• Citizens Community Bancorp, Inc. Earns $3.6 Million, or $0.32 Per Share in 4Q20; Record 2020 Annual Earnings Increase 34% from Prior Year Annual Earnings; Asset Quality Continues to Improve; 2021 Annual Cash Dividend Increases to $0.23 Per Share

    ソース: Nasdaq GlobeNewswire / 28 1 2021 16:30:01   America/New_York

    EAU CLAIRE, Wis., Jan. 28, 2021 (GLOBE NEWSWIRE) -- Citizens Community Bancorp, Inc. (the “Company”) (Nasdaq: CZWI), the parent company of Citizens Community Federal N.A. (the “Bank” or “CCFBank”), today reported earnings of $3.6 million, or $0.32 per diluted share for the quarter ended December 31, 2020, compared to $3.5 million, or $0.31 per diluted share for the quarter ended September 30, 2020 and $3.2 million, or $0.28 per diluted share for the quarter ended December 31, 2019. Net income as adjusted (non-GAAP)1 of $3.7 million, or $0.33 per diluted share was reported for the quarter ended December 31, 2020, compared to $3.3 million, or $0.30 per diluted share for the quarter ended September 30, 2020. For the fiscal year ended December 31, 2020, the Company earned a record $12.7 million, or $1.14 per diluted share compared to earnings of $9.5 million, or $0.85 per diluted share for the fiscal year ended December 31, 2019.

    The Company’s fourth quarter operating results reflected: (1) increased net interest income largely due to increased accretion related to both reductions of purchased credit impaired loans and the Small Business Administration’s Paycheck Protection Program (SBA PPP) debt forgiveness; (2) higher loan loss provisions, primarily due to the impact of loan growth and economic uncertainty; (3) a continued robust refinancing market which led to an all-time high on gains on sale of mortgage loans; and (4) a modest increase in non-interest expenses due to branch closure costs and modestly higher impairment of mortgage servicing right assets, offset by lower compensation and a seasonal reduction in advertising.

    Book value per share was $14.52 at December 31, 2020 compared to $14.10 at September 30, 2020 and $13.36 at December 31, 2019. Tangible book value per share (non-GAAP)5 was $11.18 at December 31, 2020 compared to $10.75 at September 30, 2020 and $9.89 at December 31, 2019. Book value per share increased $1.16 in fiscal 2020, a 9% increase from December 31, 2019. Tangible book value per share increased $1.29 in fiscal 2020, a 13.0% increase from December 31, 2019. In addition to building tangible book value per share 13.0% over the past year, the Company paid an annual dividend of $0.21 per share in fiscal 2020. On January 28, 2021, the Board of Directors approved a 10% increase in the annual cash dividend to $0.23 per share. The dividend will be payable on February 25, 2021 to the shareholders of record on February 11, 2021.

    Stephen Bianchi, Chairman, President and Chief Executive Officer, in expressing his appreciation of the Citizens team, said, “I am very proud of the focus and commitment by our colleagues to clients, to each other and to the communities we serve. Their dedication in the face of adversity helped the Bank deliver strong returns to stakeholders and positions us well for the future.”

    “The continued execution of our strategic priorities resulted in the following highlights; (1) a 13% increase in tangible book value, or $1.29 per share, to $11.18; (2) continued asset quality improvement in the quarter with a $3.4 million, or 23%, decrease in nonperforming assets and a decrease for the year of $10.1 million, or 47%; (3) Criticized assets declined 39% from March 31, 2020 levels; (4) originated loans, net of SBA PPP loans, grew by $59 million or 8% on a linked quarter basis; and (5) efforts to build more efficient workflows using technology and lower staffing levels through attrition and three branch closures were partially reflected in the fourth quarter as non-interest expense declined. The full cost savings will be more fully reflected in the first quarter of 2021,” continued Stephen Bianchi.

    “Fourth quarter commercial activity accelerated across our markets where unemployment through November was below 5% in all markets and under 4% in select markets. As expected, COVID-19 deferrals remain concentrated in the hospitality segment where occupancy rates generally have been tracking with, or slightly better than, national averages depending on the property. We have been working with our clients as the pandemic persists by requiring additional support from the borrower in exchange for further deferral periods and expect the second PPP draws will be beneficial to this segment,” continued Bianchi.

    December 31, 2020 Highlights: (as of or for the 3-month period ended December 31, 2020 and year ended December 31, 2020, compared to September 30, 2020 and December 31, 2019.)

    • Stockholders’ equity as a percent of total assets increased to 9.74% from 9.70% during the quarter ended December 31, 2020. Tangible common equity as a percent of tangible assets (non-GAAP)5, increased to 7.67% from 7.57% during the quarter ended December 31, 2020.

    • Return on average assets increased to 0.80% from 0.68% during the year ended December 31, 2020. Return on average equity increased to 8.29% from 6.59% during the year ended December 31, 2020. Return on average tangible common equity5 (non-GAAP) increased to 11.04% from 8.98% during the year ended December 31, 2020.

    • The Bank recorded provision for loan losses of $2.5 million for the quarter ended December 31, 2020, compared to $1.5 million for the quarter ended September 30, 2020. The increase was largely due to organic loan growth along with qualitative factor increases related to the potential adverse economic impact of COVID-19. The COVID-19 pandemic continued to result in reduced operating capacity and uncertainty regarding potential future revenue and cash flows for certain businesses, including bank borrowers. Economic conditions in our markets continued to improve during the last quarter of 2020. This has supported improving trends for businesses most impacted by the pandemic, but further improvements in their prospects will be dependent on the timing and efficacy of vaccinations, and related impact on consumer behavior and business activities.

    • As of December 31, 2020, the Bank’s COVID-19 related modifications under Section 4013 of the CARES Act, totaled $61 million, or 5% of gross loans versus $126.7 million, or 10% of gross loans at September 30, 2020. At December 31, 2020, hotel industry sector loans represent $51.6 million of the approved deferrals. The Bank has approximately $2.4 million of total payment deferrals expiring in the first quarter of 2021.

    • The sum of special mention and substandard loans decreased $5.5 million to $35.2 million at December 31, 2020 from $40.7 million at September 30, 2020, a decrease of 13%.

    • The allowance for loan losses on originated loans, excluding PPP loans, increased to 1.77% at December 31, 2020 from 1.65% at September 30, 2020. Since PPP loans are guaranteed by the SBA, they are excluded from this reserve calculation. Additionally, loans resulting from Bank acquisitions were effectively marked to market value at the time of their acquisition and were also excluded from this reserve calculation. The allowance for loan losses of $17.0 million, is allocated $14.8 million to the originated loan portfolio and $2.2 million to the acquired loan portfolio.

    • During the fourth quarter, the Bank closed three branch operations located at Minnesota Lake, Minnesota, Eau Claire, Wisconsin, and Eleva, Wisconsin. These branch operations were consolidated into nearby branch locations. These closures resulted in pretax net branch closure costs of $165 thousand as presented in the “Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP)” table.

    • Nonperforming assets continued to decline during the quarter ended December 31, 2020 to $11.5 million from $14.9 million one quarter earlier.

    • On November 30, 2020, the Board of Directors approved a stock repurchase program. Under this program the Company may repurchase up to 557,728 shares of its common stock, or approximately 5% of the current outstanding shares. Through December 31, 2020, the Company has repurchased approximately 98,000 shares under this new stock repurchase program.

    Balance Sheet and Asset Quality

    Total assets increased $26.5 million during the quarter to $1.65 billion at December 31, 2020, compared to $1.62 billion at September 30, 2020. This increase was approximately the same as the increase in deposits of $24.5 million.

    Securities available for sale decreased $6.7 million during the quarter ended December 31, 2020 to $144.2 million from $150.9 million at September 30, 2020. Meanwhile, the Bank’s securities held to maturity increased $26.0 million in the quarter. With strong deposit levels and SBA PPP loan debt forgiveness expected to increase in 2021, the Bank purchased $29 million of agency mortgage-backed certificates during the fourth quarter, in the held to maturity category.

    Loans receivable increased by $7.4 million to $1.24 billion at December 31, 2020. The originated loan portfolio before SBA PPP loans increased $59 million in the quarter. Approximately $5.5 million of the loan growth was represented by draws on lines of credit taken on December 31, 2020 with the proceeds deposited into the customer’s money market accounts at the Bank, and repaid on January 4, 2021. SBA’s PPP loans decreased $15 million in the quarter due to debt forgiveness. Acquired loans decreased by $38 million. The acquired loan portfolio asset quality improved with a reduction of $4 million in substandard loans, which included the prepayment of $3 million of nonaccrual loans and the payoff of hotel loans on deferral of $8 million.

    The allowance for loan losses increased to $17.0 million at December 31, 2020 representing 1.38% of loans receivable at December 31, 2020, compared to $14.8 million at September 30, 2020 representing 1.21% of loans receivable at September 30, 2020. Excluding the PPP loans, which are guaranteed by the SBA, the allowance for loan losses was 1.53% at December 31, 2020 compared to 1.35% at September 30, 2020. Approximately 23% of the loan portfolio at December 31, 2020 consists of loans purchased through whole bank acquisitions resulting in these loans being recorded at fair market value at acquisition. The allowance for loan losses as a percent of originated loans excluding PPP loans was 1.77% at December 31, 2020 compared to 1.65% at September 30, 2020. For the quarter ended December 31, 2020, the Bank had net charge-offs of $293,000.

    Allowance for Loan Losses Percentages        
    (in thousands, except ratios)        
      December 31, 2020 September 30, 2020 June 30, 2020 December 31, 2019
    Originated loans, net of deferred fees and costs $835,769  $777,340  $789,075  $762,127 
    SBA PPP loans, net of deferred fees 120,711  135,177  132,800   
    Acquired loans, net of unamortized discount 281,101  317,622  359,300  415,253 
    Loans, end of period $1,237,581  $1,230,139  $1,281,175  $1,177,380 
    SBA PPP loans, net of deferred fees (120,711) (135,177) (132,800)  
    Loans, net of SBA PPP loans and deferred fees $1,116,870  $1,094,962  $1,148,375  $1,177,380 
    Allowance for loan losses allocated to originated loans $14,819  $12,809  $12,109  $9,551 
    Allowance for loan losses allocated to other loans 2,224  2,027  1,264  769 
    Allowance for loan losses $17,043  $14,836  $13,373  $10,320 
    Non-accretable difference on purchased credit impaired loans $1,087  $1,661  $3,355  $6,290 
    ALL as a percentage of loans, end of period 1.38% 1.21% 1.04% 0.88%
    ALL as a percentage of loans, net of SBA PPP loans and deferred fees 1.53% 1.35% 1.16% 0.88%
    ALL allocated to originated loans as a percentage of originated loans, net of deferred fees and costs 1.77% 1.65% 1.53% 1.25%

    Nonperforming assets decreased 22.7% to $11.5 million or 0.70% of total assets at December 31, 2020 compared to $14.9 million or 0.92% of total assets at September 30, 2020. Included in nonperforming assets at December 31, 2020 are $7.4 million of nonperforming assets acquired during recent whole-bank acquisitions. Originated nonperforming assets were only $4.2 million, or 0.25% of total assets for the most recent quarter. Over the past year, nonperforming assets declined 47% from $21.6 million at December 31, 2019 to $11.5 million at December 31, 2020.

    Substandard and special mention loans declined $5.5 million, or 13%, during the quarter ended December 31, 2020. The table below shows the decreases in substandard loans by quarter during 2020. Over the past year, total criticized loans decreased 30.6% from $50.7 million at December 31, 2019 to $35.2 million at December 31, 2020.

      (in thousands)
      December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019
    Special mention loan balances $6,672  $7,777  $19,958  $19,387  $10,856 
    Substandard loan balances 28,541  32,922  35,911  38,393  39,892 
    Criticized loans, end of period $35,213  $40,699  $55,869  $57,780  $50,748 

    Deposits increased $24.5 million to $1.295 billion at December 31, 2020 compared to $1.271 billion at September 30, 2020. The increase was in non-maturity deposits which more than offset the modest decrease of $10 million in certificates of deposit. Deposit growth of $5.5 million represents line of credit draw proceeds deposited into customers’ money market accounts, which were subsequently withdrawn to repay the line of credits on January 4, 2021. The decrease in certificates of deposit was due to the Company choosing not to match higher rate local retail certificate competition.

    Review of Operations

    Net interest income was $13.4 million for the fourth quarter of 2020 compared to $11.9 million for the third quarter of
    2020, and $11.8 million for the quarter ended December 31, 2019. The net interest margin increased to 3.51% for the fourth quarter of 2020 compared to 3.11% for the third quarter of 2020 and 3.41% for the fourth quarter ended December 31, 2019.

    Net interest income and net interest margin with and without loan purchase accounting:
    (in thousands, except yields and rates)
      Three months ended
      December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019
      Net
    Interest Income
     Net
    Interest Margin
     Net
    Interest Income
     Net
    Interest Margin
     Net
    Interest Income
     Net
    Interest Margin
     Net
    Interest Income
     Net
    Interest Margin
     Net
    Interest Income
     Net
    Interest Margin
    With loan purchase accretion $13,372  3.51% $11,909  3.11% $12,303  3.34% $12,671   3.64 % $11,775  3.41%
    Less non-accretable difference realized as interest from payoff of purchased credit impaired loans (324) (0.08)% (130) (0.03)% (196) (0.05)% (1,043)  (0.30)% (271) (0.08)%
    Less accelerated accretion from payoff of certain PCI loans with transferred non-accretable differences (872) (0.23)%   % (99) (0.03)%     %   %
    Less scheduled accretion interest (252) (0.07)% (276) (0.07)% (247) (0.07)% (233)  (0.07)% (233) (0.07)%
    Without loan purchase accretion $11,924  3.13% $11,503  3.01% $11,761  3.19% $11,395   3.27 % $11,271  3.26%
                                         

    As noted above, the current quarter net interest margin was favorably impacted by reductions in purchased credit impaired loans and associated income realization. The Company realized $1.2 million, or 31 basis points, of such accelerated accretion in the quarter ended December 31, 2020. In addition, current quarter SBA PPP fee accretion of $0.98 million represented a $0.34 million, or 10 basis point, net interest margin increase over the prior quarter’s accretion of $0.64 million. The increase in SBA PPP fee accretion results from such loans qualifying for and receiving debt forgiveness. Deferred SBA PPP fees were approximately $3 million at December 31, 2020.

    The Company continued to manage deposit interest rates. Various non-maturity deposit product yields were reduced and the Bank was able to lower the cost of certificate of deposit accounts as the interest rates on new and renewed certificates of deposit were lower than the previous quarter. Additionally, the Bank relied less on higher-costing certificates of deposit. These actions reduced the cost of deposits by 9 basis points in the quarter which more than offset the full quarter impact of the third quarter’s subordinated debt issuance. The Bank has $61 million of certificates of deposits maturing in the first quarter of 2021 with a blended interest cost of approximately 1.90% and an additional $124 million maturing in the remaining three quarters of 2021 at a blended interest cost of approximately 1.05%. The weighted average cost of new certificates in the fourth quarter of 2020 was approximately 0.50%.

    Loan loss provisions were $2.5 million for the quarter ended December 31, 2020 compared to $1.50 million for the quarter ended September 30, 2020 and $1.4 million one year earlier. There was no provision on the $5.5 million lines of credit drawn in late December and repaid on January 4, 2021. The increase was largely due to organic growth, along with qualitative factor increases related to the potential adverse impact of COVID-19. We estimate the COVID-19/qualitative factor increase impact on the provisions for loan losses to be approximately $1.3 million and $4.8 million for the three and twelve months ended December 31, 2020. For the year ended December 31, 2020, provisions for loan losses were $7.750 million compared to $3.525 million for the year ended December 31, 2019.

    Non-interest income decreased modestly in the quarter ended December 31, 2020 to $4.8 million from the previous quarter ended September 30, 2020 level of $5.1 million. The decrease in the fourth quarter was largely due to a recognized gain in the third quarter on the disposition of an acquired business line and the third quarter recognition of a higher annual incentive paid on debit card activity. For the year ended December 31, 2020, non-interest income increased by $3.5 million to $18.4 million with stronger gain on sale of loans and loan servicing income being partially offset by the sale of the Company’s only Michigan branch in the second quarter of 2019.

    Total non-interest expense increased by $0.1 million to $10.8 million for the quarter ended December 31, 2020. This was due to modestly higher impairment on mortgage servicing rights (“MSR”) of $0.33 million and $0.17 million of costs related to the closure of 3 branches in mid-November. MSR impairment for the quarter ended December 31, 2020 totaled $0.33 million compared to $0.25 million for the quarter ended September 30, 2020. These increases were partially offset by lower compensation due to a smaller level of FTE and lower seasonal marketing costs. For the year ended December 31, 2020, total non-interest expense was $43.7 million compared to $42.7 million for the year ended December 21, 2019. The impact of the F&M acquisition on July 1, 2019 increased non-interest expense in 2020 in addition to the items discussed above.

    Provisions for income taxes remained unchanged in the fourth quarter at $1.3 million compared to the preceding quarter. For the year ended December 31, 2020, provisions for income taxes were $4.6 million compared to $2.8 million for the year ended December 31, 2019, which included a $0.3 million reduction due to a favorable tax treatment of certain acquired bank-owned life insurance. The effective tax rate for the most recent quarter was 25.9% compared to 26.7% the prior quarter.

    These financial results are preliminary until the Form 10-K is filed in March 2021.

    About the Company
    Citizens Community Bancorp, Inc. (NASDAQ: “CZWI”) is the holding company of the Bank, a national bank based in Altoona, Wisconsin, currently serving customers primarily in Wisconsin and Minnesota through 25
    branch locations. Its primary markets include the Chippewa Valley Region in Wisconsin, the Twin Cities and Mankato markets in Minnesota, and various rural communities around these areas. The Bank offers traditional community banking services to businesses, Ag operators and consumers, including residential mortgage loans.

    Cautionary Statement Regarding Forward-Looking Statements
    Certain statements contained in this release are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified using forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “estimates,” “intend,” “may,” “preliminary,” “planned,” “potential,” “should,” “will,” “would” or the negative of those terms or other words of similar meaning. Such forward-looking statements in this release are inherently subject to many uncertainties arising in the operations and business environment of the Company and the Bank. These uncertainties include the conditions in the financial markets and economic conditions generally; adverse impacts to the Company or Bank arising from the COVID-19 pandemic; the possibility of a deterioration in the residential real estate markets; interest rate risk; lending risk; the sufficiency of loan allowances; changes in the fair value or ratings downgrades of our securities; competitive pressures among depository and other financial institutions; our ability to maintain our reputation; our ability to realize the benefits of net deferred tax assets; our ability to maintain or increase our market share; acts of terrorism and political or military actions by the United States or other governments; legislative or regulatory changes or actions, or significant litigation, adversely affecting the Company or Bank; increases in FDIC insurance premiums or special assessments by the FDIC; disintermediation risk; our inability to obtain needed liquidity; risks related to the ongoing integration of F. & M. Bancorp. of Tomah, Inc. into the Company’s operations; our ability to successfully execute our acquisition growth strategy; risks posed by acquisitions and other expansion opportunities, including difficulties and delays in integrating the acquired business operations or fully realizing the cost savings and other benefits; our ability to raise capital needed to fund growth or meet regulatory requirements; the possibility that our internal controls and procedures could fail or be circumvented; our ability to attract and retain key personnel; our ability to keep pace with technological change; cybersecurity risks; changes in federal or state tax laws; changes in accounting principles, policies or guidelines and their impact on financial performance; restrictions on our ability to pay dividends; and the potential volatility of our stock price. Stockholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Such uncertainties and other risks that may affect the Company’s performance are discussed further in Part I, Item 1A, “Risk Factors,” in the Company’s Form 10-K, for the year ended December 31, 2019 filed with the Securities and Exchange Commission (“SEC”) on March 10, 2020 and the Company’s subsequent filings with the SEC. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this news release or to update them to reflect events or circumstances occurring after the date of this release.

    Non-GAAP Financial Measures
    This press release contains non-GAAP financial measures, such as net income as adjusted, net income as adjusted per share, tangible book value, tangible book value per share, tangible common equity as a percent of tangible assets, return on average tangible common equity and return on average tangible common equity as adjusted which management believes may be helpful in understanding the Company’s results of operations or financial position and comparing results over different periods.

    Net income as adjusted and net income as adjusted per share are non-GAAP measures that eliminates the impact of certain expenses such as acquisition and branch closure costs and related data processing termination fees, legal costs, severance pay, accelerated depreciation expense and lease termination fees, the gain on sale of branch deposits and fixed assets and the net impact of the Tax Cuts and Jobs Act of 2017, which management believes enhances investors’ ability to better understand the underlying business performance and trends related to core business activities. Merger related charges represent expenses to either satisfy contractual obligations of acquired entities without any useful benefit to the Company or to convert and consolidate customer records onto the Company platforms. These costs are unique to each transaction based on the contracts in existence at the merger date. Tangible book value, tangible book value per share, tangible common equity as a percent of tangible assets and return on average tangible common equity are non-GAAP measures that eliminate the impact of preferred stock equity, goodwill and intangible assets on our financial position. Management believes these measures are useful in assessing the strength of our financial position.

    Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks and financial institutions.

    Contact: Steve Bianchi, CEO
    (715)-836-9994

     
     
    CITIZENS COMMUNITY BANCORP, INC.
    Consolidated Balance Sheets
    (in thousands, except shares and per share data)
     
      December 31, 2020
    (unaudited)
     September 30, 2020
    (unaudited)
     December 31, 2019
    (audited)
    Assets      
    Cash and cash equivalents $119,440  $115,474  $55,840 
    Other interest-bearing deposits 3,752  3,752  4,744 
    Securities available for sale “AFS” 144,233  150,908  180,119 
    Securities held to maturity “HTM” 43,551  16,927  2,851 
    Equity securities with readily determinable fair value 200  187  246 
    Other investments 14,948  15,075  15,005 
    Loans receivable 1,237,581  1,230,139  1,177,380 
    Allowance for loan losses (17,043) (14,836) (10,320)
    Loans receivable, net 1,220,538  1,215,303  1,167,060 
    Loans held for sale 3,075  4,938  5,893 
    Mortgage servicing rights 3,252  3,498  4,282 
    Office properties and equipment, net 21,165  21,607  21,106 
    Accrued interest receivable 5,652  5,829  4,738 
    Intangible assets 5,494  5,893  7,587 
    Goodwill 31,498  31,498  31,498 
    Foreclosed and repossessed assets, net 197  812  1,460 
    Bank owned life insurance (“BOLI”) 23,684  23,514  23,063 
    Other assets 8,416  7,378  5,757 
    TOTAL ASSETS $1,649,095  $1,622,593  $1,531,249 
    Liabilities and Stockholders’ Equity      
    Liabilities:      
    Deposits $1,295,256  $1,270,778  $1,195,702 
    Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) advances 123,498  124,491  130,971 
    Other borrowings 58,328  58,297  43,560 
    Other liabilities 11,449  11,704  10,463 
    Total liabilities 1,488,531  1,465,270  1,380,696 
    Stockholders’ equity:      
    Common stock— $0.01 par value,
    authorized 30,000,000; 11,056,349;
    11,154,645 and 11,266,954 shares issued
    and outstanding, respectively
     111  112  113 
    Additional paid-in capital 126,704  127,778  128,856 
    Retained earnings 32,809  29,239  22,517 
    Unearned deferred compensation (550) (710) (462)
    Accumulated other comprehensive income (loss) 1,490  904  (471)
    Total stockholders’ equity 160,564  157,323  150,553 
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $1,649,095  $1,622,593  $1,531,249 
                 
                 
    Note: Certain items previously reported were reclassified for consistency with the current presentation.
     


    CITIZENS COMMUNITY BANCORP, INC.
    Consolidated Statements of Operations
    (in thousands, except per share data)
     
      Three Months Ended Twelve Months Ended
      December 31,
    2020
    (unaudited)
     September 30,
    2020
    (unaudited)
     December 31,
    2019
    (unaudited)
     December 31,
    2020
    (unaudited)
     December 31,
    2019
    (audited)
    Interest and dividend income:          
    Interest and fees on loans $15,463   $14,154   $14,611   $59,763   $54,647  
    Interest on investments 1,052   1,064   1,535   4,764   5,776  
    Total interest and dividend income 16,515   15,218   16,146   64,527   60,423  
    Interest expense:          
    Interest on deposits 1,958   2,255   3,284   10,000   12,174  
    Interest on FHLB and FRB borrowed funds 428   430   508   1,814   2,721  
    Interest on other borrowed funds 757   624   579   2,458   2,015  
    Total interest expense 3,143   3,309   4,371   14,272   16,910  
    Net interest income before provision for loan losses 13,372   11,909   11,775   50,255   43,513  
    Provision for loan losses 2,500   1,500   1,400   7,750   3,525  
    Net interest income after provision for loan losses 10,872   10,409   10,375   42,505   39,988  
    Non-interest income:          
    Service charges on deposit accounts 496   431   612   1,832   2,368  
    Interchange income 520   556   468   2,029   1,735  
    Loan servicing income 1,014   1,144   772   4,158   2,674  
    Gain on sale of loans 2,108   1,987   902   6,693   2,462  
    Loan fees and service charges 342   320   285   1,383   1,145  
    Insurance commission income —   —   161   475   734  
    Net gains (losses) on investment securities 13   (1) 120   110   271  
    Net gain (loss) on sale of branch —   —   —   432   2,295  
    Net gain (loss) on sale of acquired business lines —   180   —   —   —  
    Settlement proceeds —   —   —   131   —  
    Other 277   445   464   1,205   1,291  
    Total non-interest income 4,770   5,062   3,784   18,448   14,975  
    Non-interest expense:          
    Compensation and related benefits 5,440   5,538   5,720   22,321   20,325  
    Occupancy 1,017   993   972   3,915   3,697  
    Office 502   532   539   2,152   2,188  
    Data processing 1,210   1,145   985   4,375   3,938  
    Amortization of intangible assets 399   399   412   1,622   1,496  
    Mortgage servicing rights expense 720   603   286   3,050   1,108  
    Advertising, marketing and public relations 165   260   240   967   1,214  
    FDIC premium assessment 148   188   (60) 584   258  
    Professional services 438   434   496   1,829   2,457  
    Gains (losses) on repossessed assets, net (64) (105) 18   (259) (125)
    Other 851   737   820   3,117   6,130  
    Total non-interest expense 10,826   10,724   10,428   43,673   42,686  
    Income before provision for income taxes 4,816   4,747   3,731   17,280   12,277  
    Provision for income taxes 1,246   1,267   562   4,555   2,814  
    Net income attributable to common stockholders $3,570   $3,480   $3,169   $12,725   $9,463  
    Per share information:          
    Basic earnings $0.32   $0.31   $0.28   $1.14   $0.85  
    Diluted earnings $0.32   $0.31   $0.28   $1.14   $0.85  
    Cash dividends paid $—   $—   $—   $0.21   $0.20  
    Book value per share at end of period $14.52   $14.10   $13.36   $14.52   $13.36  
    Tangible book value per share at end of period (non-GAAP) $11.18   $10.75   $9.89   $11.18   $9.89  
                         
    Note: Certain items previously reported were reclassified for consistency with the current presentation.
     


    Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP)
    (in thousands, except per share data)
     
      Three Months Ended Twelve Months Ended
      December 31,
    2020
     September 30,
    2020
     December 31,
    2019
     December 31,
    2020
     December 31,
    2019
              
    GAAP pretax income $4,816  $4,747  $3,731  $17,280  $12,277 
    Merger related costs     104    3,880 
    Branch closure costs (1) 165      165  15 
    Audit and Financial Reporting (2)         358 
    Net gain on sale of branch (3)         (2,295)
    Net gain on sale of acquired business lines (4)   (180)   (432)  
    Settlement proceeds (5)       (131)  
    Pretax income as adjusted (6) 4,981  4,567  3,835  16,882  14,235 
    Provision for income tax on net income as adjusted (7) 1,290  1,219  579  4,457  3,260 
    Tax impact of certain acquired BOLI policies (8)     300    300 
    Total Provision for income tax 1,290  1,219  879  4,457  3,560 
    Net income as adjusted after income taxes (non-GAAP) (6) $3,691  $3,348  $2,956  $12,425  $10,675 
    GAAP diluted earnings per share, net of tax $0.32  $0.31  $0.28  $1.14  $0.85 
    Merger related costs, net of tax     0.01    0.27 
    Branch closure costs, net of tax 0.01      0.01   
    Audit and Financial Reporting         0.02 
    Net gain on sale of branch         (0.15)
    Tax impact of certain acquired BOLI policies     (0.03)   (0.03)
    Net gain on sale of acquired business lines   (0.01)   (0.03)  
    Settlement proceeds       (0.01)  
    Diluted earnings per share, as adjusted, net of tax (non-GAAP) $0.33  $0.30  $0.26  $1.11  $0.96 
                     
    Average diluted shares outstanding 11,128,628  11,155,337  11,275,961  11,161,811  11,121,435 

    (1) Branch closure costs include severance pay recorded in compensation and benefits, accelerated depreciation expense and lease termination fees included in occupancy and other costs included in other non-interest expense in the consolidated statement of operations.
    (2) Audit and financial reporting costs include additional audit and professional fees related to the change in our year end from September 30 to December 31, effective December 31, 2018.
    (3) Gain on sale of branch resulted from the sale of our sole Michigan office in Rochester Hills.
    (4) Gain on sale of acquired business lines resulted from (1) the sale of Wells Insurance Agency and (2) the termination and sale of the wealth management business line sales contract acquired in a former acquisition.
    (5) Settlement proceeds includes litigation income from a JP Morgan Residential Mortgage Backed Security (RMBS) claim. This distribution represents a supplement to the proceeds received in March 2017 from a JP Morgan RMBS previously owned by the Bank and sold in 2011.
    (6) Net income as adjusted is a non-GAAP measure that management believes enhances the market’s ability to assess the underlying business performance and trends related to core business activities.
    (7) Provision for income tax on net income as adjusted is calculated at our effective tax rate for each respective period presented.
    (8) Tax impact of certain BOLI policies acquired from United Bank equal to $300 thousand.

             
             
    Loan Composition (in thousands) December 31,
    2020
     September 30,
    2020
     June 30,
    2020
     December 31,
    2019
    Originated Loans:        
    Commercial/Agricultural real estate:        
    Commercial real estate $351,113  $322,028  $314,390  $302,546 
    Agricultural real estate 31,741  32,530  35,138  34,026 
    Multi-family real estate 112,731  100,148  90,617  71,877 
    Construction and land development 91,241  80,992  94,856  71,467 
    C&I/Agricultural operating:        
    Commercial and industrial 95,290  79,959  80,369  89,730 
    Agricultural operating 24,457  24,324  25,813  20,717 
    Residential mortgage:        
    Residential mortgage 86,283  90,100  95,664  108,619 
    Purchased HELOC loans 6,260  6,547  6,861  8,407 
    Consumer installment:        
    Originated indirect paper 25,851  28,535  32,031  39,585 
    Other consumer 12,056  13,221  14,175  15,546 
    Originated loans before SBA PPP loans 837,023  778,384  789,914  762,520 
    SBA PPP loans 123,702  139,166  137,330   
    Total originated loans $960,725  $917,550  $927,244  $762,520 
    Acquired Loans:        
    Commercial/Agricultural real estate:        
    Commercial real estate $156,562  $178,645  $195,335  $211,913 
    Agricultural real estate 37,054  40,613  43,054  51,337 
    Multi-family real estate 9,421  9,520  13,022  15,131 
    Construction and land development 7,276  8,346  15,276  14,943 
    C&I/Agricultural operating:        
    Commercial and industrial 21,263  24,413  29,477  44,004 
    Agricultural operating 8,328  9,634  12,124  17,063 
    Residential mortgage:        
    Residential mortgage 45,103  51,754  56,760  67,713 
    Consumer installment:        
    Other consumer 1,157  1,409  1,639  2,640 
    Total acquired loans $286,164  $324,334  $366,687  $424,744 
    Total Loans:        
    Commercial/Agricultural real estate:        
    Commercial real estate $507,675  $500,673  $509,725  $514,459 
    Agricultural real estate 68,795  73,143  78,192  85,363 
    Multi-family real estate 122,152  109,668  103,639  87,008 
    Construction and land development 98,517  89,338  110,132  86,410 
    C&I/Agricultural operating:        
    Commercial and industrial 116,553  104,372  109,846  133,734 
    Agricultural operating 32,785  33,958  37,937  37,780 
    Residential mortgage:        
    Residential mortgage 131,386  141,854  152,424  176,332 
    Purchased HELOC loans 6,260  6,547  6,861  8,407 
    Consumer installment:        
    Originated indirect paper 25,851  28,535  32,031  39,585 
    Other consumer 13,213  14,630  15,814  18,186 
    Gross loans before SBA PPP loans 1,123,187  1,102,718  1,156,601  1,187,264 
    SBA PPP loans 123,702  139,166  137,330   
    Gross loans $1,246,889  $1,241,884  $1,293,931  $1,187,264 
    Unearned net deferred fees and costs and loans in process (4,245) (5,033) (5,369) (393)
    Unamortized discount on acquired loans (5,063) (6,712) (7,387) (9,491)
    Total loans receivable $1,237,581  $1,230,139  $1,281,175  $1,177,380 


    Nonperforming Originated and Acquired Assets
    (in thousands, except ratios)
     
      December 31, 2020
    and Three Months
    Ended
     September 30, 2020
    and Three Months
    Ended
     June 30, 2020 and
    Three Months
    Ended
     December 31, 2019
    and Three Months
    Ended
    Nonperforming assets:        
    Originated nonperforming assets:        
    Nonaccrual loans $3,649  $3,255  $3,951  $4,285 
    Accruing loans past due 90 days or more 415  698  1,455  946 
    Total originated nonperforming loans (“NPL”) 4,064  3,953  5,406  5,231 
    Other real estate owned (“OREO”) 63  352  270  441 
    Other collateral owned 41  56  42  28 
    Total originated nonperforming assets (“NPAs”) $4,168  $4,361  $5,718  $5,700 
    Acquired nonperforming assets:        
    Nonaccrual loans $7,098  $9,899  $10,836  $14,771 
    Accruing loans past due 90 days or more 171  252  425  158 
    Total acquired nonperforming loans (“NPL”) 7,269  10,151  11,261  14,929 
    Other real estate owned (“OREO”) 93  404  422  988 
    Other collateral owned       3 
    Total acquired nonperforming assets (“NPAs”) $7,362  $10,555  $11,683  $15,920 
    Total nonperforming assets (“NPAs”) $11,530  $14,916  $17,401  $21,620 
    Loans, end of period $1,237,581  $1,230,139  $1,281,175  $1,177,380 
    Total assets, end of period $1,649,095  $1,622,593  $1,607,514  $1,531,249 
    Ratios:        
    Originated NPLs to total loans 0.33% 0.32% 0.42% 0.44%
    Acquired NPLs to total loans 0.59% 0.83% 0.88% 1.27%
    Originated NPAs to total assets 0.25% 0.27% 0.36% 0.37%
    Acquired NPAs to total assets 0.45% 0.65% 0.73% 1.04%
                 


    Nonperforming Total Assets
    (in thousand, except ratios)
     
      December 31, 2020
    and Three Months
    Ended
     September 30, 2020
    and Three Months
    Ended
     June 30, 2020
    and Three Months
    Ended
     December 31, 2019
    and Three Months
    Ended
    Nonperforming assets:        
    Nonaccrual loans        
    Commercial real estate $827  $2,762  $3,221  $5,705 
    Agricultural real estate 5,084  5,252  5,979  7,568 
    Commercial and industrial (“C&I”) 357  853  1,306  1,850 
    Agricultural operating 1,872  1,651  1,496  1,702 
    Residential mortgage 2,451  2,536  2,666  2,063 
    Consumer installment 156  100  119  168 
    Total nonaccrual loans $10,747  $13,154  $14,787  $19,056 
    Accruing loans past due 90 days or more 586  950  1,880  1,104 
    Total nonperforming loans (“NPLs”) 11,333  14,104  16,667  20,160 
    Foreclosed and repossessed assets, net 197  812  734  1,460 
    Total nonperforming assets (“NPAs”) $11,530  $14,916  $17,401  $21,620 
    Troubled Debt Restructurings (“TDRs”) $18,477  $19,778  $13,119  $12,594 
    Nonaccrual TDRs $6,735  $7,199  $6,992  $7,198 
    Loans, end of period $1,237,581  $1,230,139  $1,281,175  $1,177,380 
    Total assets, end of period $1,649,095  $1,622,593  $1,607,514  $1,531,249 
    Ratios:        
    NPLs to total loans 0.92% 1.15% 1.30% 1.71%
    NPAs to total assets 0.70% 0.92% 1.08% 1.41%


    Deposit Composition
    (in thousands)
     
       December 31,
    2020
     September 30,
    2020
     June 30,
    2020
     December 31,
    2019
     Non-interest bearing demand deposits $238,348  $229,217  $223,536  $168,157 
     Interest bearing demand deposits 301,764  279,648  270,116  223,102 
     Savings accounts 196,348  191,511  185,816  156,599 
     Money market accounts 245,549  246,651  242,536  246,430 
     Certificate accounts 313,247  323,751  350,193  401,414 
     Total deposits $1,295,256  $1,270,778  $1,272,197  $1,195,702 


    Average balances, Interest Yields and Rates
    (in thousands, except yields and rates)
     
      Three months ended December 31,
    2020
     Three months ended September 30,
    2020
     Three months ended December 31,
    2019
      Average
    Balance
     Interest
    Income/
    Expense
     Average
    Yield/
    Rate (1)
     Average
    Balance
     Interest
    Income/
    Expense
     Average
    Yield/
    Rate (1)
     Average
    Balance
     Interest
    Income/
    Expense
     Average
    Yield/
    Rate (1)
    Average interest earning assets:                  
    Cash and cash equivalents $79,225  $21  0.11% $77,774  $18  0.09% $31,327  $122  1.55%
    Loans receivable 1,240,895  15,463  4.96% 1,258,224  14,154  4.48% 1,136,330  14,611  5.10%
    Interest bearing deposits 3,752  23  2.44% 3,752  23  2.44% 4,904  30  2.43%
    Investment securities (1) 176,802  824  1.85% 166,622  846  2.02% 185,920  1,222  2.62%
    Other investments 15,015  184  4.88% 15,145  177  4.65% 14,209  161  4.50%
    Total interest earning assets (1) $1,515,689  $16,515  4.33% $1,521,517  $15,218  3.98% $1,372,690  $16,146  4.67%
    Average interest bearing liabilities:                  
    Savings accounts $187,474  $87  0.18% $183,381  $98  0.21% $152,841  $172  0.45%
    Demand deposits 285,001  200  0.28% 285,993  231  0.32% 216,021  389  0.71%
    Money market accounts 243,631  206  0.34% 255,160  280  0.44% 210,398  565  1.07%
    CD’s 284,728  1,304  1.82% 297,691  1,469  1.96% 367,278  1,951  2.11%
    IRA’s 41,493  161  1.54% 41,852  177  1.68% 43,809  207  1.87%
    Total deposits $1,042,327  $1,958  0.75% $1,064,077  $2,255  0.84% $990,347  $3,284  1.32%
    FHLB advances and other borrowings 182,463  1,185  2.58% 173,758  1,054  2.41% 165,660  1,087  2.60%
    Total interest bearing liabilities $1,224,790  $3,143  1.02% $1,237,835  $3,309  1.06% $1,156,007  $4,371  1.50%
    Net interest income   $13,372      $11,909      $11,775   
    Interest rate spread     3.31%     2.92%     3.17%
    Net interest margin (1)     3.51%     3.11%     3.41%
    Average interest earning assets to average interest bearing liabilities     1.24      1.23      1.19 
                                      
    (1) Fully taxable equivalent (FTE). The average yield on tax exempt securities is computed on a tax equivalent basis using a tax rate of 21% for the quarters ended December 31, 2020, September 30, 2020 and December 31, 2019. The FTE adjustment to net interest income included in the rate calculations totaled $0, $0 and $8 thousand for the three months ended December 31, 2020, September 30, 2020 and December 31, 2019, respectively.
     


      Twelve months ended December 31, 2020 Twelve months ended December 31, 2019
      Average
    Balance
     Interest
    Income/
    Expense
     Average
    Yield/
    Rate (1)
     Average
    Balance
     Interest
    Income/
    Expense
     Average
    Yield/
    Rate (1)
    Average interest earning assets:            
    Cash and cash equivalents $52,016  $162  0.31% $29,948  $672  2.24%
    Loans receivable 1,234,732  59,763  4.84% 1,074,952  54,647  5.08%
    Interest bearing deposits 3,914  96  2.45% 5,841  137  2.35%
    Investment securities (1) 174,396  3,789  2.17% 171,747  4,332  2.60%
    Other investments 15,081  717  4.75% 12,442  635  5.10%
    Total interest earning assets (1) $1,480,139  $64,527  4.36% $1,294,930  $60,423  4.68%
    Average interest bearing liabilities:            
    Savings accounts $174,184  $435  0.25% $155,848  $651  0.42%
    Demand deposits 268,311  1,065  0.40% 204,296  1,677  0.82%
    Money market accounts 244,632  1,446  0.59% 182,103  1,988  1.09%
    CD’s 316,264  6,325  2.00% 352,924  7,114  2.02%
    IRA’s 42,039  729  1.73% 42,134  744  1.77%
    Total deposits $1,045,430  $10,000  0.96% $937,305  $12,174  1.30%
    FHLB advances and other borrowings 186,724  4,272  2.29% 156,885  4,736  3.02%
    Total interest bearing liabilities $1,232,154  $14,272  1.16% $1,094,190  $16,910  1.55%
    Net interest income   $50,255      $43,513   
    Interest rate spread     3.20%     3.13%
    Net interest margin (1)     3.40%     3.37%
    Average interest earning assets to average interest bearing liabilities     1.20      1.18 
                   
    (1) Fully taxable equivalent (FTE). The average yield on tax exempt securities is computed on a tax equivalent basis using a tax rate of 21% for the twelve months ended December 31, 2020 and December 31, 2019. The FTE adjustment to net interest income included in the rate calculations totaled $1 thousand and $120 thousand for the twelve months ended December 31, 2020 and December 31, 2019, respectively.
     

    The following table reports key financial metric ratios based on a net income and net income as adjusted basis:

      Three Months Ended Twelve Months Ended
      December 31, 2020 September 30,
    2020
     December 31,
    2019
     December 31, 2020 December 31, 2019
    Ratios based on net income:          
    Return on average assets (annualized) 0.87% 0.85% 0.84% 0.80% 0.68%
    Return on average equity (annualized) 8.93% 8.93% 8.41% 8.29% 6.59%
    Return on average tangible common equity5 (annualized) 11.67% 11.79% 11.45% 11.04% 8.98%
    Efficiency ratio 60% 63% 67% 64% 73%
    Net interest margin with loan purchase accretion 3.51% 3.11% 3.41% 3.40% 3.37%
    Net interest margin without loan purchase accretion 3.13% 3.01% 3.26% 3.15% 3.26%
    Ratios based on net income as adjusted (non-GAAP):               
    Return on average assets as adjusted2 (annualized) 0.90% 0.82% 0.79% 0.78% 0.76%
    Return on average equity as adjusted3 (annualized) 9.24% 8.59% 7.85% 8.09% 7.44%
    Return on average tangible common equity as adjusted5 (annualized) 12.06% 11.34% 10.68% 10.78% 10.13%
    Efficiency ratio4 as adjusted (non-GAAP) 59% 64% 66% 64% 68%


    Reconciliation of Return on Average Assets as Adjusted (non-GAAP)
    (in thousands, except ratios)
     
      Three Months Ended Twelve Months Ended
      December 31, 2020 September 30, 2020 December 31, 2019 December 31, 2020 December 31, 2019
                        
    GAAP earnings after income taxes $3,570  $3,480  $3,169  $12,725  $9,463 
    Net income as adjusted after income taxes (non-GAAP) (1) $3,691  $3,348  $2,956  $12,425  $10,675 
    Average assets $1,634,459  $1,627,497  $1,492,834  $1,594,053  $1,398,482 
    Return on average assets (annualized) 0.87% 0.85% 0.84% 0.80% 0.68%
    Return on average assets as adjusted (non-GAAP) (annualized) 0.90% 0.82% 0.79% 0.78% 0.76%
     
    (1) See Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP)
     


    Reconciliation of Return on Average Equity as Adjusted (non-GAAP)
    (in thousands, except ratios)
     
      Three Months Ended Twelve Months Ended
      December 31, 2020 September 30, 2020 December 31, 2019 December 31, 2020 December 31, 2019
                        
    GAAP earnings after income taxes $3,570  $3,480  $3,169  $12,725  $9,463 
    Net income as adjusted after income taxes (non-GAAP) (1) $3,691  $3,348  $2,956  $12,425  $10,675 
    Average equity $158,968  $154,996  $149,437  $153,497  $143,523 
    Return on average equity (annualized) 8.93% 8.93% 8.41% 8.29% 6.59%
    Return on average equity as adjusted (non-GAAP) (annualized) 9.24% 8.59% 7.85% 8.09% 7.44%
     
    (1) See Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP)
     


    Reconciliation of Return on Average Tangible Common Equity and Reconciliation of Return on Average Tangible Common Equity, as Adjusted (non-GAAP)
    (in thousands, except ratios)
     
      Three Months Ended Twelve Months Ended
      December 31, 2020 September 30, 2020 December 31, 2019 December 31, 2020 December 31, 2019
    Total stockholders’ equity $160,564  $157,323  $150,553  $160,564  $150,553 
    Less: Goodwill (31,498) (31,498) (31,498) (31,498) (31,498)
    Less: Intangible assets (5,494) (5,893) (7,587) (5,494) (7,587)
    Tangible common equity (non-GAAP) $123,572  $119,932  $111,468  $123,572  $111,468 
    Average tangible common equity (non-GAAP) $121,752  $117,466  $109,829  $115,313  $105,340 
    GAAP earnings after income taxes $3,570  $3,480  $3,169  $12,725  $9,463 
    Net income as adjusted after income taxes (non-GAAP) (1) $3,691  $3,348  $2,956  $12,425  $10,675 
    Return on average tangible common equity (annualized) 11.67% 11.79% 11.45% 11.04% 8.98 %
    Return on average tangible common equity as adjusted (non-GAAP) (annualized) 12.06% 11.34% 10.68% 10.78% 10.13%
                    
    (1) See Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP)
     


    Reconciliation of Efficiency Ratio as Adjusted (non-GAAP)
    (in thousands, except ratios)
     
      Three Months Ended Twelve Months Ended
      December 31, 2020 September 30, 2020 December 31, 2019 December 31, 2020 December 31, 2019
              
    Non-interest expense (GAAP) $10,826  $10,724  $10,428  $43,673  $42,686 
    Merger related Costs (1)     (104)   (3,880)
    Branch Closure Costs (1) (165)     (165) (15)
    Audit and financial reporting (1)         (358)
    Non-interest expense as adjusted (non-GAAP) 10,661  10,724  10,324  43,508  38,433 
    Non-interest income 4,770  5,062  3,784  18,448  14,975 
    Net interest margin 13,372  11,909  11,775  50,255  43,513 
    Efficiency ratio denominator (GAAP) $18,142  $16,971  $15,559  $68,703  $58,488 
    Net gain on sale of branch (1)         (2,295)
    Net gain on acquired business lines (1)   (180)   (432)  
    Settlement proceeds (1)       (131)  
    Efficiency ratio denominator (non-GAAP) $18,142  $16,791  $15,559  $68,140  $56,193 
    Efficiency ratio (GAAP) 60% 63% 67% 64% 73%
    Efficiency ratio as adjusted (non-GAAP) 59% 64% 66% 64% 68%
     
    (1) See Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP)
     


    Reconciliation of tangible book value per share (non-GAAP)
    (
    in thousands, except per share data)
     
    Tangible book value per share at end of period December 31, 2020 September 30, 2020 December 31, 2019
    Total stockholders’ equity $160,564  $157,323  $150,553 
    Less: Goodwill (31,498) (31,498) (31,498)
    Less: Intangible assets (5,494) (5,893) (7,587)
    Tangible common equity (non-GAAP) $123,572  $119,932  $111,468 
    Ending common shares outstanding 11,056,349  11,154,645  11,266,954 
    Book value per share $14.52  $14.10  $13.36 
    Tangible book value per share (non-GAAP) $11.18  $10.75  $9.89 
                 


    Reconciliation of tangible common equity as a percent of tangible assets (non-GAAP)
    (in thousands, except ratios)
     
    Tangible common equity as a percent of tangible assets at end of period  December 31, 2020 September 30, 2020 December 31, 2019
    Total stockholders’ equity $160,564  $157,323  $150,553 
    Less: Goodwill (31,498) (31,498) (31,498)
    Less: Intangible assets (5,494) (5,893) (7,587)
    Tangible common equity (non-GAAP) $123,572  $119,932  $111,468 
    Total Assets $1,649,095  $1,622,593  $1,531,249 
    Less: Goodwill (31,498) (31,498) (31,498)
    Less: Intangible assets (5,494) (5,893) (7,587)
    Tangible Assets (non-GAAP) $1,612,103  $1,585,202  $1,492,164 
    Less SBA PPP Loans (123,702) (139,166)  
    Tangible Assets, excluding SBA PPP Loans (non-GAAP) $1,488,401  $1,446,036  $1,492,164 
    Total stockholders’ equity to total assets ratio 9.74% 9.70% 9.83%
    Tangible common equity as a percent of tangible assets (non-GAAP) 7.67% 7.57% 7.47%
    Tangible common equity as a percent of tangible assets, excluding SBA PPP Loans (non-GAAP) 8.30% 8.29% 7.47%

    1Net income as adjusted and net income as adjusted per share are non-GAAP financial measures that management believes enhances investors’ ability to better understand the underlying business performance and trends related to core business activities. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table “Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP)”.

    2Return on average assets as adjusted is a non-GAAP measure that management believes enhances investors’ ability to better understand the underlying business performance and trends relative to average assets. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table “Reconciliation of Return on Average Assets as Adjusted (non-GAAP)”.

    3Return on average equity as adjusted is a non-GAAP measure that management believes enhances investors’ ability to better understand the underlying business performance and trends relative to average equity. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table “Reconciliation of Return on Average Equity as Adjusted (non-GAAP)”.

    4The efficiency ratio as adjusted (non-GAAP) is a non-GAAP measure that management believes enhances investors’ ability to better understand the underlying business performance and the Company’s ability to use what it has to generate the most profit possible for shareholders relative to core business activities. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table “Reconciliation of Efficiency Ratio as Adjusted (non-GAAP)”.

    5Tangible book value, tangible book value per share, tangible common equity as a percent of tangible assets, return on tangible common equity and return on tangible common equity as adjusted are non-GAAP measures that management believes enhances investors’ ability to better understand the Company’s financial position. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table “Reconciliation of tangible book value per share (non-GAAP)”, “Reconciliation of tangible common equity as a percent of tangible assets (non-GAAP)”, and “Reconciliation of return on average tangible common equity and Reconciliation of Return on Average Tangible Common Equity as Adjusted (non-GAAP)”.


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