Equity Bancshares, Inc. Results Include Strong Organic Growth While Expanding Kansas Franchise

WICHITA, Kan., Jan. 26, 2022 (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 $10.5 million and $0.61 earnings per diluted share for the quarter ended December 31, 2021. Equity’s results include a full quarter contribution from American State Bancshares, Inc. as a result of the completion of its acquisition on October 1, 2021, by Equity and an increased average outstanding share count.

“As we review 2021, we reached milestones for Equity Bank for our customers, teams, and shareholders,” said Brad Elliott, Chairman and CEO. “We issued the first common stock dividend in our company’s history and we completed and successfully integrated the largest merger in our bank’s history, welcoming American State Bank & Trust teammates into the Equity Bank family. Our teams followed that up with the addition of three branch locations in St. Joseph, Missouri, adding a new market to our Missouri footprint.”

Equity customers successfully had $51.3 million of Paycheck Protection Program (“PPP”) loans forgiven during the quarter, resulting in the recognition of fee income totaling $1.7 million in the three-month period ended December 31, 2021. At December 31, 2021, the total unrecognized fee income associated with PPP loans was $1.3 million.

“Equity was founded on entrepreneurial spirit, and that teamwork and collaboration exists in every new initiative we take on as a company, and I’m thankful to our customer service and operational teams for their hard work assisting a diverse range of customers,” said Mr. Elliott. “In 2022, we expect to continue to strengthen our customer delivery options including online and mobile banking, while continuing to offer the personal approach our customers expect from their community bank.”

Notable Items:

• Diluted earnings per share of $0.61, adjusted to reflect core operating results, was $0.82 per diluted share. The adjustment to earnings was comprised of the exclusion of merger expenses of $4.6 million.
• The Company authorized a third stock repurchase program in the third quarter of 2021 totaling 1,000,000 shares. During the quarter ended December 31, 2021, the Company repurchased 132,873 shares at a weighted average cost of $32.99 per share, totaling $4.4 million from this plan as well as 719 shares from the previous authorization that expired on October 29, 2021. At the end of the quarter, capacity of 867,127 shares remained under the current repurchase program.
• Non-accrual loans declined $35.6 million to $29.4 million for the quarter ended December 31, 2021, as compared to the quarter ended September 30, 2021, representing 0.93% non-accrual loans to total loans at December 31, 2021, the lowest level reported since 2016.
  

Equity’s Balance Sheet Highlights:

• During the quarter, total loans increased from $2.69 billion to $3.16 billion, of which $400 million is attributed to American State Bank & Trust (“ASBT”) loans and includes a reduction in PPP assets of $51.0 million. Excluding the impact of ASBT loans and PPP, loan growth linked quarter was $120.7 million or 18.6% annualized.
• During the quarter total deposits increased to $4.42 billion at December 31, 2021 from $3.66 billion at September 30, 2021. Of the $757.2 million increase in the quarter, $646.5 million is attributed to ASBT deposits.  
• As excess liquidity continues to impact the operating environment at quarter end, securities and interest-earning cash and cash equivalents comprise 32.5% of average earnings assets, up from 31.4% at the end of the linked quarter and 26.2% at the end of the comparable quarter in the previous year.
  

Financial Results for the Quarter Ended December 31, 2021

Net income allocable to common stockholders was $10.5 million, or $0.61 per diluted share, for the three months ended December 31, 2021, as compared to $11.8 million, or $0.80 per diluted share, for the three months ended September 30, 2021, a decrease of $1.3 million. This fourth quarter decrease was attributable to an increase in non-interest expense of $7.4 million and a decrease in net interest income of $1.8 million, partially offset by a decrease in provision for credit losses of $3.2 million, an increase of $1.4 million in non-interest income and a decrease in provision for income taxes of $3.2 million.

Net Interest Income

Net interest income was $37.2 million for the three months ended December 31, 2021, as compared to $39.0 million for the three months ended September 30, 2021, a decrease of $1.8 million, or 4.6%. The decrease in net interest income was primarily driven by a decrease in loan fees, due to the forgiveness of PPP assets, of $6.3 million for the quarter ended December 31, 2021, compared to the quarter ended September 30, 2021. The yield on interest-earning assets decreased 77-basis points to 3.43% during the quarter ended December 31, 2021, as compared to 4.20% for the quarter ended September 30, 2021. The cost of interest-bearing deposits declined by 3 basis points to 0.25% for the three months ended December 31, 2021, from 0.28% in the previous quarter.

Provision for Credit Losses

During the three months ended December 31, 2021, there was a net release of $2.1 million in the allowance for credit losses recognized through the provision for credit losses as compared to a provision of $1.1 million in the allowance for credit losses for the three months ended September 30, 2021. The comparative decrease was primarily driven by a decrease 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 December 31, 2021, we had net charge-offs of $7.9 million as compared to $129 thousand for the three months ended September 30, 2021.

Non-Interest Income

Total non-interest income was $9.2 million for the three months ended December 31, 2021, as compared to $7.8 million for the three months ended September 30, 2021, or an increase of 17.5% quarter over quarter. Other non-interest income was $2.3 million, an increase of $1.8 million from the quarter ended September 30, 2021. The increase 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 third quarter, the Company had identified deterioration of two assets, requiring a reserve and resulting in reduction of income recognition of $771 thousand. Further, the company had an increase of $511 thousand of income related to derivative transactions in quarter ending December 31, 2021.

Non-Interest Expense

Total non-interest expense for the quarter ended December 31, 2021, was $38.1 million as compared to $30.7 million for the quarter ended September 30, 2021. The $7.4 million change is primarily attributed to increases of $2.7 million in other expenses, $1.5 million in salaries and employee benefits driven by the increased headcount related to the American State Bank & Trust merger, and $959 thousand in other real estate owned expense. Included in other expenses is the recognition of $1.4 million of partnership expense related to tax credit activity the Company engaged in with assets being placed into service in the quarter ending December 31, 2021, and also resulted in credits recognized in reduced tax expense.

Asset Quality

As of December 31, 2021, Equity’s allowance for credit losses to total loans was 1.5%, as compared to 2.0% at September 30, 2021.   Nonperforming assets were $66.0 million as of December 31, 2021, or 1.3% of total assets, compared to $74.3 million at September 30, 2021, or 1.7% of total assets. Non-accrual loans were $29.4 million at December 31, 2021, as compared to $65.0 million at September 30, 2021. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $138.5 million, or 25.4% of regulatory capital, up from $112.4 million, or 24.3% of regulatory capital as of September 30, 2021. This increase is from classified loans acquired in the ASBT merger, most of which are performing.

During the quarter, non-performing assets decreased by $8.2 million due to the payoff of a relationship that was previously disclosed in 2019 and contributed to a reversal of allowance for credit losses of $2.7 million. A separate large credit previously discussed in prior quarters was moved to other repossessed assets and subsequently sold in mid-January. This relationship totaled $18.7 million and led to a reduction of $1.3 million in previously recorded specific reserves. The Company had a net release of $2.1 million to the allowance for credit losses, comprised of a decrease in specific reserves, primarily driven by resolution of previously identified non-performing assets and continued improved historical loss performance, partially offset by the continued uncertainty of economic conditions driven by the COVID-19 pandemic.

Regulatory Capital

The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.0%, the total capital to risk-weighted assets was 15.9% and the total leverage ratio was 9.0% at December 31, 2021. 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 14.1%, a ratio of total capital to risk-weighted assets of 15.3% and a total leverage ratio of 10.1% at December 31, 2021. 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 2021 fourth quarter results on Thursday, January 27, 2022, 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 Thursday, January 27, 2021, 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. 8086496.

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 February 3, 2022, accessible at (855) 859-2056 with conference ID no. 8086496 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, 2021, 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
cnavratil@equitybank.com        

Media Contact:

John J. Hanley
SVP, Senior Director of Marketing
Equity Bancshares, Inc.
(913) 583-8004
jhanley@equitybank.com

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 December 31,								Year ended December 31,
		2021				2020				2021				2020
Interest and dividend income
Loans, including fees		$	34,942			$	35,383			$	137,334			$	134,664
Securities, taxable			4,754				3,408				15,996				15,521
Securities, nontaxable			747				913				2,843				3,682
Federal funds sold and other			349				285				1,195				1,694
Total interest and dividend income			40,792				39,989				157,368				155,561
Interest expense
Deposits			1,939				2,755				8,255				16,582
Federal funds purchased and retail repurchase agreements			32				25				104				105
Federal Home Loan Bank advances			14				94				169				2,292
Federal Reserve Bank discount window			—				—				—				6
Bank stock loan			—				—				—				415
Subordinated debt			1,592				1,556				6,261				3,509
Total interest expense			3,577				4,430				14,789				22,909
Net interest income			37,215				35,559				142,579				132,652
Provision (reversal) for credit losses			(2,125	)			1,000				(8,480	)			24,255
Net interest income after provision (reversal) for credit losses			39,340				34,559				151,059				108,397
Non-interest income
Service charges and fees			2,471				1,759				8,596				6,856
Debit card income			2,633				2,401				10,236				9,136
Mortgage banking			722				855				3,306				3,153
Increase in value of bank-owned life insurance			1,060				489				3,506				1,941
Net gain on acquisition			—				2,145				585				2,145
Net gains (losses) from securities transactions			8				(1	)			406				11
Other			2,305				852				6,207				2,781
Total non-interest income			9,199				8,500				32,842				26,023
Non-interest expense
Salaries and employee benefits			15,119				14,053				54,198				54,129
Net occupancy and equipment			2,967				2,206				10,137				8,784
Data processing			3,867				2,748				13,261				10,991
Professional fees			1,565				1,095				4,713				4,282
Advertising and business development			1,129				801				3,370				2,498
Telecommunications			435				510				1,966				1,873
FDIC insurance			360				797				1,665				2,088
Courier and postage			389				338				1,429				1,441
Free nationwide ATM cost			515				423				2,019				1,609
Amortization of core deposit intangibles			1,080				1,044				4,174				3,850
Loan expense			308				161				934				789
Other real estate owned			617				1,600				(188	)			2,310
Loss on debt extinguishment			—				—				372				—
Merger expenses			4,562				299				9,189				299
Goodwill impairment			—				—				—				104,831
Other			5,176				2,385				12,226				9,216
Total non-interest expense			38,089				28,460				119,465				208,990
Income (loss) before income tax			10,450				14,599				64,436				(74,570	)
Provision for income taxes			(16	)			2,111				11,956				400
Net income (loss) and net income (loss) allocable to common stockholders		$	10,466			$	12,488			$	52,480			$	(74,970	)
Basic earnings (loss) per share		$	0.62			$	0.85			$	3.49			$	(4.97	)
Diluted earnings (loss) per share		$	0.61			$	0.84			$	3.43			$	(4.97	)
Weighted average common shares			16,865,167				14,760,810				15,019,221				15,098,512
Weighted average diluted common shares			14,669,312				14,934,058				15,306,431				15,098,512

TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)

		As of and for the three months ended
		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
Interest and dividend income
Loans, including fees		$	34,942			$	37,581			$	33,810			$	31,001			$	35,383
Securities, taxable			4,754				3,920				3,523				3,799				3,408
Securities, nontaxable			747				655				717				724				913
Federal funds sold and other			349				290				268				288				285
Total interest and dividend income			40,792				42,446				38,318				35,812				39,989
Interest expense
Deposits			1,939				1,881				2,025				2,410				2,755
Federal funds purchased and retail repurchase agreements			32				24				26				22				25
Federal Home Loan Bank advances			14				10				80				65				94
Subordinated debt			1,592				1,556				1,557				1,556				1,556
Total interest expense			3,577				3,471				3,688				4,053				4,430
Net interest income			37,215				38,975				34,630				31,759				35,559
Provision (reversal) for credit losses			(2,125	)			1,058				(1,657	)			(5,756	)			1,000
Net interest income after provision (reversal) for credit losses			39,340				37,917				36,287				37,515				34,559
Non-interest income
Service charges and fees			2,471				2,360				2,169				1,596				1,759
Debit card income			2,633				2,574				2,679				2,350				2,401
Mortgage banking			722				801				848				935				855
Increase in value of bank-owned life insurance			1,060				1,169				676				601				489
Net gain on acquisition			—				—				663				(78	)			2,145
Net gains (losses) from securities transactions			8				381				—				17				(1	)
Other			2,305				546				2,065				1,291				852
Total non-interest income			9,199				7,831				9,100				6,712				8,500
Non-interest expense
Salaries and employee benefits			15,119				13,588				12,769				12,722				14,053
Net occupancy and equipment			2,967				2,475				2,327				2,368				2,206
Data processing			3,867				3,257				3,474				2,663				2,748
Professional fees			1,565				1,076				999				1,073				1,095
Advertising and business development			1,129				760				799				682				801
Telecommunications			435				439				512				580				510
FDIC insurance			360				465				425				415				797
Courier and postage			389				344				327				369				338
Free nationwide ATM cost			515				519				513				472				423
Amortization of core deposit intangibles			1,080				1,030				1,030				1,034				1,044
Loan expense			308				207				181				238				161
Other real estate owned			617				(342	)			(468	)			5				1,600
Loss on debt extinguishment			—				372				—				—				—
Merger expenses			4,562				4,015				460				152				299
Other			5,176				2,484				2,458				2,108				2,385
Total non-interest expense			38,089				30,689				25,806				24,881				28,460
Income (loss) before income tax			10,450				15,059				19,581				19,346				14,599
Provision for income taxes (benefit)			(16	)			3,286				4,415				4,271				2,111
Net income (loss) and net income (loss) allocable to common stockholders		$	10,466			$	11,773			$	15,166			$	15,075			$	12,488
Basic earnings (loss) per share		$	0.62			$	0.82			$	1.06			$	1.04			$	0.85
Diluted earnings (loss) per share		$	0.61			$	0.80			$	1.03			$	1.02			$	0.84
Weighted average common shares			16,865,167				14,384,302				14,356,958				14,464,291				14,760,810
Weighted average diluted common shares			17,141,174				14,669,312				14,674,838				14,734,083				14,934,058

TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

		December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020
ASSETS
Cash and due from banks		$	259,131			$	141,645			$	138,869			$	136,190			$	280,150
Federal funds sold			823				673				452				498				548
Cash and cash equivalents			259,954				142,318				139,321				136,688				280,698
Interest-bearing time deposits in other banks			—				—				—				249				249
Available-for-sale securities			1,327,442				1,157,423				1,041,613				998,100				871,827
Loans held for sale			4,214				4,108				6,183				8,609				12,394
Loans, net of allowance for credit losses(1)			3,107,262				2,633,148				2,763,227				2,740,215				2,557,987
Other real estate owned, net			9,523				10,267				10,861				10,559				11,733
Premises and equipment, net			104,038				90,727				90,876				90,322				89,412
Bank-owned life insurance			120,787				103,431				103,321				102,645				77,044
Federal Reserve Bank and Federal Home Loan Bank stock			17,510				14,540				18,454				15,174				16,415
Interest receivable			18,048				15,519				15,064				16,655				15,831
Goodwill			56,609				31,601				31,601				31,601				31,601
Core deposit intangibles, net			14,879				12,963				13,993				15,023				16,057
Other			99,509				47,223				33,702				30,344				32,108
Total assets		$	5,139,775			$	4,263,268			$	4,268,216			$	4,196,184			$	4,013,356
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Demand		$	1,244,117			$	984,436			$	992,565			$	972,364			$	791,639
Total non-interest-bearing deposits			1,244,117				984,436				992,565				972,364				791,639
Savings, NOW and money market			2,522,289				2,092,849				2,035,496				2,074,261				2,029,097
Time			653,598				585,492				659,494				587,905				626,854
Total interest-bearing deposits			3,175,887				2,678,341				2,694,990				2,662,166				2,655,951
Total deposits			4,420,004				3,662,777				3,687,555				3,634,530				3,447,590
Federal funds purchased and retail repurchase agreements			56,006				39,137				47,184				40,339				36,029
Federal Home Loan Bank advances			—				—				9,208				9,926				10,144
Subordinated debt			95,885				88,030				87,908				87,788				87,684
Contractual obligations			17,692				18,771				4,469				4,856				5,189
Interest payable and other liabilities			49,557				36,804				18,897				20,930				19,071
Total liabilities			4,639,144				3,845,519				3,855,221				3,798,369				3,605,707
Commitments and contingent liabilities
Stockholders’ equity
Common stock			203				178				176				175				174
Additional paid-in capital			478,862				392,321				389,394				387,939				386,820
Retained earnings			88,324				79,226				68,625				53,459				50,787
Accumulated other comprehensive income, net of tax			1,776				9,475				13,450				12,019				19,781
Employee stock loans			—				—				—				—				(43	)
Treasury stock			(68,534	)			(63,451	)			(58,650	)			(55,777	)			(49,870	)
Total stockholders’ equity			500,631				417,749				412,995				397,815				407,649
Total liabilities and stockholders’ equity		$	5,139,775			$	4,263,268			$	4,268,216			$	4,196,184			$	4,013,356
(1) Allowance for credit losses		$	48,365			$	52,763			$	51,834			$	55,525			$	33,709

TABLE 4. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)

		As of and for the three months ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2021				2021				2021				2021				2020
Loans Held For Investment by Type
Commercial real estate		$	1,486,148			$	1,308,707			$	1,261,214			$	1,218,537			$	1,188,696
Commercial and industrial			567,497				569,513				732,126				820,736				734,495
Residential real estate			638,087				490,633				503,110				438,503				381,958
Agricultural real estate			198,330				138,793				129,020				134,944				133,693
Agricultural			166,976				93,767				97,912				93,764				94,322
Consumer			98,590				84,498				91,679				89,256				58,532
Total loans held-for-investment			3,155,628				2,685,911				2,815,061				2,795,740				2,591,696
Allowance for credit losses			(48,365	)			(52,763	)			(51,834	)			(55,525	)			(33,709	)
Net loans held for investment		$	3,107,263			$	2,633,148			$	2,763,227			$	2,740,215			$	2,557,987
Asset Quality Ratios
Allowance for credit losses on loans to total loans			1.53	%			1.96	%			1.84	%			1.99	%			1.30	%
Past due or nonaccrual loans to total loans			1.18	%			2.78	%			2.09	%			2.30	%			1.99	%
Nonperforming assets to total assets			1.28	%			1.74	%			1.56	%			1.67	%			1.36	%
Nonperforming assets to total loans plus other real estate owned			2.09	%			2.76	%			2.36	%			2.50	%			2.10	%
Classified assets to bank total regulatory capital			25.35	%			24.25	%			23.20	%			26.45	%			25.50	%
Selected Average Balance Sheet Data (QTD Average)
Investment securities		$	1,330,267			$	1,061,178			$	986,986			$	947,453			$	814,114
Total gross loans receivable			3,181,281				2,748,202				2,853,145				2,736,918				2,692,223
Interest-earning assets			4,713,819				4,005,509				3,964,633				3,891,140				3,647,730
Total assets			5,068,301				4,275,298				4,231,439				4,143,752				3,910,628
Interest-bearing deposits			3,101,657				2,702,040				2,656,052				2,690,159				2,551,219
Borrowings			165,941				132,581				171,658				139,360				172,730
Total interest-bearing liabilities			3,267,598				2,834,621				2,827,710				2,829,519				2,723,949
Total deposits			4,342,732				3,686,169				3,624,950				3,577,625				2,960,791
Total liabilities			4,507,113				3,852,419				3,827,400				3,748,114				3,501,056
Total stockholders' equity			563,023				422,879				404,039				395,638				409,572
Tangible common equity*			501,814				376,544				356,705				347,262				355,025
Performance ratios
Return on average assets (ROAA) annualized			0.82	%			1.09	%			1.44	%			1.48	%			1.27	%
Return on average assets before income tax, provision for loan losses and goodwill impairment*			0.65	%			1.50	%			1.70	%			1.33	%			1.59	%
Return on average equity (ROAE) annualized			7.37	%			11.05	%			15.06	%			15.45	%			12.13	%
Return on average equity before income tax, provision for loan losses and goodwill impairment*			5.87	%			15.12	%			17.79	%			13.93	%			15.15	%
Return on average tangible common equity (ROATCE) annualized*			8.97	%			13.27	%			17.98	%			18.57	%			14.93	%
Return on average tangible common equity adjusted for goodwill impairment*			8.97	%			13.27	%			17.98	%			18.57	%			14.93	%
Yield on loans annualized			4.36	%			5.43	%			4.75	%			4.59	%			5.23	%
Cost of interest-bearing deposits annualized			0.25	%			0.28	%			0.31	%			0.36	%			0.43	%
Cost of total deposits annualized			0.18	%			0.20	%			0.22	%			0.27	%			0.37	%
Net interest margin annualized			3.13	%			3.86	%			3.50	%			3.31	%			3.88	%
Efficiency ratio*			72.25	%			56.65	%			58.85	%			64.18	%			67.19	%
Non-interest income / average assets			0.72	%			0.73	%			0.86	%			0.66	%			0.86	%
Non-interest expense / average assets			2.98	%			2.85	%			2.45	%			2.44	%			2.90	%
Capital Ratios
Tier 1 Leverage Ratio			9.05	%			9.02	%			8.88	%			8.73	%			9.30	%
Common Equity Tier 1 Capital Ratio			12.00	%			12.39	%			12.41	%			12.53	%			12.82	%
Tier 1 Risk Based Capital Ratio			12.65	%			12.90	%			12.93	%			13.08	%			13.37	%
Total Risk Based Capital Ratio			15.94	%			16.63	%			16.74	%			17.02	%			17.35	%
Total stockholders' equity to total assets			9.74	%			9.80	%			9.68	%			9.48	%			10.16	%
Tangible common equity to tangible assets*			8.44	%			8.82	%			8.68	%			8.44	%			9.05	%
Book value per common share		$	29.84			$	29.08			$	28.76			$	27.66			$	28.04
Tangible book value per common share*		$	25.49			$	25.90			$	25.51			$	24.34			$	24.68
Tangible book value per diluted common share*		$	25.09			$	25.42			$	24.98			$	23.87			$	24.32

* 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 year ended												For the year ended
	December 31, 2021												December 31, 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	$	714,561			$	41,580				5.82	%		$	763,971			$	35,601				4.66	%
Commercial real estate		1,040,443				48,676				4.68	%			952,083				50,667				5.32	%
Real estate construction		277,307				10,256				3.70	%			238,015				10,947				4.60	%
Residential real estate		498,164				19,341				3.88	%			449,789				19,894				4.42	%
Agricultural real estate		153,607				8,122				5.29	%			133,813				8,008				5.98	%
Agricultural		108,276				5,361				4.95	%			88,206				4,944				5.61	%
Consumer		88,383				3,998				4.52	%			70,064				4,603				6.57	%
Total loans		2,880,741				137,334				4.77	%			2,695,941				134,664				5.00	%
Securities
Taxable securities		976,942				15,996				1.64	%			727,452				15,521				2.13	%
Nontaxable securities		105,522				2,843				2.69	%			122,783				3,682				3.00	%
Total securities		1,082,464				18,839				1.74	%			850,235				19,203				2.26	%
Federal funds sold and other		182,443				1,195				0.65	%			112,053				1,694				1.51	%
Total interest-earning assets	$	4,145,648				157,368				3.80	%		$	3,658,229				155,561				4.25	%
Interest-bearing liabilities
Savings, NOW and money market deposits	$	2,162,807				3,705				0.17	%		$	1,795,108				5,893				0.33	%
Time deposits		625,562				4,550				0.73	%			704,921				10,689				1.52	%
Total interest-bearing deposits		2,788,369				8,255				0.30	%			2,500,029				16,582				0.66	%
FHLB advances		16,797				169				1.01	%			213,155				2,292				1.08	%
Other borrowings		135,607				6,365				4.69	%			109,064				4,035				3.70	%
Total interest-bearing liabilities	$	2,940,773				14,789				0.50	%		$	2,822,248				22,909				0.81	%
Net interest income					$	142,579											$	132,652
Interest rate spread										3.30	%											3.44	%
Net interest margin (2)										3.44	%											3.63	%
(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
	December 31, 2021												December 31, 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	$	601,103			$	6,971				4.60	%		$	782,433			$	10,943				5.56	%
Commercial real estate		1,187,747				13,732				4.59	%			980,686				12,647				5.13	%
Real estate construction		315,774				3,062				3.85	%			216,714				2,301				4.22	%
Residential real estate		618,057				5,174				3.32	%			406,450				5,005				4.90	%
Agricultural real estate		206,462				2,919				5.61	%			135,337				2,244				6.60	%
Agricultural		151,589				1,929				5.05	%			92,173				1,163				5.02	%
Consumer		100,547				1,155				4.56	%			78,430				1,080				5.48	%
Total loans		3,181,279				34,942				4.36	%			2,692,223				35,383				5.23	%
Securities
Taxable securities		1,209,826				4,754				1.56	%			698,985				3,408				1.94	%
Nontaxable securities		120,441				747				2.46	%			115,129				913				3.15	%
Total securities		1,330,267				5,501				1.64	%			814,114				4,321				2.11	%
Federal funds sold and other		202,271				348				0.68	%			141,393				285				0.80	%
Total interest-earning assets	$	4,713,817				40,791				3.43	%		$	3,647,730				39,989				4.36	%
Interest-bearing liabilities
Savings, NOW and money market deposits	$	2,418,492				978				0.16	%		$	1,915,280				970				0.20	%
Time deposits		683,165				962				0.56	%			635,939				1,785				1.12	%
Total interest-bearing deposits		3,101,657				1,940				0.25	%			2,551,219				2,755				0.43	%
FHLB advances		18,197				15				0.32	%			39,245				94				0.95	%
Other borrowings		147,744				1,624				4.36	%			133,485				1,581				4.71	%
Total interest-bearing liabilities	$	3,267,598				3,579				0.43	%		$	2,723,949				4,430				0.65	%
Net interest income					$	37,212											$	35,559
Interest rate spread										3.00	%											3.71	%
Net interest margin (2)										3.13	%											3.88	%
(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
	December 31, 2021												September 30, 2021
	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	$	601,103			$	6,971				4.60	%		$	630,622			$	13,646				8.59	%
Commercial real estate		1,187,747				13,732				4.59	%			1,009,141				12,072				4.75	%
Real estate construction		315,774				3,062				3.85	%			283,106				2,664				3.73	%
Residential real estate		618,057				5,174				3.32	%			512,135				5,073				3.93	%
Agricultural real estate		206,462				2,919				5.61	%			134,673				1,819				5.36	%
Agricultural		151,589				1,929				5.05	%			91,878				1,370				5.92	%
Consumer		100,547				1,155				4.56	%			86,647				937				4.29	%
Total loans		3,181,279				34,942				4.36	%			2,748,202				37,581				5.43	%
Securities
Taxable securities		1,209,826				4,754				1.56	%			966,651				3,920				1.61	%
Nontaxable securities		120,441				747				2.46	%			94,527				655				2.75	%
Total securities		1,330,267				5,501				1.64	%			1,061,178				4,575				1.71	%
Federal funds sold and other		202,271				348				0.68	%			196,129				290				0.59	%
Total interest-earning assets	$	4,713,817				40,791				3.43	%		$	4,005,509				42,446				4.20	%
Interest-bearing liabilities
Savings, NOW and money market deposits	$	2,418,492				978				0.16	%		$	2,082,515				862				0.16	%
Time deposits		683,165				962				0.56	%			619,525				1,019				0.65	%
Total interest-bearing deposits		3,101,657				1,940				0.25	%			2,702,040				1,881				0.28	%
FHLB advances		18,197				15				0.32	%			1,401				10				2.78	%
Other borrowings		147,744				1,624				4.36	%			131,180				1,580				4.78	%
Total interest-bearing liabilities	$	3,267,598				3,579				0.43	%		$	2,834,621				3,471				0.49	%
Net interest income					$	37,212											$	38,975
Interest rate spread										3.00	%											3.71	%
Net interest margin (2)										3.13	%											3.86	%
(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)

		As of and for the three months ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2021				2021				2021				2021				2020
Total stockholders' equity		$	500,631			$	417,749			$	412,995			$	397,815			$	407,649
Less: goodwill			56,609				31,601				31,601				31,601				31,601
Less: core deposit intangibles, net			14,879				12,963				13,993				15,023				16,057
Less: mortgage servicing asset, net			276				—				—				—				—
Less: naming rights, net			1,087				1,098				1,109				1,119				1,130
Tangible common equity		$	427,780			$	372,087			$	366,292			$	350,072			$	358,861
Common shares issued at period end			16,779,029				14,365,785				14,360,172				14,383,913				14,540,556
Diluted common shares outstanding at period end			17,050,115				14,637,306				14,664,603				14,668,287				14,756,378
Book value per common share		$	29.84			$	29.08			$	28.76			$	27.66			$	28.04
Tangible book value per common share		$	25.49			$	25.90			$	25.51			$	24.34			$	24.68
Tangible book value per diluted common share		$	25.09			$	25.42			$	24.98			$	23.87			$	24.32
Total assets		$	5,139,775			$	4,263,268			$	4,268,216			$	4,196,184			$	4,013,356
Less: goodwill			56,609				31,601				31,601				31,601				31,601
Less: core deposit intangibles, net			14,879				12,963				13,993				15,023				16,057
Less: mortgage servicing asset, net			276				—				—				—				—
Less: naming rights, net			1,087				1,098				1,109				1,119				1,130
Tangible assets		$	5,066,924			$	4,217,606			$	4,221,513			$	4,148,441			$	3,964,568
Total stockholders' equity to total assets			9.74	%			9.80	%			9.68	%			9.48	%			10.16	%
Tangible common equity to tangible assets			8.44	%			8.82	%			8.68	%			8.44	%			9.05	%
Total average stockholders' equity		$	563,023			$	422,879			$	404,039			$	395,638			$	409,572
Less: average intangible assets			61,209				46,335				47,334				48,376				54,547
Average tangible common equity		$	501,814			$	376,544			$	356,705			$	347,262			$	355,025
Net income (loss) allocable to common stockholders		$	10,466			$	11,773			$	15,166			$	15,075			$	12,488
Amortization of intangible assets			1,116				1,040				1,041				1,045				1,055
Less: tax effect of intangible assets amortization			234				218				219				219				222
Adjusted net income (loss) allocable to common stockholders		$	11,348			$	12,595			$	15,988			$	15,901			$	13,321
Return on total average stockholders' equity (ROAE) annualized			7.37	%			11.05	%			15.06	%			15.45	%			12.13	%
Return on average tangible common equity (ROATCE) annualized			8.97	%			13.27	%			17.98	%			18.57	%			14.93	%
Non-interest expense		$	38,089			$	30,689			$	25,806			$	24,881			$	28,460
Less: merger expense			4,562				4,015				460				152				299
Non-interest expense, excluding merger expense and loss on debt extinguishment		$	33,527			$	26,674			$	25,346			$	24,729			$	28,161
Net interest income		$	37,215			$	38,975			$	34,630			$	31,759			$	35,559
Non-interest income			9,199				7,831				9,100				6,712				8,500
Less: net gain on acquisition			—				—				663				(78	)			2,145
Less: net gains (losses) from securities transactions			8				381				—				17				(1	)
Non-interest income, excluding gains (losses) from securities transactions		$	9,191			$	7,450			$	8,437			$	6,773			$	6,356
Net interest income plus non-interest income, excluding net gain on acquisition and net gains (losses) from securities transactions		$	46,406			$	46,425			$	43,067			$	38,532			$	41,915
Non-interest expense to net interest income plus non-interest income			82.06	%			65.57	%			59.01	%			64.67	%			64.60	%
Efficiency ratio			72.25	%			57.46	%			58.85	%			64.18	%			67.19	%
Net income (loss) allocable to common stockholders		$	10,466			$	11,773			$	15,166			$	15,075			$	12,488
Add: income tax provision			(16	)			3,286				4,415				4,271				2,111
Add: provision (reversal) of credit losses			(2,125	)			1,058				(1,657	)			(5,756	)			1,000
Adjusted net income		$	8,325			$	16,117			$	17,924			$	13,590			$	15,599
Total average assets		$	5,068,301			$	4,275,298			$	4,231,439			$	4,143,752			$	3,910,628
Total average stockholders' equity		$	563,023			$	422,879			$	404,039			$	395,638			$	409,572
Return on average assets (ROAA) annualized			0.82	%			1.09	%			1.44	%			1.48	%			1.27	%
Adjusted return on average assets			0.65	%			1.50	%			1.70	%			1.33	%			1.59	%
Adjusted return on average equity			5.87	%			15.12	%			17.79	%			13.93	%			15.15	%