Farmers National Banc Corp. Announces Record 2021 Results
Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced financial results for the three and twelve months ended December 31, 2021.
On a GAAP basis, net income for the fourth quarter of 2021 was $5.7 million, or $0.18 per diluted share, compared to $11.4 million, or $0.40 per diluted share, for the three months ended December 31, 2020. The results for the quarter included pretax items for acquisition related provision for credit loss expense of $4.9 million, $6.5 million for acquisition costs, $1.8 million for a prepayment penalty on an FHLB advance, security gains of $25,000, a loss of $195,000 on the sale of assets, and a one-time gain of $239,000 for the sale of Farmers’ credit card portfolio. Excluding these items (non-GAAP), core net income for the quarter ended December 31, 2021, would have been $16.2 million, or $0.50 per diluted share.
Net income for the twelve months ended December 31, 2021, totaled $51.8 million, or $1.77 per diluted share, compared to $41.9 million, or $1.47 per diluted share for the twelve months ended December 31, 2020. Results for the year ended December 31, 2021, included pre-tax items for acquisition related provision for credit loss expense of $4.9 million, acquisition costs of $7.1 million, prepayment penalties on FHLB advances of $2.1 million, security gains of $1.0 million, a loss of $247,000 on the sale of assets, and the one-time gain of $239,000 on the sale of the credit card portfolio. Net income for the twelve months ended December 31, 2021, excluding these items (non-GAAP), was $62.3 million, or $2.13 per share.
On November 1, 2021, Farmers and Cortland Bancorp (“Cortland”) completed the previously announced merger of Cortland into Farmers in a cash and stock transaction. Under the terms of the merger agreement, shareholders of Cortland were able to elect to receive either $28.00 per share in cash or 1.75 shares of Farmers’ common stock, subject to an overall limitation of 75% of the Cortland shares being exchanged for Farmers shares and 25% for cash. The merger combines two complementary banking institutions with similar culture and operating philosophies, and will further solidify Farmers’ market share in Trumbull and Mahoning counties while expanding Farmers’ presence in the greater Cleveland market. In February 2022, the systems integration of Farmers and Cortland will be completed, bringing the combined 48 branches together under one name.
At the closing of the merger, Farmers issued 5.6 million shares of its common stock along with cash of $29.6 million, which represented a transaction value of approximately $128.5 million based on its closing stock price of $17.82 on October 31, 2021. The transaction value has been allocated to assets acquired and liabilities assumed, including $482.2 million in loans and loans held for sale, $305.2 million in other tangible assets, $695.3 million in deposits, $17.9 million in other liabilities and $54.4 million in goodwill and other intangible assets. Prior to closing, Cortland incurred $3.3 million of merger-related costs. The year-over-year comparison of Farmers results is impacted by the Cortland merger, with 2021 including two months of combined operations from Cortland compared to none in the prior year.
Kevin J. Helmick, President and CEO, stated, “The last two years have brought unbelievable challenges to the world and our industry. Through it all, the Farmers team has continued to deliver record earnings and superior returns while catering to the needs of the communities we serve. I am extremely proud of our staff for all of their hard work. With the closing of the Cortland acquisition, I look forward to the possibilities in 2022.”
Balance Sheet
Total assets at December 31, 2021, grew to $4.14 billion compared to $3.32 billion at September 30, 2021 and $3.07 billion at December 31, 2020. The acquisition of Cortland added $841.7 million in assets to the balance sheet. Gross loans (excluding loans held for sale) were $2.33 billion at December 31, 2021, compared to $1.89 billion at September 30, 2021 and $2.08 billion at December 31, 2020. Gross loan growth for the quarter totaled $436.9 million and included $470.6 million in gross loans associated with the acquisition of Cortland (excluding Cortland’s PPP loans) offset by a decline in PPP loan balances of $26.3 million (inclusive of Cortland’s PPP loans) and a decline in other loan balances of $7.4 million which includes the sale of the Company’s credit card portfolio. The credit card portfolio had a balance of $3.0 million at the time of sale. At December 31, 2021, the Company has $37.5 million of PPP loans before deferred fees still to be forgiven and $1.3 million in net deferred fees associated with these loans still to be recognized into income.
Available for sale securities increased to $1.43 billion at December 31, 2021, an increase of $852.1 million from December 31, 2020. During 2021, the Company continued to deploy excess cash balances into securities. The Cortland acquisition in the fourth quarter was responsible for $130.6 million of the growth in the portfolio.
Total deposits at December 31, 2021, were $3.55 billion compared to $2.87 billion at September 30, 2021, and $2.61 billion at December 31, 2020. The growth, year over year, was due to $695.3 million in deposits obtained in the acquisition of Cortland and $241.1 million of organic growth, or 9.2% organically. After adjusting for Cortland in the fourth quarter, deposits shrank $14.5 million for the quarter.
Total stockholders’ equity increased to $472.4 million at December 31, 2021, compared to $377.5 million at September 30, 2021 and $350.1 million at December 31, 2020. The increase in stockholders’ equity was due to the Cortland acquisition and the Company’s earnings offset by dividends paid to common shareholders and changes in other comprehensive income.
Credit Quality
Non-performing loans to loans declined to 0.69% at December 31, 2021, compared to 0.78% at September 30, 2021. Early stage delinquencies, defined as 30-89 days past due, were $8.9 million, or 0.38% of total loans, at December 31, 2021, compared to $6.9 million, or 0.37% of total loans, for the prior quarter.
On January 1, 2021, Farmers adopted the Current Expected Credit Loss (“CECL”) model of accounting for credit losses. At adoption, Farmers recorded a $2.16 million increase to its allowance for loan losses and a $0.29 million increase to its reserve for off-balance sheet commitments for a combined $2.45 million, of which $1.94 million was recorded as a reduction to retained earnings with the remainder to deferred taxes. In connection with the Cortland acquisition, on November 1, 2021, Farmers recorded a $6.16 million increase to its allowance for loan losses, which was comprised of $4.87 million required to be recorded as a provision for credit losses related to non-purchased credit deteriorated loans and $1.29 million required to be recorded as a reduction of loan balances for purchased credit deteriorated loans.
Excluding the merger impact noted above, the fourth quarter 2021 results include net charge-offs of $313,000 and a provision for credit loss of $691,000 compared to net charge-offs of $197,000 and a provision expense of $3.0 million for the same period in 2020. As an overall percentage of loans, the allowance for credit losses increased to 1.26% at December 31, 2021, compared to 1.22% for the quarter ended September 30, 2021. Excluding the PPP loans, this allowance for credit losses to gross loans ratio increases to 1.28% (non-GAAP) as of December 31, 2021. Total net charge-offs as a percentage of average net loans outstanding was 6 basis points for the quarter ended December 31, 2021, compared to 4 basis points for the fourth quarter of 2020.
Net interest income
Net interest income was $29.7 million for the fourth quarter of 2021 compared to $25.8 million for the fourth quarter of 2020. The increase was due to growth in average interest earning assets, including the acquisition of Cortland, offset by a decline in net interest margin of 36 basis points. The net interest margin was 3.33% for the current quarter which is down from the 3.47% net interest margin reported in the third quarter of 2021 and lower than the 3.69% net interest margin reported in the fourth quarter of 2020. The decline in net interest margin in the fourth quarter of 2021 compared to the third quarter of 2021 was driven by the acquisition of Cortland and the issuance of subordinated debt, the proceeds of which were used to purchase securities. Excluding the impact of acquisition marks and related accretion and PPP interest and fees (non-GAAP), the net interest margin for the fourth quarter of 2021 was 3.21% compared to 3.37% for the third quarter of 2021 and 3.51% for the fourth quarter of 2020.
Noninterest income
Noninterest income declined to $9.5 million for the quarter ended December 31, 2021 compared to $10.5 million for the fourth quarter in 2020. Net gains on the sale of loans decreased to $1.7 million for the fourth quarter of 2021 compared to $3.6 million in the fourth quarter of 2020 due to lower origination volumes and tighter margins. In addition, security gains and other noninterest income were lower by $154,000 and $251,000, respectively, in the fourth quarter of 2021 compared to the same period in 2020. These declines have been partially offset by increases to service charges on deposit of $208,000, a 22.4% increase, trust fees of $559,000, a 28.7% increase, investment commissions of $161,000, a 35.8% increase, and an increase in bank owned life insurance (BOLI) income of $227,000 from the purchase of additional insurance in December 2020 and the addition of Cortland’s BOLI.
Noninterest expense
Total noninterest expense for the fourth quarter of 2021 increased to $27.7 million compared to $19.6 million in the fourth quarter of 2020. Excluding merger related costs and a $1.8 million prepayment penalty for the payoff of a $40 million FHLB advance, noninterest expense in the fourth quarter of 2021 was $19.3 million compared to $17.8 million of noninterest expense in the fourth quarter of 2020 after excluding merger related costs in that quarter. This increase in noninterest expense after adjusting for these items was primarily due to the acquisition of Cortland.
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 December 31, 2021, Farmers had no customers still on deferral.
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 that 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.
About Farmers National Banc Corp.
Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $4.4 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 48 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 December 31, 2021 are $3.1 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, 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.
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 Twelve Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
Percent
2021
2021
2021
2021
2020
2021
2020
Change
Total interest income$31,685
$28,375
$28,609
$27,790
$28,833
$116,459
$112,327
3.7%
Total interest expense1,986
1,841
2,119
2,523
3,030
8,469
16,136
-47.5%
Net interest income29,699
26,534
26,490
25,267
25,803
107,990
96,191
12.3%
Provision for credit losses5,366
(948)
50
425
3,000
4,893
9,100
-46.2%
Noninterest income9,538
9,015
9,508
10,132
10,499
38,193
36,161
5.6%
Acquisition related costs6,521
472
104
12
1,798
7,109
3,223
120.6%
Other expense21,140
16,656
16,966
17,305
17,796
72,067
69,757
3.3%
Income before income taxes6,210
19,369
18,878
17,657
13,708
62,114
50,272
23.6%
Income taxes508
3,358
3,303
3,101
2,351
10,270
8,396
22.3%
Net income$5,702
$16,011
$15,575
$14,556
$11,357
$51,844
$41,876
23.8%
Average diluted shares outstanding32,074
28,361
28,353
28,336
28,322
29,280
28,394
Basic earnings per share0.18
0.57
0.55
0.52
0.40
1.78
1.48
Diluted earnings per share0.18
0.56
0.55
0.51
0.40
1.77
1.47
Cash dividends per share0.14
0.11
0.11
0.11
0.11
0.47
0.44
Performance Ratios Net Interest Margin (Annualized)3.33%
3.47%
3.52%
3.54%
3.69%
3.45%
3.70%
Efficiency Ratio (Tax equivalent basis)63.61%
46.04%
45.70%
47.76%
50.07%
51.13%
52.55%
Return on Average Assets (Annualized)0.58%
1.92%
1.90%
1.87%
1.49%
1.52%
1.46%
Return on Average Equity (Annualized)5.24%
16.93%
17.17%
16.81%
13.10%
13.64%
12.80%
Dividends to Net Income82.99%
19.41%
19.95%
21.35%
27.30%
27.11%
29.62%
Other Performance Ratios (Non-GAAP) Return on Average Tangible Assets0.60%
1.97%
1.93%
1.87%
1.52%
1.55%
1.48%
Return on Average Tangible Equity6.57%
19.63%
19.81%
19.30%
15.48%
16.13%
15.07%
Consolidated Statements of Financial ConditionDec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
2021
2021
2021
2021
2020
Assets Cash and cash equivalents$112,790
$79,808
$149,357
$326,385
$254,621
Securities available for sale1,427,677
1,183,361
996,271
802,866
575,600
Other investments30,459
19,041
20,573
21,317
21,528
Loans held for sale4,545
2,628
1,922
3,993
4,766
Loans2,331,082
1,894,216
1,959,865
2,037,404
2,078,044
Less allowance for credit losses (a)29,386
23,136
24,806
24,935
22,144
Net Loans2,301,696
1,871,080
1,935,059
2,012,469
2,055,900
Other assets265,582
161,129
156,876
157,494
158,733
Total Assets$4,142,749
$3,317,047
$3,260,058
$3,324,524
$3,071,148
Liabilities and Stockholders' Equity Deposits Noninterest-bearing$916,237
$675,938
$663,640
$675,045
$608,791
Interest-bearing2,630,998
2,190,475
2,115,183
2,158,009
2,002,087
Total deposits3,547,235
2,866,413
2,778,823
2,833,054
2,610,878
Other interest-bearing liabilities87,758
49,649
78,369
79,683
78,906
Other liabilities35,324
23,461
35,958
64,432
31,267
Total liabilities3,670,317
2,939,523
2,893,150
2,977,169
2,721,051
Stockholders' Equity472,432
377,524
366,908
347,355
350,097
Total Liabilities and Stockholders' Equity$4,142,749
$3,317,047
$3,260,058
$3,324,524
$3,071,148
Period-end shares outstanding33,898
28,322
28,322
28,308
28,258
Book value per share$13.94
$13.33
$12.95
$12.27
$12.39
Tangible book value per share (Non-GAAP)*10.91
11.61
11.23
10.53
10.63
* 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)13.13%
14.58%
13.95%
13.49%
13.22%
Total Risk Based Capital Ratio (b)17.56%
16.25%
15.54%
15.10%
14.72%
Tier 1 Risk Based Capital Ratio (b)13.79%
15.18%
14.39%
13.93%
13.67%
Tier 1 Leverage Ratio (b)10.11%
10.17%
9.70%
9.69%
9.77%
Equity to Asset Ratio11.40%
11.38%
11.25%
10.45%
11.40%
Tangible Common Equity Ratio (c)9.15%
10.06%
9.90%
9.10%
9.94%
Net Loans to Assets55.56%
56.41%
59.36%
60.53%
66.94%
Loans to Deposits65.72%
66.08%
70.53%
71.92%
79.59%
Asset Quality Non-performing loans$16,195
$14,744
$13,873
$11,640
$13,835
Other Real Estate Owned0
0
30
30
0
Non-performing assets16,195
14,744
13,903
11,670
13,835
Loans 30 - 89 days delinquent8,891
6,944
7,606
7,183
9,297
Charged-off loans470
411
502
284
387
Recoveries157
125
323
200
190
Net Charge-offs313
286
179
84
197
Annualized Net Charge-offs to Average Net Loans Outstanding0.06%
0.06%
0.04%
0.02%
0.04%
Allowance for Credit Losses to Total Loans (a)1.26%
1.22%
1.27%
1.22%
1.07%
Non-performing Loans to Total Loans0.69%
0.78%
0.71%
0.57%
0.67%
Allowance to Non-performing Loans (a)181.45%
156.92%
178.81%
214.22%
160.06%
Non-performing Assets to Total Assets0.39%
0.44%
0.43%
0.35%
0.45%
(a) CECL methodology used during 2021. Prior periods used the incurred loss methodology. (b) December 31, 2021 ratio is estimated (c) 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 Balances2021
2021
2021
2021
2020
Commercial real estate$1,011,891
$690,407
$704,809
$702,556
$713,936
Commercial313,836
302,356
351,261
406,064
404,492
Residential real estate453,635
376,901
383,187
400,982
413,841
HELOC127,433
106,750
107,153
107,501
110,352
Consumer189,522
189,497
190,064
193,295
203,061
Agricultural loans232,365
226,896
223,427
227,073
232,129
Total, excluding net deferred loan costs$2,328,682
$1,892,807
$1,959,901
$2,037,471
$2,077,811
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 Income2021
2021
2021
2021
2020
2021
2020
Service charges on deposit accounts$1,138
$924
$790
$808
$930
$3,660
$3,682
Bank owned life insurance income414
340
300
284
187
1,338
795
Trust fees2,509
2,335
2,358
2,236
1,950
9,438
7,632
Insurance agency commissions706
799
948
1,003
776
3,456
3,124
Security gains, including fair value changes25
459
32
488
179
1,004
380
Retirement plan consulting fees378
334
389
320
394
1,421
1,523
Investment commissions611
638
523
504
450
2,276
1,530
Net gains on sale of loans1,728
1,466
2,191
2,900
3,610
8,285
11,362
Other mortgage banking fee income, net2
32
(55)
(115)
108
(136)
(83)
Debit card and EFT fees1,424
1,227
1,322
1,171
1,061
5,144
4,264
Other noninterest income603
461
710
533
854
2,307
1,952
Total Noninterest Income$9,538
$9,015
$9,508
$10,132
$10,499
$38,193
$36,161
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 Expense2021
2021
2021
2021
2020
2021
2020
Salaries and employee benefits$10,230
$9,321
$9,866
$9,976
$9,638
$39,393
$39,826
Occupancy and equipment2,422
1,899
1,890
2,275
2,060
8,486
7,254
State and local taxes620
552
551
554
515
2,277
2,138
Professional fees1,296
1,009
830
1,056
341
4,191
2,733
Merger related costs6,521
472
104
12
1,798
7,109
3,223
Advertising776
466
357
260
478
1,859
1,531
FDIC insurance152
140
120
170
100
582
750
Intangible amortization414
316
316
316
332
1,362
1,327
Core processing charges880
860
831
627
831
3,198
3,551
Other noninterest expenses4,350
2,093
2,205
2,071
3,501
10,719
10,647
Total Noninterest Expense$27,661
$17,128
$17,070
$17,317
$19,594
$79,176
$72,980
Business Combination Consideration Cash$ 29,618
Stock98,921
Fair value of total consideration transferred$ 128,539
Fair value of assets acquired Cash and cash equivalents$ 113,391
Securities available for sale130,574
Other investments16,092
Loans, net482,168
Premises and equipment12,644
Bank owned life insurance21,547
Core deposit intangible5,886
Current and deferred taxes3,135
Other assets7,805
Total assets acquired793,242
Fair value of liabilities assumed Deposits695,274
Short-term borrowings4,246
Long-term borrowings4,262
Accrued interest payable and other liabilities9,386
Total liabilities713,168
Net assets acquired$ 80,074
Goodwill created48,465
Total net assets acquired$ 128,539
Average Balance Sheets and Related Yields and Rates
(Dollar Amounts in Thousands)
Three Months Ended
Three Months Ended
December 31, 2021
December 31, 2020
AVERAGE
YIELD/
AVERAGE
YIELD/
BALANCE
INTEREST (1)
RATE (1)
BALANCE
INTEREST (1)
RATE (1)
EARNING ASSETS Loans (2)$2,187,770
$24,946
4.52%
$2,110,031
$25,409
4.79%
Taxable securities892,563
3,948
1.75
223,306
1,335
2.38
Tax-exempt securities (2)410,016
3,397
3.29
262,829
2,514
3.81
Other investments26,475
142
2.13
15,138
128
3.36
Federal funds sold and other114,496
39
0.14
237,357
67
0.11
Total earning assets3,631,320
32,472
3.55
2,848,661
29,453
4.11
Nonearning assets248,581
184,344
Total assets$3,879,901
$3,033,005
INTEREST-BEARING LIABILITIES Time deposits$379,786
$697
0.73%
$458,340
$1,591
1.38%
Brokered time deposits0
0
0.00
43,685
98
0.89
Savings deposits736,732
202
0.11
489,071
236
0.19
Demand deposits - interest bearing1,367,921
475
0.14
995,977
804
0.32
Short term borrowings0
2
0.00
3,859
7
0.72
Long term borrowings80,799
610
3.00
76,400
294
1.53
Total interest-bearing liabilities$2,565,238
1,986
0.31
$2,067,332
3,030
0.58
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing851,130
593,955
Other liabilities31,824
26,769
Stockholders' equity431,709
344,949
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$3,879,901
$3,033,005
Net interest income and interest rate spread$30,486
3.24%
$26,423
3.53%
Net interest margin3.33%
3.69%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2021, adjustments of $86 thousand and $701 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2020, adjustments of $101 thousand and $519 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, 2021
December 31, 2020
AVERAGE
YIELD/
AVERAGE
YIELD/
BALANCE
INTEREST (1)
RATE (1)
BALANCE
INTEREST (1)
RATE (1)
EARNING ASSETS Loans (2)$2,041,347
$95,180
4.66%
$2,062,936
$98,779
4.79%
Taxable securities617,475
11,399
1.85
209,817
5,423
2.58
Tax-exempt securities (2)348,627
12,027
3.45
250,394
9,675
3.86
Other investments21,912
498
2.27
16,073
543
3.38
Federal funds sold and other180,718
201
0.11
124,447
298
0.24
Total earning assets3,210,079
119,305
3.72
2,663,667
114,718
4.31
Nonearning assets195,805
205,727
Total assets$3,405,884
$2,869,394
INTEREST-BEARING LIABILITIES Time deposits$393,039
$3,652
0.93%
$480,302
$8,083
1.68%
Brokered time deposits11,737
75
0.64
72,472
1,057
1.46
Savings deposits569,179
712
0.13
462,021
1,080
0.23
Demand deposits - interest bearing1,240,014
2,336
0.19
856,462
4,161
0.49
Short term borrowings3,957
11
0.28
20,764
359
1.73
Long term borrowings70,057
1,683
2.40
82,451
1,396
1.69
Total interest-bearing liabilities$2,287,983
8,469
0.37
$1,974,472
16,136
0.82
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits - noninterest bearing$714,978
$546,177
Other liabilities23,498
21,570
Stockholders' equity379,425
327,175
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$3,405,884
$2,869,394
Net interest income and interest rate spread$110,836
3.35%
$98,582
3.49%
Net interest margin3.45%
3.70%
(1) Interest and yields are calculated on a tax-equivalent basis where applicable. (2) For 2021, adjustments of $360 thousand and $2.5 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2020, adjustments of $400 thousand and $2.0 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,
2021
2021
2021
2021
2020
2021
2020
Total Assets$4,142,749
$3,317,047
$3,260,058
$3,324,524
$3,071,148
$4,142,749
$3,071,148
Less Goodwill and other intangibles102,606
48,670
48,985
49,301
49,617
102,606
49,617
Tangible Assets$4,040,143
$3,268,377
$3,211,073
$3,275,223
$3,021,531
$4,040,143
$3,021,531
Average Assets3,879,901
3,304,708
3,280,316
3,155,695
3,033,005
3,405,912
2,869,394
Less average Goodwill and other intangibles84,580
48,879
49,193
49,509
51,476
58,111
49,363
Average Tangible Assets$3,795,321
$3,255,829
$3,231,123
$3,106,186
$2,981,529
$3,347,801
$2,820,031
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,
2021
2021
2021
2021
2020
2021
2020
Stockholders' Equity$472,432
$377,524
$366,908
$347,355
$350,097
$472,432
$350,097
Less Goodwill and other intangibles102,606
48,670
48,985
49,301
49,617
102,606
49,617
Tangible Common Equity$369,826
$328,854
$317,923
$298,054
$300,480
$369,826
$300,480
Average Stockholders' Equity431,709
375,208
363,753
351,190
344,949
379,425
327,175
Less average Goodwill and other intangibles84,580
48,879
49,193
49,509
51,476
58,111
49,363
Average Tangible Common Equity$347,129
$326,329
$314,560
$301,681
$293,473
$321,314
$277,812
Reconciliation of Net Income, Less Merger and One-Time ItemsFor the Three Months Ended
For the Twelve Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2021
2021
2021
2021
2020
2021
2020
Net income$5,702
$16,011
$15,575
$14,556
$11,357
$51,844
$41,876
Acquisition related costs - after tax5,232
468
83
9
1,431
5,731
2,585
Acquisition related provision - after tax3,846
0
0
0
0
3,846
0
FHLB prepayment penalties - after tax1,425
257
0
0
0
1,682
666
Net loss (gain) on asset/security sales - after tax134
(362)
(26)
(344)
502
(598)
404
Gain on sale of credit card portfolio - after tax(189)
0
0
0
0
(189)
0
Net income - Adjusted$16,150
$16,374
$15,632
$14,221
$13,290
$62,316
$45,531
Diluted EPS excluding merger and one-time items$0.50
$0.58
$0.55
$0.50
$0.47
$2.13
$1.60
Return on Average Assets excluding merger and one-time items (Annualized)1.65%
1.97%
1.91%
1.83%
1.74%
1.83%
1.59%
Return on Average Equity excluding merger and one-time items (Annualized)14.84%
17.31%
17.24%
16.42%
15.29%
16.42%
13.92%
Return on Average Tangible Equity excluding acquisition costs and one-time items (Annualized)18.46%
19.91%
19.93%
19.12%
17.97%
19.39%
16.39%
Efficiency ratio excluding one-time itemsFor the Three Months Ended
For the Twelve Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2021
2021
2021
2021
2020
2021
2020
Net interest income, after tax$30,492
$27,256
$27,192
$25,901
$26,423
$110,840
$98,582
Noninterest income9,538
9,015
9,508
10,132
10,499
38,193
36,161
Net loss (gain) on asset/security sales170
(458)
(33)
(436)
635
(757)
511
Gain on sale of credit card portfolio(239)
0
0
0
0
(239)
0
Net interest income and noninterest income adjusted39,961
35,813
36,667
35,597
37,557
148,037
135,254
Noninterest expense less intangible amortization27,247
16,813
16,755
17,002
19,213
77,817
70,001
Acquisition related costs6,521
472
104
12
1,798
7,109
3,223
FHLB prepayment penalties1,804
325
0
0
0
2,129
0
Noninterest income adjusted18,922
16,016
16,651
16,990
17,415
68,579
66,778
Efficiency ratio excluding one-time items47.35%
44.72%
45.41%
47.73%
46.37%
46.33%
49.37%
Net interest margin excluding acquisition marks and PPP interest and feesFor the Three Months Ended
For the Twelve Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
Dec. 31,
Dec. 31,
2021
2021
2021
2021
2020
2021
2020
Net interest income, fully-taxable equivalent$ 30,486
$ 27,256
$ 27,192
$ 25,901
$ 26,423
$ 110,836
$ 98,582
Acquisition marks496
(35)
200
271
308
932
1,126
PPP interest and fees979
1,402
2,097
2,144
2,456
6,621
4,914
Adjusted and annualized net interest income115,098
102,712
99,854
95,249
93,865
103,283
92,542
Average earning assets3,631,320
3,120,336
3,077,915
2,937,144
2,848,661
3,210,079
2,663,667
less PPP average balances47,939
76,990
131,856
125,168
177,382
95,226
121,641
Adjusted average earning assets3,583,381
3,043,346
2,946,059
2,811,976
2,671,279
3,114,853
2,542,026
Net interest margin excluding marks and PPP interest and fees3.21%
3.37%
3.39%
3.39%
3.51%
3.32%
3.64%
Reconciliation of Allowance for Credit Losses to Gross Loans, Excluding PPP Loans and Acquired LoansFor the Three Months Ended
Dec. 31,
Sept. 30,
June 30,
March 31,
Dec. 31,
2021
2021
2021
2020
2020
Gross Loans$ 2,331,082
$ 1,894,216
$ 1,959,865
$ 2,037,404
$ 2,078,044
PPP Loans, net36,215
53,580
92,073
136,826
125,396
Loans less PPP2,294,867
1,840,636
1,867,792
1,900,578
1,952,648
Allowance for Credit Losses to Gross Loans Excluding PPP (a)1.28%
1.26%
1.33%
1.31%
1.13%
Acquired Loans654,552
211,954
233,790
251,616
272,150
(a) CECL methodology used for the 2021 quarters. Prior period used the incurred loss methodology.
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