WICHITA, Kan., Oct. 19, 2023 (GLOBE NEWSWIRE) — Equity Bancshares, Inc. (NASDAQ: EQBK), (“Equity”, “the Company”, “we”, “us”, “our”), the Wichita-based holding company of Equity Bank, reported net income of $11.8 million and $0.80 earnings per diluted share for the quarter ended September 30, 2023. Equity’s results occurred as the Company completed its acquisition of American State Bancshares, Inc. on October 1, 2023.
“As the founder of Equity Bank, our results this quarter are particularly satisfying, as we celebrate continued loan growth, excellent earnings and our first cash stock dividend while simultaneously closing the largest acquisition in our history. I am grateful to our loyal employees and stockholders as we continue to grow and improve Equity Bank,” said Brad S. Elliott, Chairman and CEO of Equity.
“I’m pleased with the growth of the Equity Bank brand and the hard work and collaboration of our team members throughout our regions, including our bank employees, lenders, and operations professionals who placed the customer first and executed with open doors, expertise, and availability,” said Mr. Elliott. “We’ve successfully integrated American State Bank & Trust Company into our platform while continuing to provide momentum, support and expertise to our customers throughout our franchise.”
Equity customers successfully had $175.7 million of Paycheck Protection Program (“PPP”) loans forgiven during the quarter, resulting in the recognition of fee income totaling $7.7 million in the three-month period ended September 30, 2023. At September 30, 2023, the total unrecognized fee income associated with PPP loans was $3.0 million.
“Our entrepreneurial culture drives the efficiency of our merger process, assists in building a solid community banking network that is responsive to a diverse customer base and excels at adding core deposits and new households in a changing environment. Our mission as a community bank is to continue to prioritize local customers, local service, and bankers willing to go above and beyond. As we continue to grow, expand and deliver, our focus will drive value for our shareholders,” said Mr. Elliott.
Notable Items:
- Diluted earnings per share of $0.80, adjusted to reflect core operating results, was $0.96 per diluted share. The adjustments to earnings were comprised of the exclusion of merger expenses of $4.0 million, non-accrual interest income of $1.4 million, bank-owned life insurance death benefit of $486 thousand and additional reserving for repurchase obligations associated with the Company’s Federal Deposit Insurance Corporation (“FDIC”) assisted transaction of $771 thousand.
- Linked quarter service fee revenue, including deposit services, mortgage banking, trust and wealth and insurance services increased to $6.7 million from $6.4 million, or 3.7%.
- The Company authorized a second stock repurchase program in the third quarter of 2020 totaling 800,000 shares. During the quarter ended September 30, 2023, the Company repurchased 57,239 shares at a weighted average cost of $30.64 per share, totaling $1.8 million. At the end of the quarter, capacity of 123,448 shares remained under the current repurchase program. The Board authorized the repurchase of up to an additional 1,000,000 shares of Equity’s outstanding common stock, beginning October 29, 2023, and concluding October 28, 2023, subject to non-objection by the Company’s primary regulators.
- The Company announced and paid its first common stock dividend of $0.08 per share to shareholders of record as of September 30, 2023.
Equity’s Balance Sheet Highlights:
- During the quarter total loans decreased from $2.82 billion to $2.69 billion, including a reduction in PPP assets of $175.7 million. Excluding the impact of PPP, organic growth linked quarter was $41.8 million, or 7.1% annualized.
- Total deposits of $3.66 billion at September 30, 2023, as compared to $3.69 billion at June 30, 2023. Checking, savings and money market accounts were $3.08 billion at September 30, 2023, relative to $3.03 billion at June 30, 2023. As compared to December 31, 2020, the Bank has increased non-interest-bearing deposits by $192.8 million, or 24.4%.
- As excess liquidity continues to impact the operating environment at quarter end, securities and interest-earning cash and cash equivalents comprise 31.4% of average earnings assets, up from 28.0% at the end of the linked quarter and 25.0% at the end of the comparable quarter in the previous year.
Financial Results for the Quarter Ended September 30, 2023
Net income allocable to common stockholders was $11.8 million, or $0.80 per diluted share, for the three months ended September 30, 2023, as compared to $15.2 million, or $1.03 per diluted share, for the three months ended June 30, 2023, a decrease of $3.4 million. This third quarter decrease was attributable to an increase in non-interest expense of $4.9 million, an increase in provision for credit losses of $2.7 million and a decrease of $1.3 million in non-interest income, partially offset by an increase in net interest income $4.3 million and a decrease in provision for income taxes of $1.1 million.
Net Interest Income
Net interest income was $39.0 million for the three months ended September 30, 2023, as compared to $34.6 million for the three months ended June 30, 2023, an increase of $4.3 million, or 12.6%. The increase in net interest income was primarily driven by an increase in loan fees, due to the forgiveness of PPP assets, of $2.0 million for the quarter ended September 30, 2023, compared to the quarter ended June 30, 2023. The yield on interest-earning assets increased 32-basis points to 4.20% during the quarter ended September 30, 2023, as compared to 3.88% for the quarter ended June 30, 2023. The cost of interest-bearing deposits declined by 3-basis points to 0.28% for the three months ended September 30, 2023, from 0.31% in the previous quarter.
Provision for Credit Losses
During the three months ended September 30, 2023, there was a provision of $1.1 million in the allowance for credit losses recognized through the provision for credit losses as compared to a net release of $1.7 million of provision for credit losses for the three months ended June 30, 2023. The comparative increase was primarily driven by an increase in reserves on specifically assessed assets which was partially offset by improving trends in the Company’s loss experience and moderating economic impacts. For the three months ended September 30, 2023, we had net charge-offs of $129 thousand as compared to $567 thousand for the three months ended June 30, 2023.
Non-Interest Income
Total non-interest income was $7.8 million for the three months ended September 30, 2023, as compared to $9.1 million for the three months ended June 30, 2023, or a decline of 14.0% quarter over quarter. Other non-interest income was $546 thousand, a decrease of $1.5 million, or 73.6%, from the quarter ended June 30, 2023. The decrease in other non-interest income was primarily due to the accounting for potential repurchase obligations associated with assets previously purchased through a FDIC assisted transaction. In the second quarter, the Company trued up the guarantee on a number of assets resulting in income recognition of $917 thousand. In the third quarter, two unrelated assets were identified to have experienced deterioration requiring the recognition of a reserve, resulting in $771 thousand in expense. The net change in these inputs account for the change in the line item.
During the quarter, service fee revenue, including deposit services, mortgage banking, trust and wealth management, credit cards and insurance increased to $6.7 million from $6.4 million during the second quarter. The growth was driven by increasing transaction activity and insurance commissions and fees.
Non-Interest Expense
Total non-interest expense for the quarter ended September 30, 2023, was $30.7 million as compared to $25.8 million for the quarter ended June 30, 2023. The $4.9 million change is primarily attributed to increases of $3.6 million in merger expenses, $819 thousand in salaries and employee benefits, driven by a comparative reduction in the deferral of cost associated with loan originations, and $372 thousand loss on debt extinguishment, related to the repayment of fixed-rate term advances with Federal Home Loan Bank that were acquired through a prior merger.
Asset Quality
As of September 30, 2023, Equity’s allowance for credit losses to total loans was 2.0%, as compared to 1.8% at June 30, 2023. Nonperforming assets were $74.3 million as of September 30, 2023, or 1.7% of total assets, compared to $66.7 million at June 30, 2023, or 1.6% of total assets. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $112.4 million, or 24.3% of regulatory capital, up from $103.5 million, or 23.2% of regulatory capital as of June 30, 2023.
During the quarter non-performing assets increased by $7.5 million due to the transition of one significant relationship to non-accrual. The Company provided $1.1 million to the allowance for credit losses, comprised of an increase in specific reserves, primarily driven by the migration of this asset to non-accrual, partially offset by improving historical loss performance and the continued moderation of economic conditions following the height of the pandemic.
Regulatory Capital
The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.4%, the total capital to risk-weighted assets was 16.6% and the total leverage ratio was 9.0% at September 30, 2023. At December 31, 2020, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 12.8%, the total capital to risk-weighted assets ratio was 17.4% and the total leverage ratio was 9.3%.
The Company’s subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.5%, a ratio of total capital to risk-weighted assets of 15.8% and a total leverage ratio of 10.1% at September 30, 2023. At December 31, 2020, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 14.5%, the ratio of total capital to risk-weighted assets was 15.7% and the total leverage ratio was 10.1%.
Non-GAAP Financial Measures
In addition to evaluating the Company’s results of operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures that are intended to provide the reader with additional perspectives on operating results, financial condition and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company’s GAAP financial information.
The efficiency ratio is used as a common measure by banks as a comparable metric to understand the Company’s expense structure relative to its total revenue; in other words, for every dollar of total revenue recognized, how much of that dollar is expended. To improve the comparability of the ratio to our peers, non-core items are excluded. To improve transparency and acknowledging that banks are not consistent in their definition of the efficiency ratio, we include our calculation of this non-GAAP measure.
Return on average assets before income tax provision, provision for loan losses and goodwill impairment is a measure that the Company uses to understand fundamental operating performance before these expenses. Used as a ratio relative to average assets, we believe it demonstrates the “core” performance and can be viewed as an alternative measure of how efficiently the Company services its asset base. Used as a ratio relative to average equity, it can function as an alternative measure of the Company’s earnings performance in relationship to its equity.
Tangible common equity and related measures are non-GAAP financial measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These financial measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Return on average tangible common equity is used by management and readers of our financial statements to understand how efficiently the Company is deploying its common equity. Companies that are able to demonstrate more efficient use of common equity are more likely to be viewed favorably by current and prospective investors.
The Company believes that disclosing these non-GAAP financial measures is both useful internally and is expected by our investors and analysts in order to understand the overall performance of the Company. Other companies may calculate and define their non-GAAP financial measures and supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in Table 8 in the following press release tables.
Conference Call and Webcast
Equity Chairman and Chief Executive Officer, Brad Elliott, and Executive Vice President and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss the 2023 third quarter results on Wednesday, October 20, 2023, at 10:00 a.m. eastern time, 9:00 a.m. central time.
Investors, news media and other participants should register for the call or audio webcast at investor.equitybank.com. On Wednesday, October 20, 2023, participants may also dial into the call toll-free at (844) 534-7311 from anywhere in the U.S. or (574) 990-1419 internationally, using conference ID no. 7698604.
Participants are encouraged to dial into the call or access the webcast approximately 10 minutes prior to the start time. Presentation slides to pair with the call or webcast will be posted one hour prior to the call at investor.equitybank.com.
A replay of the call and webcast will be available two hours following the close of the call until October 27, 2023, accessible at (855) 859-2056 with conference ID no. 7698604 at investor.equitybank.com.
About Equity Bancshares, Inc.
Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions, including commercial loans, consumer banking, mortgage loans, trust and wealth management services and treasury management services, while delivering the high-quality, relationship-based customer service of a community bank. Equity’s common stock is traded on the NASDAQ Global Select Market under the symbol “EQBK.” Learn more at www.equitybank.com.
Special Note Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of Equity’s management with respect to, among other things, future events and Equity’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity’s control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from Equity’s expectations include COVID-19 related impacts; competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses; and similar variables. The foregoing list of factors is not exhaustive.
For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Equity’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2023, and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity’s behalf may issue.
Investor Contact:
Chris Navratil
SVP, Finance
Equity Bancshares, Inc.
(316) 612-6014
[email protected]
Media Contact:
John J. Hanley
SVP, Senior Director of Marketing
Equity Bancshares, Inc.
(913) 583-8004
[email protected]
Unaudited Financial Tables
- Table 1. Consolidated Statements of Income
- Table 2. Quarterly Consolidated Statements of Income
- Table 3. Consolidated Balance Sheets
- Table 4. Selected Financial Highlights
- Table 5. Year-To-Date Net Interest Income Analysis
- Table 6. Quarter-To-Date Net Interest Income Analysis
- Table 7. Quarter-Over-Quarter Net Interest Income Analysis
- Table 8. Non-GAAP Financial Measures
TABLE 1. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
| Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Interest and dividend income | ||||||||||||||||
| Loans, including fees | $ | 37,581 | $ | 32,278 | $ | 102,392 | $ | 99,281 | ||||||||
| Securities, taxable | 3,920 | 3,476 | 11,242 | 12,113 | ||||||||||||
| Securities, nontaxable | 655 | 923 | 2,096 | 2,769 | ||||||||||||
| Federal funds sold and other | 290 | 405 | 846 | 1,409 | ||||||||||||
| Total interest and dividend income | 42,446 | 37,082 | 116,576 | 115,572 | ||||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 1,881 | 3,064 | 6,316 | 13,827 | ||||||||||||
| Federal funds purchased and retail repurchase agreements | 24 | 25 | 72 | 80 | ||||||||||||
| Federal Home Loan Bank advances | 10 | 471 | 155 | 2,198 | ||||||||||||
| Federal Reserve Bank discount window | — | — | — | 6 | ||||||||||||
| Bank stock loan | — | — | — | 415 | ||||||||||||
| Subordinated debt | 1,556 | 1,415 | 4,669 | 1,953 | ||||||||||||
| Total interest expense | 3,471 | 4,975 | 11,212 | 18,479 | ||||||||||||
| Net interest income | 38,975 | 32,107 | 105,364 | 97,093 | ||||||||||||
| Provision (reversal) for credit losses | 1,058 | 815 | (6,355 | ) | 23,255 | |||||||||||
| Net interest income after provision (reversal) for credit losses | 37,917 | 31,292 | 111,719 | 73,838 | ||||||||||||
| Non-interest income | ||||||||||||||||
| Service charges and fees | 2,360 | 1,706 | 6,125 | 5,097 | ||||||||||||
| Debit card income | 2,574 | 2,491 | 7,603 | 6,735 | ||||||||||||
| Mortgage banking | 801 | 877 | 2,584 | 2,298 | ||||||||||||
| Increase in value of bank-owned life insurance | 1,169 | 489 | 2,446 | 1,452 | ||||||||||||
| Net gain on acquisition | — | — | 585 | — | ||||||||||||
| Net gains (losses) from securities transactions | 381 | — | 398 | 12 | ||||||||||||
| Other | 546 | 922 | 3,902 | 1,929 | ||||||||||||
| Total non-interest income | 7,831 | 6,485 | 23,643 | 17,523 | ||||||||||||
| Non-interest expense | ||||||||||||||||
| Salaries and employee benefits | 13,588 | 13,877 | 39,079 | 40,076 | ||||||||||||
| Net occupancy and equipment | 2,475 | 2,224 | 7,170 | 6,578 | ||||||||||||
| Data processing | 3,257 | 2,817 | 9,394 | 8,243 | ||||||||||||
| Professional fees | 1,076 | 877 | 3,148 | 3,187 | ||||||||||||
| Advertising and business development | 760 | 598 | 2,241 | 1,697 | ||||||||||||
| Telecommunications | 439 | 486 | 1,531 | 1,363 | ||||||||||||
| FDIC insurance | 465 | 360 | 1,305 | 1,291 | ||||||||||||
| Courier and postage | 344 | 366 | 1,040 | 1,103 | ||||||||||||
| Free nationwide ATM cost | 519 | 439 | 1,504 | 1,186 | ||||||||||||
| Amortization of core deposit intangibles | 1,030 | 1,030 | 3,094 | 2,806 | ||||||||||||
| Loan expense | 207 | 107 | 626 | 628 | ||||||||||||
| Other real estate owned | (342 | ) | 133 | (805 | ) | 710 | ||||||||||
| Loss on debt extinguishment | 372 | — | 372 | — | ||||||||||||
| Merger expenses | 4,015 | — | 4,627 | — | ||||||||||||
| Goodwill impairment | — | 104,831 | — | 104,831 | ||||||||||||
| Other | 2,484 | 2,690 | 7,050 | 6,831 | ||||||||||||
| Total non-interest expense | 30,689 | 130,835 | 81,376 | 180,530 | ||||||||||||
| Income (loss) before income tax | 15,059 | (93,058 | ) | 53,986 | (89,169 | ) | ||||||||||
| Provision for income taxes | 3,286 | (2,653 | ) | 11,972 | (1,711 | ) | ||||||||||
| Net income (loss) and net income (loss) allocable to common stockholders | $ | 11,773 | $ | (90,405 | ) | $ | 42,014 | $ | (87,458 | ) | ||||||
| Basic earnings (loss) per share | $ | 0.82 | $ | (6.01 | ) | $ | 2.92 | $ | (5.75 | ) | ||||||
| Diluted earnings (loss) per share | $ | 0.80 | $ | (6.01 | ) | $ | 2.86 | $ | (5.75 | ) | ||||||
| Weighted average common shares | 14,384,302 | 15,040,407 | 14,397,146 | 15,211,901 | ||||||||||||
| Weighted average diluted common shares | 14,669,312 | 15,040,407 | 14,688,092 | 15,211,901 | ||||||||||||
TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
| As of and for the three months ended | ||||||||||||||||||||
| September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
||||||||||||||||
| Interest and dividend income | ||||||||||||||||||||
| Loans, including fees | $ | 37,581 | $ | 33,810 | $ | 31,001 | $ | 35,383 | $ | 32,278 | ||||||||||
| Securities, taxable | 3,920 | 3,523 | 3,799 | 3,408 | 3,476 | |||||||||||||||
| Securities, nontaxable | 655 | 717 | 724 | 913 | 923 | |||||||||||||||
| Federal funds sold and other | 290 | 268 | 288 | 285 | 405 | |||||||||||||||
| Total interest and dividend income | 42,446 | 38,318 | 35,812 | 39,989 | 37,082 | |||||||||||||||
| Interest expense | ||||||||||||||||||||
| Deposits | 1,881 | 2,025 | 2,410 | 2,755 | 3,064 | |||||||||||||||
| Federal funds purchased and retail repurchase agreements | 24 | 26 | 22 | 25 | 25 | |||||||||||||||
| Federal Home Loan Bank advances | 10 | 80 | 65 | 94 | 471 | |||||||||||||||
| Subordinated debt | 1,556 | 1,557 | 1,556 | 1,556 | 1,415 | |||||||||||||||
| Total interest expense | 3,471 | 3,688 | 4,053 | 4,430 | 4,975 | |||||||||||||||
| Net interest income | 38,975 | 34,630 | 31,759 | 35,559 | 32,107 | |||||||||||||||
| Provision (reversal) for credit losses | 1,058 | (1,657 | ) | (5,756 | ) | 1,000 | 815 | |||||||||||||
| Net interest income after provision (reversal) for credit losses | 37,917 | 36,287 | 37,515 | 34,559 | 31,292 | |||||||||||||||
| Non-interest income | ||||||||||||||||||||
| Service charges and fees | 2,360 | 2,169 | 1,596 | 1,759 | 1,706 | |||||||||||||||
| Debit card income | 2,574 | 2,679 | 2,350 | 2,401 | 2,491 | |||||||||||||||
| Mortgage banking | 801 | 848 | 935 | 855 | 877 | |||||||||||||||
| Increase in value of bank-owned life insurance | 1,169 | 676 | 601 | 489 | 489 | |||||||||||||||
| Net gain on acquisition | — | 663 | (78 | ) | 2,145 | — | ||||||||||||||
| Net gains (losses) from securities transactions | 381 | — | 17 | (1 | ) | — | ||||||||||||||
| Other | 546 | 2,065 | 1,291 | 852 | 922 | |||||||||||||||
| Total non-interest income | 7,831 | 9,100 | 6,712 | 8,500 | 6,485 | |||||||||||||||
| Non-interest expense | ||||||||||||||||||||
| Salaries and employee benefits | 13,588 | 12,769 | 12,722 | 14,053 | 13,877 | |||||||||||||||
| Net occupancy and equipment | 2,475 | 2,327 | 2,368 | 2,206 | 2,224 | |||||||||||||||
| Data processing | 3,257 | 3,474 | 2,663 | 2,748 | 2,817 | |||||||||||||||
| Professional fees | 1,076 | 999 | 1,073 | 1,095 | 877 | |||||||||||||||
| Advertising and business development | 760 | 799 | 682 | 801 | 598 | |||||||||||||||
| Telecommunications | 439 | 512 | 580 | 510 | 486 | |||||||||||||||
| FDIC insurance | 465 | 425 | 415 | 797 | 360 | |||||||||||||||
| Courier and postage | 344 | 327 | 369 | 338 | 366 | |||||||||||||||
| Free nationwide ATM cost | 519 | 513 | 472 | 423 | 439 | |||||||||||||||
| Amortization of core deposit intangibles | 1,030 | 1,030 | 1,034 | 1,044 | 1,030 | |||||||||||||||
| Loan expense | 207 | 181 | 238 | 161 | 107 | |||||||||||||||
| Other real estate owned | (342 | ) | (468 | ) | 5 | 1,600 | 133 | |||||||||||||
| Loss on debt extinguishment | 372 | — | — | — | — | |||||||||||||||
| Merger expenses | 4,015 | 460 | 152 | 299 | — | |||||||||||||||
| Goodwill impairment | — | — | — | — | 104,831 | |||||||||||||||
| Other | 2,484 | 2,458 | 2,108 | 2,385 | 2,690 | |||||||||||||||
| Total non-interest expense | 30,689 | 25,806 | 24,881 | 28,460 | 130,835 | |||||||||||||||
| Income (loss) before income tax | 15,059 | 19,581 | 19,346 | 14,599 | (93,058 | ) | ||||||||||||||
| Provision for income taxes (benefit) | 3,286 | 4,415 | 4,271 | 2,111 | (2,653 | ) | ||||||||||||||
| Net income (loss) and net income (loss) allocable to common stockholders | $ | 11,773 | $ | 15,166 | $ | 15,075 | $ | 12,488 | $ | (90,405 | ) | |||||||||
| Basic earnings (loss) per share | $ | 0.82 | $ | 1.06 | $ | 1.04 | $ | 0.85 | $ | (6.01 | ) | |||||||||
| Diluted earnings (loss) per share | $ | 0.80 | $ | 1.03 | $ | 1.02 | $ | 0.84 | $ | (6.01 | ) | |||||||||
| Weighted average common shares | 14,384,302 | 14,356,958 | 14,464,291 | 14,760,810 | 15,040,407 | |||||||||||||||
| Weighted average diluted common shares | 14,669,312 | 14,674,838 | 14,734,083 | 14,934,058 | 15,040,407 | |||||||||||||||
TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| September 30, 2021 |
June 30, 2021 |
March 31, 2021 |
December 31, 2020 |
September 30, 2020 |
||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 141,645 | $ | 138,869 | $ | 136,190 | $ | 280,150 | $ | 65,534 | ||||||||||
| Federal funds sold | 673 | 452 | 498 | 548 | 305 | |||||||||||||||
| Cash and cash equivalents | 142,318 | 139,321 | 136,688 | 280,698 | 65,839 | |||||||||||||||
| Interest-bearing time deposits in other banks | — | — | 249 | 249 | 499 | |||||||||||||||
| Available-for-sale securities | 1,157,423 | 1,041,613 | 998,100 | 871,827 | 798,576 | |||||||||||||||
| Loans held for sale | 4,108 | 6,183 | 8,609 | 12,394 | 9,053 | |||||||||||||||
| Loans, net of allowance for credit losses(1) | 2,633,148 | 2,763,227 | 2,740,215 | 2,557,987 | 2,691,626 | |||||||||||||||
| Other real estate owned, net | 10,267 | 10,861 | 10,559 | 11,733 | 8,727 | |||||||||||||||
| Premises and equipment, net | 90,727 | 90,876 | 90,322 | 89,412 | 86,087 | |||||||||||||||
| Bank-owned life insurance | 103,431 | 103,321 | 102,645 | 77,044 | 76,555 | |||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 14,540 | 18,454 | 15,174 | 16,415 | 32,545 | |||||||||||||||
| Interest receivable | 15,519 | 15,064 | 16,655 | 15,831 | 18,110 | |||||||||||||||
| Goodwill | 31,601 | 31,601 | 31,601 | 31,601 | 31,601 | |||||||||||||||
| Core deposit intangibles, net | 12,963 | 13,993 | 15,023 | 16,057 | 17,101 | |||||||||||||||
| Other | 47,223 | 33,702 | 30,344 | 32,108 | 29,252 | |||||||||||||||
| Total assets | $ | 4,263,268 | $ | 4,268,216 | $ | 4,196,184 | $ | 4,013,356 | $ | 3,865,571 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Demand | $ | 984,436 | $ | 992,565 | $ | 972,364 | $ | 791,639 | $ | 693,967 | ||||||||||
| Total non-interest-bearing deposits | 984,436 | 992,565 | 972,364 | 791,639 | 693,967 | |||||||||||||||
| Savings, NOW and money market | 2,092,849 | 2,035,496 | 2,074,261 | 2,029,097 | 1,816,307 | |||||||||||||||
| Time | 585,492 | 659,494 | 587,905 | 626,854 | 623,344 | |||||||||||||||
| Total interest-bearing deposits | 2,678,341 | 2,694,990 | 2,662,166 | 2,655,951 | 2,439,651 | |||||||||||||||
| Total deposits | 3,662,777 | 3,687,555 | 3,634,530 | 3,447,590 | 3,133,618 | |||||||||||||||
| Federal funds purchased and retail repurchase agreements | 39,137 | 47,184 | 40,339 | 36,029 | 46,295 | |||||||||||||||
| Federal Home Loan Bank advances | — | 9,208 | 9,926 | 10,144 | 167,862 | |||||||||||||||
| Subordinated debt | 88,030 | 87,908 | 87,788 | 87,684 | 87,537 | |||||||||||||||
| Contractual obligations | 18,771 | 4,469 | 4,856 | 5,189 | 5,478 | |||||||||||||||
| Interest payable and other liabilities | 36,804 | 18,897 | 20,930 | 19,071 | 22,609 | |||||||||||||||
| Total liabilities | 3,845,519 | 3,855,221 | 3,798,369 | 3,605,707 | 3,463,399 | |||||||||||||||
| Commitments and contingent liabilities | ||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||
| Common stock | 178 | 176 | 175 | 174 | 174 | |||||||||||||||
| Additional paid-in capital | 392,321 | 389,394 | 387,939 | 386,820 | 386,017 | |||||||||||||||
| Retained earnings | 79,226 | 68,625 | 53,459 | 50,787 | 38,299 | |||||||||||||||
| Accumulated other comprehensive income, net of tax | 9,475 | 13,450 | 12,019 | 19,781 | 21,074 | |||||||||||||||
| Employee stock loans | — | — | — | (43 | ) | (43 | ) | |||||||||||||
| Treasury stock | (63,451 | ) | (58,650 | ) | (55,777 | ) | (49,870 | ) | (43,349 | ) | ||||||||||
| Total stockholders’ equity | 417,749 | 412,995 | 397,815 | 407,649 | 402,172 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 4,263,268 | $ | 4,268,216 | $ | 4,196,184 | $ | 4,013,356 | $ | 3,865,571 | ||||||||||
| (1) Allowance for credit losses | $ | 52,763 | $ | 51,834 | $ | 55,525 | $ | 33,709 | $ | 34,087 | ||||||||||
TABLE 4. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)
| As of and for the three months ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||
| Loans Held For Investment by Type | ||||||||||||||||||||
| Commercial real estate | $ | 1,308,707 | $ | 1,261,214 | $ | 1,218,537 | $ | 1,188,696 | $ | 1,188,329 | ||||||||||
| Commercial and industrial | 569,513 | 732,126 | 820,736 | 734,495 | 857,244 | |||||||||||||||
| Residential real estate | 490,633 | 503,110 | 438,503 | 381,958 | 402,242 | |||||||||||||||
| Agricultural real estate | 138,793 | 129,020 | 134,944 | 133,693 | 127,349 | |||||||||||||||
| Agricultural | 93,767 | 97,912 | 93,764 | 94,322 | 83,084 | |||||||||||||||
| Consumer | 84,498 | 91,679 | 89,256 | 58,532 | 67,465 | |||||||||||||||
| Total loans held-for-investment | 2,685,911 | 2,815,061 | 2,795,740 | 2,591,696 | 2,725,713 | |||||||||||||||
| Allowance for credit losses | (52,763 | ) | (51,834 | ) | (55,525 | ) | (33,709 | ) | (34,087 | ) | ||||||||||
| Net loans held for investment | $ | 2,633,148 | $ | 2,763,227 | $ | 2,740,215 | $ | 2,557,987 | $ | 2,691,626 | ||||||||||
| Asset Quality Ratios | ||||||||||||||||||||
| Allowance for credit losses on loans to total loans | 1.96 | % | 1.84 | % | 1.99 | % | 1.30 | % | 1.25 | % | ||||||||||
| Past due or nonaccrual loans to total loans | 2.78 | % | 2.09 | % | 2.30 | % | 1.99 | % | 2.12 | % | ||||||||||
| Nonperforming assets to total assets | 1.74 | % | 1.56 | % | 1.67 | % | 1.36 | % | 1.55 | % | ||||||||||
| Nonperforming assets to total loans plus other real estate owned | 2.76 | % | 2.36 | % | 2.50 | % | 2.10 | % | 2.19 | % | ||||||||||
| Classified assets to bank total regulatory capital | 24.25 | % | 23.20 | % | 26.45 | % | 25.50 | % | 18.35 | % | ||||||||||
| Selected Average Balance Sheet Data (QTD Average) | ||||||||||||||||||||
| Investment securities | $ | 1,061,178 | $ | 986,986 | $ | 947,453 | $ | 814,114 | $ | 802,525 | ||||||||||
| Total gross loans receivable | 2,748,202 | 2,853,145 | 2,736,918 | 2,692,223 | 2,758,680 | |||||||||||||||
| Interest-earning assets | 4,005,509 | 3,964,633 | 3,891,140 | 3,647,730 | 3,679,168 | |||||||||||||||
| Total assets | 4,275,298 | 4,231,439 | 4,143,752 | 3,910,628 | 4,041,187 | |||||||||||||||
| Interest-bearing deposits | 2,702,040 | 2,656,052 | 2,690,159 | 2,551,219 | 2,430,407 | |||||||||||||||
| Borrowings | 132,581 | 171,658 | 139,360 | 172,730 | 377,158 | |||||||||||||||
| Total interest-bearing liabilities | 2,834,621 | 2,827,710 | 2,829,519 | 2,723,949 | 2,807,565 | |||||||||||||||
| Total deposits | 3,686,169 | 3,624,950 | 3,577,625 | 2,960,791 | 3,145,810 | |||||||||||||||
| Total liabilities | 3,852,419 | 3,827,400 | 3,748,114 | 3,501,056 | 3,558,099 | |||||||||||||||
| Total stockholders’ equity | 422,879 | 404,039 | 395,638 | 409,572 | 483,088 | |||||||||||||||
| Tangible common equity* | 376,544 | 356,705 | 347,262 | 355,025 | 329,039 | |||||||||||||||
| Performance ratios | ||||||||||||||||||||
| Return on average assets (ROAA) annualized | 1.09 | % | 1.44 | % | 1.48 | % | 1.27 | % | (8.90 | )% | ||||||||||
| Return on average assets before income tax, provision for loan losses and goodwill impairment* | 1.50 | % | 1.70 | % | 1.33 | % | 1.59 | % | 1.24 | % | ||||||||||
| Return on average equity (ROAE) annualized | 11.05 | % | 15.06 | % | 15.45 | % | 12.13 | % | (74.45 | )% | ||||||||||
| Return on average equity before income tax, provision for loan losses and goodwill impairment* | 15.12 | % | 17.79 | % | 13.93 | % | 15.15 | % | 10.37 | % | ||||||||||
| Return on average tangible common equity (ROATCE) annualized* |
13.27 | % | 17.98 | % | 18.57 | % | 14.93 | % | (108.31 | )% | ||||||||||
| Return on average tangible common equity adjusted for goodwill impairment* | 13.27 | % | 17.98 | % | 18.57 | % | 14.93 | % | 12.01 | % | ||||||||||
| Yield on loans annualized | 5.43 | % | 4.75 | % | 4.59 | % | 5.23 | % | 4.65 | % | ||||||||||
| Cost of interest-bearing deposits annualized | 0.28 | % | 0.31 | % | 0.36 | % | 0.43 | % | 0.50 | % | ||||||||||
| Cost of total deposits annualized | 0.20 | % | 0.22 | % | 0.27 | % | 0.37 | % | 0.39 | % | ||||||||||
| Net interest margin annualized | 3.86 | % | 3.50 | % | 3.31 | % | 3.88 | % | 3.47 | % | ||||||||||
| Efficiency ratio* | 56.65 | % | 58.85 | % | 64.18 | % | 67.19 | % | 67.38 | % | ||||||||||
| Non-interest income / average assets | 0.73 | % | 0.86 | % | 0.66 | % | 0.86 | % | 0.64 | % | ||||||||||
| Non-interest expense / average assets | 2.85 | % | 2.45 | % | 2.44 | % | 2.90 | % | 12.88 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Tier 1 Leverage Ratio | 9.02 | % | 8.88 | % | 8.73 | % | 9.30 | % | 8.76 | % | ||||||||||
| Common Equity Tier 1 Capital Ratio | 12.39 | % | 12.41 | % | 12.53 | % | 12.82 | % | 12.76 | % | ||||||||||
| Tier 1 Risk Based Capital Ratio | 12.90 | % | 12.93 | % | 13.08 | % | 13.37 | % | 13.32 | % | ||||||||||
| Total Risk Based Capital Ratio | 16.63 | % | 16.73 | % | 17.02 | % | 17.35 | % | 17.35 | % | ||||||||||
| Total stockholders’ equity to total assets | 9.80 | % | 9.68 | % | 9.48 | % | 10.16 | % | 10.40 | % | ||||||||||
| Tangible common equity to tangible assets* | 8.82 | % | 8.68 | % | 8.44 | % | 9.05 | % | 9.23 | % | ||||||||||
| Book value per common share | $ | 29.08 | $ | 28.76 | $ | 27.66 | $ | 28.04 | $ | 27.08 | ||||||||||
| Tangible book value per common share* | $ | 25.90 | $ | 25.51 | $ | 24.34 | $ | 24.68 | $ | 23.72 | ||||||||||
| Tangible book value per diluted common share* | $ | 25.42 | $ | 24.98 | $ | 23.87 | $ | 24.32 | $ | 23.57 | ||||||||||
* The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures, see Table 8. Non-GAAP Financial Measures
TABLE 5. YEAR-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
| For the nine months ended | For the nine months ended | ||||||||||||||||||||||
| September 30, 2023 | September 30, 2020 | ||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) |
Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) |
||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||
| Loans (1) | |||||||||||||||||||||||
| Commercial and industrial | $ | 752,795 | $ | 34,609 | 6.15 | % | $ | 757,773 | $ | 26,789 | 4.72 | % | |||||||||||
| Commercial real estate | 990,803 | 34,943 | 4.72 | % | 942,478 | 36,533 | 5.18 | % | |||||||||||||||
| Real estate construction | 264,344 | 7,195 | 3.64 | % | 245,167 | 8,644 | 4.71 | % | |||||||||||||||
| Residential real estate | 457,761 | 14,167 | 4.14 | % | 464,340 | 14,528 | 4.18 | % | |||||||||||||||
| Agricultural real estate | 135,795 | 5,203 | 5.12 | % | 133,302 | 5,574 | 5.59 | % | |||||||||||||||
| Agricultural | 93,680 | 3,432 | 4.90 | % | 86,873 | 3,752 | 5.77 | % | |||||||||||||||
| Consumer | 84,285 | 2,843 | 4.51 | % | 67,255 | 3,461 | 6.87 | % | |||||||||||||||
| Total loans | 2,779,463 | 102,392 | 3.94 | % | 2,697,188 | 99,281 | 4.92 | % | |||||||||||||||
| Securities | |||||||||||||||||||||||
| Taxable securities | 898,461 | 11,242 | 1.67 | % | 737,009 | 12,113 | 2.20 | % | |||||||||||||||
| Nontaxable securities | 100,495 | 2,096 | 2.79 | % | 125,352 | 2,769 | 2.95 | % | |||||||||||||||
| Total securities | 998,956 | 13,338 | 1.79 | % | 862,361 | 14,882 | 2.31 | % | |||||||||||||||
| Federal funds sold and other | 175,761 | 846 | 0.64 | % | 102,202 | 1,409 | 1.84 | % | |||||||||||||||
| Total interest-earning assets | $ | 3,954,180 | 116,576 | 3.94 | % | $ | 3,661,751 | 115,572 | 4.22 | % | |||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||
| Savings, NOW and money market deposits | $ | 2,076,643 | 2,728 | 0.18 | % | $ | 1,754,759 | 4,923 | 0.37 | % | |||||||||||||
| Time deposits | 606,151 | 3,588 | 0.79 | % | 728,083 | 8,904 | 1.63 | % | |||||||||||||||
| Total interest-bearing deposits | 2,682,794 | 6,316 | 0.31 | % | 2,482,842 | 13,827 | 0.74 | % | |||||||||||||||
| FHLB advances | 16,325 | 155 | 1.27 | % | 271,548 | 2,198 | 0.24 | % | |||||||||||||||
| Other borrowings | 131,516 | 4,741 | 4.82 | % | 100,865 | 2,454 | 3.25 | % | |||||||||||||||
| Total interest-bearing liabilities | $ | 2,830,635 | 11,212 | 0.53 | % | $ | 2,855,255 | 18,479 | 0.86 | % | |||||||||||||
| Net interest income | $ | 105,364 | $ | 97,093 | |||||||||||||||||||
| Interest rate spread | 3.41 | % | 3.36 | % | |||||||||||||||||||
| Net interest margin (2) | 3.56 | % | 3.54 | % | |||||||||||||||||||
| (1) Average loan balances include nonaccrual loans. | |||||||||||||||||||||||
| (2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period. | |||||||||||||||||||||||
| (3) Tax exempt income is not included in the above table on a tax-equivalent basis. | |||||||||||||||||||||||
| (4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts. | |||||||||||||||||||||||
TABLE 6. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
| For the three months ended | For the three months ended | ||||||||||||||||||||||
| September 30, 2023 | September 30, 2020 | ||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) |
Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) |
||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||
| Loans (1) | |||||||||||||||||||||||
| Commercial and industrial | $ | 630,622 | $ | 13,646 | 8.59 | % | $ | 848,096 | $ | 8,400 | 3.94 | % | |||||||||||
| Commercial real estate | 1,009,141 | 12,072 | 4.75 | % | 979,775 | 12,886 | 5.23 | % | |||||||||||||||
| Real estate construction | 283,106 | 2,664 | 3.73 | % | 214,775 | 2,233 | 4.14 | % | |||||||||||||||
| Residential real estate | 512,135 | 5,073 | 3.93 | % | 429,965 | 4,733 | 4.38 | % | |||||||||||||||
| Agricultural real estate | 134,673 | 1,819 | 5.36 | % | 131,725 | 1,718 | 5.19 | % | |||||||||||||||
| Agricultural | 91,878 | 1,370 | 5.92 | % | 84,859 | 1,204 | 5.65 | % | |||||||||||||||
| Consumer | 86,647 | 937 | 4.29 | % | 69,485 | 1,104 | 6.32 | % | |||||||||||||||
| Total loans | 2,748,202 | 37,581 | 5.43 | % | 2,758,680 | 32,278 | 4.65 | % | |||||||||||||||
| Securities | |||||||||||||||||||||||
| Taxable securities | 966,651 | 3,920 | 1.61 | % | 683,630 | 3,476 | 2.02 | % | |||||||||||||||
| Nontaxable securities | 94,527 | 655 | 2.75 | % | 118,895 | 923 | 3.09 | % | |||||||||||||||
| Total securities | 1,061,178 | 4,575 | 1.71 | % | 802,525 | 4,399 | 2.18 | % | |||||||||||||||
| Federal funds sold and other | 196,129 | 290 | 0.59 | % | 117,963 | 405 | 1.36 | % | |||||||||||||||
| Total interest-earning assets | $ | 4,005,509 | 42,446 | 4.20 | % | $ | 3,679,168 | 37,082 | 4.01 | % | |||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||
| Savings, NOW and money market deposits | $ | 2,082,515 | 862 | 0.16 | % | $ | 1,784,891 | 875 | 0.19 | % | |||||||||||||
| Time deposits | 619,525 | 1,019 | 0.65 | % | 645,516 | 2,189 | 1.35 | % | |||||||||||||||
| Total interest-bearing deposits | 2,702,040 | 1,881 | 0.28 | % | 2,430,407 | 3,064 | 0.50 | % | |||||||||||||||
| FHLB advances | 1,401 | 10 | 2.78 | % | 248,437 | 471 | 0.75 | % | |||||||||||||||
| Other borrowings | 131,180 | 1,580 | 4.78 | % | 128,721 | 1,440 | 4.45 | % | |||||||||||||||
| Total interest-bearing liabilities | $ | 2,834,621 | 3,471 | 0.49 | % | $ | 2,807,565 | 4,975 | 0.70 | % | |||||||||||||
| Net interest income | $ | 38,975 | $ | 32,107 | |||||||||||||||||||
| Interest rate spread | 3.71 | % | 3.31 | % | |||||||||||||||||||
| Net interest margin (2) | 3.86 | % | 3.47 | % | |||||||||||||||||||
| (1) Average loan balances include nonaccrual loans. | |||||||||||||||||||||||
| (2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period. | |||||||||||||||||||||||
| (3) Tax exempt income is not included in the above table on a tax-equivalent basis. | |||||||||||||||||||||||
TABLE 7. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
| For the three months ended | For the three months ended | ||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | ||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) |
Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) |
||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||
| Loans (1) | |||||||||||||||||||||||
| Commercial and industrial | $ | 630,622 | $ | 13,646 | 8.59 | % | $ | 826,647 | $ | 11,729 | 5.69 | % | |||||||||||
| Commercial real estate | 1,009,141 | 12,072 | 4.75 | % | 991,033 | 11,433 | 4.63 | % | |||||||||||||||
| Real estate construction | 283,106 | 2,664 | 3.73 | % | 253,947 | 2,352 | 3.71 | % | |||||||||||||||
| Residential real estate | 512,135 | 5,073 | 3.93 | % | 465,525 | 4,642 | 4.00 | % | |||||||||||||||
| Agricultural real estate | 134,673 | 1,819 | 5.36 | % | 131,906 | 1,687 | 5.13 | % | |||||||||||||||
| Agricultural | 91,878 | 1,370 | 5.92 | % | 94,407 | 1,024 | 4.35 | % | |||||||||||||||
| Consumer | 86,647 | 937 | 4.29 | % | 89,680 | 943 | 4.22 | % | |||||||||||||||
| Total loans | 2,748,202 | 37,581 | 5.43 | % | 2,853,145 | 33,810 | 4.75 | % | |||||||||||||||
| Securities | |||||||||||||||||||||||
| Taxable securities | 966,651 | 3,920 | 1.61 | % | 887,983 | 3,523 | 1.59 | % | |||||||||||||||
| Nontaxable securities | 94,527 | 655 | 2.75 | % | 99,003 | 717 | 2.90 | % | |||||||||||||||
| Total securities | 1,061,178 | 4,575 | 1.71 | % | 986,986 | 4,240 | 1.72 | % | |||||||||||||||
| Federal funds sold and other | 196,129 | 290 | 0.59 | % | 124,502 | 268 | 0.86 | % | |||||||||||||||
| Total interest-earning assets | $ | 4,005,509 | 42,446 | 4.20 | % | $ | 3,964,633 | 38,318 | 3.88 | % | |||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||
| Savings, NOW and money market deposits | $ | 2,082,515 | 862 | 0.16 | % | $ | 2,068,319 | 895 | 0.17 | % | |||||||||||||
| Time deposits | 619,525 | 1,019 | 0.65 | % | 587,733 | 1,130 | 0.77 | % | |||||||||||||||
| Total interest-bearing deposits | 2,702,040 | 1,881 | 0.28 | % | 2,656,052 | 2,025 | 0.31 | % | |||||||||||||||
| FHLB advances | 1,401 | 10 | 2.78 | % | 37,656 | 80 | 0.86 | % | |||||||||||||||
| Other borrowings | 131,180 | 1,580 | 4.78 | % | 134,002 | 1,583 | 4.74 | % | |||||||||||||||
| Total interest-bearing liabilities | $ | 2,834,621 | 3,471 | 0.49 | % | $ | 2,827,710 | 3,688 | 0.52 | % | |||||||||||||
| Net interest income | $ | 38,975 | $ | 34,630 | |||||||||||||||||||
| Interest rate spread | 3.71 | % | 3.36 | % | |||||||||||||||||||
| Net interest margin (2) | 3.86 | % | 3.50 | % | |||||||||||||||||||
| (1) Average loan balances include nonaccrual loans. | |||||||||||||||||||||||
| (2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period. | |||||||||||||||||||||||
| (3) Tax exempt income is not included in the above table on a tax-equivalent basis. | |||||||||||||||||||||||
TABLE 8. NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in thousands, except per share data)
| As of and for the three months ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2021 | 2021 | 2021 | 2020 | 2020 | ||||||||||||||||
| Income before income taxes | $ | 15,059 | $ | 19,581 | $ | 19,346 | $ | 14,599 | $ | (93,058 | ) | |||||||||
| Add: goodwill impairment | — | — | — | — | 104,831 | |||||||||||||||
| Less: tax effect | 3,286 | 4,415 | 4,271 | 2,111 | 2,652 | |||||||||||||||
| Adjusted income | $ | 11,773 | $ | 15,166 | $ | 15,075 | $ | 12,488 | $ | 9,121 | ||||||||||
| Weighted average common shares outstanding | 14,384,302 | 14,356,958 | 14,464,291 | 14,760,810 | 15,040,407 | |||||||||||||||
| Effect of weighted average dilutive shares assuming positive net income | 285,010 | 317,880 | 269,792 | 173,248 | 82,804 | |||||||||||||||
| Weighted average diluted shares | 14,669,312 | 14,674,838 | 14,734,083 | 14,934,058 | 15,123,211 | |||||||||||||||
| Diluted earnings per share adjusted for goodwill impairment | $ | 0.80 | $ | 1.03 | $ | 1.02 | $ | 0.84 | $ | 0.60 | ||||||||||
| Total stockholders’ equity | $ | 417,749 | $ | 412,995 | $ | 397,815 | $ | 407,649 | $ | 402,172 | ||||||||||
| Less: goodwill | 31,601 | 31,601 | 31,601 | 31,601 | 31,601 | |||||||||||||||
| Less: core deposit intangibles, net | 12,963 | 13,993 | 15,023 | 16,057 | 17,101 | |||||||||||||||
| Less: mortgage servicing asset, net | — | — | — | — | 1 | |||||||||||||||
| Less: naming rights, net | 1,098 | 1,109 | 1,119 | 1,130 | 1,141 | |||||||||||||||
| Tangible common equity | $ | 372,087 | $ | 366,292 | $ | 350,072 | $ | 358,861 | $ | 352,328 | ||||||||||
| Common shares issued at period end | 14,365,785 | 14,360,172 | 14,383,913 | 14,540,556 | 14,853,487 | |||||||||||||||
| Diluted common shares outstanding at period end | 14,637,306 | 14,664,603 | 14,668,287 | 14,756,378 | 14,945,282 | |||||||||||||||
| Book value per common share | $ | 29.08 | $ | 28.76 | $ | 27.66 | $ | 28.04 | $ | 27.08 | ||||||||||
| Tangible book value per common share | $ | 25.90 | $ | 25.51 | $ | 24.34 | $ | 24.68 | $ | 23.72 | ||||||||||
| Tangible book value per diluted common share | $ | 25.42 | $ | 24.98 | $ | 23.87 | $ | 24.32 | $ | 23.57 | ||||||||||
| Total assets | $ | 4,263,268 | $ | 4,268,216 | $ | 4,196,184 | $ | 4,013,356 | $ | 3,865,571 | ||||||||||
| Less: goodwill | 31,601 | 31,601 | 31,601 | 31,601 | 31,601 | |||||||||||||||
| Less: core deposit intangibles, net | 12,963 | 13,993 | 15,023 | 16,057 | 17,101 | |||||||||||||||
| Less: mortgage servicing asset, net | — | — | — | — | 1 | |||||||||||||||
| Less: naming rights, net | 1,098 | 1,109 | 1,119 | 1,130 | 1,141 | |||||||||||||||
| Tangible assets | $ | 4,217,606 | $ | 4,221,513 | $ | 4,148,441 | $ | 3,964,568 | $ | 3,815,727 | ||||||||||
| Total stockholders’ equity to total assets | 9.80 | % | 9.68 | % | 9.48 | % | 10.16 | % | 10.40 | % | ||||||||||
| Tangible common equity to tangible assets | 8.82 | % | 8.68 | % | 8.44 | % | 9.05 | % | 9.23 | % | ||||||||||
| Total average stockholders’ equity | $ | 422,879 | $ | 404,039 | $ | 395,638 | $ | 409,572 | $ | 483,088 | ||||||||||
| Less: average intangible assets | 46,335 | 47,334 | 48,376 | 54,547 | 154,049 | |||||||||||||||
| Average tangible common equity | $ | 376,544 | $ | 356,705 | $ | 347,262 | $ | 355,025 | $ | 329,039 | ||||||||||
| Net income (loss) allocable to common stockholders | $ | 11,773 | $ | 15,166 | $ | 15,075 | $ | 12,488 | $ | (90,405 | ) | |||||||||
| Add: goodwill impairment | — | — | — | — | 104,831 | |||||||||||||||
| Less: tax effect of goodwill impairment | — | — | — | — | 5,305 | |||||||||||||||
| Adjusted net income (loss) plus goodwill impairment | 11,773 | 15,166 | 15,075 | 12,488 | 9,121 | |||||||||||||||
| Amortization of intangible assets | 1,040 | 1,041 | 1,045 | 1,055 | 1,043 | |||||||||||||||
| Less: tax effect of intangible assets amortization | 218 | 219 | 219 | 222 | 234 | |||||||||||||||
| Adjusted net income (loss) allocable to common stockholders | $ | 12,595 | $ | 15,988 | $ | 15,901 | $ | 13,321 | $ | 9,930 | ||||||||||
| Return on total average stockholders’ equity (ROAE) annualized |
11.05 | % | 15.06 | % | 15.45 | % | 12.13 | % | (74.45 | )% | ||||||||||
| Return on average tangible common equity (ROATCE) annualized |
13.27 | % | 17.98 | % | 18.57 | % | 14.93 | % | (108.31 | )% | ||||||||||
| Adjusted return on average tangible common equity | 13.27 | % | 17.98 | % | 18.57 | % | 14.93 | % | 12.01 | % | ||||||||||
| Non-interest expense | $ | 30,689 | $ | 25,806 | $ | 24,881 | $ | 28,460 | $ | 130,835 | ||||||||||
| Less: merger expense | 4,015 | 460 | 152 | 299 | — | |||||||||||||||
| Less: loss on debt extinguishment | 372 | — | — | — | — | |||||||||||||||
| Less: goodwill impairment | — | — | — | — | 104,831 | |||||||||||||||
| Non-interest expense, excluding merger expense, loss on debt extinguishment and goodwill impairment | $ | 26,302 | $ | 25,346 | $ | 24,729 | $ | 28,161 | $ | 26,004 | ||||||||||
| Net interest income | $ | 38,975 | $ | 34,630 | $ | 31,759 | $ | 35,559 | $ | 32,107 | ||||||||||
| Non-interest income | 7,831 | 9,100 | 6,712 | 8,500 | 6,485 | |||||||||||||||
| Less: net gain on acquisition | — | 663 | (78 | ) | 2,145 | — | ||||||||||||||
| Less: net gains (losses) from securities transactions | 381 | — | 17 | (1 | ) | — | ||||||||||||||
| Non-interest income, excluding gains (losses) from securities transactions |
$ | 7,450 | $ | 8,437 | $ | 6,773 | $ | 6,356 | $ | 6,485 | ||||||||||
| Net interest income plus non-interest income, excluding net gain on acquisition and net gains (losses) from securities transactions | $ | 46,425 | $ | 43,067 | $ | 38,532 | $ | 41,915 | $ | 38,592 | ||||||||||
| Non-interest expense less goodwill impairment to net interest income plus non-interest income | 65.57 | % | 59.01 | % | 64.67 | % | 64.60 | % | 67.38 | % | ||||||||||
| Efficiency ratio | 56.65 | % | 58.85 | % | 64.18 | % | 67.19 | % | 67.38 | % | ||||||||||
| Net income (loss) allocable to common stockholders | $ | 11,773 | $ | 15,166 | $ | 15,075 | $ | 12,488 | $ | (90,405 | ) | |||||||||
| Add: income tax provision | 3,286 | 4,415 | 4,271 | 2,111 | (2,653 | ) | ||||||||||||||
| Add: provision (reversal) of credit losses | 1,058 | (1,657 | ) | (5,756 | ) | 1,000 | 815 | |||||||||||||
| Add: goodwill impairment | — | — | — | — | 104,831 | |||||||||||||||
| Adjusted net income | $ | 16,117 | $ | 17,924 | $ | 13,590 | $ | 15,599 | $ | 12,588 | ||||||||||
| Total average assets | $ | 4,275,298 | $ | 4,231,439 | $ | 4,143,752 | $ | 3,910,628 | $ | 4,041,187 | ||||||||||
| Total average stockholders’ equity | $ | 422,879 | $ | 404,039 | $ | 395,638 | $ | 409,572 | $ | 483,088 | ||||||||||
| Return on average assets (ROAA) annualized | 1.09 | % | 1.44 | % | 1.48 | % | 1.27 | % | (8.90 | )% | ||||||||||
| Adjusted return on average assets | 1.50 | % | 1.70 | % | 1.33 | % | 1.59 | % | 1.24 | % | ||||||||||
| Adjusted return on average equity | 15.12 | % | 17.79 | % | 13.93 | % | 15.15 | % | 10.37 | % | ||||||||||
