GlobeNewswire Inc | Jan 28, 2021 07:00AM EST

January 28, 2021

-- Asset growth of 21.2% to $6.05 billion as of December 31, 2020 from $4.99 billion as of December 31, 2019

-- Net income of $15.9 million and diluted earnings per share of $0.77, representing 13.9% net income growth and 14.9% diluted earnings per share growth from the fourth quarter of 2019 -- Declared quarterly dividend of $0.12 per share of common stock up from $0.10 per share of common stock

HOUSTON, Jan. 28, 2021 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) (Allegiance), the holding company of Allegiance Bank (the "Bank"), today reported net income of $15.9 million and diluted earnings per share of $0.77 for the fourth quarter 2020 compared to net income of $14.0 million and diluted earnings per share of $0.67 for the fourth quarter 2019. Net income for the year ended December 31, 2020 was $45.5 million, or $2.22 per diluted share, compared to $53.0 million, or $2.47 per diluted share, for the year ended December 31, 2019. The year ended December 31, 2020 results were primarily impacted by the increased provision for credit losses in response to COVID-19-related uncertainties in the current economic environment partially offset by increased net interest income.

We are pleased to report solid quarter and full-year earnings during a very challenging economic environment which has further evidenced the resiliency of our business model, said Steve Retzloff, Allegiances Chief Executive Officer. Our results reflect several meaningful accomplishments achieved by our team, continued Retzloff.

We are extremely proud of the continued hard work and dedication of our Allegiance bankers as our team helped a tremendous number of customers enabling us to post impressive 2020 PPP results for an institution of our size and we expect continued success with the 2021 PPP. As further validation of our outstanding service culture and performance, we received recognition as a Top Workplace in Houston by the Houston Chronicle and this year ranked number six in the large company category with 500 plus employees. We are one of only three companies that has been recognized as a Top Workplace for eleven consecutive years, commented Retzloff.

We are also pleased to announce an increase in our quarterly dividend, reflecting our continued commitment to enhancing shareholder value. As Houstons largest locally-headquartered community bank, we expect to build on our strong core fundamentals. We are excited about the future and look forward to the year ahead where we will embrace the opportunity to remain focused on our customers and the communities we serve, concluded Retzloff.

Fourth Quarter 2020 Results

Net interest income before the provision for credit losses in the fourth quarter 2020 increased $10.4 million, or 23.3%, to $54.9 million from $44.5 million for the fourth quarter 2019 and increased $3.0 million, or 5.8%, from $51.9 million in the third quarter 2020. These increases were primarily due to changes in the volume and relative mix of the underlying assets and liabilities, the impact of PPP loans as well as lower costs on interest-bearing liabilities. The net interest margin on a tax equivalent basis increased 3 basis points to 4.14% for the fourth quarter 2020 from 4.11% for the fourth quarter 2019 and increased 19 basis points from 3.95% for the third quarter 2020. Excluding the impact of acquisition accounting adjustments, adjusted net interest margin on a tax equivalent basis was 4.12% for the fourth quarter 2020 compared to 3.94% for the fourth quarter 2019 and 3.91% for the third quarter 2020. Adjusted net interest margin is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Noninterest income for the fourth quarter 2020 was $2.0 million, a decrease of $1.4 million, or 40.6%, compared to $3.4 million for the fourth quarter 2019 and an increase of $169 thousand, or 9.1%, compared to $1.9 million for the third quarter 2020. Fourth quarter 2020 noninterest income reflected lower transactional fee income and significantly lower correspondent bank rebates when compared to fourth quarter 2019.

Noninterest expense for the fourth quarter 2020 increased $3.3 million, or 11.3%, to $32.7 million from $29.4 million for the fourth quarter 2019 and increased $184 thousand, or 0.6%, compared to the third quarter 2020.

In the fourth quarter 2020, Allegiances efficiency ratio decreased to 57.53% compared to 62.20% for the fourth quarter 2019 and 60.58% for the third quarter 2020. Fourth quarter 2020 annualized returns on average assets, average equity and average tangible equity were 1.05%, 8.38% and 12.32%, respectively, compared to 1.13%, 7.81% and 11.96%, respectively, for the fourth quarter 2019. Annualized returns on average assets, average equity and average tangible equity for the third quarter 2020 were 1.09%, 8.59% and 12.72%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Year Ended December 31, 2020 Results

Net interest income before provision for credit losses for the year ended December31, 2020 increased $23.1 million, or 12.9%, to $202.7 million from $179.5 million for the year ended December31, 2019 primarily due to a $746.9 million, or 17.5%, increase in average interest-earning assets over the prior year, the impact of PPP loans as well as lower costs related to interest-bearing liabilities. The net interest margin on a tax equivalent basis decreased 14 basis points to 4.08% for the year ended December31, 2020 from 4.22% for the year ended December31, 2019. Excluding the impact of acquisition accounting adjustments, the adjusted net interest margin for the year ended December31, 2020 was 4.02%, compared to 4.00% for the year ended December31, 2019. Adjusted net interest margin is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Noninterest income for the year ended December31, 2020 was $8.2 million, a decrease of $5.3 million, or 39.2%, compared to $13.4 million for the year ended December31, 2019 due primarily to significantly lower correspondent bank rebates and losses on the sales of other real estate owned of $258 thousand. Additionally, noninterest income for the year ended December 31, 2020 included $287 thousand of gains on the sale of securities compared to $1.5 million for the year ended December 31, 2019.

Noninterest expense for the year ended December31, 2020 increased $6.9 million, or 5.7%, to $127.5 million from $120.6 million for the year ended December31, 2019. The increase in noninterest expense during the year ended December31, 2020 was primarily due to $4.1 million of other real estate write-downs partially offset by having no merger-related expenses incurred compared to $1.3 million during the year ended December 31, 2019.

Allegiances efficiency ratio decreased from 62.99% for the year ended December31, 2019 to 60.55% for the year ended December31, 2020. For the year ended December31, 2020, returns on average assets, average equity and average tangible equity were 0.81%, 6.22% and 9.33%, respectively, compared to 1.10%, 7.48% and 11.50%, respectively, for the year ended December31, 2019. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Financial Condition

Total assets at December31, 2020 increased $1.06 billion, or 21.2%, to $6.05 billion compared to $4.99 billion at December31, 2019, primarily due to the origination of PPP loans and growth in the securities portfolio, and increased $82.4 million, or 5.5% (annualized), compared to $5.97 billion at September30, 2020.

Total loans at December31, 2020 increased $576.5 million, or 14.7%, to $4.49 billion compared to $3.92 billion at December31, 2019, primarily due to the origination of $710.2 million of PPP loans, and decreased $100.6 million, or 8.8% (annualized), compared to $4.59 billion at September30, 2020. Core loans, which exclude the mortgage warehouse portfolio and PPP loans, increased $14.9 million, or 0.4%, to $3.92 billion at December 31, 2020 from $3.91 billion at December31, 2019 and increased $39.7 million, or 4.1% (annualized), from $3.88 billion at September30, 2020.

Deposits at December31, 2020 increased $920.4 million, or 22.6%, to $4.99 billion compared to $4.07 billion at December31, 2019 and increased $71.1 million, or 5.8% (annualized), compared to $4.92 billion at September30, 2020.

Asset Quality

Nonperforming assets totaled $38.1 million, or 0.63% of total assets, at December31, 2020, compared to $36.7 million, or 0.74% of total assets, at December31, 2019 and $46.8 million, or 0.78% of total assets, at September30, 2020. Accounting Standards Update (ASU) 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL), was effective for the Company on January 1, 2020; however, Section 4014 of the CARES Act included an option for entities to delay the implementation of CECL until the earlier of the termination date of the national emergency declaration by the President or December 31, 2020. Due to the uncertainty of the impact of COVID-19, the Company chose to delay its implementation of CECL until the fourth quarter of 2020, at which point the standard was adopted retrospectively to January 1, 2020. The allowance for loan losses for the quarter ending December 31, 2020 was calculated under the CECL methodology and as a percentage of total loans was 1.18%. Other quarter-end periods presented for the allowance for loan losses were not restated for CECL adoption and were calculated under the incurred loss methodology.The allowance for loan losses as a percentage of total loans was 0.75% at December 31, 2019 and 1.06% at September 30, 2020.

The provision for credit losses for the fourth quarter 2020 was $4.4 million, or 0.38% (annualized) of average loans, compared to $933 thousand, or 0.10% (annualized) of average loans, for the fourth quarter 2019 and $1.3 million, or 0.12% (annualized) of average loans, for the third quarter 2020 primarily due to economic risks and uncertainties related to the COVID-19 pandemic. The Companys $21.4 million of increased provision for credit losses during the year ended December 31, 2020 compared to the same period in 2019 reflects the uncertainty surrounding unemployment, the economic impact caused by COVID-19 and the economic effects related to the sustained lower crude oil prices.

Fourth quarter 2020 net charge-offs were $4.3 million, or 0.37% (annualized) of average loans, an increase from net charge-offs of $1.3 million, or 0.13% (annualized) of average loans, for the fourth quarter 2019 and $291 thousand, or 0.03% (annualized) of average loans, for the third quarter 2020. Net charge-offs for the year ended December31, 2020 were $8.0 million, or 0.12% (annualized) of average loans, compared to net charge-offs for the year ended December31, 2019 of $2.8 million, or 0.07% (annualized) of average loans.

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 $127.3million, or 2.8% of total loans, at December 31, 2020, of which $1.4 million were on nonaccrual. At December 31, 2020, restaurant and bar industry loans, excluding PPP loans, totaled $116.7million, or 2.6%, of total loans, of which $494 thousand were on nonaccrual. At December31, 2020, the Companys allowance for loan losses allocated to its hotel portfolio was 3.2% of total hotel loans and its restaurant and bar portfolio was 1.3% of total restaurant and bar loans. The oil and gas portfolio, excluding PPP loans, totaled $74.8 million, or 1.7%, of total loans at December 31, 2020, of which $494 thousand were on nonaccrual. At December31, 2020, the allowance for loan losses allocated to the oil and gas loan portfolio was 2.3% of total oil and gas loans.

During the year ended December 31, 2020, the Company granted initial principal and interest deferrals on outstanding loan balances to borrowers in connection with the COVID-19 relief provided by the CARES Act and subsequent deferrals upon request and after meeting certain conditions. These deferrals were generally no more than 90 days in duration. As of December 31, 2020, 164 loans with outstanding loan balances of $161.3 million remained on deferral.

Dividend

On January 27, 2021, the Board of Directors of Allegiance declared a cash dividend of $0.12 per share, an increase in the quarterly dividend of 20%, to be paid on March 15, 2021 to all shareholders of record as of February 26, 2021. The amount and timing of any future dividend payments to shareholders will be subject to the discretion of Allegiances Board of Directors.

GAAP Reconciliation of Non-GAAP Financial Measures

Allegiances management uses certain non-GAAP financial measures to evaluate its performance. Please refer to the GAAP Reconciliation and Managements 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, Allegiances management team will host a conference call on Thursday, January 28, 2021 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its fourth quarter and year-end 2020 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 6884418. Alternatively, a simultaneous audio-only webcast may be accessed via the Investor Relations section of Allegiances website at www.allegiancebank.com, under Upcoming Events. If you are unable to participate during the live webcast, the webcast will be archived on the Investor Relations section of Allegiances website at www.allegiancebank.com, under News and Events, Event Calendar, Past Events.

Allegiance Bancshares, Inc.

As of December31, 2020, Allegiance was a $6.05 billion asset Houston, Texas-based bank holding company. Through its wholly owned subsidiary, Allegiance Bank, Allegiance provides a diversified range of commercial banking services primarily to small- to medium-sized businesses and individual customers in the Houston region. Allegiances super-community banking strategy was designed to foster strong customer relationships while benefiting from a platform and scale that is competitive with larger local and regional banks. As of December31, 2020, Allegiance Bank operated 28 full-service banking locations in the Houston region, which we define as the Houston-The Woodlands-Sugar Land and Beaumont-Port Arthur metropolitan statistical areas, with 27 bank offices in the Houston metropolitan area and one bank office in Beaumont, just outside of the Houston metropolitan area. Visit www.allegiancebank.comfor more information.

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 Allegiances 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 Allegiances 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 Allegiances Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 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 Allegiances website at www.allegiancebank.com, under Financial Information, SEC Filings. Any forward-looking statement made by Allegiance in this release speaks only as of the date on which it is made. Factors or events that could cause Allegiances 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.

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

2020 2019 December31 September30 June30 March31 December31 (Dollars in thousands) ASSETS Cash and due from banks $ 122,897 $ 327,416 $ 237,585 $ 156,700 $ 213,347 Interest-bearing depositsat other financial 299,869 19,732 28,815 18,189 132,901 institutionsTotal cash and cash 422,766 347,148 266,400 174,889 346,248 equivalentsAvailable for sale 772,890 663,301 618,751 508,250 372,545 securities, at fair valueLoans held for investment 4,491,764 4,592,362 4,583,656 3,955,546 3,915,310 Less: allowance for loan (53,173 ) (48,698 ) (47,642 ) (37,511 ) (29,438 )lossesLoans, net 4,438,591 4,543,664 4,536,014 3,918,035 3,885,872 Accrued interest 40,053 36,996 32,795 17,203 15,468 receivablePremises and equipment, 70,685 69,887 67,229 66,798 66,790 netOther real estate owned 9,196 8,876 11,847 12,617 8,337 Federal Home Loan Bank 7,756 9,716 14,844 12,798 6,242 stockBank owned life insurance 27,686 27,542 27,398 27,255 27,104 Goodwill 223,642 223,642 223,642 223,642 223,642 Core deposit intangibles, 17,954 18,907 19,896 20,886 21,876 netOther assets 18,909 18,072 18,065 20,056 18,530 Total assets $ 6,050,128 $ 5,967,751 $ 5,836,881 $ 5,002,429 $ 4,992,654 LIABILITIES ANDSHAREHOLDERS? EQUITYLIABILITIES: Deposits: Noninterest-bearing $ 1,704,567 $ 1,772,700 $ 1,754,128 $ 1,217,532 $ 1,252,232 Interest-bearing Demand 437,328 409,137 375,353 341,524 367,278 Money market and savings 1,499,938 1,483,370 1,270,437 1,110,631 1,258,008 Certificates and other 1,346,649 1,252,159 1,300,793 1,283,887 1,190,583 timeTotal interest-bearing 3,283,915 3,144,666 2,946,583 2,736,042 2,815,869 depositsTotal deposits 4,988,482 4,917,366 4,700,711 3,953,574 4,068,101 Accrued interest payable 2,701 3,082 3,293 3,821 4,326 Borrowed funds 155,515 155,512 255,509 190,506 75,503 Subordinated debt 108,322 108,191 108,061 107,930 107,799 Other liabilities 36,439 30,547 33,164 40,005 27,060 Total liabilities 5,291,459 5,214,698 5,100,738 4,295,836 4,282,789 SHAREHOLDERS? EQUITY: Common stock 20,208 20,445 20,431 20,355 20,524 Capital surplus 508,794 516,151 515,045 513,894 521,066 Retained earnings 195,236 186,866 172,723 164,858 163,375 Accumulated othercomprehensive 34,431 29,591 27,944 7,486 4,900 incomeTotal shareholders? 758,669 753,053 736,143 706,593 709,865 equityTOTAL LIABILITIES AND $ 6,050,128 $ 5,967,751 $ 5,836,881 $ 5,002,429 $ 4,992,654 SHAREHOLDERS? EQUITY

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended Year-to-Date 2020 2019 2020 2019 December31 September30 June30 March31 December31 December31 December31 (Dollars in thousands, except per share data) INTEREST INCOME: Loans, including $ 58,496 $ 56,418 $ 56,421 $ 54,624 $ 55,368 $ 225,959 $ 221,363 feesSecurities: Taxable 2,203 2,095 1,842 2,087 2,066 8,227 6,975 Tax-exempt 2,316 2,280 2,169 546 469 7,311 2,934 Deposits inother financial 32 18 20 195 244 265 1,635 institutionsTotal interest 63,047 60,811 60,452 57,452 58,147 241,762 232,907 income INTEREST EXPENSE:Demand, moneymarket and 1,621 1,657 1,729 4,364 5,091 9,371 18,307 savings depositsCertificates andother time 4,507 5,239 5,845 6,084 6,483 21,675 26,656 depositsBorrowed funds 557 558 562 506 547 2,183 4,675 Subordinated 1,460 1,448 1,469 1,473 1,500 5,850 3,732 debtTotal interest 8,145 8,902 9,605 12,427 13,621 39,079 53,370 expenseNET INTEREST 54,902 51,909 50,847 45,025 44,526 202,683 179,537 INCOMEProvision for 4,368 1,347 10,669 10,990 933 27,374 5,939 credit lossesNet interestincome afterprovision 50,534 50,562 40,178 34,035 43,593 175,309 173,598 for creditlosses NONINTEREST INCOME:Nonsufficient 100 75 60 169 189 404 658 funds feesService chargeson deposit 405 325 343 457 403 1,530 1,472 accountsGain on sale of ? ? 93 194 613 287 1,459 securitiesGain (loss) onsales of otherreal ? 117 (306 ) (69 ) (45 ) (258 ) 26 estate andrepossessedassetsBank owned life 144 144 143 151 157 582 624 insuranceRebate fromcorrespondent 196 98 89 493 900 876 3,580 bankOther 1,174 1,091 1,140 1,330 1,183 4,735 5,604 Totalnoninterest 2,019 1,850 1,562 2,725 3,400 8,156 13,423 income NONINTEREST EXPENSE:Salaries andemployee 21,003 20,034 19,334 19,781 18,273 80,152 77,593 benefitsNet occupancy 2,079 2,057 1,926 1,907 1,994 7,969 8,179 and equipmentDepreciation 1,019 946 885 866 861 3,716 3,192 Data processingand software 2,107 2,125 1,934 1,826 2,120 7,992 7,464 amortizationProfessional 999 756 800 573 540 3,128 2,333 feesRegulatoryassessments and 810 875 609 632 216 2,926 1,705 FDIC insuranceCore depositintangibles 953 989 990 990 1,177 3,922 4,711 amortizationCommunications 225 355 390 417 486 1,387 1,839 Advertising 347 327 370 521 597 1,565 2,367 Other real 382 2,017 114 2,649 164 5,162 614 estate expenseAcquisition andmerger-related ? ? ? ? ? ? 1,326 expensesOther 2,825 2,084 2,427 2,239 3,003 9,575 9,312 Totalnoninterest 32,749 32,565 29,779 32,401 29,431 127,494 120,635 expenseINCOME BEFOREINCOME 19,804 19,847 11,961 4,359 17,562 55,971 66,386 TAXESProvision for 3,863 3,677 2,054 843 3,576 10,437 13,427 income taxesNET INCOME $ 15,941 $ 16,170 $ 9,907 $ 3,516 $ 13,986 $ 45,534 $ 52,959 EARNINGS PER SHAREBasic $ 0.78 $ 0.79 $ 0.49 $ 0.17 $ 0.68 $ 2.23 $ 2.50 Diluted $ 0.77 $ 0.79 $ 0.48 $ 0.17 $ 0.67 $ 2.22 $ 2.47

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended Year-to-Date 2020 2019 2020 2019 December31 September30 June30 March31 December31 December31 December31 (Dollars and share amounts in thousands, except per share data) Net income $ 15,941 $ 16,170 $ 9,907 $ 3,516 $ 13,986 $ 45,534 $ 52,959 Earnings per share, $ 0.78 $ 0.79 $ 0.49 $ 0.17 $ 0.68 $ 2.23 $ 2.50 basicEarnings per share, $ 0.77 $ 0.79 $ 0.48 $ 0.17 $ 0.67 $ 2.22 $ 2.47 diluted Return on average 1.05 % 1.09 % 0.71 % 0.29 % 1.13 % 0.81 % 1.10 %assets^(A)Return on average 8.38 % 8.59 % 5.51 % 1.98 % 7.81 % 6.22 % 7.48 %equity^(A)Return on averagetangible 12.32 % 12.72 % 8.32 % 3.02 % 11.96 % 9.33 % 11.50 %equity^(A)(B)Net interest margin 4.14 % 3.95 % 4.10 % 4.15 % 4.11 % 4.08 % 4.22 %(tax equivalent)^(C)Adjusted net interestmargin 4.12 % 3.91 % 4.05 % 4.04 % 3.94 % 4.02 % 4.00 %(tax equivalent)^(B)Efficiency ratio^(D) 57.53 % 60.58 % 56.92 % 68.13 % 62.20 % 60.55 % 62.99 % Capital Ratios Allegiance Bancshares,Inc. (Consolidated)Equity to assets 12.54 % 12.62 % 12.61 % 14.12 % 14.22 % 12.54 % 14.22 %Tangible equity totangible 8.90 % 8.92 % 8.81 % 9.71 % 9.78 % 8.90 % 9.78 %assets^(B)Estimated common equity 11.80 % 11.73 % 11.36 % 11.15 % 11.42 % 11.80 % 11.42 %tier 1 capitalEstimated tier 1risk-based 12.04 % 11.96 % 11.60 % 11.38 % 11.66 % 12.04 % 11.66 %capitalEstimated totalrisk-based 15.71 % 15.56 % 15.17 % 14.72 % 14.83 % 15.71 % 14.83 %capitalEstimated tier 1leverage 8.51 % 8.70 % 8.83 % 9.89 % 10.02 % 8.51 % 10.02 %capitalAllegiance Bank Estimated common equity 13.32 % 13.25 % 12.84 % 12.58 % 12.67 % 13.32 % 12.67 %tier 1 capitalEstimated tier 1risk-based 13.32 % 13.25 % 12.84 % 12.58 % 12.67 % 13.32 % 12.67 %capitalEstimated totalrisk-based 15.55 % 15.41 % 14.97 % 14.48 % 14.39 % 15.55 % 14.39 %capitalEstimated tier 1leverage 9.41 % 9.64 % 9.77 % 10.94 % 10.89 % 9.41 % 10.89 %capital Other Data Weighted average shares:Basic 20,396 20,439 20,414 20,411 20,652 20,415 21,152 Diluted 20,575 20,532 20,514 20,690 20,930 20,546 21,424 Period end shares 20,208 20,445 20,431 20,355 20,524 20,208 20,524 outstandingBook value per share $ 37.54 $ 36.83 $ 36.03 $ 34.71 $ 34.59 $ 37.54 $ 34.59 Tangible book value per $ 25.59 $ 24.97 $ 24.11 $ 22.70 $ 22.62 $ 25.59 $ 22.62 share^(B)

(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.

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended December31, 2020 September30, 2020 December31, 2019 Interest Average Interest Average Interest Average Average Earned/ Yield/ Average Earned/ Yield/ Average Earned/ Yield/ Balance Interest Rate Balance Interest Rate Balance Interest Rate Paid Paid Paid (Dollars in thousands) Assets Interest-Earning Assets: Loans $ 4,569,210 $ 58,496 5.09 % $ 4,594,333 $ 56,418 4.89 % $ 3,888,476 $ 55,368 5.65 %Securities 701,233 4,519 2.56 % 667,008 4,375 2.61 % 364,605 2,535 2.76 %Deposits in other financial 58,664 32 0.22 % 20,176 18 0.35 % 54,947 244 1.76 %institutions and otherTotal interest-earning assets 5,329,107 $ 63,047 4.71 % 5,281,517 $ 60,811 4.58 % 4,308,028 $ 58,147 5.35 %Allowance for loan losses (53,260 ) (47,593 ) (29,997 ) Noninterest-earning assets 783,200 679,750 639,601 Total assets $ 6,059,047 $ 5,913,674 $ 4,917,632 Liabilities and Shareholders' EquityInterest-Bearing Liabilities: Interest-bearing demand $ 430,145 $ 386 0.36 % $ 394,612 $ 392 0.40 % $ 361,666 $ 952 1.04 %depositsMoney market and savings 1,513,816 1,235 0.32 % 1,409,969 1,265 0.36 % 1,169,996 4,139 1.40 %depositsCertificates and other time 1,284,181 4,507 1.40 % 1,291,536 5,239 1.61 % 1,203,110 6,483 2.14 %depositsBorrowed funds 157,687 557 1.41 % 171,804 558 1.29 % 86,372 547 2.51 %Subordinated debt 108,259 1,460 5.37 % 108,130 1,448 5.33 % 107,782 1,500 5.52 %Total interest-bearing 3,494,088 $ 8,145 0.93 % 3,376,051 $ 8,902 1.05 % 2,928,926 $ 13,621 1.85 %liabilities Noninterest-Bearing Liabilities:Noninterest-bearing demand 1,766,826 1,752,404 1,237,770 depositsOther liabilities 41,434 36,572 40,781 Total liabilities 5,302,348 5,165,027 4,207,477 Shareholders' equity 756,699 748,647 710,155 Total liabilities and $ 6,059,047 $ 5,913,674 $ 4,917,632 shareholders' equity Net interest rate spread 3.78 % 3.53 % 3.50 % Net interest income and margin $ 54,902 4.10 % $ 51,909 3.91 % $ 44,526 4.10 % Net interest income and netinterest margin (tax $ 55,477 4.14 % $ 52,446 3.95 % $ 44,623 4.11 %equivalent)

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Years Ended December31, 2020 2019 Interest Average Interest Average Average Earned/ Yield/ Average Earned/ Yield/ Balance Interest Rate Balance Interest Rate Paid Paid (Dollars in thousands) Assets Interest-Earning Assets: Loans $ 4,383,375 $ 225,959 5.15 % $ 3,831,894 $ 221,363 5.78 %Securities 588,318 15,538 2.64 % 355,233 9,909 2.79 %Deposits in other financial institutions 36,945 265 0.72 % 74,655 1,635 2.19 %Total interest-earning assets 5,008,638 $ 241,762 4.83 % 4,261,782 $ 232,907 5.47 %Allowance for loan losses (46,680 ) (28,129 ) Noninterest-earning assets 675,701 594,981 Total assets $ 5,637,659 $ 4,828,634 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-bearing demand deposits $ 385,482 $ 2,045 0.53 % $ 345,693 $ 4,010 1.16 %Money market and savings deposits 1,316,188 7,326 0.56 % 1,037,126 14,297 1.38 %Certificates and other time deposits 1,268,080 21,675 1.71 % 1,276,684 26,656 2.09 %Borrowed funds 197,525 2,183 1.11 % 127,138 4,675 3.68 %Subordinated debt 108,064 5,850 5.41 % 64,451 3,732 5.79 %Total interest-bearing liabilities 3,275,339 $ 39,079 1.19 % 2,851,092 $ 53,370 1.87 % Noninterest-Bearing Liabilities: Noninterest-bearing demand deposits 1,593,354 1,194,496 Other liabilities 37,278 74,777 Total liabilities 4,905,971 4,120,365 Shareholders' equity 731,688 708,269 Totalliabilitiesandshareholders'equity $ 5,637,659 $ 4,828,634 Net interest rate spread 3.64 % 3.60 % Net interest income and margin $ 202,683 4.05 % $ 179,537 4.21 % Net interest income and net interest $ 204,416 4.08 % $ 180,036 4.22 %margin (tax equivalent)

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended 2020 2019 December31 September30 June30 March31 December31 (Dollars in thousands) Period-endLoan Portfolio:Commercialand $ 667,079 $ 650,634 $ 651,430 $ 702,267 $ 689,360 industrialMortgage ? ? ? 1,051 8,304 warehousePaycheckProtection 569,901 710,234 695,772 ? ? Program (PPP)Real estate: Commercialreal estate(including 1,999,877 1,971,228 1,956,116 1,951,080 1,873,782 multi-familyresidential)Commercialreal estateconstruction 367,213 376,877 386,865 378,987 410,471 andlanddevelopment1-4 familyresidential 737,605 716,565 703,513 704,212 698,957 (includinghome equity)Residential 127,522 148,056 171,656 177,025 192,515 constructionConsumer and 22,567 18,768 18,304 40,924 41,921 otherTotal loans $ 4,491,764 $ 4,592,362 $ 4,583,656 $ 3,955,546 $ 3,915,310 Asset Quality:Nonaccrual $ 28,893 $ 37,928 $ 33,223 $ 21,621 $ 28,371 loansAccruingloans 90 or ? ? ? ? ? more dayspast dueTotalnonperforming 28,893 37,928 33,223 21,621 28,371 loansOther real 9,196 8,876 11,847 12,617 8,337 estateOtherrepossessed ? ? ? ? ? assetsTotalnonperforming $ 38,089 $ 46,804 $ 45,070 $ 34,238 $ 36,708 assets Net $ 4,287 $ 291 $ 538 $ 2,917 $ 1,303 charge-offs Nonaccrual loans:Commercialand $ 10,747 $ 13,171 $ 12,578 $ 8,669 $ 8,388 industrialMortgage ? ? ? ? ? warehouseReal estate: Commercialreal estate(including 10,081 15,849 16,127 7,024 6,741 multi-familyresidential)Commercialreal estateconstruction 3,011 3,085 53 1,958 9,050 andlanddevelopment1-4 familyresidential 4,525 4,263 3,434 2,845 3,294 (includinghome equity)Residential ? 876 898 982 746 constructionConsumer and 529 684 133 143 152 otherTotalnonaccrual $ 28,893 $ 37,928 $ 33,223 $ 21,621 $ 28,371 loans Asset Quality Ratios:Nonperformingassets to 0.63 % 0.78 % 0.77 % 0.68 % 0.74 %total assetsNonperformingloans to 0.64 % 0.83 % 0.72 % 0.55 % 0.72 %total loansAllowance forloan lossesto 184.03 % 128.40 % 143.40 % 173.49 % 103.76 %nonperformingloansAllowance forloan losses 1.18 % 1.06 % 1.04 % 0.95 % 0.75 %to totalloansNetcharge-offsto average 0.37 % 0.03 % 0.05 % 0.30 % 0.13 %loans(annualized)

Allegiance Bancshares, Inc.GAAP Reconciliation and Managements Explanation of Non-GAAP Financial Measures(Unaudited)

Allegiances 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 Allegiances 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 December31 September30 June30 March31 December31 December31 December31 (Dollars and share amounts in thousands, except per share data) Totalshareholders' $ 758,669 $ 753,053 $ 736,143 $ 706,593 $ 709,865 $ 758,669 $ 709,865 equityLess: Goodwilland coredeposit 241,596 242,549 243,538 244,528 245,518 241,596 245,518 intangibles,netTangibleshareholders? $ 517,073 $ 510,504 $ 492,605 $ 462,065 $ 464,347 $ 517,073 $ 464,347 equity Sharesoutstanding at 20,208 20,445 20,431 20,355 20,524 20,208 20,524 end ofperiod Tangible book $ 25.59 $ 24.97 $ 24.11 $ 22.70 $ 22.62 $ 25.59 $ 22.62 value per share Net income $ 15,941 $ 16,170 $ 9,907 $ 3,516 $ 13,986 $ 45,534 $ 52,959 Averageshareholders' $ 756,699 $ 748,647 $ 723,104 $ 713,535 $ 710,155 $ 731,688 $ 708,269 equityLess: Averagegoodwill andcore deposit 242,043 243,015 244,010 245,007 246,154 243,513 247,854 intangibles,netAveragetangible $ 514,656 $ 505,632 $ 479,094 $ 468,528 $ 464,001 $ 488,175 $ 460,415 shareholders?equity Return onaverage 12.32 % 12.72 % 8.32 % 3.02 % 11.96 % 9.33 % 11.50 %tangible equity Total assets $ 6,050,128 $ 5,967,751 $ 5,836,881 $ 5,002,429 $ 4,992,654 $ 6,050,128 $ 4,992,654 Less: Goodwilland coredeposit 241,596 242,549 243,538 244,528 245,518 241,596 245,518 intangibles,netTangible assets $ 5,808,532 $ 5,725,202 $ 5,593,343 $ 4,757,901 $ 4,747,136 $ 5,808,532 $ 4,747,136 Tangible equityto tangible 8.90 % 8.92 % 8.81 % 9.71 % 9.78 % 8.90 % 9.78 %assets Net interestincome $ 55,477 $ 52,446 $ 51,342 $ 45,152 $ 44,623 $ 204,416 $ 180,036 (taxequivalent)Less:Acquisition (342 ) (598 ) (665 ) (1,259 ) (1,860 ) (2,864 ) (9,625 )accountingadjustmentsAdjusted netinterest $ 55,135 $ 51,848 $ 50,677 $ 43,893 $ 42,763 $ 201,552 $ 170,411 income (taxequivalent) Average earning $ 5,329,107 $ 5,281,517 $ 5,037,414 $ 4,372,723 $ 4,308,028 $ 5,008,638 $ 4,261,782 assets Net interestmargin 4.14 % 3.95 % 4.10 % 4.15 % 4.11 % 4.08 % 4.22 %(taxequivalent)Adjusted netinterest margin 4.12 % 3.91 % 4.05 % 4.04 % 3.94 % 4.02 % 4.00 %(taxequivalent)

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