Document

DEF 14A 1 allegiancebancsharesincpro.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

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S			Definitive Proxy Statement

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Allegiance Bancshares, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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March 10, 2022

Dear Fellow Shareholder:

On behalf of our board of directors, I invite you to attend the 2022 Annual Meeting of Shareholders to be held on Thursday, April 28, 2022, at 10:00 a.m., Central Time. The purposes of the meeting are set forth in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement. In light of public health concerns, the 2022 Annual Meeting of Shareholders will be held in a virtual meeting format only, via live webcast. Shareholders will be able to listen, vote, and submit questions from a remote location with Internet connectivity. Information on how to participate in this year’s virtual meeting can be found on the Notice of Annual Meeting of Shareholders and pages 1 and 2 of the Proxy Statement.

Whether or not you plan to attend the virtual meeting, it is important that your shares be represented. Please take a moment to complete, date, sign and return the enclosed proxy card as soon as possible, or use Internet or telephone voting according to the instructions on the proxy card. You may also attend and vote your shares electronically during the live webcast.

We appreciate your continued support of our company and look forward to your participation at our virtual 2022 Annual Meeting.


			Sincerely,

			George Martinez
			Chairman of the Board

8847 West Sam Houston Parkway, N., Suite 200

Houston, Texas 77040

(281) 894-3200

______________________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

______________________________

To the shareholders of Allegiance Bancshares, Inc.:

The 2022 Annual Meeting of Shareholders (the "annual meeting") of Allegiance Bancshares, Inc. (the "Company") will be held virtually, via live webcast, on Thursday, April 28, 2022, at 10:00 a.m., Central Time for the following purposes:

1.To elect five (5) Class I directors to serve on the board of directors of the Company until the Company’s 2025 annual meeting of shareholders and until their respective successor or successors are duly elected and qualified or until their earlier resignation or removal;

2.To approve, on an advisory basis, the compensation of our named executive officers as disclosed in the CD&A, tabular disclosures and related narrative in this proxy statement (“Say-On-Pay”);

3.To ratify the appointment of Crowe LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2022; and

4.To transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.

Only shareholders of record at the close of business on February 28, 2022, will be entitled to receive notice of and to vote at the annual meeting. You will be able to attend and participate in the Annual Meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting: http://meetnow.global/MJ2JSHC at the meeting date and time described in the accompanying proxy statement. There is no physical location for the annual meeting. For instructions on voting, please refer to the enclosed proxy card or voting information form. A list of shareholders entitled to vote at the annual meeting will be available for inspection by any shareholder at the principal office of the Company during ordinary business hours for a period of ten days prior to the annual meeting. This list also will be available to shareholders at the annual meeting.

In accordance with the "Notice and Access" rules adopted by the U.S. Securities and Exchange Commission, we have elected to provide our shareholders access to our proxy materials by posting such documents on the Internet. Accordingly, on March 10, 2022, an Important Notice Regarding the Availability of Proxy Materials ("notice of availability") was mailed to the holders of our common stock as of the close of business on the record date. Shareholders have the ability to access the proxy materials on the website referenced in the notice of availability, or to request that a printed set of proxy materials be sent to them, by following the instructions on the notice of availability.

Your Vote is Important

Whether or not you plan to attend the annual meeting, we urge you to vote and submit your proxy by the Internet, telephone or mail in order to ensure the presence of a quorum. If you attend the meeting, you will have the right to revoke the proxy and vote your shares in person.


			By Order of the Board of Directors,

			George Martinez
			Chairman of the Board

Houston, Texas

March 10, 2022

Table of Contents


ABOUT THE ANNUAL MEETING			2

PROPOSAL 1. ELECTION OF DIRECTORS			7
Classification of the Company’s Directors			7
Election Procedures; Term of Office			7
Nominees for Election			7

CONTINUING DIRECTORS AND EXECUTIVE OFFICERS			9
Board Diversity Disclosure			13

BOARD AND COMMITTEE MATTERS			13
Board Meetings			13
Director Attendance at Annual Meeting			13
Board Leadership Structure			14
Executive Sessions			14
Board Composition			14
Director Independence			14
Risk Management and Oversight			15
Director Nominations			15
Criteria for Director Nominees			15
Process for Identifying and Evaluating Director Nominees			15
Procedures to be Followed by Shareholders For Director Nominations			16
Committees of the Board			17
Director Compensation			19

CERTAIN CORPORATE GOVERNANCE MATTERS			21
Code of Business Conduct and Ethics			21
Corporate Governance Guidelines			21
Compensation Committee Interlocks and Insider Participation			21
Independent Auditors			21
Fees Paid to Independent Registered Public Accounting Firm			22
Audit Committee Pre-Approval			22

EXECUTIVE COMPENSATION AND OTHER MATTERS			22
Compensation Discussion and Analysis			22
Employment Agreements and Change in Control and Severance Arrangements with Named Executive Officers			30
Compensation Policies and Practices and Risk Management			31
Compensation Committee Report			32

EXECUTIVE COMPENSATION PAYMENTS AND AWARDS			33
Summary Compensation Table			33
Description of Plan-Based Awards			34
Grants of Plan-Based Awards for 202 1			35
Outstanding Equity Awards at Fiscal Year End			36
Stock Vested			37
2019 Stock Awards Plan			37
Potential Payments upon Termination or Change of Control			37
CEO Pay Ratio			41

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS			42

BENEFICIAL OWNERSHIP OF THE COMPANY’S COMMON STOCK BY MANAGEMENT AND PRINCIPAL SHAREHOLDERS OF THE COMPANY			43


Delinquent Section 16(a) Reports			44

AUDIT COMMITTEE REPORT			45

PROPOSAL 2. ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”)			46

PROPOSAL 3 . RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			46

DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS FOR 2022 ANNUAL MEETING			47

ANNUAL REPORT ON FORM 10-K			47

OTHER MATTERS			47

8847 West Sam Houston Parkway, N., Suite 200

Houston, Texas 77040

______________________________

PROXY STATEMENT FOR

2022 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON APRIL 28, 2022

______________________________

Unless the context otherwise requires, references in this proxy statement to "we," "us," "our," "our company," the "Company" or "Allegiance" refer to Allegiance Bancshares, Inc., a Texas corporation, and its consolidated subsidiaries as a whole; references to the "Bank" refer to Allegiance Bank, a wholly-owned subsidiary of Allegiance Bancshares, Inc. In addition, unless the context otherwise requires, references to "shareholders" are to the holders of outstanding shares of our common stock, par value $1.00 per share (the "common stock").

The board of directors of Allegiance Bancshares, Inc. (the "board") is soliciting proxies to be used at the 2022 annual meeting of shareholders of the Company to be held on Thursday, April 28, 2022 at 10:00 a.m., Central Time, virtually, via live webcast and any adjournments or postponements thereof (the "annual meeting"). This notice is first being sent to shareholders on or about March 10, 2022. You should read carefully the proxy materials in their entirety before voting.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2022 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON THURSDAY, APRIL 28, 2022.

We are pleased to provide access to our proxy materials on the Internet. This Proxy Statement for the 2022 Annual Meeting of Shareholders and our 2021 Annual Report to Shareholders are available at our proxy materials website at www.envisionreports.com/ABTX. This website does not use any functions that identify you as a visitor to the website, and thus protects your privacy.

You have the option to vote and submit your proxy by the Internet. If you have Internet access, we encourage you to record your vote by the Internet. We believe it will be convenient for you, and it saves postage and processing costs. In addition, when you vote by the Internet, your vote is recorded immediately, and there is no risk that postal delays will cause your vote to arrive late and therefore not be counted. Submitting your proxy by the Internet or telephone will not affect your right to vote in person if you decide to attend the annual meeting.

Pursuant to the rules promulgated by the Securities and Exchange Commission (the "SEC"), the Company is providing proxy materials to its shareholders on the Internet. You will not receive a printed copy of the proxy materials unless you specifically request to receive one. The Important Notice Regarding the Availability of Proxy Materials ("notice of availability") will instruct you as to how you may access and review all of the important information contained in the proxy materials. The notice of availability also instructs you as to how you may submit your proxy by the Internet. You may access the following information under the Investor Relations section of the Company's website at www.allegiancebank.com:

•Notice of Annual Meeting of Shareholders to be held on Thursday, April 28, 2022;

•Proxy Statement for 2022 Annual Meeting of Shareholders;

•Form of Proxy; and

•Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Pending Merger of Equals

On November 8, 2021, Allegiance and CBTX, Inc. (“CBTX”) jointly announced that they entered into a definitive merger agreement pursuant to which the companies will combine in an all-stock merger of equals. CBTX reported total assets of $4.49 billion as of December 31, 2021. Under the terms of the definitive merger agreement, Allegiance shareholders will receive 1.4184 shares of CBTX common stock for each share of Allegiance common stock they own. Based on the number of outstanding shares of Allegiance and CBTX as of November 5, 2021, Allegiance shareholders are expected to own approximately 54% and CBTX shareholders are expected to own approximately 46% of the combined company. The companies have submitted the required regulatory filings and, subject to satisfaction or in some cases waiver of the closing conditions, including approval of the merger agreement by both companies’ shareholders, the parties anticipate closing in the second quarter of the year.

ABOUT THE ANNUAL MEETING

What is a proxy?

A proxy is another person that you legally designate to vote your shares of common stock. If you designate someone as your proxy in a written document, that document is also called a "proxy" or a "proxy card."

Why did I receive an "Important Notice Regarding the Availability of Proxy Materials" but no proxy materials?

We have chosen to distribute our proxy materials to shareholders via the Internet under the "Notice and Access" approach permitted by rules of the SEC. This approach conserves resources and reduces our distribution costs, while providing you a timely and convenient method of accessing the materials and voting. On or before March 10, 2022, we mailed a notice of availability to shareholders, containing instructions on how to access the proxy materials on the Internet and to vote your shares by the Internet or by telephone. You will not receive a printed copy of the proxy materials unless you request one. If you would like to receive a printed copy of our proxy materials, including a printed proxy card on which you may submit your vote by mail, then you should follow the instructions for obtaining a printed copy of our proxy materials contained in the notice of availability.

When and where will the annual meeting be held?

The annual meeting is scheduled to take place at 10:00 a.m., Central Time, on Thursday, April 28, 2022. To access the annual meeting please go to http://meetnow.global/MJ2JSHC. See “—How do I vote?” below to find out how to access your control number.

What is the purpose of the annual meeting?

At the 2022 annual meeting, shareholders will act upon the matters outlined in the notice, including the following:

2.To approve, on an advisory basis, the compensation of our named executive officers as disclosed in the CD&A, tabular disclosures and related narrative in this proxy statement (“Say-On-Pay”);

3.To ratify the appointment of Crowe LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2022; and

4.To transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof.

Who are the nominees for directors?

The following individuals have been nominated by the board for election as Class I directors of the Company:

John Beckworth

Raimundo Riojas A.

Matthew H. Hartzell

Roland L. Williams

Frances H. Jeter

All of the nominees are currently directors of the Company.

Who is entitled to vote at the annual meeting?

The holders of record of the outstanding shares of common stock on February 28, 2022, which is the date that the board has fixed as the record date for the annual meeting (the "record date"), are entitled to vote at the annual meeting. The record date is established by the board as required by the Company’s bylaws and Texas law. On the record date, 20,367,232 shares of common stock were outstanding.

How do I vote?

You may vote using any of the following methods:

•By Internet: You can vote by the Internet at www.envisionreports.com/ABTX by following the instructions in the notice of availability or on the proxy card.

•By Telephone: You can vote over the telephone by following the instructions in the notice of availability or on the proxy card.

•By Mail: If you have requested or received a proxy or voting instruction card by mail, you can vote by completing, signing and dating the accompanying proxy or voting instruction card and returning it in the prepaid envelope. If you are a shareholder of record and return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by your proxy card as recommended by our board.

•At the Annual Meeting: If you were a shareholder as of the close of business on February 28, 2022 you may vote during the annual meeting by following the instructions available on the meeting website during the meeting. If you are a registered shareholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register to attend the annual meeting virtually on the Internet. Please follow the instructions on the notice or proxy card that you received. You may also be represented by another person at the meeting by executing a proper proxy designating that person. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other holder of record and register in advance to attend the annual meeting as a shareholder in accordance with the instructions below.

The Company must receive your vote no later than the time the polls close for voting at the annual meeting for your vote to be counted at the annual meeting.

Voting your shares by proxy will enable your shares of common stock to be represented and voted at the annual meeting if you do not attend the annual meeting and vote your shares in person. By following the voting instructions in the materials you receive, you will direct the designated persons (known as "proxies") to vote your common stock at the annual meeting in accordance with your instructions. The board has appointed Steven F. Retzloff and Ramon A. Vitulli, III to serve as the proxies for the annual meeting. If you vote by the Internet or telephone, you do not have to return your proxy or voting instruction card.

If your shares of common stock are held in "street name," your ability to vote by the Internet depends on your broker’s voting process. When your shares are held in a brokerage account or by a bank or other nominee, the nominee is considered the record holder of those shares. You are considered the beneficial owner of these shares, and your shares are held in "street name." The notice of availability has been provided to you by your broker, bank or other holder of record. As the beneficial owner, you have the right to direct your nominee concerning how to vote your shares by using the voting instruction card or by following its instructions for voting by telephone or by the Internet.

To vote the shares that you hold in "street name" at the annual meeting during the live webcast, you must register in advance to attend the annual meeting as a shareholder. To register, you must submit proof of your proxy power (legal proxy) reflecting your Allegiance Bancshares, Inc. holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 4:00 p.m., Central Time, on April 25, 2022. You will receive a confirmation email from Computershare of your registration.

Requests for registration should be directed to Computershare at the following address:

By email: legalproxy@computershare.com

To submit proof of your legal proxy, you may forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com.

By mail: Computershare

Allegiance Bancshares, Inc. Legal Proxy

P.O. Box 43001

Providence, RI 02940-3001

Can I vote my shares by filling out and returning the notice of availability?

No. The notice of availability will, however, provide instructions on how to vote over the telephone or by the Internet, or by requesting and returning a signed paper proxy card or voting instruction card, as applicable, or submitting a ballot at the annual meeting.

What are the voting rights of the shareholders?

The holders of at least a majority of the outstanding shares of common stock on the record date must be represented at the annual meeting, in person or by proxy, in order to constitute a quorum for the transaction of business. Each record holder of shares of common stock is entitled to one vote for each share of common stock registered, on the record date, in such holder’s name on the books of the Company on all matters to be acted upon at the annual meeting. The Company’s certificate of formation prohibits cumulative voting.

What is a broker non-vote?

A broker non-vote occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner. Your broker has discretionary authority to vote your shares with respect to the ratification of the appointment of Crowe LLP as our independent registered public accounting firm (Proposal 3). In the absence of specific instructions from you, your broker does not have discretionary authority to vote your shares with respect to the election of directors to the board (Proposal 1) or the Say-On-Pay resolution (Proposal 2).

Who counts the votes?

All votes will be tabulated by the inspector of election appointed for the annual meeting. Votes for each proposal will be tabulated separately.

What are the board’s recommendations on how I should vote my shares?

The board recommends that you vote your shares as follows:

Proposal 1 – FOR the election of each nominee for director.

Proposal 2 – FOR the Say-On-Pay resolution.

Proposal 3 – FOR the ratification of the appointment of Crowe LLP.

How will my shares be voted if I return a signed and dated proxy card, but don’t specify how my shares will be voted?

If you are a "street name" holder and do not provide voting instructions on one or more proposals, your bank, broker or other nominee will be unable to vote those shares in the election of directors (Proposal 1) or the Say-On-Pay resolution (Proposal 2), but will have discretion to vote on the ratification of the appointment of Crowe LLP (Proposal 3).

If you are a record holder who returns a completed proxy card that does not specify how you want to vote your shares on one or more proposals, the proxies will vote your shares for each proposal as to which you provide no voting instructions, and such shares will be voted in accordance with the board’s recommendations.

What are my choices when voting?

In the election of directors, you may vote for all director nominees or you may withhold your vote as to one or more director nominees. With respect to the proposals to approve the Say-On-Pay resolution and to ratify the appointment of Crowe LLP, you may vote for the proposal, against the proposal or abstain from voting on the proposal.

May I change my vote after I have submitted my proxy card?

Yes. Regardless of the method used to cast a vote, if you are a record holder, you may change your vote by:

•delivering to the Company prior to the annual meeting a written notice of revocation addressed to: Allegiance Bancshares, Inc., 8847 West Sam Houston Parkway, N., Suite 200, Houston, Texas 77040, Attn: Shanna Kuzdzal;

•delivering a valid, later-dated proxy, or a later-dated vote by telephone or by the Internet, in a timely manner;

•logging onto the Internet website specified on your notice of availability, proxy card or voting instruction card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card or voting instruction card, in each case if you are eligible to do so and following the instructions indicated on the notice of availability, proxy card or voting instruction card; or

•attending the annual meeting and voting during the live webcast, and any earlier proxy will be revoked. However, simply attending the annual meeting without voting will not revoke your proxy.

If your shares are held in "street name" and you desire to change any voting instructions you have previously given to the record holder of the shares of which you are the beneficial owner, you should contact the broker, bank or other nominee holding your shares in "street name" in order to direct a change in the manner your shares will be voted.

What percentage of the vote is required to approve each proposal?

Assuming the presence of a quorum, the five Class I director nominees who receive the most votes from the holders of the outstanding shares of common stock for their election will be elected—i.e., the affirmative vote of the holders of a plurality of the votes cast at the annual meeting is required for the election of the director nominees (Proposal 1). Assuming the presence of a quorum, the approval of the Say-On-Pay resolution (Proposal 2) and the ratification of Crowe LLP’s appointment as the Company’s independent registered public accounting firm (Proposal 3) require the affirmative vote of the holders of a majority of the votes cast at the annual meeting.

How are broker non-votes and abstentions treated?

Broker non-votes and abstentions are counted for purposes of determining the presence or absence of a quorum. A broker non-vote or a withholding of authority to vote with respect to one or more nominees for director will not have the effect of a vote against such nominee or nominees. Because the ratification of the appointment of the independent registered public accounting firm is considered a routine matter and a broker or other nominee may generally vote on routine matters, no broker non-votes are expected to occur in connection with the proposal to approve the proposal to ratify the appointment of Crowe LLP as the Company's independent registered accounting firm. Any abstentions will have the effect of a vote against the proposal to ratify the appointment of Crowe LLP as the Company’s independent registered public accounting firm. Any abstentions will not have the effect of a vote against the proposals with respect to the Say-On-Pay vote. The advisory, nonbinding vote on the Say-On-Pay resolution is considered a non-routine matter and, as such, broker non-votes will be deemed shares not present to vote on this matter, will not count as votes for or against this proposal and will not be included in calculating the number of votes necessary for approval of such matter.

What are the solicitation expenses and who pays the cost of this proxy solicitation?

The board is asking for your proxy, and we will pay all of the costs of soliciting shareholder proxies. In addition to the solicitation of proxies via mail, our officers, directors and employees may solicit proxies personally or by other means of communication, without being paid additional compensation for such services. The Company will reimburse banks, brokerage houses and other custodians, nominees and fiduciaries for their reasonable expenses in forwarding the proxy materials to beneficial owners of common stock.

Are there any other matters to be acted upon at the annual meeting?

Management does not intend to present any business at the annual meeting for a vote other than the matters set forth in the notice, and management has no information that others will do so. The proxy also confers on the proxies the discretionary authority to vote with respect to any matter properly presented at the annual meeting. If other matters requiring a vote of the shareholders properly come before the annual meeting, it is the intention of the persons named in the accompanying form of proxy to vote the shares represented by the proxies held by them in accordance with applicable law and their judgment on such matters.

Where can I find voting results?

The Company will publish the voting results in a current report on Form 8-K, which will be filed with the SEC within four business days following the annual meeting.

How can I communicate with the board?

To communicate with the board, shareholders or other interested parties should submit their comments by sending written correspondence via mail or courier to Allegiance Bancshares, Inc., 8847 West Sam Houston Parkway, N., Suite 200, Houston, Texas 77040, Attn: Shanna Kuzdzal; or via email at ir@allegiancebank.com. Communications will be sent directly to the specific director or directors of the Company indicated in the communication or to all members of the board if not specified.

PROPOSAL 1. ELECTION OF DIRECTORS

Classification of the Company’s Directors

In accordance with the terms of the Company’s certificate of formation, the Company’s board is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms as follows:

•The Class I directors are John Beckworth, Matthew H. Hartzell, Frances H. Jeter, Raimundo Riojas A. and Roland L. Williams, and their terms will expire at the 2022 annual meeting.

•The Class II directors are Denise Castillo-Rhodes, Jon-Al Duplantier, Robert Ivany, George Martinez and Janet S. Wong, and their terms will expire at the 2023 annual meeting.

•The Class III directors are William S. Nichols, III, Steven F. Retzloff, Fred S. Robertson, Ramon A. Vitulli, III and Louis A. Waters Jr., and their terms will expire at the 2024 annual meeting.

Election Procedures; Term of Office

The Corporate Governance and Nominating Committee has recommended to the board, and the board has approved, the nomination of John Beckworth, Matthew H. Hartzell, Frances H. Jeter, Raimundo Riojas A. and Roland L. Williams to fill the five expiring Class I director positions.

The five Class I nominees, if elected at the annual meeting, will serve until the annual meeting of shareholders in 2025 and until their respective successor or successors are duly elected and qualified or until their earlier resignation or removal.

The affirmative vote of a plurality of the votes cast at an annual meeting at which a quorum is present is required for the election of each of the nominees for director. This means that the five Class I director nominees who receive the most votes from the holders of the outstanding shares of common stock for their election at this year’s annual meeting will be elected.

Unless the authority to vote for the election of directors is withheld as to one or more of the nominees, all shares of common stock represented by proxy will be voted FOR the election of the nominees. If the authority to vote for the election of directors is withheld as to one or more but not all of the nominees, all shares of common stock represented by any such proxy will be voted FOR the election of the nominee or nominees, as the case may be, as to whom such authority is not withheld.

If a nominee becomes unavailable to serve as a director for any reason before the election, the shares represented by proxy will be voted for such other person, if any, as may be designated by the board. The board has no reason to believe that any nominee will be unavailable to serve as a director, and all of the nominees have consented to being named herein and to serve if elected.

Nominees for Election

The following table sets forth certain information with respect to the Company’s Class I director nominees. The business address for all of these individuals is 8847 West Sam Houston Parkway N., Suite 200, Houston, Texas 77040:


Name	Age	Position with the Company and the Bank	Director Since
John Beckworth	64	Class I Director of the Company	2009
Matthew H. Hartzell	63	Class I Director of the Company; Director of the Bank	2013
Frances H. Jeter	65	Class I Director of the Company	2014
Raimundo Riojas A.	51	Class I Director of the Company	2021
Roland L. Williams	71	Class I Director of the Company	2018

The following is a brief discussion of the business and banking background and experience of our director nominees.

John Beckworth. John Beckworth has served on our board since 2009. Mr. Beckworth practiced law in Houston for thirty years from 1983 until 2013. He was an associate and partner at Fulbright & Jaworski LLP before leaving to start his own law firm in 1994. From 2013-2018, Mr. Beckworth served as an associate dean at The University of Texas School of Law in Austin. Since 2018, Mr. Beckworth has continued in the school as a member of the law faculty. Also in 2018, Mr. Beckworth became affiliated as of counsel at Jackson Walker LLP in Austin. He has served as a trustee of The University of Texas Law School Foundation, and he is a former president and chairman of the board of The University of Texas Ex Students Association. Mr. Beckworth is a member of the Texas and American Bar Associations and he is a life fellow of the Houston and Texas Bar Foundations. He is an associate member of the American Board of Trial Advocates and he is board certified by the Texas Board of Legal Specialization in Oil, Gas and Mineral Law. Mr. Beckworth is a current director of the Texas Cultural Trust, The Will Erwin Headache Research Foundation, and the LBJ Foundation. Mr. Beckworth also operates family ranching, oil and gas and investment interests. He received Bachelor of Arts and Juris Doctor degrees from The University of Texas at Austin and The University of Texas School of Law. In 2017, Mr. Beckworth became a National Association of Corporate Directors (“NACD”) board leadership fellow. As an experienced attorney and administrator, Mr. Beckworth provides service to the board and management as lead independent director and as a member of the Corporate Governance and Nominating Committee and the Compensation Committee.

Matthew H. Hartzell. Matthew H. Hartzell has served on our board since our acquisition of Independence Bank in 2013. Prior to the acquisition, Mr. Hartzell served Independence Bank as the Vice Chairman of the Board, as the Chair of both the IT Committee and the Compensation Committee, and as a member of the Executive Committee, having served on that board over ten years. Mr. Hartzell currently serves as Chief Administrative Officer of N.F. Smith & Associates, L.P., an independent distributor of computer hardware components, and previously served as their Chief Operating Officer. For the past 20 years, he has also served as General Counsel of Valid Management, LLC, one of the holdings in N.F. Smith’s diversified portfolio of technology businesses. Prior to joining Valid Management, Mr. Hartzell was a commercial lawyer with Hirsch & Westheimer, P.C., for more than a decade. Since 2010, he served as a member of the SAE G-19 Committee, a committee dedicated to promulgating standards for the mitigation of counterfeit parts in electronic part purchasing. Mr. Hartzell served many years on the board of the Woodlands Heights Civic Association. He received a Bachelor of Arts degree from St. John’s College, Annapolis, Maryland and a Juris Doctorate from the University of Houston. Mr. Hartzell’s extensive legal experience and business skills qualify him to serve on our board. Mr. Hartzell understands computer technology and applications, which enables him to provide valuable insight and guidance as the Chairman of the Bank’s Information Technology Committee. Given the existence of cyber-security risks in the industry, his IT and general business skillsets also make him a valued member of the Enterprise Risk Management Committee.

Frances H. Jeter. Frances H. Jeter has served on our board since 2014. She has more than 25 years of experience in marketing, public affairs and business and nonprofit management. Ms. Jeter is a Managing Director and head of the Houston office for Sard Verbinnen & Co., a strategic communications firm. Ms. Jeter previously served as Group Vice President of Internal and External Affairs for Spectra Energy. Before joining Spectra Energy, Ms. Jeter served as Chief Marketing Officer for Bracewell & Giuliani LLP and served as Vice President of Public Affairs for Duke Energy Gas Transmission, a predecessor company of Spectra Energy. She is a Life Trustee and a past Chair of the Board of Trustees of the Kinkaid School in Houston and a former Trustee of The Hockaday School in Dallas. She is the founding Chair of Houston’s The Fay School and is also a former member of the Board of Directors of the Greater Houston Community Foundation and St. Luke’s Episcopal Health Charities, among a number of other non-profit organizations. Ms. Jeter received a Bachelor of Arts degree from the University of North Carolina at Chapel Hill. Her extensive experience in the public company arena is leveraged to assist the organization in all areas of marketing and public and investor relations and financial communications. Her attention to detail and working knowledge of corporate and board governance matters are well-suited to her participation on the board and Corporate Governance and Nominating Committee.

Raimundo Riojas A. Raimundo Riojas A. has served on our board since 2021. Mr. Riojas is the CEO of Grupo Duwest, a group of companies in Central America, the Caribbean, Colombia and Peru, dedicated to the manufacture and distribution of agricultural inputs. Grupo Duwest generates approximately $200 million in yearly revenue and has over 800 employees. He holds a Chemical Engineering degree from Rice University and a Master of Business Administration from Harvard University. Between 2000 and 2020, he was an active member of YPO (Young Presidents Organization), where he has served in multiple leadership positions for the YPO Guatemala Chapter. He is a former director of the Chamber of Industry in Guatemala and has served as board member in regional, privately-held companies. Mr. Riojas has also served for the past 17 years on the Regional Steering Committee for Crop Life International (an industry association) where he served as President and other leadership positions. Mr. Riojas’ international business and leadership experience qualify him to serve on our board.

Roland L. Williams. Roland L. Williams joined our board in October 2018 in connection with our acquisition of Post Oak Bancshares, Inc., where he was the Chairman, President and Chief Executive Officer of both Post Oak Bancshares, Inc. and Post Oak Bank, N.A. He previously served as Executive Vice Chairman of Allegiance Bank until his retirement in September 2019. Mr. Williams was a founding member of Post Oak Bank and has over 40 years of banking experience. Prior to founding Post Oak Bank, Mr. Williams served as Chairman, President and Chief Executive Officer of Langham Creek National Bank and Market Chief Executive Officer of SouthTrust Bank. In addition, Mr. Williams previously served as a member of the Federal Reserve Bank of Dallas Community Depository Institutions Advisory Council and a board member for the Texas Bankers Association. Mr. Williams has also served as an advisory board member and board member of Outreach Center of West Houston and on the Bauer College of Business Banking Certificate Board Committee at the University of Houston. Mr. Williams received a Bachelor of Science degree in business administration from McNeese State University in Lake Charles, Louisiana, and graduated from the Southwestern Graduate School of Banking at Southern Methodist University. Mr. Williams’ extensive business experience in the community banking industry qualifies him to serve on our board.

THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE FOR ELECTION TO THE BOARD.

CONTINUING DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the Company’s Class II and Class III directors whose terms of office do not expire at the annual meeting, and the executive officers of the Company who are not also a director. The business address for all of these individuals is 8847 West Sam Houston Parkway N., Suite 200, Houston, Texas 77040.

Name

Age

Position with the Company and the Bank

Directors:

Denise Castillo-Rhodes

Class II Director of the Company

Jon-Al Duplantier

Class II Director of the Company

Robert Ivany

Class II Director of the Company

George Martinez

Class II Director and Chairman of the Company; Director and Vice Chairman of the Bank

William S. Nichols, III

Class III Director of the Company; Director of the Bank

Steven F. Retzloff

Class III Director and CEO of the Company; Chairman of the Board of the Bank

Fred S. Robertson

Class III Director of the Company; Director of the Bank

Ramon A. Vitulli, III

Class III Director and President of the Company; Director and CEO of the Bank

Louis A. Waters Jr.

Class III Director of the Company

Janet S. Wong

Class II Director of the Company

Executive officers who are not also directors:

Okan I. Akin

Executive Vice President and Chief Risk Officer of the Company;

Director, President and Chief Risk Officer of the Bank

Paul P. Egge

Executive Vice President and Chief Financial Officer of the Company and the Bank

Shanna Kuzdzal

Executive Vice President, General Counsel and Secretary of the Company and the Bank

The following is a brief discussion of the professional background and experience of our continuing directors and executive officers. All officers of the Company are elected by the board and serve at the discretion of the board.

Denise Castillo-Rhodes. Denise Castillo-Rhodes joined our Board in April 2020. Since 2008, Ms. Castillo-Rhodes has served as Executive Vice President and Chief Financial Officer of Texas Medical Center, where she oversees accounting, finance, billing and collections and tax compliance. Ms. Castillo-Rhodes serves on several boards, including Oil States International, Inc. (NYSE: OIS), where she is a member of the Audit Committee, The University of St. Thomas High School, American Heart Association, Medical Bridges and the Greater Houston Women’s Chamber of Commerce.

She also serves as a Trustee for the City of Houston’s Municipal Employee Pension System. Ms. Castillo-Rhodes holds a Bachelor of Business Administration from the University of Texas at El Paso, where she is a Gold Nugget honorary alumnus, and a Masters of Business Administration from the University of St. Thomas Cameron School of Business, where she is a Distinguished Alumnus. Ms. Castillo-Rhodes is a certified public accountant and a member of the American Institute of Certified Accountants, the Texas Society of Certified Public Accountants and the Houston Chapter of Certified Public Accountants. In 2016, Ms. Castillo-Rhodes was named Houston Business Journal Non-Profit Business Woman of the Year and also was named one of the Top 100 Women to Watch in America. In 2017, she was honored as an Outstanding Woman in Banking and Finance. Ms. Castillo-Rhodes’ professional experience as a financial executive and other leadership experience qualify her to provide pertinent guidance to the board, as well as the Audit Committee.

Jon-Al Duplantier. Jon-Al Duplantier joined our Board in January 2021. Mr. Duplantier enjoyed a 25-year career in the oil and gas industry with Conoco Inc., ConocoPhillips and Parker Drilling Company. Most recently, he served as Parker Drilling’s President, Rental Tools and Well Services, a position he held from April 2018 until his departure in July 2020. In December 2018, Parker Drilling Company commenced voluntary chapter 11 proceedings and filed a prearranged plan of reorganization under the U.S. Bankruptcy Code. Prior to that role, Mr. Duplantier held a series of executive positions at Parker Drilling where he had responsibility across more than a dozen countries, and his roles included management and oversight of legal affairs, corporate compliance and governance, human resources, environmental, safety and procurement from 2009 to 2018. Prior to joining Parker Drilling, Mr. Duplantier worked for ConocoPhillips from 2002 to 2009, where he held legal and management roles. From 1995 to 2002, Mr. Duplantier served in multiple roles of increasing responsibility at Conoco Inc. Mr. Duplantier holds a Juris Doctorate from Louisiana State University and a Bachelor of Science degree from Grambling State University. Mr. Duplantier serves on the Board of Directors of Brigham Minerals, Inc. (NYSE: MNRL), where he is a member of the Compensation Committee and the Nominating and Governance Committee. Mr. Duplantier also serves on the Board of Directors of AltaGas Ltd. (TSX: ALA), where he is a member of the Human Resources and Compensation Committee as well as the Governance Committee. Mr. Duplantier’s broad experience across commercial, governance and legal aspects of business along with his professional and leadership experience qualify him to serve on our board, as well as on the Audit Committee and the Compensation Committee.

Robert Ivany. Robert Ivany joined our board in July 2017. Dr. Ivany recently retired as President of the University of St. Thomas, a position he held since 2004 and now serves as President Emeritus. Prior to his tenure, Dr. Ivany served as an adjunct professor in Executive Education at the Graduate School of Business at Columbia University. Dr. Ivany's background also includes a distinguished career in the military culminating in the rank of Major General, service as the Army Aide to President Reagan and Commandant of the U.S. Army War College. Dr. Ivany sits on the board of the Duchesne Academy of the Sacred Heart. He also served on the Mutual of America Capital Management Corporation Board of Directors from 2004 to 2009. He earned a Bachelor of Science degree from the U.S. Military Academy and a Ph.D. from the University of Wisconsin in Madison in European History. Dr. Ivany presently teaches leadership to executives as a faculty member with Thayer Leadership at West Point. His leadership ability and experience working with the younger generation, as well as his involvement with Houston philanthropic and veterans organizations, qualify him to serve on our board.

George Martinez. George Martinez is one of the organizers of the Bank and has been the Chairman of our board since 2008. He assumed the role of Vice Chairman of the Bank on January 1, 2020. Mr. Martinez served as Chief Executive Officer of the Company and the Bank from the formation of each through 2019. Mr. Martinez began his banking career in 1974 as the co-founder of Sterling Bank, where he served as an Executive Vice President from 1974 to 1980, and then as Chief Executive Officer of Sterling Bancshares, Inc. a publicly traded multi-billion dollar financial institution, from 1980 to 2001 and as Chairman from 1992 to 2004. From 1998 to 2008, Mr. Martinez served as President of Chrysalis Partners, LLC, a leadership consulting firm. From 2003 to 2020, he served on the Board of Directors of Cornerstone Building Brands, Inc. (NYSE:CNR). From 2003 to 2021, he served on the Board of Directors of Landmark Worldwide Enterprises, Inc. Mr. Martinez received a Bachelor of Business Administration and Economics degree from Rice University. With over 50 years of banking experience, Mr. Martinez’s significant leadership skills and extensive experience in community banking qualify him to serve on our board and as our Chairman.

William S. Nichols, III. William (Nick) S. Nichols is one of the organizers of the Bank and has served on our board since 2008 and the board of the Bank since 2007. Mr. Nichols retired in 2017 as the President of Suncor Companies, LLC, a real estate development company that primarily focused on the development of freestanding retail facilities throughout the United States. From 1974 to 1984, he worked as an audit principal at Ernst & Young. He has held numerous board appointments, including advisory director at Community Bank, Katy, Texas. Additionally, he is the founder and director of the Nichols Foundation, a foundation to provide college scholarships to students on a need basis. He also serves on the development council of the Mays Business School at Texas A&M University. Mr. Nichols is a Certified Public Accountant

and is a member of the American Institute of Certified Public Accountants and the Texas Society of Certified Public Accountants. He received a Bachelor of Business Administration degree from Texas A&M University. Mr. Nichols’ understanding of the Houston business market and leadership experience qualify him to serve on our board. Mr. Nichols makes good use of both his experience in the real estate industry and as a CPA as he contributes by serving as a director of the Bank. He also provides informed guidance as a member of the Compensation Committee and as the Chairman of the Audit Committee.

Steven F. Retzloff. Steven F. Retzloff is one of the organizers of the Bank and became Chief Executive Officer of the Company in 2020 after serving as our President from 2008 through 2019. Mr. Retzloff serves as Chairman of the Bank, a position he has held since 2007. Mr. Retzloff has over 39 years of business experience and 30 years of Houston Banking experience. Mr. Retzloff served as a director of Sterling Bancshares, Inc., a publicly traded multi-billion dollar financial institution, and Sterling Bank from 1987 to 2006, including terms as Chairman of the board of Sterling Bancshares from 1990 to 1992 and from 2004 to 2005. He is currently Chairman and Chief Executive Officer of Retzloff Industries, Inc. and is an advisory director to Pharos Capital Partners III. Prior to co-founding Allegiance Bank, Mr. Retzloff owned and managed Travis Body & Trailer, Inc., a nationwide manufacturer of specialized truck trailers. His past work experience also includes General Motors, Bristol Myers and Retzloff Capital Corporation. Mr. Retzloff received an Industrial Engineering degree from The Georgia Institute of Technology and a Master of Business Administration degree (with distinction) from the Babcock Graduate School of Management at Wake Forest University. Mr. Retzloff currently serves as a director of the Independent Bankers Association of Texas, Faith in Practice, The Open Door Mission, the Greater Houston Partnership and, since 2021, the Houston Food Bank also serving as a member of its finance committee. He also serves as Chairman of the Finance Committee for the Greater Houston Partnership. He previously served as Vice President of the Kinkaid School Investments Foundation and previously served as trustee of Pines Presbyterian Church and on the advisory board for the Mays School Banking Program at Texas A&M University and Fuller Texas School of Theology. Mr. Retzloff's significant experience as a director and officer of community banks and his extensive leadership skills qualify him to serve on our board.

Fred S. Robertson. Fred S. Robertson has served on our board since 2011. Mr. Robertson has over 30 years of experience overseeing institutional and retail investments. He has managed fixed income investments and designed extensive quantitative models for bond management. For the past five years, Mr. Robertson has been managing his personal investments. Mr. Robertson holds a number of non-profit board appointments and volunteers with many organizations in Houston. Mr. Robertson received a Bachelor of Science from Cornell University and a Masters of Business Administration in finance from The College of William and Mary. Mr. Robertson’s significant experience in the banking industry and leadership skills qualify him to serve on our board. Mr. Robertson utilizes his knowledge of investment and fund management as Chair of the Bank's ALCO Committee. His financial expertise provides additional benefit to the Company as he serves as a director of the Bank, as Chairman of the Compensation Committee and as Chairman of the 401K Committee.

Ramon A. Vitulli, III. Ramon A. Vitulli, III became President of the Company and Chief Executive Officer of the Bank in 2020 after serving as Executive Vice President of the Company since 2014 and as President of the Bank from 2013 through 2019 and Bank Office President from 2007 to 2013. He has served on our board since 2014 and has been a director of the Bank since 2008. Mr. Vitulli has over 30 years of banking experience. He started his career as a loan review examiner at Charter National Bank in Houston and worked as a senior credit analyst and later as bank manager for Charter until his move to Sterling Bank in 1996. Mr. Vitulli previously was the Market Chief Executive Officer at Sterling Bank, where he managed various bank offices in northwest Houston. He presently serves as a director for the Texas Bankers Association and on the St. Pius X High School Foundation and School Board and is a current member of the Texas Finance Committee, the CHRISTUS Foundation for HealthCare Board and the Limited Partner Advisory Board of Bluehenge Capital Partners. Mr. Vitulli received a Bachelor of Business Administration degree in finance from The University of Texas at Austin. Mr. Vitulli’s considerable business experience, and in particular his considerable experience in community banking, qualifies him to serve on our board.

Louis A. Waters Jr. Louis A. Waters Jr. joined our board in October 2018 in connection with our acquisition of Post Oak Bancshares, Inc., where he was a director of both Post Oak Bancshares, Inc. and Post Oak Bank, N.A. since 2005. Mr. Waters currently serves as President of Waters Group Houston, a private investment company that he founded in 1990; President of Flood Break Automatic Floodgates, a manufacturer of flood protection systems for commercial and residential applications that he founded in 2001; and Chairman of PV Rentals. Leasing and Sales, a provider of specialty automobile, van and truck rentals in the Greater Houston area, since 2011. Mr. Waters currently serves as a director of Edgeworth Construction Products LLC, as well as Bandera Corridor Conservation Bank, and has previously successfully built and sold several other operating companies. Mr. Waters received a Bachelor of Science in mechanical engineering from Rice

University and a Master of Business Administration from INSEAD. The entrepreneurial, small business and banking experience that Mr. Waters brings to our organization qualify him to serve on our board.

Janet S. Wong. Janet S. Wong joined our board in April 2020. Ms. Wong is a licensed Certified Public Accountant and has more than 30 years of public accounting experience. She is a partner (retired) with KPMG, an international professional services firm, where she has extensive industry experience in technology, manufacturing, financial services and consumer products. Since 2015, she has served on the Board of Directors of Enviva Inc. (NYSE: EVA) and as Chair of the Audit Committee and as a member of the Nominating Governance Committee. She also serves on the Board of Directors of Lumentum Holdings (Nasdaq: LITE), where she is a member of the Audit Committee and on the Board of Directors of Lucid Group, Inc. (Nasdaq: LCID), where she serves as Audit Committee Chair. In addition, she is on the Board of Trustees for the Computer History Museum, the Louisiana Tech University Foundation Board and on the Board of the Tri-Cities Chapter of the National Association of Corporate Directors. She holds a Master of Professional Accountancy from Louisiana Tech University and a Master of Taxation from Golden Gate University. She is a NACD (National Association of Corporate Directors) Certified® Director, the premier director designation in the U.S. reflecting her qualifications and governance experience as a corporate board director. Ms. Wong's financial expertise and her leadership and governance experience qualify her to serve on our board, as well as on the Corporate Governance and Nominating Committee.

Executive Officers Who Are Not Also Directors

Okan I. Akin. Okan I. Akin joined the Bank as a director and Regional President and Deputy Chief Credit Officer in 2013 in connection with our acquisition of Independence Bank, N.A., where he was the President and CEO. Mr. Akin became Executive Vice President and Chief Risk Officer of the Company and the Bank in January 2019 after serving over three years as the Executive Vice President and Chief Administrative Officer of the Bank. Mr. Akin added the role of President of the Bank in January 2020. Mr. Akin has more than 25 years of community banking experience focused exclusively in the Houston market. Mr. Akin received a Master of Business Administration and a Bachelor of Business Administration degree in finance from the University of Houston.

Paul P. Egge. Paul P. Egge joined us as Executive Vice President and Chief Financial Officer of the Company and the Bank in 2016. Mr. Egge has over 15 years of financial services experience, predominantly as an investment banker focused on providing strategic and capital markets advisory services to banks and specialty finance companies. Prior to joining the Company, he served as Director of Capital Planning and Corporate Development for Cadence Bank. Prior to joining Cadence, Mr. Egge was a senior investment banker at Robert W. Baird & Co Incorporated, where he played a leadership role in our initial public offering as well as our 2015 acquisition of Enterprise Bank. Mr. Egge graduated cum laude with a Bachelor of Arts degree in Economics and Finance from The College of William and Mary and holds a Master of Business Administration from the Kellogg School of Management at Northwestern University.

Shanna Kuzdzal. Shanna Kuzdzal joined us as Executive Vice President and General Counsel of the Company and the Bank in February 2017 and became Secretary in April 2017. Ms. Kuzdzal has more than 15 years of legal experience during which her practice has focused on community banking in Texas with a concentration in the corporate area including capital markets and mergers and acquisitions. Prior to joining Allegiance, she served as Senior Vice President and Associate General Counsel at Prosperity Bank from 2014 to 2017. Prior to joining Prosperity, she was an attorney at Bracewell LLP, where she represented financial institutions in corporate matters, which included the organization of the Company in 2008 and our acquisition of Independence Bank. She received a Bachelor of Arts degree in biochemistry and biology from Rice University and graduated with honors with a Juris Doctorate from The University of Texas School of Law. Ms. Kuzdzal currently serves as President of the Southwest Association of Bank Counsel and on the board and Governance Committee of The Women’s Resource of Greater Houston.

BOARD DIVERSITY DISCLOSURE

Board Diversity Matrix

We believe that it is important that our board is composed of individuals reflecting the diversity of our employees, shareholders and the communities we serve. In recent years, our Corporate Governance and Nominating Committee has taken this priority to heart, and the diversity of our board has grown significantly. We provide the below enhanced disclosure regarding the diversity of our board, utilizing the template in accordance with NASDAQ’s board diversity listing standards.


Board Diversity Matrix (As of March 10, 2022)
Total Number of Directors	15
	Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	3	9	—	3
Part II: Demographic Background
African American or Black	—	1	—	—
Alaskan Native or Native American	—	—	—	—
Asian	1	—	—	—
Hispanic or Latinx	1	1	—	—
Native Hawaiian or Pacific Islander	—	—	—	—
White	1	7	—	—
Two or More Races or Ethnicities	—	—	—	—
LGBTQ+	—
Did Not Disclose Demographic Background	3

BOARD AND COMMITTEE MATTERS

Board Meetings

Our board met eleven times during 2021 (including regularly scheduled and special meetings). During 2021, each director attended at least 75% or more of the aggregate of (i) the total number of meetings of the board (held during the period for which he or she was a director) and (ii) the total number of meetings of all committees of the board on which he or she served (during the period that he or she served).

Director Attendance at Annual Meeting

The board encourages all directors to attend the annual meeting of shareholders. All of our directors, except Mr. Riojas A. who had not yet joined the board, attended the 2021 annual meeting of shareholders.

Board Leadership Structure

Our board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the board believes that it is in the best interests of the Company to make that determination from time to time based on the position and direction of the Company and the membership of the board. Until January 1, 2020, the roles of Chairman of the Board and Chief Executive Officer of the Company were held by the same person, George Martinez. In connection with the execution of the succession plan pursuant to which Steven F. Retzloff became Chief Executive Officer on January 1, 2020, Mr. Martinez remained as our Chairman of the Board, but in a non-executive role. The board has determined that having a separate Chief Executive Officer and Chairman of the Board is in the best interests of our shareholders at this time as this structure provides continuity of leadership.

Upon the recommendation from the Corporate Governance and Nominating Committee, the independent directors elected John Beckworth to serve as Lead Director beginning in April 2017 and continuing in such role despite separating the Chairman of the Board and Chief Executive Officer roles, as our Chairman of the Board is not an independent director. The Lead Director chairs each executive session; will meet with any director who is not adequately performing his or her duties as a member of the board or any committee; facilitates communications between other members of the board and the Chairman or Chief Executive Officer; monitors, with the assistance of the Company’s General Counsel, communications from shareholders and other interested parties and provides copies or summaries to the other directors as he considers appropriate; works with the Chairman in the preparation of the agenda for board meetings and in determining the need for special meetings of the board; and otherwise consults with the Chairman of the Board, the Chief Executive Officer and members of the Corporate Governance and Nominating Committee on matters relating to corporate governance and board performance.

Executive Sessions

The independent directors of the Company hold executive sessions from time to time without the Chief Executive Officer or any management director present. The Company’s Corporate Governance Guidelines provide that the Company’s independent directors will meet at least twice a year in executive session. During 2021, eleven executive sessions were held.

Board Composition

The size of our board is currently set at 15 members. In accordance with the Company’s bylaws, members of the board are divided into three classes, Class I, Class II and Class III. The members of each class are elected for a term of office to expire at the third succeeding annual meeting of shareholders following their election. The term of office of the current Class I directors expires at the annual meeting. The terms of the Class II and Class III directors expire at the annual meeting of shareholders in 2023 and 2024, respectively. Upon recommendation of the Corporate Governance and Nominating Committee, the board decided to maintain the size of the board at 15. Accordingly, if the five Class I director nominees are elected at the annual meeting, the composition of our board of directors will be five Class I directors, five Class II directors and five Class III directors.

Any director vacancy existing on or occurring after the election may be filled by a majority vote of the remaining directors, even if the remaining directors constitute less than a quorum of the full board. In accordance with the Company’s bylaws, a director appointed to fill a vacancy will be appointed to serve until the next annual meeting of shareholders held for the election of directors, regardless of whether the class of director in which he serves is to be elected at such annual meeting. The number of directors may be changed only by resolution of the board.

As discussed in greater detail below, the board has affirmatively determined that 11 of our 15 current directors qualify as independent directors under the applicable rules of the NASDAQ Global Market and the SEC.

Director Independence

Under the rules of the NASDAQ Global Market, a majority of the members of our board are required to be independent. The rules of the NASDAQ Global Market, as well as those of the SEC, also impose several other requirements with respect to the independence of our directors.

Our board has evaluated the independence of each director and each unaffiliated nominee for director based upon these rules. Applying these rules, our board has affirmatively determined that, with the exception of Messrs. Martinez, Retzloff, Vitulli and Williams, each of our current directors qualify as an independent director under applicable rules. In

making these determinations, our board considered the current and prior relationships that each director has and has had with the Company and all other facts and circumstances our board deemed relevant in determining their independence, including the beneficial ownership of common stock by each director, and the transactions described under the section titled "Certain Relationships and Related Person Transactions." The board also considered whether there were any transactions or relationships between directors or any member of their immediate family (or any entity of which a director or an immediate family member is an executive officer, general partner or significant equity holder) and members of the Company’s senior management or their affiliates. The purpose of this review was to determine whether any such relationships or transactions existed that were inconsistent with a determination that the director is independent.

Risk Management and Oversight

Our board is responsible for oversight of management and the business and affairs of the Company, including those relating to management of risk. Our full board determines the appropriate risk for us generally, assesses the specific risks faced by us and reviews the steps taken by management to manage those risks. While our full board maintains the ultimate oversight responsibility for the risk management process, its committees oversee risk in certain specified areas as described in the section entitled "– Committees of the Board."

Director Nominations

The Corporate Governance and Nominating Committee considers nominees to serve as directors of the Company and recommends such persons to the board. The Corporate Governance and Nominating Committee also considers director candidates recommended by shareholders who appear to be qualified to serve on the board and meet the criteria for nominees considered by such committee. The Corporate Governance and Nominating Committee may choose not to consider an unsolicited recommendation if no vacancy exists on the board and the Corporate Governance and Nominating Committee does not perceive a need to increase the size of the board. In order to avoid the unnecessary use of the Corporate Governance and Nominating Committee’s resources, it will consider only those director candidates recommended in accordance with the procedures set forth in the section titled " – Procedures to be Followed by Shareholders For Director Nominations."

Criteria for Director Nominees

The Corporate Governance and Nominating Committee has adopted a set of criteria that it considers when it selects individuals to be nominated for election to the board. In addition to reviewing the background and qualifications of the individuals considered in the selection of candidates, the Corporate Governance and Nominating Committee looks at a number of attributes and criteria, including: experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Corporate Governance and Nominating Committee considers appropriate in the context of the needs of the board. The Corporate Governance and Nominating Committee does not have a formal policy with respect to diversity; however, the board and Corporate Governance and Nominating Committee believe that it is essential that the board’s members represent diverse viewpoints.

The Corporate Governance and Nominating Committee may weigh the foregoing criteria differently in different situations, depending on the composition of the board at the time. The Corporate Governance and Nominating Committee will strive to maintain at least one director who meets the definition of "audit committee financial expert" under the regulations of the SEC.

In addition, prior to nominating an existing director for re-election to the board, the Corporate Governance and Nominating Committee considers and reviews an existing director’s board and committee attendance and performance; length of board service; experience, skills and contributions that the existing director brings to the board; and independence.

Process for Identifying and Evaluating Director Nominees

Pursuant to the Corporate Governance and Nominating Committee charter as approved by the board, the Corporate Governance and Nominating Committee is responsible for the process relating to director nominations, including identifying, recruiting, interviewing and selecting individuals who may be nominated for election to the board.

The process that the Corporate Governance and Nominating Committee follows when it identifies and evaluates individuals to be nominated for election to the board is set forth below.

Identification. For purposes of identifying nominees for the board, the Corporate Governance and Nominating Committee will rely on personal contacts of the members of the board as well as their knowledge of members of the communities served by the Company. The Corporate Governance and Nominating Committee will also consider director candidates recommended by shareholders in accordance with the policy and procedures set forth below in the section titled "– Procedures to be Followed by Shareholders For Director Nominations." The Corporate Governance and Nominating Committee has not previously used an independent search firm in identifying nominees.

Evaluation. In evaluating potential nominees, the Corporate Governance and Nominating Committee determines whether the candidate is eligible and qualified for service on the board by evaluating the candidate under the selection criteria set forth above. In addition, for any new director nominee, the Corporate Governance and Nominating Committee will conduct a check of the individual’s background and interview the candidate.

Procedures to be Followed by Shareholders For Director Nominations

Any shareholder of the Company entitled to vote in the election of directors may recommend to the Corporate Governance and Nominating Committee one or more persons as a nominee for election as director at a meeting only if such shareholder has given timely notice in proper written form of such shareholder’s intent to make such nomination or nominations. To be timely, a shareholder’s notice given in the context of an annual meeting of shareholders must be delivered to or mailed and received at the principal executive office of the Company not less than one hundred twenty days in advance of the first anniversary of the date of the Company’s notice to shareholders in connection with the previous year’s annual meeting of shareholders. If no annual meeting was held in the previous year or the date of the annual meeting of shareholders has been changed by more than thirty days from the date contemplated at the time of the previous year’s notice, the notice must be received by the Company at least eighty days prior to the date the Company intends to distribute its notice with respect to the annual meeting. To be timely, a shareholder’s notice given in the context of a special meeting of shareholders must be delivered to or mailed and received by the Secretary of the Company at the principal executive office of the Company not later than the later of the ninetieth day prior to such special meeting or the tenth day following the day on which notice of the date of the special meeting and of the nominees proposed by the board to be elected at such special meeting was given. Any meeting of shareholders which is adjourned and will reconvene within thirty days after the meeting date as originally noticed will, for purposes of any notice contemplated by the foregoing, be deemed to be a continuation of the original meeting and no nominations by a shareholder of persons to be elected directors of the Company may be made at any such reconvened meeting other than pursuant to a notice that was timely for the meeting on the date originally noticed.

To be in proper written form, a shareholder’s notice to the Secretary of the Company must set forth:

•the name and address of the shareholder who intends to make the nominations and of the person or persons to be nominated;

•a representation that the shareholder is a holder of record of shares of common stock entitled to vote at such meeting and, if applicable, intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; and

•if applicable, a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder.

Shareholder nominations should be addressed to the Secretary of Allegiance Bancshares, Inc., 8847 West Sam Houston Parkway, N., Suite 200, Houston, Texas 77040.

A nomination not made in compliance with the foregoing procedures will not be eligible to be voted upon by the shareholders at the meeting. The Corporate Governance and Nominating Committee has the power and duty to determine whether a nomination was made in accordance with procedures set forth above and, if any nomination is not in compliance with the procedures set forth above, to declare that such defective nomination will be disregarded.

Committees of the Board

Our board has established an Audit Committee, a Compensation Committee and a Corporate Governance and Nominating Committee. Below is a summary of our current committee structure and membership information:

Audit
Committee

Compensation Committee

Corporate Governance and Nominating Committee

John B. Beckworth

Denise Castillo-Rhodes

Jon-Al Duplantier

Matthew Hartzell

Robert Ivany

Frances H. Jeter

William S. (Nick) Nichols, III

C, FE

Raimundo Riojas A.

Fred S. Robertson

Louis A. Waters Jr.

Janet S. Wong

__________________

C = Chairperson; FE = Financial Expert

Our board may establish additional committees as it deems appropriate, in accordance with applicable law and regulations and our certificate of formation and bylaws.

Audit Committee

The members of the Audit Committee are Denise Castillo-Rhodes, Jon-Al Duplantier and William S. Nichols, III, with Mr. Nichols serving as chairperson. Our board has evaluated the independence of each of the members of the Audit Committee and has affirmatively determined that (i) each of the members meets the definition of an "independent director" under applicable NASDAQ Global Market rules; (ii) each of the members satisfies the additional independence standards under applicable SEC rules for audit committee service; and (iii) each of the members has the ability to read and understand fundamental financial statements. In addition, the board has affirmatively determined that each of Mr. Nichols and Ms. Castillo-Rhodes have the requisite financial sophistication due to his or her experience and background to qualify as an "audit committee financial expert" as defined by the SEC and as required by NASDAQ Global Market rules. The Audit Committee met five times in 2021.

The purpose of the Audit Committee is to assist the board in fulfilling its oversight responsibilities with respect to the following, among other things:

•overseeing the accounting and financial reporting processes of the Company and audit of the financial statements of the Company;

•discussing the financial statements of the Company with management and the Company’s independent auditor;

•monitoring actions taken by the Company to comply with its internal policies as well as external accounting, legal and regulatory requirements;

•obtaining input from the independent auditor on the internal auditor and financial and accounting personnel, the accounting and financial controls of the Company;

•reviewing with the independent auditor, the internal auditor and financial and accounting personnel, the accounting and financial controls of the Company;

•reviewing disclosures regarding independence of the Company’s independent auditor; and

•evaluating the performance of the Company’s independent auditor.

The Audit Committee is responsible for oversight of Company risks relating to accounting matters, financial reporting and legal and regulatory compliance. To satisfy these oversight responsibilities, the Audit Committee separately meets with the Company’s executive officers, internal and external counsel, independent registered public accounting firm and management. The Audit Committee also receives reports regarding issues such as the status and findings of audits being conducted by the internal auditors and the independent registered public accounting firm, the status of material litigation and accounting changes that could affect the Company’s financial statements and proposed audit adjustments, if any.

The Audit Committee has adopted a written charter, which sets forth the Audit Committee’s duties and responsibilities. The Audit Committee charter is available on our website at www.allegiancebank.com under Investor Relations/Corporate Governance/Governance Documents.

Compensation Committee

The members of the Compensation Committee are John Beckworth, Jon-Al Duplantier, Matthew H. Hartzell, William S. Nichols III, Raimundo Riojas A. and Fred Robertson, with Mr. Robertson serving as chairperson. Our board has evaluated the independence of each of the members of and the nominee expected to join the Compensation Committee and has affirmatively determined that each meets the definition of an "independent director" under the applicable NASDAQ Global Market and SEC rules. The members of and the nominee expected to join the Compensation Committee also satisfy the independence requirements and additional independence criteria under Rule 10C-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), qualify as "non-employee directors" within the meaning of Rule 16b-3 under the Exchange Act and "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code ("Code"). The Compensation Committee met four times in 2021. The Compensation Committee charter requires the Compensation Committee to meet at least twice each year.

The purpose of the Compensation Committee is to assist the board in fulfilling its oversight responsibilities with respect to the following, among other things:

•discharging the board’s responsibilities relating to compensation of directors, officers and senior managers;

•overseeing, evaluating, maintaining and advising the board regarding overall compensation policies and structure, and stock ownership, pension, profit sharing and other benefit plans and programs, for directors, officers, senior managers and employees;

•reviewing and discussing with management the Compensation Discussion and Analysis when applicable and as required by the rules and regulations of the SEC and, based on its review and discussion, determine whether to recommend to the board that the Compensation Discussion and Analysis be included in the Company’s annual proxy statement; and

•preparing the report of the Compensation Committee when applicable and as required by the rules and regulations of the SEC to be included in the Company’s annual proxy statement.

After due consideration of factors set forth in the Compensation Committee’s charter, the Compensation Committee may select and appoint a compensation consultant, legal counsel or other adviser to the Compensation Committee. The compensation consultant McLagan, a part of Aon plc, was retained in 2020 to provide services related to a peer group compensation study, which was used in the Compensation Committee’s review and determination of 2021 director and named executive officer compensation. Aon Risk Services, an affiliate of McLagan, provided services to the Company in 2021. There are no known conflicts of interests between McLagan and the Company.

The Compensation Committee has adopted a written charter, which sets forth the Compensation Committee’s duties and responsibilities. The Compensation Committee charter is available on our website at www.allegiancebank.com under Investor Relations/Corporate Governance/Governance Documents.

Corporate Governance and Nominating Committee

The members of our Corporate Governance and Nominating Committee are John Beckworth, Robert Ivany, Frances H. Jeter, Louis A. Waters Jr. and Janet Wong, with Ms. Jeter serving as chairperson. Our board has evaluated the independence of each of the members of the Corporate Governance and Nominating Committee and has affirmatively determined that each of the members meets the definition of an "independent director" under the applicable NASDAQ Global Market and SEC rules. The Corporate Governance and Nominating Committee met six times in 2021. The Corporate Governance and Nominating Committee did not retain the services of any third party to identify, evaluate or assist in identifying or evaluating potential board nominees during 2021.

The Corporate Governance and Nominating Committee has responsibility for, among other things:

•making recommendations to the board from time to time as to changes that the Corporate Governance and Nominating Committee believes to be desirable to the size of the board or any board committee;

•identifying individuals believed to be qualified to become members of the board and any of its committees;

•developing and recommending to the board standards to be applied in making determinations as to the absence of material relationships between the Company and a director;

•evaluating the independence of directors and nominees;

•evaluating the tendered resignation of any director and providing a recommendation to the board on whether to accept such resignation;

•establishing procedures for the Corporate Governance and Nominating Committee to exercise oversight of the evaluation of the board and management;

•developing and recommending to the board a set of Corporate Governance Guidelines applicable to the Company; and

•assisting management in the preparation of the disclosure in the Company’s annual proxy statement.

Our Corporate Governance and Nominating Committee has adopted a written charter, which sets forth the Corporate Governance and Nominating Committee’s duties and responsibilities. The Corporate Governance and Nominating Committee charter is available on our website at www.allegiancebank.com under Investor Relations/Corporate Governance/Governance Documents.

Our Corporate Governance and Nominating Committee will consider shareholder recommendations for nominees, provided that such shareholder complies with the procedures described in the section titled " – Procedures to be Followed by Shareholders For Director Nominations."

Director Compensation

We and the Bank pay our respective directors, other than those directors who are employed by us or the Bank, a fee based on the directors’ participation in board and committee meetings. From January 1, 2021 through March 31, 2021, each Company director who was not employed by us or the Bank received $5,000, the pro rata portion of the $20,000 annual cash retainer in effect, and $1,000 for each board meeting and $500 for each committee meeting, except for members of the Audit Committee, who received $1,000 per meeting, that he or she attended. After a review of director compensation of similar bank holding companies, the Compensation Committee approved and recommended to the Board a market adjustment to the compensation program to more closely align with peers. Beginning April 1, 2021, each Company director who was not employed by us or the Bank received $7,500 quarterly, as payment of the $30,000 annual cash retainer that went into effect on April 1, 2021, and $1,000 for each board meeting and each Audit Committee, Compensation Committee or Corporate Governance and Nominating Committee meeting, and $500 for each other committee meeting, that he or she attended. In addition to the increase in the annual cash retainer and certain committee fees, effective April 1, 2021, each committee chair and the Lead Director received a quarterly cash payment of $1,250.

In addition, the Compensation Committee recommended, and the board approved, a grant of $30,000 in restricted stock to each non-employee director that was calculated using the closing price of the Company’s common stock on the day prior to the date of the annual meeting, issued on the date of the annual meeting and for which the forfeiture

restrictions lapse on the first of the month in which the next year’s annual meeting is expected to be held. In satisfaction of this obligation, each non-employee director received a grant of 758 shares pursuant to the Company’s 2019 Amended and Restated Stock Awards and Incentive Plan (the “2019 Stock Awards Plan”) on April 22, 2021, for which the forfeiture restrictions will lapse on April 1, 2022.

Directors who are employed by us, the Bank or both do not receive remuneration for serving as a director of the Bank or us, but are compensated in their capacity as employees. Mr. Martinez serves as Vice Chairman of the Bank, is not a named executive officer and his compensation is included in the “Fees Earned or Paid in Cash” column in the table below.

The following table sets forth the compensation paid to each director who served on our board during 2021. The table also includes compensation earned by each director that is attributable to his or her service on the board or a committee of the Bank. For the year ended December 31, 2021, none of the non-employee directors received compensation in the form of perquisites or other personal benefits valued at $10,000 or more.


Name	Fees Earned or Paid in Cash (1)			Stock Awards (2)			Non-Equity Incentive Plan Compensation			All Other Compensation			Total
John Beckworth	$	66,250	(a)	$	29,426	(a)	—			$	381	(4)	$	96,056
Denise Castillo-Rhodes	41,500			29,426		(a)	—			381		(4)	71,306
Jon-Al Duplantier	50,000			34,070		(a)(b)	—			273		(4)	84,343
Matthew H. Hartzell	60,500		(b)	29,426		(a)	—			381		(4)	90,306
Robert Ivany	43,000			29,426		(a)	—			381		(4)	72,806
Frances H. Jeter	46,750			29,426		(a)	—			381		(4)	76,556
George Martinez	283,250		(c)	54,076		(c)	$	112,592	(3)	39,622		(5)	489,540
William S. Nichols, III	73,750		(d)	29,426		(a)	—			381		(4)	103,556
Raimundo Riojas A.(6)	32,769			29,426		(a)	—			273		(4)	62,468
Raimundo Riojas E.(7)	9,231			—			—			108		(4)	9,339
Fred S. Robertson	72,250		(e)	29,426		(a)	—			381		(4)	102,056
Louis A. Waters Jr.	41,500		(f)	29,426		(a)	—			381		(4)	71,307
Roland L. Williams	11,000		(g)	—			—			—			11,000
Janet S. Wong	47,000			29,426		(a)	—			381		(4)	76,806

__________________

(1)The amounts shown in this column include annual retainer and meeting fees for serving on the Company's and the Bank's board of directors and any of their respective committees.

(a)Consists of $59,250 in fees paid for service to the Company and $7,000 in fees paid for service to the Bank.

(b)Consists of $42,000 in fees paid for service to the Company and $18,500 in fees paid for service to the Bank.

(c)Consists of $283,250 received as salary for service as an officer of the Bank during 2021.

(d)Consists of $50,750 in fees paid for service to the Company and $23,000 in fees paid for service to the Bank.

(e)Consists of $54,750 in fees paid for service to the Company and $17,500 in fees paid for service to the Bank.

(f)Consists of $39,500 in fees paid for service to the Company and $2,000 in fees paid for service to the Bank.

(g)Mr. Williams agreed to forego certain compensation including the cash retainer and stock award as a director upon his resignation as an officer and director of the Bank in September 2019.

(2)Represents the aggregate grant date fair value of restricted stock awarded pursuant to the Company's 2019 Stock Awards Plan in the fiscal year ended December 31, 2021, which was computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“ASC Topic 718”).

(a)This director had 758 unvested shares of restricted stock as of December 31, 2021.

(b)Includes 130 shares of restricted stock granted on January 28, 2021, when Mr. Duplantier joined the board. These shares vested on April 1, 2021.

(c)The amount shown reflects the aggregate grant date fair value of an award of 685 shares of restricted stock and 686 performance share units, each granted on March 1, 2021. As of December 31, 2021, Mr. Martinez had 1,468 unvested shares of restricted stock and 716 earned but unvested PSUs. The maximum grant date fair value of the PSUs granted in 2021 was $41,298.

(3)This amount represents the annual incentive bonus awarded to Mr. Martinez as an officer of the Bank under the Company’s Annual Incentive Plan, which was paid to Mr. Martinez in February 2022.

(4)This amount represents dividend payments on unvested restricted stock awards.

(5)This amount consists of $600 paid for not enrolling in Company-provided medical insurance, premiums paid on life insurance and disability policies of $60, $659 in dividends paid on unvested restricted stock, Company matching contributions under the 401(k) plan of $8,497 and a contribution of $29,395 under the Company’s profit sharing plan.

(6)This director joined the board at the 2021 annual meeting.

(7)Mr. Riojas E. did not stand for re-election at the 2021 annual meeting.

All non-employee directors have been and will continue to be reimbursed for their reasonable out-of-pocket travel expenses incurred in attending meetings of our board or any committees thereof. Directors are also entitled to the protection provided by the indemnification provisions in our certificate of formation and bylaws, as well as the articles of association and bylaws of the Bank if a Bank director, and separate indemnification agreements between each director and the Company. Additionally, the Company maintains a directors and officers insurance policy.

CERTAIN CORPORATE GOVERNANCE MATTERS

Code of Business Conduct and Ethics

We have a Code of Business Conduct and Ethics in place that applies to all of our directors, officers and employees. The Code of Business Conduct and Ethics sets forth specific standards of conduct and ethics that we expect all of our directors, officers and employees to follow, including the Company’s Chief Executive Officer and senior financial officers. The Code of Business Conduct and Ethics is available on our website at www.allegiancebank.com under Investor Relations/Corporate Governance/Governance Documents. Any amendments to the Code of Business Conduct and Ethics, or any waivers of requirements thereof, will be disclosed on our website within four days of such amendment or waiver.

Corporate Governance Guidelines

We have adopted Corporate Governance Guidelines to assist the board in the exercise of its fiduciary duties and responsibilities and to serve the best interests of the Company and our shareholders. The Corporate Governance Guidelines are available on our website at www.allegiancebank.com under Investor Relations/Corporate Governance/Governance Documents.

Compensation Committee Interlocks and Insider Participation

None of our executive officers served as (1) a member of a compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board) of another entity, one of whose executive officers served on the Company’s Compensation Committee, (2) a director of another entity, one of whose executive officers served on the Company’s Compensation Committee or (3) a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board) of another entity, one of whose executive officers served as a director of the Company. In addition, none of the members of the Compensation Committee (a) was an officer or employee of the Company or any of its subsidiaries in 2021, (b) was formerly an officer or employee of the Company or any of its subsidiaries or (c) had any relationship that required disclosure under the section titled “Certain Relationships and Related Person Transactions.” During the year ended December 31, 2021, the members of our Compensation Committee were John Beckworth, Jon-Al Duplantier, Matthew H. Hartzell, William S. Nichols, III, Raimundo Riojas A. and Fred Robertson.

Independent Auditors

The Audit Committee has recommended, and the board appointed, Crowe LLP as our independent auditors to audit the consolidated financial statements of the Company for the 2022 fiscal year. Crowe LLP has served as our independent auditors since 2014 and reported on the Company’s consolidated financial statements for the 2014 through 2021 fiscal years.

Fees Paid to Independent Registered Public Accounting Firm

The Audit Committee has reviewed the following audit and non-audit fees billed to the Company by Crowe LLP for 2021 and 2020 for purposes of considering whether such fees are compatible with maintaining the auditor’s independence, and concluded that such fees did not impair Crowe LLP’s independence. The policy of the Audit Committee is to pre-approve all audit and non-audit services performed by Crowe LLP before the services are performed, including all of the services described under "Audit Fees" and "Audit-Related Fees" below.

The Audit Committee has pre-approved all of the services provided by Crowe LLP in accordance with the policies and procedures described in the section titled "—Audit Committee Pre-Approval."


	2021		2020
Audit Fees(1)	$	792,493	$	690,076
Audit-Related Fees(2)	—		12,500
Tax Fees	—		—
All Other Fees(3)	37,787		3,660
Total Fees	$	830,280	$	706,236

__________________

(1)Audit fees reflect the aggregate fees billed for services related to the reviews of our quarterly reports filed on Form 10-Q, the audit of the consolidated financial statements of the Company and other SEC filings.

(2)Audit-related fees reflect fees billed for services related to the review of the Company’s registration statement on Form S-8 and subordinated debt procedures in 2020.

(3)All other fees reflect fees billed for a benchmarking analysis and access to an accounting research database in 2021 and access to an accounting research database in 2020.

Audit Committee Pre-Approval

The Audit Committee’s charter establishes a policy and related procedures regarding the Audit Committee’s authority to approve, in advance, all auditing services (which, if applicable, may include providing comfort letters in connection with securities underwritings), and non-audit services that are otherwise permitted by law (including tax services, if any) that are provided to the Company by its independent auditors (which approval is made after receiving input from the Company’s management, if desired). The Audit Committee may also delegate to one or more of its members the authority to pre-approve auditing services and non-audit services that are otherwise permitted by law, provided that each such preapproval decision is presented to the full Audit Committee at a scheduled meeting. In addition, the Audit Committee has the authority to review and, in its sole discretion, approve in advance the Company’s independent auditors’ annual engagement letter, including the proposed fees contained therein.

EXECUTIVE COMPENSATION AND OTHER MATTERS

Compensation Discussion and Analysis

Overview

This Compensation Discussion and Analysis (“CD&A”) describes the philosophy, components and additional aspects of our 2021 executive compensation program and is intended to be read in conjunction with the tables that immediately follow this section, which provide further compensation information. Our 2021 “named executive officers” were as follows:


Name						Position
Steve F. Retzloff						Chief Executive Officer (“CEO”)
Ramon A. Vitulli, III						President of the Company
Paul P. Egge						Executive Vice President and Chief Financial Officer
Okan I. Akin						Executive Vice President and Chief Risk Officer
Shanna Kuzdzal						Executive Vice President, General Counsel and Secretary

Executive Summary

2021 Select Business Highlights

The Company continued its strong performance in 2021 and was able to achieve these accomplishments, despite challenges caused by the COVID-19 pandemic, by executing on its super-community banking strategy. Management believes that continued growth of loans and deposits, along with focus on operating expenses and maintaining manageable levels of nonperforming assets, is fundamental to the long-term success of the Company as a whole. The chart below summarizes key results.

Company Performance

Metric

2021 Results

2020 Results

Diluted Earnings Per Share

$4.01

$2.22

Deposit Growth

$1.06 billion

$920.4 million

Net Income

$81.6 million

$45.5 million

Net Interest Income Before Provision for Credit Losses

$228.6 million

$202.7 million

Net Interest Margin on a Tax Equivalent Basis

3.90%

4.08%

Noninterest Income

$8.6 million

$8.2 million

Noninterest Expense

$139.6 million

$127.5 million

Efficiency Ratio

58.86%

60.55%

Return on Average Assets

1.24%

0.81%

Return on Average Equity

10.38%

6.22%

Return on Average Tangible Common Equity(1)

14.93%

9.33%

__________________

(1)Return on average tangible common equity is computed by dividing net earnings by average total shareholders’ equity reduced by average goodwill and core deposit intangibles, net of accumulated amortization.

Compensation Philosophy and Objectives

The Company compensates the Company’s named executive officers through a mix of base salary, cash incentive bonuses, restricted stock grants, performance share units and other benefits, including, to a limited extent, perquisites. The Company believes the current mix of these compensation elements and the amounts of each element provide the Company’s named executive officers with compensation that is reasonable and competitive within the Company’s markets, and also appropriately reflects the Company’s performance and the officer’s particular contributions to that performance, and takes into account applicable regulatory guidelines and requirements.

The Compensation Committee’s philosophy is to provide a compensation package that attracts and retains executive talent and encourages and rewards the achievement of our financial and strategic objectives. It is also the Compensation Committee’s practice to provide a mix of cash and equity-based compensation that the committee believes appropriate to align executive interests with the interests of our shareholders to ensure their focus on long-term return to shareholders and consideration of risk management, which is further supported by requiring executive officers to acquire substantial levels of ownership of the Company’s stock.

Good Governance

The Company is committed to sound compensation and governance practices, including the following:

•a clawback policy applicable to all executive officers, which was adopted in 2018;

•stock ownership guidelines established for our executive officers in 2020;

•no excise tax gross-up payments upon a change in control;

•no dividends are accrued or paid on performance share units; and

•no hedging transactions by our executive officers and restrictions on pledging.

Compensation Committee and Management Role in Determining Compensation for the Named Executive Officers

The Compensation Committee has responsibility for overseeing the Company’s executive compensation policies and practices, including establishing annual salaries, annual incentive arrangements, long-term equity-incentive arrangements and all other benefit and compensation programs for the Company’s executive officers, including our named executive officers. The Compensation Committee is solely responsible for setting the compensation of Mr. Retzloff, the Company’s CEO. As for the other named executive officers, the CEO generally makes recommendations to the Compensation Committee considering each named executive officer’s performance, the Company’s performance and other factors. The Compensation Committee then evaluates the recommendations and determines the appropriate amounts of compensation.

In making its decisions, the Compensation Committee considers a number of factors including among other things:

•the Company’s and the Bank’s attainment of net income goals;

•the Company’s operating performance against its past performance and that of the industry;

•total shareholder return;

•overall profitability from year to year; and

•performance of individual named executive officers, the scope of responsibility within the overall organization and the specific contributions made to the Company and the Bank during the course of the year.

The Compensation Committee considers other relevant factors, including involvement in the community that might better position the organization to serve the immediate needs of the Company’s market. The Compensation Committee generally considers most or all of the above criteria but does not generally assign a specific weight to any of these factors in making compensation decisions and may choose certain criteria in one year and others in other years. Except for specific goals set with respect to certain compensation programs described herein, the Compensation Committee makes compensation decisions on a discretionary basis considering such factors and criteria as it deems appropriate from year to year.

Peer Group

The Compensation Committee reviews the compensation of the CEO and the other named executive officers relative to the compensation paid to similarly situated executives at companies that the Company considers to be peer companies. The Compensation Committee does not benchmark the compensation of the named executive officers to a certain percentage or range of compensation within its peer group, but rather believes that the compensation paid to similarly situated executives should be a point of reference for measurement and not the determinative factor for the Company's named executive officers’ compensation. Because the comparative compensation information is just one of the analytical tools that are used in setting named executive officer compensation, the Compensation Committee has discretion in determining the nature and extent of its use. Further, given the limitations associated with comparative pay information for setting individual executive compensation, including the difficulty of assessing and comparing wealth accumulation through equity gains and post-employment amounts, the Compensation Committee may elect not to use the comparative compensation information at all in the course of making compensation decisions.

The Compensation Committee believes that the peer group of companies listed below is representative of the sector in which the Company operates. This group includes public bank holding companies with assets between $2.5 billion and $10 billion as of September 30, 2019, not headquartered in Alaska, California, Hawaii or New York, each located in a top 200 metro area, whose commercial loan portfolio is greater than 50 percent of the total loan portfolio and whose non-interest income was less than 20 percent of total revenue. These companies were chosen because of their similarity in size, location, asset composition and income profile to the Company.

The Company’s peer group for assessing 2021 compensation consisted of the following companies:



•BCB Bancorp Inc.			•Heritage Financial Corp.
•Byline Bancorp Inc.			•HomeTrust Bancshares Inc.
•CBTX, Inc.			•Kearny Financial Corp.
•Century Bancorp Inc.			•Lakeland Bancorp
•ConnectOne Bancorp Inc.			•Mercantile Bank Corp


•CrossFirst Bankshares Inc.			•Meridian Bancorp Inc.
•Enterprise Bancorp Inc.			•Northfield Bancorp Inc.
•Enterprise Financial Services			•Seacoast Banking Corp. of Florida
•Equity Bancshares Inc.			•Southside Bancshares Inc.
•Franklin Financial Network Inc.			•Triumph Bancorp Inc.
•Great Southern Bancorp Inc.			•Veritex Holdings Inc.

2021 Executive Compensation Program

General. Each of our named executive officers is also an officer of the Bank and has substantial responsibilities in connection with the day-to-day operations of the Bank. As a result, each named executive officer devotes a substantial majority of his or her business time to the operations of the Bank, and the compensation received is paid largely to compensate that named executive officer for services to the Bank.

The target pay mix for our CEO and other named executive officers, on average, is shown in the charts below. Target pay mix includes 2021 base salary, 2021 Annual Incentive Plan target and the grant date fair value of equity awards granted in 2021.

Base Salary. The base salaries of our named executive officers have been historically reviewed and set annually by the Compensation Committee as part of the Company’s performance review process as well as upon the promotion of an executive officer to a new position or other change in job responsibility. In establishing base salaries for our named executive officers, the Compensation Committee has relied on external market data obtained from outside sources, including McLagan. In addition to considering the information obtained from such sources, the Compensation Committee has considered:

•each named executive officer’s scope of responsibility;

•the types and amount of the elements of compensation to be paid to each named executive officer;

•our overall financial performance and performance with respect to other aspects to our operations, such as our growth, asset quality, profitability and other matters, including the status of our relationship with regulatory agencies; and

•each named executive officer’s individual performance and contributions to our company-wide performance, including leadership, team work and community service.

For 2021, the base salary for both our CEO and our President remained the same. For the other named executive officers, the annual salary increases for 2021 were 3%, effective as of January 1, 2021. The 3% salary increases for the other named executive officers were granted in order to recognize movement in the external market as well as reward the performance and contribution of each, which is in line with the Company’s practice for its employees.


Name	Title	2020 Base Salary		Increase Percentage	2021 Base Salary
Steven F. Retzloff	CEO	$	540,000	0%	$	540,000
Ramon A. Vitulli, III	President & CEO of the Bank	540,000		0%	540,000
Paul P. Egge	Chief Financial Officer	440,000		3%	453,200
Okan I. Akin	Chief Risk Officer	425,000		3%	437,750
Shanna Kuzdzal	General Counsel	340,000		3%	350,200

Annual Bonuses. Annual incentive bonuses are intended to recognize and reward those named executive officers who contribute meaningfully to our performance for the year. Generally, these annual incentive bonuses are paid in cash no later than the end of February of the year following the year for which the bonus was earned.

Annual Incentive Plan. The Annual Incentive Plan (the “AIP”) was designed to motivate and reward eligible employees by making a portion of their cash compensation dependent on the achievement of certain organizational performance metrics. All officers of the Company and the Bank participate in the AIP. The AIP provides for cash incentive awards determined pursuant to a formulaic plan based on the Company’s achievement of pre-defined financial performance targets for the applicable year and, for the named executive officers, has no subjective or discretionary component. Under the AIP, each of the Company's named executive officers were eligible for a target cash incentive set at 30% of his or her then-current base salary.

The performance metrics and the allocation of the total eligible cash incentive amount for each metric are set annually by the Compensation Committee. In determining the amount of the annual cash incentive for 2021, a minimum, target and maximum performance level was established with respect to four performance metrics. These performance metrics consisted of pre-tax pre-provision return on average assets, return on average tangible common equity, the ratio of non-performing assets (excluding trouble debt restructurings) to total assets and the ratio of net charge-offs to average loans, each subject to adjustment to exclude gains and losses and other non-recurring items. A specific percentage weight of the total eligible cash incentive is allocated to each of these performance metrics as set forth in the table below.

The 2021 AIP used the same performance metrics as the 2020 AIP. The pre-tax pre-provision return on average assets (PTPP ROAA) reflects a widely-used measure of core earnings dependent in part on both effectively producing and managing the balance sheet in terms of the optimization of both loan and deposit growth as well as achieving an efficiency ratio required to drive core operating performance. Increasing the weighting of return on average tangible common equity (ROATCE) as a primary measure of performance is highly correlated with earnings per share and is considered to be well aligned with overall company performance inclusive of the provision for loan losses which is driven by both growth and asset quality. The direct asset quality measures including the period end ratio of non-performing assets to total assets (NPA/Assets) and the ratio of annual net charge-offs to average loans (NCO/Avg. Loans) effectively measure both forward looking asset quality performance (NPA/Assets) and prior period performance (NCO/ Avg. Loans), both of which we believe to be important to the evaluation of company performance.

When the Company's performance reaches the minimum payout level with respect to a particular performance metric, the named executive officer will receive a cash payment based on the weight of the performance metric, achievement of such performance metric and the amount of the individual’s target bonus opportunity.


Performance Metric	Weight	Minimum (0%)	Target (100%)	Maximum (150%)	2021 Achievement	Payment Level
Pre-Tax Pre-Provision Return on Average Assets (PTPP ROAA)(1)	35.00%	1.20%	1.50% to 1.60%	1.70%	1.54%	100.00%
Return on Average Tangible Common Equity (ROATCE)	40.00%	7.00%	10.00% to 12.00%	13.00%	15.46%	150.00%
Ratio of Non-Performing Assets to Total Assets	12.50%	125 bps	75 to 50 bps	40 bps	34 bps	150.00%
Ratio of Net Charge Offs to Average Loans	12.50%	70 bps	30 to 20 bps	10 bps	5 bps	150.00%

__________________

(1)Pre-Tax Pre-Provision Return on Average Assets is computed by dividing pre-tax net income before subtracting funds set aside for the provision for credit losses divided by average assets.

If the Company's performance is less than or equal to the minimum level with respect to a particular performance metric, no incentive compensation is payable for that particular performance metric. Payouts are interpolated on a straight-line basis for achievement for a particular performance metric above the minimum level to the targeted range from 0% to 100%. For achievement for a particular performance metric between the targeted range and maximum level, payouts are interpolated on a straight-line basis between 100% and 150%. For 2021, the cash incentive earned by each eligible named executive officer was 132.5% of the target cash incentive for such named executive officer.


Name	Target Opportunity (as a % of base salary)	Target Opportunity		2021 AIP Paid at 132.5%
Steven F. Retzloff	30%	$	162,000	$	214,650
Ramon A. Vitulli, III	30%	162,000		214,650
Paul P. Egge	30%	135,960		180,147
Okan I. Akin	30%	131,325		174,006
Shanna Kuzdzal	30%	105,060		139,205

Discretionary Bonuses. The Compensation Committee, within its sole discretion, determines whether discretionary bonuses will be paid for any year and the amount of any bonus paid. In determining whether to pay a discretionary bonus to a named executive officer for a given year and the amount of any bonus to be paid, the Compensation Committee considers factors which include the personal performance of the executive officer, including taking on additional and exceptional work activities, and his or her contributions to leadership, team work and community service. In January 2022, based upon the recommendation of the CEO, the Compensation Committee determined to award discretionary bonuses of $15,000 to each of Mr. Egge and Ms. Kuzdzal and $7,500 to Mr. Akin in recognition of such officer’s additional and exceptional performance in 2021.

Long-Term Equity-Based Incentive Compensation. We maintain a long-term equity-based incentive compensation program for all of the officers of the Company and the Bank, which includes our named executive officers, through the 2019 Stock Awards Plan, which was approved by our shareholders at our 2019 annual meeting. The 2019 Stock Awards Plan was established to attract and retain key employees and enable those persons to participate in the long-term success of the Company. We believe that a portion of each named executive officer’s compensation should be tied to the performance of the Company, aligning the officer’s interest with that of our shareholders. Historically, we have granted both restricted stock awards and stock options to officers. In 2019, we began granting performance share units (“PSUs”) as part of our equity compensation program. Our PSUs do not contain dividend equivalent rights.

For 2021, as in 2020, the Compensation Committee determined that the award vehicle mix should be 50% time-based restricted stock awards and 50% PSUs at an aggregate dollar value equal to 50% of current base salary for the CEO and 25% of each other named executive officer’s then-current base salary. The time-based restricted stock awards ratably vest over a four-year period from the date of grant. PSUs are earned subject to certain performance goals being met after the two-year performance period from January 1, 2021 through December 31, 2022 and cliff vest one year later on December 31, 2023 provided the officer is still employed. The average closing price of the Company’s common stock during January 2021 of $36.13 was used to set the number of shares of restricted stock and PSUs awarded on March 1, 2021. In addition to the 1,211 shares of restricted stock that were awarded to Ms. Kuzdzal under the non-equity incentive plan, Ms. Kuzdzal also received a grant of 554 shares of time-based restricted stock that ratably vest over a four-year period from the date of grant in recognition of her excellent performance and goals achieved in lieu of an additional cash bonus. These shares are included in the table below.

The Compensation Committee granted the following restricted stock awards and PSUs to each of our named executive officers under the 2021 long-term equity-based incentive compensation program:


	2021 Long-Term Incentive Target Award
Name	Restricted Stock	PSUs
Steven F. Retzloff	4,483	4,484
Ramon A. Vitulli, III	3,362	3,363
Paul P. Egge	2,195	2,195
Okan I. Akin	1,514	1,514
Shanna Kuzdzal	1,765	1,212

Performance Share Unit Awards

2021 PSUs (Performance Period - January 1, 2021 and ending on December 31, 2022). For the 2021 PSU awards, the percentage of PSUs that vest following the two-year performance period is determined based on two performance metrics: relative total shareholder return and return on average tangible common equity, adjusted to remove the impact of any acquisition or merger-related expenses as well as any related day-one provision for loan losses on acquired loans as required by applicable accounting rules. The Compensation Committee replaced cumulative earnings per share and the ratio of net charge-offs to average loans with ROATCE for 2021 because ROATCE is highly correlated with earnings per share and is considered to be well aligned with overall company performance inclusive of the provision for loan losses which is driven by both growth and asset quality.

Total shareholder return will be calculated as the increase in our stock price (plus shareholder dividends, if any) over the two-year measurement period divided by the beginning stock price as compared with the stock price and dividend performance of the companies on the SNL Small Cap U.S. Bank Index (now known as the S&P U.S. Small Cap Bank Index). Return of average tangible common equity will be calculated by dividing net earnings applicable to common shareholders by tangible common shareholders’ equity. The Compensation Committee will approve adjustments to ROATCE to exclude any acquisition or merger-related expenses, as well as any related day one provision for loan losses on acquired loans under applicable accounting rules.

Performance Metrics

Weight

Minimum

(0%)

Target

(100%)

Maximum

(150%)

Relative Total Shareholder Return

80%

20th percentile

45th to 55th percentile

80th percentile

Return on Average Tangible Common Equity

20%

8.0%

10.0% to 12.0%

14.0%

Fifty percent of the payout occurs for achievement of a particular performance metric at or below the minimum level. Payouts are interpolated on a straight-line basis for achievement for a particular performance metric above the minimum level to the targeted range from 50% to 100%. For achievement of a particular performance metric between the targeted range and maximum level, payouts are interpolated on a straight-line basis between 100% and 150%.

2020 PSUs (Performance Period - January 1, 2020 and ending on December 31, 2021). In light of the unprecedented, unforeseen circumstances as a result of COVID-19, certain of the PSU metrics for the 2020 PSUs had been impacted and, if not adjusted, would devalue the 2020 PSUs. In order that they retain some value to incentivize the performance of the approximately 150 officers of the Company and the Bank who received PSUs, and to ensure the long-term success of the Company’s stock compensation program that serves as a key retention driver, the Compensation Committee revised the following weightings in October 2020, increasing relative total shareholder return from 50% to 80%, reducing cumulative earnings per share from 35% to 15% and reducing the ratio of net charge-offs to average loans from 15% to 5%. The weightings in the chart below reflect the adjusted weightings of the performance metrics. However, the performance metrics and their targets remained as follows:

Performance Metrics

Weight

Minimum

(0%)

Target

(100%)

Maximum

(150%)

Actual

Result ($/%)

Achievement

Relative Total Shareholder Return

80%

20th percentile

45th to 55th percentile

75th percentile

49.1%

100.0%

Cumulative Earnings Per Share

15%

$4.50

$4.95 to $5.25

$5.50

$6.22

150.0%

NCOs/ Avg. Loans

25 bps

15-10 bps

5 bps

12 bps

100.0%

Total

107.5%

No payout occurs for achievement of a particular performance metric at or below the minimum level. Payouts are interpolated on a straight-line basis for achievement for a particular performance metric above the minimum level to the targeted range from 0% to 100%. For achievement of a particular performance metric between the targeted range and maximum level, payouts are interpolated on a straight-line basis between 100% and 150%.

In making the decision to adjust the weightings for the 2020 PSUs, the Compensation Committee considered the actual conditions under which the Company was operating under during 2020, namely the COVID-19 pandemic; the fact that a global pandemic with broad-spread financial impact was not anticipated when the weightings were initially set; and, most importantly, the response both needed and delivered by our officers to generate a successful outcome in terms of managing pandemic-related risks and shareholder returns. The Committee believed increasing the weighting in favor of Relative Total Shareholder Return presented an accessible and quantifiable methodology for determining the degree to which the officers of the Company and the Bank would perform successfully in light of the challenges presented by the pandemic. The response by the officers and leadership produced a notably outsized high volume of participation in the Paycheck Protection Program, which required an all-hands-on-deck effort, long hours including both weekdays and weekends for an extended period followed by extensive, continual customer outreach. These efforts and others produced much needed relief for impacted customers, which in turn benefitted the Bank in terms of payment performance. In addition, a significant volume of new customers were served, which not only assisted the broader community, but also provided the Bank with ongoing future opportunities for market share gains. The fee structure and anticipated fee recognition process made available through the forgiveness phase further provided and continues to provide the Company with revenues that serve as a bridge to a broader economic recovery. The reputational impact of the PPP response is more difficult to quantify, but should translate to greater value for shareholders as the Company is credited for the extraordinary effort. The pandemic impacted the 2020 PSU two-year measurement period, which had its weightings and metrics set prior to the onset of the pandemic. As such, the Compensation Committee concluded that the motivational benefits and appropriate alignment to shareholder interests were best served by adjusting the PSU weightings and metrics for the PSU issuance.

Based on the performance results, the named executive officers earned the 2020 PSUs as follows:


Name	Target PSUs	PSU Achievement	Earned PSUs
Steven F. Retzloff	3,738	107.5%	4,018
Ramon A. Vitulli, III	1,869	107.5%	2,009
Paul P. Egge	1,523	107.5%	1,637
Okan I. Akin	1,471	107.5%	1,581
Shanna Kuzdzal	1,177	107.5%	1,265

Had the weightings for the 2020 PSUs not been adjusted, the PSU achievement percentage would have been 117.5% for all officers, including the named executive officers.

Benefits and Perquisites. Our named executive officers are eligible to participate in the same benefit plans designed for all of our full-time employees, including health, dental, vision, disability and basic group life insurance coverage. We also provide our employees, including our named executive officers, with a 401(k) plan to assist participants in planning for retirement and securing appropriate levels of income during retirement. The purpose of our employee benefit plans is to help attract and retain quality employees, including executives, by offering benefit plans similar to those typically offered by our competitors. The Company also provides Mr. Vitulli with a membership in a club of his choice. The Compensation Committee believes that this benefit is generally consistent with industry practice and provides a platform for Mr. Vitulli to entertain clients and potential clients of the Company and fosters interaction with other community leaders, which is intended to drive business development, and ultimately, Company performance.

401(k) and Profit Sharing Plans. Our 401(k) plan and companion profit sharing plan are designed to provide retirement benefits to all eligible full-time and part-time employees. The 401(k) plan provides employees the opportunity to save for retirement on a tax-favored basis. Our named executive officers, all of whom were eligible to participate in the 401(k) plan during 2021, may elect to participate in the 401(k) plan on the same basis as all other employees. Employees may defer from 1% to 100% of their compensation to the 401(k) plan up to the applicable IRS limit. We match 50% of an employee’s annual contribution to the 401(k) plan up to a total of 3% per annum of the employee’s eligible salary. We make our matching contributions in cash and that contribution is invested according to the employee’s current investment allocation. In addition, upon approval by our board, each of our named executive officers, along with all individuals employed by us at yearend, are eligible to receive a contribution to his or her 401(k) account under our profit sharing plan. In 2021, the profits were allocated based on annual salary and hours worked. Each of our named executive officers received the maximum amount under the profit sharing plan, as may have been limited by IRS regulations.

Deferred Compensation Plan. Certain officers, including all of the named executive officers, are eligible to participate in our deferred compensation plan. We do not contribute or match any funds contributed to the deferred compensation plan. None of our named executive officers participated in the deferred compensation plan in 2021.

Insurance Premiums. We invest in bank-owned life insurance due to its attractive nontaxable return and protection against the loss of our key employees. Amounts included in the Summary Compensation Table represent premiums paid by us on behalf of our named executive officers.

The Company does not maintain any defined benefit plan, actuarial benefit plan or a supplemental executive retirement plan for the Company’s named executive officers or any other employees. Moreover, the Company has no plan, agreement or other arrangement with any of the Company’s named executive officers relating to the payments of any amounts upon the retirement of such named executive officer from employment with the Company.

Employment Agreements and Change in Control and Severance Arrangements with Named Executive Officers

The Company currently does not have employment agreements with any of the Company’s named executive officers, and they are considered employees "at will." We maintain a severance plan under which all of our employees, including our named executive officers, are eligible to receive certain benefits upon a termination of employment that meets the requirements detailed in such plan, and includes as a result of their job being eliminated and who are not offered a comparable position within the organization.

Allegiance Bancshares, Inc. Change in Control Severance Plan

In January 2020 the board approved the Allegiance Bancshares, Inc. Change in Control Severance Plan (the “Plan”) to retain qualified employees, maintain a stable work environment and provide economic security to eligible employees, including our named executive officers, in the event of certain terminations of employment in connection with a change in control. We believe that it is in the best interest of our shareholders to encourage these employees to remain with the Company up to and through the consummation of such strategic acquisition in order to ensure a stable management team through the consummation of such transaction. If an involuntary termination of employment (other than for death, disability or “cause”) or a resignation by the eligible employee for “good reason” occurs three months prior to the consummation of a change in control or within 18 months following such change in control, the named executive officer will be entitled to (a) a payment equal to two times the sum of (i) the named executive officer’s annual base salary and (ii) the named executive officer’s target bonus, (b) a payment equal to a pro-rata portion of the named executive officer’s target bonus for the year in which the termination occurs, and (c) a payment equal to 18 times the Company’s monthly contribution to the cost of medical, dental and vision coverage for the named executive officer and his or her dependents. The named executive officer will also be entitled to outplacement services not to exceed $25,000.

If the payments or benefits to be paid to an named executive officer under the Plan or any other arrangement would trigger the excise tax imposed on “excess parachute payments,” the named executive officer’s payments and benefits will be reduced to the maximum amount that does not trigger the excise tax unless the named executive officer would be better off (on an after-tax basis) if he or she received all payments and benefits and paid all excise and income tax.

Treatment of Equity Awards upon a Change in Control

Options and Restricted Stock Awards. Any options and restricted stock awards granted to the officers of the Company and the Bank, including our named executive officers, provide for full acceleration of vesting upon a change in control.

Performance Share Units. Under the terms of the PSUs applicable to all participants, the treatment of the PSU depends on the date of the change in control as follows:

•if the change in control occurs prior to the first anniversary of the grant date, any unvested PSUs will be automatically forfeited upon the change in control;

•if the change in control occurs more than one year but less than 18 months after the grant date, any unvested PSUs will vest as of the date of the change in control as to a pro rata portion of the amount that would have been earned had the performance period ended on the date of the change in control but only up to the target amount;

•if the change in control occurs 18 months after the grant date and up to the last day of the performance period, any unvested PSUs will vest as of the date of the change in control as to a pro rata portion of the amount that would have been earned had the performance period ended on the date of the change in control; and

•if the change in control occurs during the one-year period following the end of the performance period, the PSUs will vest in full as to the amount earned.

Compensation Policies and Practices and Risk Management

We do not believe any risks arise from our compensation policies and practices for our executive officers and other employees that are reasonably likely to have a material adverse effect on our operations, results of operations or financial condition.

Stock Ownership Guidelines

In January 2020, our board adopted a stock ownership and retention policy applicable to all executive officers subject to the reporting and other requirements of Section 16 of the Securities Exchange Act of 1934, as amended (“Section 16 Officers”) and directors.

Within five years of the later of appointment or the date the policy was adopted, Section 16 Officers, which include all of the named executive officers, are required to achieve ownership of a defined market value of Company common stock as follows:

•five times annual base salary for the Chief Executive Officer; and

•two times annual base salary for the other Section 16 Officers.

Under this policy, directors are expected to own shares with a value greater than five times their annual retainer for serving on the board. As of February 28, 2022, all Section 16 Officers and directors either met the guidelines or were on track to meet the ownership guidelines.

In calculating equity ownership for purposes of this requirement, we include all shares beneficially owned by an individual, such as shares owned by an individual in the Company’s benefit plans (e.g., 401(k)), shares of restricted stock and shares with respect to which an individual has voting or investment power. Shares underlying unexercised stock options, unearned performance share units and pledged shares are excluded when determining ownership for these purposes.

Executive officers are expected to hold 100% of any net shares received through option exercises or restricted stock vestings until the ownership guidelines are achieved. Once such officer achieves the ownership requirement, he or she is no longer restricted by this holding requirement, provided his or her total stock ownership level does not fall below the ownership guidelines.

Clawback Policy

In January 2018, our board adopted an executive compensation clawback policy applicable to all executive officers of the Company. The clawback policy provides that our board may direct the Company to recover some, all or none of certain compensation received by officers of the Company in the event that the board concludes (utilizing the process set forth in the policy) that the Company is required to prepare a material accounting restatement due to noncompliance of the Company with any financial reporting requirement under the U.S. securities laws, and such noncompliance is the result of misconduct. Compensation including cash bonuses and other incentive compensation the amount, payment, earning and/or vesting of which is calculated based in whole or in part on the application of performance measures is covered by the clawback policy.

Prohibition on Hedging and Restrictions on Pledging

Executive officers, including our named executive officers, are required to receive pre-clearance approval from two members of the Insider Trading Team, comprised of the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Risk Officer and the General Counsel, prior to entering into any transactions in our securities, including purchases, sales and option exercises. Trading is permitted only during open trading windows. Employees who are subject to trading restrictions, including our named executive officers, may enter into a trading plan under Rule 10b5-1 under the Exchange Act. These trading plans may be entered into only during an open trading period and must be approved in advance by the General Counsel. Trading plans are required to include a 15-day waiting period. Executive officers are prohibited from entering into hedging, short sale and derivative transactions involving our securities or that are designed to offset any decrease in the market value of our securities and any pledge of our securities as collateral for a loan may only be made if the value of the assets, including the securities, securing the loan is at least 250% of the outstanding loan balance at all times. Any pledge of securities must be pre-approved by the General Counsel, certified to on an annual basis and the officer must immediately report any failure to comply with the 250% collateral of loan amount requirement and provide a written plan and undertaking to bring the arrangement into compliance with the insider trading policy within 90 days.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with the management of the Company. Based on this review and discussion, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement.

Compensation Committee:

Fred S. Robertson (Chairperson)

John B. Beckworth

Jon-Al Duplantier

Matthew H. Hartzell

William S. (Nick) Nichols, III

Raimundo Riojas A.

EXECUTIVE COMPENSATION PAYMENTS AND AWARDS

Summary Compensation Table

The following table sets forth information regarding the compensation paid to each of our named executive officers for the fiscal years indicated. The title shown for each named executive officer reflects his or her position as of the last day of 2021. Except as set forth in the notes to the table, all cash compensation for each of our named executive officers was paid by the Bank.


Name and Position	Year	Salary(1)		Bonus(2)		Stock Awards(3)			Non-equity Incentive Plan Compensation(4)		All Other Compensation(5)			Total
Steven F. Retzloff	2021	$	540,000	$	—	$	289,143	(a)	$	214,650	$	42,536	(a)	$	1,086,329
Chief Executive Officer	2020	540,000		—		200,221		(a)	158,711		28,153			927,085
	2019	540,000		—		39,606			44,755		30,173			654,534

Ramon A. Vitulli, III	2021	540,000		—		216,848		(b)	214,650		50,116		(b)	1,021,614
President	2020	540,000		—		116,716		(b)	158,711		35,096			850,523
	2019	375,000		—		178,879			62,159		35,859			651,897

Paul P. Egge	2021	453,200		15,000		141,560		(c)	180,147		42,958		(c)	832,865
Executive Vice President and Chief Financial Officer	2020	440,000		—		97,603		(c)	129,320		31,417			698,340
	2019	350,000		20,000		85,551			58,015		31,298			544,864

Okan I. Akin	2021	437,750		7,500		97,641		(d)	174,006		43,957		(d)	760,854
Executive Vice President and Chief Risk Officer	2020	425,000		—		94,946		(d)	124,912		30,861			675,719
	2019	350,000		10,000		162,741			58,015		31,887			612,643
Shanna Kuzdzal	2021	350,200		15,000		99,593		(e)	139,205		41,383		(e)	645,381
Executive Vice President, General Counsel & Secretary	2020	340,000		—		76,257		(e)	99,929		31,043			547,229
	2019	285,000		40,000		69,688			47,241		31,286			473,215

(1)The amounts shown in this column represent salaries earned during the fiscal year shown.

(2)For 2021, the amount shown was awarded as a discretionary cash bonus paid on February 28, 2022 for such officer’s additional and exceptional personal performance in 2021. For 2019, the amount shown was awarded as a discretionary cash bonus paid on January 31, 2020 for such officer’s additional and exceptional personal performance during 2019.

(3)Represents the aggregate grant date fair value of restricted stock and PSUs awarded pursuant to the Company's 2019 Stock Awards Plan in the fiscal year shown, which was computed in accordance with ASC Topic 718 with the assumptions described in Note 15 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The grant date fair value of restricted stock awards is calculated based on the closing market price of our common stock on the grant date. The grant date fair value of the PSUs is based on the probable outcome of the applicable performance conditions and is calculated at target based on a combination of the closing market price of our common stock on the grant date and a Monte Carlo simulated fair value in accordance with ASC 718. The maximum grant date fair value of the 2021 PSUs based on the original grant date fair value was (a) $173,141 for Mr. Retzloff, (b) $129,855 for Mr. Vitulli, (c) $84,756 for Mr. Egge, (d) $58,460 for Mr. Akin and (e) $46,799 for Ms. Kuzdzal. The maximum grant date fair value of the 2020 PSUs based on the original grant date fair value was (a) $125,400 for Mr. Retzloff, (b) $62,350 for Mr. Vitulli, (c) $50,807 for Mr. Egge, (d) $49,073 for Mr. Akin and (e) $39,265 for Ms. Kuzdzal. As described in the “Long-Term Equity-Based Incentive Compensation” section above, the PSUs granted in 2019 and 2020 were modified on October 23, 2020. In accordance with applicable SEC rules, the amount reported in the “Stock Awards” column also includes the incremental fair value of these modified awards of (a) $33,510 for Mr. Retzloff, (b) $33,372 for Mr. Vitulli, (c) $29,693 for Mr. Egge, (d) $29,354 for Mr. Akin and (e) $23,779 for Ms. Kuzdzal, computed as of the modification date in accordance with ASC Topic 718, although no additional PSUs were granted on the modification date. The maximum grant date fair value of the 2020 PSUs based on the modification grant date fair value was (a) $161,946 for Mr. Retzloff, (b) $53,984 for Mr. Vitulli, (c) $65,982 for Mr. Egge, (d) $63,731 for Mr. Akin and (e) $50,994 for Ms. Kuzdzal. The maximum grant date fair value of the 2019 PSUs based on the modification grant date fair value was (a) $43,515 for Mr. Retzloff, (b) $100,817 for Mr. Vitulli, (c) $94,041 for Mr. Egge, (d) $94,041 for Mr. Akin and (e) $76,634 for Ms. Kuzdzal.

(4)The amounts in this column represent the annual incentive bonus awarded to the named executive officer under the Company’s Annual Incentive Plan, which was paid to the officer in cash no later than the end of February of the year following the year for which the bonus was earned.

(5)The amounts shown in this column represent the aggregate incremental cost to the Company of all perquisites and personal benefits provided to the named executive officers as follows:

(a)For Mr. Retzloff, the 2021 amount includes premiums paid on life insurance and disability policies of $594, Company matching contributions under the 401(k) plan of $6,713, a contribution of $1,500 to a health savings account, $3,224 in dividend payments on unvested restricted stock and a contribution of $30,096 under the Company’s profit sharing plan.

(b)For Mr. Vitulli, the 2021 amount includes club membership dues of $10,488, premiums paid on life insurance and disability policies of $594, Company matching contributions under the 401(k) plan of $900, a contribution of $1,500 to a health savings account, $2,967 in dividend payments on unvested restricted stock and a contribution of $30,096 under the Company’s profit sharing plan.

(c)For Mr. Egge, the 2021 amount includes premiums paid on life insurance and disability policies of $594, Company matching contributions under the 401(k) plan of $8,700, a contribution of $1,500 to a health savings account, $1,714 in dividend payments on unvested restricted stock and a contribution of $29,800 under the Company’s profit sharing plan.

(d)For Mr. Akin, the 2021 amount includes premiums paid on life insurance and disability policies of $594, Company matching contributions under the 401(k) plan of $8,700, a contribution of $1,500 to a health savings account, $2,046 in dividend payments on unvested restricted stock and a contribution of $29,800 under the Company’s profit sharing plan.

(e)For Ms. Kuzdzal, the 2021 amount includes premiums paid on life insurance and disability policies of $594, Company matching contributions under the 401(k) plan of $8,700, $1,639 in dividend payments on unvested restricted stock and a contribution of $29,800 under the Company’s profit sharing plan.

Description of Plan-Based Awards

Under the Company’s Annual Incentive Plan, each of the Company's named executive officers were eligible for a target cash incentive set at 30% of his or her then-current base salary. The Compensation Committee established four weighted performance measures for 2021 under the Annual Incentive Plan. The performance measures and weightings for 2021 were: pre-tax pre-provision return on average assets (35%), return on average tangible common equity (40%), the ratio of non-performing assets (excluding trouble debt restructurings) to total assets (12.5%) and the ratio of net charge-offs to average loans (12.5%), each subject to adjustment to exclude gains and losses and other non-recurring items. When the Company's performance reaches the minimum payout level with respect to a performance metric, the named executive officer will receive a cash payment based on the weight of the performance metric, achievement of such performance metric and the amount of the individual’s target bonus opportunity. The cash incentive earned by each eligible named executive officer was 132.5% of the target cash incentive for such named executive officer and each named executive officer’s payout is set forth above in the Summary Compensation Table under the heading “Non-equity Incentive Plan Compensation”. The Compensation Discussion and Analysis describes in greater detail the terms and payouts under the 2021 Annual Incentive Plan.

On March 1, 2021, the Company granted restricted stock awards and PSUs to its named executive officers, all of which were made under the 2019 Stock Awards Plan. For 2021, the Compensation Committee determined that the award vehicle mix should be 50% restricted stock awards and 50% PSUs at an aggregate dollar value equal to 50% of current base salary for the CEO and 25% of current base salary for each of the other named executive officers.

Grants of Plan-Based Awards for 2021

The following two tables set forth information relating to grants of plan-based awards to the named executive officers during 2021 and the stock options, restricted stock and PSUs held by the named executive officers as of December 31, 2021. All non-equity incentive plan awards were made under the Company’s Annual Incentive Plan as it was in effect during 2021, and all awards of stock options, restricted stock and PSUs were made under the 2019 Stock Awards Plan.


			Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)				Estimated Future Payouts Under Equity Incentive Plan Awards (2)		All Other Stock Awards: Number of Shares of Stock(3)	Grant Date Fair Value Of Stock and Option Awards
Name	Award Type	Grant Date	Target		Maximum		Target	Maximum
Steven F. Retzloff	Annual Incentive		$	162,000	$	243,000	—	—	—	$	—
	Restricted Stock	3/1/2021	—		—		—	—	4,483	173,716		(4)
	Performance Share Units	3/1/2021	—		—		4,484	6,726	—	289,143		(5)
Ramon A. Vitulli, III	Annual Incentive		162,000		243,000		—	—	—	—
	Restricted Stock	3/1/2021	—		—		—	—	3,362	130,278		(4)
	Performance Share Units	3/1/2021	—		—		3,363	5,045	—	216,848		(5)
Paul P. Egge	Annual Incentive		135,960		203,940		—	—	—	—
	Restricted Stock	3/1/2021	—		—		—	—	2,195	85,056		(4)
	Performance Share Units	3/1/2021	—		—		2,195	3,293	—	141,560		(5)
Okan I. Akin	Annual Incentive		131,325		196,988		—	—	—	—
	Restricted Stock	3/1/2021	—		—		—	—	1,514	58,668		(4)
	Performance Share Units	3/1/2021	—		—		1,514	2,271	—	97,641

SEC Form DEF 14A filed by Allegiance Bancshares Inc.