Memories are thought to be stored in neural ensembles known as engrams that are specifically reactivated during memory recall. According to recent studies, memory engrams of two events that happened close in time tend to overlap in the hippocampus and the amygdala, and this overlap has been shown to support memory linking. It has been hypothesised that these overlaps arise from the mechanisms that regulate memory allocation itself, involving neural excitability, but the exact process remains unclear. Indeed, most theoretical studies focus on synaptic plasticity and little is known about the role of intrinsic plasticity, which could be mediated by neural excitability and serve as a complementary mechanism for forming memory engrams. Here, we developed a rate-based model that includes neural excitability as a variable threshold of the firing rate input-output function. We obtained overlapping memory engrams for contexts that are presented close in time, consistent with experimental studies. Moreover, we showed that increasing the initial excitability of a subset of neurons just before presenting a context biases the memory allocation to these neurons. We then explored the role of global inhibition as a way of controlling competition between neurons from two ensembles. These results have identified the possible mechanisms underlying the role of intrinsic excitability in memory allocation and linking, and now allow for predictions regarding the dynamics of memory engrams.