GlobeNewswire Inc | Jul 30, 2020 07:01AM EDT

July 30, 2020

-- Record net interest income of $50.8 million, representing 12.9% growth from the first quarter of 2020

-- Funded over 5,800 loans totaling in excess of $695 million within the Small Business Administration Paycheck Protection Program under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) through June 30, 2020 -- Net interest margin remained strong at 4.10% for the second quarter 2020 -- Declared quarterly dividend of $0.10 per share of common stock -- Opened de novo branch in the historic East End of Houston on July 27, 2020

HOUSTON, July 30, 2020 (GLOBE NEWSWIRE) -- Allegiance Bancshares, Inc. (NASDAQ: ABTX) (Allegiance), the holding company of Allegiance Bank (the "Bank"), today reported net income of $9.9 million and diluted earnings per share of $0.48 for the second quarter 2020 compared to net income of $14.2 million and diluted earnings per share of $0.66 for the second quarter 2019. Net income for the six months ended June 30, 2020 was $13.4 million, or $0.65 per diluted share, compared to $26.9 million, or $1.24 per diluted share, for the six months ended June 30, 2019. The second quarter and six months ended June 30, 2020 results were primarily driven by the increased provision for loan losses in response to COVID-19-related uncertainties in the current economic environment partially offset by increased net interest income.

"We are pleased with our second quarter 2020 earnings performance, especially in light of the impact of the coronavirus on our economy," said Steve Retzloff, Allegiances Chief Executive Officer. Allegiance finished the quarter on a solid foundation of record pre-tax, pre-provision earnings, strong capital ratios, and a great liquidity position. We believe that we are well-positioned in light of todays economic uncertainties and remain a strong resource for those we serve, commented Retzloff.

Our team of extraordinary bankers and small business lenders worked tirelessly around the clock to deploy the SBAs Paycheck Protection Program ('PPP') to support our small business community. I am incredibly proud of the Banks ability to deliver on our commitment to help our customers - all while making many changes to how and where we all work. Allegiance reinforces the unique and valuable role a community bank offers to the businesses it serves as our bankers helped our customers and new borrowers secure funding for over 5,800 loans totaling over $695 million and will continue to do more until the PPP program expires. In turn, Allegiance collected a weighted average fee of 3.75% on the PPP loans to be recognized over the life of the loans. Allegiance was committed to supporting its customers from the start of the process and will continue to be committed throughout the entire forgiveness journey, continued Retzloff.

As community bankers, we have a responsibility to support the health and welfare of our customers, communities and employees throughout this unprecedented time. Allegiance donated $150,000 and issued a $100,000 matching grant as well as committed volunteers to support the Houston Food Bank that will help provide one million meals across its Houston footprint. Small businesses are the mainstay of our business in the Houston region and we have been honored to serve their needs during this challenging economic environment. We continue to work diligently to build shareholder value by utilizing our strong capital position to support our customers and the communities we serve with outstanding customer service to keep Houston strong, concluded Retzloff.

Second Quarter 2020 Results

Net interest income before the provision for loan losses in the second quarter 2020 increased $5.3 million, or 11.6%, to $50.8 million from $45.6 million for the second quarter 2019 and increased $5.8 million, or 12.9%, from $45.0 million in the first 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 decreased 23 basis points to 4.10% for the second quarter 2020 from 4.33% for the second quarter 2019 and decreased 5 basis points from 4.15% for the first quarter 2020. Excluding the impact of acquisition accounting adjustments, adjusted net interest margin on a tax equivalent basis was 4.05% for the second quarter 2020 compared to 4.07% for the second quarter 2019 and 4.04% for the first 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 second quarter 2020 was $1.6 million, a decrease of $2.3 million, or 59.4%, compared to $3.8 million for the second quarter 2019 and a decrease of $1.2 million, or 42.7%, compared to $2.7 million for the first quarter 2020. Noninterest income for the second quarter 2020, first quarter 2020 and second quarter 2019 included $93 thousand, $194 thousand and $846 thousand, respectively, of gains on the sale of securities. Second quarter 2020 noninterest income reflected lower transactional fee income, significantly lower correspondent bank rebates and included a loss on the sale of other real estate owned of $306 thousand.

Noninterest expense for the second quarter 2020 decreased $301 thousand, or 1.0%, to $29.8 million from $30.1 million for the second quarter 2019 and decreased $2.6 million, or 8.1%, compared to the first quarter 2020. Noninterest expense for the first quarter 2020 included $2.2 million of other real estate write-downs.

In the second quarter 2020, Allegiances efficiency ratio was 56.92% compared to 68.13% for the first quarter 2020 and 61.93% for the second quarter 2019. Second quarter 2020 annualized returns on average assets, average equity and average tangible equity were 0.71%, 5.51% and 8.32%, 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 second quarter 2019 were 1.19%, 8.10% and 12.52%, 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, 2020 Results

Net interest income before provision for loan losses for the six months ended June 30, 2020 increased $5.7 million, or 6.3%, to $95.9 million from $90.2 million for the six months ended June 30, 2019 primarily due to a $481.4 million, or 11.4%, 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 20 basis points to 4.12% for the six months ended June 30, 2020 from 4.32% for the six months ended June 30, 2019. Excluding the impact of acquisition accounting adjustments, the adjusted net interest margin for the six months ended June 30, 2020 was 4.04%, compared to 4.05% for the six months ended June 30, 2019. Adjusted net interest margin is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Noninterest income for the six months ended June 30, 2020 was $4.3 million, a decrease of $2.8 million, or 39.9%, compared to $7.1 million for the six months ended June 30, 2019 due primarily to significantly lower correspondent bank rebates and losses on the sales of other real estate owned of $375 thousand. Additionally, noninterest income for the first six months of 2020 and 2019 included $287 thousand and $846 thousand, respectively, of gains on the sale of securities.

Noninterest expense for the six months ended June 30, 2020 increased $985 thousand, or 1.6%, to $62.2 million from $61.2 million for the six months ended June 30, 2019. The increase in noninterest expense over the six months ended June 30, 2019 was primarily due to $2.2 million of other real estate write-downs during the first quarter of 2020 partially offset by the decrease in merger-related expenses incurred during the first six months of 2019.

Allegiances efficiency ratio decreased from 63.44% for the six months ended June 30, 2019 to 62.26% for the six months ended June 30, 2020. For the six months ended June 30, 2020, returns on average assets, average equity and average tangible equity were 0.51%, 3.76% and 5.70%, respectively, compared to 1.14%, 7.69% and 11.87%, respectively, for the six months ended June 30, 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 June30, 2020 increased $834.5 million, or 66.7% (annualized), to $5.84 billion compared to $5.00 billion at March31, 2020 and increased $1.04 billion, or 21.7%, compared to $4.79 billion at June30, 2019, primarily due to the origination of PPP loans and growth in the securities portfolio.

Total loans at June30, 2020 increased $628.1 million, or 63.5% (annualized), to $4.58 billion compared to $3.96 billion at March31, 2020 and increased $725.7 million, or 18.8%, compared to $3.86billion at June30, 2019, primarily due to the origination of $695.8 million of PPP loans and organic loan growth. Core loans, which exclude the mortgage warehouse portfolio and PPP loans, decreased $66.6 million, or 6.7% (annualized), to $3.89 billion at June30, 2020 from $3.95 billion at March31, 2020 and increased $76.1 million, or 2.0%, from $3.81 billion at June30, 2019.

Deposits at June30, 2020 increased $747.1 million, or 75.6% (annualized), to $4.70 billion compared to $3.95 billion at March31, 2020 and increased $840.1 million, or 21.8%, compared to $3.86 billion at June30, 2019.

Asset Quality

Nonperforming assets totaled $45.1 million, or 0.77% of total assets, at June30, 2020, compared to $34.2 million, or 0.68% of total assets, at March31, 2020, and $37.7 million, or 0.79% of total assets, at June30, 2019. The allowance for loan losses was 1.04% of total loans at June30, 2020, 0.95% of total loans at March31, 2020 and 0.72% of total loans at June30, 2019. Accounting Standards Update (ASU) 2016-13, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL), became effective for the Company on January1, 2020. On March27, 2020, 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 December31, 2020. Due to the uncertainty on the economy from COVID-19, the Company chose to delay its implementation of CECL and recorded its provision for loan losses under the incurred loss model that existed prior to CECL.

The provision for loan losses for the second quarter 2020 was $10.7 million, or 0.97% (annualized) of average loans, compared to $11.0 million, or 1.12% (annualized) of average loans, for the first quarter 2020 and $1.4 million, or 0.15% (annualized) of average loans for the second quarter 2019 primarily due to economic risks and uncertainties related to the COVID-19 pandemic. The increase in the Companys provision for loan losses in the second quarter of 2020 compared to prior quarters reflects the uncertainty surrounding unemployment, the economic impact caused by COVID-19 and the economic effects related to the sustained lower crude oil prices.

Second quarter 2020 net charge-offs were $538 thousand, or 0.05% (annualized) of average loans, a decrease from net charge-offs of $2.9 million, or 0.30% (annualized) of average loans, for the first quarter 2020 and $590 thousand, or 0.06% (annualized) of average loans, for the second quarter 2019. Net charge-offs for the six months ended June 30, 2020 were $3.5 million, or 0.17% (annualized) of average loans, compared to net charge-offs for the six months ended June 30, 2019 of $799 thousand, or 0.04% (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 $134.0million, or 2.9% of total loans, at June 30, 2020, of which $7.1 million were on nonaccrual. At June 30, 2020, restaurant and bar industry loans, excluding PPP loans, totaled $111.3million, or 2.4%, of total loans, of which $695 thousand were on nonaccrual. At June30, 2020, the Companys allowance for loan losses allocated to its hotel portfolio was 1.3% 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 $74.7 million, or 1.6%, of total loans at June 30, 2020, of which $788 thousand were on nonaccrual. At June30, 2020, the allowance for loan losses allocated to the oil and gas loan portfolio was 2.1% of total oil and gas loans.

As of June 30, 2020, the Company executed 2,111 principal and interest deferrals on outstanding loan balances of $1.19 billion with associated accrued interest of $16.4 million to borrowers in connection with the COVID-19 relief provided by the CARES Act. Additionally, upon request and after meeting certain conditions, borrowers could be granted a second payment deferral subsequent to the first deferral. The Company processed second payment deferrals for 129 loans with outstanding loan balances of $100.1 million and associated accrued interest of $1.4 million through July 24, 2020. These deferrals were generally no more than 90 days in duration.

Dividend

On July 23, 2020, the Board of Directors of Allegiance declared a cash dividend of $0.10 per share to be paid on September 15, 2020 to all shareholders of record as of August 31, 2020. 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 30, 2020 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its second quarter 2020 results. Individuals and investment professionals may participate in the call by dialing (877) 279-2520. The conference ID number is 1791298. 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, 2020, Allegiance was a $5.84 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, 2020, 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 and one loan production office in the Houston metropolitan area and one bank office location 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 Report on Form 10-Q for the quarter ended March 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)

2020 2019 June30 March31 December31 September June 30 30 (Dollars in thousands) ASSETS Cash and due from $ 237,585 $ 156,700 $ 213,347 $ 246,312 $ 170,850 banksInterest-bearingdeposits at other 28,815 18,189 132,901 54,307 61,757 financial institutionsTotal cash and cash 266,400 174,889 346,248 300,619 232,607 equivalentsAvailable for salesecurities, at fair 618,751 508,250 372,545 353,000 348,173 valueLoans held for 4,583,656 3,955,546 3,915,310 3,886,004 3,857,963 investmentLess: allowance for (47,642 ) (37,511 ) (29,438 ) (29,808 ) (27,940 )loan lossesLoans, net 4,536,014 3,918,035 3,885,872 3,856,196 3,830,023 Accrued interest 32,795 17,203 15,468 15,201 16,508 receivablePremises and 67,229 66,798 66,790 67,175 59,690 equipment, netOther real estate 11,847 12,617 8,337 8,333 6,294 ownedFederal Home Loan 14,844 12,798 6,242 14,138 8,866 Bank stockBank owned life 27,398 27,255 27,104 26,947 26,794 insuranceGoodwill 223,642 223,642 223,642 223,642 223,642 Core deposit 19,896 20,886 21,876 23,053 24,231 intangibles, netOther assets 18,065 20,056 18,530 17,536 17,383 Total assets $ 5,836,881 $ 5,002,429 $ 4,992,654 $ 4,905,840 $ 4,794,211 LIABILITIES ANDSHAREHOLDERS? EQUITYLIABILITIES: Deposits: Noninterest-bearing $ 1,754,128 $ 1,217,532 $ 1,252,232 $ 1,227,839 $ 1,173,423 Interest-bearing Demand 375,353 341,524 367,278 340,754 390,067 Money market and 1,270,437 1,110,631 1,258,008 1,114,233 995,467 savingsCertificates and 1,300,793 1,283,887 1,190,583 1,214,659 1,301,683 other timeTotalinterest-bearing 2,946,583 2,736,042 2,815,869 2,669,646 2,687,217 depositsTotal deposits 4,700,711 3,953,574 4,068,101 3,897,485 3,860,640 Accrued interest 3,293 3,821 4,326 4,915 3,531 payableBorrowed funds 255,509 190,506 75,503 159,501 146,998 Subordinated debt 108,061 107,930 107,799 107,771 49,019 Other liabilities 33,164 40,005 27,060 29,860 29,322 Total liabilities 5,100,738 4,295,836 4,282,789 4,199,532 4,089,510 SHAREHOLDERS? EQUITY:Common stock 20,431 20,355 20,524 20,737 21,147 Capital surplus 515,045 513,894 521,066 529,688 541,979 Retained earnings 172,723 164,858 163,375 149,389 137,342 Accumulated othercomprehensive 27,944 7,486 4,900 6,494 4,233 incomeTotal shareholders? 736,143 706,593 709,865 706,308 704,701 equityTOTAL LIABILITIESAND $ 5,836,881 $ 5,002,429 $ 4,992,654 $ 4,905,840 $ 4,794,211 SHAREHOLDERS?EQUITY

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended Year-to-Date 2020 2019 2020 2019 June30 March31 December31 September30 June 30 June30 June30 (Dollars in thousands, except per share data) INTEREST INCOME: Loans, including $ 56,421 $ 54,624 $ 55,368 $ 55,790 $ 56,016 $ 111,045 $ 110,205 fees Securities: Taxable 1,842 2,087 2,066 2,090 1,837 3,929 2,819 Tax-exempt 2,169 546 469 483 692 2,715 1,982 Deposits in otherfinancial 20 195 244 302 401 215 1,089 institutions Total interest 60,452 57,452 58,147 58,665 58,946 117,904 116,095 income INTEREST EXPENSE: Demand, moneymarket and 1,729 4,364 5,091 4,975 4,513 6,093 8,241 savingsdeposits Certificates andother time 5,845 6,084 6,483 6,909 7,008 11,929 13,264 deposits Borrowed funds 562 506 547 1,183 1,118 1,068 2,945 Subordinated debt 1,469 1,473 1,500 761 736 2,942 1,471 Total interest 9,605 12,427 13,621 13,828 13,375 22,032 25,921 expenseNET INTEREST INCOME 50,847 45,025 44,526 44,837 45,571 95,872 90,174 Provision for loan 10,669 10,990 933 2,597 1,407 21,659 2,409 lossesNet interest incomeafter provision 40,178 34,035 43,593 42,240 44,164 74,213 87,765 for loan losses NONINTEREST INCOME: Nonsufficient 60 169 189 168 139 229 301 funds fees Service chargeson deposit 343 457 403 379 365 800 690 accounts Gain on sale of 93 194 613 ? 846 287 846 securities (Loss) gain onsales of other real (306 ) (69 ) (45 ) ? 70 (375 ) 71 estate andrepossessed assets Bank owned life 143 151 157 153 155 294 314 insurance Rebate from 89 493 900 900 884 582 1,780 correspondent bank Other 1,140 1,330 1,183 1,289 1,386 2,470 3,132 Total noninterest 1,562 2,725 3,400 2,889 3,845 4,287 7,134 income NONINTEREST EXPENSE: Salaries and 19,334 19,781 18,273 20,221 19,415 39,115 39,099 employee benefits Net occupancy and 1,926 1,907 1,994 1,973 2,114 3,833 4,166 equipment Depreciation 885 866 861 822 756 1,751 1,509 Data processingand software 1,934 1,826 2,120 2,058 1,709 3,760 3,332 amortization Professional fees 800 573 540 667 527 1,373 1,126 Regulatoryassessments and 609 632 216 (41 ) 802 1,241 1,530 FDIC insurance Core depositintangibles 990 990 1,177 1,178 1,178 1,980 2,356 amortization Communications 390 417 486 455 468 807 898 Advertising 370 521 597 449 617 891 1,321 Acquisition andmerger-related ? ? ? ? 153 ? 1,326 expenses Other 2,541 4,888 3,167 2,227 2,341 7,429 4,532 Total noninterest 29,779 32,401 29,431 30,009 30,080 62,180 61,195 expenseINCOME BEFOREINCOME 11,961 4,359 17,562 15,120 17,929 16,320 33,704 TAXES Provision for 2,054 843 3,576 3,073 3,681 2,897 6,778 income taxesNET INCOME $ 9,907 $ 3,516 $ 13,986 $ 12,047 $ 14,248 $ 13,423 $ 26,926 EARNINGS PER SHARE Basic $ 0.49 $ 0.17 $ 0.68 $ 0.57 $ 0.67 $ 0.66 $ 1.25 Diluted $ 0.48 $ 0.17 $ 0.67 $ 0.57 $ 0.66 $ 0.65 $ 1.24

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended Year-to-Date 2020 2019 2020 2019 June30 March31 December31 September30 June 30 June30 June30 (Dollars and share amounts in thousands, except per share data) Net income $ 9,907 $ 3,516 $ 13,986 $ 12,047 $ 14,248 $ 13,423 $ 26,926 Earnings per $ 0.49 $ 0.17 $ 0.68 $ 0.57 $ 0.67 $ 0.66 $ 1.25 share, basicEarnings per $ 0.48 $ 0.17 $ 0.67 $ 0.57 $ 0.66 $ 0.65 $ 1.24 share, diluted Return onaverage assets^ 0.71 % 0.29 % 1.13 % 0.98 % 1.19 % 0.51 % 1.14 %(A)Return onaverage equity^ 5.51 % 1.98 % 7.81 % 6.73 % 8.10 % 3.76 % 7.69 %(A)Return onaverage tangible 8.32 % 3.02 % 11.96 % 10.33 % 12.52 % 5.70 % 11.87 % equity^(A)(B)Net interestmargin 4.10 % 4.15 % 4.11 % 4.16 % 4.33 % 4.12 % 4.32 % (taxequivalent)^(C)Adjusted netinterest margin 4.05 % 4.04 % 3.94 % 3.97 % 4.07 % 4.04 % 4.05 % (taxequivalent)^(B)Efficiency ratio 56.92 % 68.13 % 62.20 % 62.88 % 61.93 % 62.26 % 63.44 %^(D) Capital Ratios AllegianceBancshares, Inc. (Consolidated) Equity to 12.61 % 14.12 % 14.22 % 14.40 % 14.70 % 12.61 % 14.70 %assets Tangibleequity to 8.81 % 9.71 % 9.78 % 9.86 % 10.05 % 8.81 % 10.05 %tangible assets^(B) Estimatedcommon equity 11.36 % 11.15 % 11.42 % 11.28 % 11.34 % 11.36 % 11.34 % tier 1capital Estimatedtier 1 11.60 % 11.38 % 11.66 % 11.51 % 11.58 % 11.60 % 11.58 %risk-based capital Estimatedtotal risk-based 15.17 % 14.72 % 14.83 % 14.70 % 13.27 % 15.17 % 13.27 % capital Estimatedtier 1 leverage 8.83 % 9.89 % 10.02 % 10.06 % 10.17 % 8.83 % 10.17 % capitalAllegiance Bank Estimatedcommon equity 12.84 % 12.58 % 12.67 % 12.28 % 12.02 % 12.84 % 12.02 % tier 1capital Estimatedtier 1 12.84 % 12.58 % 12.67 % 12.28 % 12.02 % 12.84 % 12.02 %risk-based capital Estimatedtotal risk-based 14.97 % 14.48 % 14.39 % 14.01 % 13.71 % 14.97 % 13.71 % capital Estimatedtier 1 leverage 9.77 % 10.94 % 10.89 % 10.73 % 10.57 % 9.77 % 10.57 % capital Other Data Weighted average shares: Basic 20,414 20,411 20,652 20,981 21,257 20,413 21,494 Diluted 20,514 20,690 20,930 21,256 21,546 20,572 21,780 Period endshares 20,431 20,355 20,524 20,737 21,147 20,431 21,147 outstandingBook value per $ 36.03 $ 34.71 $ 34.59 $ 34.06 $ 33.32 $ 36.03 $ 33.32 shareTangible bookvalue per $ 24.11 $ 22.70 $ 22.62 $ 22.16 $ 21.60 $ 24.11 $ 21.60 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 June30, 2020 March31, 2020 June 30, 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 $ 4,425,036 $ 56,421 5.13 % $ 3,933,291 $ 54,624 5.59 % $ 3,819,687 $ 56,016 5.88 %Securities 594,205 4,011 2.71 % 388,721 2,633 2.72 % 350,004 2,529 2.90 %Deposits in other financial 18,173 20 0.44 % 50,711 195 1.55 % 63,962 401 2.52 % institutions and otherTotal interest-earning assets 5,037,414 $ 60,452 4.83 % 4,372,723 $ 57,452 5.28 % 4,233,653 $ 58,946 5.58 %Allowance for loan losses (41,334 ) (28,718 ) (27,125 ) Noninterest-earning assets 637,608 602,778 586,435 Total assets $ 5,633,688 $ 4,946,783 $ 4,792,963 Liabilities and Shareholders' EquityInterest-Bearing Liabilities: Interest-bearing demand $ 353,252 $ 421 0.48 % $ 363,326 $ 846 0.94 % $ 350,147 $ 1,152 1.32 % depositsMoney market and savings 1,169,225 1,308 0.45 % 1,168,541 3,518 1.21 % 994,557 3,361 1.36 % depositsCertificates and other time 1,302,743 5,845 1.80 % 1,193,427 6,084 2.05 % 1,331,955 7,008 2.11 % depositsBorrowed funds 320,332 562 0.71 % 140,999 506 1.44 % 155,969 1,118 2.87 %Subordinated debt 107,998 1,469 5.47 % 107,865 1,473 5.49 % 48,986 736 6.03 % Total interest-bearing 3,253,550 $ 9,605 1.19 % 2,974,158 $ 12,427 1.68 % 2,881,614 $ 13,375 1.86 % liabilities Noninterest-Bearing Liabilities:Noninterest-bearing demand 1,624,641 1,225,888 1,173,662 depositsOther liabilities 32,393 33,202 32,525 Total liabilities 4,910,584 4,233,248 4,087,801 Shareholders' equity 723,104 713,535 705,162 Total liabilities and $ 5,633,688 $ 4,946,783 $ 4,792,963 shareholders' equity Net interest rate spread 3.64 % 3.60 % 3.72 % Net interest income and margin $ 50,847 4.06 % $ 45,025 4.14 % $ 45,571 4.32 % Net interest income and net interest margin (tax $ 51,342 4.10 % $ 45,152 4.15 % $ 45,684 4.33 %equivalent)

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Six Months Ended June30, 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 $ 4,179,164 $ 111,045 5.34 % $ 3,783,662 $ 110,205 5.87 %Securities 491,463 6,644 2.72 % 348,354 4,801 2.78 %Deposits in other financial institutions 34,442 215 1.26 % 91,628 1,089 2.40 %Total interest-earning assets 4,705,069 $ 117,904 5.04 % 4,223,644 $ 116,095 5.54 %Allowance for loan losses (35,026 ) (26,944 ) Noninterest-earning assets 619,315 572,748 Total assets $ 5,289,358 $ 4,769,448 Liabilities and Shareholders' Equity Interest-Bearing Liabilities: Interest-bearing demand deposits $ 358,289 $ 1,267 0.71 % $ 344,203 $ 2,115 1.24 %Money market and savings deposits 1,168,883 4,826 0.83 % 937,664 6,126 1.32 %Certificates and other time deposits 1,248,085 11,929 1.92 % 1,317,536 13,264 2.03 %Borrowed funds 230,666 1,068 0.93 % 219,415 2,945 2.71 %Subordinated debt 107,931 2,942 5.48 % 48,956 1,471 6.06 %Total interest-bearing liabilities 3,113,854 $ 22,032 1.42 % 2,867,774 $ 25,921 1.82 % Noninterest-Bearing Liabilities: Noninterest-bearing demand deposits 1,425,265 1,170,435 Other liabilities 31,919 24,832 Total liabilities 4,571,038 4,063,041 Shareholders' equity 718,320 706,407 Totalliabilitiesandshareholders'equity $ 5,289,358 $ 4,769,448 Net interest rate spread 3.62 % 3.72 % Net interest income and margin $ 95,872 4.10 % $ 90,174 4.31 % Net interest income and net interest $ 96,493 4.12 % $ 90,489 4.32 % margin (tax equivalent)

Allegiance Bancshares, Inc.Financial Highlights(Unaudited)

Three Months Ended 2020 2019 June30 March31 December31 September30 June 30 (Dollars in thousands) Period-endLoan Portfolio:Commercialand $ 651,430 $ 702,267 $ 689,360 $ 675,055 $ 694,516 industrialMortgage ? 1,051 8,304 36,594 46,171 warehousePaycheckProtection 695,772 ? ? ? ? Program (PPP)Real estate: Commercialreal estate(including 1,956,116 1,951,080 1,873,782 1,859,721 1,830,764 multi-familyresidential) Commercialreal estateconstruction 386,865 378,987 410,471 386,723 368,108 and landdevelopment 1-4 familyresidential 703,513 704,212 698,957 695,520 690,961 (includinghome equity) Residential 171,656 177,025 192,515 189,608 183,991 constructionConsumer and 18,304 40,924 41,921 42,783 43,452 otherTotal loans $ 4,583,656 $ 3,955,546 $ 3,915,310 $ 3,886,004 $ 3,857,963 Asset Quality:Nonaccrual $ 33,223 $ 21,621 $ 28,371 $ 34,615 $ 31,382 loansAccruingloans 90 or ? ? ? ? ? more dayspast dueTotalnonperforming 33,223 21,621 28,371 34,615 31,382 loansOther real 11,847 12,617 8,337 8,333 6,294 estateOtherrepossessed ? ? ? ? ? assetsTotalnonperforming $ 45,070 $ 34,238 $ 36,708 $ 42,948 $ 37,676 assets Net $ 538 $ 2,917 $ 1,303 $ 729 $ 590 charge-offs Nonaccrual loans:Commercialand $ 12,578 $ 8,669 $ 8,388 $ 8,033 $ 9,386 industrialMortgage ? ? ? ? ? warehouseReal estate: Commercialreal estate(including 16,127 7,024 6,741 15,356 18,218 multi-familyresidential) Commercialreal estateconstruction 53 1,958 9,050 9,050 1,541 and landdevelopment 1-4 familyresidential 3,434 2,845 3,294 1,992 2,074 (includinghome equity) Residential 898 982 746 ? ? constructionConsumer and 133 143 152 184 163 otherTotalnonaccrual $ 33,223 $ 21,621 $ 28,371 $ 34,615 $ 31,382 loans Asset Quality Ratios:Nonperformingassets to 0.77 % 0.68 % 0.74 % 0.88 % 0.79 %total assetsNonperformingloans to 0.72 % 0.55 % 0.72 % 0.89 % 0.81 %total loansAllowance forloan lossesto 143.40 % 173.49 % 103.76 % 86.11 % 89.03 %nonperformingloansAllowance forloan losses 1.04 % 0.95 % 0.75 % 0.77 % 0.72 %to totalloansNetcharge-offsto average 0.05 % 0.30 % 0.13 % 0.07 % 0.06 %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 June30 March31 December31 September30 June 30 June30 June30 (Dollars and share amounts in thousands, except per share data) Totalshareholders' $ 736,143 $ 706,593 $ 709,865 $ 706,308 $ 704,701 $ 736,143 $ 704,701 equityLess: Goodwilland core deposit 243,538 244,528 245,518 246,695 247,873 243,538 247,873 intangibles,netTangibleshareholders? $ 492,605 $ 462,065 $ 464,347 $ 459,613 $ 456,828 $ 492,605 $ 456,828 equity Sharesoutstanding at 20,431 20,355 20,524 20,737 21,147 20,431 21,147 end of period Tangible book $ 24.11 $ 22.70 $ 22.62 $ 22.16 $ 21.60 $ 24.11 $ 21.60 value per share Net income $ 9,907 $ 3,516 $ 13,986 $ 12,047 $ 14,248 $ 13,423 $ 26,926 Averageshareholders' $ 723,104 $ 713,535 $ 710,155 $ 710,044 $ 705,162 $ 718,320 $ 706,407 equityLess: Averagegoodwill and core deposit 244,010 245,007 246,154 247,404 248,621 244,508 248,947 intangibles,netAveragetangible $ 479,094 $ 468,528 $ 464,001 $ 462,640 $ 456,541 $ 473,812 $ 457,460 shareholders?equity Return onaverage 8.32 % 3.02 % 11.96 % 10.33 % 12.52 % 5.70 % 11.87 % tangibleequity Total assets $ 5,836,881 $ 5,002,429 $ 4,992,654 $ 4,905,840 $ 4,794,211 $ 5,836,881 $ 4,794,211 Less: Goodwilland core deposit 243,538 244,528 245,518 246,695 247,873 243,538 247,873 intangibles,netTangible assets $ 5,593,343 $ 4,757,901 $ 4,747,136 $ 4,659,145 $ 4,546,338 $ 5,593,343 $ 4,546,338 Tangible equityto tangible 8.81 % 9.71 % 9.78 % 9.86 % 10.05 % 8.81 % 10.05 % assets Net interestincome $ 51,342 $ 45,152 $ 44,623 $ 44,924 $ 45,684 $ 96,493 $ 90,489 (taxequivalent)Less:Acquisition (669 ) (1,259 ) (1,860 ) (2,045 ) (2,755 ) (1,928 ) (5,720 )accounting adjustmentsAdjusted netinterest $ 50,673 $ 43,893 $ 42,763 $ 42,879 $ 42,929 $ 94,565 $ 84,768 income (taxequivalent) Average earning $ 5,037,414 $ 4,372,723 $ 4,308,028 $ 4,284,667 $ 4,233,653 $ 4,705,069 $ 4,223,644 assets Net interestmargin 4.10 % 4.15 % 4.11 % 4.16 % 4.33 % 4.12 % 4.32 % (taxequivalent)Adjusted netinterest margin 4.05 % 4.04 % 3.94 % 3.97 % 4.07 % 4.04 % 4.05 % (taxequivalent)

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