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Equity Bancshares, Inc. Reports First Quarter Results, Continued Organic Growth

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Equity Bancshares, Inc.
Equity Bancshares, Inc.

Company’s expanding banking franchise earns net income of $15.7 million, sustains momentum following fourth quarter acquisitions

WICHITA, Kan., April 19, 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 $15.7 million and $0.93 earnings per diluted share for the quarter ended March 31, 2022.

“I’m pleased with the entrepreneurial spirit of our bankers, including our market leaders, bank leaders and our support and operations teams for their collaboration and their continued focus on our customers,” said Brad Elliott, Chairman and CEO. “We began 2022 as a franchise of nearly 70 bank locations in our four-state network and we’ve continued to sustain momentum in our first quarter with customers by being responsive and open, and providing additional products and services to our new communities.”

“Our first quarter reflects our approach as a brand, providing sophisticated and innovative solutions delivered with trusted expertise of bankers dedicated to local communities,” said Mr. Elliott. “As we continue to review opportunities to expand our brand via merger, our service and sales teams continue to boost organic growth, by delivering new solutions each and every day to our customers.”

Notable Items:

  • During the first quarter, the Company realized period over period growth in loans held for investment of 14.53% excluding the impact of PPP assets, effectively deploying excess cash balances from the end of the year into higher yielding asset classes.

  • The Company realized economic benefit of $5.7 million from the American State Bancshares and Almena State Bank acquisitions during the quarter as specific credits saw improvement resulting in release of specific reserves generated against these assets. In addition to the release of specific reserves, the Company also reversed repurchase obligations associated with certain of these assets further benefiting income by $500 thousand.

  • The Company continued to successfully manage our problem asset portfolio to positive outcomes for the Company and its shareholders. As compared to December 31, 2021, all non-performing ratios have improved in excess of 30%, while classified assets to regulatory capital has fallen to 17.1%, its lowest level since December 31, 2015.

  • The Company continued to position itself in the event of the realization of losses following economic turmoil domestically due in part to inflation and monetary policy as well as geopolitical concerns arising from Russia’s actions in Ukraine.

  • The Company continued to emphasize investor returns through repurchase of 384,383 shares during the quarter, at an average price of $32.21, as well as the continuation of our quarterly dividend program at $0.08 per share. Under the currently active repurchase program, the Company is authorized to purchase an additional 482,744 shares.

Financial Results for the Quarter Ended March 31, 2022

Net income allocable to common stockholders was $15.7 million, or $0.93 per diluted share, for the three months ended March 31, 2022, as compared to $10.5 million, or $0.61 per diluted share, for the three months ended December 31, 2021, an increase of $5.2 million. The increase for the first quarter of 2022 is primarily due to increases in loan and investment security interest income of $1.4 million and $545 thousand, respectively, and decreases in non-interest expenses of $8.6 million.

Net Interest Income

Net interest income was $39.3 million for the three months ended March 31, 2022, as compared to $37.2 million for the three months ended December 31, 2021, an increase of $2.1 million, or 5.6%. The increase was mainly due to increasing yields on interest-earning assets with relatively unchanged yields on interest-bearing liabilities. Loans were responsible for the majority of the increase in interest income, with a $14.5 million increase in average balance and a 25 basis point increase in yield. The cost of time deposits fell by 9 basis points during the quarter, moving from 0.56% at December 31, 2021 to 0.47% at March 31, 2022. Total yield on interest-earning assets increased 24 basis points, while total cost of interest-bearing liabilities decreased 2 basis points.

Provision for Credit Losses

During the three months ended March 31, 2022, there was a net release of $412 thousand from the allowance for credit losses recognized through the provision for credit losses as compared to a net release of $2.1 million from the allowance for credit losses for the three months ended December 31, 2021. The net release of allowance for credit losses was mainly driven by decreases in specific reserves on purchased credit deteriorated loans due to improvement in credit quality during the quarter. Offsetting the reduction in allowance for loans specifically analyzed for impairment was an increase in general reserves driven by increasing loan balances as well as perceived risk associated with near term economic turmoil including significant inflation, supply chain concerns which are potentially exacerbated by geopolitical issues, and uncertainty around the impact of monetary policy on consumers and businesses. For the three months ended March 31, 2022, we had net charge-offs of $362 thousand as compared to $7.9 million for the three months ended December 31, 2021.

Non-Interest Income

Total non-interest income was $9.0 million for the three months ended March 31, 2022, as compared to $9.2 million for the three months ended December 31, 2021, or a decrease of 1.9%, quarter over quarter. The decrease was due to decreased income from the valuation of bank-owned life insurance of $195 thousand, insurance commissions and fees of $157 thousand, and mortgage banking revenue of $160 thousand, partially offset by an increase in fee income and other of $152 thousand and an increase of $104 thousand of income related to derivative transactions in the quarter ending March 31, 2022.

Non-Interest Expense

Total non-interest expense for the quarter ended March 31, 2022, was $29.5 million as compared to $38.1 million for the quarter ended December 31, 2021. The $8.6 million change was primarily due to decreases in merger expenses of $4.2 million and other non-interest expense of $3.0 million. The comparative change in other non-interest expense was primarily driven by a release of reserve for unfunded commitments of $1.0 million and a reduction in the cost of our solar investments of an additional $900 thousand.

Asset Quality

As of March 31, 2022, Equity’s allowance for credit losses to total loans had remained constant at 1.5%, as compared to December 31, 2021. Nonperforming assets were $37.5 million as of March 31, 2022, or 0.7% of total assets, compared to $66.0 million at December 31, 2021, or 1.3% of total assets. Non-accrual loans were $20.7 million at March 31, 2022, as compared to $29.4 million at December 31, 2021. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $94.2 million, or 17.1% of regulatory capital, down from $138.5 million, or 25.3% of regulatory capital as of December 31, 2021.

During the quarter ended March 31, 2022, non-performing assets decreased $28.5 million due to decreases in non-accrual loans of $8.7 million and other repossessed assets of $20.0 million. The decrease in non-accrual loans was largely due to $8.2 million in loans upgraded to accrual status during the quarter due to repayment performance and improvements in specific credit concerns. The change in other repossessed assets was primarily due to the sale of a group of assets that were moved to other repossessed assets in the fourth quarter of 2021.

Regulatory Capital

The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 11.8%, the total capital to risk-weighted assets was 15.7% and the total leverage ratio was 9.1% at March 31, 2022. At December 31, 2021, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 12.0%, 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 13.7%, a ratio of total capital to risk-weighted assets of 14.9% and a total leverage ratio of 10.0% at March 31, 2022. At December 31, 2021, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 14.0%, the ratio of total capital to risk-weighted assets was 15.3% 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 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 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 2022 first quarter results on Wednesday, April 20, 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 Wednesday, April 20, 2022, 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. 1392188.

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 April 27, 2022, accessible at (855) 859-2056 with conference ID no. 1392188 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. 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. Quarterly Consolidated Statements of Income

  • Table 2. Consolidated Balance Sheets

  • Table 3. Selected Financial Highlights

  • Table 4. Quarter-To-Date Net Interest Income Analysis

  • Table 5. Quarter-Over-Quarter Net Interest Income Analysis

  • Table 6. Non-GAAP Financial Measures

TABLE 1. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)

As of and for the three months ended

March 31,
2022

December 31,
2021

September 30,
2021

June 30,
2021

March 31,
2021

Interest and dividend income

Loans, including fees

$

36,306

$

34,942

$

37,581

$

33,810

$

31,001

Securities, taxable

5,391

4,754

3,920

3,523

3,799

Securities, nontaxable

655

747

655

717

724

Federal funds sold and other

300

349

290

268

288

Total interest and dividend income

42,652

40,792

42,446

38,318

35,812

Interest expense

Deposits

1,722

1,939

1,881

2,025

2,410

Federal funds purchased and retail repurchase agreements

33

32

24

26

22

Federal Home Loan Bank advances

9

14

10

80

65

Subordinated debt

1,599

1,592

1,556

1,557

1,556

Total interest expense

3,363

3,577

3,471

3,688

4,053

Net interest income

39,289

37,215

38,975

34,630

31,759

Provision (reversal) for credit losses

(412

)

(2,125

)

1,058

(1,657

)

(5,756

)

Net interest income after provision (reversal) for credit losses

39,701

39,340

37,917

36,287

37,515

Non-interest income

Service charges and fees

2,522

2,471

2,360

2,169

1,596

Debit card income

2,628

2,633

2,574

2,679

2,350

Mortgage banking

562

722

801

848

935

Increase in value of bank-owned life insurance

865

1,060

1,169

676

601

Net gain on acquisition

663

(78

)

Net gains (losses) from securities transactions

40

8

381

17

Other

2,405

2,305

546

2,065

1,291

Total non-interest income

9,022

9,199

7,831

9,100

6,712

Non-interest expense

Salaries and employee benefits

15,068

15,119

13,588

12,769

12,722

Net occupancy and equipment

3,170

2,967

2,475

2,327

2,368

Data processing

3,769

3,867

3,257

3,474

2,663

Professional fees

1,171

1,565

1,076

999

1,073

Advertising and business development

976

1,129

760

799

682

Telecommunications

470

435

439

512

580

FDIC insurance

180

360

465

425

415

Courier and postage

423

389

344

327

369

Free nationwide ATM cost

501

515

519

513

472

Amortization of core deposit intangibles

1,050

1,080

1,030

1,030

1,034

Loan expense

185

308

207

181

238

Other real estate owned

(1

)

617

(342

)

(468

)

5

Loss on debt extinguishment

372

Merger expenses

323

4,562

4,015

460

152

Other

2,174

5,176

2,484

2,458

2,108

Total non-interest expense

29,459

38,089

30,689

25,806

24,881

Income (loss) before income tax

19,264

10,450

15,059

19,581

19,346

Provision for income taxes (benefit)

3,614

(16

)

3,286

4,415

4,271

Net income (loss) and net income (loss) allocable to common stockholders

$

15,650

$

10,466

$

11,773

$

15,166

$

15,075

Basic earnings (loss) per share

$

0.94

$

0.62

$

0.82

$

1.06

$

1.04

Diluted earnings (loss) per share

$

0.93

$

0.61

$

0.80

$

1.03

$

1.02

Weighted average common shares

16,652,556

16,865,167

14,384,302

14,356,958

14,464,291

Weighted average diluted common shares

16,869,152

17,141,174

14,669,312

14,674,838

14,734,083

TABLE 2. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

March 31,
2022

December 31,
2021

September 30,
2021

June 30,
2021

March 31,
2021

ASSETS

Cash and due from banks

$

89,764

$

259,131

$

141,645

$

138,869

$

136,190

Federal funds sold

286

823

673

452

498

Cash and cash equivalents

90,050

259,954

142,318

139,321

136,688

Interest-bearing time deposits in other banks

249

Available-for-sale securities

1,352,894

1,327,442

1,157,423

1,041,613

998,100

Loans held for sale

1,575

4,214

4,108

6,183

8,609

Loans, net of allowance for credit losses(1)

3,194,987

3,107,262

2,633,148

2,763,227

2,740,215

Other real estate owned, net

9,897

9,523

10,267

10,861

10,559

Premises and equipment, net

103,168

104,038

90,727

90,876

90,322

Bank-owned life insurance

120,928

120,787

103,431

103,321

102,645

Federal Reserve Bank and Federal Home Loan Bank stock

19,890

17,510

14,540

18,454

15,174

Interest receivable

16,923

18,048

15,519

15,064

16,655

Goodwill

54,465

54,465

31,601

31,601

31,601

Core deposit intangibles, net

13,830

14,879

12,963

13,993

15,023

Other

100,016

99,509

47,223

33,702

30,344

Total assets

$

5,078,623

$

5,137,631

$

4,263,268

$

4,268,216

$

4,196,184

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits

Demand

$

1,255,793

$

1,244,117

$

984,436

$

992,565

$

972,364

Total non-interest-bearing deposits

1,255,793

1,244,117

984,436

992,565

972,364

Savings, NOW and money market

2,511,478

2,522,289

2,092,849

2,035,496

2,074,261

Time

612,399

653,598

585,492

659,494

587,905

Total interest-bearing deposits

3,123,877

3,175,887

2,678,341

2,694,990

2,662,166

Total deposits

4,379,670

4,420,004

3,662,777

3,687,555

3,634,530

Federal funds purchased and retail repurchase agreements

48,199

56,006

39,137

47,184

40,339

Federal Home Loan Bank advances

50,000

9,208

9,926

Subordinated debt

96,010

95,885

88,030

87,908

87,788

Contractual obligations

17,307

17,692

18,771

4,469

4,856

Interest payable and other liabilities

35,422

47,413

36,804

18,897

20,930

Total liabilities

4,626,608

4,637,000

3,845,519

3,855,221

3,798,369

Commitments and contingent liabilities

Stockholders’ equity

Common stock

204

203

178

176

175

Additional paid-in capital

480,106

478,862

392,321

389,394

387,939

Retained earnings

102,632

88,324

79,226

68,625

53,459

Accumulated other comprehensive income, net of tax

(50,012

)

1,776

9,475

13,450

12,019

Treasury stock

(80,915

)

(68,534

)

(63,451

)

(58,650

)

(55,777

)

Total stockholders’ equity

452,015

500,631

417,749

412,995

397,815

Total liabilities and stockholders’ equity

$

5,078,623

$

5,137,631

$

4,263,268

$

4,268,216

$

4,196,184

(1) Allowance for credit losses

$

47,590

$

48,365

$

52,763

$

51,834

$

55,525

TABLE 3. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)

As of and for the three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

2022

2021

2021

2021

2021

Loans Held For Investment by Type

Commercial real estate

$

1,552,134

$

1,486,148

$

1,308,707

$

1,261,214

$

1,218,537

Commercial and industrial

629,181

567,497

569,513

732,126

820,736

Residential real estate

613,928

638,087

490,633

503,110

438,503

Agricultural real estate

198,844

198,330

138,793

129,020

134,944

Agricultural

150,077

166,975

93,767

97,912

93,764

Consumer

98,413

98,590

84,498

91,679

89,256

Total loans held-for-investment

3,242,577

3,155,627

2,685,911

2,815,061

2,795,740

Allowance for credit losses

(47,590

)

(48,365

)

(52,763

)

(51,834

)

(55,525

)

Net loans held for investment

$

3,194,987

$

3,107,262

$

2,633,148

$

2,763,227

$

2,740,215

Asset Quality Ratios

Allowance for credit losses on loans to total loans

1.47

%

1.53

%

1.96

%

1.84

%

1.99

%

Past due or nonaccrual loans to total loans

0.82

%

1.18

%

2.78

%

2.09

%

2.30

%

Nonperforming assets to total assets

0.74

%

1.28

%

1.74

%

1.56

%

1.67

%

Nonperforming assets to total loans plus other real estate owned

1.15

%

2.07

%

2.76

%

2.36

%

2.50

%

Classified assets to bank total regulatory capital

17.12

%

25.34

%

24.25

%

23.20

%

26.45

%

Selected Average Balance Sheet Data (QTD Average)

Investment securities

$

1,397,421

$

1,330,267

$

1,061,178

$

986,986

$

947,453

Total gross loans receivable

3,195,787

3,181,279

2,748,202

2,853,145

2,736,918

Interest-earning assets

4,715,389

4,713,817

4,005,509

3,964,633

3,891,140

Total assets

5,108,120

5,068,278

4,275,298

4,231,439

4,143,752

Interest-bearing deposits

3,163,777

3,101,657

2,702,040

2,656,052

2,690,159

Borrowings

160,094

165,941

132,581

171,658

139,360

Total interest-bearing liabilities

3,323,871

3,267,598

2,834,621

2,827,710

2,829,519

Total deposits

4,393,879

4,342,732

3,686,169

3,624,950

3,577,625

Total liabilities

4,615,521

4,505,232

3,852,419

3,827,400

3,748,114

Total stockholders' equity

492,599

563,046

422,879

404,039

395,638

Tangible common equity*

422,418

501,860

376,544

356,705

347,262

Performance ratios

Return on average assets (ROAA) annualized

1.24

%

0.82

%

1.09

%

1.44

%

1.48

%

Return on average assets before income tax and provision for loan losses*

1.50

%

0.65

%

1.50

%

1.70

%

1.33

%

Return on average equity (ROAE) annualized

12.88

%

7.37

%

11.05

%

15.06

%

15.45

%

Return on average equity before income tax and provision for loan losses*

15.52

%

5.87

%

15.12

%

17.79

%

13.93

%

Return on average tangible common equity (ROATCE) annualized*

15.85

%

8.97

%

13.27

%

17.98

%

18.57

%

Yield on loans annualized

4.61

%

4.36

%

5.43

%

4.75

%

4.59

%

Cost of interest-bearing deposits annualized

0.22

%

0.25

%

0.28

%

0.31

%

0.36

%

Cost of total deposits annualized

0.16

%

0.18

%

0.20

%

0.22

%

0.27

%

Net interest margin annualized

3.38

%

3.13

%

3.86

%

3.50

%

3.31

%

Efficiency ratio*

60.36

%

72.25

%

56.65

%

58.85

%

64.18

%

Non-interest income / average assets

0.72

%

0.72

%

0.73

%

0.86

%

0.66

%

Non-interest expense / average assets

2.34

%

2.98

%

2.85

%

2.45

%

2.44

%

Capital Ratios

Tier 1 Leverage Ratio

9.07

%

9.09

%

9.02

%

8.88

%

8.73

%

Common Equity Tier 1 Capital Ratio

11.81

%

12.03

%

12.39

%

12.41

%

12.53

%

Tier 1 Risk Based Capital Ratio

12.43

%

12.67

%

12.90

%

12.93

%

13.08

%

Total Risk Based Capital Ratio

15.66

%

15.96

%

16.63

%

16.74

%

17.02

%

Total stockholders' equity to total assets

8.90

%

9.74

%

9.80

%

9.68

%

9.48

%

Tangible common equity to tangible assets*

7.63

%

8.48

%

8.82

%

8.68

%

8.44

%

Dividend payout ratio

8.60

%

13.05

%

9.96

%

0.00

%

0.00

%

Book value per common share

$

27.47

$

29.87

$

29.08

$

28.76

$

27.66

Tangible book value per common share*

$

23.24

$

25.65

$

25.90

$

25.51

$

24.34

Tangible book value per diluted common share*

$

22.95

$

25.22

$

25.42

$

24.98

$

23.87

* 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 4. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)

For the three months ended

For the three months ended

March 31, 2022

March 31, 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

$

575,563

$

7,761

5.47

%

$

803,012

$

9,234

4.66

%

Commercial real estate

1,190,128

13,451

4.58

%

971,825

11,441

4.77

%

Real estate construction

342,536

3,299

3.91

%

255,677

2,178

3.45

%

Residential real estate

632,581

5,665

3.63

%

394,329

4,452

4.58

%

Agricultural real estate

202,145

2,663

5.34

%

140,875

1,696

4.88

%

Agricultural

149,676

2,316

6.28

%

94,787

1,037

4.44

%

Consumer

103,158

1,151

4.53

%

76,413

963

5.11

%

Total loans

3,195,787

36,306

4.61

%

2,736,918

31,001

4.59

%

Securities

Taxable securities

1,285,942

5,391

1.70

%

839,349

3,799

1.84

%

Nontaxable securities

111,479

655

2.38

%

108,104

724

2.72

%

Total securities

1,397,421

6,046

1.75

%

947,453

4,523

1.94

%

Federal funds sold and other

122,181

300

1.00

%

206,769

288

0.56

%

Total interest-earning assets

$

4,715,389

42,652

3.67

%

$

3,891,140

35,812

3.73

%

Interest-bearing liabilities

Savings, NOW and money market deposits

$

2,534,102

996

0.16

%

$

2,079,057

971

0.19

%

Time deposits

629,675

726

0.47

%

611,102

1,439

0.96

%

Total interest-bearing deposits

3,163,777

1,722

0.22

%

2,690,159

2,410

0.36

%

FHLB advances

9,943

9

0.38

%

10,013

65

2.63

%

Other borrowings

150,151

1,632

4.41

%

129,347

1,578

4.95

%

Total interest-bearing liabilities

$

3,323,871

3,363

0.41

%

$

2,829,519

4,053

0.58

%

Net interest income

$

39,289

$

31,759

Interest rate spread

3.26

%

3.15

%

Net interest margin (2)

3.38

%

3.31

%

(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 5. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)

For the three months ended

For the three months ended

March 31, 2022

December 31, 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

$

575,563

$

7,761

5.47

%

$

601,103

$

6,971

4.60

%

Commercial real estate

1,190,128

13,451

4.58

%

1,187,747

13,732

4.59

%

Real estate construction

342,536

3,299

3.91

%

315,774

3,062

3.85

%

Residential real estate

632,581

5,665

3.63

%

618,057

5,174

3.32

%

Agricultural real estate

202,145

2,663

5.34

%

206,462

2,919

5.61

%

Agricultural

149,676

2,316

6.28

%

151,589

1,929

5.05

%

Consumer

103,158

1,151

4.53

%

100,547

1,155

4.56

%

Total loans

3,195,787

36,306

4.61

%

3,181,279

34,942

4.36

%

Securities

Taxable securities

1,285,942

5,391

1.70

%

1,209,826

4,754

1.56

%

Nontaxable securities

111,479

655

2.38

%

120,441

747

2.46

%

Total securities

1,397,421

6,046

1.75

%

1,330,267

5,501

1.64

%

Federal funds sold and other

122,181

300

1.00

%

202,271

348

0.68

%

Total interest-earning assets

$

4,715,389

42,652

3.67

%

$

4,713,817

40,791

3.43

%

Interest-bearing liabilities

Savings, NOW and money market deposits

$

2,534,102

996

0.16

%

$

2,418,492

978

0.16

%

Time deposits

629,675

726

0.47

%

683,165

962

0.56

%

Total interest-bearing deposits

3,163,777

1,722

0.22

%

3,101,657

1,940

0.25

%

FHLB advances

9,943

9

0.38

%

18,197

15

0.32

%

Other borrowings

150,151

1,632

4.41

%

147,744

1,624

4.36

%

Total interest-bearing liabilities

$

3,323,871

3,363

0.41

%

$

3,267,598

3,579

0.43

%

Net interest income

$

39,289

$

37,212

Interest rate spread

3.26

%

3.00

%

Net interest margin (2)

3.38

%

3.13

%

(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 6. NON-GAAP FINANCIAL MEASURES (Unaudited)

As of and for the three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

2022

2021

2021

2021

2021

Total stockholders' equity

$

452,015

$

500,631

$

417,749

$

412,995

$

397,815

Less: goodwill

54,465

56,609

31,601

31,601

31,601

Less: core deposit intangibles, net

13,830

14,879

12,963

13,993

15,023

Less: mortgage servicing asset, net

251

276

Less: naming rights, net

1,076

1,087

1,098

1,109

1,119

Tangible common equity

$

382,393

$

427,780

$

372,087

$

366,292

$

350,072

Common shares issued at period end

16,454,966

16,779,029

14,365,785

14,360,172

14,383,913

Diluted common shares outstanding at period end

16,662,779

17,050,115

14,637,306

14,664,603

14,668,287

Book value per common share

$

27.47

$

29.84

$

29.08

$

28.76

$

27.66

Tangible book value per common share

$

23.24

$

25.49

$

25.90

$

25.51

$

24.34

Tangible book value per diluted common share

$

22.95

$

25.09

$

25.42

$

24.98

$

23.87

Total assets

$

5,078,623

$

5,139,775

$

4,263,268

$

4,268,216

$

4,196,184

Less: goodwill

54,465

56,609

31,601

31,601

31,601

Less: core deposit intangibles, net

13,830

14,879

12,963

13,993

15,023

Less: mortgage servicing asset, net

251

276

Less: naming rights, net

1,076

1,087

1,098

1,109

1,119

Tangible assets

$

5,009,001

$

5,066,924

$

4,217,606

$

4,221,513

$

4,148,441

Total stockholders' equity to total assets

8.90

%

9.74

%

9.80

%

9.68

%

9.48

%

Tangible common equity to tangible assets

7.63

%

8.44

%

8.82

%

8.68

%

8.44

%

Total average stockholders' equity

$

492,599

$

563,023

$

422,879

$

404,039

$

395,638

Less: average intangible assets

70,181

61,209

46,335

47,334

48,376

Average tangible common equity

$

422,418

$

501,814

$

376,544

$

356,705

$

347,262

Net income (loss) allocable to common stockholders

$

15,650

$

10,466

$

11,773

$

15,166

$

15,075

Amortization of intangible assets

1,085

1,116

1,040

1,041

1,045

Less: tax effect of intangible assets amortization

228

234

218

219

219

Adjusted net income (loss) allocable to common stockholders

$

16,507

$

11,348

$

12,595

$

15,988

$

15,901

Return on total average stockholders' equity (ROAE) annualized

12.88

%

7.37

%

11.05

%

15.06

%

15.45

%

Return on average tangible common equity (ROATCE) annualized

15.85

%

8.97

%

13.27

%

17.98

%

18.57

%

Non-interest expense

$

29,459

$

38,089

$

30,689

$

25,806

$

24,881

Less: merger expense

323

4,562

4,015

460

152

Non-interest epense, excluding merge expense and loss on debt extinguishment

$

29,136

$

33,527

$

26,674

$

25,346

$

24,729

Net interest income

$

39,289

$

37,215

$

38,975

$

34,630

$

31,759

Non-interest income

9,022

9,199

7,831

9,100

6,712

Less: net gain on acquisition

663

(78

)

Less: net gains (losses) from securities transactions

40

8

381

17

Non-interest income, excluding gains (losses) from securities transactions

$

8,982

$

9,191

$

7,450

$

8,437

$

6,773

Net interest income plus non-interest income, excluding net gain on acquisition and net gains (losses) from securities transactions

$

48,271

$

46,406

$

46,425

$

43,067

$

38,532

Non-interest expense to net interest income plus non-interest income

60.98

%

82.06

%

65.57

%

59.01

%

64.67

%

Efficiency ratio

60.36

%

72.25

%

57.46

%

58.85

%

64.18

%

Net income (loss) allocable to common stockholders

$

15,650

$

10,466

$

11,773

$

15,166

$

15,075

Add: income tax provision

3,614

(16

)

3,286

4,415

4,271

Add: provision (reversal) of credit losses

(412

)

(2,125

)

1,058

(1,657

)

(5,756

)

Adjusted net income

$

18,852

$

8,325

$

16,117

$

17,924

$

13,590

Total average assets

$

5,108,120

$

5,068,301

$

4,275,298

$

4,231,439

$

4,143,752

Total average stockholders' equity

$

492,599

$

563,023

$

422,879

$

404,039

$

395,638

Return on average assets (ROAA) annualized

1.24

%

0.82

%

1.09

%

1.44

%

1.48

%

Adjusted return on average assets

1.50

%

0.65

%

1.50

%

1.70

%

1.33

%

Adjusted return on average equity

15.52

%

5.87

%

15.12

%

17.79

%

13.93

%


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