EX-99.1 2 stel20221028ex991.htm EX-99.1 Document

Exhibit 99.1
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PRESS RELEASE                                                         
STELLAR BANCORP, INC. REPORTS
THIRD QUARTER 2022 RESULTS
HOUSTON, October 28, 2022 - (NASDAQ: STEL) The merger of equals between CBTX, Inc. (CBTX) and Allegiance Bancshares, Inc. (Allegiance) became effective as of October 1, 2022, with the combined company renamed Stellar Bancorp, Inc. This press release includes the pre-merger financial results of stand-alone CBTX and stand-alone Allegiance for the periods presented. As such, these financial results do not include the impact of purchase accounting adjustments related to the merger.
Stellar Bancorp, Inc. (Stellar), formerly known as CBTX, reported net income of $12.7 million and diluted earnings per share of $0.52 for the third quarter 2022 compared to net income of $14.4 million and diluted earnings per share of $0.59 for the third quarter 2021. Net income for the nine months ended September 30, 2022 was $35.0 million, or $1.43 per diluted share, compared to $36.1 million, or $1.47 per diluted share, for the nine months ended September 30, 2021.
Allegiance reported net income of $14.3 million and diluted earnings per share of $0.71 for the third quarter 2022 compared to net income of $19.1 million and diluted earnings per share of $0.93 for the third quarter 2021. Net income for the nine months ended September 30, 2022 was $49.4 million, or $2.42 per diluted share, compared to $60.0 million, or $2.95 per diluted share, for the nine months ended September 30, 2021.

Third Quarter 2022 Financial Highlights

•CBTX highlights
◦Loans held for investment grew 12.3% (annualized), or $93.5 million, during the third quarter 2022 to $3.13 billion
◦Net interest income increased 23.3%, or $8.1 million, compared to the second quarter of 2022
◦Tax equivalent net interest margin increased 76 basis points to 4.25% compared to the second quarter of 2022

•Allegiance highlights
◦Loans held for investment grew 22.4% (annualized), or $243.1 million, during the third quarter 2022 to $4.59 billion
◦Net interest income increased 5.6%, or $3.2 million, compared to the second quarter of 2022
◦Tax equivalent net interest margin increased 32 basis points to 3.85% compared to the second quarter of 2022
CBTX, Inc.Allegiance Bancshares, Inc.
3Q 20222Q 20223Q 20222Q 2022
(Dollars in thousands, except per share data)
Net income$12,747 $11,707 $14,286 $16,437 
Pre-tax, pre-provision income(A)
$17,140 $14,660 $19,654 $22,282 
Earnings per share, diluted$0.52 $0.48 $0.71 $0.80 
Efficiency ratio(B)
63.11 %61.84 %69.18 %62.96 %
Acquisition and merger-related expenses$5,897 $1,100 $10,551 $1,667 
Adjusted pre-tax, pre-provision income(A)(C)
$23,037 $15,760 $30,205 $23,949 
Adjusted efficiency ratio(A)(C)
50.42 %58.98 %52.61 %60.19 %
(A)Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on pages 11 and 18 of this Earnings Release.
(B)Refer to the calculation of the efficiency ratio on pages 5 and 12 for CBTX and Allegiance, respectively.
(C)Adjusted results exclude the impact of acquisition and merger-related expenses.

“We are proud to have closed the merger between CBTX and Allegiance to become Stellar,” said Stellar’s Chief Executive Officer Robert R. Franklin, Jr. “Both of our organizations entered this merger from tremendous positions of strength and with great momentum, providing Stellar a solid foundation upon which to build.”
“Our teams have worked diligently to ensure a successful integration of these two organizations. Together we are stronger and committed to providing value for our shareholders as we drive purposeful growth, deliver continued personalized service and invest in the communities that we serve,” concluded Franklin.
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CBTX, Inc. Third Quarter 2022 Results
CBTX’s net interest income in the third quarter 2022 increased $11.8 million, or 37.6%, to $43.0 million from $31.2 million for the third quarter 2021 and increased $8.1 million, or 23.3%, from $34.9 million for the second quarter 2022. These increases were primarily due to increased interest income on loans and interest-bearing deposits at other financial institutions as a result of changes in market interest rates and increases in average loans and securities. The net interest margin on a tax equivalent basis increased 103 basis points to 4.25% for the third quarter 2022 from 3.22% for the third quarter 2021 and increased 76 basis points from 3.49% for the second quarter 2022.
Noninterest income for the third quarter 2022 was $3.4 million, a decrease of $2.1 million, or 38.0%, compared to $5.6 million for the third quarter 2021 and a decrease of $97 thousand, or 2.7%, compared to $3.5 million for the second quarter 2022. The decrease in noninterest income of $2.1 million during the three months ended September 30, 2022 compared to the three months ended September 30, 2021, was primarily due to the impact of earnings on bank-owned life insurance and related gains of $1.9 million during the third quarter of 2021.
Noninterest expense for the third quarter 2022 increased $4.9 million, or 20.3%, to $29.3 million from $24.4 million for the third quarter 2021 and increased $5.6 million, or 23.4%, compared to the second quarter of 2022. The increase in noninterest expense for the third quarter of 2022 compared to the third quarter of 2021, was primarily due to acquisition and merger-related expenses associated with the merger with Allegiance, partially offset by a decrease in professional and director fees, primarily related to BSA/AML compliance matters and legal fees incurred during the third quarter of 2021. The increase in noninterest expense for the third quarter of 2022 compared to the second quarter of 2022 was primarily due to greater acquisition and merger-related expenses.
CBTX’s efficiency ratio decreased to 63.11% for the third quarter 2022 compared to 66.21% for the third quarter 2021 and increased from 61.84% for the second quarter 2022. Third quarter 2022 annualized returns on average assets, average equity and average tangible equity were 1.16%, 9.40% and 11.15%, respectively, compared to 1.37%, 10.15% and 11.95% for the third quarter 2021. Annualized returns on average assets, average equity and average tangible equity for the second quarter 2022 were 1.08%, 8.75% and 10.38%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.
Financial Condition
CBTX’s total assets at September 30, 2022 increased $62.7 million, or 1.5%, to $4.27 billion compared to $4.21 billion at September 30, 2021 and decreased $50.5 million, or 4.6% (annualized), compared to $4.32 billion at June 30, 2022.
Total gross loans at September 30, 2022 increased $517.7 million, or 19.8%, to $3.13 billion compared to $2.61 billion at September 30, 2021, primarily due to organic loan growth, and increased $93.5 million, or 12.3% (annualized) compared to $3.03 billion at June 30, 2022 due to the increase in organic loans.
Deposits at September 30, 2022 increased $192.1 million, or 5.4%, to $3.72 billion compared to $3.53 billion at September 30, 2021 and decreased $32.9 million, or 3.5% (annualized), compared to $3.76 billion at June 30, 2022.
Asset Quality
CBTX’s nonperforming assets totaled $22.4 million, or 0.52% of total assets, at September 30, 2022 compared to $20.6 million, or 0.49% of total assets, at September 30, 2021 and $28.3 million, or 0.65% of total assets at June 30, 2022. The allowance for credit losses on loans as a percentage of total loans, excluding loans held for sale, was 1.04% at September 30, 2022, 1.23% at September 30, 2021 and 1.06% at June 30, 2022.
The provision for credit losses for the third quarter 2022 was $1.0 million compared to the recapture of provision for credit losses of $4.9 million for the third quarter 2021 and the provision for credit losses of $126 thousand for the second quarter 2022.
Third quarter 2022 net charge-offs were $33 thousand, or 0.00% (annualized) of average loans, compared to net recoveries of $82 thousand, or 0.01% (annualized) of average loans, for the third quarter 2021 and net recoveries of $166 thousand, or 0.02% (annualized) of average loans, for the second quarter 2022.
Allegiance Bancshares, Inc. Third Quarter 2022 Results
Allegiance’s net interest income in the third quarter 2022 increased $2.5 million, or 4.3%, to $60.7 million from $58.2 million for the third quarter 2021 and increased $3.2 million, or 5.6%, from $57.5 million for the second quarter 2022. These increases were primarily due to increased interest income on securities and loans as a result of changes in market interest rates. The net interest margin on a tax equivalent basis decreased 5 basis points to 3.85% for the third quarter 2022 from 3.90% for the third quarter 2021 and increased 32 basis points from 3.53% for the second quarter 2022. The decrease in the margin over the prior year was primarily due to the increase in funding costs. The increase in the margin over the prior quarter was primarily due to changes in market interest rates and the composition of earning assets.
Noninterest income for the third quarter 2022 was $3.0 million, an increase of $896 thousand, or 42.7%, compared to $2.1 million for the third quarter 2021 and an increase of $291 thousand, or 10.8%, compared to $2.7 million for the second quarter 2022. Third quarter 2022 other noninterest income included increased income from Small Business Investment Company investments.
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Noninterest expense for the third quarter 2022 increased $9.7 million, or 28.4%, to $44.0 million from $34.3 million for the third quarter 2021 and increased $6.1 million, or 16.2%, compared to the second quarter of 2022. These increases in noninterest expense over the prior periods were primarily due to greater acquisition and merger-related expenses associated with the merger with CBTX.
Allegiance’s efficiency ratio increased to 69.18% for the third quarter 2022 compared to 56.91% for the third quarter 2021 and 62.96% for the second quarter 2022. Third quarter 2022 annualized returns on average assets, average equity and average tangible equity were 0.84%, 7.90% and 11.78%, respectively, compared to 1.14%, 9.45% and 13.49% for the third quarter 2021. Annualized returns on average assets, average equity and average tangible equity for the second quarter 2022 were 0.94%, 8.86% and 13.00%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 18.  
    Financial Condition
Allegiance’s total assets at September 30, 2022 decreased $29.4 million, or 0.4%, to $6.73 billion compared to $6.76 billion at September 30, 2021 and decreased $1.4 million, or 0.1% (annualized), compared to $6.73 billion at June 30, 2022.
Total gross loans at September 30, 2022 increased $302.4 million, or 7.1%, to $4.59 billion compared to $4.29 billion at September 30, 2021, primarily due to organic loan growth, and increased $243.1 million, or 22.4% (annualized) compared to $4.35 billion at June 30, 2022, primarily due to the increase in organic loans. Core loans, which exclude Paycheck Protection Program (PPP) loans, increased $574.6 million, or 14.4%, to $4.57 billion at September 30, 2022 from $4.00 billion at September 30, 2021 and increased $257.1 million, or 23.8% (annualized), from $4.32 billion at June 30, 2022.
Deposits at September 30, 2022 decreased $6.2 million, or 0.1%, to $5.66 billion compared to $5.67 billion at September 30, 2021 and decreased $219.9 million, or 15.0% (annualized), compared to $5.88 billion at June 30, 2022.
    Asset Quality
Allegiance’s nonperforming assets totaled $21.6 million, or 0.32% of total assets, at September 30, 2022 compared to $29.8 million, or 0.44% of total assets, at September 30, 2021 and $28.2 million, or 0.42% of total assets at June 30, 2022. The allowance for credit losses on loans as a percentage of total loans was 1.14% at September 30, 2022, 1.18% at September 30, 2021 and 1.16% at June 30, 2022.
The provision for credit losses for the third quarter 2022 was $2.0 million compared to the provision for credit losses of $2.3 million for the third quarter 2021 and the provision for credit losses of $2.1 million for the second quarter 2022.
Third quarter 2022 net recoveries were $245 thousand, or 0.02% (annualized) of average loans, compared to net charge-offs of $450 thousand, or 0.04% (annualized) of average loans, for the third quarter 2021 and net charge-offs of $571 thousand, or 0.05% (annualized) of average loans, for the second quarter 2022.
Share Repurchase Authorization
On September 22, 2022, the Board of Directors of CBTX authorized the repurchase of up to $40 million of outstanding CBTX (now Stellar) common stock through September 30, 2023. 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. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The repurchase program does not obligate Stellar to purchase any particular number of shares and there is no guarantee as to the exact dollar amount or number of shares that will be repurchased by Stellar. Stellar may suspend, modify or terminate the program at any time and for any reason, without prior notice.
GAAP Reconciliation of Non-GAAP Financial Measures
Stellar’s management uses certain non-GAAP financial measures to evaluate its performance. Please refer to the GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures on pages 11 and 18 of this earnings release for a reconciliation of these non-GAAP financial measures.
Conference Call
As previously announced, Stellar’s management team will host a conference call and webcast on Friday, October 28, 2022 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss third quarter 2022 results of stand-alone CBTX and stand-alone Allegiance. Individuals and investment professionals may register for the conference call at https://register.vevent.com/register/BId5b581acd6f143fdb46c9666597c0d84 to receive the dial-in numbers and unique PIN to access the call. If you need assistance in obtaining a dial-in number, please contact IR@stellarbancorpinc.com. A simultaneous audio-only webcast may be accessed via the Investor Relations section of Stellar’s website at https://IR.stellarbancorpinc.com/events-and-presentations. If you are unable to participate during the live webcast, the webcast will be accessible via the Investor Relations section of Stellar’s website at IR.stellarbancorpinc.com.
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About Stellar Bancorp, Inc.
Stellar Bancorp, Inc. is a bank holding company headquartered in Houston, Texas. Stellar’s principal banking subsidiary, created by the merger of Allegiance Bank and CommunityBank of Texas, N.A. and to be renamed Stellar Bank upon system conversion, provides a diversified range of commercial banking services primarily to small- to medium-sized businesses and individual customers across the Houston, Dallas, Beaumont and surrounding communities in Texas.
Investor relations:
IR@stellarbancorpinc.com
Forward-Looking Statements
Certain statements in this press release which are not historical in nature are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements about the benefits of the merger of CBTX, Inc. (now Stellar Bancorp, Inc.)(the "Company") and Allegiance Bancshares, Inc. ("Allegiance"), including future financial performance and operating results, the combined company’s plans, business and growth strategies, objectives, expectations and intentions, and other statements that are not historical facts, including 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. Forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “could,” “scheduled,” “plans,” “intends,” “projects,” “anticipates,” “expects,” “believes,” “estimates,” “potential,” “would,” or “continue” or negatives of such terms or other comparable terminology.
All forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Stellar to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others: (1) the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized; (2) disruption to our business as a result of the merger; (3) the risk that the integration of our operations will be materially delayed or will be more costly or difficult than we expected or that we are otherwise unable to successfully integrate our legacy businesses; (4) the amount of the costs, fees, expenses and charges related to the merger; (5) reputational risk and the reaction of our customers, suppliers, employees or other business partners to the merger; (6) the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (7) the dilution caused by Stellar’s issuance of additional shares of its common stock in the merger; (8) general competitive, economic, political and market conditions; and (9) other factors that may affect future results of Stellar including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; and other actions of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Texas Department of Banking and legislative and regulatory actions and reforms.
Additional factors which could affect the Company’s future results can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and the Joint Proxy Statement/Prospectus regarding the merger that CBTX filed with the SEC on April 7, 2022 pursuant to Rule 424(b)(3) and Allegiance’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, in each case filed with the SEC and available on the SEC’s website at https:// www.sec.gov. We disclaim any obligation and do not intend to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
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CBTX, Inc.
Financial Highlights
(Unaudited)
Three Months EndedNine Months Ended
2022202120222021
 September 30  June 30  March 31  December 31  September 30  September 30  September 30
(Dollars and share amounts in thousands, except per share data)
Net income (loss)$12,747$11,707$10,595$(545)$14,421$35,049$36,143
Earnings (loss) per share, basic$0.52$0.48$0.43$(0.02)$0.59$1.43$1.48
Earnings (loss) per share, diluted$0.52$0.48$0.43$(0.02)$0.59$1.43$1.47
Dividends per share$0.13$0.13$0.13$0.13$0.13$0.39$0.39
Return on average assets(A)
1.16 %1.08 %0.97 %(0.05 %)1.37 %1.07 %1.19 %
Return on average equity(A)
9.40 %8.75 %7.67 %(0.38 %)10.15 %8.60 %8.70 %
Return on average tangible
    equity(A)(B)
11.15 %10.38 %9.03 %(0.45 %)11.95 %10.18 %10.27 %
Net interest margin
    (tax equivalent)(A)(C)
4.25 %3.49 %3.22 %3.07 %3.22 %3.65 %3.40 %
Efficiency ratio(D)
63.11 %61.84 %64.94 %99.78 %66.21 %63.28 %67.76 %
Capital Ratios
CBTX, Inc.(Consolidated)
Equity to assets11.74 %12.19 %12.14 %12.53 %13.41 %11.74 %13.41 %
Tangible equity to tangible
    assets(B)
9.96 %10.44 %10.44 %10.85 %11.64 %9.96 %11.64 %
Estimated common equity
    tier 1 capital
14.05 %14.49 %14.97 %15.31 %16.87 %14.05 %16.87 %
Estimated tier 1 risk-based
    capital
14.05 %14.49 %14.97 %15.31 %16.87 %14.05 %16.87 %
Estimated total risk-based
    capital
15.09 %15.53 %16.06 %16.42 %18.12 %15.09 %18.12 %
Estimated tier 1 leverage
    capital
11.42 %11.48 %11.08 %11.22 %11.69 %11.42 %11.69 %
CommunityBank of Texas
Estimated common equity
    tier 1 capital
13.81 %13.77 %14.13 %14.43 %15.88 %13.81 %15.88 %
Estimated tier 1 risk-based
    capital
13.81 %13.77 %14.13 %14.43 %15.88 %13.81 %15.88 %
Estimated total risk-based
    capital
14.85 %14.82 %15.22 %15.54 %17.13 %14.85 %17.13 %
Estimated tier 1 leverage
    capital
11.22 %10.91 %10.47 %10.58 %11.01 %11.22 %11.01 %
Other Data
Weighted average shares:
Basic24,34524,49324,49724,43724,43224,44524,462
Diluted24,46424,59324,60524,57524,54424,55224,572
Period end shares
    outstanding		24,01524,42524,50224,48824,42024,01524,420
Book value per share$20.88$21.56$22.03$22.96$23.12$20.88$23.12
Tangible book value per share(B)
$17.38$18.11$18.58$19.50$19.65$17.38$19.65
Employees - full-time equivalents487491503506520487520
(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.
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CBTX, Inc.
Financial Highlights
(Unaudited)
20222021
 September 30 June 30March 31December 31September 30
 (Dollars in thousands)
ASSETS
Cash and due from banks$41,219 $41,951 $47,718 $27,689 $50,642 
Interest-bearing deposits at other financial
    institutions
329,229 442,015 723,273 922,457 948,143 
Total cash and cash equivalents370,448 483,966 770,991 950,146 998,785 
Available for sale securities, at fair value511,282 550,083 547,979 425,046 359,539 
Equity investments17,835 18,073 17,101 17,727 17,349 
Loans held for sale— — 748 164 327 
Loans held for investment3,126,421 3,032,914 2,879,880 2,867,524 2,608,402 
Less: allowance for credit losses on loans(32,577)(32,087)(31,442)(31,345)(32,208)
Loans, net3,093,844 3,000,827 2,848,438 2,836,179 2,576,194 
Premises and equipment, net55,594 56,010 56,665 58,417 59,235 
Goodwill80,950 80,950 80,950 80,950 80,950 
Other intangible assets, net3,188 3,353 3,540 3,658 3,702 
Bank owned life insurance74,274 73,898 73,527 73,156 72,771 
Operating lease right-to-use assets10,992 11,324 10,850 11,191 11,527 
Deferred tax assets, net29,581 22,699 16,724 9,973 9,760 
Other assets23,843 21,120 18,464 19,394 18,980 
Total assets$4,271,831 $4,322,303 $4,445,977 $4,486,001 $4,209,119 
LIABILITIES AND SHAREHOLDERS’
    EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing$1,780,473 $1,810,275 $1,801,323 $1,784,981 $1,628,144 
Interest-bearing
Demand415,970 445,149 444,571 468,361 386,196 
Money market and savings1,273,855 1,239,978 1,348,300 1,336,690 1,257,961 
Certificates and other time253,476 261,232 227,031 241,252 259,334 
Total interest-bearing deposits1,943,301 1,946,359 2,019,902 2,046,303 1,903,491 
Total deposits3,723,774 3,756,634 3,821,225 3,831,284 3,531,635 
Operating lease liabilities13,748 14,169 13,752 14,142 14,556 
Federal Home Loan Bank advances— — 50,000 50,000 50,000 
Other liabilities32,884 24,821 21,277 28,450 48,335 
Total liabilities3,770,406 3,795,624 3,906,254 3,923,876 3,644,526 
SHAREHOLDERS’ EQUITY:
Common stock240 253 253 253 253 
Capital surplus308,197 334,104 336,214 335,846 335,226 
Retained earnings262,804 253,180 244,672 237,165 241,012 
Treasury stock— (14,046)(14,196)(14,196)(14,334)
Accumulated other comprehensive (loss) income(69,816)(46,812)(27,220)3,057 2,436 
Total shareholders’ equity501,425 526,679 539,723 562,125 564,593 
TOTAL LIABILITIES AND
    SHAREHOLDERS’ EQUITY
$4,271,831 $4,322,303 $4,445,977 $4,486,001 $4,209,119 
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CBTX, Inc.
Financial Highlights
(Unaudited)
Three Months EndedNine Months Ended
2022202120222021
 September 30  June 30  March 31  December 31  September 30  September 30  September 30
(Dollars in thousands, except per share data)
INTEREST INCOME:
Interest and fees on loans$39,058 $31,768 $31,221 $29,882 $30,765 $102,047 $94,723 
Securities3,046 2,937 2,292 1,796 1,435 8,275 3,940 
Interest-bearing deposits at other financial institutions2,408 1,238 348 383 340 3,994 740 
Equity investments161 158 154 168 157 473 461 
Total interest income44,673 36,101 34,015 32,229 32,697 114,789 99,864 
INTEREST EXPENSE:
Deposits1,661 1,178 1,164 1,180 1,227 4,003 3,844 
Federal Home Loan Bank advances— 51 221 222 221 272 663 
Other interest-bearing liabilities— — — 17 — — — 
Total interest expense1,661 1,229 1,385 1,419 1,448 4,275 4,507 
NET INTEREST INCOME43,012 34,872 32,630 30,810 31,249 110,514 95,357 
Provision (recapture) for credit losses for loans523 479 20 (901)(5,057)1,022 (8,961)
Provision (recapture) for credit losses for unfunded commitments489 (353)415 (306)162 551 (605)
Total provision (recapture) for credit losses1,012 126 435 (1,207)(4,895)1,573 (9,566)
Net interest income after provision (recapture) for credit losses42,000 34,746 32,195 32,017 36,144 108,941 104,923 
NONINTEREST INCOME:
Deposit account service charges1,320 1,386 1,370 1,370 1,352 4,076 3,712 
Card interchange fees1,056 1,135 1,037 1,081 1,048 3,228 3,119 
Earnings on bank-owned life insurance376 371 371 385 2,323 1,118 3,103 
Net gain on sales of assets85 58 530 910 360 673 918 
Other612 596 2,021 354 479 3,229 1,312 
Total noninterest income3,449 3,546 5,329 4,100 5,562 12,324 12,164 
NONINTEREST EXPENSE:
Salaries and employee benefits14,706 14,698 15,254 16,609 15,000 44,658 43,922 
Occupancy expense2,595 2,386 2,371 2,606 2,660 7,352 7,778 
Professional and director fees836 1,140 879 756 1,167 2,855 5,271 
Data processing and software1,502 1,210 1,763 1,716 1,629 4,475 4,866 
Regulatory fees599 803 614 8,366 478 2,016 1,535 
Advertising, marketing and business development350 366 249 263 493 965 1,288 
Telephone and communications348 349 454 471 516 1,151 1,529 
Security and protection expense386 170 324 439 425 880 1,352 
Amortization of intangibles165 172 181 179 182 518 559 
Acquisition and merger-related
      expenses		5,897 1,100 784 1,293 400 7,781 1,689 
Other expenses1,937 1,364 1,779 2,134 1,422 5,080 3,065 
Total noninterest expense29,321 23,758 24,652 34,832 24,372 77,731 72,854 
INCOME BEFORE INCOME TAXES16,128 14,534 12,872 1,285 17,334 43,534 44,233 
Provision for income taxes3,381 2,827 2,277 1,830 2,913 8,485 8,090 
NET INCOME (LOSS)$12,747 $11,707 $10,595 $(545)$14,421 $35,049 $36,143 
EARNINGS PER SHARE
Basic$0.52 $0.48 $0.43 $(0.02)$0.59 $1.43 $1.48 
Diluted$0.52 $0.48 $0.43 $(0.02)$0.59 $1.43 $1.47 

7
CBTX, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
September 30, 2022June 30, 2022September 30, 2021
Average Outstanding BalanceInterest Earned/
Interest Paid
Average Yield/ Rate(A)
Average Outstanding BalanceInterest Earned/
Interest Paid
Average Yield/ Rate(A)
Average Outstanding BalanceInterest Earned/
Interest Paid
Average Yield/ Rate(A)
(Dollars in thousands)
Assets
Interest-Earning Assets:
Total loans(B)
$3,074,655 $39,058 5.04 %$2,897,335 $31,768 4.40 %$2,702,248 $30,765 4.52 %
Securities552,901 3,046 2.19 %562,518 2,937 2.09 %327,968 1,435 1.74 %
Interest-bearing deposits at other financial institutions428,196 2,408 2.23 %593,255 1,238 0.84 %854,406 340 0.16 %
Equity investments13,393 161 4.77 %13,386 158 4.73 %13,367 157 4.66 %
Total interest-earning assets4,069,145 $44,673 4.36 %4,066,494 $36,101 3.56 %3,897,989 $32,697 3.33 %
Allowance for credit losses on loans(32,106)(31,081)(36,945)
Noninterest-earning assets318,761 315,133 313,901 
Total assets$4,355,800 $4,350,546 $4,174,945 
Liabilities and
    Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing deposits$1,954,854 $1,661 0.34 %$1,939,990 $1,178 0.24 %$1,895,617 $1,227 0.26 %
Federal Home Loan Bank advances— — 0.00 %5,495 51 3.72 %50,000 221 1.75 %
Total interest-bearing
    liabilities
1,954,854 $1,661 0.34 %1,945,485 $1,229 0.25 %1,945,617 $1,448 0.30 %
Noninterest-Bearing
    Liabilities:
Noninterest-bearing demand
    deposits
1,822,323 1,825,400 1,612,985 
Other liabilities40,684 42,861 52,712 
Total noninterest-bearing liabilities1,863,007 1,868,261 1,665,697 
Shareholders' equity537,939 536,800 563,631 
Total liabilities and
    shareholders' equity
$4,355,800 $4,350,546 $4,174,945 
Net interest income$43,012 $34,872 $31,249 
Net interest spread(C)
4.02 %3.31 %3.03 %
Net interest margin(D)
4.19 %3.44 %3.18 %
Net interest margin - tax equivalent(E)
4.25 %3.49 %3.22 %
(A)Annualized.
(B)Includes average outstanding balances related to loans held for sale.
(C)Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
(D)Net interest margin is equal to net interest income divided by average interest-earning assets.
(E)Tax equivalent adjustments of $578 thousand, $478 thousand and $369 thousand for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, respectively, were computed using a federal income tax rate of 21%.
8
CBTX, Inc.
Financial Highlights
(Unaudited)
Nine Months Ended September 30,
20222021
Average Outstanding BalanceInterest Earned/
Interest Paid
Average Yield/ Rate(A)
Average Outstanding BalanceInterest Earned/
Interest Paid
Average Yield/ Rate(A)
(Dollars in thousands)
Assets
Interest-Earning Assets:
Total loans(B)
$2,953,607 $102,047 4.62 %$2,812,449 $94,723 4.50 %
Securities537,889 8,275 2.06 %296,958 3,940 1.77 %
Interest-bearing deposits at other financial institutions595,458 3,994 0.90 %668,119 740 0.15 %
Equity investments13,386 473 4.72 %14,679 461 4.20 %
Total interest-earning assets4,100,340 $114,789 3.74 %3,792,205 $99,864 3.52 %
Allowance for credit losses on loans(31,599)(39,594)
Noninterest-earning assets313,938 318,009 
Total assets$4,382,679 $4,070,620 
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing deposits$1,971,247 $4,003 0.27 %$1,846,211 $3,844 0.28 %
Federal Home Loan Bank advances18,315 272 1.99 %50,000 663 1.77 %
Total interest-bearing
    liabilities
1,989,562 $4,275 0.29 %1,896,211 4,507 0.32 %
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits1,803,702 1,568,071 
Other liabilities44,479 50,966 
Total noninterest-bearing liabilities1,848,181 1,619,037 
Shareholders' equity544,936 555,372 
Total liabilities and shareholders' equity$4,382,679 $4,070,620 
Net interest income$110,514 $95,357 
Net interest spread(C)
3.45 %3.20 %
Net interest margin(D)
3.60 %3.36 %
Net interest margin - tax equivalent(E)
3.65 %3.40 %
(A)Annualized.
(B)Includes average outstanding balances related to loans held for sale.
(C)Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
(D)Net interest margin is equal to net interest income divided by average interest-earning assets.
(E)Tax equivalent adjustments of $1.5 million and $989 thousand for the nine months ended September 30, 2022 and 2021, respectively, were computed using a federal income tax rate of 21%.


9
CBTX, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
20222021
 September 30  June 30  March 31  December 31  September 30
(Dollars in thousands)
Loan Portfolio:
Commercial and industrial$568,071$581,443$600,990$634,384$596,251
Real estate:
Commercial real estate1,242,1181,181,6201,142,6461,091,9691,029,137
Construction and development507,570560,903473,326460,719393,541
1-4 family residential288,456264,428263,213277,273204,151
Multi-family residential370,391300,582279,099286,396285,852
Consumer24,50926,81028,23028,09027,930
Agriculture11,1858,0366,2877,9418,780
Other123,591118,15395,18789,65571,915
Gross loans3,135,8913,041,9752,888,9782,876,4272,617,557
Less allowance for credit losses(32,577)(32,087)(31,442)(31,345)(32,208)
Less deferred fees and unearned discount(9,470)(9,061)(8,350)(8,739)(8,828)
Less loans held for sale——(748)(164)(327)
Loans, net$3,093,844$3,000,827$2,848,438$2,836,179$2,576,194
Deposits:
Interest-bearing demand accounts$415,970$445,149$444,571$468,361$386,196
Money market accounts1,144,9691,109,2651,218,0821,209,6591,139,167
Savings accounts128,886130,713130,218127,031118,794
Certificates and other time deposits, $100,000 or greater161,975169,616127,798134,775140,740
Certificates and other time deposits, less than $100,00091,50191,61699,233106,477118,594
Total interest-bearing deposits1,943,3011,946,3592,019,9022,046,3031,903,491
Noninterest-bearing deposits1,780,4731,810,2751,801,3231,784,9811,628,144
Total deposits$3,723,774$3,756,634$3,821,225$3,831,284$3,531,635
Asset Quality:
Nonaccrual loans$22,410$28,273$22,083$22,568$20,585
Accruing loans 90 or more days past due—————
Total nonperforming loans22,41028,27322,08322,56820,585
Other real estate—————
Total nonperforming assets$22,410$28,273$22,083$22,568$20,585
Net charge-offs (recoveries)$33$(166)$(77)$(38)$(82)
Nonaccrual loans:
Commercial and industrial$7,985$8,312$8,765$9,090$9,773
Real estate:
Commercial real estate11,07616,48111,36311,51210,419
Construction and development139143140142—
1-4 family residential3,1763,3021,7771,784351
Multi-family residential—————
Consumer—————
Agriculture—————
Other3435384042
Total nonaccrual loans$22,410$28,273$22,083$22,568$20,585
Asset Quality Ratios:
Nonperforming assets to total assets0.52 %0.65 %0.50 %0.50 %0.49 %
Nonperforming loans to loans excluding loans held for sale0.72 %0.93 %0.77 %0.79 %0.79 %
Allowance for credit losses on loans to
    nonperforming loans
145.37 %113.49 %142.38 %138.89 %156.46 %
Allowance for credit losses on loans to loans excluding loans held for sale1.04 %1.06 %1.09 %1.09 %1.23 %
Net charge-offs (recoveries) to average loans (annualized)0.00 %(0.02 %)(0.01 %)(0.01 %)(0.01 %)
10
CBTX, Inc.
GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures
(Unaudited)
CBTX’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. CBTX 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 CBTX’s performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, CBTX reviews pre-tax, pre-provision income, adjusted pre-tax, pre-provision income, adjusted efficiency ratio, 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. CBTX 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 CBTX calculates the non-GAAP financial measures may differ from that of other companies reporting measures with similar names.
Three Months EndedNine Months Ended
2022202120222021
 September 30  June 30  March 31  December 31  September 30  September 30  September 30
(Dollars and share amounts in thousands, except per share data)
Net income$12,747$11,707$10,595$(545)$14,421$35,049$36,143
Add: Provision for credit losses1,012126435(1,207)(4,895)1,573(9,566)
Add: Provision for income taxes3,3812,8272,2771,8302,9138,4858,090
Pre-tax, pre-provision income$17,140$14,660$13,307$78$12,439$45,107$34,667
Pre-tax, pre-provision income$17,140$14,660$13,307$78$12,439$45,107$34,667
Add: Acquisition and merger-related expenses5,8971,1007841,2934007,7811,689
Adjusted pre-tax, pre-provision income$23,037$15,760$14,091$1,371$12,839$52,888$36,356
Total noninterest expense$29,321$23,758$24,652$34,832$24,372$77,731$72,854
Acquisition and merger-related expenses5,8971,1007841,2934007,7811,689
Net interest income43,01234,87232,63030,81031,249110,51495,357
Total noninterest income3,4493,5465,3294,1005,56212,32412,164
Adjusted efficiency ratio(A)
50.42%58.98%62.88%96.07%65.12%56.94%66.19%
Total shareholders' equity$501,425$526,679$539,723$562,125$564,593$501,425$564,593
Less:  Goodwill and other intangible assets, net84,13884,30384,49084,60884,65284,13884,652
Tangible shareholders’ equity$417,287$442,376$455,233$477,517$479,941$417,287$479,941
Shares outstanding at end of period24,01524,42524,50224,48824,42024,01524,420
Tangible book value per share$17.38$18.11$18.58$19.50$19.65$17.38$19.65
Net income$12,747$11,707$10,595$(545)$14,421$35,049$36,143
Average shareholders' equity$537,939$536,800$560,315$568,167$563,631$544,936$555,372
Less:  Average goodwill and other intangible assets, net84,24284,41384,58484,64384,75384,41384,901
Average tangible shareholders’ equity$453,697$452,387$475,731$483,524$478,878$460,523$470,471
Return on average tangible equity(B)
11.15 %10.38 %9.03 %(0.45 %)11.95 %10.18 %10.27 %
Total assets$4,271,831$4,322,303$4,445,977$4,486,001$4,209,119$4,271,831$4,209,119
Less:  Goodwill and other intangible assets, net84,13884,30384,49084,60884,65284,13884,652
Tangible assets$4,187,693$4,238,000$4,361,487$4,401,393$4,124,467$4,187,693$4,124,467
Tangible equity to tangible assets9.96 %10.44 %10.44 %10.85 %11.64 %9.96 %11.64 %
(A)Represents total noninterest expense, excluding acquisition and merger-related expenses, divided by the sum of net interest income plus noninterest income. Additionally, taxes and provision for credit losses are not part of this calculation.
(B)Interim periods annualized.
11
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months EndedNine Months Ended
2022202120222021
 September 30  June 30  March 31  December 31  September 30  September 30  September 30
(Dollars and share amounts in thousands, except per share data)
Net income$14,286$16,437$18,657$21,558$19,060$49,380$59,995
Earnings per share, basic$0.72$0.81$0.92$1.06$0.94$2.44$2.97
Earnings per share, diluted$0.71$0.80$0.91$1.06$0.93$2.42$2.95
Dividends per share$0.14$0.14$0.14$0.12$0.12$0.42$0.36
Return on average assets(A)
0.84 %0.94 %1.04 %1.23 %1.14 %0.94 %1.25 %
Return on average equity(A)
7.90 %8.86 %9.40 %10.60 %9.45 %8.74 %10.30 %
Return on average tangible
    equity(A)(B)
11.78 %13.00 %13.35 %15.05 %13.49 %12.75 %14.89 %
Net interest margin
    (tax equivalent)(A)(C)
3.85 %3.53 %3.30 %3.57 %3.90 %3.55 %4.03 %
Efficiency ratio(D)
69.18 %62.96 %58.32 %60.68 %56.91 %63.62 %58.24 %
Capital Ratios
Allegiance Bancshares, Inc.(Consolidated)
Equity to assets9.75 %10.48 %10.52 %11.49 %11.81 %9.75 %11.81 %
Tangible equity to tangible
    assets(B)
6.47 %7.21 %7.44 %8.42 %8.58 %6.47 %8.58 %
Estimated common equity
    tier 1 capital
11.39 %12.06 %12.28 %12.47 %12.37 %11.39 %12.37 %
Estimated tier 1 risk-based
    capital
11.58 %12.26 %12.49 %12.69 %12.60 %11.58 %12.60 %
Estimated total risk-based
    capital
14.66 %15.47 %15.76 %16.08 %16.13 %14.66 %16.13 %
Estimated tier 1 leverage
    capital
9.00 %8.65 %8.37 %8.53 %8.76 %9.00 %8.76 %
Allegiance Bank
Estimated common equity
    tier 1 capital
12.20 %12.51 %12.48 %12.63 %12.81 %12.20 %12.81 %
Estimated tier 1 risk-based
    capital
12.20 %12.51 %12.48 %12.63 %12.81 %12.20 %12.81 %
Estimated total risk-based
    capital
14.12 %14.50 %14.50 %14.71 %14.98 %14.12 %14.98 %
Estimated tier 1 leverage
    capital
9.49 %8.83 %8.37 %8.49 %8.91 %9.49 %8.91 %
Other Data
Weighted average shares:
Basic19,94220,35720,36320,26020,22120,21920,188
Diluted20,11420,53020,52620,42320,41120,37620,369
Period end shares outstanding19,83720,15420,37820,33720,21819,83720,218
Book value per share$33.08$35.00$36.90$40.15$39.50$33.08$39.50
Tangible book value per share(B)
$21.19$23.25$25.24$28.43$27.67$21.19$27.67
Employees - full-time equivalents562578586594603562603
(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 18 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 credit losses are not part of this calculation.
12
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
20222021
 September 30 June 30March 31December 31September 30
 (Dollars in thousands)
ASSETS
Cash and due from banks$16,449 $17,547 $26,629 $23,961 $23,903 
Interest-bearing deposits at other financial
    institutions
102,118 275,290 672,755 733,548 879,858 
Total cash and cash equivalents118,567 292,837 699,384 757,509 903,761 
Available for sale securities, at fair value1,618,995 1,709,321 1,790,707 1,773,765 1,211,476 
Loans held for investment4,591,912 4,348,833 4,283,514 4,220,486 4,289,469 
Less: allowance for credit losses on loans(52,147)(50,242)(49,215)(47,940)(50,491)
Loans, net4,539,765 4,298,591 4,234,299 4,172,546 4,238,978 
Accrued interest receivable29,697 29,882 31,505 33,392 33,523 
Premises and equipment, net57,837 58,482 62,168 63,708 65,140 
Other real estate owned— — — — 1,397 
Federal Home Loan Bank stock16,843 4,078 9,376 9,358 8,326 
Bank owned life insurance28,305 28,170 28,374 28,240 28,101 
Goodwill223,642 223,642 223,642 223,642 223,642 
Core deposit intangibles, net12,406 13,156 13,907 14,658 15,482 
Other assets84,285 73,605 56,001 28,136 29,935 
Total assets$6,730,342 $6,731,764 $7,149,363 $7,104,954 $6,759,761 
LIABILITIES AND SHAREHOLDERS’
    EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing$2,465,839 $2,394,719 $2,353,604 $2,243,085 $2,086,683 
Interest-bearing
Demand956,920 1,016,381 1,070,855 869,984 594,959 
Money market and savings1,471,690 1,510,008 1,552,853 1,643,745 1,604,222 
Certificates and other time766,270 959,524 1,185,015 1,290,825 1,381,014 
Total interest-bearing deposits3,194,880 3,485,913 3,808,723 3,804,554 3,580,195 
Total deposits5,660,719 5,880,632 6,162,327 6,047,639 5,666,878 
Accrued interest payable2,673 1,500 3,086 1,753 3,296 
Borrowed funds257,000 — 89,959 89,956 139,954 
Subordinated debt109,241 109,109 108,978 108,847 108,715 
Other liabilities44,407 35,194 33,073 40,291 42,326 
Total liabilities6,074,040 6,026,435 6,397,423 6,288,486 5,961,169 
SHAREHOLDERS’ EQUITY:
Common stock19,837 20,154 20,378 20,337 20,218 
Capital surplus491,878 504,165 512,284 510,797 507,948 
Retained earnings307,975 296,477 282,896 267,092 247,966 
Accumulated other comprehensive (loss) income(163,388)(115,467)(63,618)18,242 22,460 
Total shareholders’ equity656,302 705,329 751,940 816,468 798,592 
TOTAL LIABILITIES AND
    SHAREHOLDERS’ EQUITY
$6,730,342 $6,731,764 $7,149,363 $7,104,954 $6,759,761 
13
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months EndedNine Months Ended
2022202120222021
 September 30  June 30  March 31  December 31  September 30  September 30  September 30
(Dollars in thousands, except per share data)
INTEREST INCOME:
Loans, including fees$58,025 $53,835 $52,370 $56,855 $58,176 $164,230 $173,858 
Securities:
Taxable6,655 5,571 5,068 3,933 2,998 17,294 7,956 
Tax-exempt2,594 2,557 2,525 2,526 2,498 7,676 7,383 
Deposits in other financial
    institutions
608 877 340 317 221 1,825 356 
Total interest income67,882 62,840 60,303 63,631 63,893 191,025 189,553 
INTEREST EXPENSE:
Demand, money market and
    savings deposits
3,527 1,859 1,347 1,277 1,267 6,733 4,088 
Certificates and other time
    deposits
1,664 1,922 2,156 2,391 2,583 5,742 9,237 
Borrowed funds499 114 186 434 436 799 1,444 
Subordinated debt1,502 1,463 1,442 1,425 1,441 4,407 4,324 
Total interest expense7,192 5,358 5,131 5,527 5,727 17,681 19,093 
NET INTEREST INCOME60,690 57,482 55,172 58,104 58,166 173,344 170,460 
Provision for credit losses1,962 2,143 1,814 (2,577)2,295 5,919 255 
Net interest income after provision
    for credit losses
58,728 55,339 53,358 60,681 55,871 167,425 170,205 
NONINTEREST INCOME:
Nonsufficient funds fees145 126 116 156 131 387 308 
Service charges on deposit
    accounts
527 560 527 476 425 1,614 1,195 
Gain (loss) on sale of securities42 (17)— — — 25 49 
Loss on sale of other real
    estate and repossessed assets
— — — (89)— — (176)
Bank owned life insurance135 342 133 139 125 610 415 
Debit card and ATM card income869 880 819 834 771 2,568 2,162 
Other1,277 813 2,423 938 647 4,513 2,155 
Total noninterest income2,995 2,704 4,018 2,454 2,099 9,717 6,108 
NONINTEREST EXPENSE:
Salaries and employee benefits22,013 21,864 22,728 22,918 22,335 66,605 67,259 
Net occupancy and equipment2,129 2,220 2,205 2,194 2,335 6,554 6,950 
Depreciation1,003 1,012 1,033 1,103 1,060 3,048 3,151 
Data processing and software
    amortization
2,541 2,522 2,498 2,264 2,222 7,561 6,598 
Professional fees485 662 138 1,008 620 1,285 2,017 
Regulatory assessments and
    FDIC insurance
1,134 1,256 1,261 949 883 3,651 2,458 
Core deposit intangibles
    amortization
750 751 751 824 824 2,252 2,472 
Communications359 363 341 395 358 1,063 1,011 
Advertising385 483 462 481 481 1,330 1,211 
Other real estate expense93 65 59 69 137 217 479 
Acquisition and merger-related
      expenses		10,551 1,667 451 1,408 603 12,669 603 
Other2,588 5,039 2,590 3,131 2,438 10,217 8,601 
Total noninterest expense44,031 37,904 34,517 36,744 34,296 116,452 102,810 
INCOME BEFORE INCOME
    TAXES
17,692 20,139 22,859 26,391 23,674 60,690 73,503 
Provision for income taxes3,406 3,702 4,202 4,833 4,614 11,310 13,508 
NET INCOME$14,286 $16,437 $18,657 $21,558 $19,060 $49,380 $59,995 
EARNINGS PER SHARE
Basic$0.72 $0.81 $0.92 $1.06 $0.94 $2.44 $2.97 
Diluted$0.71 $0.80 $0.91 $1.06 $0.93 $2.42 $2.95 
14
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)

Three Months Ended
September 30, 2022June 30, 2022September 30, 2021
Average BalanceInterest Earned/
Interest Paid		Average Yield/ RateAverage BalanceInterest Earned/
Interest Paid		Average Yield/ RateAverage BalanceInterest Earned/
Interest Paid		Average Yield/ Rate
(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans$4,456,174 $58,025 5.17 %$4,303,714 $53,835 5.02 %$4,336,443 $58,176 5.32 %
Securities1,709,470 9,249 2.15 %1,778,745 8,128 1.83 %1,070,851 5,496 2.04 %
Deposits in other financial institutions160,340 608 1.50 %535,546 877 0.66 %588,859 221 0.15 %
Total interest-earning assets6,325,984 $67,882 4.26 %6,618,005 $62,840 3.81 %5,996,153 $63,893 4.23 %
Allowance for credit losses on loans(50,609)(49,290)(49,381)
Noninterest-earning assets442,511 450,584 680,682 
Total assets$6,717,886 $7,019,299 $6,627,454 
Liabilities and
    Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand
    deposits
$978,531 $2,380 0.96 %$1,044,493 $927 0.36 %$576,144 $324 0.22 %
Money market and savings
    deposits
1,500,083 1,147 0.30 %1,566,376 932 0.24 %1,565,965 943 0.24 %
Certificates and other time
    deposits
877,231 1,664 0.75 %1,088,664 1,922 0.71 %1,363,121 2,583 0.75 %
Borrowed funds68,752 499 2.88 %50,116 114 0.91 %139,844 436 1.24 %
Subordinated debt109,177 1,502 5.46 %109,045 1,463 5.38 %108,652 1,441 5.26 %
Total interest-bearing
    liabilities
3,533,774 $7,192 0.81 %3,858,694 $5,358 0.56 %3,753,726 $5,727 0.61 %
Noninterest-Bearing
    Liabilities:
Noninterest-bearing demand
    deposits
2,424,884 2,382,230 2,031,399 
Other liabilities41,792 34,249 42,183 
Total liabilities6,000,450 6,275,173 5,827,308 
Shareholders' equity717,436 744,126 800,146 
Total liabilities and
    shareholders' equity
$6,717,886 $7,019,299 $6,627,454 
Net interest rate spread3.45 %3.25 %3.62 %
Net interest income and margin$60,690 3.81 %$57,482 3.48 %$58,166 3.85 %
Net interest income and net
    interest margin (tax equivalent)
$61,418 3.85 %$58,238 3.53 %$58,873 3.90 %
15
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Nine Months Ended September 30,
20222021
Average BalanceInterest Earned/
Interest Paid		Average Yield/
Rate		Average BalanceInterest Earned/
Interest Paid		Average Yield/Rate
(Dollars in thousands)
Assets
Interest-Earning Assets:
Loans$4,331,288 $164,230 5.07 %$4,482,684 $173,858 5.19 %
Securities1,774,149 24,970 1.88 %913,078 15,339 2.25 %
Deposits in other financial institutions498,456 1,825 0.49 %328,238 356 0.15 %
Total interest-earning assets6,603,893 $191,025 3.87 %5,724,000 $189,553 4.43 %
Allowance for credit losses
    on loans		(49,422)(51,802)
Noninterest-earning assets441,767 758,774 
Total assets$6,996,238 $6,430,972 
Liabilities and Shareholders' Equity
Interest-Bearing Liabilities:
Interest-bearing demand deposits$1,031,006 $3,856 0.50 %$523,272 $1,021 0.26 %
Money market and savings deposits1,549,969 2,877 0.25 %1,555,791 3,067 0.26 %
Certificates and other time deposits1,069,011 5,742 0.72 %1,354,000 9,237 0.91 %
Borrowed funds69,492 799 1.54 %146,244 1,444 1.32 %
Subordinated debt109,046 4,407 5.40 %108,522 4,324 5.33 %
Total interest-bearing liabilities3,828,524 $17,681 0.62 %3,687,829 19,093 0.69 %
Noninterest-Bearing Liabilities:
Noninterest-bearing demand deposits2,373,489 1,923,584 
Other liabilities39,123 40,568 
Total liabilities6,241,136 5,651,981 
Shareholders' equity755,102 778,991 
Total liabilities and shareholders' equity$6,996,238 $6,430,972 
Net interest rate spread3.25 %3.74 %
Net interest income and margin$173,344 3.51 %$170,460 3.98 %
Net interest income and net interest
    margin (tax equivalent)
$175,578 3.55 %$172,477 4.03 %
16
Allegiance Bancshares, Inc.
Financial Highlights
(Unaudited)
Three Months Ended
20222021
 September 30  June 30  March 31  December 31  September 30
(Dollars in thousands)
Period-end Loan Portfolio:
Commercial and industrial$732,636$727,068$714,450$693,559$728,897
Paycheck Protection Program (PPP)17,82731,85578,624145,942290,028
Real estate:
Commercial real estate (including
    multi-family residential)
2,407,0392,265,1552,197,5022,104,6212,073,521
Commercial real estate construction and
    land development
513,248450,694453,473439,125382,610
1-4 family residential (including home equity)699,636682,066669,306685,071683,919
Residential construction183,563155,017136,760117,901104,638
Consumer and other37,96336,97833,39934,26725,856
Total loans$4,591,912$4,348,833$4,283,514$4,220,486$4,289,469
Deposits:
Interest-bearing demand accounts$956,920$1,016,381$1,070,855$869,984$594,959
Money market and savings1,471,6901,510,0081,552,8531,643,7451,604,222
Certificates and other time766,270959,5241,185,0151,290,8251,381,014
Total interest-bearing deposits3,194,8803,485,9133,808,7233,804,5543,580,195
Noninterest-bearing deposits2,465,8392,394,7192,353,6042,243,0852,086,683
Total deposits$5,660,719$5,880,632$6,162,327$6,047,639$5,666,878
Asset Quality:
Nonaccrual loans$21,551$28,225$26,275$24,127$28,369
Accruing loans 90 or more days past due—————
Total nonperforming loans21,55128,22526,27524,12728,369
Other real estate————1,397
Total nonperforming assets$21,551$28,225$26,275$24,127$29,766
Net (recoveries) charge-offs$(245)$571$317$1,353$450
Nonaccrual loans:
Commercial and industrial$6,916$9,145$7,809$8,358$10,247
Real estate:
Commercial real estate (including
    multi-family residential)
10,39214,40915,25912,63914,629
Commercial real estate construction and
    land development
2411,511—6353
1-4 family residential (including home equity)3,8543,0403,0652,8753,224
Residential construction—————
Consumer and other148120142192216
Total nonaccrual loans$21,551$28,225$26,275$24,127$28,369
Asset Quality Ratios:
Nonperforming assets to total assets0.32 %0.42 %0.37 %0.34 %0.44 %
Nonperforming loans to total loans0.47 %0.65 %0.61 %0.57 %0.66 %
Allowance for credit losses on loans to
    nonperforming loans
241.97 %178.01 %187.31 %198.70 %177.98 %
Allowance for credit losses on loans to total loans1.14 %1.16 %1.15 %1.14 %1.18 %
Net (recoveries) charge-offs to average loans (annualized)(0.02 %)0.05 %0.03 %0.13 %0.04 %
17
Allegiance Bancshares, Inc.
GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures
(Unaudited)
Allegiance’s 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 Allegiance’s performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, Allegiance reviews pre-tax, pre-provision income, adjusted pre-tax, pre-provision income, adjusted efficiency ratio, 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 EndedNine Months Ended
2022202120222021
 September 30  June 30  March 31  December 31  September 30  September 30  September 30
(Dollars and share amounts in thousands, except per share data)
Net income$14,286$16,437$18,657$21,558$19,060$49,380$59,995
Add: Provision for credit losses1,9622,1431,814(2,577)2,2955,919255
Add: Provision for income taxes3,4063,7024,2024,8334,61411,31013,508
Pre-tax, pre-provision income$19,654$22,282$24,673$23,814$25,969$66,609$73,758
Pre-tax, pre-provision income$19,654$22,282$24,673$23,814$25,969$66,609$73,758
Add: Acquisition and merger-related expenses10,5511,6674511,40860312,669603
Adjusted pre-tax, pre-provision income$30,205$23,949$25,124$25,222$26,572$79,278$74,361
Total noninterest expense$44,031$37,904$34,517$36,744$34,296$116,452$102,810
Acquisition and merger-related expenses10,5511,6674511,40860312,669603
Net interest income60,69057,48255,17258,10458,166173,344170,460
Total noninterest income2,9952,7044,0182,4542,0999,7176,108
Gain on sale of securities42(17)———2549
Adjusted efficiency ratio(A)
52.61%60.19%57.55%58.35%55.91%56.69%57.87%
Total shareholders' equity$656,302$705,329$751,940$816,468$798,592$656,302$798,592
Less:  Goodwill and core deposit intangibles, net236,048236,798237,549238,300239,124236,048239,124
Tangible shareholders’ equity$420,254$468,531$514,391$578,168$559,468$420,254$559,468
Shares outstanding at end of period19,83720,15420,37820,33720,21819,83720,218
Tangible book value per share$21.19$23.25$25.24$28.43$27.67$21.19$27.67
Net income$14,286$16,437$18,657$21,558$19,060$49,380$59,995
Average shareholders' equity$717,436$744,126$804,704$806,941$800,146$755,102$778,991
Less:  Average goodwill and core deposit intangibles, net236,399237,153237,925238,700239,497237,153240,325
Average tangible shareholders’ equity$481,037$506,973$566,779$568,241$560,649$517,949$538,666
Return on average tangible equity(B)
11.78 %13.00 %13.35 %15.05 %13.49 %12.75 %14.89 %
Total assets$6,730,342$6,731,764$7,149,363$7,104,954$6,759,761$6,730,342$6,759,761
Less: Goodwill and core deposit intangibles, net236,048236,798237,549238,300239,124236,048239,124
Tangible assets$6,494,294$6,494,966$6,911,814$6,866,654$6,520,637$6,494,294$6,520,637
Tangible equity to tangible assets6.47 %7.21 %7.44 %8.42 %8.58 %6.47 %8.58 %
(A)Represents total noninterest expense, excluding acquisition and merger-related expenses, 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 credit losses are not part of this calculation.
(B)Interim periods annualized.
18