ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of Business Acquisitions, by Acquisition

The table below summarizes the ownership of the combined company following the Merger, for each shareholder group, using shares of CBTX and Allegiance common stock outstanding at September 30, 2022 and Allegiance’s closing price on September 30, 2022 (shares in thousands).

	Stellar Bancorp, Inc. Ownership
	Number of CBTX Outstanding Shares	Percentage Ownership
CBTX shareholders	24,015	46.0	%
Allegiance shareholders	28,137	54.0	%
Total	52,152	100.0	%

The table below summarizes the hypothetical number of shares as of September 30, 2022 that Allegiance would have to issue to give CBTX owners the same percentage ownership in the combined company (shares in thousands).

	Hypothetical Allegiance Ownership
	Number of Allegiance Outstanding Shares	Percentage Ownership
CBTX shareholders	16,931	46.0	%
Allegiance shareholders	19,837	54.0	%
Total	36,768	100.0	%

The purchase price is calculated based on the number of hypothetical shares of Allegiance common stock issued to CBTX shareholders multiplied by the share price as demonstrated in the table below (shares and dollars in thousands).

Number of hypothetical Allegiance shares issued to CBTX shareholders	16,931
Allegiance market price per share as of September 30, 2022	$	41.63
Purchase price determination of hypothetical Allegiance shares issued to CBTX shareholders	$	704,837
Value of CBTX stock options hypothetically converted to options to acquire shares of Allegiance common stock	1,806
Purchase price consideration	$	706,643

Schedule of Purchase Price Allocation

The following table details the preliminary purchase price allocation of merger consideration to the valuations of the identifiable tangible and intangible assets acquired and liabilities assumed from CBTX as of October 1, 2022 (in thousands).

Purchase price consideration	$	706,643
Fair value of assets acquired:
Cash and due from banks	370,448
Available for sale securities	513,248
Loans held for investment, less allowance for credit losses on PCD loans	2,959,572
Premises and equipment, net	74,992
Core deposit intangible	138,150
Other intangible	329
Other assets	127,971
Total assets acquired	4,184,710
Fair value of liabilities assumed:
Deposits	3,723,774
Other liabilities	27,911
Total liabilities assumed	3,751,685
Fair value of net identifiable assets	433,025
Goodwill resulting from the merger	$	273,618

Supplemental disclosures of cash flow information related to investing and financing activities regarding the Merger are as follows for the year ended December 31, 2022 (in thousands):

Fair value of tangible assets acquired	$	4,046,231
Goodwill, core deposit intangible and other intangible assets acquired	412,097
Liabilities assumed	3,751,685
Purchase price consideration	706,643

Financing Receivable, Loans Acquired

The noncredit discount or premium, after the adjustment for the allowance for credit losses, shall be accreted to interest income using the interest method based on the effective interest rate determined after the adjustment for credit losses at the adoption date. Information regarding loans acquired as of October 1, 2022 are as follows (in thousands):

PCD Loans:
Unpaid principal balance	$	71,232
Noncredit discount at acquisition	(9,290)
Unpaid principal balance, net	61,942
Allowance for credit losses on loans at acquisition	(7,558)
Fair value at acquisition	$	54,384
Non-PCD Loans:
Unpaid principal balance	$	3,062,038
Discount at acquisition	(156,850)
Fair value at acquisition	2,905,188
Total fair value at acquisition	$	2,959,572

Schedule of Pro Forma Information

The pro forma information does not necessarily reflect the results of operations that would have occurred had Allegiance merged with CBTX at the beginning of 2020.

	Years Ended December 31,
	2022		2021		2020
	(Dollars in thousands, except per share data)
Net interest income	$	423,833	$	387,212	$	363,770
Noninterest income	32,678		24,826		22,937
Net income	121,367		124,357		52,112
Earnings per share:
Basic	$	2.30	$	2.35	$	0.97
Diluted	2.29		2.35		0.97