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First Mid Bancshares, Inc. Announces Fourth Quarter 2023 Results
ソース: Nasdaq GlobeNewswire / 25 1 2024 07:00:01 America/New_York
MATTOON, Ill., Jan. 25, 2024 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter and year ended December 31, 2023.
Highlights
- Net income of $18.1 million, or $0.76 diluted EPS
- Adjusted net income (non-GAAP) of $22.4 million, or $0.94 diluted EPS
- Completed the merger and integration of Blackhawk Bank (“Blackhawk”)
- Sold additional bonds to reposition balance sheet helping drive a strong net interest margin of 3.33%
- Strong asset quality performance continued with minimal net charge offs for the quarter
- Board of Directors declares regular quarterly dividend of $0.23 per share
“We capped off 2023 with a strong quarter of financial results,” said Joe Dively, Chairman and Chief Executive Officer. “This was the first full quarter inclusive of Blackhawk and the value of the transaction is evident in our results. We completed another step in the Blackhawk related balance sheet repositioning by selling additional bonds with proceeds of $79.7 million used to reduce brokered CDs and wholesale borrowings, improving our net interest margin.”
“During the quarter, we completed the merger of Blackhawk into First Mid Bank & Trust and the related core system conversion. Our employees worked extremely hard to make the transition as seamless as possible for our customers in what was our largest, most complex integration. I am proud of the efforts of our team and their support of our customers,” Dively concluded.
Net Interest Income
Net interest income for the fourth quarter of 2023 increased by $7.0 million, or 13.9% compared to the third quarter of 2023. Interest income and interest expense increased in the quarter by $9.5 million and $2.5 million, respectively. The increase in interest income was primarily driven by the addition of Blackhawk, loan growth, and the repricing of loans with higher interest rates. Accretion income for the quarter was $4.6 million, an increase compared to $2.6 million in the prior quarter. The increase in interest expense was primarily driven by the addition of Blackhawk and higher interest rates. During the quarter, the Company sold $79.7 million of bonds and used the proceeds to payoff maturing brokered CDs and wholesale borrowings.In comparison to the fourth quarter of 2022, net interest income increased $11.8 million, or 25.8%. The increase was primarily driven by the addition of Blackhawk. For the same period, interest income increased by $29.2 million, while interest expense increased $17.4 million.
Net Interest Margin
Net interest margin, on a tax equivalent basis (non-GAAP), was 3.33% for the fourth quarter of 2023, which was 27 basis points higher compared to the prior quarter. Earning asset yields increased by 29 basis points and the average cost of funds increased 2 basis points.In comparison to the fourth quarter of last year, the net interest margin increased 26 basis points, with an average earning asset increase of 111 basis points versus the average cost of funds increase of 85 basis points.
Loan Portfolio
Total loans ended the quarter at $5.58 billion, representing an increase of $40.5 million. The growth was spread among several categories with the largest increase in Ag operating loans. Overall, loan demand slightly improved and we saw an increase in line draws during the period. Most of the new originations and renewed loans in the period were at rates in the 8.00% to 8.50% range.Asset Quality
The fourth quarter was another strong period with respect to the Company’s asset quality metrics. The allowance for credit losses (“ACL”) increased by $0.4 million to $68.7 million with an ending ACL to total loans ratio of 1.23%. In addition to the ACL, an unearned discount of $49.9 million remains at quarter end. Provision expense was recorded in the amount of $0.6 million with net charge offs of $0.1 million in the quarter. Also, at the end of the fourth quarter, the ratio of non-performing loans to total loans was 0.36%, and the ACL to non-performing loans was 341.19%. The ratio of nonperforming assets to total assets was 0.28% and nonperforming loans were $20.1 million at quarter end. For the quarter, special mention loans were $74.1 million and substandard loans were $28.9 million.Deposits
Total deposits ended the quarter at $6.12 billion, which represented a decrease of $222.7 million from the prior quarter. Of the decline, $73.2 million came from time deposits, including brokered, where the Company used proceeds from its bond sales to pay these off at maturity. The remaining portion of the decline in balances was driven primarily by seasonal cash flow operating needs of commercial customers. Noninterest bearing deposits increased by $9.2 million in the quarter. The Company’s average rate on cost of funds increased to 1.85% compared to 1.83% in the prior quarter and 1.00% in the fourth quarter of 2022.Noninterest Income
Noninterest income represented 31% of our total net revenues for the year.Noninterest income for the fourth quarter of 2023 was $21.8 million compared to $23.1 million in the third quarter of 2023. Excluding securities gains for both periods, noninterest income increased $2.1 million in the current quarter. The increase was primarily driven by the full quarter benefit of Blackhawk, along with higher insurance revenues.
In comparison to the fourth quarter of 2022, noninterest income increased $3.6 million, or 19.6%, due to a combination of organic growth and the addition of Blackhawk’s operating costs for the period.
Noninterest Expenses
Noninterest expense for the fourth quarter of 2023 totaled $57.0 million compared to $47.1 million in the prior quarter. The increase was primarily driven by the full quarter of Blackhawk and approximately $5.6 million in nonrecurring acquisition related costs.In comparison to the fourth quarter of 2022, noninterest expenses increased $17.7 million. In addition to $5.6 million in nonrecurring integration related costs during the period, the increase was primarily driven by the addition of Blackhawk.
The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the fourth quarter 2023 was 58.9% compared to 58.6% in the prior quarter and 58.1% for the same period last year.
Capital Levels, Dividend and Taxes
The Company’s capital levels remained strong and above the “well capitalized” levels. Capital levels ended the period as follows:Total capital to risk-weighted assets 14.84% Tier 1 capital to risk-weighted assets 12.02% Common equity tier 1 capital to risk-weighted assets 11.62% Leverage ratio 9.33% Tangible book value per share increased in the period to $22.20 on a combination of both earnings growth and improvement in the unrealized loss position in the bond portfolio impacting accumulated other comprehensive income (“AOCI”).
The Company’s Board of Directors approved a regular quarterly dividend of $0.23 payable on March 1, 2024 for shareholders of record on February 16, 2024.
The Company’s effective tax rate for the fourth quarter was 16.6% and 22.0% for the year. The lower rate in the current period was primarily due to $0.8 million of refunds for amendments filed on Wisconsin state taxes.
About First Mid: First Mid Bancshares, Inc. (“First Mid”) is the parent company of First Mid Bank & Trust, N.A., First Mid Insurance Group, Inc., and First Mid Wealth Management Co. First Mid is a $7.6 billion community-focused organization that provides a full-suite of financial services including banking, wealth management, brokerage, Ag services, and insurance through a sizeable network of locations throughout Illinois, Missouri, Texas, and Wisconsin and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in providing solutions and services to the customers and communities and has done so over the last 159 years. More information about the Company is available on our website at www.firstmid.com.
Non-GAAP Measures: In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance. Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported. These non-GAAP financial measures are detailed as supplemental tables and include “Adjusted Net Income,” “Adjusted Diluted EPS,” “Efficiency Ratio,” “Net Interest Margin, tax equivalent,” and “Tangible Book Value per Common Share”. While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP. These non-GAAP financial measures may also differ from the similar measures presented by other companies.
Forward Looking Statements
This document may contain certain forward-looking statements about First Mid, such as discussions of First Mid’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses and planned schedules. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid are identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative and/or regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mid’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; accounting principles, policies and guidelines; and the impact of the global COVID-19 pandemic on First Mid’s businesses. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mid’s financial results, are included in First Mid’s filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.Investor Contact:
Aaron Holt
VP, Shareholder Relations
217-258-0463
aholt@firstmid.comMatt Smith
Chief Financial Officer
217-258-1528
msmith@firstmid.com– Tables Follow –
FIRST MID BANCSHARES, INC. Condensed Consolidated Balance Sheets (In thousands, unaudited) As of December 31, September 30, December 31, 2023 2023 2022 Assets Cash and cash equivalents $ 143,064 $ 383,237 $ 152,433 Investment securities 1,179,402 1,226,746 1,223,720 Loans (including loans held for sale) 5,580,565 5,540,065 4,826,212 Less allowance for credit losses (68,675 ) (68,241 ) (59,093 ) Net loans 5,511,890 5,471,824 4,767,119 Premises and equipment, net 101,396 102,004 90,473 Goodwill and intangibles, net 264,231 267,793 169,897 Bank owned life insurance 166,125 165,022 151,756 Other assets 220,686 238,668 188,817 Total assets $ 7,586,794 $ 7,855,294 $ 6,744,215 Liabilities and Stockholders' Equity Deposits: Non-interest bearing $ 1,398,234 $ 1,389,022 $ 1,256,514 Interest bearing 4,725,425 4,957,302 4,000,487 Total deposits 6,123,659 6,346,324 5,257,001 Repurchase agreement with customers 213,721 214,978 221,414 Other borrowings 263,787 364,953 465,071 Junior subordinated debentures 24,058 24,003 19,364 Subordinated debt 106,755 106,648 94,553 Other liabilities 61,610 60,440 53,657 Total liabilities 6,793,590 7,117,346 6,111,060 Total stockholders' equity 793,204 737,948 633,155 Total liabilities and stockholders' equity $ 7,586,794 $ 7,855,294 $ 6,744,215 FIRST MID BANCSHARES, INC. Condensed Consolidated Statements of Income (In thousands, except per share data, unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2023 2022 2023 2022 Interest income: Interest and fees on loans $ 78,676 $ 53,128 $ 262,423 $ 185,869 Interest on investment securities 8,515 7,285 32,119 29,380 Interest on federal funds sold & other deposits 2,736 296 5,624 642 Total interest income 89,927 60,709 300,166 215,891 Interest expense: Interest on deposits 25,900 9,227 77,294 18,813 Interest on securities sold under agreements to repurchase 1,754 1,163 6,565 1,795 Interest on other borrowings 3,073 3,345 16,789 6,193 Interest on jr. subordinated debentures 545 315 1,859 868 Interest on subordinated debt 1,193 987 4,196 3,945 Total interest expense 32,465 15,037 106,703 31,614 Net interest income 57,462 45,672 193,463 184,277 Provision for credit losses 552 805 6,104 4,806 Net interest income after provision for loan 56,910 44,867 187,359 179,471 Non-interest income: Wealth management revenues 4,998 6,201 20,793 22,492 Insurance commissions 5,398 4,719 24,814 21,622 Service charges 3,298 2,375 10,881 9,112 Net securities gains/(losses) 46 (48 ) 3,383 33 Mortgage banking revenues 954 65 2,282 1,190 ATM/debit card revenue 4,233 3,209 14,347 12,422 Other 2,841 1,686 10,286 7,811 Total non-interest income 21,768 18,207 86,786 74,682 Non-interest expense: Salaries and employee benefits 29,925 23,610 104,962 98,594 Net occupancy and equipment expense 7,977 6,126 26,946 24,257 Net other real estate owned (income) expense 800 87 1,862 330 FDIC insurance 1,015 464 3,339 1,805 Amortization of intangible assets 3,560 1,537 9,127 6,290 Stationary and supplies 404 298 1,346 1,295 Legal and professional expense 2,065 1,607 7,379 6,996 ATM/debit card expense 1,332 1,309 5,322 4,300 Marketing and donations 679 681 3,005 2,999 Other 9,268 3,653 22,452 15,995 Total non-interest expense 57,025 39,372 185,740 162,861 Income before income taxes 21,653 23,702 88,405 91,292 Income taxes 3,582 3,063 19,470 18,340 Net income $ 18,071 $ 20,639 $ 68,935 $ 72,952 Per Share Information Basic earnings per common share $ 0.76 $ 1.01 $ 3.17 $ 3.62 Diluted earnings per common share 0.76 1.01 3.15 3.60 Weighted average shares outstanding 23,837,853 20,461,046 21,780,217 20,169,077 Diluted weighted average shares outstanding 23,921,758 20,535,220 21,868,788 20,243,635 FIRST MID BANCSHARES, INC. Condensed Consolidated Statements of Income (In thousands, except per share data, unaudited) For the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Interest income: Interest and fees on loans $ 78,676 $ 69,143 $ 58,368 $ 56,236 $ 53,128 Interest on investment securities 8,515 9,284 7,193 7,127 7,285 Interest on federal funds sold & other deposits 2,736 2,011 569 308 296 Total interest income 89,927 80,438 66,130 63,671 60,709 Interest expense: Interest on deposits 25,900 22,047 16,580 12,767 9,227 Interest on securities sold under agreements to repurchase 1,754 1,625 1,723 1,463 1,163 Interest on other borrowings 3,073 4,749 4,084 4,883 3,345 Interest on jr. subordinated debentures 545 545 390 379 315 Interest on subordinated debt 1,193 1,029 986 988 987 Total interest expense 32,465 29,995 23,763 20,480 15,037 Net interest income 57,462 50,443 42,367 43,191 45,672 Provision for credit losses 552 5,911 458 (817 ) 805 Net interest income after provision for loan 56,910 44,532 41,909 44,008 44,867 Non-interest income: Wealth management revenues 4,998 4,940 5,341 5,514 6,201 Insurance commissions 5,398 5,199 5,737 8,480 4,719 Service charges 3,298 2,994 2,386 2,203 2,375 Securities gains, net 46 3,389 (6 ) (46 ) (48 ) Mortgage banking revenues 954 846 332 150 65 ATM/debit card revenue 4,233 3,766 3,265 3,083 3,209 Other 2,841 1,919 2,431 3,095 1,686 Total non-interest income 21,768 23,053 19,486 22,479 18,207 Non-interest expense: Salaries and employee benefits 29,925 25,422 23,544 26,071 23,610 Net occupancy and equipment expense 7,977 6,929 6,035 6,005 6,126 Net other real estate owned (income) expense 800 902 27 133 87 FDIC insurance 1,015 785 1,076 463 464 Amortization of intangible assets 3,560 2,568 1,477 1,522 1,537 Stationary and supplies 404 335 315 292 298 Legal and professional expense 2,065 1,844 1,780 1,690 1,607 ATM/debit card expense 1,332 1,751 1,016 1,223 1,309 Marketing and donations 679 764 908 654 681 Other 9,268 5,796 3,864 3,524 3,653 Total non-interest expense 57,025 47,096 40,042 41,577 39,372 Income before income taxes 21,653 20,489 21,353 24,910 23,702 Income taxes 3,582 5,372 4,786 5,730 3,063 Net income $ 18,071 $ 15,117 $ 16,567 $ 19,180 $ 20,639 Per Share Information Basic earnings per common share $ 0.76 $ 0.68 $ 0.81 $ 0.94 $ 1.01 Diluted earnings per common share 0.76 0.68 0.80 0.93 1.01 Weighted average shares outstanding 23,837,853 22,220,438 20,528,717 20,492,254 20,461,046 Diluted weighted average shares outstanding 23,921,758 22,319,334 20,628,239 20,563,972 20,535,220 FIRST MID BANCSHARES, INC. Consolidated Financial Highlights and Ratios (Dollars in thousands, except per share data) (Unaudited) As of and for the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Loan Portfolio Construction and land development $ 205,077 $ 189,206 $ 151,574 $ 159,157 $ 144,264 Farm real estate loans 391,132 399,834 392,220 401,957 410,327 1-4 Family residential properties 542,469 531,699 418,932 424,545 440,180 Multifamily residential properties 319,129 327,067 303,482 301,808 294,346 Commercial real estate 2,384,704 2,392,834 2,056,529 2,003,647 2,030,011 Loans secured by real estate 3,842,511 3,840,640 3,322,737 3,291,114 3,319,128 Agricultural operating loans 196,272 179,447 148,318 146,847 166,838 Commercial and industrial loans 1,266,159 1,242,653 1,094,522 1,078,021 1,082,960 Consumer loans 91,014 99,542 80,241 88,430 97,775 All other loans 184,609 177,783 167,598 156,219 159,511 Total loans 5,580,565 5,540,065 4,813,416 4,760,631 4,826,212 Deposit Portfolio Non-interest bearing demand deposits $ 1,398,234 $ 1,389,022 $ 1,171,047 $ 1,262,181 $ 1,256,514 Interest bearing demand deposits 1,837,296 1,940,162 1,477,765 1,419,791 1,389,283 Savings deposits 710,586 734,377 602,523 639,691 636,699 Money Market 1,129,950 1,161,957 923,259 878,452 1,267,726 Time deposits 1,047,593 1,120,806 1,044,991 830,663 706,779 Total deposits 6,123,659 6,346,324 5,219,585 5,030,778 5,257,001 Asset Quality Non-performing loans $ 20,128 $ 21,269 $ 18,637 $ 15,163 $ 19,170 Non-performing assets 21,292 23,565 22,615 19,225 23,539 Net charge-offs (recoveries) 118 181 (38 ) 53 489 Allowance for credit losses to non-performing loans 341.19 % 320.85 % 315.07 % 383.98 % 308.26 % Allowance for credit losses to total loans outstanding 1.23 % 1.23 % 1.22 % 1.22 % 1.22 % Nonperforming loans to total loans 0.36 % 0.38 % 0.39 % 0.32 % 0.40 % Nonperforming assets to total assets 0.28 % 0.30 % 0.34 % 0.29 % 0.35 % Special Mention loans 74,050 73,732 40,687 47,022 39,853 Substandard and Doubtful loans 28,945 30,575 28,255 29,931 34,352 Common Share Data Common shares outstanding 23,827,137 23,830,038 20,528,192 20,519,717 20,452,376 Book value per common share $ 33.29 $ 30.97 $ 32.18 $ 32.26 $ 30.96 Tangible book value per common share (1) 22.20 19.73 23.48 24.05 22.65 Tangible book value per common share excluding other comprehensive income at period end (1) 27.93 27.24 30.87 30.77 30.06 Market price of stock 34.66 26.56 24.14 27.22 32.08 Key Performance Ratios and Metrics End of period earning assets $ 6,780,160 $ 7,007,282 $ 6,023,553 $ 5,995,674 $ 6,063,953 Average earning assets 6,948,309 6,593,781 6,049,626 6,052,264 6,000,106 Average rate on average earning assets (tax equivalent) 5.18 % 4.89 % 4.43 % 4.32 % 4.07 % Average rate on cost of funds 1.85 % 1.83 % 1.59 % 1.38 % 1.00 % Net interest margin (tax equivalent) (1) 3.33 % 3.06 % 2.84 % 2.94 % 3.07 % Return on average assets 0.93 % 0.90 % 0.99 % 1.15 % 1.24 % Adjusted return on average assets (1) 1.16 % 0.94 % 1.03 % 1.18 % 1.25 % Return on average common equity 9.76 % 8.70 % 10.07 % 12.11 % 13.51 % Adjusted return on average common equity (1) 12.11 % 9.82 % 10.42 % 11.92 % 13.60 % Efficiency ratio (tax equivalent) (1) 58.91 % 58.60 % 60.37 % 59.01 % 58.07 % Full-time equivalent employees 1,187 1,224 995 988 1,043 1 Non-GAAP financial measure. Refer to reconciliation to the comparable GAAP measure. FIRST MID BANCSHARES, INC. Net Interest Margin (In thousands, unaudited) For the Quarter Ended December 31, 2023 QTD Average Average Balance Interest Rate INTEREST EARNING ASSETS Interest bearing deposits $ 186,849 $ 2,560 5.44 % Federal funds sold 8,842 122 5.47 % Certificates of deposits investments 1,630 54 13.14 % Investment Securities: Taxable (total less municipals) 946,620 6,522 2.76 % Tax-exempt (Municipals) 259,662 2,524 3.89 % Loans (net of unearned income) 5,544,706 78,938 5.65 % Total interest earning assets 6,948,309 90,720 5.18 % NONEARNING ASSETS Cash and due from banks 137,282 Premises and equipment 101,641 Other nonearning assets 618,063 Allowance for loan losses (68,584 ) Total assets $ 7,736,711 INTEREST BEARING LIABILITIES Demand deposits $ 2,999,731 $ 16,077 2.13 % Savings deposits 724,347 190 0.10 % Time deposits 1,074,569 9,633 3.56 % Total interest bearing deposits 4,798,647 25,900 2.14 % Repurchase agreements 230,977 1,754 3.01 % FHLB advances 336,939 3,060 3.60 % Federal funds purchased - 1 0.00 % Subordinated debt 106,684 1,193 4.44 % Jr. subordinated debentures 24,029 545 9.00 % Other debt - 12 0.00 % Total borrowings 698,629 6,565 3.73 % Total interest bearing liabilities 5,497,276 32,465 2.34 % NONINTEREST BEARING LIABILITIES Demand deposits 1,463,572 Average cost of funds 1.85 % Other liabilities 35,248 Stockholders' equity 740,615 Total liabilities & stockholders' equity $ 7,736,711 Net Interest Earnings / Spread $ 58,255 2.84 % Impact of Non-Interest Bearing Funds 0.49 % Tax effected yield on interest earning assets 3.33 % FIRST MID BANCSHARES, INC. Reconciliation of Non-GAAP Financial Measures (In thousands, unaudited) As of and for the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Net interest income as reported $ 57,462 $ 50,443 $ 42,367 $ 43,191 $ 45,672 Net interest income, (tax equivalent) 58,255 51,212 43,109 43,947 46,464 Average earning assets 6,948,309 6,593,781 6,049,626 6,052,264 6,000,106 Net interest margin (tax equivalent) 3.33 % 3.06 % 2.84 % 2.94 % 3.07 % Common stockholder's equity $ 793,204 $ 737,948 $ 660,687 $ 661,865 $ 633,155 Goodwill and intangibles, net 264,231 267,793 178,615 168,373 169,897 Common shares outstanding 23,827 23,830 20,528 20,520 20,452 Tangible Book Value per common share $ 22.20 $ 19.73 $ 23.48 $ 24.05 $ 22.65 Accumulated other comprehensive loss (AOCI) (136,427 ) (178,903 ) (151,566 ) (137,901 ) (151,507 ) Adjusted tangible book value per common share $ 27.93 $ 27.24 $ 30.87 $ 30.77 $ 30.06 FIRST MID BANCSHARES, INC. Reconciliation of Non-GAAP Financial Measures (In thousands, except per share data, unaudited) As of and for the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Adjusted earnings Reconciliation Net Income - GAAP $ 18,071 $ 15,117 $ 16,567 $ 19,180 $ 20,639 Adjustments (post-tax): (1) Acquisition ACL on non-PCD assets in provision expense - 2,985 - - - Nonrecurring severance expense - - - 416 - Net (gain)/loss on securities sales (36 ) (2,677 ) - - - Integration and acquisition expenses 4,385 1,653 589 135 131 Total non-recurring adjustments (non-GAAP) $ 4,348 $ 1,962 $ 589 $ 551 $ 131 Adjusted earnings - non-GAAP $ 22,419 $ 17,079 $ 17,156 $ 19,731 $ 20,770 Adjusted diluted earnings per share (non-GAAP) $ 0.94 $ 0.77 $ 0.83 $ 0.96 $ 1.01 Adjusted return on average assets - non-GAAP 1.16 % 0.94 % 1.03 % 1.18 % 1.25 % Adjusted return on average common equity - non-GAAP 12.11 % 9.82 % 10.42 % 11.92 % 13.60 % Efficiency Ratio Reconciliation Noninterest expense - GAAP $ 57,025 $ 47,096 $ 40,042 $ 41,577 $ 39,372 Other real estate owned property income (expense) (800 ) (902 ) (27 ) (133 ) (87 ) Amortization of intangibles (3,560 ) (2,568 ) (1,477 ) (1,522 ) (1,537 ) Nonrecurring severance expense - - - (527 ) - Integration and acquisition expenses (5,550 ) (2,093 ) (745 ) (171 ) (166 ) Adjusted noninterest expense (non-GAAP) $ 47,115 $ 41,533 $ 37,793 $ 39,224 $ 37,582 Net interest income -GAAP $ 57,462 $ 50,443 $ 42,367 $ 43,192 $ 45,672 Effect of tax-exempt income (1) 793 769 742 755 792 Adjusted net interest income (non-GAAP) $ 58,255 $ 51,212 $ 43,109 $ 43,947 $ 46,464 Noninterest income - GAAP $ 21,768 $ 23,053 $ 19,486 $ 22,479 $ 18,207 Net (gain)/loss on securities sales (46 ) (3,389 ) 6 46 48 Adjusted noninterest income (non-GAAP) $ 21,722 $ 19,664 $ 19,492 $ 22,525 $ 18,255 Adjusted total revenue (non-GAAP) $ 79,977 $ 70,876 $ 62,601 $ 66,472 $ 64,719 Efficiency ratio (non-GAAP) 58.91 % 58.60 % 60.37 % 59.01 % 58.07 % (1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%. 
