Farmers National Banc Corp. Reports Solid Results for Fourth Quarter of 2023
Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $14.6 million, or $0.39 per diluted share, for the three months ended December 31, 2023, compared to $13.4 million, or $0.39 per diluted share, for the three months ended December 31, 2022. Net income for the fourth quarter of 2023 included pretax items of $452,000 for acquisition related costs, a gain of $915,000 on the sale of commercial loans, $1.0 million in expense for severance/contract payouts for staff resignations, and combined net losses of $217,000 on the sale of securities and the sale of other assets. Excluding these items (non-GAAP), net income for the fourth quarter of 2023 increased 7.8% to $15.2 million from $14.1 million for the same period last year. Net income per diluted share excluding these items (non-GAAP), was $0.41 for the fourth quarter of 2023, compared to $0.42 per diluted share for the fourth quarter of 2022.
Kevin J. Helmick, President and CEO, stated “Our solid fourth quarter results demonstrate our success enhancing profitability throughout an extremely challenging operating environment. This is a testament to our team’s focus on supporting our customers, maintaining excellent asset quality, and controlling operating costs. We expect the economic environment will remain fluid in 2024, but we believe Farmers is well positioned to navigate this period as a result of the value our team members provide our Ohio and Pennsylvania communities, as well as our continued focus on maintaining strong asset quality and profitability.”
Balance Sheet
The Company’s total assets were $5.08 billion at December 31, 2023, compared to $4.97 billion at September 30, 2023 and $4.08 billion at December 31, 2022. The increase from December was primarily due to the acquisition of Emclaire Financial Corp. (“Emclaire”) which added $977.6 million in assets in the first quarter of 2023. Loans have increased by $793.4 million since December 31, 2022 and $29.6 million, or 3.7% annualized, since September 30, 2023. Emclaire was responsible for $740.7 million of the increase in loans since December 31, 2022. Growth in the fourth quarter of 2023 was concentrated in commercial real estate.
The Company had securities available for sale of $1.30 billion at December 31, 2023, compared to $1.21 billion at September 30, 2023, and $1.27 billion at December 31, 2022. The increase since December is due to the acquisition of Emclaire which added $127.0 million in available for sale securities and a decrease in the amount of gross unrealized losses on the portfolio which totaled $266.5 million at December 31, 2022, compared to a gross unrealized loss of $217.1 million at December 31, 2023. The Company also had sales and runoff from the portfolio during the twelve months ended December 31, 2023. Bond market volatility was extreme in 2023 and this volatility may remain in 2024. The Company expects that it will continue to allow the size of the securities portfolio to shrink via runoff to optimize profitability and provide liquidity for future loan growth.
At December 31, 2023, deposits totaled $4.18 billion compared to $4.26 billion at September 30, 2023 and $4.51 billion at December 31, 2022. During the fourth quarter of 2023, the Company allowed $254.3 million in brokered time deposits to mature and replaced the funding with less expensive short term borrowings. In addition, public fund seasonality resulted in $95.3 million in shrinkage during the quarter offset by $15.3 million in growth in other deposit categories. The increase from December 31, 2022, was driven by $875.8 million in deposits assumed in the acquisition of Emclaire offset by a decline in brokered time deposits of $138.1 million and runoff in other deposit categories.
Total stockholders’ equity increased to $404.4 million at December 31, 2023, from $316.0 million at September 30, 2023, and $292.3 million at December 31, 2022. The year-over-year increase was primarily due to the acquisition of Emclaire and an increase in retained earnings and a decrease in the unrealized loss from accumulated other comprehensive income. The increase in total stockholders’ equity since September 30, 2023, was primarily due to a decline in the accumulated other comprehensive loss which decreased $79.7 million as market rates dropped rapidly during the fourth quarter of 2023.
Credit Quality
As of December 31, 2023, the Company’s non-performing loans totaled $15.1 million compared to $18.4 million at September 30, 2023, and $14.8 million at December 31, 2022. The year-over-year increase was primarily due to the addition of Emclaire while the decrease since September 30 was due to the sale of non-performing loans. The non-performing loans to total loans ratio was 0.47% at December 31, 2023, 0.58% at September 30, 2023, and 0.62% at December 31, 2022. Non-performing assets to total assets was 0.30% at December 31, 2023, 0.37% at September 30, 2023, and 0.36% at December 31, 2022. The Company also continues to experience low levels of early-stage delinquencies, defined as loans 30-89 days delinquent. At December 31, 2023, these early-stage delinquencies totaled $16.7 million, or 0.52% of total loans compared to $13.3 million, or 0.42% of total loans at September 30, 2023, and $9.6 million, or 0.40% of total loans, at December 31, 2022.
The Company recorded provision for credit losses and unfunded commitments of $286,000 for the fourth quarter of 2023 compared to $243,000 for the third quarter of 2023 and $416,000 for the fourth quarter of 2022. Annualized net charge-offs as a percentage of average loans were 0.10% for the three months ended December 31, 2023, compared to 0.10% for the same period in 2022. For the year ended December 31, 2023, net charge-offs as a percentage of average loans were 0.07% compared to 0.11% for last year. The allowance for credit losses to total loans was 1.08% at December 31, 2023, compared to 1.10% at September 30, 2023, and 1.12% at December 31, 2022.
Net Interest Income
Net interest income for the three months ended December 31, 2023, totaled $32.8 million in the fourth quarter of 2023 compared to $33.8 million in the third quarter of 2023 and $29.4 million for the fourth quarter of 2022. Earning assets were greater in the fourth quarter of 2023 compared to the fourth quarter of 2022 due to the acquisition of Emclaire but this was partially offset by a decline of 21 basis point in the net interest margin. The net interest margin was 2.78% for the quarter ending December 31, 2023, compared to 2.86% in the third quarter of 2023 and 2.99% for the fourth quarter of 2022. Excluding the impact of acquisition marks and related accretion and PPP interest and fees, the net interest margin (non-GAAP) for the fourth quarter of 2023 was 2.58% compared to 2.61% for the third quarter of 2023 and 2.97% for the fourth quarter of 2022. The decline in net interest margin between the fourth quarter of 2023 and the fourth quarter of 2022 was due to increases in funding costs outstripping the increase in yields on earning assets. This increase in funding costs has been due to the rapid increase in deposit rates due to intense competition for deposits, the Federal Reserve’s rate hiking cycle, and runoff of deposit balances which are being replaced with more costly wholesale funding.
Noninterest Income
The Company recorded $12.2 million in noninterest income during the fourth quarter of 2023 compared to $8.2 million during the fourth quarter of 2022. Service charges on deposit accounts increased to $1.7 million in the fourth quarter of 2023 compared to $1.2 million for the same period in 2022 primarily due to the acquisition of Emclaire. Bank owned life insurance income, other mortgage banking fee income and debit card income have also increased in the fourth quarter of 2023 compared to the fourth quarter of 2022 due to the Emclaire acquisition. Trust fees increased by $283,000 in the fourth quarter of 2023 compared to the fourth quarter of 2022 as growth in this line of business continued. Insurance agency commissions also exhibited outstanding growth as Insurance commissions increased by $407,000 for the quarter ending December 31, 2023 compared to same quarter a year ago. Growth for the year in this business has been solid as pricing in the Insurance business has been very strong and increased annuity sales have bolstered results. Investment commissions are up slightly for the quarter ended December 31, 2023 compared to the quarter ended December 31, 2022, as markets have been resilient in 2023 and the Company begins to expand into Pennsylvania. Net gains on the sale of loans have increased by over $1.0 million between the fourth quarter of 2022 and the fourth quarter of 2023. Of this increase, $915,000 was driven by the sale of commercial loans discussed previously. Traditional gains on the sale of mortgage loans remain sluggish due to high interest rates. Other noninterest income increased $910,000 in the fourth quarter of 2023 compared to the prior year’s fourth quarter. This increase was primarily driven by higher income associated with the Company’s investments in SBIC funds. The earnings on these funds can be volatile from period to period.
Noninterest Expense
The Company reported noninterest expense of $27.0 million for the three months ended December 31, 2023, compared to $21.1 million for the three months ended December 31, 2022. The increase in expense is primarily due to the acquisition of Emclaire along with the $1.0 million in severance expense associated with staff resignations. Salaries and employee benefits increased $3.5 million to $14.9 million in the fourth quarter of 2023 compared to $11.4 million during the same period in 2022. The acquisition of Emclaire, normal raise activity and the severance were the primary reasons for the increase. Occupancy and equipment expense increased $1.1 million primarily due to the acquisition. FDIC and state and local taxes increased $474,000 due to the acquisition and the increase in the rate paid for FDIC insurance in 2023. Core processing charges increased due to the acquisition. Merger related costs were $452,000 for the fourth quarter of 2023 compared to $584,000 in the fourth quarter of 2022. Other noninterest expense increased due to the acquisition.
At December 31, 2023, the Company’s loan to deposit ratio was 76.6% and the Company’s average deposit balance per account (excluding collateralized deposits) was $23,678. The Company has access to an additional $819.5 million of FHLB borrowing capacity at December 31, 2023 along with $214.3 million of available for sale securities that are not pledged. With a deep and diverse deposit base and access to a large amount of additional funding capacity, the Company is well positioned to navigate the current banking landscape.
About Farmers National Banc Corp.
Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $5.1 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 64 banking locations in Mahoning, Trumbull, Columbiana, Portage, Stark, Wayne, Medina, Geauga and Cuyahoga Counties in Ohio and Beaver, Butler, Allegheny, Jefferson, Clarion, Venango, Clearfield, Mercer, Elk and Crawford Counties 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 December 31, 2023 are $3.5 billion. Farmers National Insurance, LLC, a wholly-owned subsidiary of The Farmers National Bank of Canfield, offers 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 certain items, return on average assets excluding merger costs and certain items, return on average equity excluding merger costs and certain items, net interest margin excluding acquisition marks and related accretion and PPP interest and fees and efficiency ratio less certain items, 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.
Cautionary Statements Regarding Forward-Looking Statements
We make statements in this news release and our related investor conference call, and we may from time to time make other statements, that are 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 certain forward-looking statements include significant changes in near-term local, regional, and U.S. economic conditions including those resulting from continued high rates of inflation, tightening monetary policy of the Board of Governors of the Federal Reserve, and possibility of a recession; Farmers’ failure to integrate Emclaire with Farmers in accordance with expectations; deviations from performance expectations related to Emclaire; continuing impacts from the length and extent of the economic impacts of the COVID-19 pandemic; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2022 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 Twelve Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
Percent
2023
2023
2023
2023
2022
2023
2022
Change
Total interest income$
55,069
$
54,229
$
52,804
$
51,233
$
38,111
$
213,335
$
142,086
50.1
%
Total interest expense
22,239
20,461
18,226
14,623
8,679
75,549
17,920
321.6
%
Net interest income
32,830
33,768
34,578
36,610
29,432
137,786
124,166
11.0
%
Provision (credit) for credit losses
286
243
25
8,599
416
9,153
1,122
715.8
%
Noninterest income
12,156
9,831
9,449
10,425
8,200
41,861
44,202
-5.3
%
Acquisition related costs
452
268
442
4,313
584
5,475
4,070
34.5
%
Other expense
26,520
27,448
25,944
26,409
20,511
106,321
90,341
17.7
%
Income before Income taxes
17,728
15,640
17,616
7,714
16,121
58,698
72,835
-19.4
%
Income taxes
3,151
2,326
2,650
639
2,765
8,766
12,238
-28.4
%
Net income$
14,577
$
13,314
$
14,966
$
7,075
$
13,356
$
49,932
$
60,597
-17.6
%
Average diluted shares outstanding
37,426
37,379
37,320
37,933
33,962
37,498
33,929
Basic earnings per share
0.39
0.36
0.40
0.19
0.39
1.34
1.79
Diluted earnings per share
0.39
0.36
0.40
0.19
0.39
1.33
1.79
Cash dividends per share
0.17
0.17
0.17
0.17
0.17
0.68
0.65
Performance Ratios Net Interest Margin (Annualized)
2.78
%
2.86
%
2.92
%
3.07
%
2.99
%
2.91
%
3.18
%
Efficiency Ratio (Tax equivalent basis)
57.84
%
60.11
%
56.28
%
62.53
%
52.59
%
59.24
%
53.68
%
Return on Average Assets (Annualized)
1.17
%
1.06
%
1.18
%
0.56
%
1.31
%
0.99
%
1.46
%
Return on Average Equity (Annualized)
17.98
%
14.49
%
16.12
%
7.71
%
20.16
%
13.97
%
17.24
%
Dividends to Net Income
43.68
%
47.82
%
42.54
%
90.50
%
43.10
%
25.64
%
36.31
%
Other Performance Ratios (Non-GAAP) Return on Average Tangible Assets
1.22
%
1.09
%
1.23
%
0.58
%
1.34
%
1.03
%
1.50
%
Return on Average Tangible Equity
43.77
%
30.29
%
33.55
%
16.31
%
32.81
%
30.23
%
24.31
%
Consolidated Statements of Financial ConditionDec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
2023
2023
2023
2023
2022
Assets Cash and cash equivalents$
103,658
$
93,923
$
116,063
$
128,001
$
75,551
Debt securities available for sale
1,299,701
1,210,736
1,316,878
1,355,449
1,268,025
Other investments
35,311
35,342
44,975
39,670
33,444
Loans held for sale
3,711
1,910
2,197
1,703
858
Loans
3,198,127
3,168,554
3,155,200
3,152,339
2,404,750
Less allowance for credit losses
34,440
34,753
34,957
36,011
26,978
Net Loans
3,163,687
3,133,801
3,120,243
3,116,328
2,377,772
Other assets
472,282
495,451
473,098
468,735
326,550
Total Assets$
5,078,350
$
4,971,163
$
5,073,454
$
5,109,886
$
4,082,200
Liabilities and Stockholders' Equity Deposits Noninterest-bearing$
1,026,630
$
1,039,524
$
1,084,232
$
1,106,870
$
896,957
Interest-bearing
3,150,756
3,217,869
3,165,381
3,207,121
2,526,760
Brokered time deposits
0
254,257
21,135
82,169
138,051
Total deposits
4,177,386
4,511,650
4,270,748
4,396,160
3,561,768
Other interest-bearing liabilities
443,663
88,550
388,437
292,324
183,211
Other liabilities
52,886
54,981
47,278
46,760
44,926
Total liabilities
4,673,935
4,655,181
4,706,463
4,735,244
3,789,905
Stockholders' Equity
404,415
315,982
366,991
374,642
292,295
Total Liabilities and Stockholders' Equity$
5,078,350
$
4,971,163
$
5,073,454
$
5,109,886
$
4,082,200
Period-end shares outstanding
37,503
37,489
37,457
37,439
34,055
Book value per share$
10.78
$
8.43
$
9.80
$
10.01
$
8.58
Tangible book value per share (Non-GAAP)*
5.71
3.33
4.67
4.84
5.60
* Tangible book value per share is calculated by dividing tangible common equity by outstanding sharesFor the Three Months Ended
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
Capital and Liquidity
2023
2023
2023
2023
2022
2023
2022
Common Equity Tier 1 Capital Ratio (a)
10.63
%
10.37
%
10.25
%
10.04
%
13.71
%
Total Risk Based Capital Ratio (a)
14.08
%
13.83
%
13.76
%
13.60
%
17.79
%
Tier 1 Risk Based Capital Ratio (a)
11.11
%
10.86
%
10.74
%
10.54
%
14.32
%
Tier 1 Leverage Ratio (a)
8.02
%
7.84
%
7.68
%
7.43
%
9.84
%
Equity to Asset Ratio
7.96
%
6.36
%
7.23
%
7.33
%
7.16
%
Tangible Common Equity Ratio (b)
4.38
%
2.61
%
3.58
%
3.69
%
4.79
%
Net Loans to Assets
62.30
%
63.04
%
61.50
%
60.99
%
58.25
%
Loans to Deposits
76.56
%
70.23
%
73.88
%
71.71
%
67.52
%
Asset Quality Non-performing loans$
15,063
$
18,368
$
17,956
$
17,959
$
14,803
Non-performing assets
15,321
18,522
18,167
18,053
14,876
Loans 30 - 89 days delinquent
16,705
13,314
12,321
10,219
9,605
Charged-off loans
972
525
971
469
754
2,937
3,304
Recoveries
172
139
172
198
184
681
646
Net Charge-offs
800
386
799
271
570
2,256
2,658
Annualized Net Charge-offs to Average Net Loans
0.10
%
0.05
%
0.10
%
0.03
%
0.10
%
0.07
%
0.11
%
Allowance for Credit Losses to Total Loans
1.08
%
1.10
%
1.11
%
1.14
%
1.12
%
Non-performing Loans to Total Loans
0.47
%
0.58
%
0.57
%
0.57
%
0.62
%
Loans 30 - 89 Days Delinquent to Total Loans
0.52
%
0.42
%
0.39
%
0.32
%
0.40
%
Allowance to Non-performing Loans
228.64
%
189.20
%
194.68
%
200.52
%
182.25
%
Non-performing Assets to Total Assets
0.30
%
0.37
%
0.36
%
0.35
%
0.36
%
(a) December 31, 2023 ratio is estimated (b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown belowFor the Three Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
End of Period Loan Balances2023
2023
2023
2023
2022
Commercial real estate$
1,335,806
$
1,295,847
$
1,284,974
$
1,286,830
$
1,028,050
Commercial
346,354
357,691
362,664
361,845
293,643
Residential real estate
843,697
842,729
849,533
853,074
475,791
HELOC
142,441
140,772
138,535
137,319
132,179
Consumer
259,784
261,136
260,326
260,596
221,260
Agricultural loans
261,288
261,738
250,807
244,938
246,937
Total, excluding net deferred loan costs$
3,189,370
$
3,159,913
$
3,146,839
$
3,144,602
$
2,397,860
For the Three Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
End of Period Customer Deposit Balances2023
2023
2023
2023
2022
Noninterest-bearing demand$
1,026,630
$
1,039,524
$
1,084,232
$
1,106,870
$
896,957
Interest-bearing demand
1,362,609
1,426,349
1,383,326
1,473,001
1,224,884
Money market
593,975
588,043
610,051
599,037
435,369
Savings
468,890
488,991
511,642
535,321
441,978
Certificate of deposit
720,259
714,486
660,362
599,762
424,529
Total customer deposits$
4,172,363
$
4,257,393
$
4,249,613
$
4,313,991
$
3,423,717
For the Three Months Ended
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
Noninterest Income
2023
2023
2023
2023
2022
2023
2022
Service charges on deposit accounts
$
1,677
$
1,712
$
1,501
$
1,432
$
1,203
$
6,322
$
4,716
Bank owned life insurance income, including death benefits
617
694
584
547
590
2,442
1,810
Trust fees
2,656
2,617
2,248
2,587
2,373
10,108
9,638
Insurance agency commissions
1,540
1,116
1,332
1,456
1,133
5,444
4,402
Security gains (losses), including fair value changes for equity securities
19
(624
)
13
121
(366
)
(471
)
(454
)
Retirement plan consulting fees
357
360
382
307
337
1,406
1,389
Investment commissions
589
520
476
393
508
1,978
2,183
Net gains on sale of loans
1,280
395
406
310
242
2,391
2,062
Other mortgage banking fee income (loss), net
139
185
234
153
98
711
291
Debit card and EFT fees
1,697
1,763
1,810
1,789
1,407
7,059
5,814
Other noninterest income
1,585
1,093
463
1,330
675
4,471
12,351
Total Noninterest Income
$
12,156
$
9,831
$
9,449
$
10,425
$
8,200
$
41,861
$
44,202
For the Three Months Ended
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
Noninterest Expense
2023
2023
2023
2023
2022
2023
2022
Salaries and employee benefits
$
14,871
$
14,233
$
13,625
$
14,645
$
11,385
$
57,374
$
45,013
Occupancy and equipment
3,896
3,810
3,859
3,869
2,753
15,434
11,379
FDIC insurance and state and local taxes
1,484
1,648
1,494
1,222
1,010
5,848
3,951
Professional fees
1,004
1,043
1,190
1,114
938
4,351
6,114
Merger related costs
452
268
442
4,313
584
5,475
4,070
Advertising
414
492
478
409
472
1,793
1,947
Intangible amortization
578
725
1,222
909
702
3,434
1,973
Core processing charges
1,057
1,274
1,144
1,164
742
4,639
3,348
Other noninterest expenses
3,216
4,223
2,932
3,077
2,509
13,448
16,616
Total Noninterest Expense
$
26,972
$
27,716
$
26,386
$
30,722
$
21,095
$
111,796
$
94,411
Business Combination Consideration Cash
$
33,440
59,202
Fair value of total consideration transferred$
92,642
Fair value of assets acquired Cash and cash equivalents$
20,265
Securities available for sale
126,970
Other investments
7,795
Loans, net
740,659
Premises and equipment
14,808
Bank owned life insurance
22,485
Core deposit intangible
19,249
Current and deferred taxes
17,708
Other assets
7,682
Total assets acquired
977,621
Fair value of liabilities assumed Deposits
875,813
Short-term borrowings
75,000
Accrued interest payable and other liabilities
7,104
Total liabilities
957,917
Net assets acquired$
19,704
Goodwill created
72,938
Total net assets acquired$
92,642
Average Balance Sheets and Related Yields and Rates (Dollar Amounts in Thousands) Three Months Ended Three Months Ended December 31, 2023 December 31, 2022 AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2)$
3,188,581
$
44,868
5.63
%
$
2,394,872
$
29,092
4.86
%
Taxable securities
1,113,107
6,536
2.35
1,105,545
5,556
2.01
Tax-exempt securities (2)
411,860
3,235
3.14
453,917
3,580
3.15
Other investments
37,625
529
5.62
33,901
326
3.85
Federal funds sold and other
65,236
564
3.46
59,108
336
2.27
Total earning assets
4,816,409
55,732
4.63
4,047,343
38,890
3.84
Nonearning assets
163,905
33,154
Total assets$
4,980,314
$
4,080,497
INTEREST-BEARING LIABILITIES Time deposits$
712,485
$
6,291
3.53
%
$
370,914
$
1,261
1.36
%
Brokered time deposits
96,634
1,315
5.44
115,021
1,034
3.60
Savings deposits
1,068,465
2,918
1.09
871,584
879
0.40
Demand deposits - interest bearing
1,393,252
7,922
2.27
1,301,475
3,805
1.17
Short term borrowings
206,826
2,749
5.32
85,641
777
3.63
Long term borrowings
88,609
1,043
4.71
88,138
922
4.18
Total interest-bearing liabilities
$
3,566,271
22,238
2.49
$
2,832,773
8,678
1.23
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing
1,035,405
938,881
Other liabilities
54,306
43,904
Stockholders' equity
324,332
264,939
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$
4,980,314
$
4,080,497
Net interest income and interest rate spread$
33,494
2.14
%
$
30,212
2.61
%
Net interest margin2.78
%
2.99
%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2023, adjustments of $86 thousand and $577 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2022, adjustments of $72 thousand and $707 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. Twelve Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2)$
3,155,858
$
172,161
5.46
%
$
2,358,724
$
108,100
4.58
%
Taxable securities
1,143,547
26,231
2.29
1,081,966
20,843
1.93
Tax-exempt securities (2)
419,557
13,283
3.17
465,855
14,952
3.21
Other investments
39,559
1,986
5.02
33,153
871
2.63
Federal funds sold and other
74,950
2,476
3.30
76,253
684
0.90
Total earning assets
4,833,471
216,137
4.47
4,015,951
145,450
3.62
Nonearning assets
205,683
128,757
Total assets$
5,039,154
$
4,144,708
INTEREST-BEARING LIABILITIES Time deposits$
654,717
$
19,462
2.97
%
$
360,687
$
3,044
0.84
%
Brokered time deposits
132,895
6,204
4.67
56,965
1,240
2.18
Savings deposits
1,113,561
9,899
0.89
846,418
1,352
0.16
Demand deposits - interest bearing
1,415,425
27,541
1.95
1,392,058
7,449
0.54
Short term borrowings
160,964
8,357
5.19
55,668
1,408
2.53
Long term borrowings
88,439
4,086
4.62
87,972
3,427
3.90
Total interest-bearing liabilities
$
3,566,001
75,549
2.12
$
2,799,768
17,920
0.64
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing
$
1,065,389
$
959,294
Other liabilities
50,302
34,180
Stockholders' equity
357,462
351,466
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$
5,039,154
$
4,144,708
Net interest income and interest rate spread$
140,588
2.35
%
$
127,530
2.98
%
Net interest margin2.91
%
3.18
%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2023, adjustments of $353 thousand and $2.4 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2022, adjustments of $310 thousand and $3.1 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. Reconciliation of Total Assets to Tangible AssetsFor the Three Months Ended
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2023
2023
2023
2023
2022
2023
2022
Total Assets$
5,078,350
$
4,971,163
$
5,073,454
$
5,109,886
$
4,082,200
$
5,078,350
$
4,082,200
Less Goodwill and other intangibles
190,288
191,326
192,052
193,273
101,666
190,288
101,666
Tangible Assets$
4,888,062
$
4,779,837
$
4,881,402
$
4,916,613
$
3,980,534
$
4,888,062
$
3,980,534
Average Assets
4,980,314
5,058,969
5,070,444
5,085,009
4,080,497
5,039,154
4,144,708
Less average Goodwill and other intangibles
191,108
191,804
192,972
193,368
102,126
192,306
102,151
Average Tangible Assets$
4,789,206
$
4,867,165
$
4,877,472
$
4,891,641
$
3,978,371
$
4,846,848
$
4,042,557
Reconciliation of Common Stockholders' Equity to Tangible Common EquityFor the Three Months Ended
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2023
2023
2023
2023
2022
2023
2022
Stockholders' Equity$
404,415
$
315,982
$
366,991
$
374,642
$
292,295
$
404,415
$
292,295
Less Goodwill and other intangibles
190,288
191,326
192,052
193,273
101,666
190,288
101,666
Tangible Common Equity$
214,127
$
124,656
$
174,939
$
181,369
$
190,629
$
214,127
$
190,629
Average Stockholders' Equity
324,332
367,600
371,421
366,851
264,939
357,462
351,466
Less average Goodwill and other intangibles
191,108
191,804
192,972
193,368
102,126
192,306
102,151
Average Tangible Common Equity$
133,224
$
175,796
$
178,449
$
173,483
$
162,813
$
165,156
$
249,315
Reconciliation of Net Income, Less Merger and Certain ItemsFor the Three Months Ended
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2023
2023
2023
2023
2022
2023
2022
Net income
$
14,577
$
13,314
$
14,966
$
7,075
$
13,356
$
49,932
$
60,597
Acquisition related costs - after tax
358
234
354
3,449
475
4,395
3,290
Acquisition related provision - after tax
0
0
0
6,077
0
6,077
0
Employee severence - after tax
798
0
0
0
0
798
0
Lawsuit settlement income - after tax
0
0
0
0
0
0
(6,616
)
Lawsuit settlement contingent legal expense - after tax
0
0
0
0
0
0
1,639
Lawsuit settlement expense - after tax
0
620
0
0
0
620
0
Charitable donation - after tax
0
0
0
0
0
0
4,740
Net (gain) on loan sale - after tax
(723
)
0
0
0
0
(723
)
0
Net loss (gain) on asset/security sales - after tax
171
604
(5
)
(72
)
268
698
344
Net income - Adjusted
$
15,181
$
14,772
$
15,315
$
16,529
$
14,099
$
61,797
$
63,994
Diluted EPS excluding merger and certain items
$
0.41
$
0.40
$
0.41
$
0.44
$
0.42
$
1.65
$
1.89
Return on Average Assets excluding merger and certain items (Annualized)
1.22
%
1.17
%
1.21
%
1.30
%
1.36
%
1.23
%
1.54
%
Return on Average Equity excluding merger and certain items (Annualized)
18.72
%
16.07
%
16.49
%
18.02
%
21.29
%
17.29
%
18.21
%
Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)
45.58
%
33.61
%
34.33
%
38.11
%
34.64
%
37.42
%
25.67
%
Efficiency ratio excluding certain itemsFor the Three Months Ended
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2023
2023
2023
2023
2022
2023
2022
Net interest income, tax equated
$
33,494
$
34,448
$
35,273
$
37,374
$
30,212
$
140,588
$
127,530
Noninterest income
12,156
9,831
9,449
10,425
8,200
41,861
44,202
Legal settlement income
0
0
0
0
0
0
(8,375
)
Net (gain) on loan sale
(915
)
0
0
0
0
(915
)
0
Net loss (gain) on asset/security sales
217
764
(6
)
(91
)
338
883
435
Net interest income and noninterest income adjusted
44,952
45,043
44,716
47,708
38,750
182,417
163,792
Noninterest expense less intangible amortization
26,394
26,991
25,163
29,813
20,393
108,361
92,438
Charitable donation
0
0
0
0
0
0
6,000
Legal settlement expense
0
785
0
0
0
785
0
Contingent legal settlement expense
0
0
0
0
0
0
2,075
Employee severence
1,010
0
0
0
0
1,010
0
Acquisition related costs
452
268
442
4,313
584
5,475
4,070
Noninterest expense adjusted
24,932
25,938
24,721
25,500
19,809
101,091
80,293
Efficiency ratio excluding certain items
55.46
%
57.58
%
55.28
%
53.45
%
51.12
%
55.42
%
49.02
%
Net interest margin excluding acquisition marks and PPP interest and feesFor the Three Months Ended
For the Twelve Months
Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2023
2023
2023
2023
2022
2023
2022
Net interest income, tax equated
$
33,494
$
34,448
$
35,273
$
37,374
$
30,212
$
140,588
$
127,530
Acquisition marks
2,475
2,959
2,884
2,628
174
10,946
1,793
PPP interest and fees
1
1
3
0
10
5
1,392
Adjusted and annualized net interest income
124,072
125,952
129,544
138,984
120,112
129,637
124,345
Average earning assets
4,816,409
4,820,888
4,830,910
4,866,263
4,047,343
4,833,471
4,015,951
Less PPP average balances
229
247
277
310
485
254
11,914
Adjusted average earning assets
4,816,180
4,820,641
4,830,633
4,865,953
4,046,858
4,833,217
4,004,037
Net interest margin excluding marks and PPP interest and fees
2.58
%
2.61
%
2.68
%
2.86
%
2.97
%
2.68
%
3.11
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20240123953680/en/