Allegiance Bancshares, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the third quarter 2020 Allegiance Bank Shares Inc. conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question at that time, please press star then one on your touchtone telephone. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Courtney Perrieau, and then you may begin.

Thank you, Operator, and thank you to all who have joined our call today. This morning's earnings call will be led by Steve Wetzel, CEO of the company, Reza Thule, President of the company and CEO of Allegiance Bank, Paul Ege, Executive Vice President and CFO, Okon Akin, Executive Vice President and Chief Risk Officer of the company and President of Allegiance Bank, and Shanna Cuzzle, Executive Vice President and General Counsel. Before we begin, I need to remind everyone that some of the remarks made today may constitute forward-looking statements. as defined in the Private Securities Litigation Reform Act of 1995 as amended. We intend all such statements to be covered by the safe harbor provisions for forward-looking statements contained in the Act. Also note that if we give guidance about future results, that guidance is only a reflection of management's belief at the time the statement is made. Management's beliefs relating to predictions are subject to change and we do not publicly update guidance. Please see the last page of the text in this morning's earnings release for additional information about the risk factors associated with forward-looking statements. If needed, a copy of the earnings release is available on our website at allegiancebank.com or by calling Heather Robert at 281-517-6422 and she will email you a copy. We also have provided an investor presentation on our website. Although it is not being used as a guide for today's comments, it is available for review at this time. At the conclusion of our remarks, we will open the line and allow time for questions. I now turn the call over to our CEO, Steve Redfall.

Thanks, Courtney. Welcome, everyone, to our third quarter conference call, and thank you for your attendance. This is our third conference call since the pandemic and associated economic impact interrupted the nation's extended recovery from the Great Recession. Although most everyone originally anticipated that the virus, at least as it relates to business interruptions, would have been in the rearview mirror by now, we're all receiving forecasts that a full recovery will likely extend well into 2021, with some segments even further delayed. Allegiance Bank has played our role to the fullest extent possible as a community bank, as we not only supported our pre-existing customers, but extended a helping hand to over 3,200 small businesses in our region through the PPP program who are not prior customers. In fact, Though we have an approximate 1.5% deposit market share in the Houston MSA, we completed over 7% of the region's TPP loan advances. We continue to work closely with all of these customers through the forgiveness phase, where our customer-facing portal was opened during the third quarter with some forgiveness applications already being submitted by September 30th. In addition, our customers are hearing from our bankers as we reached out to virtually all of them in late Q3. This extensive outreach was not only constructive for our ongoing loan grading process, but further exemplifies our value-added, one-customer-at-a-time approach to building relationships. We are left with an optimistic outlook for the recovery of our customer base while remaining cautious and prepared for stress scenarios. Though we have an active central marketing and PR department, it is every employee, every lender, who in fact deliver our greatest PR impact. We are proud of our bankers and, like our customers, are so very appreciative of their selfless efforts. To this point, we have not only received recognition as a top places to work, but have recently been a top ten finalist for the National Association of Corporate Directors NXT Award for our commitment to diversity, equity, and inclusion. We believe our culture and super community bank strategy are key driving contributors to our past and future growth. We are committed to continuing our strong performance with an unending focus on toward continuous improvement of customer and employee experiences that will build excellent long-term value for our shareholders. Our record third quarter results reflect our ongoing progress and disciplined strategies as we ended the quarter with record earnings per share, very low net charge-offs, strong deposit growth, and stronger than ever capital, allowance, and liquidity positions. These earning power improvements is due to meaningfully growing our earning assets while maintaining the strength of our net interest margin and holding the line on non-industrial expenses. We believe that our performance and balance sheet well position us as we remain cautiously optimistic given the ongoing uncertainties. I will close my remarks. emphasizing that Allegiance Bank is clearly more nimble than ever relating to business continuity. We are accelerating our shift to more paperless and efficient processes and service deliveries and are better positioned than ever to achieve our objective of organically driven market share growth. Next, Ray will describe our loan and deposit production results as well as an outlook on credit, followed by Paul, who will cover our financial results. We will then open the call up for questions. Thanks, Steve.