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Equity Bancshares, Inc. Reports Third Quarter Results, Continued Organic Growth
ソース: Nasdaq GlobeNewswire / 18 10 2022 17:25:19 America/New_York
WICHITA, Kan., Oct. 18, 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 $15.2 million and $0.93 earnings per diluted share for the quarter ended September 30, 2022.
"In 2022, our Company has realized meaningful, organic growth while emphasizing return to our stockholders via earnings, share buybacks, and an increasing dividend. Annualized growth within our commercial and commercial real estate loan portfolios of 17.13% is a credit to our sales and operational teams,” said Brad S. Elliott, Chairman and CEO, Equity Bancshares, Inc. “We have been diligent in enhancing our sales process, expanding our marketing geography, and hiring exceptional operators which has and will continue to drive our Company’s success.”
“At the end of the quarter, our classified asset ratio is down more than 50% year-to-date and at an all-time low for our Company,” continued Mr. Elliott. “The committed efforts of our sales and credit teams to source and underwrite strong credits while meeting the financing needs of the communities we serve allows our Company to hold true to its mission as a community bank.”
Notable Items:
- During the third quarter, the Company realized continued loan growth excluding the impact of PPP assets and sold branches bringing annualized loan growth year-to-date to 7.01%.
- During the quarter, the Company realized linked period Net Interest Margin growth of 23 basis points, and Net Interest Income growth of $2.38 million.
- The Company continued to emphasize investor returns through repurchase of 126,900 shares during the quarter, at an average price of $32.51, as well as the expansion of our quarterly dividend program to $0.10 per share. Also during the quarter, the Company’s Board authorized the repurchase of up to 1 million shares and the Company received non-objection from the Federal Reserve Bank of Kansas City related to the repurchase plan.
Financial Results for the Quarter Ended September 30, 2022
Net income allocable to common stockholders was $15.2 million, or $0.93 per diluted share, for the three months ended September 30, 2022, as compared to $15.3 million, or $0.94 per diluted share, for the three months ended June 30, 2022. The decrease for the second quarter of 2022 is primarily driven by income taxes as a true-up of rate was experienced in the second quarter that, as expected, did not repeat. Pre-tax income increased $1.9 million as the Company's net interest income benefitted from increasing interest rates.
Net Interest Income
Net interest income was $41.9 million for the three months ended September 30, 2022, as compared to $39.6 million for the three months ended June 30, 2022, an increase of $2.4 million, or 6.1%. The yield on interest-earning assets increased 44 basis points to 4.18% during the quarter ended September 30, 2022, as compared to 3.74% for the quarter ended June 30, 2022. The cost of interest-bearing deposits increased by 29 basis points during the quarter, moving from 0.28% at June 30, 2022 to 0.57% at September 30, 2022.
Provision for Credit Losses
During the three months ended September 30, 2022, there was a net release of $136 thousand compared to a provision to the allowance for credit losses of $824 thousand in the previous quarter. The minimal release of provision for the quarter is the result of having a relatively similar sized loan portfolio and similar realized loss rates; however, the Company continues to estimate the allowance for credit loss with assumptions that anticipate slowing prepayments rates and continued market disruption caused by elevated inflation, supply chain issues and the impact of monetary policy on consumers and businesses. For the three months ended September 30, 2022, we had net charge-offs of $1.6 million as compared to $176 thousand for the three months ended June 30, 2022.
Non-Interest Income
Total non-interest income was $9.0 million for the three months ended September 30, 2022, as compared to $9.6 million for the three months ended June 30, 2022, or a decrease of 6.9%, quarter over quarter. The $600 thousand decrease was primarily due to a decrease in net gain on acquisition and branch sales of $540 thousand.
Non-Interest Expense
Total non-interest expense for the quarter ended September 30, 2022, was $32.2 million as compared to $31.4 million for the quarter ended June 30, 2022. The $800 thousand change was primarily due to an increase in data processing of $496 thousand and an increase in the write-off of tax investments of $423 thousand for the quarter ended September 30, 2022, compared to the quarter ended June 30, 2022.
Asset Quality
As of September 30, 2022, Equity’s allowance for credit losses to total loans decreased to 1.4% as compared to 1.5% at June 30, 2022. Nonperforming assets were $29.7 million as of September, 2022, or 0.6% of total assets, compared to $37.0 million at June 30, 2022, or 0.7% of total assets. Non-accrual loans were $23.1 million at September 30, 2022, as compared to $18.9 million at June 30, 2022. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $63.1 million, or 11.0% of regulatory capital, down from $72.1 million, or 13.1% of regulatory capital as of June 30, 2022.
During the quarter ended September 30, 2022, non-performing assets decreased $7.3 million due to decreases in other repossessed assets of $8.7 million and other real estate owned of $2.5 million, partially offset by increases in non-accrual loans of $4.3 million.
Regulatory Capital
The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.1%, the total capital to risk-weighted assets was 16.0% and the total leverage ratio was 9.7% at September 30, 2022. At June 30, 2022, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 12.1%, the total capital to risk-weighted assets ratio was 16.0% and the total leverage ratio was 9.1%.
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 15.4% and a total leverage ratio of 10.5% at September 30, 2022. At June 30, 2022, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 13.9%, the ratio of total capital to risk-weighted assets was 15.1% and the total leverage ratio was 9.9%.
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 a common comparable metric used by banks to understand the expense structure relative to 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 and provision for loan losses 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 “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 6 in the following press release tables.
Conference Call and Webcast
Equity’s Chairman and Chief Executive Officer, Brad Elliott, and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss third quarter results on Wednesday, October 19, 2022 at 10 a.m. eastern time or 9 a.m. central time.
A live webcast of the call will be available on the Company’s website at investor.equitybank.com. To access the call by phone, please go to this registration link, and you will be provided with dial in details. Investors, news media, and other participants are encouraged to dial into the conference call ten minutes ahead of the scheduled start time.
A replay of the call and webcast will be available two hours following the close of the call until October 26, 2022, accessible 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, 2022, 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, except as required by law. 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.comMedia Contact:
John J. Hanley
SVP, Senior Director of Marketing
Equity Bancshares, Inc.
(913) 583-8004
jhanley@equitybank.comUnaudited Financial Tables
- Table 1. Consolidated Statements of Income
- Table 2. Quarterly Consolidated Statements of Income
- Table 3. Consolidated Balance Sheets
- Table 4. Selected Financial Highlights
- Table 5. Year-To-Date Net Interest Income Analysis
- Table 6. Quarter-To-Date Net Interest Income Analysis
- Table 7. Quarter-Over-Quarter Net Interest Income Analysis
- Table 8. Non-GAAP Financial Measures
TABLE 1. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)Three months ended
September 30,Nine months ended
September 30,2022 2021 2022 2021 Interest and dividend income Loans, including fees $ 41,555 $ 37,581 $ 114,710 $ 102,392 Securities, taxable 5,792 3,920 16,767 11,242 Securities, nontaxable 687 655 2,020 2,096 Federal funds sold and other 514 290 1,327 846 Total interest and dividend income 48,548 42,446 134,824 116,576 Interest expense Deposits 4,403 1,881 8,308 6,316 Federal funds purchased and retail repurchase agreements 71 24 150 72 Federal Home Loan Bank advances 409 10 594 155 Subordinated debt 1,721 1,556 4,973 4,669 Total interest expense 6,604 3,471 14,025 11,212 Net interest income 41,944 38,975 120,799 105,364 Provision (reversal) for credit losses (136 ) 1,058 276 (6,355 ) Net interest income after provision (reversal) for credit losses 42,080 37,917 120,523 111,719 Non-interest income Service charges and fees 2,788 2,360 7,927 6,125 Debit card income 2,682 2,574 8,120 7,603 Mortgage banking 310 801 1,300 2,584 Increase in value of bank-owned life insurance 754 1,169 2,355 2,446 Net gain on acquisition and branch sales — — 540 585 Net gains (losses) from securities transactions (17 ) 381 (9 ) 398 Other 2,452 546 7,395 3,902 Total non-interest income 8,969 7,831 27,628 23,643 Non-interest expense Salaries and employee benefits 15,442 13,588 45,893 39,079 Net occupancy and equipment 3,127 2,475 9,304 7,170 Data processing 4,138 3,257 11,549 9,394 Professional fees 1,265 1,076 3,547 3,148 Advertising and business development 1,191 760 3,139 2,241 Telecommunications 487 439 1,399 1,531 FDIC insurance 340 465 780 1,305 Courier and postage 436 344 1,348 1,040 Free nationwide ATM cost 551 519 1,593 1,504 Amortization of core deposit intangibles 957 1,030 3,118 3,094 Loan expense 174 207 566 626 Other real estate owned 188 (342 ) 201 (805 ) Loss on debt extinguishment — 372 — 372 Merger expenses 115 4,015 526 4,627 Other 3,825 2,484 10,168 7,050 Total non-interest expense 32,236 30,689 93,131 81,376 Income (loss) before income tax 18,813 15,059 55,020 53,986 Provision for income taxes 3,642 3,286 8,940 11,972 Net income (loss) and net income (loss) allocable to common stockholders $ 15,171 $ 11,773 $ 46,080 $ 42,014 Basic earnings (loss) per share $ 0.94 $ 0.82 $ 2.83 $ 2.92 Diluted earnings (loss) per share $ 0.93 $ 0.80 $ 2.79 $ 2.86 Weighted average common shares 16,056,658 14,384,302 16,303,586 14,397,146 Weighted average diluted common shares 16,273,231 14,669,312 16,516,787 14,688,092 TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)As of and for the three months ended September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021Interest and dividend income Loans, including fees $ 41,555 $ 36,849 $ 36,306 $ 34,942 $ 37,581 Securities, taxable 5,792 5,584 5,391 4,754 3,920 Securities, nontaxable 687 678 655 747 655 Federal funds sold and other 514 513 300 349 290 Total interest and dividend income 48,548 43,624 42,652 40,792 42,446 Interest expense Deposits 4,403 2,183 1,722 1,939 1,881 Federal funds purchased and retail repurchase agreements 71 46 33 32 24 Federal Home Loan Bank advances 409 176 9 14 10 Subordinated debt 1,721 1,653 1,599 1,592 1,556 Total interest expense 6,604 4,058 3,363 3,577 3,471 Net interest income 41,944 39,566 39,289 37,215 38,975 Provision (reversal) for credit losses (136 ) 824 (412 ) (2,125 ) 1,058 Net interest income after provision (reversal) for credit losses 42,080 38,742 39,701 39,340 37,917 Non-interest income Service charges and fees 2,788 2,617 2,522 2,471 2,360 Debit card income 2,682 2,810 2,628 2,633 2,574 Mortgage banking 310 428 562 722 801 Increase in value of bank-owned life insurance 754 736 865 1,060 1,169 Net gain on acquisition and branch sales — 540 — — — Net gains (losses) from securities transactions (17 ) (32 ) 40 8 381 Other 2,452 2,538 2,405 2,305 546 Total non-interest income 8,969 9,637 9,022 9,199 7,831 Non-interest expense Salaries and employee benefits 15,442 15,383 15,068 15,119 13,588 Net occupancy and equipment 3,127 3,007 3,170 2,967 2,475 Data processing 4,138 3,642 3,769 3,867 3,257 Professional fees 1,265 1,111 1,171 1,565 1,076 Advertising and business development 1,191 972 976 1,129 760 Telecommunications 487 442 470 435 439 FDIC insurance 340 260 180 360 465 Courier and postage 436 489 423 389 344 Free nationwide ATM cost 551 541 501 515 519 Amortization of core deposit intangibles 957 1,111 1,050 1,080 1,030 Loan expense 174 207 185 308 207 Other real estate owned 188 14 (1 ) 617 (342 ) Loss on debt extinguishment — — — — 372 Merger expenses 115 88 323 4,562 4,015 Other 3,825 4,169 2,174 5,176 2,484 Total non-interest expense 32,236 31,436 29,459 38,089 30,689 Income (loss) before income tax 18,813 16,943 19,264 10,450 15,059 Provision for income taxes (benefit) 3,642 1,684 3,614 (16 ) 3,286 Net income (loss) and net income (loss) allocable to common stockholders $ 15,171 $ 15,259 $ 15,650 $ 10,466 $ 11,773 Basic earnings (loss) per share $ 0.94 $ 0.95 $ 0.94 $ 0.62 $ 0.82 Diluted earnings (loss) per share $ 0.93 $ 0.94 $ 0.93 $ 0.61 $ 0.80 Weighted average common shares 16,056,658 16,206,978 16,652,556 16,865,167 14,384,302 Weighted average diluted common shares 16,273,231 16,413,248 16,869,152 17,141,174 14,669,312 TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)September 30,
2022June 30,
2022March 31,
2022December 31,
2021September 30,
2021ASSETS Cash and due from banks $ 155,039 $ 103,126 $ 89,764 $ 259,131 $ 141,645 Federal funds sold 374 458 286 823 673 Cash and cash equivalents 155,413 103,584 90,050 259,954 142,318 Available-for-sale securities 1,198,962 1,288,180 1,352,894 1,327,442 1,157,423 Loans held for sale 1,518 1,714 1,575 4,214 4,108 Loans, net of allowance for credit losses(1) 3,208,524 3,175,208 3,194,987 3,107,262 2,633,148 Other real estate owned, net 10,412 12,969 9,897 9,523 10,267 Premises and equipment, net 100,566 101,212 103,168 104,038 90,727 Bank-owned life insurance 122,418 121,665 120,928 120,787 103,431 Federal Reserve Bank and Federal Home Loan Bank stock 24,428 21,479 19,890 17,510 14,540 Interest receivable 18,497 16,519 16,923 18,048 15,519 Goodwill 53,101 53,101 54,465 54,465 31,601 Core deposit intangibles, net 11,598 12,554 13,830 14,879 12,963 Other 94,978 93,971 100,016 99,509 47,223 Total assets $ 5,000,415 $ 5,002,156 $ 5,078,623 $ 5,137,631 $ 4,263,268 LIABILITIES AND STOCKHOLDERS’ EQUITY Deposits Demand $ 1,217,094 $ 1,194,863 $ 1,255,793 $ 1,244,117 $ 984,436 Total non-interest-bearing deposits 1,217,094 1,194,863 1,255,793 1,244,117 984,436 Demand, savings and money market 2,335,847 2,445,545 2,511,478 2,522,289 2,092,849 Time 673,670 651,363 612,399 653,598 585,492 Total interest-bearing deposits 3,009,517 3,096,908 3,123,877 3,175,887 2,678,341 Total deposits 4,226,611 4,291,771 4,379,670 4,420,004 3,662,777 Federal funds purchased and retail repurchase agreements 47,443 52,750 48,199 56,006 39,137 Federal Home Loan Bank advances 186,001 80,000 50,000 — — Subordinated debt 96,263 96,135 96,010 95,885 88,030 Contractual obligations 15,562 15,813 17,307 17,692 18,771 Interest payable and other liabilities 32,729 37,572 35,422 47,413 36,804 Total liabilities 4,604,609 4,574,041 4,626,608 4,637,000 3,845,519 Commitments and contingent liabilities Stockholders’ equity Common stock 204 204 204 203 178 Additional paid-in capital 482,668 480,897 480,106 478,862 392,321 Retained earnings 130,114 116,576 102,632 88,324 79,226 Accumulated other comprehensive income (loss), net of tax (120,918 ) (77,426 ) (50,012 ) 1,776 9,475 Treasury stock (96,262 ) (92,136 ) (80,915 ) (68,534 ) (63,451 ) Total stockholders’ equity 395,806 428,115 452,015 500,631 417,749 Total liabilities and stockholders’ equity $ 5,000,415 $ 5,002,156 $ 5,078,623 $ 5,137,631 $ 4,263,268 (1) Allowance for credit losses $ 46,499 $ 48,238 $ 47,590 $ 48,365 $ 52,763 TABLE 4. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)As of and for the three months ended September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Loans Held For Investment by Type Commercial real estate $ 1,655,646 $ 1,643,068 $ 1,552,134 $ 1,486,148 $ 1,308,707 Commercial and industrial 607,722 578,899 629,181 567,497 569,513 Residential real estate 573,431 578,936 613,928 638,087 490,633 Agricultural real estate 200,415 197,938 198,844 198,330 138,793 Agricultural 115,048 124,753 150,077 166,975 93,767 Consumer 102,761 99,852 98,413 98,590 84,498 Total loans held-for-investment 3,255,023 3,223,446 3,242,577 3,155,627 2,685,911 Allowance for credit losses (46,499 ) (48,238 ) (47,590 ) (48,365 ) (52,763 ) Net loans held for investment $ 3,208,524 $ 3,175,208 $ 3,194,987 $ 3,107,262 $ 2,633,148 Asset Quality Ratios Allowance for credit losses on loans to total loans 1.43 % 1.50 % 1.47 % 1.53 % 1.96 % Past due or nonaccrual loans to total loans 0.94 % 0.78 % 0.82 % 1.18 % 2.78 % Nonperforming assets to total assets 0.59 % 0.74 % 0.74 % 1.28 % 1.74 % Nonperforming assets to total loans plus other
real estate owned0.91 % 1.14 % 1.15 % 2.07 % 2.76 % Classified assets to bank total regulatory capital 11.03 % 13.08 % 17.12 % 25.34 % 24.25 % Selected Average Balance Sheet Data (QTD Average) Investment securities $ 1,272,414 $ 1,319,099 $ 1,397,421 $ 1,330,267 $ 1,061,178 Total gross loans receivable 3,240,998 3,216,853 3,195,787 3,181,279 2,748,202 Interest-earning assets 4,602,568 4,675,967 4,715,389 4,713,817 4,005,509 Total assets 4,988,755 5,067,686 5,108,120 5,068,278 4,275,298 Interest-bearing deposits 3,081,245 3,112,300 3,163,777 3,101,657 2,702,040 Borrowings 221,514 238,062 160,094 165,941 132,581 Total interest-bearing liabilities 3,302,759 3,350,362 3,323,871 3,267,598 2,834,621 Total deposits 4,283,855 4,340,196 4,393,879 4,342,732 3,686,169 Total liabilities 4,552,564 4,630,204 4,615,521 4,505,232 3,852,419 Total stockholders' equity 436,191 437,483 492,599 563,046 422,879 Tangible common equity* 369,746 368,505 422,418 501,860 376,544 Performance ratios Return on average assets (ROAA) annualized 1.21 % 1.21 % 1.24 % 0.82 % 1.09 % Return on average assets before income tax and
provision for loan losses*1.49 % 1.41 % 1.50 % 0.65 % 1.50 % Return on average equity (ROAE) annualized 13.80 % 13.99 % 12.88 % 7.37 % 11.05 % Return on average equity before income tax and
provision for loan losses*16.99 % 16.29 % 15.52 % 5.87 % 15.12 % Return on average tangible common equity
(ROATCE) annualized*17.12 % 17.60 % 15.85 % 8.97 % 13.27 % Yield on loans annualized 5.09 % 4.59 % 4.61 % 4.36 % 5.43 % Cost of interest-bearing deposits annualized 0.57 % 0.28 % 0.22 % 0.25 % 0.28 % Cost of total deposits annualized 0.41 % 0.20 % 0.16 % 0.18 % 0.20 % Net interest margin annualized 3.62 % 3.39 % 3.38 % 3.13 % 3.86 % Efficiency ratio* 63.07 % 64.38 % 60.36 % 72.25 % 56.65 % Non-interest income / average assets 0.71 % 0.76 % 0.72 % 0.72 % 0.73 % Non-interest expense / average assets 2.56 % 2.49 % 2.34 % 2.98 % 2.85 % Capital Ratios Tier 1 Leverage Ratio 9.46 % 9.11 % 9.07 % 9.09 % 9.02 % Common Equity Tier 1 Capital Ratio 12.15 % 12.08 % 11.81 % 12.03 % 12.39 % Tier 1 Risk Based Capital Ratio 12.77 % 12.71 % 12.43 % 12.67 % 12.90 % Total Risk Based Capital Ratio 15.99 % 15.97 % 15.66 % 15.96 % 16.63 % Total stockholders' equity to total assets 7.92 % 8.56 % 8.90 % 9.74 % 9.80 % Tangible common equity to tangible assets* 6.68 % 7.32 % 7.63 % 8.48 % 8.82 % Dividend payout ratio 10.78 % 8.61 % 8.58 % 13.05 % 9.96 % Book value per common share $ 24.71 $ 26.58 $ 27.47 $ 29.87 $ 29.08 Tangible book value per common share* $ 20.59 $ 22.42 $ 23.24 $ 25.65 $ 25.90 Tangible book value per diluted common share* $ 20.33 $ 22.17 $ 22.95 $ 25.22 $ 25.42 TABLE 5. YEAR-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)For the nine months ended For the nine months ended September 30, 2022 September 30, 2021 Average
Outstanding
BalanceInterest
Income/
ExpenseAverage
Yield/Rate(3)(4)Average
Outstanding
BalanceInterest
Income/
ExpenseAverage
Yield/Rate(3)(4)Interest-earning assets Loans (1) Commercial and industrial $ 579,610 $ 22,994 5.30 % $ 752,795 $ 34,609 6.15 % Commercial real estate 1,236,282 45,995 4.97 % 990,803 34,943 4.72 % Real estate construction 362,543 12,443 4.59 % 264,344 7,195 3.64 % Residential real estate 604,218 16,336 3.61 % 457,761 14,167 4.14 % Agricultural real estate 201,566 8,046 5.34 % 135,795 5,203 5.12 % Agricultural 132,485 5,254 5.30 % 93,680 3,432 4.90 % Consumer 101,341 3,642 4.80 % 84,285 2,843 4.51 % Total loans 3,218,045 114,710 4.77 % 2,779,463 102,392 4.93 % Securities Taxable securities 1,220,045 16,767 1.84 % 898,461 11,242 1.67 % Nontaxable securities 109,142 2,020 2.47 % 100,495 2,096 2.79 % Total securities 1,329,187 18,787 1.89 % 998,956 13,338 1.79 % Federal funds sold and other 116,997 1,327 1.52 % 175,761 846 0.64 % Total interest-earning assets $ 4,664,229 134,824 3.86 % $ 3,954,180 116,576 3.94 % Interest-bearing liabilities Demand savings and money market deposits $ 2,480,113 5,461 0.29 % $ 2,076,643 2,728 0.18 % Time deposits 638,692 2,847 0.60 % 606,151 3,588 0.79 % Total interest-bearing deposits 3,118,805 8,308 0.36 % 2,682,794 6,316 0.31 % FHLB advances 54,100 594 1.47 % 16,325 155 1.27 % Other borrowings 152,682 5,123 4.49 % 131,516 4,741 4.82 % Total interest-bearing liabilities $ 3,325,587 14,025 0.56 % $ 2,830,635 11,212 0.53 % Net interest income $ 120,799 $ 105,364 Interest rate spread 3.30 % 3.41 % Net interest margin (2) 3.46 % 3.56 % (1) Average loan balances include nonaccrual loans. (2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period. (3) Tax exempt income is not included in the above table on a tax-equivalent basis. (4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts. TABLE 6. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)For the three months ended For the three months ended September 30, 2022 September 30, 2021 Average
Outstanding
BalanceInterest
Income/
ExpenseAverage
Yield/Rate(3)(4)Average
Outstanding
BalanceInterest
Income/
ExpenseAverage
Yield/Rate(3)(4)Interest-earning assets Loans (1) Commercial and industrial $ 575,149 $ 7,750 5.35 % $ 630,622 $ 13,646 8.59 % Commercial real estate 1,307,244 18,023 5.47 % 1,009,141 12,072 4.75 % Real estate construction 360,579 4,847 5.33 % 283,106 2,664 3.73 % Residential real estate 582,938 5,464 3.72 % 512,135 5,073 3.93 % Agricultural real estate 200,534 2,740 5.42 % 134,673 1,819 5.36 % Agricultural 113,351 1,406 4.92 % 91,878 1,370 5.92 % Consumer 101,203 1,325 5.20 % 86,647 937 4.29 % Total loans 3,240,998 41,555 5.09 % 2,748,202 37,581 5.43 % Securities Taxable securities 1,164,697 5,793 1.97 % 966,651 3,920 1.61 % Nontaxable securities 107,717 687 2.53 % 94,527 655 2.75 % Total securities 1,272,414 6,480 2.02 % 1,061,178 4,575 1.71 % Federal funds sold and other 89,156 513 2.29 % 196,129 290 0.59 % Total interest-earning assets $ 4,602,568 48,548 4.18 % $ 4,005,509 42,446 4.20 % Interest-bearing liabilities Demand savings and money market deposits $ 2,425,824 3,118 0.51 % $ 2,082,515 862 0.16 % Time deposits 655,421 1,285 0.78 % 619,525 1,019 0.65 % Total interest-bearing deposits 3,081,245 4,403 0.57 % 2,702,040 1,881 0.28 % FHLB advances 71,415 409 2.27 % 1,401 10 2.78 % Other borrowings 150,099 1,792 4.74 % 131,180 1,580 4.78 % Total interest-bearing liabilities $ 3,302,759 6,604 0.79 % $ 2,834,621 3,471 0.49 % Net interest income $ 41,944 $ 38,975 Interest rate spread 3.39 % 3.71 % Net interest margin (2) 3.62 % 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 7. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)For the three months ended For the three months ended September 30, 2022 June 30, 2022 Average
Outstanding
BalanceInterest
Income/
ExpenseAverage
Yield/Rate(3)(4)Average
Outstanding
BalanceInterest
Income/
ExpenseAverage
Yield/Rate(3)(4)Interest-earning assets Loans (1) Commercial and industrial $ 575,149 $ 7,750 5.35 % $ 588,126 $ 7,483 5.10 % Commercial real estate 1,307,244 18,023 5.47 % 1,210,185 14,521 4.81 % Real estate construction 360,579 4,847 5.33 % 384,317 4,297 4.48 % Residential real estate 582,938 5,464 3.72 % 597,680 5,206 3.49 % Agricultural real estate 200,534 2,740 5.42 % 202,038 2,643 5.25 % Agricultural 113,351 1,406 4.92 % 134,826 1,533 4.56 % Consumer 101,203 1,325 5.20 % 99,680 1,166 4.69 % Total loans 3,240,998 41,555 5.09 % 3,216,852 36,849 4.59 % Securities Taxable securities 1,164,697 5,793 1.97 % 1,210,828 5,584 1.85 % Nontaxable securities 107,717 687 2.53 % 108,271 678 2.51 % Total securities 1,272,414 6,480 2.02 % 1,319,099 6,262 1.90 % Federal funds sold and other 89,156 513 2.29 % 140,016 513 1.47 % Total interest-earning assets $ 4,602,568 48,548 4.18 % $ 4,675,967 43,624 3.74 % Interest-bearing liabilities Demand savings and money market deposits $ 2,425,824 3,118 0.51 % $ 2,481,602 1,346 0.22 % Time deposits 655,421 1,285 0.78 % 630,698 837 0.53 % Total interest-bearing deposits 3,081,245 4,403 0.57 % 3,112,300 2,183 0.28 % FHLB advances 71,415 409 2.27 % 80,266 176 0.88 % Other borrowings 150,099 1,792 4.74 % 157,796 1,699 4.32 % Total interest-bearing liabilities $ 3,302,759 6,604 0.79 % $ 3,350,362 4,058 0.49 % Net interest income $ 41,944 $ 39,566 Interest rate spread 3.39 % 3.25 % Net interest margin (2) 3.62 % 3.39 % (1) Average loan balances include nonaccrual loans. (2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period. (3) Tax exempt income is not included in the above table on a tax-equivalent basis. TABLE 8. NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in thousands, except per share data)As of and for the three months ended September 30, June 30, March 31, December 31, September 30, 2022 2022 2022 2021 2021 Total stockholders' equity $ 395,806 $ 428,115 $ 452,015 $ 500,631 $ 417,749 Less: goodwill 53,101 53,101 54,465 54,465 31,601 Less: core deposit intangibles, net 11,598 12,554 13,830 14,879 12,963 Less: mortgage servicing rights, net 201 226 251 276 — Less: naming rights, net 1,054 1,065 1,076 1,087 1,098 Tangible common equity $ 329,852 $ 361,169 $ 382,393 $ 429,924 $ 372,087 Common shares outstanding at period end 16,017,834 16,106,818 16,454,966 16,760,115 14,365,785 Diluted common shares outstanding at period end 16,225,591 16,289,635 16,662,779 17,050,115 14,637,306 Book value per common share $ 24.71 $ 26.58 $ 27.47 $ 29.87 $ 29.08 Tangible book value per common share $ 20.59 $ 22.42 $ 23.24 $ 25.65 $ 25.90 Tangible book value per diluted common share $ 20.33 $ 22.17 $ 22.95 $ 25.22 $ 25.42 Total assets $ 5,000,415 $ 5,002,156 $ 5,078,623 $ 5,137,631 $ 4,263,268 Less: goodwill 53,101 53,101 54,465 54,465 31,601 Less: core deposit intangibles, net 11,598 12,554 13,830 14,879 12,963 Less: mortgage servicing rights, net 201 226 251 276 — Less: naming rights, net 1,054 1,065 1,076 1,087 1,098 Tangible assets $ 4,934,461 $ 4,935,210 $ 5,009,001 $ 5,066,924 $ 4,217,606 Total stockholders' equity to total assets 7.92 % 8.56 % 8.90 % 9.74 % 9.80 % Tangible common equity to tangible assets 6.68 % 7.32 % 7.63 % 8.48 % 8.82 % Total average stockholders' equity $ 436,191 $ 437,483 $ 492,599 $ 563,046 $ 422,879 Less: average intangible assets 66,445 68,978 70,181 61,186 46,335 Average tangible common equity $ 369,746 $ 368,505 $ 422,418 $ 501,860 $ 376,544 Net income (loss) allocable to common stockholders $ 15,171 $ 15,259 $ 15,650 $ 10,466 $ 11,773 Add: amortization of intangible assets 992 1,148 1,085 1,116 1,040 Less: tax effect of intangible assets amortization 208 241 228 234 218 Adjusted net income (loss) allocable to common
stockholders$ 15,955 $ 16,166 $ 16,507 $ 11,348 $ 12,595 Return on total average stockholders' equity
(ROAE) annualized13.80 % 13.99 % 12.88 % 7.37 % 11.05 % Return on average tangible common equity
(ROATCE) annualized17.12 % 17.60 % 15.85 % 8.97 % 13.27 % Non-interest expense $ 32,236 $ 31,436 $ 29,459 $ 38,089 $ 30,689 Less: loss on debt extinguishment — — — — $ 372 Less: merger expense 115 88 323 4,562 4,015 Adjusted non-interest expense $ 32,121 $ 31,348 $ 29,136 $ 33,527 $ 26,302 Net interest income $ 41,944 $ 39,566 $ 39,289 $ 37,215 $ 38,975 Non-interest income 8,969 9,637 9,022 9,199 7,831 Less: net gain on acquisition and branch sales — 540 — — — Less: net gains (losses) from securities transactions (17 ) (32 ) 40 8 381 Adjusted non-interest income $ 8,986 $ 9,129 $ 8,982 $ 9,191 $ 7,450 Net interest income plus adjusted non-interest income $ 50,930 $ 48,695 $ 48,271 $ 46,406 $ 46,425 Non-interest expense to
net interest income plus non-interest income63.32 % 63.89 % 60.98 % 82.06 % 65.57 % Efficiency ratio 63.07 % 64.38 % 60.36 % 72.25 % 56.65 % Net income (loss) allocable to common stockholders $ 15,171 $ 15,259 $ 15,650 $ 10,466 $ 11,773 Add: income tax provision 3,642 1,684 3,614 (16 ) 3,286 Add: provision (reversal) of credit losses (136 ) 824 (412 ) (2,125 ) 1,058 Pre-tax, pre-provision income $ 18,677 $ 17,767 $ 18,852 $ 8,325 $ 16,117 Total average assets $ 4,988,755 $ 5,067,687 $ 5,108,120 $ 5,068,301 $ 4,275,298 Total average stockholders' equity $ 436,191 $ 437,483 $ 492,599 $ 563,023 $ 422,879 Return on average assets (ROAA) annualized 1.21 % 1.21 % 1.24 % 0.82 % 1.09 % Adjusted return on average assets 1.49 % 1.41 % 1.50 % 0.65 % 1.50 % Adjusted return on average equity 16.99 % 16.29 % 15.52 % 5.87 % 15.12 %