||||||||||||||||||||
Taxable | 2,095 | 1,842 | 2,087 | 2,066 | 2,090 | 6,024 | 4,909 | |||||||||||||||||||||
Tax-exempt | 2,280 | 2,169 | 546 | 469 | 483 | 4,995 | 2,465 | |||||||||||||||||||||
Deposits in other financial institutions | 18 | 20 | 195 | 244 | 302 | 233 | 1,391 | |||||||||||||||||||||
Total interest income | 60,811 | 60,452 | 57,452 | 58,147 | 58,665 | 178,715 | 174,760 | |||||||||||||||||||||
INTEREST EXPENSE: | ||||||||||||||||||||||||||||
Demand, money market and savings deposits | 1,657 | 1,729 | 4,364 | 5,091 | 4,975 | 7,750 | 13,216 | |||||||||||||||||||||
Certificates and other time deposits | 5,239 | 5,845 | 6,084 | 6,483 | 6,909 | 17,168 | 20,173 | |||||||||||||||||||||
Borrowed funds | 558 | 562 | 506 | 547 | 1,183 | 1,626 | 4,128 | |||||||||||||||||||||
Subordinated debt | 1,448 | 1,469 | 1,473 | 1,500 | 761 | 4,390 | 2,232 | |||||||||||||||||||||
Total interest expense | 8,902 | 9,605 | 12,427 | 13,621 | 13,828 | 30,934 | 39,749 | |||||||||||||||||||||
NET INTEREST INCOME | 51,909 | 50,847 | 45,025 | 44,526 | 44,837 | 147,781 | 135,011 | |||||||||||||||||||||
Provision for loan losses | 1,347 | 10,669 | 10,990 | 933 | 2,597 | 23,006 | 5,006 | |||||||||||||||||||||
Net interest income after provision for loan losses | 50,562 | 40,178 | 34,035 | 43,593 | 42,240 | 124,775 | 130,005 | |||||||||||||||||||||
NONINTEREST INCOME: | ||||||||||||||||||||||||||||
Nonsufficient funds fees | 75 | 60 | 169 | 189 | 168 | 304 | 469 | |||||||||||||||||||||
Service charges on deposit accounts | 325 | 343 | 457 | 403 | 379 | 1,125 | 1,069 | |||||||||||||||||||||
Gain on sale of securities | — | 93 | 194 | 613 | — | 287 | 846 | |||||||||||||||||||||
Gain (loss) on sales of other real estate and repossessed assets | 117 | (306 | ) | (69 | ) | (45 | ) | — | (258 | ) | 71 | |||||||||||||||||
Bank owned life insurance | 144 | 143 | 151 | 157 | 153 | 438 | 467 | |||||||||||||||||||||
Rebate from correspondent bank | 98 | 89 | 493 | 900 | 900 | 680 | 2,680 | |||||||||||||||||||||
Other | 1,091 | 1,140 | 1,330 | 1,183 | 1,289 | 3,561 | 4,421 | |||||||||||||||||||||
Total noninterest income | 1,850 | 1,562 | 2,725 | 3,400 | 2,889 | 6,137 | 10,023 | |||||||||||||||||||||
NONINTEREST EXPENSE: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 20,034 | 19,334 | 19,781 | 18,273 | 20,221 | 59,149 | 59,320 | |||||||||||||||||||||
Net occupancy and equipment | 2,057 | 1,926 | 1,907 | 1,994 | 1,973 | 5,890 | 6,139 | |||||||||||||||||||||
Depreciation | 946 | 885 | 866 | 861 | 822 | 2,697 | 2,331 | |||||||||||||||||||||
Data processing and software amortization | 2,125 | 1,934 | 1,826 | 2,120 | 2,058 | 5,885 | 5,390 | |||||||||||||||||||||
Professional fees | 756 | 800 | 573 | 540 | 667 | 2,129 | 1,793 | |||||||||||||||||||||
Regulatory assessments and | 875 | 609 | 632 | 216 | (41 | ) | 2,116 | 1,489 | ||||||||||||||||||||
Core deposit intangibles amortization | 989 | 990 | 990 | 1,177 | 1,178 | 2,969 | 3,534 | |||||||||||||||||||||
Communications | 355 | 390 | 417 | 486 | 455 | 1,162 | 1,353 | |||||||||||||||||||||
Advertising | 327 | 370 | 521 | 597 | 449 | 1,218 | 1,770 | |||||||||||||||||||||
Other real estate expense | 2,017 | 114 | 2,649 | 164 | 137 | 4,780 | 450 | |||||||||||||||||||||
Acquisition and merger-related expenses | — | — | — | — | — | — | 1,326 | |||||||||||||||||||||
Other | 2,084 | 2,427 | 2,239 | 3,003 | 2,090 | 6,750 | 6,309 | |||||||||||||||||||||
Total noninterest expense | 32,565 | 29,779 | 32,401 | 29,431 | 30,009 | 94,745 | 91,204 | |||||||||||||||||||||
INCOME BEFORE INCOME TAXES | 19,847 | 11,961 | 4,359 | 17,562 | 15,120 | 36,167 | 48,824 | |||||||||||||||||||||
Provision for income taxes | 3,677 | 2,054 | 843 | 3,576 | 3,073 | 6,574 | 9,851 | |||||||||||||||||||||
NET INCOME | $ | 16,170 | $ | 9,907 | $ | 3,516 | $ | 13,986 | $ | 12,047 | $ | 29,593 | $ | 38,973 | ||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||||||||||||||
Basic | $ | 0.79 | $ | 0.49 | $ | 0.17 | $ | 0.68 | $ | 0.57 | $ | 1.45 | $ | 1.83 | ||||||||||||||
Diluted | $ | 0.79 | $ | 0.48 | $ | 0.17 | $ | 0.67 | $ | 0.57 | $ | 1.44 | $ | 1.81 |
Financial Highlights
(Unaudited)
Three Months Ended | Year-to-Date | |||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
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 | $ | 16,170 | $ | 9,907 | $ | 3,516 | $ | 13,986 | $ | 12,047 | $ | 29,593 | $ | 38,973 | ||||||||||||||
Earnings per share, basic | $ | 0.79 | $ | 0.49 | $ | 0.17 | $ | 0.68 | $ | 0.57 | $ | 1.45 | $ | 1.83 | ||||||||||||||
Earnings per share, diluted | $ | 0.79 | $ | 0.48 | $ | 0.17 | $ | 0.67 | $ | 0.57 | $ | 1.44 | $ | 1.81 | ||||||||||||||
Return on average assets(A) | 1.09 | % | 0.71 | % | 0.29 | % | 1.13 | % | 0.98 | % | 0.72 | % | 1.09 | % | ||||||||||||||
Return on average equity(A) | 8.59 | % | 5.51 | % | 1.98 | % | 7.81 | % | 6.73 | % | 5.43 | % | 7.36 | % | ||||||||||||||
Return on average tangible equity(A)(B) | 12.72 | % | 8.32 | % | 3.02 | % | 11.96 | % | 10.33 | % | 8.16 | % | 11.35 | % | ||||||||||||||
Net interest margin (tax equivalent)(C) | 3.95 | % | 4.10 | % | 4.15 | % | 4.11 | % | 4.16 | % | 4.06 | % | 4.27 | % | ||||||||||||||
Adjusted net interest margin (tax equivalent)(B) | 3.91 | % | 4.05 | % | 4.04 | % | 3.94 | % | 3.97 | % | 3.99 | % | 4.02 | % | ||||||||||||||
Efficiency ratio(D) | 60.58 | % | 56.92 | % | 68.13 | % | 62.20 | % | 62.88 | % | 61.67 | % | 63.25 | % | ||||||||||||||
Capital Ratios | ||||||||||||||||||||||||||||
(Consolidated) | ||||||||||||||||||||||||||||
Equity to assets | 12.62 | % | 12.61 | % | 14.12 | % | 14.22 | % | 14.40 | % | 12.62 | % | 14.40 | % | ||||||||||||||
Tangible equity to tangible assets(B) | 8.92 | % | 8.81 | % | 9.71 | % | 9.78 | % | 9.86 | % | 8.92 | % | 9.86 | % | ||||||||||||||
Estimated common equity tier 1 capital | 11.73 | % | 11.36 | % | 11.15 | % | 11.42 | % | 11.28 | % | 11.73 | % | 11.28 | % | ||||||||||||||
Estimated tier 1 risk-based capital | 11.96 | % | 11.60 | % | 11.38 | % | 11.66 | % | 11.51 | % | 11.96 | % | 11.51 | % | ||||||||||||||
Estimated total risk-based capital | 15.56 | % | 15.17 | % | 14.72 | % | 14.83 | % | 14.70 | % | 15.56 | % | 14.70 | % | ||||||||||||||
Estimated tier 1 leverage capital | 8.70 | % | 8.83 | % | 9.89 | % | 10.02 | % | 10.06 | % | 8.70 | % | 10.06 | % | ||||||||||||||
Estimated common equity tier 1 capital | 13.25 | % | 12.84 | % | 12.58 | % | 12.67 | % | 12.28 | % | 13.25 | % | 12.28 | % | ||||||||||||||
Estimated tier 1 risk-based capital | 13.25 | % | 12.84 | % | 12.58 | % | 12.67 | % | 12.28 | % | 13.25 | % | 12.28 | % | ||||||||||||||
Estimated total risk-based capital | 15.41 | % | 14.97 | % | 14.48 | % | 14.39 | % | 14.01 | % | 15.41 | % | 14.01 | % | ||||||||||||||
Estimated tier 1 leverage capital | 9.64 | % | 9.77 | % | 10.94 | % | 10.89 | % | 10.73 | % | 9.64 | % | 10.73 | % | ||||||||||||||
Other Data | ||||||||||||||||||||||||||||
Weighted average shares: | ||||||||||||||||||||||||||||
Basic | 20,439 | 20,414 | 20,411 | 20,652 | 20,981 | 20,421 | 21,321 | |||||||||||||||||||||
Diluted | 20,532 | 20,514 | 20,690 | 20,930 | 21,256 | 20,551 | 21,591 | |||||||||||||||||||||
Period end shares outstanding | 20,445 | 20,431 | 20,355 | 20,524 | 20,737 | 20,445 | 20,737 | |||||||||||||||||||||
Book value per share | $ | 36.83 | $ | 36.03 | $ | 34.71 | $ | 34.59 | $ | 34.06 | $ | 36.83 | $ | 34.06 | ||||||||||||||
Tangible book value per share(B) | $ | 24.97 | $ | 24.11 | $ | 22.70 | $ | 22.62 | $ | 22.16 | $ | 24.97 | $ | 22.16 |
(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 11 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 loan losses are not part of this calculation.
Financial Highlights
(Unaudited)
Three Months Ended | ||||||||||||||||||||||||||||||||||||
September 30, 2020 | June 30, 2020 | September 30, 2019 | ||||||||||||||||||||||||||||||||||
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 | $ | 4,594,333 | $ | 56,418 | 4.89 | % | $ | 4,425,036 | $ | 56,421 | 5.13 | % | $ | 3,870,205 | $ | 55,790 | 5.72 | % | ||||||||||||||||||
Securities | 667,008 | 4,375 | 2.61 | % | 594,205 | 4,011 | 2.71 | % | 359,392 | 2,573 | 2.84 | % | ||||||||||||||||||||||||
Deposits in other financial institutions and other | 20,176 | 18 | 0.35 | % | 18,173 | 20 | 0.44 | % | 55,070 | 302 | 2.17 | % | ||||||||||||||||||||||||
Total interest-earning assets | 5,281,517 | $ | 60,811 | 4.58 | % | 5,037,414 | $ | 60,452 | 4.83 | % | 4,284,667 | $ | 58,665 | 5.43 | % | |||||||||||||||||||||
Allowance for loan losses | (47,593 | ) | (41,334 | ) | (28,593 | ) | ||||||||||||||||||||||||||||||
Noninterest-earning assets | 679,750 | 637,608 | 600,004 | |||||||||||||||||||||||||||||||||
Total assets | $ | 5,913,674 | $ | 5,633,688 | $ | 4,856,078 | ||||||||||||||||||||||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||||||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 394,612 | $ | 392 | 0.40 | % | $ | 353,252 | $ | 421 | 0.48 | % | $ | 332,652 | $ | 943 | 1.13 | % | ||||||||||||||||||
Money market and savings deposits | 1,409,969 | 1,265 | 0.36 | % | 1,169,225 | 1,308 | 0.45 | % | 1,099,937 | 4,032 | 1.45 | % | ||||||||||||||||||||||||
Certificates and other time deposits | 1,291,536 | 5,239 | 1.61 | % | 1,302,743 | 5,845 | 1.80 | % | 1,269,886 | 6,909 | 2.16 | % | ||||||||||||||||||||||||
Borrowed funds | 171,804 | 558 | 1.29 | % | 320,332 | 562 | 0.71 | % | 158,358 | 1,183 | 2.96 | % | ||||||||||||||||||||||||
Subordinated debt | 108,130 | 1,448 | 5.33 | % | 107,998 | 1,469 | 5.47 | % | 51,607 | 761 | 5.85 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities | 3,376,051 | $ | 8,902 | 1.05 | % | 3,253,550 | $ | 9,605 | 1.19 | % | 2,912,440 | $ | 13,828 | 1.88 | % | |||||||||||||||||||||
Noninterest-Bearing Liabilities: | ||||||||||||||||||||||||||||||||||||
Noninterest-bearing demand deposits | 1,752,404 | 1,624,641 | 1,198,564 | |||||||||||||||||||||||||||||||||
Other liabilities | 36,572 | 32,393 | 35,030 | |||||||||||||||||||||||||||||||||
Total liabilities | 5,165,027 | 4,910,584 | 4,146,034 | |||||||||||||||||||||||||||||||||
Shareholders' equity | 748,647 | 723,104 | 710,044 | |||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 5,913,674 | $ | 5,633,688 | $ | 4,856,078 | ||||||||||||||||||||||||||||||
Net interest rate spread | 3.53 | % | 3.64 | % | 3.55 | % | ||||||||||||||||||||||||||||||
Net interest income and margin | $ | 51,909 | 3.91 | % | $ | 50,847 | 4.06 | % | $ | 44,837 | 4.15 | % | ||||||||||||||||||||||||
Net interest income and net interest margin (tax equivalent) | $ | 52,446 | 3.95 | % | $ | 51,342 | 4.10 | % | $ | 44,924 | 4.16 | % |
Financial Highlights
(Unaudited)
Nine Months Ended September 30, | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
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 | $ | 4,318,564 | $ | 167,463 | 5.18 | % | $ | 3,812,827 | $ | 165,995 | 5.82 | % | ||||||||||||
Securities | 550,405 | 11,019 | 2.67 | % | 352,074 | 7,374 | 2.80 | % | ||||||||||||||||
Deposits in other financial institutions | 29,652 | 233 | 1.05 | % | 79,309 | 1,391 | 2.34 | % | ||||||||||||||||
Total interest-earning assets | 4,898,621 | $ | 178,715 | 4.87 | % | 4,244,210 | $ | 174,760 | 5.51 | % | ||||||||||||||
Allowance for loan losses | (39,245 | ) | (27,500 | ) | ||||||||||||||||||||
Noninterest-earning assets | 639,606 | 581,932 | ||||||||||||||||||||||
Total assets | $ | 5,498,982 | $ | 4,798,642 | ||||||||||||||||||||
Liabilities and Shareholders' Equity | ||||||||||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 370,485 | $ | 1,659 | 0.60 | % | $ | 340,310 | $ | 3,058 | 1.20 | % | ||||||||||||
Money market and savings deposits | 1,249,832 | 6,091 | 0.65 | % | 992,349 | 10,158 | 1.37 | % | ||||||||||||||||
Certificates and other time deposits | 1,262,674 | 17,168 | 1.82 | % | 1,301,478 | 20,173 | 2.07 | % | ||||||||||||||||
Borrowed funds | 210,902 | 1,626 | 1.03 | % | 198,839 | 4,128 | 2.78 | % | ||||||||||||||||
Subordinated debt | 107,998 | 4,390 | 5.43 | % | 49,849 | 2,232 | 5.99 | % | ||||||||||||||||
Total interest-bearing liabilities | 3,201,891 | $ | 30,934 | 1.29 | % | 2,882,825 | $ | 39,749 | 1.84 | % | ||||||||||||||
Noninterest-Bearing Liabilities: | ||||||||||||||||||||||||
Noninterest-bearing demand deposits | 1,535,107 | 1,179,914 | ||||||||||||||||||||||
Other liabilities | 33,482 | 28,270 | ||||||||||||||||||||||
Total liabilities | 4,770,480 | 4,091,009 | ||||||||||||||||||||||
Shareholders' equity | 728,502 | 707,633 | ||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 5,498,982 | $ | 4,798,642 | ||||||||||||||||||||
Net interest rate spread | 3.58 | % | 3.67 | % | ||||||||||||||||||||
Net interest income and margin | $ | 147,781 | 4.03 | % | $ | 135,011 | 4.25 | % | ||||||||||||||||
Net interest income and net interest margin (tax equivalent) | $ | 148,939 | 4.06 | % | $ | 135,413 | 4.27 | % |
Financial Highlights
(Unaudited)
Three Months Ended | ||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||
September 30 | June 30 | March 31 | December 31 | September 30 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Period-end Loan Portfolio: | ||||||||||||||||||||
Commercial and industrial | $ | 650,634 | $ | 651,430 | $ | 702,267 | $ | 689,360 | $ | 675,055 | ||||||||||
Mortgage warehouse | — | — | 1,051 | 8,304 | 36,594 | |||||||||||||||
Paycheck Protection Program (PPP) | 710,234 | 695,772 | — | — | — | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate (including multi-family residential) | 1,971,228 | 1,956,116 | 1,951,080 | 1,873,782 | 1,859,721 | |||||||||||||||
Commercial real estate construction and land development | 376,877 | 386,865 | 378,987 | 410,471 | 386,723 | |||||||||||||||
1-4 family residential (including home equity) | 716,565 | 703,513 | 704,212 | 698,957 | 695,520 | |||||||||||||||
Residential construction | 148,056 | 171,656 | 177,025 | 192,515 | 189,608 | |||||||||||||||
Consumer and other | 18,768 | 18,304 | 40,924 | 41,921 | 42,783 | |||||||||||||||
Total loans | $ | 4,592,362 | $ | 4,583,656 | $ | 3,955,546 | $ | 3,915,310 | $ | 3,886,004 | ||||||||||
Asset Quality: | ||||||||||||||||||||
Nonaccrual loans | $ | 37,928 | $ | 33,223 | $ | 21,621 | $ | 28,371 | $ | 34,615 | ||||||||||
Accruing loans 90 or more days past due | — | — | — | — | — | |||||||||||||||
Total nonperforming loans | 37,928 | 33,223 | 21,621 | 28,371 | 34,615 | |||||||||||||||
Other real estate | 8,876 | 11,847 | 12,617 | 8,337 | 8,333 | |||||||||||||||
Other repossessed assets | — | — | — | — | — | |||||||||||||||
Total nonperforming assets | $ | 46,804 | $ | 45,070 | $ | 34,238 | $ | 36,708 | $ | 42,948 | ||||||||||
Net charge-offs | $ | 291 | $ | 538 | $ | 2,917 | $ | 1,303 | $ | 729 | ||||||||||
Nonaccrual loans: | ||||||||||||||||||||
Commercial and industrial | $ | 13,171 | $ | 12,578 | $ | 8,669 | $ | 8,388 | $ | 8,033 | ||||||||||
Mortgage warehouse | — | — | — | — | — | |||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial real estate (including multi-family residential) | 15,849 | 16,127 | 7,024 | 6,741 | 15,356 | |||||||||||||||
Commercial real estate construction and land development | 3,085 | 53 | 1,958 | 9,050 | 9,050 | |||||||||||||||
1-4 family residential (including home equity) | 4,263 | 3,434 | 2,845 | 3,294 | 1,992 | |||||||||||||||
Residential construction | 876 | 898 | 982 | 746 | — | |||||||||||||||
Consumer and other | 684 | 133 | 143 | 152 | 184 | |||||||||||||||
Total nonaccrual loans | $ | 37,928 | $ | 33,223 | $ | 21,621 | $ | 28,371 | $ | 34,615 | ||||||||||
Asset Quality Ratios: | ||||||||||||||||||||
Nonperforming assets to total assets | 0.78 | % | 0.77 | % | 0.68 | % | 0.74 | % | 0.88 | % | ||||||||||
Nonperforming loans to total loans | 0.83 | % | 0.72 | % | 0.55 | % | 0.72 | % | 0.89 | % | ||||||||||
Allowance for loan losses to nonperforming loans | 128.40 | % | 143.40 | % | 173.49 | % | 103.76 | % | 86.11 | % | ||||||||||
Allowance for loan losses to total loans | 1.06 | % | 1.04 | % | 0.95 | % | 0.75 | % | 0.77 | % | ||||||||||
Net charge-offs to average loans (annualized) | 0.03 | % | 0.05 | % | 0.30 | % | 0.13 | % | 0.07 | % |
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, the ratio of tangible equity to tangible assets and adjusted net interest margin on a tax equivalent basis 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 | ||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||
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 | $ | 753,053 | $ | 736,143 | $ | 706,593 | $ | 709,865 | $ | 706,308 | $ | 753,053 | $ | 706,308 | |||||||||||||
Less: deposit intangibles, net | 242,549 | 243,538 | 244,528 | 245,518 | 246,695 | 242,549 | 246,695 | ||||||||||||||||||||
Tangible shareholders’ equity | $ | 510,504 | $ | 492,605 | $ | 462,065 | $ | 464,347 | $ | 459,613 | $ | 510,504 | $ | 459,613 | |||||||||||||
Shares outstanding at end of period | 20,445 | 20,431 | 20,355 | 20,524 | 20,737 | 20,445 | 20,737 | ||||||||||||||||||||
Tangible book value per share | $ | 24.97 | $ | 24.11 | $ | 22.70 | $ | 22.62 | $ | 22.16 | $ | 24.97 | $ | 22.16 | |||||||||||||
Net income | $ | 16,170 | $ | 9,907 | $ | 3,516 | $ | 13,986 | $ | 12,047 | $ | 29,593 | $ | 38,973 | |||||||||||||
Average shareholders' equity | $ | 748,647 | $ | 723,104 | $ | 713,535 | $ | 710,155 | $ | 710,044 | $ | 728,502 | $ | 707,633 | |||||||||||||
Less: Average goodwill and core deposit intangibles, net | 243,015 | 244,010 | 245,007 | 246,154 | 247,404 | 244,007 | 248,427 | ||||||||||||||||||||
Average tangible shareholders’ equity | $ | 505,632 | $ | 479,094 | $ | 468,528 | $ | 464,001 | $ | 462,640 | $ | 484,495 | $ | 459,206 | |||||||||||||
Return on average tangible equity | 12.72 | % | 8.32 | % | 3.02 | % | 11.96 | % | 10.33 | % | 8.16 | % | 11.35 | % | |||||||||||||
Total assets | $ | 5,967,751 | $ | 5,836,881 | $ | 5,002,429 | $ | 4,992,654 | $ | 4,905,840 | $ | 5,967,751 | $ | 4,905,840 | |||||||||||||
Less: deposit intangibles, net | 242,549 | 243,538 | 244,528 | 245,518 | 246,695 | 242,549 | 246,695 | ||||||||||||||||||||
Tangible assets | $ | 5,725,202 | $ | 5,593,343 | $ | 4,757,901 | $ | 4,747,136 | $ | 4,659,145 | $ | 5,725,202 | $ | 4,659,145 | |||||||||||||
Tangible equity to tangible assets | 8.92 | % | 8.81 | % | 9.71 | % | 9.78 | % | 9.86 | % | 8.92 | % | 9.86 | % | |||||||||||||
Net interest income (tax equivalent) | $ | 52,446 | $ | 51,342 | $ | 45,152 | $ | 44,623 | $ | 44,924 | $ | 148,939 | $ | 135,413 | |||||||||||||
Less: Acquisition accounting adjustments | (598 | ) | (665 | ) | (1,259 | ) | (1,860 | ) | (2,045 | ) | (2,522 | ) | (7,765 | ) | |||||||||||||
Adjusted net interest income (tax equivalent) | $ | 51,848 | $ | 50,677 | $ | 43,893 | $ | 42,763 | $ | 42,879 | $ | 146,417 | $ | 127,648 | |||||||||||||
Average earning assets | $ | 5,281,517 | $ | 5,037,414 | $ | 4,372,723 | $ | 4,308,028 | $ | 4,284,667 | $ | 4,898,621 | $ | 4,244,210 | |||||||||||||
Net interest margin (tax equivalent) | 3.95 | % | 4.10 | % | 4.15 | % | 4.11 | % | 4.16 | % | 4.06 | % | 4.27 | % | |||||||||||||
Adjusted net interest margin (tax equivalent) | 3.91 | % | 4.05 | % | 4.04 | % | 3.94 | % | 3.97 | % | 3.99 | % | 4.02 | % |
ir@allegiancebank.com
Source:
2020 GlobeNewswire, Inc., source