Allegiance Bancshares, Inc. [ABTX] Filings

10-Q 1 abtx-20220331.htm 10-Q abtx-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________

FORM 10-Q

_______________________________________________


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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022


£			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 S 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 S 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 S

As of April 26, 2022, the registrant had 20,378,054 shares common stock, $1.00 par value per share, outstanding.

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ALLEGIANCE BANCSHARES, INC.

INDEX TO FORM 10-Q

March 31, 2022


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	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	53
Item 4.	Controls and Procedures	54

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	56
Signatures		57

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PART I—FINANCIAL INFORMATION

ITEM 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS

ALLEGIANCE BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2022		December 31, 2021
	(Dollars in thousands, except par value)
ASSETS
Cash and due from banks	$	26,629	$	23,961
Interest-bearing deposits at other financial institutions	672,755		733,548
Total cash and cash equivalents	699,384		757,509
Available for sale securities, at fair value	1,790,707		1,773,765
Loans held for investment	4,283,514		4,220,486
Less: allowance for credit losses on loans	(49,215)		(47,940)
Loans, net	4,234,299		4,172,546
Accrued interest receivable	31,505		33,392
Premises and equipment, net	62,168		63,708

Federal Home Loan Bank stock	9,376		9,358
Bank owned life insurance	28,374		28,240
Goodwill	223,642		223,642
Core deposit intangibles, net	13,907		14,658
Other assets	56,001		28,136
TOTAL ASSETS	$	7,149,363	$	7,104,954
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing	$	2,353,604	$	2,243,085
Interest-bearing
Demand	1,070,855		869,984
Money market and savings	1,552,853		1,643,745
Certificates and other time	1,185,015		1,290,825
Total interest-bearing deposits	3,808,723		3,804,554
Total deposits	6,162,327		6,047,639
Accrued interest payable	3,086		1,753
Borrowed funds	89,959		89,956
Subordinated debt	108,978		108,847
Other liabilities	33,073		40,291
Total liabilities	6,397,423		6,288,486
COMMITMENTS AND CONTINGENCIES (See Note 13)
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; 20,378,116 shares issued and outstanding at March 31, 2022 and 20,337,220 shares issued and outstanding at December 31, 2021	20,378		20,337
Capital surplus	512,284		510,797
Retained earnings	282,896		267,092
Accumulated other comprehensive (loss) income	(63,618)		18,242
Total shareholders’ equity	751,940		816,468
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	7,149,363	$	7,104,954

See condensed notes to interim consolidated financial statements.

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ALLEGIANCE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
	2022		2021
	(Dollars in thousands, except per share data)
INTEREST INCOME:
Loans, including fees	$	52,370	$	57,991
Securities:
Taxable	5,068		2,402
Tax-exempt	2,525		2,394
Deposits in other financial institutions	340		41
Total interest income	60,303		62,828
INTEREST EXPENSE:
Demand, money market and savings deposits	1,347		1,484
Certificates and other time deposits	2,156		3,665
Borrowed funds	186		539
Subordinated debt	1,442		1,442
Total interest expense	5,131		7,130
NET INTEREST INCOME	55,172		55,698
Provision for credit losses	1,814		639
Net interest income after provision for credit losses	53,358		55,059
NONINTEREST INCOME:
Nonsufficient funds fees	116		83
Service charges on deposit accounts	527		388
Gain on sale of securities	—		49
Loss on sale of other real estate and other repossessed assets	—		(176)
Bank owned life insurance income	133		139
Debit card and ATM card income	819		630
Other	2,423		623
Total noninterest income	4,018		1,736
NONINTEREST EXPENSE:
Salaries and employee benefits	22,728		22,452
Net occupancy and equipment	2,205		2,390
Depreciation	1,033		1,034
Data processing and software amortization	2,498		2,200
Professional fees	138		789
Regulatory assessments and FDIC insurance	1,261		807
Core deposit intangibles amortization	751		824
Communications	341		321
Advertising	462		298
Other real estate expense	59		113
Acquisition and merger-related expenses	451		—
Other	2,590		3,691
Total noninterest expense	34,517		34,919
INCOME BEFORE INCOME TAXES	22,859		21,876
Provision for income taxes	4,202		3,866
NET INCOME	$	18,657	$	18,010
EARNINGS PER SHARE:
Basic	$	0.92	$	0.89
Diluted	$	0.91	$	0.89
DIVIDENDS PER SHARE	$	0.14	$	0.12

See condensed notes to interim consolidated financial statements.

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ALLEGIANCE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
	2022		2021
	(Dollars in thousands)
Net income	$	18,657	$	18,010
Other comprehensive loss:
Unrealized loss on securities:
Change in unrealized holding (loss) gain on available for sale securities during the period	(103,621)		(14,710)
Reclassification of gain realized through the sale of securities	—		(49)
Unrealized gain on cash flow hedge:
Change in fair value of cash flow hedge	—		1,824

Total other comprehensive loss	(103,621)		(12,935)
Deferred tax benefit related to other comprehensive loss	21,761		2,717
Other comprehensive loss, net of tax	(81,860)		(10,218)
Comprehensive (loss) income	$	(63,203)	$	7,792

See condensed notes to interim consolidated financial statements.

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ALLEGIANCE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


	Common Stock			Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Shareholders’ Equity
	Shares	Amount
	(Dollars in thousands, except per share data)
BALANCE AT DECEMBER 31, 2020	20,208,323	$	20,208	$	508,794	$	195,236	$	34,431	$	758,669
Net income						18,010				18,010
Other comprehensive loss								(10,218)		(10,218)
Cash dividends declared, $0.12 per share						(2,412)				(2,412)
Common stock issued in connection with the exercise of stock options and restricted stock awards	135,854	136		1,191						1,327
Repurchase of common stock	(161,206)	(161)		(5,498)						(5,659)
Stock based compensation expense				820						820
BALANCE AT MARCH 31, 2021	20,182,971	$	20,183	$	505,307	$	210,834	$	24,213	$	760,537

BALANCE AT DECEMBER 31, 2021	20,337,220	$	20,337	$	510,797	$	267,092	$	18,242	$	816,468
Net income						18,657				18,657
Other comprehensive loss								(81,860)		(81,860)
Cash dividends declared, $0.14 per share						(2,853)				(2,853)
Common stock issued in connection with the exercise of stock options and restricted stock awards	40,896	41		528						569
Stock based compensation expense				959						959
BALANCE AT MARCH 31, 2022	20,378,116	$	20,378	$	512,284	$	282,896	$	(63,618)	$	751,940

See condensed notes to interim consolidated financial statements.

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ALLEGIANCE BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
	2022		2021
	(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	18,657	$	18,010
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and core deposit intangibles amortization	1,784		1,858
Provision for credit losses	1,814		639
Deferred income tax expense (benefit)	47		(1,899)
Net amortization of premium on investments	2,797		1,471
Excess tax benefit from stock based compensation	(149)		(251)
Bank owned life insurance income	(133)		(139)
Net accretion of discount on loans	(77)		(97)
Net amortization of discount on subordinated debt	29		28
Net accretion of discount on certificates of deposit	(16)		(58)
Loss on sale of other real estate and other repossessed assets	—		176
Loss on write-downs of premises, equipment and other real estate	—		1,317
Net gain on sale of securities	—		(49)
Federal Home Loan Bank stock dividends	(18)		(19)
Stock based compensation expense	959		820
Net change in operating leases	767		712
Increase in accrued interest receivable and other assets	(26,190)		(8,012)
Increase in accrued interest payable and other liabilities	15,785		6,739
Net cash provided by operating activities	16,056		21,246
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities and principal paydowns of available for sale securities	640,437		1,012,785
Proceeds from sales and calls of available for sale securities	—		4,898
Purchase of available for sale securities	(763,586)		(1,048,261)
Net change in total loans	(63,268)		(167,253)
Purchase of bank premises and equipment	(184)		(916)
Proceeds from sale of bank premises, equipment and other real estate	—		8,044

Net cash used in investing activities	(186,601)		(190,703)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in noninterest-bearing deposits	110,519		209,554
Net increase in interest-bearing deposits	4,185		176,211

Net paydown in borrowings under credit agreement	—		(8,000)
Dividends paid to common shareholders	(2,853)		(2,412)
Proceeds from the issuance of common stock and stock option exercises	569		1,327
Repurchase of common stock	—		(5,659)
Net cash provided by financing activities	112,420		371,021
NET CHANGE IN CASH AND CASH EQUIVALENTS	(58,125)		201,564
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	757,509		422,766
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	699,384	$	624,330
SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid	$	3,798	$	5,969
Cash paid for operating lease liabilities	892		870
SUPPLEMENTAL NONCASH DISCLOSURE:
Lease right-of-use asset obtained in exchange for lessee operating lease liabilities	$	76	$	502

Bank-financed sales of other real estate	—		8,125

See condensed notes to interim consolidated financial statements.

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ALLEGIANCE BANCSHARES, INC.

CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

(Unaudited)

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES

Nature of Operations-Allegiance Bancshares, Inc. (“Allegiance”) and its wholly-owned subsidiary, Allegiance Bank, (the “Bank”, and together with Allegiance, collectively referred to as the “Company”) provide commercial and retail loans and commercial banking services. The Company derives substantially all of its revenues and income from the operation of the Bank. The Company is focused on delivering a wide variety of relationship-driven commercial banking products and community-oriented services tailored to meet the needs of small to medium-sized businesses, professionals and individual customers. The Company operated 27 full-service banking locations in the Houston region, which it defines as the Houston-The Woodlands-Sugar Land and Beaumont-Port Arthur metropolitan statistical areas, with 26 bank offices in the Houston metropolitan area and one bank office location in Beaumont, just outside of the Houston metropolitan area as of March 31, 2022. The Bank provides its customers with a variety of banking services including checking accounts, savings accounts and certificates of deposit, and its primary lending products are commercial, personal, automobile, mortgage and home improvement loans. The Bank also offers safe deposit boxes, automated teller machines, drive-through services and 24-hour depository facilities.

Basis of Presentation-The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and in accordance with guidance provided by the Securities and Exchange Commission. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis, and all such adjustments are of a normal recurring nature. Transactions between the Company and the Bank have been eliminated. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Pending Merger of Equals

On November 8, 2021, Allegiance and CBTX, Inc., jointly announced that they entered into a definitive merger agreement pursuant to which the companies will combine in an all-stock merger of equals. CBTX reported total assets of $4.49 billion as of December 31, 2021. Under the terms of the definitive merger agreement, Allegiance shareholders will receive 1.4184 shares of CBTX, Inc. common stock for each share of Allegiance common stock they own. Following the completion of the merger, we estimate that former Allegiance shareholders will own approximately 54% and former CBTX, Inc. shareholders will own approximately 46% of the combined company. The companies have submitted the required regulatory filings and, subject to satisfaction or in some cases waiver of the closing conditions, including approval of the merger agreement by both companies’ shareholders, the parties anticipate closing in the second quarter of the year. Each company has scheduled a special meeting for May 24, 2022 at which its respective shareholders will consider and vote on the merger agreement and other related matters.

Significant Accounting and Reporting Policies

The Company’s significant accounting and reporting policies can be found in Note 1 of the Company’s annual financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

New Accounting Standards

Newly Issued But Not Yet Effective Accounting Standards

ASU 2022-02, "Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." ASU 2022-02 eliminates the TDR accounting model for creditors that have already adopted Topic 326, which is commonly referred to as the current expected credit loss ("CECL") model. The FASB’s decision to eliminate the TDR accounting model is in response to

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feedback that the allowance under CECL already incorporates credit losses from loans modified as TDRs and, consequently, the related accounting and disclosures – which preparers often find onerous to apply – no longer provide the same level of benefit to users. In lieu of the TDR accounting model, creditors now will apply the general loan modification guidance in Subtopic 310-20 to all loan modifications, including modifications made for borrowers experiencing financial difficulty. Under the general loan modification guidance, a modification is treated as a new loan only if the following two conditions are met: (1) the terms of the new loan are at least as favorable to the lender as the terms for comparable loans to other customers with similar collection risks; and (2) modifications to the terms of the original loan are more than minor. If either condition is not met, the modification is accounted for as the continuation of the old loan with any effect of the modification treated as a prospective adjustment to the loan’s effective interest rate. ASU 2022-02 will become effective for the Company on December 15, 2022 and is not expected to have a significant impact on the Company’s financial statements.

2. GOODWILL AND CORE DEPOSIT INTANGIBLE ASSETS

Changes in the carrying amount of the Company’s goodwill and core deposit intangible assets were as follows:


	Goodwill		Core Deposit Intangibles
	(Dollars in thousands)
Balance as of December 31, 2020	$	223,642	$	17,954
Amortization	—		(3,296)
Balance as of December 31, 2021	223,642		14,658
Amortization	—		(751)
Balance as of March 31, 2022	$	223,642	$	13,907

Goodwill is recorded on the acquisition date of an entity. During the measurement period, the Company may record subsequent adjustments to goodwill for provisional amounts recorded at the acquisition date.

Management performs an evaluation annually, and more frequently if a triggering event occurs, of whether any impairment of the goodwill and other intangible assets has occurred. If any such impairment is determined, a write-down is recorded. As of March 31, 2022, there were no impairments recorded on goodwill and other intangible assets.

The estimated aggregate future amortization expense for core deposit intangible assets remaining as of March 31, 2022 is as follows (dollars in thousands):


Remaining 2022	$	2,252
2023	2,323
2024	2,188
2025	2,061
2026	1,941
Thereafter	3,142
Total	$	13,907

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3. SECURITIES

The amortized cost and fair value of investment securities were as follows:


	March 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)
Available for Sale
U.S. government and agency securities	$	424,171	$	300	$	(11,376)	$	413,095
Municipal securities	470,404		7,449		(18,150)		459,703
Agency mortgage-backed pass-through securities	322,883		102		(22,119)		300,866
Agency collateralized mortgage obligations	518,067		81		(34,030)		484,118
Corporate bonds and other	135,701		1,157		(3,933)		132,925
Total	$	1,871,226	$	9,089	$	(89,608)	$	1,790,707


	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(Dollars in thousands)
Available for Sale
U.S. government and agency securities	$	401,811	$	414	$	(1,674)	$	400,551
Municipal securities	468,164		30,483		(1,547)		497,100
Agency mortgage-backed pass-through securities	307,097		2,075		(6,576)		302,596
Agency collateralized mortgage obligations	443,277		2,026		(4,247)		441,056
Corporate bonds and other	130,314		2,922		(774)		132,462
Total	$	1,750,663	$	37,920	$	(14,818)	$	1,773,765

As of March 31, 2022, no allowance for credit losses has been recognized on available for sale securities in an unrealized loss position as management does not believe any of the securities are impaired due to reasons of credit quality. This is based upon the Company’s analysis of the underlying risk characteristics, including credit ratings, and other qualitative factors related to its available for sale securities and in consideration of our historical credit loss experience and internal forecasts. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, management does not have the intent to sell any of the securities classified as available for sale in the table above and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity date or repricing date or if market yields for such investments decline.

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The amortized cost and fair value of investment securities at March 31, 2022, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations at any time with or without call or prepayment penalties.


	Amortized Cost		Fair Value
	(Dollars in thousands)
Due in one year or less	$	5,817	$	5,867
Due after one year through five years	261,665		251,280
Due after five years through ten years	158,863		157,109
Due after ten years	603,931		591,467
Subtotal	1,030,276		1,005,723
Agency mortgage-backed pass-through securities and collateralized mortgage obligations	840,950		784,984
Total	$	1,871,226	$	1,790,707

Securities with unrealized losses segregated by length of time such securities have been in a continuous loss position are as follows:


	March 31, 2022
	Less than 12 Months				More than 12 Months				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(Dollars in thousands)
Available for Sale
U.S. government and agency securities	$	360,995	$	(11,376)	$	—	$	—	$	360,995	$	(11,376)
Municipal securities	223,001		(15,908)		14,746		(2,242)		237,747		(18,150)
Agency mortgage-backed pass-through securities	248,653		(17,462)		38,031		(4,657)		286,684		(22,119)
Agency collateralized mortgage obligations	462,888		(33,458)		12,725		(572)		475,613		(34,030)
Corporate bonds and other	71,447		(3,933)		—		—		71,447		(3,933)
Total	$	1,366,984	$	(82,137)	$	65,502	$	(7,471)	$	1,432,486	$	(89,608)


	December 31, 2021
	Less than 12 Months				More than 12 Months				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(Dollars in thousands)
Available for Sale
U.S. government and agency securities	$	340,161	$	(1,674)	$	—	$	—	$	340,161	$	(1,674)
Municipal securities	70,019		(1,185)		10,435		(362)		80,454		(1,547)
Agency mortgage-backed pass-through securities	219,610		(5,675)		21,627		(901)		241,237		(6,576)
Agency collateralized mortgage obligations	328,300		(3,994)		13,820		(253)		342,120		(4,247)
Corporate bonds and other	38,210		(774)		—		—		38,210		(774)
Total	$	996,300	$	(13,302)	$	45,882	$	(1,516)	$	1,042,182	$	(14,818)

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There were no sales of securities for the three months ended March 31, 2022. The Company sold $4.9 million of securities recording gross gains of $49 thousand for the three months ended March 31, 2021. At March 31, 2022 and December 31, 2021, the Company did not own securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of consolidated shareholders’ equity at such respective dates.

The carrying value of pledged securities was $460.7 million at March 31, 2022 and $258.8 million at December 31, 2021, respectively. The majority of the securities were pledged to collateralize public fund deposits.

4. LOANS AND ALLOWANCE FOR CREDIT LOSSES

The loan portfolio balances, net of unearned income and fees, consist of various types of loans primarily made to borrowers located within Texas and are segregated by class of loan as follows:


	March 31, 2022		December 31, 2021
	(Dollars in thousands)
Commercial and industrial	$	714,450	$	693,559
Paycheck Protection Program (PPP)	78,624		145,942
Real estate:
Commercial real estate (including multi-family residential)	2,197,502		2,104,621
Commercial real estate construction and land development	453,473		439,125
1-4 family residential (including home equity)	669,306		685,071
Residential construction	136,760		117,901
Consumer and other	33,399		34,267
Total loans	4,283,514		4,220,486
Allowance for credit losses on loans	(49,215)		(47,940)
Loans, net	$	4,234,299	$	4,172,546

Nonaccrual and Past Due Loans

An aging analysis of the recorded investment in past due loans, segregated by class of loans, is included below. The Company defines recorded investment as the outstanding loan balances including net deferred loan fees, and excluding accrued interest receivable of $24.1 million and $26.0 million as of March 31, 2022 and December 31, 2021, respectively, due to immateriality.


	March 31, 2022
	Loans Past Due and Still Accruing						Nonaccrual Loans		Current Loans		Total Loans
	30-89 Days		90 or More Days		Total Past Due Loans
	(Dollars in thousands)
Commercial and industrial	$	3,149	$	—	$	3,149	$	7,809	$	703,492	$	714,450
Paycheck Protection Program (PPP)	—		—		—		—		78,624		78,624
Real estate:
Commercial real estate (including multi-family residential)	8,391		—		8,391		15,259		2,173,852		2,197,502
Commercial real estate construction and land development	2,611		—		2,611		—		450,862		453,473
1-4 family residential (including home equity)	1,539		—		1,539		3,065		664,702		669,306
Residential construction	2,431		—		2,431		—

Allegiance Bancshares, Inc. [ABTX] Filings
10-Q	[2022-04-29]
10-K	[2022-02-25]
10-Q	[2021-10-28]
10-Q	[2021-07-29]
10-Q	[2021-04-29]
10-K	[2021-03-10]
10-Q	[2020-11-06]
10-Q	[2020-07-31]
10-Q	[2020-05-01]
10-K	[2020-03-09]
10-Q	[2019-11-01]
10-Q	[2019-08-01]
10-Q	[2019-05-06]
10-K	[2019-03-11]
10-Q	[2018-11-01]
10-Q	[2018-08-03]
10-Q	[2018-05-08]
10-K	[2018-03-09]
10-Q	[2017-11-02]
10-Q	[2017-08-03]
10-Q	[2017-05-05]
10-K	[2017-03-10]
10-Q	[2016-11-10]
10-Q	[2016-08-12]
10-Q	[2016-05-10]
10-K	[2016-03-22]
10-Q	[2015-11-20]
S-1	[2015-08-24]