Farmers National Banc Corp. Announces Strong Third Quarter 2021 Results
Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced financial results for the three and nine months ended September 30, 2021.
Net income for the third quarter of 2021 was $16.0 million, or $0.56 per diluted share, which compares to $10.9 million, or $0.38 per diluted share, for the three months ended September 30, 2020. The results for the quarter were positively impacted by a negative provision for credit losses totaling $948,000 pre-tax which was primarily due to a release of reserves for credit losses. Net income excluding acquisition costs (non-GAAP) for the quarter ended September 30, 2021 was $16.5 million or $0.58 per diluted share, compared to $10.9 million or $0.39 per diluted share for the same quarter in 2020.
Net income for the nine months ended September 30, 2021, totaled $46.1 million, or $1.63 per diluted share, compared to $30.5 million, or $1.07 per diluted share for the nine months ended September 30, 2020. Net income excluding acquisition costs (non-GAAP) for the nine months ended September 30, 2021 was $46.6 million, or $1.65 per share, compared to $31.7 million, or $1.11 per share for the same period in 2020.
On June 22, 2021, Farmers entered into an agreement and plan of merger with Cortland Bancorp Inc. (“Cortland”), the parent company of Cortland Savings and Banking Company (“Cortland Bank”). The transaction has received the approval of Cortland’s shareholders and all customary regulatory approvals. The transaction is expected to close on November 1, 2021 and will enable Farmers to continue building local scale throughout Northeast Ohio as Farmers’ market share increases in Trumbull, Mahoning and Cuyahoga Counties. As of September 30, 2021, Cortland had total assets of $799.2 million, which included gross loans of $500.0 million, deposits of $693.0 million and equity of $83.0 million.
Kevin J. Helmick, President and CEO, stated, “We are pleased with our ability to post record earnings and find ways to win even as the impact from PPP loans begins to wane. Our strong net interest margin and fee businesses, outstanding credit quality and tight expense control have contributed to this record performance. With the closing of the Cortland Bank acquisition in November, we are poised to realize additional economies of scale which should allow us to continue our momentum into 2022.”
Balance Sheet
Total assets at September 30, 2021, were $3.32 billion compared to $3.07 billion at December 31, 2020. Total loans were $1.89 billion at September 30, 2021, compared to $1.96 billion at June 30, 2021 and $2.08 billion at December 31, 2020. Through the nine months ended September 30, 2021, total loans have declined $183.8 million due to a $71.8 million decrease in PPP loans, a decline of $36.9 million in 1-4 family residential loans due to the continued level of refinance activity in 2021 and declines in commercial and commercial real estate due to a high degree of liquidity in the system that has resulted in a greater level of payoffs. Securities have grown to $1.18 billion at September 30, 2021, compared to $996.3 million at June 30, 2021 and $575.6 million at December 31, 2020.
Total deposits grew to $2.87 billion at September 30, 2021, which represents growth of $87.6 million from June 30, 2021 and $255.5 million in growth, or 9.8%, compared to December 31, 2020. Growth has come from increases in both noninterest-bearing and interest-bearing deposits as customers continue to carry higher balances in their accounts.
Total stockholders’ equity was $377.5 million at September 30, 2021, compared to $366.9 million at June 30, 2021 and $350.1 million at December 31, 2020. The Company has not been able to repurchase any of its common shares in the third quarter due to the announcement of the Cortland transaction but still has 548,913 common shares remaining to be repurchased under the Company’s existing authorization.
Credit Quality
Due to a decline in loan balances, a decrease in a specific reserve on one loan, and a continued decline in historical loss ratios, the Company recorded a negative provision for credit losses of $948,000 for the quarter ended September 30, 2021, compared to the $2.6 million of loan loss provision recorded in the third quarter of 2020. Net charge-offs for the current quarter were $286,000, compared to $219,000 in the same quarter in 2020. Total net charge-offs as a percentage of average net loans outstanding was 0.06% for the quarter ended September 30, 2021, compared to 0.04% for the same quarter in 2020. As an overall percentage of loans, the allowance for credit losses decreased to 1.22% for the current quarter compared to 1.27% for the quarter ended June 30, 2021. Excluding the PPP loans, this allowance for credit losses to gross loans ratio increased to 1.26% (non-GAAP) as of September 30, 2021, and the ratio of the allowance for credit losses to gross loans, excluding PPP loans and acquired loans is 1.42% (non-GAAP).
Non-performing loans to loans ticked up to 0.78% at June 30, 2021, compared to 0.71% at June 30, 2021. This increase was primarily driven by the nonperformance of one credit. Early stage delinquencies, defined as 30-89 days past due, were $6.9 million, or 0.37% of total loans, at September 30, 2021, compared to $7.6 million, or 0.39% of total loans, for the prior quarter.
Net interest income
Net interest income was $26.5 million for the third quarter of 2021 compared to $24.2 million for the third quarter of 2020. The increase was due to growth in average interest earning assets and the impact of PPP fees offset by a decline in the net interest margin of 8 basis points. The net interest margin was 3.47% for the current quarter which is down from the 3.52% net interest margin reported in the second quarter of 2021 and lower than the 3.55% net interest margin reported in the third quarter of 2020. Excluding the impact of acquisition marks and PPP interest and fees (non-GAAP), the net interest margin for the third quarter of 2021 was 3.37% compared to 3.35% for the second quarter of 2021 and 3.60% for the third quarter of 2020.
Noninterest income
Noninterest income was down slightly to $9.0 million for the quarter ended September 30, 2021 compared to $9.2 million in the same quarter in 2020. Net gains on the sale of loans was down $1.7 million for the third quarter of 2021 compared to the third quarter of 2020 due to lower origination volumes. This decline was offset by an increase in trust fees of $362,000, or 18.4%, investment commissions of $285,000, or 80.7%, security gains of $389,000 and bank owned life insurance income of $144,000.
Noninterest expense
Total noninterest expense for the third quarter of 2021 decreased to $17.1 million compared to $17.5 million in the same quarter in 2020. Excluding merger related costs and a $326,000 prepayment penalty for the payoff of a $25 million FHLB advance, noninterest expense declined $1.1 million from the third quarter of 2020 to the third quarter of 2021. The $342,000 decline in noninterest expense from the third quarter of 2020 to the third quarter of 2021 was primarily due to a $923,000 decline in salaries and employee benefits offset by an increase of $180,000 in occupancy and equipment, $256,000 in professional fees and $414,000 in merger related expenses. The drop in salary and employee benefits was due to lower health insurance costs compared to the same quarter in 2020 along with lower incentive compensation expense and a greater amount of contra salary expense related deferred loan costs.
Covid Support Efforts
Farmers offered special financial assistance to support customers who were experiencing financial hardships related to the COVID-19 pandemic. The Company offered three month deferrals upon request by the borrowers, beginning in the middle of March, 2020 and concluding at the end of the three month deferral period. For those borrowers in industries that were greatly impacted by COVID-19, additional deferrals were considered and granted beyond the initial three month period. The range of deferred months for subsequent requests was three to nine months. The decline in deferred loans and balances was due to borrowers not requesting additional deferments and beginning to restart payments under the original terms of their loan. At September 30, 2021, Farmers had one customer with a loan balance of $5.0 million still on deferral. This customer is expected to come off of deferral in the 4th quarter of 2021.
Farmers is also a preferred SBA lender and we dedicated significant additional staff and other resources to help our customers complete and submit their applications and supporting documentation for loans offered under the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, so they could obtain SBA approval and receive funding as quickly as possible. During the initial 2020 period of the PPP program, the Company facilitated PPP assistance to 1,714 business customers totaling $199.8 million. The Company, on behalf of its customers, began processing borrower applications for PPP forgiveness at the beginning of September 2020. The SBA has up to ninety days to review an application for PPP forgiveness and provide a decision at the end of that review. Once forgiveness of the PPP loans has been communicated and payment is received from the SBA, the Company will record the cash received from the SBA, pay-off the loans based on the amount of forgiveness provided and accelerate the amount of net deferred loan fees/costs recognized for the portion of the PPP loans that are forgiven. During the period ended September 30, 2021, the Company has received life to date payments from the SBA for forgiveness of loans totaling $198.4 million, or approximately 99.2% of the PPP loans originated in 2020. The Company has processed $84.0 million in new loans for PPP loan funding during 2021. The Company has also received payments from the SBA for forgiveness of loans totaling $29.2 million, or approximately 34.7% of PPP loans originated in 2021.
About Farmers National Banc Corp.
Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $3.3 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 41 banking locations in Mahoning, Trumbull, Columbiana, Stark, Wayne, Medina, Geauga and Cuyahoga Counties in Ohio and Beaver County in Pennsylvania, and Farmers Trust Company, which operates five trust offices and offers services in the same geographic markets. Total wealth management assets under care at September 30, 2021 are $3.0 billion. Farmers National Insurance, LLC and Bowers Insurance Agency, Inc., wholly-owned subsidiaries of The Farmers National Bank of Canfield, offer a variety of insurance products.
Non-GAAP Disclosure
This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity, net income excluding costs related to acquisition activities and allowance for credit losses to gross loans, excluding PPP loans and acquired loans, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to their GAAP equivalents are included in the tables following Consolidated Financial Highlights below.
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in the forward-looking statements include impacts from the COVID-19 pandemic, including further resurgence in the spread of COVID-19, on local, national and global economic conditions; higher default rates on loans made to our customers related to COVID-19 and its impact on our customers’ operations and financial condition; unexpected changes in interest rates or disruptions in the mortgage markets related to COVID-19 or other responses to the health crisis; impacts of the upcoming U.S. elections on the regulatory landscape, capital markets, and response to and management of the COVID-19 pandemic including further economic stimulus from the federal government; Farmers’ failure to integrate Cortland and Cortland Bank with Farmers in accordance with expectations; deviations from performance expectations related to Cortland and Cortland Bank; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.
Farmers National Banc Corp. and Subsidiaries Consolidated Financial Highlights (Amounts in thousands, except per share results) Unaudited Consolidated Statements of IncomeFor the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
Percent
2021
2021
2021
2020
2020
2021
2020
Change
Total interest income$28,375
$28,609
$27,790
$28,833
$27,635
$84,774
$83,494
1.5%
Total interest expense1,841
2,119
2,523
3,030
3,470
6,483
13,106
-50.5%
Net interest income26,534
26,490
25,267
25,803
24,165
78,291
70,388
11.2%
Provision for credit losses(948)
50
425
3,000
2,600
(473)
6,100
-107.8%
Noninterest income9,015
9,508
10,183
10,499
9,217
28,706
25,662
11.9%
Acquisition related costs472
104
12
1,798
58
588
1,425
-58.7%
Other expense16,656
16,966
17,356
17,796
17,412
50,978
51,961
-1.9%
Income before income taxes19,369
18,878
17,657
13,708
13,312
55,904
36,564
52.9%
Income taxes3,358
3,303
3,101
2,351
2,443
9,762
6,045
61.5%
Net income$16,011
$15,575
$14,556
$11,357
$10,869
$46,142
$30,519
51.2%
Average diluted shares outstanding28,361
28,353
28,336
28,322
28,291
28,339
28,421
Basic earnings per share0.57
0.55
0.52
0.40
0.39
1.63
1.08
Diluted earnings per share0.56
0.55
0.51
0.40
0.38
1.63
1.07
Cash dividends3,107
3,107
3,107
3,100
3,101
9,321
9,305
Cash dividends per share0.11
0.11
0.11
0.11
0.11
0.33
0.33
Performance Ratios Net Interest Margin (Annualized)3.47%
3.52%
3.54%
3.69%
3.55%
3.50%
3.64%
Efficiency Ratio (Tax equivalent basis)46.04%
45.70%
47.76%
50.07%
50.37%
46.49%
53.48%
Return on Average Assets (Annualized)1.92%
1.90%
1.87%
1.49%
1.46%
1.90%
1.45%
Return on Average Equity (Annualized)16.93%
17.17%
16.81%
13.10%
12.87%
17.05%
12.84%
Dividends to Net Income19.41%
19.95%
21.35%
27.30%
28.53%
20.20%
30.49%
Other Performance Ratios (Non-GAAP) Return on Average Tangible Assets1.97%
1.93%
1.87%
1.52%
1.50%
1.92%
1.47%
Return on Average Tangible Equity19.63%
19.81%
19.30%
15.48%
15.30%
19.67%
15.14%
Return on Average Tangible Equity excluding acquisition costs20.20%
19.91%
19.31%
17.43%
15.37%
19.88%
15.71%
Consolidated Statements of Financial ConditionSept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
2021
2021
2021
2020
2020
Assets Cash and cash equivalents$79,808
$149,357
$326,385
$254,621
$199,575
Securities available for sale1,183,361
996,271
802,866
575,600
481,509
Other investments19,041
20,573
21,317
21,528
23,276
Loans held for sale2,628
1,922
3,993
4,766
7,076
Loans1,894,216
1,959,865
2,037,404
2,078,044
2,147,158
Less allowance for credit losses (a)23,136
24,806
24,935
22,144
19,341
Net Loans1,871,080
1,935,059
2,012,469
2,055,900
2,127,817
Other assets161,129
156,876
157,494
158,733
149,926
Total Assets$3,317,047
$3,260,058
$3,324,524
$3,071,148
$2,989,179
Liabilities and Stockholders' Equity Deposits Noninterest-bearing$675,938
$663,640
$675,045
$608,791
$577,334
Interest-bearing2,190,475
2,115,183
2,158,009
2,002,087
1,960,998
Total deposits2,866,413
2,778,823
2,833,054
2,610,878
2,538,332
Other interest-bearing liabilities49,649
78,369
79,683
78,906
81,690
Other liabilities23,461
35,958
64,432
31,267
29,189
Total liabilities2,939,523
2,893,150
2,977,169
2,721,051
2,649,211
Stockholders' Equity377,524
366,908
347,355
350,097
339,968
Total Liabilities and Stockholders' Equity$3,317,047
$3,260,058
$3,324,524
$3,071,148
$2,989,179
Period-end shares outstanding28,322
28,322
28,308
28,258
28,186
Book value per share$13.33
$12.95
$12.27
$12.39
$12.06
Tangible book value per share (Non-GAAP)*11.61
11.23
10.53
10.63
10.23
* Tangible book value per share is calculated by dividing tangible common equity by outstanding shares Capital and Liquidity Common Equity Tier 1 Capital Ratio (b)14.58%
13.95%
13.49%
13.22%
12.98%
Total Risk Based Capital Ratio (b)16.25%
15.54%
15.10%
14.72%
14.36%
Tier 1 Risk Based Capital Ratio (b)15.18%
14.39%
13.93%
13.67%
13.43%
Tier 1 Leverage Ratio (b)10.17%
9.70%
9.69%
9.77%
9.67%
Equity to Asset Ratio11.38%
11.25%
10.45%
11.40%
11.37%
Tangible Common Equity Ratio (c)10.06%
9.90%
9.10%
9.94%
9.82%
Net Loans to Assets56.41%
59.36%
60.53%
66.94%
71.18%
Loans to Deposits66.08%
70.53%
71.92%
79.59%
84.59%
Asset Quality Non-performing loans$14,744
$13,873
$11,640
$13,835
$11,841
Other Real Estate Owned0
30
30
0
73
Non-performing assets14,744
13,903
11,670
13,835
11,914
Loans 30 - 89 days delinquent6,944
7,606
7,183
9,297
10,134
Charged-off loans411
502
284
387
393
Recoveries125
323
200
190
174
Net Charge-offs286
179
84
197
219
Annualized Net Charge-offs to Average Net Loans Outstanding0.06%
0.04%
0.02%
0.04%
0.04%
Allowance for Credit Losses to Total Loans (a)1.22%
1.27%
1.22%
1.07%
0.90%
Non-performing Loans to Total Loans0.78%
0.71%
0.57%
0.67%
0.55%
Allowance to Non-performing Loans (a)156.92%
178.81%
214.22%
160.06%
163.34%
Non-performing Assets to Total Assets0.44%
0.43%
0.35%
0.45%
0.40%
(a) CECL method used for the 2021 quarters. Prior periods used the incurred loss methodology. (b) Sept. 30, 2021 ratio is estimated (c) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below Reconciliation of Total Assets to Tangible AssetsFor the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
2021
2021
2021
2020
2020
2021
2020
Total Assets$3,317,047
$3,260,058
$3,324,524
$3,071,148
$2,989,179
$3,317,047
$2,989,179
Less Goodwill and other intangibles48,670
48,985
49,301
49,617
51,608
48,670
51,608
Tangible Assets$3,268,377
$3,211,073
$3,275,223
$3,021,531
$2,937,571
$3,268,377
$2,937,571
Average Assets3,304,708
3,280,316
3,155,695
3,033,005
2,957,702
3,247,466
2,814,339
Less average Goodwill and other intangibles48,879
49,193
49,509
51,476
51,754
49,192
48,655
Average Tangible Assets$3,255,829
$3,231,123
$3,106,186
$2,981,529
$2,905,948
$3,198,274
$2,765,684
Reconciliation of Common Stockholders' Equity to Tangible Common EquityFor the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
2021
2021
2021
2020
2020
2021
2020
Stockholders' Equity$377,524
$366,908
$347,355
$350,097
$339,968
$377,524
$339,968
Less Goodwill and other intangibles48,670
48,985
49,301
49,617
51,608
48,670
51,608
Tangible Common Equity$328,854
$317,923
$298,054
$300,480
$288,360
$328,854
$288,360
Average Stockholders' Equity375,208
363,753
351,190
344,949
335,982
361,933
317,448
Less average Goodwill and other intangibles48,879
49,193
49,509
51,476
51,754
49,192
48,655
Average Tangible Common Equity$326,329
$314,560
$301,681
$293,473
$284,228
$312,741
$268,793
Reconciliation of Net Income, Excluding Acquisition Related CostsFor the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
2021
2021
2021
2020
2020
2021
2020
Net income$16,011
$15,575
$14,556
$11,357
$10,869
$46,142
$30,519
Acquisition related costs - tax equated468
83
9
1,431
50
499
1,154
Net income - Adjusted$16,479
$15,658
$14,565
$12,788
$10,919
$46,641
$31,673
Diluted EPS excluding acquisition costs$0.58
$0.55
$0.51
$0.45
$0.39
$1.65
$1.11
Reconciliation of Allowance for Credit Losses to Gross Loans, Excluding PPP Loans and Acquired Loans For the Three Months EndedSept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
2021
2021
2021
2020
2020
Gross Loans$1,894,216
$1,959,865
$2,037,404
$2,078,044
$2,147,158
PPP Loans, net53,580
92,073
136,826
125,396
194,490
Loans less PPP1,840,636
1,867,792
1,900,578
1,952,648
1,952,668
Allowance for Credit Losses to Gross Loans Excluding PPP (a)1.26%
1.33%
1.31%
1.13%
0.99%
Acquired Loans211,954
233,790
251,616
272,150
294,712
Loans less PPP and Acquired$1,628,682
$1,634,002
$1,648,962
$1,680,498
$1,657,956
Allowance for Credit Losses to Gross Loans Excluding PPP and Acquired (a)1.42%
1.52%
1.51%
1.32%
1.17%
(a) CECL method used for the 2021 quarters. Prior periods used the incurred loss methodology. For the Three Months EndedSept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
End of Period Loan Balances2021
2021
2021
2020
2020
Commercial real estate$690,407
$704,809
$702,556
$713,936
$710,730
Commercial302,356
351,261
406,064
404,492
481,593
Residential real estate376,901
383,187
400,982
413,841
416,859
HELOC106,750
107,153
107,501
110,352
109,768
Consumer189,497
190,064
193,295
203,061
209,883
Agricultural loans226,896
223,427
227,073
232,129
219,896
Total, excluding net deferred loan costs$1,892,807
$1,959,901
$2,037,471
$2,077,811
$2,148,729
For the Three Months EndedSept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Noninterest Income2021
2021
2021
2020
2020
Service charges on deposit accounts$924
$790
$808
$930
$904
Bank owned life insurance income340
300
284
187
196
Trust fees2,335
2,358
2,236
1,950
1,973
Insurance agency commissions799
948
1,001
776
784
Security gains (losses)459
32
488
179
70
Retirement plan consulting fees334
389
320
394
341
Investment commissions638
523
504
450
353
Net gains on sale of loans1,466
2,191
2,900
3,610
3,119
Other mortgage banking fee income, net32
(55)
(115)
108
(21)
Debit card and EFT fees1,128
1,226
1,084
1,061
1,048
Other operating income560
806
673
854
450
Total Noninterest Income$9,015
$9,508
$10,183
$10,499
$9,217
For the Three Months EndedSept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Noninterest Expense2021
2021
2021
2020
2020
Salaries and employee benefits$9,321
$9,866
$9,976
$9,638
$10,244
Occupancy and equipment1,899
1,890
2,275
2,060
1,719
State and local taxes552
551
554
515
576
Professional fees1,009
830
1,056
341
753
Merger related costs472
104
12
1,798
58
Advertising391
196
260
478
460
FDIC insurance140
120
170
100
200
Intangible amortization316
316
316
332
332
Core processing charges860
831
627
831
925
Telephone and data117
139
138
154
182
Other operating expenses2,051
2,227
1,984
3,347
2,021
Total Noninterest Expense$17,128
$17,070
$17,368
$19,594
$17,470
Average Balance Sheets and Related Yields and Rates (Dollar Amounts in Thousands) Three Months Ended Three Months Ended September 30, 2021 September 30, 2020 AVERAGE AVERAGE BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2)$1,917,443
$22,665
4.69%
$2,142,624
$24,331
4.52%
Taxable securities727,271
3,222
1.76
197,311
1,263
2.55
Tax-exempt securities (2)360,371
3,065
3.37
254,533
2,459
3.84
Other investments19,380
113
2.31
22,999
138
2.39
Federal funds sold and other95,871
32
0.13
159,151
52
0.13
Total earning assets3,120,336
29,097
3.70
2,776,618
28,243
4.05
Nonearning assets184,372
181,084
Total assets$3,304,708
$2,957,702
INTEREST-BEARING LIABILITIES Time deposits$361,566
$692
0.76%
$476,205
$1,869
1.56%
Brokered time deposits0
0
0
57,000
157
1.10
Savings deposits525,560
152
0.11
476,097
256
0.21
Demand deposits1,278,099
502
0.16
913,946
871
0.38
Short term borrowings5,671
0
0.00
4,476
14
1.24
Long term borrowings51,767
495
3.79
76,554
303
1.57
Total interest-bearing liabilities$2,222,663
1,841
0.33
$2,004,278
3,470
0.69
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits684,419
592,539
Other liabilities22,418
24,903
Stockholders' equity375,208
335,982
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$3,304,708
$2,957,702
Net interest income and interest rate spread$27,256
3.37%
$24,773
3.36%
Net interest margin3.47%
3.55%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2021, adjustments of $87 thousand and $635 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2020, adjustments of $103 thousand and $505 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 AVERAGE AVERAGE BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2)$1,992,003
$70,234
4.71%
$2,066,178
$73,370
4.78%
Taxable securities524,774
7,452
1.90
205,168
4,088
2.66
Tax-exempt securities (2)327,938
8,630
3.52
246,218
7,161
3.88
Other investments20,372
355
2.33
24,008
415
2.31
Federal funds sold and other203,197
161
0.11
104,201
231
0.33
Total earning assets3,068,284
86,832
3.78
2,645,773
85,265
4.35
Nonearning assets179,182
168,566
Total assets$3,247,466
$2,814,339
INTEREST-BEARING LIABILITIES Time deposits$397,378
$2,955
0.99%
$488,051
$6,492
1.78%
Brokered time deposits15,692
75
0.64
82,138
959
1.56
Savings deposits512,716
510
0.13
452,938
844
0.25
Demand deposits1,196,910
1,861
0.21
809,619
3,357
0.55
Short term borrowings4,395
7
0.21
26,440
352
1.78
Long term borrowings67,335
1,075
2.13
84,483
1,102
1.74
Total interest-bearing liabilities$2,194,426
6,483
0.39
$1,943,669
13,106
0.90
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits$669,255
$533,400
Other liabilities21,852
19,822
Stockholders' equity361,933
317,448
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$3,247,466
$2,814,339
Net interest income and interest rate spread$80,349
3.39%
$72,159
3.45%
Net interest margin3.50%
3.64%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2021, adjustments of $274 thousand and $1.8 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2020, adjustments of $299 thousand and $1.5 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.
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