Equity Bancshares, Inc. Reports Third Quarter Results, Continued Organic Growth

GlobeNewswire
WICHITA, Kan., Oct. 18, 2022 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ: EQBK), (“Equity”, “the Company”, “we,” “us,” “our”), the Wichita-based holding company of Equity Bank, reported net income of $15.2 million and $0.93 earnings per diluted share for the quarter ended September 30, 2022.
"In 2022, our Company has realized meaningful, organic growth while emphasizing return to our stockholders via earnings, share buybacks, and an increasing dividend. Annualized growth within our commercial and commercial real estate loan portfolios of 17.13% is a credit to our sales and operational teams,” said Brad S. Elliott, Chairman and CEO, Equity Bancshares, Inc. “We have been diligent in enhancing our sales process, expanding our marketing geography, and hiring exceptional operators which has and will continue to drive our Company’s success.”
“At the end of the quarter, our classified asset ratio is down more than 50% year-to-date and at an all-time low for our Company,” continued Mr. Elliott. “The committed efforts of our sales and credit teams to source and underwrite strong credits while meeting the financing needs of the communities we serve allows our Company to hold true to its mission as a community bank.”
Notable Items:
During the third quarter, the Company realized continued loan growth excluding the impact of PPP assets and sold branches bringing annualized loan growth year-to-date to 7.01%.
During the quarter, the Company realized linked period Net Interest Margin growth of 23 basis points, and Net Interest Income growth of $2.38 million.
The Company continued to emphasize investor returns through repurchase of 126,900 shares during the quarter, at an average price of $32.51, as well as the expansion of our quarterly dividend program to $0.10 per share. Also during the quarter, the Company’s Board authorized the repurchase of up to 1 million shares and the Company received non-objection from the Federal Reserve Bank of Kansas City related to the repurchase plan.
Net income allocable to common stockholders was $15.2 million, or $0.93 per diluted share, for the three months ended September 30, 2022, as compared to $15.3 million, or $0.94 per diluted share, for the three months ended June 30, 2022. The decrease for the second quarter of 2022 is primarily driven by income taxes as a true-up of rate was experienced in the second quarter that, as expected, did not repeat. Pre-tax income increased $1.9 million as the Company's net interest income benefitted from increasing interest rates.
Net Interest Income
Net interest income was $41.9 million for the three months ended September 30, 2022, as compared to $39.6 million for the three months ended June 30, 2022, an increase of $2.4 million, or 6.1%. The yield on interest-earning assets increased 44 basis points to 4.18% during the quarter ended September 30, 2022, as compared to 3.74% for the quarter ended June 30, 2022. The cost of interest-bearing deposits increased by 29 basis points during the quarter, moving from 0.28% at June 30, 2022 to 0.57% at September 30, 2022.
Provision for Credit Losses
During the three months ended September 30, 2022, there was a net release of $136 thousand compared to a provision to the allowance for credit losses of $824 thousand in the previous quarter. The minimal release of provision for the quarter is the result of having a relatively similar sized loan portfolio and similar realized loss rates; however, the Company continues to estimate the allowance for credit loss with assumptions that anticipate slowing prepayments rates and continued market disruption caused by elevated inflation, supply chain issues and the impact of monetary policy on consumers and businesses. For the three months ended September 30, 2022, we had net charge-offs of $1.6 million as compared to $176 thousand for the three months ended June 30, 2022.
Non-Interest Income
Total non-interest income was $9.0 million for the three months ended September 30, 2022, as compared to $9.6 million for the three months ended June 30, 2022, or a decrease of 6.9%, quarter over quarter. The $600 thousand decrease was primarily due to a decrease in net gain on acquisition and branch sales of $540 thousand.
Non-Interest Expense
Total non-interest expense for the quarter ended September 30, 2022, was $32.2 million as compared to $31.4 million for the quarter ended June 30, 2022. The $800 thousand change was primarily due to an increase in data processing of $496 thousand and an increase in the write-off of tax investments of $423 thousand for the quarter ended September 30, 2022, compared to the quarter ended June 30, 2022.
As of September 30, 2022, Equity’s allowance for credit losses to total loans decreased to 1.4% as compared to 1.5% at June 30, 2022. Nonperforming assets were $29.7 million as of September, 2022, or 0.6% of total assets, compared to $37.0 million at June 30, 2022, or 0.7% of total assets. Non-accrual loans were $23.1 million at September 30, 2022, as compared to $18.9 million at June 30, 2022. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $63.1 million, or 11.0% of regulatory capital, down from $72.1 million, or 13.1% of regulatory capital as of June 30, 2022.
During the quarter ended September 30, 2022, non-performing assets decreased $7.3 million due to decreases in other repossessed assets of $8.7 million and other real estate owned of $2.5 million, partially offset by increases in non-accrual loans of $4.3 million.
The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.1%, the total capital to risk-weighted assets was 16.0% and the total leverage ratio was 9.7% at September 30, 2022. At June 30, 2022, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 12.1%, the total capital to risk-weighted assets ratio was 16.0% and the total leverage ratio was 9.1%.
The Company’s subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.1%, a ratio of total capital to risk-weighted assets of 15.4% and a total leverage ratio of 10.5% at September 30, 2022. At June 30, 2022, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 13.9%, the ratio of total capital to risk-weighted assets was 15.1% and the total leverage ratio was 9.9%.
In addition to evaluating the Company’s results of operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures that are intended to provide the reader with additional perspectives on operating results, financial condition and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company’s GAAP financial information.
The efficiency ratio is a common comparable metric used by banks to understand the expense structure relative to total revenue. In other words, for every dollar of total revenue recognized, how much of that dollar is expended. To improve the comparability of the ratio to our peers, non-core items are excluded. To improve transparency and acknowledging that banks are not consistent in their definition of the efficiency ratio, we include our calculation of this non-GAAP measure.
Return on average assets before income tax provision and provision for loan losses is a measure that the Company uses to understand fundamental operating performance before these expenses. Used as a ratio relative to average assets, we believe it demonstrates “core” performance and can be viewed as an alternative measure of how efficiently the Company services its asset base. Used as a ratio relative to average equity, it can function as an alternative measure of the Company’s earnings performance in relationship to its equity.
Tangible common equity and related measures are non-GAAP financial measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These financial measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Return on average tangible common equity is used by management and readers of our financial statements to understand how efficiently the Company is deploying its common equity. Companies that are able to demonstrate more efficient use of common equity are more likely to be viewed favorably by current and prospective investors.
The Company believes that disclosing these non-GAAP financial measures is both useful internally and is expected by our investors and analysts in order to understand the overall performance of the Company. Other companies may calculate and define their non-GAAP financial measures and supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in Table 6 in the following press release tables.
Equity’s Chairman and Chief Executive Officer, Brad Elliott, and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss third quarter results on Wednesday, October 19, 2022 at 10 a.m. eastern time or 9 a.m. central time.
A live webcast of the call will be available on the Company’s website at . To access the call by phone, please go to this , and you will be provided with dial in details. Investors, news media, and other participants are encouraged to dial into the conference call ten minutes ahead of the scheduled start time.
A replay of the call and webcast will be available two hours following the close of the call until October 26, 2022, accessible at .
Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions, including commercial loans, consumer banking, mortgage loans, trust and wealth management services and treasury management services, while delivering the high-quality, relationship-based customer service of a community bank. Equity’s common stock is traded on the NASDAQ Global Select Market under the symbol “EQBK.” Learn more at .
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of Equity’s management with respect to, among other things, future events and Equity’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity’s control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from Equity’s expectations include COVID-19 related impacts; competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses; and similar variables. The foregoing list of factors is not exhaustive.
For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Equity’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2022, and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity’s behalf may issue.
Chris Navratil
SVP, Finance
Equity Bancshares, Inc.
(316) 612-6014
[email protected]
John J. Hanley
SVP, Senior Director of Marketing
Equity Bancshares, Inc.
(913) 583-8004
[email protected]
Table 1. Consolidated Statements of Income
Table 2. Quarterly Consolidated Statements of Income
Table 3. Consolidated Balance Sheets
Table 4. Selected Financial Highlights
Table 5. Year-To-Date Net Interest Income Analysis
Table 6. Quarter-To-Date Net Interest Income Analysis
Table 7. Quarter-Over-Quarter Net Interest Income Analysis
Table 8. Non-GAAP Financial Measures
TABLE 1. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
Three months ended
September 30,
Nine months ended
September 30,
Interest and dividend income
Loans, including fees
$
41,555
$
37,581
$
114,710
$
102,392
Securities, taxable
5,792
3,920
16,767
11,242
Securities, nontaxable
687
655
2,020
2,096
Federal funds sold and other
514
290
1,327
846
Total interest and dividend income
48,548
42,446
134,824
116,576
Interest expense
Deposits
4,403
1,881
8,308
6,316
Federal funds purchased and retail repurchase agreements
71
24
150
72
Federal Home Loan Bank advances
409
10
594
155
Subordinated debt
1,721
1,556
4,973
4,669
Total interest expense
6,604
3,471
14,025
11,212
Net interest income
41,944
38,975
120,799
105,364
Provision (reversal) for credit losses
(136
)
1,058
276
(6,355
)
Net interest income after provision (reversal) for credit losses
42,080
37,917
120,523
111,719
Non-interest income
Service charges and fees
2,788
2,360
7,927
6,125
Debit card income
2,682
2,574
8,120
7,603
Mortgage banking
310
801
1,300
2,584
Increase in value of bank-owned life insurance
754
1,169
2,355
2,446
Net gain on acquisition and branch sales
—
—
540
585
Net gains (losses) from securities transactions
(17
)
381
(9
)
398
Other
2,452
546
7,395
3,902
Total non-interest income
8,969
7,831
27,628
23,643
Non-interest expense
Salaries and employee benefits
15,442
13,588
45,893
39,079
Net occupancy and equipment
3,127
2,475
9,304
7,170
Data processing
4,138
3,257
11,549
9,394
Professional fees
1,265
1,076
3,547
3,148
Advertising and business development
1,191
760
3,139
2,241
Telecommunications
487
439
1,399
1,531
FDIC insurance
340
465
780
1,305
Courier and postage
436
344
1,348
1,040
Free nationwide ATM cost
551
519
1,593
1,504
Amortization of core deposit intangibles
957
1,030
3,118
3,094
Loan expense
174
207
566
626
Other real estate owned
188
(342
)
201
(805
)
Loss on debt extinguishment
—
372
—
372
Merger expenses
115
4,015
526
4,627
Other
3,825
2,484
10,168
7,050
Total non-interest expense
32,236
30,689
93,131
81,376
Income (loss) before income tax
18,813
15,059
55,020
53,986
Provision for income taxes
3,642
3,286
8,940
11,972
Net income (loss) and net income (loss) allocable to common stockholders
$
15,171
$
11,773
$
46,080
$
42,014
Basic earnings (loss) per share
$
0.94
$
0.82
$
2.83
$
2.92
Diluted earnings (loss) per share
$
0.93
$
0.80
$
2.79
$
2.86
Weighted average common shares
16,056,658
14,384,302
16,303,586
14,397,146
Weighted average diluted common shares
16,273,231
14,669,312
16,516,787
14,688,092
TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
As of and for the three months ended
Interest and dividend income
Loans, including fees
$
41,555
$
36,849
$
36,306
$
34,942
$
37,581
Securities, taxable
5,792
5,584
5,391
4,754
3,920
Securities, nontaxable
687
678
655
747
655
Federal funds sold and other
514
513
300
349
290
Total interest and dividend income
48,548
43,624
42,652
40,792
42,446
Interest expense
Deposits
4,403
2,183
1,722
1,939
1,881
Federal funds purchased and retail repurchase agreements
71
46
33
32
24
Federal Home Loan Bank advances
409
176
9
14
10
Subordinated debt
1,721
1,653
1,599
1,592
1,556
Total interest expense
6,604
4,058
3,363
3,577
3,471
Net interest income
41,944
39,566
39,289
37,215
38,975
Provision (reversal) for credit losses
(136
)
824
(412
)
(2,125
)
1,058
Net interest income after provision (reversal) for credit losses
42,080
38,742
39,701
39,340
37,917
Non-interest income
Service charges and fees
2,788
2,617
2,522
2,471
2,360
Debit card income
2,682
2,810
2,628
2,633
2,574
Mortgage banking
310
428
562
722
801
Increase in value of bank-owned life insurance
754
736
865
1,060
1,169
Net gain on acquisition and branch sales
—
540
—
—
—
Net gains (losses) from securities transactions
(17
)
(32
)
40
8
381
Other
2,452
2,538
2,405
2,305
546
Total non-interest income
8,969
9,637
9,022
9,199
7,831
Non-interest expense
Salaries and employee benefits
15,442
15,383
15,068
15,119
13,588
Net occupancy and equipment
3,127
3,007
3,170
2,967
2,475
Data processing
4,138
3,642
3,769
3,867
3,257
Professional fees
1,265
1,111
1,171
1,565
1,076
Advertising and business development
1,191
972
976
1,129
760
Telecommunications
487
442
470
435
439
FDIC insurance
340
260
180
360
465
Courier and postage
436
489
423
389
344
Free nationwide ATM cost
551
541
501
515
519
Amortization of core deposit intangibles
957
1,111
1,050
1,080
1,030
Loan expense
174
207
185
308
207
Other real estate owned
188
14
(1
)
617
(342
)
Loss on debt extinguishment
—
—
—
—
372
Merger expenses
115
88
323
4,562
4,015
Other
3,825
4,169
2,174
5,176
2,484
Total non-interest expense
32,236
31,436
29,459
38,089
30,689
Income (loss) before income tax
18,813
16,943
19,264
10,450
15,059
Provision for income taxes (benefit)
3,642
1,684
3,614
(16
)
3,286
Net income (loss) and net income (loss) allocable to common stockholders
$
15,171
$
15,259
$
15,650
$
10,466
$
11,773
Basic earnings (loss) per share
$
0.94
$
0.95
$
0.94
$
0.62
$
0.82
Diluted earnings (loss) per share
$
0.93
$
0.94
$
0.93
$
0.61
$
0.80
Weighted average common shares
16,056,658
16,206,978
16,652,556
16,865,167
14,384,302
Weighted average diluted common shares
16,273,231
16,413,248
16,869,152
17,141,174
14,669,312
TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
ASSETS
Cash and due from banks
$
155,039
$
103,126
$
89,764
$
259,131
$
141,645
Federal funds sold
374
458
286
823
673
Cash and cash equivalents
155,413
103,584
90,050
259,954
142,318
Available-for-sale securities
1,198,962
1,288,180
1,352,894
1,327,442
1,157,423
Loans held for sale
1,518
1,714
1,575
4,214
4,108
Loans, net of allowance for credit losses(1)
3,208,524
3,175,208
3,194,987
3,107,262
2,633,148
Other real estate owned, net
10,412
12,969
9,897
9,523
10,267
Premises and equipment, net
100,566
101,212
103,168
104,038
90,727
Bank-owned life insurance
122,418
121,665
120,928
120,787
103,431
Federal Reserve Bank and Federal Home Loan Bank stock
24,428
21,479
19,890
17,510
14,540
Interest receivable
18,497
16,519
16,923
18,048
15,519
Goodwill
53,101
53,101
54,465
54,465
31,601
Core deposit intangibles, net
11,598
12,554
13,830
14,879
12,963
Other
94,978
93,971
100,016
99,509
47,223
Total assets
$
5,000,415
$
5,002,156
$
5,078,623
$
5,137,631
$
4,263,268
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Demand
$
1,217,094
$
1,194,863
$
1,255,793
$
1,244,117
$
984,436
Total non-interest-bearing deposits
1,217,094
1,194,863
1,255,793
1,244,117
984,436
Demand, savings and money market
2,335,847
2,445,545
2,511,478
2,522,289
2,092,849
Time
673,670
651,363
612,399
653,598
585,492
Total interest-bearing deposits
3,009,517
3,096,908
3,123,877
3,175,887
2,678,341
Total deposits
4,226,611
4,291,771
4,379,670
4,420,004
3,662,777
Federal funds purchased and retail repurchase agreements
47,443
52,750
48,199
56,006
39,137
Federal Home Loan Bank advances
186,001
80,000
50,000
—
—
Subordinated debt
96,263
96,135
96,010
95,885
88,030
Contractual obligations
15,562
15,813
17,307
17,692
18,771
Interest payable and other liabilities
32,729
37,572
35,422
47,413
36,804
Total liabilities
4,604,609
4,574,041
4,626,608
4,637,000
3,845,519
Commitments and contingent liabilities
Stockholders’ equity
Common stock
204
204
204
203
178
Additional paid-in capital
482,668
480,897
480,106
478,862
392,321
Retained earnings
130,114
116,576
102,632
88,324
79,226
Accumulated other comprehensive income (loss), net of tax
(120,918
)
(77,426
)
(50,012
)
1,776
9,475
Treasury stock
(96,262
)
(92,136
)
(80,915
)
(68,534
)
(63,451
)
Total stockholders’ equity
395,806
428,115
452,015
500,631
417,749
Total liabilities and stockholders’ equity
$
5,000,415
$
5,002,156
$
5,078,623
$
5,137,631
$
4,263,268
(1) Allowance for credit losses
$
46,499
$
48,238
$
47,590
$
48,365
$
52,763
TABLE 4. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)
As of and for the three months ended
Loans Held For Investment by Type
Commercial real estate
$
1,655,646
$
1,643,068
$
1,552,134
$
1,486,148
$
1,308,707
Commercial and industrial
607,722
578,899
629,181
567,497
569,513
Residential real estate
573,431
578,936
613,928
638,087
490,633
Agricultural real estate
200,415
197,938
198,844
198,330
138,793
Agricultural
115,048
124,753
150,077
166,975
93,767
Consumer
102,761
99,852
98,413
98,590
84,498
Total loans held-for-investment
3,255,023
3,223,446
3,242,577
3,155,627
2,685,911
Allowance for credit losses
(46,499
)
(48,238
)
(47,590
)
(48,365
)
(52,763
)
Net loans held for investment
$
3,208,524
$
3,175,208
$
3,194,987
$
3,107,262
$
2,633,148
Asset Quality Ratios
Allowance for credit losses on loans to total loans
1.43
%
1.50
%
1.47
%
1.53
%
1.96
%
Past due or nonaccrual loans to total loans
0.94
%
0.78
%
0.82
%
1.18
%
2.78
%
Nonperforming assets to total assets
0.59
%
0.74
%
0.74
%
1.28
%
1.74
%
Nonperforming assets to total loans plus other
real estate owned
0.91
%
1.14
%
1.15
%
2.07
%
2.76
%
Classified assets to bank total regulatory capital
11.03
%
13.08
%
17.12
%
25.34
%
24.25
%
Selected Average Balance Sheet Data (QTD Average)
Investment securities
$
1,272,414
$
1,319,099
$
1,397,421
$
1,330,267
$
1,061,178
Total gross loans receivable
3,240,998
3,216,853
3,195,787
3,181,279
2,748,202
Interest-earning assets
4,602,568
4,675,967
4,715,389
4,713,817
4,005,509
Total assets
4,988,755
5,067,686
5,108,120
5,068,278
4,275,298
Interest-bearing deposits
3,081,245
3,112,300
3,163,777
3,101,657
2,702,040
Borrowings
221,514
238,062
160,094
165,941
132,581
Total interest-bearing liabilities
3,302,759
3,350,362
3,323,871
3,267,598
2,834,621
Total deposits
4,283,855
4,340,196
4,393,879
4,342,732
3,686,169
Total liabilities
4,552,564
4,630,204
4,615,521
4,505,232
3,852,419
Total stockholders' equity
436,191
437,483
492,599
563,046
422,879
Tangible common equity*
369,746
368,505
422,418
501,860
376,544
Performance ratios
Return on average assets (ROAA) annualized
1.21
%
1.21
%
1.24
%
0.82
%
1.09
%
Return on average assets before income tax and
provision for loan losses*
1.49
%
1.41
%
1.50
%
0.65
%
1.50
%
Return on average equity (ROAE) annualized
13.80
%
13.99
%
12.88
%
7.37
%
11.05
%
Return on average equity before income tax and
provision for loan losses*
16.99
%
16.29
%
15.52
%
5.87
%
15.12
%
Return on average tangible common equity
(ROATCE) annualized*
17.12
%
17.60
%
15.85
%
8.97
%
13.27
%
Yield on loans annualized
5.09
%
4.59
%
4.61
%
4.36
%
5.43
%
Cost of interest-bearing deposits annualized
0.57
%
0.28
%
0.22
%
0.25
%
0.28
%
Cost of total deposits annualized
0.41
%
0.20
%
0.16
%
0.18
%
0.20
%
Net interest margin annualized
3.62
%
3.39
%
3.38
%
3.13
%
3.86
%
Efficiency ratio*
63.07
%
64.38
%
60.36
%
72.25
%
56.65
%
Non-interest income / average assets
0.71
%
0.76
%
0.72
%
0.72
%
0.73
%
Non-interest expense / average assets
2.56
%
2.49
%
2.34
%
2.98
%
2.85
%
Capital Ratios
Tier 1 Leverage Ratio
9.46
%
9.11
%
9.07
%
9.09
%
9.02
%
Common Equity Tier 1 Capital Ratio
12.15
%
12.08
%
11.81
%
12.03
%
12.39
%
Tier 1 Risk Based Capital Ratio
12.77
%
12.71
%
12.43
%
12.67
%
12.90
%
Total Risk Based Capital Ratio
15.99
%
15.97
%
15.66
%
15.96
%
16.63
%
Total stockholders' equity to total assets
7.92
%
8.56
%
8.90
%
9.74
%
9.80
%
Tangible common equity to tangible assets*
6.68
%
7.32
%
7.63
%
8.48
%
8.82
%
Dividend payout ratio
10.78
%
8.61
%
8.58
%
13.05
%
9.96
%
Book value per common share
$
24.71
$
26.58
$
27.47
$
29.87
$
29.08
Tangible book value per common share*
$
20.59
$
22.42
$
23.24
$
25.65
$
25.90
Tangible book value per diluted common share*
$
20.33
$
22.17
$
22.95
$
25.22
$
25.42
TABLE 5. YEAR-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For the nine months ended
For the nine months ended
Average
Outstanding
Balance
Interest
Income/
Expense
Average
Yield/Rate(3)(4)
Average
Outstanding
Balance
Interest
Income/
Expense
Average
Yield/Rate(3)(4)
Interest-earning assets
Commercial and industrial
$
579,610
$
22,994
5.30
%
$
752,795
$
34,609
6.15
%
Commercial real estate
1,236,282
45,995
4.97
%
990,803
34,943
4.72
%
Real estate construction
362,543
12,443
4.59
%
264,344
7,195
3.64
%
Residential real estate
604,218
16,336
3.61
%
457,761
14,167
4.14
%
Agricultural real estate
201,566
8,046
5.34
%
135,795
5,203
5.12
%
Agricultural
132,485
5,254
5.30
%
93,680
3,432
4.90
%
Consumer
101,341
3,642
4.80
%
84,285
2,843
4.51
%
Total loans
3,218,045
114,710
4.77
%
2,779,463
102,392
4.93
%
Securities
Taxable securities
1,220,045
16,767
1.84
%
898,461
11,242
1.67
%
Nontaxable securities
109,142
2,020
2.47
%
100,495
2,096
2.79
%
Total securities
1,329,187
18,787
1.89
%
998,956
13,338
1.79
%
Federal funds sold and other
116,997
1,327
1.52
%
175,761
846
0.64
%
Total interest-earning assets
$
4,664,229
134,824
3.86
%
$
3,954,180
116,576
3.94
%
Interest-bearing liabilities
Demand savings and money market deposits
$
2,480,113
5,461
0.29
%
$
2,076,643
2,728
0.18
%
Time deposits
638,692
2,847
0.60
%
606,151
3,588
0.79
%
Total interest-bearing deposits
3,118,805
8,308
0.36
%
2,682,794
6,316
0.31
%
FHLB advances
54,100
594
1.47
%
16,325
155
1.27
%
Other borrowings
152,682
5,123
4.49
%
131,516
4,741
4.82
%
Total interest-bearing liabilities
$
3,325,587
14,025
0.56
%
$
2,830,635
11,212
0.53
%
Net interest income
$
120,799
$
105,364
Interest rate spread
3.30
%
3.41
%
Net interest margin (2)
3.46
%
3.56
%
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.
(3) Tax exempt income is not included in the above table on a tax-equivalent basis.
(4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts.
TABLE 6. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For the three months ended
For the three months ended
Average
Outstanding
Balance
Interest
Income/
Expense
Average
Yield/Rate(3)(4)
Average
Outstanding
Balance
Interest
Income/
Expense
Average
Yield/Rate(3)(4)
Interest-earning assets
Commercial and industrial
$
575,149
$
7,750
5.35
%
$
630,622
$
13,646
8.59
%
Commercial real estate
1,307,244
18,023
5.47
%
1,009,141
12,072
4.75
%
Real estate construction
360,579
4,847
5.33
%
283,106
2,664
3.73
%
Residential real estate
582,938
5,464
3.72
%
512,135
5,073
3.93
%
Agricultural real estate
200,534
2,740
5.42
%
134,673
1,819
5.36
%
Agricultural
113,351
1,406
4.92
%
91,878
1,370
5.92
%
Consumer
101,203
1,325
5.20
%
86,647
937
4.29
%
Total loans
3,240,998
41,555
5.09
%
2,748,202
37,581
5.43
%
Securities
Taxable securities
1,164,697
5,793
1.97
%
966,651
3,920
1.61
%
Nontaxable securities
107,717
687
2.53
%
94,527
655
2.75
%
Total securities
1,272,414
6,480
2.02
%
1,061,178
4,575
1.71
%
Federal funds sold and other
89,156
513
2.29
%
196,129
290
0.59
%
Total interest-earning assets
$
4,602,568
48,548
4.18
%
$
4,005,509
42,446
4.20
%
Interest-bearing liabilities
Demand savings and money market deposits
$
2,425,824
3,118
0.51
%
$
2,082,515
862
0.16
%
Time deposits
655,421
1,285
0.78
%
619,525
1,019
0.65
%
Total interest-bearing deposits
3,081,245
4,403
0.57
%
2,702,040
1,881
0.28
%
FHLB advances
71,415
409
2.27
%
1,401
10
2.78
%
Other borrowings
150,099
1,792
4.74
%
131,180
1,580
4.78
%
Total interest-bearing liabilities
$
3,302,759
6,604
0.79
%
$
2,834,621
3,471
0.49
%
Net interest income
$
41,944
$
38,975
Interest rate spread
3.39
%
3.71
%
Net interest margin (2)
3.62
%
3.86
%
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.
(3) Tax exempt income is not included in the above table on a tax-equivalent basis.
TABLE 7. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For the three months ended
For the three months ended
Average
Outstanding
Balance
Interest
Income/
Expense
Average
Yield/Rate(3)(4)
Average
Outstanding
Balance
Interest
Income/
Expense
Average
Yield/Rate(3)(4)
Interest-earning assets
Commercial and industrial
$
575,149
$
7,750
5.35
%
$
588,126
$
7,483
5.10
%
Commercial real estate
1,307,244
18,023
5.47
%
1,210,185
14,521
4.81
%
Real estate construction
360,579
4,847
5.33
%
384,317
4,297
4.48
%
Residential real estate
582,938
5,464
3.72
%
597,680
5,206
3.49
%
Agricultural real estate
200,534
2,740
5.42
%
202,038
2,643
5.25
%
Agricultural
113,351
1,406
4.92
%
134,826
1,533
4.56
%
Consumer
101,203
1,325
5.20
%
99,680
1,166
4.69
%
Total loans
3,240,998
41,555
5.09
%
3,216,852
36,849
4.59
%
Securities
Taxable securities
1,164,697
5,793
1.97
%
1,210,828
5,584
1.85
%
Nontaxable securities
107,717
687
2.53
%
108,271
678
2.51
%
Total securities
1,272,414
6,480
2.02
%
1,319,099
6,262
1.90
%
Federal funds sold and other
89,156
513
2.29
%
140,016
513
1.47
%
Total interest-earning assets
$
4,602,568
48,548
4.18
%
$
4,675,967
43,624
3.74
%
Interest-bearing liabilities
Demand savings and money market deposits
$
2,425,824
3,118
0.51
%
$
2,481,602
1,346
0.22
%
Time deposits
655,421
1,285
0.78
%
630,698
837
0.53
%
Total interest-bearing deposits
3,081,245
4,403
0.57
%
3,112,300
2,183
0.28
%
FHLB advances
71,415
409
2.27
%
80,266
176
0.88
%
Other borrowings
150,099
1,792
4.74
%
157,796
1,699
4.32
%
Total interest-bearing liabilities
$
3,302,759
6,604
0.79
%
$
3,350,362
4,058
0.49
%
Net interest income
$
41,944
$
39,566
Interest rate spread
3.39
%
3.25
%
Net interest margin (2)
3.62
%
3.39
%
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.
(3) Tax exempt income is not included in the above table on a tax-equivalent basis.
TABLE 8. NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in thousands, except per share data)
As of and for the three months ended
Total stockholders' equity
$
395,806
$
428,115
$
452,015
$
500,631
$
417,749
Less: goodwill
53,101
53,101
54,465
54,465
31,601
Less: core deposit intangibles, net
11,598
12,554
13,830
14,879
12,963
Less: mortgage servicing rights, net
201
226
251
276
—
Less: naming rights, net
1,054
1,065
1,076
1,087
1,098
Tangible common equity
$
329,852
$
361,169
$
382,393
$
429,924
$
372,087
Common shares outstanding at period end
16,017,834
16,106,818
16,454,966
16,760,115
14,365,785
Diluted common shares outstanding at period end
16,225,591
16,289,635
16,662,779
17,050,115
14,637,306
Book value per common share
$
24.71
$
26.58
$
27.47
$
29.87
$
29.08
Tangible book value per common share
$
20.59
$
22.42
$
23.24
$
25.65
$
25.90
Tangible book value per diluted common share
$
20.33
$
22.17
$
22.95
$
25.22
$
25.42
Total assets
$
5,000,415
$
5,002,156
$
5,078,623
$
5,137,631
$
4,263,268
Less: goodwill
53,101
53,101
54,465
54,465
31,601
Less: core deposit intangibles, net
11,598
12,554
13,830
14,879
12,963
Less: mortgage servicing rights, net
201
226
251
276
—
Less: naming rights, net
1,054
1,065
1,076
1,087
1,098
Tangible assets
$
4,934,461
$
4,935,210
$
5,009,001
$
5,066,924
$
4,217,606
Total stockholders' equity to total assets
7.92
%
8.56
%
8.90
%
9.74
%
9.80
%
Tangible common equity to tangible assets
6.68
%
7.32
%
7.63
%
8.48
%
8.82
%
Total average stockholders' equity
$
436,191
$
437,483
$
492,599
$
563,046
$
422,879
Less: average intangible assets
66,445
68,978
70,181
61,186
46,335
Average tangible common equity
$
369,746
$
368,505
$
422,418
$
501,860
$
376,544
Net income (loss) allocable to common stockholders
$
15,171
$
15,259
$
15,650
$
10,466
$
11,773
Add: amortization of intangible assets
992
1,148
1,085
1,116
1,040
Less: tax effect of intangible assets amortization
208
241
228
234
218
Adjusted net income (loss) allocable to common
stockholders
$
15,955
$
16,166
$
16,507
$
11,348
$
12,595
Return on total average stockholders' equity
(ROAE) annualized
13.80
%
13.99
%
12.88
%
7.37
%
11.05
%
Return on average tangible common equity
(ROATCE) annualized
17.12
%
17.60
%
15.85
%
8.97
%
13.27
%
Non-interest expense
$
32,236
$
31,436
$
29,459
$
38,089
$
30,689
Less: loss on debt extinguishment
—
—
—
—
$
372
Less: merger expense
115
88
323
4,562
4,015
Adjusted non-interest expense
$
32,121
$
31,348
$
29,136
$
33,527
$
26,302
Net interest income
$
41,944
$
39,566
$
39,289
$
37,215
$
38,975
Non-interest income
8,969
9,637
9,022
9,199
7,831
Less: net gain on acquisition and branch sales
—
540
—
—
—
Less: net gains (losses) from securities transactions
(17
)
(32
)
40
8
381
Adjusted non-interest income
$
8,986
$
9,129
$
8,982
$
9,191
$
7,450
Net interest income plus adjusted non-interest income
$
50,930
$
48,695
$
48,271
$
46,406
$
46,425
Non-interest expense to
net interest income plus non-interest income
63.32
%
63.89
%
60.98
%
82.06
%
65.57
%
Efficiency ratio
63.07
%
64.38
%
60.36
%
72.25
%
56.65
%
Net income (loss) allocable to common stockholders
$
15,171
$
15,259
$
15,650
$
10,466
$
11,773
Add: income tax provision
3,642
1,684
3,614
(16
)
3,286
Add: provision (reversal) of credit losses
(136
)
824
(412
)
(2,125
)
1,058
Pre-tax, pre-provision income
$
18,677
$
17,767
$
18,852
$
8,325
$
16,117
Total average assets
$
4,988,755
$
5,067,687
$
5,108,120
$
5,068,301
$
4,275,298
Total average stockholders' equity
$
436,191
$
437,483
$
492,599
$
563,023
$
422,879
Return on average assets (ROAA) annualized
1.21
%
1.21
%
1.24
%
0.82
%
1.09
%
Adjusted return on average assets
1.49
%
1.41
%
1.50
%
0.65
%
1.50
%
Adjusted return on average equity
16.99
%
16.29
%
15.52
%
5.87
%
15.12
%

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