GlobeNewswire Inc | Apr 29, 2021 07:00AM EDT

April 29, 2021

-- Record net income and diluted earnings per share of $18.0 million and $0.89, respectively -- Funded in excess of $1.04 billion in loans over the last year within the Small Business Administration Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) -- Deposit growth of 35.9% to $5.37 billion as of March 31, 2021 from $3.95 billion as of March 31, 2020, driven by $696.6 million, or 57.2%, growth in noninterest-bearing deposits -- Board declared quarterly dividend of $0.12 per share of common stock and authorized repurchases of up to 1 million shares

HOUSTON, April 29, 2021 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) (Allegiance), the holding company of Allegiance Bank (the "Bank"), today reported record net income of $18.0 million and diluted earnings per share of $0.89 for the first quarter 2021 compared to net income of $3.5 million and diluted earnings per share of $0.17 for the first quarter 2020. The first quarter 2021 results were primarily driven by increased net interest income primarily due to lower funding costs and lower provision expense.

Allegiance is off to a very productive start in 2021. We are proud to report record quarterly earnings results while continuing to maintain stable asset quality, said Steve Retzloff, Allegiances Chief Executive Officer. We reached record highs in terms of net income, diluted earnings per share, return on average assets and preserved a solid net interest margin all due to the successful execution of our core strategies, continued Retzloff.

These exceptional results highlight our teams unparalleled and coordinated effort to assist our customers during the PPP process by funding over $1.04 billion of loans since the beginning of the pandemic. A high percentage of these loans were to businesses who were not previously customers and who experienced, first hand, the value of our high service culture. We look forward to solidifying these relationships over the coming months. Our team is excited about the future of Allegiance and continues to believe that providing remarkable service to our customers and our community sets us apart as the Houston regions premier community bank and will continue to drive future value, concluded Retzloff.

First Quarter 2021 Results

Net interest income before the provision for credit losses in the first quarter 2021 increased $10.7 million, or 23.7%, to $55.7 million from $45.0 million for the first quarter 2020 and increased $796 thousand, or 1.4%, from $54.9 million in the fourth 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 4 basis points to 4.19% for the first quarter 2021 from 4.15% for the first quarter 2020 and increased 5 basis points from 4.14% for the fourth quarter 2020.

Noninterest income for the first quarter 2021 was $1.7 million, a decrease of $989 thousand, or 36.3%, compared to $2.7 million for the first quarter 2020 and decreased $283 thousand, or 14.0%, compared to $2.0 million for the fourth quarter 2020. First quarter 2021 noninterest income reflected lower transactional fee income, significantly lower correspondent bank rebates, lower gains on sales of securities and higher losses on sales of other real estate when compared to first quarter 2020.

Noninterest expense for the first quarter 2021 increased $2.5 million, or 7.8%, to $34.9 million from $32.4 million for the first quarter 2020 and increased $2.2 million, or 6.6%, compared to the fourth quarter 2020 primarily due to increases in salaries and benefits.

In the first quarter 2021, Allegiances efficiency ratio decreased to 60.85% compared to 68.13% for the first quarter 2020 and increased from 57.53% for the fourth quarter 2020. First quarter 2021 annualized returns on average assets, average equity and average tangible equity were 1.18%, 9.59% and 14.03%, respectively, compared to 0.29%, 1.98% and 3.02%, respectively, for the first quarter 2020. Annualized returns on average assets, average equity and average tangible equity for the fourth quarter 2020 were 1.05%, 8.38% and 12.32%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 9.

Financial Condition

Total assets at March31, 2021 increased $380.9 million, or 25.2% (annualized), to $6.43 billion compared to $6.05 billion at December31, 2020 and increased $1.43 billion, or 28.6%, compared to $5.00 billion at March31, 2020, primarily due to the origination of PPP loans and growth in the securities portfolio.

Total loans at March31, 2021 increased $167.4 million, or 14.9% (annualized), to $4.66 billion compared to $4.49 billion at December31, 2020, primarily due to the origination of $331.9 million of PPP loans, and increased $703.6 million, or 17.8%, compared to $3.96 billion at March31, 2020. Core loans, which exclude the mortgage warehouse portfolio and PPP loans, increased $8.9 million, or 0.9% (annualized), to $3.93 billion at March31, 2021 from $3.92 billion at December31, 2020 and decreased $23.8 million, or 0.6%, from $3.95 billion at March31, 2020.

Deposits at March31, 2021 increased $385.7 million, or 30.9% (annualized), to $5.37 billion compared to $4.99 billion at December31, 2020 and increased $1.42 billion, or 35.9%, compared to $3.95 billion at March31, 2020.

Asset Quality

Nonperforming assets totaled $35.6 million, or 0.55% of total assets, at March31, 2021, compared to $38.1 million, or 0.63% of total assets, at December31, 2020 and $34.2 million, or 0.68% of total assets, at March31, 2020. The allowance for credit losses on loans as a percentage of total loans was 1.13% at March 31, 2021 and 1.18% at December 31, 2020.

The provision for credit losses for the first quarter 2021 was $639 thousand compared to $4.4 million for the fourth quarter 2020 and $11.0 million for the first quarter 2020. The increased provision during 2020 reflected the uncertainty surrounding unemployment, the economic impact caused by COVID-19 and the economic effects related to the sustained lower crude oil prices.

First quarter 2021 net charge-offs were $345 thousand, or 0.03% (annualized) of average loans, a decrease from net charge-offs of $4.3 million, or 0.37% (annualized) of average loans, for the fourth quarter 2020 and $2.9 million, or 0.30% (annualized) of average loans, for the first quarter 2020.

The Company is carefully monitoring the hotel, restaurant and bar, and oil and gas portfolios, which it believes are at heightened risk due to the current economic environment. Loan balances in the hotel industry, excluding PPP loans, totaled $125.2million, or 2.7% of total loans, at March 31, 2021, of which $6.2 million were on nonaccrual. At March 31, 2021, restaurant and bar industry loans, excluding PPP loans, totaled $116.2million, or 2.5%, of total loans, of which $486 thousand were on nonaccrual. At March31, 2021, the Companys allowance for credit losses on loans allocated to its hotel portfolio was 3.5% 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 $72.5 million, or 1.6%, of total loans at March 31, 2021, of which $3.6 million were on nonaccrual. At March31, 2021, the allowance for credit losses on loans allocated to the oil and gas loan portfolio was 3.4% of total oil and gas loans.

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 March 31, 2021, 65 loans with outstanding loan balances of $62.1 million remained on deferral.

Dividend

The Board of Directors of Allegiance has declared a cash dividend of $0.12 per share to be paid on June 15, 2021 to all shareholders of record as of May 28, 2021. The amount and timing of any future dividend payments to shareholders will be subject to the discretion of Allegiances Board of Directors.

Share Repurchase Authorization

The Board of Directors of Allegiance approved a stock repurchase authorization, under which Allegiance may repurchase up to one million shares of its outstanding common stock at the discretion of management through April30, 2022. Repurchases under this program may be made from time to time through open market purchases, privately negotiated transactions or such other manners as will comply with applicable laws and regulations. Allegiances previously announced share repurchase program recently expired on March 31, 2021.

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 9 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, April 29, 2021 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its first quarter 2021 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 3792638. 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 March31, 2021, Allegiance was a $6.43 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 March31, 2021, Allegiance Bank operated 27 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 26 bank offices in the Houston metropolitan area and one bank office in Beaumont, just outside of the Houston metropolitan area. Visitwww.allegiancebank.com for 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, 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)

2021 2020 March31 December31 September30 June30 March31 (Dollars in thousands) ASSETS Cash and due from $ 141,947 $ 122,897 $ 327,416 $ 237,585 $ 156,700 banksInterest-bearingdeposits at other 482,383 299,869 19,732 28,815 18,189 financialinstitutionsTotal cash and cash 624,330 422,766 347,148 266,400 174,889 equivalentsAvailable for salesecurities, at fair 787,516 772,890 663,301 618,751 508,250 valueLoans held for 4,659,169 4,491,764 4,592,362 4,583,656 3,955,546 investmentLess: allowance forcredit losses on (52,758 ) (53,173 ) (48,698 ) (47,642 ) (37,511 )loansLoans, net 4,606,411 4,438,591 4,543,664 4,536,014 3,918,035 Accrued interest 38,632 40,053 36,996 32,795 17,203 receivablePremises and 66,115 70,685 69,887 67,229 66,798 equipment, netOther real estate 576 9,196 8,876 11,847 12,617 ownedFederal Home Loan 7,775 7,756 9,716 14,844 12,798 Bank stockBank owned life 27,825 27,686 27,542 27,398 27,255 insuranceGoodwill 223,642 223,642 223,642 223,642 223,642 Core deposit 17,130 17,954 18,907 19,896 20,886 intangibles, netOther assets 31,038 18,909 18,072 18,065 20,056 Total assets $ 6,430,990 $ 6,050,128 $ 5,967,751 $ 5,836,881 $ 5,002,429 LIABILITIES ANDSHAREHOLDERS? EQUITYLIABILITIES: Deposits: Noninterest-bearing $ 1,914,121 $ 1,704,567 $ 1,772,700 $ 1,754,128 $ 1,217,532 Interest-bearing Demand 480,710 437,328 409,137 375,353 341,524 Money market and 1,617,823 1,499,938 1,483,370 1,270,437 1,110,631 savingsCertificates and 1,361,535 1,346,649 1,252,159 1,300,793 1,283,887 other timeTotalinterest-bearing 3,460,068 3,283,915 3,144,666 2,946,583 2,736,042 depositsTotal deposits 5,374,189 4,988,482 4,917,366 4,700,711 3,953,574 Accrued interest 3,862 2,701 3,082 3,293 3,821 payableBorrowed funds 147,517 155,515 155,512 255,509 190,506 Subordinated debt 108,453 108,322 108,191 108,061 107,930 Other liabilities 36,432 36,439 30,547 33,164 40,005 Total liabilities 5,670,453 5,291,459 5,214,698 5,100,738 4,295,836 SHAREHOLDERS? EQUITY:Common stock 20,183 20,208 20,445 20,431 20,355 Capital surplus 505,307 508,794 516,151 515,045 513,894 Retained earnings 210,834 195,236 186,866 172,723 164,858 Accumulated othercomprehensive 24,213 34,431 29,591 27,944 7,486 incomeTotal shareholders? 760,537 758,669 753,053 736,143 706,593 equityTOTAL LIABILITIESAND SHAREHOLDERS? $ 6,430,990 $ 6,050,128 $ 5,967,751 $ 5,836,881 $ 5,002,429 EQUITY

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended 2021 2020 March31 December31 September30 June30 March31 (Dollars in thousands, except per share data) INTEREST INCOME:Loans, $ 57,991 $ 58,496 $ 56,418 $ 56,421 $ 54,624 including feesSecurities: Taxable 2,402 2,203 2,095 1,842 2,087 Tax-exempt 2,394 2,316 2,280 2,169 546 Deposits inother 41 32 18 20 195 financialinstitutionsTotal interest 62,828 63,047 60,811 60,452 57,452 income INTEREST EXPENSE:Demand, moneymarket and 1,484 1,621 1,657 1,729 4,364 savingsdepositsCertificatesand other time 3,665 4,507 5,239 5,845 6,084 depositsBorrowed funds 539 557 558 562 506 Subordinated 1,442 1,460 1,448 1,469 1,473 debtTotal interest 7,130 8,145 8,902 9,605 12,427 expenseNET INTEREST 55,698 54,902 51,909 50,847 45,025 INCOMEProvision for 639 4,368 1,347 10,669 10,990 credit lossesNet interestincome after 55,059 50,534 50,562 40,178 34,035 provision forcredit losses NONINTEREST INCOME:Nonsufficient 83 100 75 60 169 funds feesServicecharges on 388 405 325 343 457 depositaccountsGain on sale 49 ? ? 93 194 of securities(Loss) gain onsales of otherreal estate (176 ) ? 117 (306 ) (69 )andrepossessedassetsBank owned 139 144 144 143 151 life insuranceRebate fromcorrespondent 132 196 98 89 493 bankOther 1,121 1,174 1,091 1,140 1,330 Totalnoninterest 1,736 2,019 1,850 1,562 2,725 income NONINTEREST EXPENSE:Salaries andemployee 22,452 21,003 20,034 19,334 19,781 benefitsNet occupancy 2,390 2,079 2,057 1,926 1,907 and equipmentDepreciation 1,034 1,019 946 885 866 Dataprocessing and 2,200 2,107 2,125 1,934 1,826 softwareamortizationProfessional 789 999 756 800 573 feesRegulatoryassessments 807 810 875 609 632 and FDICinsuranceCore depositintangibles 824 953 989 990 990 amortizationCommunications 321 225 355 390 417 Advertising 298 347 327 370 521 Other real 113 382 2,017 114 2,649 estate expenseOther 3,691 2,825 2,084 2,427 2,239 Totalnoninterest 34,919 32,749 32,565 29,779 32,401 expenseINCOME BEFORE 21,876 19,804 19,847 11,961 4,359 INCOME TAXESProvision for 3,866 3,863 3,677 2,054 843 income taxesNET INCOME $ 18,010 $ 15,941 $ 16,170 $ 9,907 $ 3,516 EARNINGS PER SHAREBasic $ 0.89 $ 0.78 $ 0.79 $ 0.49 $ 0.17 Diluted $ 0.89 $ 0.77 $ 0.79 $ 0.48 $ 0.17

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended 2021 2020 March31 December31 September30 June30 March31 (Dollars and share amounts in thousands, except per share data) Net income $ 18,010 $ 15,941 $ 16,170 $ 9,907 $ 3,516 Earnings per $ 0.89 $ 0.78 $ 0.79 $ 0.49 $ 0.17 share, basicEarnings per $ 0.89 $ 0.77 $ 0.79 $ 0.48 $ 0.17 share, dilutedDividends per $ 0.12 $ 0.10 $ 0.10 $ 0.10 $ 0.10 share Return onaverage assets 1.18 % 1.05 % 1.09 % 0.71 % 0.29 %^(A)Return onaverage equity 9.59 % 8.38 % 8.59 % 5.51 % 1.98 %^(A)Return onaverage 14.03 % 12.32 % 12.72 % 8.32 % 3.02 %tangibleequity^(A)(B)Net interestmargin (tax 4.19 % 4.14 % 3.95 % 4.10 % 4.15 %equivalent)^(A)(C)Efficiency 60.85 % 57.53 % 60.58 % 56.92 % 68.13 %ratio^(D) Capital Ratios AllegianceBancshares, Inc.(Consolidated)Equity to 11.83 % 12.54 % 12.62 % 12.61 % 14.12 %assetsTangibleequity to 8.40 % 8.90 % 8.92 % 8.81 % 9.71 %tangibleassets^(B)Estimatedcommon equity 11.87 % 11.80 % 11.73 % 11.36 % 11.15 %tier 1 capitalEstimated tier1 risk-based 12.10 % 12.04 % 11.96 % 11.60 % 11.38 %capitalEstimatedtotal 15.72 % 15.71 % 15.56 % 15.17 % 14.72 %risk-basedcapitalEstimated tier1 leverage 8.57 % 8.51 % 8.70 % 8.83 % 9.89 %capitalAllegiance BankEstimatedcommon equity 13.17 % 13.32 % 13.25 % 12.84 % 12.58 %tier 1 capitalEstimated tier1 risk-based 13.17 % 13.32 % 13.25 % 12.84 % 12.58 %capitalEstimatedtotal 15.37 % 15.55 % 15.41 % 14.97 % 14.48 %risk-basedcapitalEstimated tier1 leverage 9.33 % 9.41 % 9.64 % 9.77 % 10.94 %capital Other Data Weightedaverage shares:Basic 20,140 20,396 20,439 20,414 20,411 Diluted 20,342 20,575 20,532 20,514 20,690 Period endshares 20,183 20,208 20,445 20,431 20,355 outstandingBook value per $ 37.68 $ 37.54 $ 36.83 $ 36.03 $ 34.71 shareTangible bookvalue per $ 25.75 $ 25.59 $ 24.97 $ 24.11 $ 22.70 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 9 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 March31, 2021 December31, 2020 March31, 2020 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 $ 4,571,045 $ 57,991 5.15 % $ 4,569,210 $ 58,496 5.09 % $ 3,933,291 $ 54,624 5.59 %Securities 789,188 4,796 2.46 % 701,233 4,519 2.56 % 388,721 2,633 2.72 %Deposits in otherfinancial institutions 96,212 41 0.17 % 58,664 32 0.22 % 50,711 195 1.55 %and otherTotal interest-earning 5,456,445 $ 62,828 4.67 % 5,329,107 $ 63,047 4.71 % 4,372,723 $ 57,452 5.28 %assetsAllowance for credit (53,370 ) (53,260 ) (28,718 ) losses on loansNoninterest-earning 760,762 783,200 602,778 assetsTotal assets $ 6,163,837 $ 6,059,047 $ 4,946,783 Liabilities and Shareholders' EquityInterest-Bearing Liabilities:Interest-bearing demand $ 458,063 $ 371 0.33 % $ 430,145 $ 386 0.36 % $ 363,326 $ 846 0.94 %depositsMoney market and savings 1,539,127 1,113 0.29 % 1,513,816 1,235 0.32 % 1,168,541 3,518 1.21 %depositsCertificates and other 1,332,663 3,665 1.12 % 1,284,181 4,507 1.40 % 1,193,427 6,084 2.05 %time depositsBorrowed funds 154,927 539 1.41 % 157,687 557 1.41 % 140,999 506 1.44 %Subordinated debt 108,387 1,442 5.40 % 108,259 1,460 5.37 % 107,865 1,473 5.49 %Total interest-bearing 3,593,167 $ 7,130 0.80 % 3,494,088 $ 8,145 0.93 % 2,974,158 $ 12,427 1.68 %liabilities Noninterest-Bearing Liabilities:Noninterest-bearing 1,767,740 1,766,826 1,225,888 demand depositsOther liabilities 41,330 41,434 33,202 Total liabilities 5,402,237 5,302,348 4,233,248 Shareholders' equity 761,600 756,699 713,535 Total liabilities and $ 6,163,837 $ 6,059,047 $ 4,946,783 shareholders' equity Net interest rate spread 3.87 % 3.78 % 3.60 % Net interest income and $ 55,698 4.14 % $ 54,902 4.10 % $ 45,025 4.14 %margin Net interest income andnet interest margin (tax $ 56,317 4.19 % $ 55,477 4.14 % $ 45,152 4.15 %equivalent)

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended 2021 2020 March31 December31 September30 June30 March31 (Dollars in thousands) Period-endLoan Portfolio:Commercialand $ 664,792 $ 667,079 $ 650,634 $ 651,430 $ 702,267 industrialMortgage ? ? ? ? 1,051 warehousePaycheckProtection 728,424 569,901 710,234 695,772 ? Program (PPP)Real estate: Commercialreal estate(including 2,018,853 1,999,877 1,971,228 1,956,116 1,951,080 multi-familyresidential)Commercialreal estateconstruction 386,637 367,213 376,877 386,865 378,987 and landdevelopment1-4 familyresidential 726,228 737,605 716,565 703,513 704,212 (includinghome equity)Residential 119,528 127,522 148,056 171,656 177,025 constructionConsumer and 14,707 22,567 18,768 18,304 40,924 otherTotal loans $ 4,659,169 $ 4,491,764 $ 4,592,362 $ 4,583,656 $ 3,955,546 Asset Quality:Nonaccrual $ 35,051 $ 28,893 $ 37,928 $ 33,223 $ 21,621 loansAccruingloans 90 or ? ? ? ? ? more dayspast dueTotalnonperforming 35,051 28,893 37,928 33,223 21,621 loansOther real 576 9,196 8,876 11,847 12,617 estateOtherrepossessed ? ? ? ? ? assetsTotalnonperforming $ 35,627 $ 38,089 $ 46,804 $ 45,070 $ 34,238 assets Net $ 345 $ 4,287 $ 291 $ 538 $ 2,917 charge-offs Nonaccrual loans:Commercialand $ 14,059 $ 10,747 $ 13,171 $ 12,578 $ 8,669 industrialMortgage ? ? ? ? ? warehouseReal estate: Commercialreal estate(including 13,455 10,081 15,849 16,127 7,024 multi-familyresidential)Commercialreal estateconstruction 1,000 3,011 3,085 53 1,958 and landdevelopment1-4 familyresidential 5,736 4,525 4,263 3,434 2,845 (includinghome equity)Residential ? ? 876 898 982 constructionConsumer and 801 529 684 133 143 otherTotalnonaccrual $ 35,051 $ 28,893 $ 37,928 $ 33,223 $ 21,621 loans Asset Quality Ratios:Nonperformingassets to 0.55 % 0.63 % 0.78 % 0.77 % 0.68 %total assetsNonperformingloans to 0.75 % 0.64 % 0.83 % 0.72 % 0.55 %total loansAllowance forcredit losseson loans to 150.52 % 184.03 % 128.40 % 143.40 % 173.49 %nonperformingloansAllowance forcredit losses 1.13 % 1.18 % 1.06 % 1.04 % 0.95 %on loans tototal loansNetcharge-offsto average 0.03 % 0.37 % 0.03 % 0.05 % 0.30 %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 and the ratio of tangible equity to tangible assets 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 2021 2020 March31 December31 September30 June30 March31 (Dollars and share amounts in thousands, except per share data) Total shareholders' $ 760,537 $ 758,669 $ 753,053 $ 736,143 $ 706,593 equityLess: Goodwill andcore deposit 240,772 241,596 242,549 243,538 244,528 intangibles, netTangible $ 519,765 $ 517,073 $ 510,504 $ 492,605 $ 462,065 shareholders?equity Shares outstanding 20,183 20,208 20,445 20,431 20,355 at end of period Tangible book value $ 25.75 $ 25.59 $ 24.97 $ 24.11 $ 22.70 per share Net income $ 18,010 $ 15,941 $ 16,170 $ 9,907 $ 3,516 Average $ 761,600 $ 756,699 $ 748,647 $ 723,104 $ 713,535 shareholders' equityLess: Averagegoodwill and core 241,166 242,043 243,015 244,010 245,007 deposit intangibles,netAverage tangible $ 520,434 $ 514,656 $ 505,632 $ 479,094 $ 468,528 shareholders? equity Return on average 14.03 % 12.32 % 12.72 % 8.32 % 3.02 %tangible equity^(A) Total assets $ 6,430,990 $ 6,050,128 $ 5,967,751 $ 5,836,881 $ 5,002,429 Less: Goodwill andcore deposit 240,772 241,596 242,549 243,538 244,528 intangibles, netTangible assets $ 6,190,218 $ 5,808,532 $ 5,725,202 $ 5,593,343 $ 4,757,901 Tangible equity to 8.40 % 8.90 % 8.92 % 8.81 % 9.71 %tangibleassets

(A)Interim periods annualized.

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