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

    المصدر: Nasdaq GlobeNewswire / 19 أكتوبر 2021 18:17:22   America/New_York

    WICHITA, Kan., Oct. 19, 2021 (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 $11.8 million and $0.80 earnings per diluted share for the quarter ended September 30, 2021. Equity’s results occurred as the Company completed its acquisition of American State Bancshares, Inc. on October 1, 2021.

    “As the founder of Equity Bank, our results this quarter are particularly satisfying, as we celebrate continued loan growth, excellent earnings and our first cash stock dividend while simultaneously closing the largest acquisition in our history. I am grateful to our loyal employees and stockholders as we continue to grow and improve Equity Bank,” said Brad S. Elliott, Chairman and CEO of Equity.

    “I’m pleased with the growth of the Equity Bank brand and the hard work and collaboration of our team members throughout our regions, including our bank employees, lenders, and operations professionals who placed the customer first and executed with open doors, expertise, and availability,” said Mr. Elliott. “We’ve successfully integrated American State Bank & Trust Company into our platform while continuing to provide momentum, support and expertise to our customers throughout our franchise.”

    Equity customers successfully had $175.7 million of Paycheck Protection Program (“PPP”) loans forgiven during the quarter, resulting in the recognition of fee income totaling $7.7 million in the three-month period ended September 30, 2021. At September 30, 2021, the total unrecognized fee income associated with PPP loans was $3.0 million.

    “Our entrepreneurial culture drives the efficiency of our merger process, assists in building a solid community banking network that is responsive to a diverse customer base and excels at adding core deposits and new households in a changing environment. Our mission as a community bank is to continue to prioritize local customers, local service, and bankers willing to go above and beyond. As we continue to grow, expand and deliver, our focus will drive value for our shareholders,” said Mr. Elliott.

    Notable Items:

    • Diluted earnings per share of $0.80, adjusted to reflect core operating results, was $0.96 per diluted share. The adjustments to earnings were comprised of the exclusion of merger expenses of $4.0 million, non-accrual interest income of $1.4 million, bank-owned life insurance death benefit of $486 thousand and additional reserving for repurchase obligations associated with the Company’s Federal Deposit Insurance Corporation (“FDIC”) assisted transaction of $771 thousand.
    • Linked quarter service fee revenue, including deposit services, mortgage banking, trust and wealth and insurance services increased to $6.7 million from $6.4 million, or 3.7%.
    • The Company authorized a second stock repurchase program in the third quarter of 2020 totaling 800,000 shares. During the quarter ended September 30, 2021, the Company repurchased 57,239 shares at a weighted average cost of $30.64 per share, totaling $1.8 million. At the end of the quarter, capacity of 123,448 shares remained under the current repurchase program. The Board authorized the repurchase of up to an additional 1,000,000 shares of Equity’s outstanding common stock, beginning October 29, 2021, and concluding October 28, 2022, subject to non-objection by the Company’s primary regulators.
    • The Company announced and paid its first common stock dividend of $0.08 per share to shareholders of record as of September 30, 2021.

    Equity’s Balance Sheet Highlights:

    • During the quarter total loans decreased from $2.82 billion to $2.69 billion, including a reduction in PPP assets of $175.7 million. Excluding the impact of PPP, organic growth linked quarter was $41.8 million, or 7.1% annualized.
    • Total deposits of $3.66 billion at September 30, 2021, as compared to $3.69 billion at June 30, 2021. Checking, savings and money market accounts were $3.08 billion at September 30, 2021, relative to $3.03 billion at June 30, 2021. As compared to December 31, 2020, the Bank has increased non-interest-bearing deposits by $192.8 million, or 24.4%.
    • As excess liquidity continues to impact the operating environment at quarter end, securities and interest-earning cash and cash equivalents comprise 31.4% of average earnings assets, up from 28.0% at the end of the linked quarter and 25.0% at the end of the comparable quarter in the previous year.

    Financial Results for the Quarter Ended September 30, 2021

    Net income allocable to common stockholders was $11.8 million, or $0.80 per diluted share, for the three months ended September 30, 2021, as compared to $15.2 million, or $1.03 per diluted share, for the three months ended June 30, 2021, a decrease of $3.4 million. This third quarter decrease was attributable to an increase in non-interest expense of $4.9 million, an increase in provision for credit losses of $2.7 million and a decrease of $1.3 million in non-interest income, partially offset by an increase in net interest income $4.3 million and a decrease in provision for income taxes of $1.1 million.

    Net Interest Income

    Net interest income was $39.0 million for the three months ended September 30, 2021, as compared to $34.6 million for the three months ended June 30, 2021, an increase of $4.3 million, or 12.6%. The increase in net interest income was primarily driven by an increase in loan fees, due to the forgiveness of PPP assets, of $2.0 million for the quarter ended September 30, 2021, compared to the quarter ended June 30, 2021. The yield on interest-earning assets increased 32-basis points to 4.20% during the quarter ended September 30, 2021, as compared to 3.88% for the quarter ended June 30, 2021. The cost of interest-bearing deposits declined by 3-basis points to 0.28% for the three months ended September 30, 2021, from 0.31% in the previous quarter.

    Provision for Credit Losses

    During the three months ended September 30, 2021, there was a provision of $1.1 million in the allowance for credit losses recognized through the provision for credit losses as compared to a net release of $1.7 million of provision for credit losses for the three months ended June 30, 2021. The comparative increase was primarily driven by an increase in reserves on specifically assessed assets which was partially offset by improving trends in the Company’s loss experience and moderating economic impacts. For the three months ended September 30, 2021, we had net charge-offs of $129 thousand as compared to $567 thousand for the three months ended June 30, 2021.

    Non-Interest Income

    Total non-interest income was $7.8 million for the three months ended September 30, 2021, as compared to $9.1 million for the three months ended June 30, 2021, or a decline of 14.0% quarter over quarter. Other non-interest income was $546 thousand, a decrease of $1.5 million, or 73.6%, from the quarter ended June 30, 2021. The decrease in other non-interest income was primarily due to the accounting for potential repurchase obligations associated with assets previously purchased through a FDIC assisted transaction. In the second quarter, the Company trued up the guarantee on a number of assets resulting in income recognition of $917 thousand. In the third quarter, two unrelated assets were identified to have experienced deterioration requiring the recognition of a reserve, resulting in $771 thousand in expense. The net change in these inputs account for the change in the line item.

    During the quarter, service fee revenue, including deposit services, mortgage banking, trust and wealth management, credit cards and insurance increased to $6.7 million from $6.4 million during the second quarter. The growth was driven by increasing transaction activity and insurance commissions and fees.

    Non-Interest Expense

    Total non-interest expense for the quarter ended September 30, 2021, was $30.7 million as compared to $25.8 million for the quarter ended June 30, 2021. The $4.9 million change is primarily attributed to increases of $3.6 million in merger expenses, $819 thousand in salaries and employee benefits, driven by a comparative reduction in the deferral of cost associated with loan originations, and $372 thousand loss on debt extinguishment, related to the repayment of fixed-rate term advances with Federal Home Loan Bank that were acquired through a prior merger.

    Asset Quality

    As of September 30, 2021, Equity’s allowance for credit losses to total loans was 2.0%, as compared to 1.8% at June 30, 2021. Nonperforming assets were $74.3 million as of September 30, 2021, or 1.7% of total assets, compared to $66.7 million at June 30, 2021, or 1.6% of total assets. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $112.4 million, or 24.3% of regulatory capital, up from $103.5 million, or 23.2% of regulatory capital as of June 30, 2021.

    During the quarter non-performing assets increased by $7.5 million due to the transition of one significant relationship to non-accrual. The Company provided $1.1 million to the allowance for credit losses, comprised of an increase in specific reserves, primarily driven by the migration of this asset to non-accrual, partially offset by improving historical loss performance and the continued moderation of economic conditions following the height of the pandemic.

    Regulatory Capital

    The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.4%, the total capital to risk-weighted assets was 16.6% and the total leverage ratio was 9.0% at September 30, 2021. At December 31, 2020, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 12.8%, the total capital to risk-weighted assets ratio was 17.4% and the total leverage ratio was 9.3%.

    The Company’s subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.5%, a ratio of total capital to risk-weighted assets of 15.8% and a total leverage ratio of 10.1% at September 30, 2021. At December 31, 2020, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 14.5%, the ratio of total capital to risk-weighted assets was 15.7% and the total leverage ratio was 10.1%.

    Non-GAAP Financial Measures

    In addition to evaluating the Company’s results of operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures that are intended to provide the reader with additional perspectives on operating results, financial condition and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company’s GAAP financial information.

    The efficiency ratio is used as a common measure by banks as a comparable metric to understand the Company’s expense structure relative to its total revenue; in other words, for every dollar of total revenue recognized, how much of that dollar is expended. To improve the comparability of the ratio to our peers, non-core items are excluded. To improve transparency and acknowledging that banks are not consistent in their definition of the efficiency ratio, we include our calculation of this non-GAAP measure.

    Return on average assets before income tax provision, provision for loan losses and goodwill impairment is a measure that the Company uses to understand fundamental operating performance before these expenses. Used as a ratio relative to average assets, we believe it demonstrates the “core” performance and can be viewed as an alternative measure of how efficiently the Company services its asset base. Used as a ratio relative to average equity, it can function as an alternative measure of the Company’s earnings performance in relationship to its equity.

    Tangible common equity and related measures are non-GAAP financial measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These financial measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Return on average tangible common equity is used by management and readers of our financial statements to understand how efficiently the Company is deploying its common equity. Companies that are able to demonstrate more efficient use of common equity are more likely to be viewed favorably by current and prospective investors.

    The Company believes that disclosing these non-GAAP financial measures is both useful internally and is expected by our investors and analysts in order to understand the overall performance of the Company. Other companies may calculate and define their non-GAAP financial measures and supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in Table 8 in the following press release tables.

    Conference Call and Webcast

    Equity Chairman and Chief Executive Officer, Brad Elliott, and Executive Vice President and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss the 2021 third quarter results on Wednesday, October 20, 2021, 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, October 20, 2021, participants may also dial into the call toll-free at (844) 534-7311 from anywhere in the U.S. or (574) 990-1419 internationally, using conference ID no. 7698604.

    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 October 27, 2021, accessible at (855) 859-2056 with conference ID no. 7698604 at investor.equitybank.com.

    About Equity Bancshares, Inc.

    Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions, including commercial loans, consumer banking, mortgage loans, trust and wealth management services and treasury management services, while delivering the high-quality, relationship-based customer service of a community bank. Equity’s common stock is traded on the NASDAQ Global Select Market under the symbol “EQBK.” Learn more at www.equitybank.com.

    Special Note Concerning Forward-Looking Statements

    This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of Equity’s management with respect to, among other things, future events and Equity’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity’s control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from Equity’s expectations include COVID-19 related impacts; competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses; and similar variables. The foregoing list of factors is not exhaustive.

    For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Equity’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2021, and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity’s behalf may issue.

    Investor Contact:

    Chris Navratil
    SVP, Finance
    Equity Bancshares, Inc.
    (316) 612-6014
    cnavratil@equitybank.com        

    Media Contact:

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

    Unaudited Financial Tables

    • Table 1. Consolidated Statements of Income
    • Table 2. Quarterly Consolidated Statements of Income
    • Table 3. Consolidated Balance Sheets
    • Table 4. Selected Financial Highlights
    • Table 5. Year-To-Date Net Interest Income Analysis
    • Table 6. Quarter-To-Date Net Interest Income Analysis
    • Table 7. Quarter-Over-Quarter Net Interest Income Analysis
    • Table 8. Non-GAAP Financial Measures


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

      Three months ended
    September 30,    		  Nine months ended
    September 30,    		 
      2021  2020  2021  2020 
    Interest and dividend income                
    Loans, including fees $37,581  $32,278  $102,392  $99,281 
    Securities, taxable  3,920   3,476   11,242   12,113 
    Securities, nontaxable  655   923   2,096   2,769 
    Federal funds sold and other  290   405   846   1,409 
    Total interest and dividend income  42,446   37,082   116,576   115,572 
    Interest expense                
    Deposits  1,881   3,064   6,316   13,827 
    Federal funds purchased and retail repurchase agreements  24   25   72   80 
    Federal Home Loan Bank advances  10   471   155   2,198 
    Federal Reserve Bank discount window  —   —   —   6 
    Bank stock loan  —   —   —   415 
    Subordinated debt  1,556   1,415   4,669   1,953 
    Total interest expense  3,471   4,975   11,212   18,479 
                     
    Net interest income  38,975   32,107   105,364   97,093 
    Provision (reversal) for credit losses  1,058   815   (6,355)  23,255 
    Net interest income after provision (reversal) for credit losses  37,917   31,292   111,719   73,838 
    Non-interest income                
    Service charges and fees  2,360   1,706   6,125   5,097 
    Debit card income  2,574   2,491   7,603   6,735 
    Mortgage banking  801   877   2,584   2,298 
    Increase in value of bank-owned life insurance  1,169   489   2,446   1,452 
    Net gain on acquisition  —   —   585   — 
    Net gains (losses) from securities transactions  381  —   398   12 
    Other  546   922   3,902   1,929 
    Total non-interest income  7,831   6,485   23,643   17,523 
    Non-interest expense                
    Salaries and employee benefits  13,588   13,877   39,079   40,076 
    Net occupancy and equipment  2,475   2,224   7,170   6,578 
    Data processing  3,257   2,817   9,394   8,243 
    Professional fees  1,076   877   3,148   3,187 
    Advertising and business development  760   598   2,241   1,697 
    Telecommunications  439   486   1,531   1,363 
    FDIC insurance  465   360   1,305   1,291 
    Courier and postage  344   366   1,040   1,103 
    Free nationwide ATM cost  519   439   1,504   1,186 
    Amortization of core deposit intangibles  1,030   1,030   3,094   2,806 
    Loan expense  207   107   626   628 
    Other real estate owned  (342)  133   (805)  710 
    Loss on debt extinguishment  372   —   372   — 
    Merger expenses  4,015   —   4,627   — 
    Goodwill impairment  —   104,831   —   104,831 
    Other  2,484   2,690   7,050   6,831 
    Total non-interest expense  30,689   130,835   81,376   180,530 
    Income (loss) before income tax  15,059   (93,058)  53,986   (89,169)
    Provision for income taxes  3,286   (2,653)  11,972   (1,711)
    Net income (loss) and net income (loss) allocable to common stockholders $11,773  $(90,405) $42,014  $(87,458)
    Basic earnings (loss) per share $0.82  $(6.01) $2.92  $(5.75)
    Diluted earnings (loss) per share $0.80  $(6.01) $2.86  $(5.75)
    Weighted average common shares  14,384,302   15,040,407   14,397,146   15,211,901 
    Weighted average diluted common shares  14,669,312   15,040,407   14,688,092   15,211,901 



    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,
    2021    		  June 30,
    2021    		  March 31,
    2021    		  December 31,
    2020    		  September 30,
    2020    		 
    Interest and dividend income                    
    Loans, including fees $37,581  $33,810  $31,001  $35,383  $32,278 
    Securities, taxable  3,920   3,523   3,799   3,408   3,476 
    Securities, nontaxable  655   717   724   913   923 
    Federal funds sold and other  290   268   288   285   405 
    Total interest and dividend income  42,446   38,318   35,812   39,989   37,082 
    Interest expense                    
    Deposits  1,881   2,025   2,410   2,755   3,064 
    Federal funds purchased and retail repurchase agreements  24   26   22   25   25 
    Federal Home Loan Bank advances  10   80   65   94   471 
    Subordinated debt  1,556   1,557   1,556   1,556   1,415 
    Total interest expense  3,471   3,688   4,053   4,430   4,975 
                         
    Net interest income  38,975   34,630   31,759   35,559   32,107 
    Provision (reversal) for credit losses  1,058   (1,657)  (5,756)  1,000   815 
    Net interest income after provision (reversal) for credit losses  37,917   36,287   37,515   34,559   31,292 
    Non-interest income                    
    Service charges and fees  2,360   2,169   1,596   1,759   1,706 
    Debit card income  2,574   2,679   2,350   2,401   2,491 
    Mortgage banking  801   848   935   855   877 
    Increase in value of bank-owned life insurance  1,169   676   601   489   489 
    Net gain on acquisition  —   663   (78)  2,145   — 
    Net gains (losses) from securities transactions  381   —   17   (1)  — 
    Other  546   2,065   1,291   852   922 
    Total non-interest income  7,831   9,100   6,712   8,500   6,485 
    Non-interest expense                    
    Salaries and employee benefits  13,588   12,769   12,722   14,053   13,877 
    Net occupancy and equipment  2,475   2,327   2,368   2,206   2,224 
    Data processing  3,257   3,474   2,663   2,748   2,817 
    Professional fees  1,076   999   1,073   1,095   877 
    Advertising and business development  760   799   682   801   598 
    Telecommunications  439   512   580   510   486 
    FDIC insurance  465   425   415   797   360 
    Courier and postage  344   327   369   338   366 
    Free nationwide ATM cost  519   513   472   423   439 
    Amortization of core deposit intangibles  1,030   1,030   1,034   1,044   1,030 
    Loan expense  207   181   238   161   107 
    Other real estate owned  (342)  (468)  5   1,600   133 
    Loss on debt extinguishment  372   —   —   —   — 
    Merger expenses  4,015   460   152   299   — 
    Goodwill impairment  —   —   —   —   104,831 
    Other  2,484   2,458   2,108   2,385   2,690 
    Total non-interest expense  30,689   25,806   24,881   28,460   130,835 
    Income (loss) before income tax  15,059   19,581   19,346   14,599   (93,058)
    Provision for income taxes (benefit)  3,286   4,415   4,271   2,111   (2,653)
    Net income (loss) and net income (loss) allocable to common stockholders $11,773  $15,166  $15,075  $12,488  $(90,405)
    Basic earnings (loss) per share $0.82  $1.06  $1.04  $0.85  $(6.01)
    Diluted earnings (loss) per share $0.80  $1.03  $1.02  $0.84  $(6.01)
    Weighted average common shares  14,384,302   14,356,958   14,464,291   14,760,810   15,040,407 
    Weighted average diluted common shares  14,669,312   14,674,838   14,734,083   14,934,058   15,040,407 



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

      September 30,
    2021    		  June 30,
    2021    		  March 31,
    2021    		  December 31,
    2020    		  September 30,
    2020    		 
    ASSETS                    
    Cash and due from banks $141,645  $138,869  $136,190  $280,150  $65,534 
    Federal funds sold  673   452   498   548   305 
    Cash and cash equivalents  142,318   139,321   136,688   280,698   65,839 
    Interest-bearing time deposits in other banks  —   —   249   249   499 
    Available-for-sale securities  1,157,423   1,041,613   998,100   871,827   798,576 
    Loans held for sale  4,108   6,183   8,609   12,394   9,053 
    Loans, net of allowance for credit losses(1)  2,633,148   2,763,227   2,740,215   2,557,987   2,691,626 
    Other real estate owned, net  10,267   10,861   10,559   11,733   8,727 
    Premises and equipment, net  90,727   90,876   90,322   89,412   86,087 
    Bank-owned life insurance  103,431   103,321   102,645   77,044   76,555 
    Federal Reserve Bank and Federal Home Loan Bank stock  14,540   18,454   15,174   16,415   32,545 
    Interest receivable  15,519   15,064   16,655   15,831   18,110 
    Goodwill  31,601   31,601   31,601   31,601   31,601 
    Core deposit intangibles, net  12,963   13,993   15,023   16,057   17,101 
    Other  47,223   33,702   30,344   32,108   29,252 
    Total assets $4,263,268  $4,268,216  $4,196,184  $4,013,356  $3,865,571 
    LIABILITIES AND STOCKHOLDERS’ EQUITY                    
    Deposits                    
    Demand $984,436  $992,565  $972,364  $791,639  $693,967 
    Total non-interest-bearing deposits  984,436   992,565   972,364   791,639   693,967 
    Savings, NOW and money market  2,092,849   2,035,496   2,074,261   2,029,097   1,816,307 
    Time  585,492   659,494   587,905   626,854   623,344 
    Total interest-bearing deposits  2,678,341   2,694,990   2,662,166   2,655,951   2,439,651 
    Total deposits  3,662,777   3,687,555   3,634,530   3,447,590   3,133,618 
    Federal funds purchased and retail repurchase agreements  39,137   47,184   40,339   36,029   46,295 
    Federal Home Loan Bank advances  —   9,208   9,926   10,144   167,862 
    Subordinated debt  88,030   87,908   87,788   87,684   87,537 
    Contractual obligations  18,771   4,469   4,856   5,189   5,478 
    Interest payable and other liabilities  36,804   18,897   20,930   19,071   22,609 
    Total liabilities  3,845,519   3,855,221   3,798,369   3,605,707   3,463,399 
    Commitments and contingent liabilities                    
    Stockholders’ equity                    
    Common stock  178   176   175   174   174 
    Additional paid-in capital  392,321   389,394   387,939   386,820   386,017 
    Retained earnings  79,226   68,625   53,459   50,787   38,299 
    Accumulated other comprehensive income, net of tax  9,475   13,450   12,019   19,781   21,074 
    Employee stock loans  —   —   —   (43)  (43)
    Treasury stock  (63,451)  (58,650)  (55,777)  (49,870)  (43,349)
    Total stockholders’ equity  417,749   412,995   397,815   407,649   402,172 
    Total liabilities and stockholders’ equity $4,263,268  $4,268,216  $4,196,184  $4,013,356  $3,865,571 
                         
    (1) Allowance for credit losses $52,763  $51,834  $55,525  $33,709  $34,087 


    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, 
      2021  2021  2021  2020  2020 
    Loans Held For Investment by Type                    
    Commercial real estate $1,308,707  $1,261,214  $1,218,537  $1,188,696  $1,188,329 
    Commercial and industrial  569,513   732,126   820,736   734,495   857,244 
    Residential real estate  490,633   503,110   438,503   381,958   402,242 
    Agricultural real estate  138,793   129,020   134,944   133,693   127,349 
    Agricultural  93,767   97,912   93,764   94,322   83,084 
    Consumer  84,498   91,679   89,256   58,532   67,465 
    Total loans held-for-investment  2,685,911   2,815,061   2,795,740   2,591,696   2,725,713 
    Allowance for credit losses  (52,763)  (51,834)  (55,525)  (33,709)  (34,087)
    Net loans held for investment $2,633,148  $2,763,227  $2,740,215  $2,557,987  $2,691,626 
                         
                         
    Asset Quality Ratios                    
    Allowance for credit losses on loans to total loans  1.96%  1.84%  1.99%  1.30%  1.25%
    Past due or nonaccrual loans to total loans  2.78%  2.09%  2.30%  1.99%  2.12%
    Nonperforming assets to total assets  1.74%  1.56%  1.67%  1.36%  1.55%
    Nonperforming assets to total loans plus other real estate owned  2.76%  2.36%  2.50%  2.10%  2.19%
    Classified assets to bank total regulatory capital  24.25%  23.20%  26.45%  25.50%  18.35%
                         
                         
    Selected Average Balance Sheet Data (QTD Average)                    
    Investment securities $1,061,178  $986,986  $947,453  $814,114  $802,525 
    Total gross loans receivable  2,748,202   2,853,145   2,736,918   2,692,223   2,758,680 
    Interest-earning assets  4,005,509   3,964,633   3,891,140   3,647,730   3,679,168 
    Total assets  4,275,298   4,231,439   4,143,752   3,910,628   4,041,187 
    Interest-bearing deposits  2,702,040   2,656,052   2,690,159   2,551,219   2,430,407 
    Borrowings  132,581   171,658   139,360   172,730   377,158 
    Total interest-bearing liabilities  2,834,621   2,827,710   2,829,519   2,723,949   2,807,565 
    Total deposits  3,686,169   3,624,950   3,577,625   2,960,791   3,145,810 
    Total liabilities  3,852,419   3,827,400   3,748,114   3,501,056   3,558,099 
    Total stockholders' equity  422,879   404,039   395,638   409,572   483,088 
    Tangible common equity*  376,544   356,705   347,262   355,025   329,039 
                         
                         
    Performance ratios                    
    Return on average assets (ROAA) annualized  1.09%  1.44%  1.48%  1.27%  (8.90)%
    Return on average assets before income tax, provision for loan losses and goodwill impairment*  1.50%  1.70%  1.33%  1.59%  1.24%
    Return on average equity (ROAE) annualized  11.05%  15.06%  15.45%  12.13%  (74.45)%
    Return on average equity before income tax, provision for loan losses and goodwill impairment*  15.12%  17.79%  13.93%  15.15%  10.37%
    Return on average tangible common equity
    (ROATCE) annualized*    		  13.27%  17.98%  18.57%  14.93%  (108.31)%
    Return on average tangible common equity adjusted for goodwill impairment*  13.27%  17.98%  18.57%  14.93%  12.01%
    Yield on loans annualized  5.43%  4.75%  4.59%  5.23%  4.65%
    Cost of interest-bearing deposits annualized  0.28%  0.31%  0.36%  0.43%  0.50%
    Cost of total deposits annualized  0.20%  0.22%  0.27%  0.37%  0.39%
    Net interest margin annualized  3.86%  3.50%  3.31%  3.88%  3.47%
    Efficiency ratio*  56.65%  58.85%  64.18%  67.19%  67.38%
    Non-interest income / average assets  0.73%  0.86%  0.66%  0.86%  0.64%
    Non-interest expense / average assets  2.85%  2.45%  2.44%  2.90%  12.88%
                         
                         
    Capital Ratios                    
    Tier 1 Leverage Ratio  9.02%  8.88%  8.73%  9.30%  8.76%
    Common Equity Tier 1 Capital Ratio  12.39%  12.41%  12.53%  12.82%  12.76%
    Tier 1 Risk Based Capital Ratio  12.90%  12.93%  13.08%  13.37%  13.32%
    Total Risk Based Capital Ratio  16.63%  16.73%  17.02%  17.35%  17.35%
    Total stockholders' equity to total assets  9.80%  9.68%  9.48%  10.16%  10.40%
    Tangible common equity to tangible assets*  8.82%  8.68%  8.44%  9.05%  9.23%
    Book value per common share $29.08  $28.76  $27.66  $28.04  $27.08 
    Tangible book value per common share* $25.90  $25.51  $24.34  $24.68  $23.72 
    Tangible book value per diluted common share* $25.42  $24.98  $23.87  $24.32  $23.57 

    * The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures, see Table 8. Non-GAAP Financial Measures


    TABLE 5. YEAR-TO-DATE NET INTEREST INCOME ANALYSIS     (Unaudited)
    (Dollars in thousands)

     For the nine months ended  For the nine months ended 
     September 30, 2021  September 30, 2020 
     Average Outstanding Balance  Interest Income/ Expense  Average
    Yield/Rate(3)(4)    		  Average Outstanding Balance  Interest Income/ Expense  Average
    Yield/Rate(3)(4)    		 
    Interest-earning assets                       
    Loans (1)                       
    Commercial and industrial$752,795  $34,609   6.15% $757,773  $26,789   4.72%
    Commercial real estate 990,803   34,943   4.72%  942,478   36,533   5.18%
    Real estate construction 264,344   7,195   3.64%  245,167   8,644   4.71%
    Residential real estate 457,761   14,167   4.14%  464,340   14,528   4.18%
    Agricultural real estate 135,795   5,203   5.12%  133,302   5,574   5.59%
    Agricultural 93,680   3,432   4.90%  86,873   3,752   5.77%
    Consumer 84,285   2,843   4.51%  67,255   3,461   6.87%
    Total loans 2,779,463   102,392   3.94%  2,697,188   99,281   4.92%
    Securities                       
    Taxable securities 898,461   11,242   1.67%  737,009   12,113   2.20%
    Nontaxable securities 100,495   2,096   2.79%  125,352   2,769   2.95%
    Total securities 998,956   13,338   1.79%  862,361   14,882   2.31%
    Federal funds sold and other 175,761   846   0.64%  102,202   1,409   1.84%
    Total interest-earning assets$3,954,180   116,576   3.94% $3,661,751   115,572   4.22%
    Interest-bearing liabilities                       
    Savings, NOW and money market deposits$2,076,643   2,728   0.18% $1,754,759   4,923   0.37%
    Time deposits 606,151   3,588   0.79%  728,083   8,904   1.63%
    Total interest-bearing deposits 2,682,794   6,316   0.31%  2,482,842   13,827   0.74%
    FHLB advances 16,325   155   1.27%  271,548   2,198   0.24%
    Other borrowings 131,516   4,741   4.82%  100,865   2,454   3.25%
    Total interest-bearing liabilities$2,830,635   11,212   0.53% $2,855,255   18,479   0.86%
                            
    Net interest income    $105,364          $97,093     
    Interest rate spread         3.41%          3.36%
                            
    Net interest margin (2)         3.56%          3.54%
                            
    (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, 2021  September 30, 2020 
     Average Outstanding Balance  Interest Income/ Expense  Average
    Yield/Rate(3)(4)    		  Average Outstanding Balance  Interest Income/ Expense  Average
    Yield/Rate(3)(4)    		 
    Interest-earning assets                       
    Loans (1)                       
    Commercial and industrial$630,622  $13,646   8.59% $848,096  $8,400   3.94%
    Commercial real estate 1,009,141   12,072   4.75%  979,775   12,886   5.23%
    Real estate construction 283,106   2,664   3.73%  214,775   2,233   4.14%
    Residential real estate 512,135   5,073   3.93%  429,965   4,733   4.38%
    Agricultural real estate 134,673   1,819   5.36%  131,725   1,718   5.19%
    Agricultural 91,878   1,370   5.92%  84,859   1,204   5.65%
    Consumer 86,647   937   4.29%  69,485   1,104   6.32%
    Total loans 2,748,202   37,581   5.43%  2,758,680   32,278   4.65%
    Securities                       
    Taxable securities 966,651   3,920   1.61%  683,630   3,476   2.02%
    Nontaxable securities 94,527   655   2.75%  118,895   923   3.09%
    Total securities 1,061,178   4,575   1.71%  802,525   4,399   2.18%
    Federal funds sold and other 196,129   290   0.59%  117,963   405   1.36%
    Total interest-earning assets$4,005,509   42,446   4.20% $3,679,168   37,082   4.01%
    Interest-bearing liabilities                       
    Savings, NOW and money market deposits$2,082,515   862   0.16% $1,784,891   875   0.19%
    Time deposits 619,525   1,019   0.65%  645,516   2,189   1.35%
    Total interest-bearing deposits 2,702,040   1,881   0.28%  2,430,407   3,064   0.50%
    FHLB advances 1,401   10   2.78%  248,437   471   0.75%
    Other borrowings 131,180   1,580   4.78%  128,721   1,440   4.45%
    Total interest-bearing liabilities$2,834,621   3,471   0.49% $2,807,565   4,975   0.70%
                            
    Net interest income    $38,975          $32,107     
    Interest rate spread         3.71%          3.31%
                            
    Net interest margin (2)         3.86%          3.47%
                            
    (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, 2021  June 30, 2021 
     Average Outstanding Balance  Interest Income/ Expense  Average
    Yield/Rate(3)(4)    		  Average Outstanding Balance  Interest Income/ Expense  Average
    Yield/Rate(3)(4)    		 
    Interest-earning assets                       
    Loans (1)                       
    Commercial and industrial$630,622  $13,646   8.59% $826,647  $11,729   5.69%
    Commercial real estate 1,009,141   12,072   4.75%  991,033   11,433   4.63%
    Real estate construction 283,106   2,664   3.73%  253,947   2,352   3.71%
    Residential real estate 512,135   5,073   3.93%  465,525   4,642   4.00%
    Agricultural real estate 134,673   1,819   5.36%  131,906   1,687   5.13%
    Agricultural 91,878   1,370   5.92%  94,407   1,024   4.35%
    Consumer 86,647   937   4.29%  89,680   943   4.22%
    Total loans 2,748,202   37,581   5.43%  2,853,145   33,810   4.75%
    Securities                       
    Taxable securities 966,651   3,920   1.61%  887,983   3,523   1.59%
    Nontaxable securities 94,527   655   2.75%  99,003   717   2.90%
    Total securities 1,061,178   4,575   1.71%  986,986   4,240   1.72%
    Federal funds sold and other 196,129   290   0.59%  124,502   268   0.86%
    Total interest-earning assets$4,005,509   42,446   4.20% $3,964,633   38,318   3.88%
    Interest-bearing liabilities                       
    Savings, NOW and money market deposits$2,082,515   862   0.16% $2,068,319   895   0.17%
    Time deposits 619,525   1,019   0.65%  587,733   1,130   0.77%
    Total interest-bearing deposits 2,702,040   1,881   0.28%  2,656,052   2,025   0.31%
    FHLB advances 1,401   10   2.78%  37,656   80   0.86%
    Other borrowings 131,180   1,580   4.78%  134,002   1,583   4.74%
    Total interest-bearing liabilities$2,834,621   3,471   0.49% $2,827,710   3,688   0.52%
                            
    Net interest income    $38,975          $34,630     
    Interest rate spread         3.71%          3.36%
                            
    Net interest margin (2)         3.86%          3.50%
                            
    (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, 
      2021  2021  2021  2020  2020 
                         
    Income before income taxes $15,059  $19,581  $19,346  $14,599  $(93,058)
    Add: goodwill impairment  —   —   —   —   104,831 
    Less: tax effect  3,286   4,415   4,271   2,111   2,652 
    Adjusted income $11,773  $15,166  $15,075  $12,488  $9,121 
    Weighted average common shares outstanding  14,384,302   14,356,958   14,464,291   14,760,810   15,040,407 
    Effect of weighted average dilutive shares assuming positive net income  285,010   317,880   269,792   173,248   82,804 
    Weighted average diluted shares  14,669,312   14,674,838   14,734,083   14,934,058   15,123,211 
    Diluted earnings per share adjusted for goodwill impairment $0.80  $1.03  $1.02  $0.84  $0.60 
                         
    Total stockholders' equity $417,749  $412,995  $397,815  $407,649  $402,172 
    Less: goodwill  31,601   31,601   31,601   31,601   31,601 
    Less: core deposit intangibles, net  12,963   13,993   15,023   16,057   17,101 
    Less: mortgage servicing asset, net  —   —   —   —   1 
    Less: naming rights, net  1,098   1,109   1,119   1,130   1,141 
    Tangible common equity $372,087  $366,292  $350,072  $358,861  $352,328 
    Common shares issued at period end  14,365,785   14,360,172   14,383,913   14,540,556   14,853,487 
    Diluted common shares outstanding at period end  14,637,306   14,664,603   14,668,287   14,756,378   14,945,282 
    Book value per common share $29.08  $28.76  $27.66  $28.04  $27.08 
    Tangible book value per common share $25.90  $25.51  $24.34  $24.68  $23.72 
    Tangible book value per diluted common share $25.42  $24.98  $23.87  $24.32  $23.57 
                         
    Total assets $4,263,268  $4,268,216  $4,196,184  $4,013,356  $3,865,571 
    Less: goodwill  31,601   31,601   31,601   31,601   31,601 
    Less: core deposit intangibles, net  12,963   13,993   15,023   16,057   17,101 
    Less: mortgage servicing asset, net  —   —   —   —   1 
    Less: naming rights, net  1,098   1,109   1,119   1,130   1,141 
    Tangible assets $4,217,606  $4,221,513  $4,148,441  $3,964,568  $3,815,727 
    Total stockholders' equity to total assets  9.80%  9.68%  9.48%  10.16%  10.40%
    Tangible common equity to tangible assets  8.82%  8.68%  8.44%  9.05%  9.23%
                         
    Total average stockholders' equity $422,879  $404,039  $395,638  $409,572  $483,088 
    Less: average intangible assets  46,335   47,334   48,376   54,547   154,049 
    Average tangible common equity $376,544  $356,705  $347,262  $355,025  $329,039 
    Net income (loss) allocable to common stockholders $11,773  $15,166  $15,075  $12,488  $(90,405)
    Add: goodwill impairment  —   —   —   —   104,831 
    Less: tax effect of goodwill impairment  —   —   —   —   5,305 
    Adjusted net income (loss) plus goodwill impairment  11,773   15,166   15,075   12,488   9,121 
    Amortization of intangible assets  1,040   1,041   1,045   1,055   1,043 
    Less: tax effect of intangible assets amortization  218   219   219   222   234 
    Adjusted net income (loss) allocable to common stockholders $12,595  $15,988  $15,901  $13,321  $9,930 
    Return on total average stockholders' equity
    (ROAE) annualized    		  11.05%  15.06%  15.45%  12.13%  (74.45)%
    Return on average tangible common equity
    (ROATCE) annualized    		  13.27%  17.98%  18.57%  14.93%  (108.31)%
    Adjusted return on average tangible common equity  13.27%  17.98%  18.57%  14.93%  12.01%
                         
    Non-interest expense $30,689  $25,806  $24,881  $28,460  $130,835 
    Less: merger expense  4,015   460   152   299   — 
    Less: loss on debt extinguishment  372   —   —   —   — 
    Less: goodwill impairment  —   —   —   —   104,831 
    Non-interest expense, excluding merger expense, loss on debt extinguishment and goodwill impairment $26,302  $25,346  $24,729  $28,161  $26,004 
    Net interest income $38,975  $34,630  $31,759  $35,559  $32,107 
    Non-interest income  7,831   9,100   6,712   8,500   6,485 
    Less: net gain on acquisition  —   663   (78)  2,145   — 
    Less: net gains (losses) from securities transactions  381   —   17   (1)  — 
    Non-interest income, excluding gains (losses) from
    securities transactions    		 $7,450  $8,437  $6,773  $6,356  $6,485 
    Net interest income plus non-interest income, excluding net gain on acquisition and net gains (losses) from securities transactions $46,425  $43,067  $38,532  $41,915  $38,592 
    Non-interest expense less goodwill impairment to net interest income plus non-interest income  65.57%  59.01%  64.67%  64.60%  67.38%
    Efficiency ratio  56.65%  58.85%  64.18%  67.19%  67.38%
    Net income (loss) allocable to common stockholders $11,773  $15,166  $15,075  $12,488  $(90,405)
    Add: income tax provision  3,286   4,415   4,271   2,111   (2,653)
    Add: provision (reversal) of credit losses  1,058   (1,657)  (5,756)  1,000   815 
    Add: goodwill impairment  —   —   —   —   104,831 
    Adjusted net income $16,117  $17,924  $13,590  $15,599  $12,588 
    Total average assets $4,275,298  $4,231,439  $4,143,752  $3,910,628  $4,041,187 
    Total average stockholders' equity $422,879  $404,039  $395,638  $409,572  $483,088 
    Return on average assets (ROAA) annualized  1.09%  1.44%  1.48%  1.27%  (8.90)%
    Adjusted return on average assets  1.50%  1.70%  1.33%  1.59%  1.24%
    Adjusted return on average equity  15.12%  17.79%  13.93%  15.15%  10.37%

     


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