Farmers National Banc Corp. Announces 2022 Third Quarter Results
Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced third quarter net income of $15.4 million for the three months ended September 30, 2022. This compares to $16.0 million for the three months ended September 30, 2021. Diluted earnings per share were $0.46 for the third quarter of 2022 versus $0.56 for the third quarter of 2021. The third quarter of 2022 results included pretax items of $872,000 for merger related costs and combined net losses of $6,000 on the sale of securities and the sale of other assets. Excluding these items (non-GAAP), net income for the quarter ended September 30, 2022, would have been $16.2 million, or $0.48 per diluted share.
“We’re extremely pleased with another quarter of solid loan growth and continue to see good lending opportunities in the market”, said Kevin J. Helmick, President and CEO. “Our quarterly earnings were strong, we opened a new lab branch in Canton during the quarter and we look forward to receiving regulatory approval for our acquisition of Emclaire Financial Corp.”
On March 23, 2022, Farmers entered into an agreement and plan of merger (the “Merger Agreement”) with Emclaire Financial Corp. (NASDAQ: EMCF), a Pennsylvania corporation (“Emclaire”), and the parent company of The Farmers National Bank of Emlenton (“Emlenton”). On July 20, 2022, the transaction received the approval of Emclaire’s shareholders. The transaction is expected to be completed after the satisfaction or waiver of the remaining closing conditions set forth in the Merger Agreement, including the receipt of all required regulatory approvals. Emclaire operates 19 branches in ten counties throughout western Pennsylvania. As of September 30, 2022, Emclaire had total assets of $1.0 billion, gross loans of $810.1 million, deposits of $926.7 million and equity of $71.0 million.
Balance Sheet
At September 30, 2022, total assets were $4.12 billion compared to $4.11 billion at June 30, 2022 and $4.14 billion at December 31, 2021. Gross loans (excluding loans held for sale and PPP loans) increased to $2.40 billion at September 30, 2022 compared to $2.37 billion at June 30, 2022. The growth of $27.3 million for the quarter was equal to growth of 4.6% on an annualized basis. The quarter again exhibited strength across multiple sectors of the loan portfolio with loan pipelines still showing solid volume. At September 30, 2022, the Company’s PPP loans had declined to a minimal $637,000 before deferred fees still to be forgiven, and $13,000 in net deferred fees associated with these loans yet to be recognized into income.
The Company’s available for sale securities decreased $66.5 million from $1.36 billion at June 30, 2022 to $1.30 billion at September 30, 2022. The continued increase in U.S. treasury rates during the third quarter of 2022 resulted in a gross unrealized loss of $290.1 million compared to $206.1 million at June 30, 2022 and a gross unrealized gain of $11.7 million at December 31, 2021. With continued loan growth and the acquisition of Emclaire, the Company plans on allowing the securities portfolio to shrink and provide liquidity. The volatility in the bond market is expected to continue in 2022, which may result in increased volatility in the fair value of the Company’s available for sale securities.
The Company’s deposits declined from $3.63 billion at June 30, 2022 to $3.57 billion at September 30, 2022. Deposit balances at December 31, 2021 were $3.55 billion. Competition for deposits increased during the back half of the third quarter of 2022 as interest rates continued to increase. The Company expects competition for deposits to remain elevated which will increase funding costs moving forward.
Total stockholders’ equity decreased to $265.6 million at September 30, 2022 from $321.4 million at June 30, 2022 and $472.4 million at December 31, 2021. The decrease in stockholders’ equity has primarily been due to the decline in accumulated other comprehensive income associated with the rapid increase in U.S. treasury rates in 2022 which has had a negative effect on the value of the Company’s available for sale securities, and in turn, the dollar amount that flows through accumulated other comprehensive income. The Company’s tangible book value per share (non-GAAP) was $4.79 at September 30, 2022 compared to $6.46 at June 30, 2022, and $10.91 at December 31, 2021.
Credit Quality
Non-performing loans (NPLs) have continued to decline and the NPL to loans ratio was 0.54% at September 30, 2022 compared to 0.69% at December 31, 2021. Non-performing assets to assets has also declined from 0.39% at December 31, 2021 to 0.32% at September 30, 2022. In addition, early stage delinquencies, defined as 30-89 days delinquent, were $6.7 million, or 0.28% of total loans, at September 30, 2022 compared to $8.9 million, or 0.38% of total loans at December 31, 2021.
During the third quarter of 2022, the Company had a provision for credit losses and unfunded commitments of $448,000 compared to a credit for credit losses of $948,000 in the third quarter of 2021. Growth in loans was the primary reason for the increase in the provision expense. The Company experienced net charge-offs of $605,000 during the third quarter of 2022 compared to $286,000 in the third quarter of 2021. Net charge-offs as a percentage of average net loans was 10 basis point for the quarter ended September 30, 2022, compared to 6 basis points for the third quarter of 2021. The allowance for credit losses to total loans declined to 1.14% at September 30, 2022, compared to 1.26% at December 31, 2021, respectively. The low level of charge-off activity over the last several years continues to result in less allowance for credit losses being required.
Net Interest Income
Net interest income increased to $31.8 million for the quarter ended September 30, 2022 from $26.5 million for the quarter ended September 30, 2021. The increase was due to the acquisition of Cortland Bancorp (“Cortland”) offset by a reduction in PPP interest and fees. During the third quarter of 2021, the Company recognized $1.4 million in interest and fees associated with PPP loans compared to $62,000 in the third quarter of 2022. The net interest margin was 3.21% for the third quarter of 2022 compared to 3.25% for the second quarter of 2022 and 3.49% for the third quarter of 2021. The decline in net interest margin in the third quarter of 2022 compared to the third quarter of 2021 was driven by the lower PPP income in 2022 compared to 2021 and a greater percentage of earning assets invested in securities rather than loans. Excluding the impact of acquisition marks and related accretion and PPP interest and fees, the net interest margin (non-GAAP) for the third quarter of 2022 was 3.18% compared to 3.16% for the second quarter of 2022 and 3.37% for the third quarter of 2021.
Noninterest Income
Noninterest income decreased $188,000, to $8.8 million for the third quarter of 2022 compared to the third quarter of 2021. Service charges on deposit accounts increased $305,000 to $1.2 million in the third quarter of 2022 compared to $924,000 for the third quarter of 2021. The increase was primarily due to the acquisition of Cortland and growth. Insurance commissions increased to $1.1 million in the third quarter of 2022 compared to $799,000 in the third quarter of 2021. This business line continues to exhibit good growth. Net gains on the sale of loans decreased to $326,000 in the third quarter of 2022 compared to $1.5 million in the third quarter of 2021. This drop was caused by lower mortgage production compared to the prior year, compressed margins and a lower saleable mix due to the dramatic increase in interest rates in 2022.
Security losses for the third quarter of 2022 totaled $17,000 compared to security gains of $459,000 for the same period in 2021. Debit card and EFT fees increased to $1.5 million in the third quarter of 2022 compared to $1.2 million in the third quarter of 2021. This increase was due to the Cortland acquisition and increased volumes. Other noninterest income increased to $1.1 million in the third quarter of 2022 compared to $461,000 in the third quarter of 2021. This increase was due to the acquisition of Cortland and increased income related to investments in SBIC and SBA funds.
Noninterest Expense
Total noninterest expense increased to $21.4 million for the quarter ended September 30, 2022 compared to $17.1 million for the third quarter of 2021. The year-over-year increase was primarily due to the acquisition of Cortland, continued higher healthcare benefit costs and more merger related costs in the third quarter of 2022 compared to the third quarter of 2021.
About Farmers National Banc Corp.
Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $4.1 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 46 banking locations in Mahoning, Trumbull, Columbiana, Portage, 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, 2022 are $2.9 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, efficiency ratio less one-time expenses, 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.
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 impacts from the length and extent of the economic impacts of the COVID-19 pandemic; significant changes in near-term local, regional, and U.S. economic conditions 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 and Emlenton with Farmers in accordance with expectations; deviations from performance expectations related to Emclaire and Emlenton; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2021 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
2022
2022
2022
2021
2021
2022
2021
Change
Total interest income$
36,410
$
34,286
$
33,279
$
31,685
$
28,375
$
103,975
$
84,774
22.6
%
Total interest expense
4,629
2,575
2,037
1,986
1,841
9,241
6,483
42.5
%
Net interest income
31,781
31,711
31,242
29,699
26,534
94,734
78,291
21.0
%
Provision (credit) for credit losses
448
616
(358
)
5,366
(948
)
706
(473
)
-249.3
%
Noninterest income
8,827
9,477
17,698
9,538
9,015
36,002
28,655
25.6
%
Acquisition related costs
872
674
1,940
6,521
472
3,486
588
492.9
%
Other expense
20,527
20,787
28,516
21,140
16,656
69,830
50,927
37.1
%
Income before income taxes
18,761
19,111
18,842
6,210
19,369
56,714
55,904
1.4
%
Income taxes
3,315
3,160
2,998
508
3,358
9,473
9,762
-3.0
%
Net income$
15,446
$
15,951
$
15,844
$
5,702
$
16,011
$
47,241
$
46,142
2.4
%
Average diluted shares outstanding
33,932
33,923
33,937
32,074
28,361
33,925
28,339
Basic earnings per share
0.46
0.47
0.47
0.18
0.57
1.40
1.63
Diluted earnings per share
0.46
0.47
0.47
0.18
0.56
1.39
1.63
Cash dividends per share
0.16
0.16
0.16
0.14
0.11
0.48
0.33
Performance Ratios Net Interest Margin (Annualized)
3.21
%
3.25
%
3.27
%
3.33
%
3.49
%
3.24
%
3.49
%
Efficiency Ratio (Tax equivalent basis)
50.55
%
49.95
%
61.36
%
63.61
%
46.04
%
54.00
%
46.49
%
Return on Average Assets (Annualized)
1.48
%
1.54
%
1.52
%
0.58
%
1.92
%
1.51
%
1.90
%
Return on Average Equity (Annualized)
18.71
%
17.97
%
13.89
%
5.24
%
16.93
%
16.55
%
17.05
%
Dividends to Net Income
35.06
%
33.95
%
34.18
%
82.99
%
19.41
%
34.39
%
20.20
%
Other Performance Ratios (Non-GAAP) Return on Average Tangible Assets
1.52
%
1.57
%
1.55
%
0.60
%
1.97
%
1.55
%
1.92
%
Return on Average Tangible Equity
27.06
%
25.23
%
17.92
%
6.57
%
19.63
%
22.62
%
19.64
%
Consolidated Statements of Financial ConditionSept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
2022
2022
2022
2021
2021
Assets Cash and cash equivalents
$
79,981
$
65,458
$
137,627
$
112,790
$
79,808
Securities available for sale
1,295,133
1,361,682
1,463,626
1,427,677
1,183,361
Other investments
34,399
34,451
34,019
30,459
19,041
Loans held for sale
2,142
2,714
1,904
4,545
2,628
Loans
2,399,981
2,374,485
2,304,971
2,331,082
1,894,216
Less allowance for credit losses
27,282
27,454
27,015
29,386
23,136
Net Loans
2,372,699
2,347,031
2,277,956
2,301,696
1,871,080
Other assets
335,668
303,028
290,723
265,582
161,129
Total Assets
$
4,120,022
$
4,114,364
$
4,205,855
$
4,142,749
$
3,317,047
Liabilities and Stockholders' Equity Deposits Noninterest-bearing
$
934,638
$
983,713
$
963,143
$
916,237
$
675,938
Interest-bearing
2,632,513
2,641,825
2,730,668
2,630,998
2,190,475
Total deposits
3,567,151
3,625,538
3,693,811
3,547,235
2,866,413
Other interest-bearing liabilities
243,098
137,985
87,872
87,758
49,649
Other liabilities
44,154
29,392
30,286
35,324
23,461
Total liabilities
3,854,403
3,792,915
3,811,969
3,670,317
2,939,523
Stockholders' Equity
265,619
321,449
393,886
472,432
377,524
Total Liabilities and Stockholders' Equity
$
4,120,022
$
4,114,364
$
4,205,855
$
4,142,749
$
3,317,047
Period-end shares outstanding
34,060
34,032
34,008
33,898
28,322
Book value per share
$
7.80
$
9.45
$
11.58
$
13.94
$
13.33
Tangible book value per share (Non-GAAP)*
4.79
6.46
8.58
10.91
11.61
* Tangible book value per share is calculated by dividing tangible common equity by outstanding shares Capital and Liquidity Common Equity Tier 1 Capital Ratio (a)
13.46
%
13.30
%
13.31
%
13.16
%
14.58
%
Total Risk Based Capital Ratio (a)
17.57
%
17.46
%
17.59
%
17.60
%
16.25
%
Tier 1 Risk Based Capital Ratio (a)
14.08
%
13.92
%
13.95
%
13.82
%
15.18
%
Tier 1 Leverage Ratio (a)
9.67
%
9.56
%
9.56
%
10.12
%
10.17
%
Equity to Asset Ratio
6.45
%
7.81
%
9.37
%
11.40
%
11.38
%
Tangible Common Equity Ratio (b)
4.06
%
5.47
%
7.11
%
9.15
%
10.06
%
Net Loans to Assets
57.59
%
57.04
%
54.16
%
55.56
%
56.41
%
Loans to Deposits
67.28
%
65.49
%
62.40
%
65.72
%
66.08
%
Asset Quality Non-performing loans$
12,976
$
14,107
$
14,046
$
16,195
$
14,744
Non-performing assets
13,042
14,107
14,046
16,195
14,744
Loans 30 - 89 days delinquent
6,659
8,716
7,304
8,891
6,944
Charged-off loans
783
177
1,590
470
411
Recoveries
178
135
149
157
125
Net Charge-offs
605
42
1,441
313
286
Annualized Net Charge-offs to Average Net Loans Outstanding
0.10
%
0.01
%
0.25
%
0.06
%
0.06
%
Allowance for Credit Losses to Total Loans
1.14
%
1.16
%
1.17
%
1.26
%
1.22
%
Non-performing Loans to Total Loans
0.54
%
0.59
%
0.61
%
0.69
%
0.78
%
Allowance to Non-performing Loans
210.25
%
194.61
%
192.33
%
181.45
%
156.92
%
Non-performing Assets to Total Assets
0.32
%
0.34
%
0.33
%
0.39
%
0.44
%
(a) September 30, 2022 ratio is estimated (b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown belowFor the Three Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
End of Period Loan Balances
2022
2022
2022
2021
2021
Commercial real estate
$
1,028,484
$
1,040,243
$
1,000,972
$
1,011,891
$
690,407
Commercial
296,932
285,981
298,903
313,836
302,356
Residential real estate
474,014
464,489
455,501
453,635
376,901
HELOC
132,267
129,392
128,221
127,433
106,750
Consumer
222,706
218,219
192,586
189,522
189,497
Agricultural loans
239,081
230,477
224,845
232,365
226,896
Total, excluding net deferred loan costs
$
2,393,484
$
2,368,801
$
2,301,028
$
2,328,682
$
1,892,807
For the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
Noninterest Income
2022
2022
2022
2021
2021
2022
2021
Service charges on deposit accounts
$
1,229
$
1,139
$
1,145
$
1,138
$
924
$
3,513
$
2,522
Bank owned life insurance income, including death benefits
406
405
409
414
340
1,220
924
Trust fees
2,370
2,376
2,519
2,509
2,335
7,265
6,930
Insurance agency commissions
1,136
1,086
1,047
706
799
3,269
2,750
Security gains (losses), including fair value changes for equity securities
(17
)
(60
)
(11
)
25
459
(88
)
979
Retirement plan consulting fees
332
323
397
378
334
1,052
1,043
Investment commissions
424
557
694
611
638
1,675
1,665
Net gains on sale of loans
326
365
1,129
1,728
1,466
1,820
6,557
Other mortgage banking fee income (loss), net
94
39
60
2
32
193
(138
)
Debit card and EFT fees
1,463
1,528
1,416
1,424
1,227
4,407
3,720
Other noninterest income
1,064
1,719
8,893
603
461
11,676
1,703
Total Noninterest Income
$
8,827
$
9,477
$
17,698
$
9,538
$
9,015
$
36,002
$
28,655
For the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
Noninterest Expense
2022
2022
2022
2021
2021
2022
2021
Salaries and employee benefits
$
10,724
$
11,073
$
11,831
$
10,230
$
9,321
$
33,628
$
29,163
Occupancy and equipment
3,028
2,918
2,680
2,422
1,899
8,626
6,065
FDIC insurance and state and local taxes
1,017
979
945
772
692
2,941
2,086
Professional fees
985
1,056
3,135
1,296
1,009
5,176
2,895
Merger related costs
872
674
1,940
6,521
472
3,486
588
Advertising
596
487
392
776
466
1,475
1,083
Intangible amortization
432
419
420
414
316
1,271
948
Core processing charges
738
1,123
745
880
860
2,606
2,318
Other noninterest expenses
3,007
2,732
8,368
4,350
2,093
14,107
6,369
Total Noninterest Expense
$
21,399
$
21,461
$
30,456
$
27,661
$
17,128
$
73,316
$
51,515
Average Balance Sheets and Related Yields and Rates
(Dollar Amounts in Thousands)
Three Months Ended
Three Months Ended
September 30, 2022
September 30, 2021
AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2)$
2,386,184
$
27,570
4.62
%
$
1,917,443
$
22,665
4.73
%
Taxable securities
1,112,411
5,477
1.97
727,271
3,222
1.77
Tax-exempt securities (2)
473,677
3,814
3.22
360,371
3,065
3.40
Other investments
33,524
199
2.37
19,380
113
2.33
Federal funds sold and other
59,289
205
1.38
95,871
32
0.13
Total earning assets
4,065,085
37,265
3.67
3,120,336
29,097
3.73
Nonearning assets
99,770
184,372
Total assets$
4,164,855
$
3,304,708
INTEREST-BEARING LIABILITIES Time deposits$
338,794
$
586
0.69
%
$
361,566
$
692
0.77
%
Brokered time deposits
50,494
142
1.12
0
0
0.00
Savings deposits
832,828
165
0.08
525,560
152
0.12
Demand deposits - interest bearing
1,426,801
2,317
0.65
1,278,099
502
0.16
Short term borrowings
90,978
533
2.34
5,671
0
0.00
Long term borrowings
88,031
886
4.03
51,767
495
3.82
Total interest-bearing liabilities
$
2,827,926
4,629
0.65
$
2,222,663
1,841
0.33
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing
969,700
684,419
Other liabilities
36,929
22,418
Stockholders' equity
330,300
375,208
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$
4,164,855
$
3,304,708
Net interest income and interest rate spread$
32,636
3.02
%
$
27,256
3.40
%
Net interest margin3.21
%
3.49
%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2022, adjustments of $76 thousand and $779 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $87 thousand and $635 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 AVERAGE YIELD/ AVERAGE YIELD/ BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) EARNING ASSETS Loans (2)$
2,346,542
$
79,008
4.49
%
$
1,994,687
$
70,234
4.69
%
Taxable securities
1,074,020
15,287
1.90
524,774
7,452
1.89
Tax-exempt securities (2)
469,878
11,372
3.23
327,938
8,630
3.51
Other investments
32,901
545
2.21
20,372
355
2.32
Federal funds sold and other
82,031
348
0.57
204,037
161
0.11
Total earning assets
4,005,372
106,560
3.55
3,071,808
86,832
3.77
Nonearning assets
160,975
189,358
Total assets$
4,166,347
$
3,261,166
INTEREST-BEARING LIABILITIES Time deposits$
357,241
$
1,782
0.67
%
$
393,704
$
2,955
1.00
%
Brokered time deposits
37,400
206
0.73
15,692
75
0.64
Savings deposits
837,937
473
0.07
512,716
510
0.13
Demand deposits - interest bearing
1,422,583
3,644
0.34
1,200,584
1,861
0.21
Short term borrowings
45,568
631
1.85
3,155
7
0.30
Long term borrowings
87,915
2,505
3.80
68,306
1,075
2.10
Total interest-bearing liabilities
$
2,788,644
9,241
0.44
$
2,194,157
6,483
0.39
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing
$
966,173
$
682,584
Other liabilities
30,904
22,026
Stockholders' equity
380,626
362,399
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$
4,166,347
$
3,261,166
Net interest income and interest rate spread$
97,319
3.11
%
$
80,349
3.38
%
Net interest margin3.24
%
3.49
%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2022, adjustments of $238 thousand and $2.3 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. 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. 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 Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
2022
2022
2022
2021
2021
2022
2021
Total Assets
$
4,120,022
$
4,114,364
$
4,205,855
$
4,142,749
$
3,317,047
$
4,120,022
$
3,317,047
Less Goodwill and other intangibles
102,368
101,767
102,187
102,606
48,670
102,368
48,670
Tangible Assets
$
4,017,654
$
4,012,597
$
4,103,668
$
4,040,143
$
3,268,377
$
4,017,654
$
3,268,377
Average Assets
4,164,855
4,155,719
4,178,618
3,879,901
3,304,708
4,166,347
3,261,166
Less average Goodwill and other intangibles
101,981
102,042
102,462
84,580
48,879
102,160
49,192
Average Tangible Assets
$
4,062,874
$
4,053,677
$
4,076,156
$
3,795,321
$
3,255,829
$
4,064,187
$
3,211,974
Reconciliation of Common Stockholders' Equity to Tangible Common Equity
For the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
2022
2022
2022
2021
2021
2022
2021
Stockholders' Equity
$
265,619
$
321,449
$
393,886
$
472,432
$
377,524
$
265,619
$
377,524
Less Goodwill and other intangibles
102,368
101,767
102,187
102,606
48,670
102,368
48,670
Tangible Common Equity
$
163,251
$
219,682
$
291,699
$
369,826
$
328,854
$
163,251
$
328,854
Average Stockholders' Equity
330,300
354,981
456,206
431,709
375,208
380,626
362,399
Less average Goodwill and other intangibles
101,981
102,042
102,462
84,580
48,879
102,160
49,192
Average Tangible Common Equity
$
228,319
$
252,939
$
353,744
$
347,129
$
326,329
$
278,466
$
313,207
Reconciliation of Net Income, Less Merger and Certain Items
For the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
2022
2022
2022
2021
2021
2022
2021
Net income
$
15,446
$
15,951
$
15,844
$
5,702
$
16,011
$
47,241
$
46,142
Acquisition related costs - after tax
711
564
1,540
5,232
468
2,815
499
Acquisition related provision - after tax
0
0
0
3,846
0
0
0
Lawsuit settlement income - after tax
0
0
(6,616
)
0
0
(6,616
)
0
Lawsuit settlement contingent legal expense - after tax
0
0
1,639
0
0
1,639
0
Charitable donation - after tax
0
0
4,740
0
0
4,740
0
FHLB prepayment penalties - after tax
0
0
0
1,425
257
0
257
Net loss (gain) on asset/security sales - after tax
4
(25
)
97
134
(362
)
76
(732
)
Gain on sale of credit card portfolio - after tax
0
0
0
(189
)
0
0
0
Net income - Adjusted
$
16,161
$
16,490
$
17,244
$
16,150
$
16,374
$
49,895
$
46,166
Diluted EPS excluding merger and one-time items
$
0.48
$
0.49
$
0.51
$
0.50
$
0.58
$
1.47
$
1.63
Return on Average Assets excluding merger and certain items (Annualized)
1.55
%
1.59
%
1.65
%
1.65
%
1.97
%
1.60
%
1.89
%
Return on Average Equity excluding merger and certain items (Annualized)
19.57
%
18.58
%
15.12
%
14.84
%
17.31
%
17.48
%
16.99
%
Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)
28.31
%
26.08
%
19.50
%
18.46
%
19.91
%
23.89
%
19.65
%
Efficiency ratio excluding certain itemsFor the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
2022
2022
2022
2021
2021
2022
2021
Net interest income, after tax
$
32,636
$
32,583
$
32,100
$
30,486
$
27,256
$
97,319
$
80,349
Noninterest income
8,827
9,477
17,698
9,538
9,015
36,002
28,655
Legal settlement income
0
0
(8,375
)
0
0
(8,375
)
0
Net loss (gain) on asset/security sales
6
(32
)
123
170
(458
)
97
(927
)
Gain on sale of credit card portfolio
0
0
0
(239
)
0
0
0
Net interest income and noninterest income adjusted
41,469
42,028
41,546
39,955
35,813
125,043
108,077
Noninterest expense less intangible amortization
20,967
21,042
30,036
27,247
16,813
72,045
50,570
Charitable donation
0
0
6,000
0
0
6,000
0
Contingent legal settlement expense
0
0
2,075
0
0
2,075
0
Acquisition related costs
872
674
1,940
6,521
472
3,486
588
FHLB prepayment penalties
0
0
0
1,804
325
0
325
Noninterest income adjusted
20,095
20,368
20,021
18,922
16,016
60,484
49,657
Efficiency ratio excluding one-time items
48.46
%
48.46
%
48.19
%
47.36
%
44.72
%
48.37
%
45.95
%
Net interest margin excluding acquisition marks and PPP interest and feesFor the Three Months Ended
For the Nine Months Ended
Sept. 30,
June 30,
March 31,
Dec. 31,
Sept. 30,
Sept. 30,
Sept. 30,
2022
2022
2022
2021
2021
2022
2021
Net interest income, taxable equivalent
$
32,636
$
32,583
$
32,100
$
30,486
$
27,256
$
97,319
$
80,349
Acquisition marks
246
381
957
496
(35
)
1,584
436
PPP interest and fees
62
634
686
979
1,402
1,382
5,643
Adjusted and annualized net interest income
129,312
126,272
121,828
115,098
102,712
125,804
99,027
Average earning assets
4,065,085
4,015,385
3,931,506
3,631,320
3,120,336
4,005,372
3,261,166
Less PPP average balances
1,586
16,019
30,003
47,939
76,990
15,766
111,162
Adjusted average earning assets
4,063,499
3,999,366
3,901,503
3,583,381
3,043,346
3,989,606
3,150,004
Net interest margin excluding marks and PPP interest and fees
3.18
%
3.16
%
3.12
%
3.21
%
3.37
%
3.15
%
3.14
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20221025005827/en/