Allegiance Bancshares, Inc.

Good day, and thank you for standing by. Welcome to the Allegiance Bank Shares first quarter 2021 earnings conference call. At this time, all participants are in a responding mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I will now attend the conference over to your speaker today, Courtney Theriault, Executive Vice President and Chief Accounting Officer. Please proceed.

Thank you to all who have joined our call today. This morning's earnings call will be led by Steve Retzlaff, CEO of the company, Ray Vitulli, 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 Kerbel, Executive Vice President and General Counsel. Before we begin today, I need to remind everyone that some of the remarks made today 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 beliefs at the time the statement is made, and such beliefs are subject to change. We disclaim any obligation to publicly update any forward-looking statements, except as may be required by law. Please see the last page of the text in this morning's earnings release, which is available on our website at allegiancebank.com, for additional information about the risk factors associated with forward-looking statements. 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 Redfield.

Thank you, Courtney. We welcome everyone to our conference call and thank you for your attendance. The first quarter represented a very productive start for the year, highlighted by record earnings per share of 89 cents plus significant deposit growth of $386 million during the quarter, bringing our total deposit growth over the past 12 months to $1.42 billion or 30.9%. Assets increased to $6.43 billion as we have now funded over $1.04 billion of PPP loans, with over $332 million being funded during the last quarter. All in, we remain in a strong position relating to capital and liquidity, and we increased our dividend to 12 cents per share of common stock in the first quarter. Our record earnings was aided by the accelerated recognition of PPP fees during the quarter and by the low provision number that came from having very little in the way of net charge-offs and an improving economy. That said, we absorbed added costs in the quarter, due to asset write-downs, as Paul will describe, and incurred increased overtime and third-party staff augmentation expenses, totaling approximately $400,000 in the quarter, which furthered our PPP production. Our stakeholders benefited from the continued extraordinary outpouring of effort from our staff as we not only booked the large number of PPP loans, but also originated $325 million of core loans during the quarter for a total new loan production of $657 million in the quarter. With the PPP now moving into the file completion and forgiveness phase, our production staff will be able to redirect their entire focus to generating traditional core lending and depository relationships for which our pipelines are already solidly established and will be further enhanced as we use our proven relationship building muscle to deepen the connection to the approximately 4,000 new customers who we assisted with our PPP efforts. We are pleased with our overall asset quality and we're able to significantly reduce our ORE. We continue to remain alert to the impact of the pandemic has had on our community and our customers, particularly those in the higher risk sectors. But the streets of Houston are showing signs of broader economic activity as heavy traffic, which used to be cursed, is now an everyday welcome sight. Although with a sense of steadily growing optimism, we remain cautious as to the timing of a full and complete rebound for all sectors. Given our growing market penetration and size, and while we continue to focus on high service levels to smaller commercial customers and the market differentiation this strategy affords us, we are beginning to attract and retain larger lending relationships. That said, our average loan size is not expected to appreciably change, but we believe that a marginal well-managed debt in this direction is not only warranted, but provides incremental quality growth opportunities. From an operational perspective, we have acquired a more robust and more integrated loan origination system, which we deployed quite effectively as a platform and workflow for handling our PPP loans. And we are now beginning to implement this new system for our entire lending platform. Finally, Allegiance has built and continues to add to the value of our brand and has evolved into an extraordinary franchise value by accelerating our penetration into the market with more and more customers who have now had firsthand experience and appreciation of what our service-level commitment can bring to their table. Given how we responded to the needs of this community over the past year, I believe that we are the clear, proven bank of choice in the Houston region, and we will be deepening our position even further over the coming year. 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 for questions.