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

July 29, 2021

-- Record net income and diluted earnings per share of $22.9 million and $1.12 for the second quarter 2021, respectively, and $40.9 million and $2.01 for the six months ended June 30, 2021, respectively -- Deposit growth of 15.6% to $5.43 billion as of June 30, 2021 from $4.70 billion as of June 30, 2020, driven primarily by $513.7 million, or 17.4%, growth in interest-bearing deposits and $218.9 million, or 12.5%, growth in noninterest-bearing deposits -- Board declared quarterly dividend of $0.12 per share of common stock

HOUSTON, July 29, 2021 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) (Allegiance), the holding company of Allegiance Bank (the "Bank"), today reported record net income of $22.9 million and diluted earnings per share of $1.12 for the second quarter 2021 compared to net income of $9.9 million and diluted earnings per share of $0.48 for the second quarter 2020. Net income for the six months ended June 30, 2021 was $40.9 million, or $2.01 per diluted share, compared to $13.4 million, or $0.65 per diluted share, for the six months ended June 30, 2020. The second quarter and six months ended June 30, 2021 results were primarily due to a recapture of provision for credit losses and increased net interest income driven by lower funding costs.

We are excited to announce yet another record quarter for Allegiance, which came with core loan and deposit gains, and we enter the third quarter positioned for growth, said Steve Retzloff, Allegiances Chief Executive Officer. We maintained solid asset quality while economic factors improved which led us to a release of reserves for credit losses commented Retzloff.

The positive energy across Allegiance coupled with the outstanding determination of our employees continues to reinforce the execution of our business strategies with precision. The company-wide coordination of efforts has provided powerful momentum within our Treasury Management group as we continue to integrate new customers and focus on building both new and deepening existing customer relationships, continued Retzloff.

As we appreciate our successes in the first half of 2021, we believe we are in an excellent position of strength as we prepare for the remainder of the year. We have proven our ability to succeed in a highly competitive market and are well-positioned to support the growing needs of the communities we serve, concluded Retzloff.

Second Quarter 2021 Results

Net interest income before the provision for credit losses in the second quarter 2021 increased $5.7 million, or 11.3%, to $56.6 million from $50.8 million for the second quarter 2020 and increased $898 thousand, or 1.6%, from $55.7 million in the first quarter 2021. These increases were primarily due to changes in the volume and relative mix of the underlying assets and liabilities, the impact of loans within the Small Business Administration Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) as well as lower costs on interest-bearing liabilities. The net interest margin on a tax equivalent basis decreased 8 basis points to 4.02% for the second quarter 2021 from 4.10% for the second quarter 2020 and decreased 17 basis points from 4.19% for the first quarter 2021. The decreases in the margin were primarily due to the decrease in the average yield on interest-earning assets partially offset by the decrease in funding costs.

Noninterest income for the second quarter 2021 was $2.3 million, an increase of $711 thousand, or 45.5%, compared to $1.6 million for the second quarter 2020 and increased $537 thousand, or 30.9%, compared to $1.7 million for the first quarter 2021. Second quarter 2021 noninterest income reflected higher transactional fee income and no losses on sales of other real estate when compared to first quarter 2020.

Noninterest expense for the second quarter 2021 increased $3.8 million, or 12.8%, to $33.6 million from $29.8 million for the second quarter 2020 and decreased $1.3 million, or 3.8%, compared to the second quarter of 2020 and the first quarter 2021. The increase over the prior year was primarily due to increases in salaries and benefits and the reduced amount of deferred PPP loan origination costs compared to the second quarter of 2020.

In the second quarter 2021, Allegiances efficiency ratio increased to 57.07% compared to 56.92% for the second quarter 2020 and decreased from 60.85% for the first quarter 2021. Second quarter 2021 annualized returns on average assets, average equity and average tangible equity were 1.42%, 11.87% and 17.20%, respectively, compared to 0.71%, 5.51% and 8.32%, respectively, for the second quarter 2020. Annualized returns on average assets, average equity and average tangible equity for the first quarter 2021 were 1.18%, 9.59% and 14.03%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Six Months Ended June 30, 2021 Results

Net interest income before provision for credit losses for the six months ended June 30, 2021 increased $16.4 million, or 17.1%, to $112.3 million from $95.9 million for the six months ended June 30, 2020 primarily due to a $880.6 million, or 18.7%, increase in average interest-earning assets over the prior year including 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 2 basis points to 4.10% for the six months ended June 30, 2021 from 4.12% for the six months ended June 30, 2020. The decrease in the margin over the prior year was primarily due to the decrease in the average yield on interest-earning assets partially offset by decreased funding costs.

Noninterest income for the six months ended June 30, 2021 was $4.0 million, a decrease of $278 thousand, or 6.5%, compared to $4.3 million for the six months ended June 30, 2020 due primarily to lower correspondent bank rebates and gains on the sale of securities.

Noninterest expense for the six months ended June 30, 2021 increased $6.3 million, or 10.2%, to $68.5 million from $62.2 million for the six months ended June 30, 2020. The increase in noninterest expense over the six months ended June 30, 2020 was primarily due increased accruals for bonus and profit sharing due to increased net income along with the reduced amount of deferred PPP loan origination costs compared to the prior year.

Allegiances efficiency ratio decreased from 62.26% for the six months ended June 30, 2020 to 58.93% for the six months ended June 30, 2021. For the six months ended June 30, 2021, returns on average assets, average equity and average tangible equity were 1.30%, 10.75% and 15.65%, respectively, compared to 0.51%, 3.76% and 5.70%, respectively, for the six months ended June 30, 2020. 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 June30, 2021 increased $77.7 million, or 4.8% (annualized), to $6.51 billion compared to $6.43 billion at March31, 2021 and increased $671.8 million, or 11.5%, compared to $5.84 billion at June30, 2020, primarily due to the origination and paydowns of PPP loans, origination of core loans and growth within the securities portfolio.

Total loans at June30, 2021 decreased $198.4 million, or 17.0% (annualized), to $4.46 billion compared to $4.66 billion at March31, 2021, primarily due to $271.9 million of paydowns on PPP loans partially offset by the origination of $42.7 million of PPP loans. Total loans at June 30, 2021 decreased $122.9 million, or 2.7%, compared to $4.58 billion at June30, 2020. Core loans, which exclude PPP loans, increased $30.8 million, or 3.1% (annualized), to $3.96 billion at June30, 2021 from $3.93 billion at March31, 2021 and increased $73.7 million, or 1.9%, from $3.89 billion at June30, 2020.

Deposits at June30, 2021 increased $59.2 million, or 4.4% (annualized), to $5.43 billion compared to $5.37 billion at March31, 2021 and increased $732.6 million, or 15.6%, compared to $4.70 billion at June30, 2020.

Asset Quality

Nonperforming assets totaled $38.0 million, or 0.58%, of total assets, at June30, 2021 compared to $35.6 million, or 0.55%, of total assets at March31, 2021 and $45.1 million, or 0.77%, of total assets, at June30, 2020. The allowance for credit losses on loans as a percentage of total loans was 1.11% at June 30, 2021 and 1.13% at March 31, 2021.

The recapture of provision for credit losses for the second quarter 2021 was $2.7 million compared to the provision for credit losses of $639 thousand for the first quarter 2021 and $10.7 million for the second quarter 2020 reflecting recent improvements in economic factors compared to prior quarters where there was more uncertainty surrounding unemployment, COVID-19 and effects related to sustained lower crude oil prices.

Second quarter 2021 net charge-offs were $162 thousand, or 0.01% (annualized) of average loans, a decrease from net charge-offs of $345 thousand, or 0.03% (annualized) of average loans, for the first quarter 2021 and $538 thousand, or 0.05% (annualized) of average loans, for the second 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 $128.5million, or 2.9% of total loans, at June 30, 2021, of which $10.5 million were on nonaccrual. At June 30, 2021, restaurant and bar industry loans, excluding PPP loans, totaled $114.3million, or 2.6%, of total loans, of which $301 thousand were on nonaccrual. At June30, 2021, the Companys allowance for credit losses on loans allocated to its hotel portfolio was 3.7% 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 $73.0 million, or 1.6%, of total loans at June 30, 2021, of which $3.5 million were on nonaccrual. At June30, 2021, the allowance for credit losses on loans allocated to the oil and gas loan portfolio was 2.3% 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 June 30, 2021, 43 loans with outstanding loan balances of $47.4 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 September 15, 2021 to all shareholders of record as of August 31, 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, July 29, 2021 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its second quarter 2021 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 5047167. 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 June30, 2021, Allegiance was a $6.51 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 June30, 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. 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 continues to evolve 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 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 June30 March31 December31 September30 June30 (Dollars in thousands) ASSETS Cash and due from $ 146,397 $ 141,947 $ 122,897 $ 327,416 $ 237,585 banksInterest-bearingdeposits at other 564,888 482,383 299,869 19,732 28,815 financialinstitutionsTotal cash and cash 711,285 624,330 422,766 347,148 266,400 equivalentsAvailable for salesecurities, at fair 977,282 787,516 772,890 663,301 618,751 valueLoans held for 4,460,743 4,659,169 4,491,764 4,592,362 4,583,656 investmentLess: allowance forcredit losses on (49,586 ) (52,758 ) (53,173 ) (48,698 ) (47,642 )loansLoans, net 4,411,157 4,606,411 4,438,591 4,543,664 4,536,014 Accrued interest 37,075 38,632 40,053 36,996 32,795 receivablePremises and 65,442 66,115 70,685 69,887 67,229 equipment, netOther real estate 1,397 576 9,196 8,876 11,847 ownedFederal Home Loan 8,234 7,775 7,756 9,716 14,844 Bank stockBank owned life 27,976 27,825 27,686 27,542 27,398 insuranceGoodwill 223,642 223,642 223,642 223,642 223,642 Core deposit 16,306 17,130 17,954 18,907 19,896 intangibles, netOther assets 28,871 31,038 18,909 18,072 18,065 Total assets $ 6,508,667 $ 6,430,990 $ 6,050,128 $ 5,967,751 $ 5,836,881 LIABILITIES ANDSHAREHOLDERS? EQUITYLIABILITIES: Deposits: Noninterest-bearing $ 1,973,042 $ 1,914,121 $ 1,704,567 $ 1,772,700 $ 1,754,128 Interest-bearing Demand 553,874 480,710 437,328 409,137 375,353 Money market and 1,556,920 1,617,823 1,499,938 1,483,370 1,270,437 savingsCertificates and 1,349,522 1,361,535 1,346,649 1,252,159 1,300,793 other time Totalinterest-bearing 3,460,316 3,460,068 3,283,915 3,144,666 2,946,583 deposits Total 5,433,358 5,374,189 4,988,482 4,917,366 4,700,711 depositsAccrued interest 1,940 3,862 2,701 3,082 3,293 payableBorrowed funds 139,951 147,517 155,515 155,512 255,509 Subordinated debt 108,584 108,453 108,322 108,191 108,061 Other liabilities 35,684 36,432 36,439 30,547 33,164 Total liabilities 5,719,517 5,670,453 5,291,459 5,214,698 5,100,738 SHAREHOLDERS? EQUITY:Common stock 20,213 20,183 20,208 20,445 20,431 Capital surplus 506,810 505,307 508,794 516,151 515,045 Retained earnings 231,333 210,834 195,236 186,866 172,723 Accumulated othercomprehensive 30,794 24,213 34,431 29,591 27,944 incomeTotal shareholders? 789,150 760,537 758,669 753,053 736,143 equityTOTAL LIABILITIESAND SHAREHOLDERS? $ 6,508,667 $ 6,430,990 $ 6,050,128 $ 5,967,751 $ 5,836,881 EQUITY

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended Year-to-Date 2021 2020 2021 2020 June30 March31 December31 September30 June30 June30 June30 (Dollars in thousands, except per share data) INTEREST INCOME: Loans, including $ 57,691 $ 57,991 $ 58,496 $ 56,418 $ 56,421 $ 115,682 $ 111,045 feesSecurities: Taxable 2,556 2,402 2,203 2,095 1,842 4,958 3,929 Tax-exempt 2,491 2,394 2,316 2,280 2,169 4,885 2,715 Deposits in otherfinancial 94 41 32 18 20 135 215 institutionsTotal interest 62,832 62,828 63,047 60,811 60,452 125,660 117,904 income INTEREST EXPENSE: Demand, moneymarket and savings 1,337 1,484 1,621 1,657 1,729 2,821 6,093 depositsCertificates andother time 2,989 3,665 4,507 5,239 5,845 6,654 11,929 depositsBorrowed funds 469 539 557 558 562 1,008 1,068 Subordinated debt 1,441 1,442 1,460 1,448 1,469 2,883 2,942 Total interest 6,236 7,130 8,145 8,902 9,605 13,366 22,032 expenseNET INTEREST 56,596 55,698 54,902 51,909 50,847 112,294 95,872 INCOME(Recapture of)provision for (2,679 ) 639 4,368 1,347 10,669 (2,040 ) 21,659 credit lossesNet interestincome after 59,275 55,059 50,534 50,562 40,178 114,334 74,213 provision forcredit losses NONINTEREST INCOME:Nonsufficient 94 83 100 75 60 177 229 funds feesService charges on 382 388 405 325 343 770 800 deposit accounts(Loss) gain on ? 49 ? ? 93 49 287 sale of securities(Loss) gain onsales of other ? (176 ) ? 117 (306 ) (176 ) (375 )real estate andrepossessed assetsBank owned life 151 139 144 144 143 290 294 insuranceDebit card and ATM 761 630 637 574 510 1,391 994 card incomeRebate from 73 132 196 98 89 205 582 correspondent bankOther 812 491 537 517 630 1,303 1,476 Total noninterest 2,273 1,736 2,019 1,850 1,562 4,009 4,287 income NONINTEREST EXPENSE:Salaries and 22,472 22,452 21,003 20,034 19,334 44,924 39,115 employee benefitsNet occupancy and 2,225 2,390 2,079 2,057 1,926 4,615 3,833 equipmentDepreciation 1,057 1,034 1,019 946 885 2,091 1,751 Data processingand software 2,176 2,200 2,107 2,125 1,934 4,376 3,760 amortizationProfessional fees 608 789 999 756 800 1,397 1,373 Regulatoryassessments and 768 807 810 875 609 1,575 1,241 FDIC insuranceCore depositintangibles 824 824 953 989 990 1,648 1,980 amortizationCommunications 332 321 225 355 390 653 807 Advertising 432 298 347 327 370 730 891 Other real estate 229 113 382 2,017 114 342 2,762 expenseOther 2,472 3,691 2,825 2,084 2,427 6,163 4,667 Total noninterest 33,595 34,919 32,749 32,565 29,779 68,514 62,180 expenseINCOME BEFORE 27,953 21,876 19,804 19,847 11,961 49,829 16,320 INCOME TAXESProvision for 5,028 3,866 3,863 3,677 2,054 8,894 2,897 income taxesNET INCOME $ 22,925 $ 18,010 $ 15,941 $ 16,170 $ 9,907 $ 40,935 $ 13,423 EARNINGS PER SHARE Basic $ 1.13 $ 0.89 $ 0.78 $ 0.79 $ 0.49 $ 2.03 $ 0.66 Diluted $ 1.12 $ 0.89 $ 0.77 $ 0.79 $ 0.48 $ 2.01 $ 0.65

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended Year-to-Date 2021 2020 2021 2020 June30 March31 December31 September30 June30 June30 June30 (Dollars and share amounts in thousands, except per share data) Net income $ 22,925 $ 18,010 $ 15,941 $ 16,170 $ 9,907 $ 40,935 $ 13,423 Earnings per $ 1.13 $ 0.89 $ 0.78 $ 0.79 $ 0.49 $ 2.03 $ 0.66 share, basicEarnings per $ 1.12 $ 0.89 $ 0.77 $ 0.79 $ 0.48 $ 2.01 $ 0.65 share, dilutedDividends per $ 0.12 $ 0.12 $ 0.10 $ 0.10 $ 0.10 $ 0.24 $ 0.20 share Return on average 1.42 % 1.18 % 1.05 % 1.09 % 0.71 % 1.30 % 0.51 %assets^(A)Return on average 11.87 % 9.59 % 8.38 % 8.59 % 5.51 % 10.75 % 3.76 %equity^(A)Return on averagetangible equity^ 17.20 % 14.03 % 12.32 % 12.72 % 8.32 % 15.65 % 5.70 %(A)(B)Net interestmargin (tax 4.02 % 4.19 % 4.14 % 3.95 % 4.10 % 4.10 % 4.12 %equivalent)^(A)(C)Efficiency ratio^ 57.07 % 60.85 % 57.53 % 60.58 % 56.92 % 58.93 % 62.26 %(D) Capital Ratios AllegianceBancshares, Inc. (Consolidated)Equity to assets 12.12 % 11.83 % 12.54 % 12.62 % 12.61 % 12.12 % 12.61 %Tangible equityto tangible 8.76 % 8.40 % 8.90 % 8.92 % 8.81 % 8.76 % 8.81 %assets^(B)Estimated commonequity tier 1 12.18 % 11.87 % 11.80 % 11.73 % 11.36 % 12.18 % 11.36 %capitalEstimated tier 1risk-based 12.41 % 12.10 % 12.04 % 11.96 % 11.60 % 12.41 % 11.60 %capitalEstimated totalrisk-based 15.98 % 15.72 % 15.71 % 15.56 % 15.17 % 15.98 % 15.17 %capitalEstimated tier 1 8.56 % 8.57 % 8.51 % 8.70 % 8.83 % 8.56 % 8.83 %leverage capitalAllegiance Bank Estimated commonequity tier 1 13.03 % 13.17 % 13.32 % 13.25 % 12.84 % 13.03 % 12.84 %capitalEstimated tier 1risk-based 13.03 % 13.17 % 13.32 % 13.25 % 12.84 % 13.03 % 12.84 %capitalEstimated totalrisk-based 15.22 % 15.37 % 15.55 % 15.41 % 14.97 % 15.22 % 14.97 %capitalEstimated tier 1 8.99 % 9.33 % 9.41 % 9.64 % 9.77 % 8.99 % 9.77 %leverage capital Other Data Weighted average shares:Basic 20,203 20,140 20,396 20,439 20,414 20,171 20,413 Diluted 20,386 20,342 20,575 20,532 20,514 20,359 20,572 Period end shares 20,213 20,183 20,208 20,445 20,431 20,213 20,431 outstandingBook value per $ 39.04 $ 37.68 $ 37.54 $ 36.83 $ 36.03 $ 39.04 $ 36.03 shareTangible bookvalue per share^ $ 27.17 $ 25.75 $ 25.59 $ 24.97 $ 24.11 $ 27.17 $ 24.11 (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 (recapture of) provision for loan losses are not part of this calculation.

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended June30, 2021 March31, 2021 June30, 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 $ 4,543,142 $ 57,691 5.09 % $ 4,571,045 $ 57,991 5.15 % $ 4,425,036 $ 56,421 5.13 %Securities 876,099 5,047 2.31 % 789,188 4,796 2.46 % 594,205 4,011 2.71 %Deposits in otherfinancial institutions and 294,188 94 0.13 % 96,212 41 0.17 % 18,173 20 0.44 %otherTotal interest-earning 5,713,429 $ 62,832 4.41 % 5,456,445 $ 62,828 4.67 % 5,037,414 $ 60,452 4.83 %assetsAllowance for credit (52,699 ) (53,370 ) (41,334 ) losses on loansNoninterest-earning assets 835,801 760,762 637,608 Total assets $ 6,496,531 $ 6,163,837 $ 5,633,688 Liabilities and Shareholders' EquityInterest-Bearing Liabilities:Interest-bearing demand $ 534,314 $ 326 0.24 % $ 458,063 $ 371 0.33 % $ 353,252 $ 421 0.48 %depositsMoney market and savings 1,561,987 1,011 0.26 % 1,539,127 1,113 0.29 % 1,169,225 1,308 0.45 %depositsCertificates and other 1,365,881 2,989 0.88 % 1,332,663 3,665 1.12 % 1,302,743 5,845 1.80 %time depositsBorrowed funds 144,126 469 1.31 % 154,927 539 1.41 % 320,332 562 0.71 %Subordinated debt 108,523 1,441 5.33 % 108,387 1,442 5.40 % 107,998 1,469 5.47 %Total interest-bearing 3,714,831 $ 6,236 0.67 % 3,593,167 $ 7,130 0.80 % 3,253,550 $ 9,605 1.19 %liabilities Noninterest-Bearing Liabilities:Noninterest-bearing demand 1,968,714 1,767,740 1,624,641 depositsOther liabilities 38,183 41,330 32,393 Total liabilities 5,721,728 5,402,237 4,910,584 Shareholders' equity 774,803 761,600 723,104 Total liabilities and $ 6,496,531 $ 6,163,837 $ 5,633,688 shareholders' equity Net interest rate spread 3.74 % 3.87 % 3.64 % Net interest income and $ 56,596 3.97 % $ 55,698 4.14 % $ 50,847 4.06 %margin Net interest income andnet interest margin (tax $ 57,287 4.02 % $ 56,317 4.19 % $ 51,342 4.10 %equivalent)

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Six Months Ended June 30, 2021 2020 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 $ 4,557,016 $ 115,682 5.12 % $ 4,179,164 $ 111,045 5.34 %Securities 832,884 9,843 2.38 % 491,463 6,644 2.72 %Deposits in other financial institutions 195,768 135 0.14 % 34,442 215 1.26 %Total interest-earning assets 5,585,668 $ 125,660 4.54 % 4,705,069 $ 117,904 5.04 %Allowance for credit losses on loans (53,033 ) (35,026 ) Noninterest-earning assets 798,468 619,315 Total assets $ 6,331,103 $ 5,289,358 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-bearing demand deposits $ 496,399 $ 697 0.28 % $ 358,289 $ 1,267 0.71 %Money market and savings deposits 1,550,620 2,124 0.28 % 1,168,883 4,826 0.83 %Certificates and other time deposits 1,349,364 6,654 0.99 % 1,248,085 11,929 1.92 %Borrowed funds 149,496 1,008 1.36 % 230,666 1,068 0.93 %Subordinated debt 108,455 2,883 5.36 % 107,931 2,942 5.48 %Total interest-bearing liabilities 3,654,334 $ 13,366 0.74 % 3,113,854 $ 22,032 1.42 % Noninterest-Bearing Liabilities: Noninterest-bearing demand deposits 1,868,783 1,425,265 Other liabilities 39,748 31,919 Total liabilities 5,562,865 4,571,038 Shareholders' equity 768,238 718,320 Totalliabilitiesandshareholders'equity $ 6,331,103 $ 5,289,358 Net interest rate spread 3.80 % 3.62 % Net interest income and margin $ 112,294 4.05 % $ 95,872 4.10 % Net interest income and net interest margin $ 113,604 4.10 % $ 96,493 4.12 %(tax equivalent)

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended 2021 2020 June30 March31 December31 September30 June30 (Dollars in thousands) Period-endLoan Portfolio:Commercialand $ 690,867 $ 664,792 $ 667,079 $ 650,634 $ 651,430 industrialPaycheckProtection 499,207 728,424 569,901 710,234 695,772 Program (PPP)Real estate: Commercialreal estate(including 2,051,516 2,018,853 1,999,877 1,971,228 1,956,116 multi-familyresidential)Commercialreal estateconstruction 371,732 386,637 367,213 376,877 386,865 and landdevelopment1-4 familyresidential 715,119 726,228 737,605 716,565 703,513 (includinghome equity)Residential 111,956 119,528 127,522 148,056 171,656 constructionConsumer and 20,346 14,707 22,567 18,768 18,304 otherTotal loans $ 4,460,743 $ 4,659,169 $ 4,491,764 $ 4,592,362 $ 4,583,656 Asset Quality:Nonaccrual $ 36,643 $ 35,051 $ 28,893 $ 37,928 $ 33,223 loansAccruingloans 90 or ? ? ? ? ? more dayspast dueTotalnonperforming 36,643 35,051 28,893 37,928 33,223 loansOther real 1,397 576 9,196 8,876 11,847 estateOtherrepossessed ? ? ? ? ? assetsTotalnonperforming $ 38,040 $ 35,627 $ 38,089 $ 46,804 $ 45,070 assets Net $ 162 $ 345 $ 4,287 $ 291 $ 538 charge-offs Nonaccrual loans:Commercialand $ 12,949 $ 14,059 $ 10,747 $ 13,171 $ 12,578 industrialReal estate: Commercialreal estate(including 18,123 13,455 10,081 15,849 16,127 multi-familyresidential)Commercialreal estateconstruction 53 1,000 3,011 3,085 53 and landdevelopment1-4 familyresidential 4,839 5,736 4,525 4,263 3,434 (includinghome equity)Residential ? ? ? 876 898 constructionConsumer and 679 801 529 684 133 otherTotalnonaccrual $ 36,643 $ 35,051 $ 28,893 $ 37,928 $ 33,223 loans Asset Quality Ratios:Nonperformingassets to 0.58 % 0.55 % 0.63 % 0.78 % 0.77 %total assetsNonperformingloans to 0.82 % 0.75 % 0.64 % 0.83 % 0.72 %total loansAllowance forcredit losseson loans to 135.32 % 150.52 % 184.03 % 128.40 % 143.40 %nonperformingloansAllowance forcredit losses 1.11 % 1.13 % 1.18 % 1.06 % 1.04 %on loans tototal loansNetcharge-offsto average 0.01 % 0.03 % 0.37 % 0.03 % 0.05 %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 Year-to-Date 2021 2020 2021 2020 June30 March31 December31 September30 June30 June30 June30 (Dollars and share amounts in thousands, except per share data) Total shareholders' $ 789,150 $ 760,537 $ 758,669 $ 753,053 $ 736,143 $ 789,150 $ 736,143 equityLess: Goodwill andcore deposit 239,948 240,772 241,596 242,549 243,538 239,948 243,538 intangibles, netTangible $ 549,202 $ 519,765 $ 517,073 $ 510,504 $ 492,605 $ 549,202 $ 492,605 shareholders?equity Shares outstanding 20,213 20,183 20,208 20,445 20,431 20,213 20,431 at end of period Tangible book value $ 27.17 $ 25.75 $ 25.59 $ 24.97 $ 24.11 $ 27.17 $ 24.11 per share Net income $ 22,925 $ 18,010 $ 15,941 $ 16,170 $ 9,907 $ 40,935 $ 13,423 Average $ 774,803 $ 761,600 $ 756,699 $ 748,647 $ 723,104 $ 768,238 $ 718,320 shareholders' equityLess: Averagegoodwill and core 240,331 241,166 242,043 243,015 244,010 240,746 244,508 deposit intangibles,netAverage tangible $ 534,472 $ 520,434 $ 514,656 $ 505,632 $ 479,094 $ 527,492 $ 473,812 shareholders? equity Return on average 17.20 % 14.03 % 12.32 % 12.72 % 8.32 % 15.65 % 5.70 %tangible equity^(A) Total assets $ 6,508,667 $ 6,430,990 $ 6,050,128 $ 5,967,751 $ 5,836,881 $ 6,508,667 $ 5,836,881 Less: Goodwill andcore deposit 239,948 240,772 241,596 242,549 243,538 239,948 243,538 intangibles, netTangible assets $ 6,268,719 $ 6,190,218 $ 5,808,532 $ 5,725,202 $ 5,593,343 $ 6,268,719 $ 5,593,343 Tangible equity to 8.76 % 8.40 % 8.90 % 8.92 % 8.81 % 8.76 % 8.81 %tangibleassets

(A) Interim periods annualized.

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