Allegiance Bancshares Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow

abtx-10q_20200630.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 001-37585

Allegiance Bancshares, Inc.

(Exact name of registrant as specified in its charter)

Texas

26-3564100

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

8847 West Sam Houston Parkway, N., Suite 200

Houston, Texas 77040

(Address of principal executive offices, including zip code)

(281) 894-3200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, par value, $1.00 per share

ABTX

NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 28, 2020, the registrant had 20,431,612 shares common stock, $1.00 par value per share, outstanding.

ALLEGIANCE BANCSHARES, INC.

INDEX TO FORM 10-Q

June 30, 2020


PART I—FINANCIAL INFORMATION

Item 1.	Interim Consolidated Financial Statements	3
	Consolidated Balance Sheets (unaudited)	3
	Consolidated Statements of Income (unaudited)	4
	Consolidated Statements of Comprehensive Income (unaudited)	5
	Consolidated Statements of Changes in Shareholders' Equity (unaudited)	6
	Consolidated Statements of Cash Flows (unaudited)	7
	Condensed Notes to Interim Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	62
Item 4.	Controls and Procedures	63

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66
Item 3.	Defaults upon Senior Securities	66
Item 4.	Mine Safety Disclosures	66
Item 5.	Other Information	66
Item 6.	Exhibits	67
Signatures		68

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS

ALLEGIANCE BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30,			December 31,
	2020			2019
	(Dollars in thousands, except share data)
ASSETS
Cash and due from banks	$	237,585		$	213,347
Interest-bearing deposits at other financial institutions		28,815			132,901
Total cash and cash equivalents		266,400			346,248
Available for sale securities, at fair value		618,751			372,545
Loans held for investment		4,583,656			3,915,310
Less: allowance for loan losses		(47,642	)		(29,438	)
Loans, net		4,536,014			3,885,872
Accrued interest receivable		32,795			15,468
Premises and equipment, net		67,229			66,790
Other real estate owned		11,847			8,337
Federal Home Loan Bank stock		14,844			6,242
Bank owned life insurance		27,398			27,104
Goodwill		223,642			223,642
Core deposit intangibles, net		19,896			21,876
Other assets		18,065			18,530
TOTAL ASSETS	$	5,836,881		$	4,992,654
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing	$	1,754,128		$	1,252,232
Interest-bearing
Demand		375,353			367,278
Money market and savings		1,270,437			1,258,008
Certificates and other time		1,300,793			1,190,583
Total interest-bearing deposits		2,946,583			2,815,869
Total deposits		4,700,711			4,068,101
Accrued interest payable		3,293			4,326
Borrowed funds		255,509			75,503
Subordinated debt		108,061			107,799
Other liabilities		33,164			27,060
Total liabilities		5,100,738			4,282,789
COMMITMENTS AND CONTINGENCIES (See Note 14)
SHAREHOLDERS’ EQUITY:
Preferred stock, $1 par value; 1,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $1 par value; 80,000,000 shares authorized; 20,430,836 shares issued and outstanding at June 30, 2020 and 20,523,816 shares issued and outstanding at December 31, 2019		20,431			20,524
Capital surplus		515,045			521,066
Retained earnings		172,723			163,375
Accumulated other comprehensive income		27,944			4,900
Total shareholders’ equity		736,143			709,865
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,836,881		$	4,992,654

See condensed notes to interim consolidated financial statements.

Table of Contents

ALLEGIANCE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020			2019
	(Dollars in thousands, except per share data)
INTEREST INCOME:
Loans, including fees	$	56,421		$	56,016	$	111,045		$	110,205
Securities:
Taxable		1,842			1,837		3,929			2,819
Tax-exempt		2,169			692		2,715			1,982
Deposits in other financial institutions		20			401		215			1,089
Total interest income		60,452			58,946		117,904			116,095
INTEREST EXPENSE:
Demand, money market and savings deposits		1,729			4,513		6,093			8,241
Certificates and other time deposits		5,845			7,008		11,929			13,264
Borrowed funds		562			1,118		1,068			2,945
Subordinated debt		1,469			736		2,942			1,471
Total interest expense		9,605			13,375		22,032			25,921
NET INTEREST INCOME		50,847			45,571		95,872			90,174
Provision for loan losses		10,669			1,407		21,659			2,409
Net interest income after provision for loan losses		40,178			44,164		74,213			87,765
NONINTEREST INCOME:
Nonsufficient funds fees		60			139		229			301
Service charges on deposit accounts		343			365		800			690
Gain on sale of securities		93			846		287			846
(Loss) gain on sale of other real estate and other repossessed assets		(306	)		70		(375	)		71
Bank owned life insurance income		143			155		294			314
Rebate from correspondent bank		89			884		582			1,780
Other		1,140			1,386		2,470			3,132
Total noninterest income		1,562			3,845		4,287			7,134
NONINTEREST EXPENSE:
Salaries and employee benefits		19,334			19,415		39,115			39,099
Net occupancy and equipment		1,926			2,114		3,833			4,166
Depreciation		885			756		1,751			1,509
Data processing and software amortization		1,934			1,709		3,760			3,332
Professional fees		800			527		1,373			1,126
Regulatory assessments and FDIC insurance		609			802		1,241			1,530
Core deposit intangibles amortization		990			1,178		1,980			2,356
Communications		390			468		807			898
Advertising		370			617		891			1,321
Acquisition and merger-related expenses		—			153		—			1,326
Other		2,541			2,341		7,429			4,532
Total noninterest expense		29,779			30,080		62,180			61,195
INCOME BEFORE INCOME TAXES		11,961			17,929		16,320			33,704
Provision for income taxes		2,054			3,681		2,897			6,778

Price	33.59	EPS	2
Shares	22	P/E	19
MCap	725	P/FCF	13
Net Debt	-301	EBIT	89
TEV	425	TEV/EBIT	5
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-31
10-Q	2020-03-31	Filed 2020-05-01
10-K	2019-12-31	Filed 2020-03-09
10-Q	2019-09-30	Filed 2019-11-01
10-Q	2019-06-30	Filed 2019-08-01
10-Q	2019-03-31	Filed 2019-05-06
10-K	2018-12-31	Filed 2019-03-11
10-Q	2018-09-30	Filed 2018-11-01
10-Q	2018-06-30	Filed 2018-08-03
10-Q	2018-03-31	Filed 2018-05-08
10-K	2017-12-31	Filed 2018-03-09
10-Q	2017-09-30	Filed 2017-11-02
10-Q	2017-06-30	Filed 2017-08-03
10-Q	2017-03-31	Filed 2017-05-05
10-K	2016-12-31	Filed 2017-03-10
10-Q	2016-09-30	Filed 2016-11-10
10-Q	2016-06-30	Filed 2016-08-12
10-Q	2016-03-31	Filed 2016-05-10
10-K	2015-12-31	Filed 2016-03-22
10-Q	2015-09-30	Filed 2015-11-20

8-K	2020-09-08	Regulation FD, Exhibits
8-K	2020-07-30	Earnings, Exhibits
8-K	2020-04-30
8-K	2020-04-23
8-K	2020-04-08
8-K	2020-02-27
8-K	2020-02-07
8-K	2020-01-30
8-K	2020-01-29
8-K	2019-10-25
8-K	2019-10-24
8-K	2019-09-27
8-K	2019-09-20
8-K	2019-09-20
8-K	2019-09-11
8-K	2019-07-26
8-K	2019-07-26
8-K	2019-04-26
8-K	2019-04-25
8-K	2019-02-04
8-K	2019-01-25
8-K	2019-01-24
8-K	2018-12-28
8-K	2018-11-21
8-K	2018-10-25
8-K	2018-09-28
8-K	2018-09-14
8-K	2018-07-26
8-K	2018-04-30
8-K	2018-04-27
8-K	2018-04-26
8-K	2018-01-25

EX-31.1	abtx-ex311_8.htm
EX-31.2	abtx-ex312_9.htm
EX-32.1	abtx-ex321_6.htm
EX-32.2	abtx-ex322_7.htm

ABTX 10Q Quarterly Report

Allegiance Bancshares Earnings 2020-06-30