• Equity Bancshares, Inc. Reports Fourth Quarter Results, Strong Organic Loan Growth, and Improved Asset Quality Metrics

    来源: Nasdaq GlobeNewswire / 25 1月 2023 16:01:56   America/Chicago

    WICHITA, Kan., Jan. 25, 2023 (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 $11.6 million and $0.72 earnings per diluted share for the quarter ended December 31, 2022. For the full year ending December 31, 2022, reported net income totaled $57.7 million or $3.51 per diluted share compared to $52.5 million or $3.43 per diluted share for the full year ending December 31, 2021.

    "Our Company was able to deliver two records in 2022. First, record net income of $57.7 million and second, record revenue of $197.8 million. These achievements are a testament to the strength of our franchise despite economic uncertainty and changing consumer habits,” said Brad S. Elliott, Chairman and CEO, Equity Bancshares, Inc. “We’ve been able to offer competitive products and rely on our local market leadership to continue to add customer relationships based on value, convenience, and our brand. As we compete for business and consumer relationships, our teams continue working tirelessly to enhance our products and technology while delivering superior customer service.”

    Mr. Elliott continued, “We also saw improvement in key credit ratios, including non-performing assets to total assets down to 0.37% from 1.28% year-over-year, thanks to the disciplined work of our bankers. We took the opportunity in 2022 to invest in our people and technology, allowing us to deliver best-in-class banking products and services into the future. Our Equity teams helped us earn regional honors like Best Places to Work by the Wichita Business Journal, and we were recognized as one of Newsweek’s Best Banks in the U.S. With our prudent loan underwriting standards, growing capital base, and diversified deposit portfolio, we are well positioned to continue to generate excellent financial results for our shareholders.”

    Notable Items:

    • The Company’s loan growth, excluding PPP and branch sales, was $56.8 million, or 6.9% linked quarter annualized including 9.25% annualized growth within the commercial and commercial real estate portfolios. Loan growth for the full year of 2022 was $220.0 million or 9.5% as compared to year-end 2021.
    • Total FHLB borrowings declined $47.1 million during the quarter ending December 31, 2022 or 25.3% from $186 million at September 30, 2022. Deposits increased $15.2 million during the fourth quarter, or 0.4%.
    • Book Value per Common Share increased $1.03 linked quarter to $25.74, while Tangible Book Value per Common Share increased $1.08 to $21.67.
    • During the quarter, the Company realized linked period Net Interest Margin growth of 5 basis points, equating to record Net Interest Income of $42.0 million.
    • Equity repurchased $5.5 million of common stock representing 1.0% of shares outstanding as of the end of the third quarter.
    • During the quarter ending December 31, 2022, the ratio of non-performing assets to total assets improved 22bps linked quarter to 0.4%, and the ratio of Classified Assets to Bank Regulatory Capital improved to 10.0% from 11.0%.

    Financial Results for the Quarter Ended December 31, 2022

    Net income allocable to common stockholders was $11.6 million, or $0.72 per diluted share, for the three months ended December 31, 2022, as compared to $15.2 million, or $0.93 per diluted share, for the three months ended September 30, 2022. The decrease during the quarter was primarily driven by an increase in non-interest expense of $3.0 million as the Company continued to invest in its people, processes and the communities we serve.

    Net Interest Income

    Net interest income was $42.0 million for the three months ended December 31, 2022, as compared to $41.9 million for the three months ended September 30, 2022, an increase of $87 thousand, or 0.2%. The yield on interest-earning assets increased 49 basis points to 4.7%. The cost of interest-bearing deposits increased by 48 basis points during the quarter, moving from 0.6% at September 30, 2022, to 1.1% at December 31, 2022.

    During the quarter, the Company realized the benefit of an emphasis on re-positioning interest earning assets into the loan portfolio with realized expansion of loans as a percentage of average assets. While total average assets were down, driven by the impact of the fair value mark on the investment portfolio, average loans in total and as a percentage of earning assets increased, comprising 72.2% of average earnings assets during the quarter. The Company continues to expect repositioning of investment portfolio assets into the loan portfolio.

    Average interest-bearing liabilities moved up slightly during the quarter as the Company experienced a minor compositional shift from noninterest-bearing deposits into interest bearing categories while also paying down the level of debt on the balance sheet. Overall deposit levels increased $15.2 million, or 1.4% annualized linked quarter.

    Provision for Credit Losses

    During the three months ended December 31, 2022, there was a net release of $151 thousand compared to a net release of $136 thousand in the previous quarter. The minimal release of provision for the quarter is the result of continued positive credit trends without realization of meaningful losses. The Company continues to estimate the allowance for credit loss with assumptions that anticipate slower 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 December 31, 2022, we had net charge-offs of $501 thousand as compared to $1.6 million for the three months ended September 30, 2022.

    Non-Interest Income

    Total non-interest income was $8.3 million for the three months ended December 31, 2022, as compared to $9.0 million for the three months ended September 30, 2022, or a decrease of 7.1%, quarter-over-quarter. The $640 thousand decrease was primarily due to a decrease in loan repurchase obligation reversal of $280 thousand, mortgage banking revenue of $194 thousand, and derivative fair valuation changes of $175 thousand.

    Non-Interest Expense

    Total non-interest expense for the quarter ended December 31, 2022, was $35.2 million as compared to $32.2 million for the quarter ended September 30, 2022. The $3.0 million change was primarily due to increases in advertising and business development of $712 thousand driven by deposit campaigns, salaries and employee benefits of $671 thousand reflecting higher full-time equivalents reducing our job vacancy rate, write-off of tax credit investments of $537 thousand and an unfavorable change in losses on disposal of repossessed assets of $343 thousand reflecting a $333 thousand gain recognized in the third quarter of 2022.

    Income Tax Expense

    At December 31, 2022, the full year effective tax rate for 2022 was 17.9% as compared to an expectation of 16.2% as of September 30, 2022. The comparative increase in tax rate resulted in $1.2 million in additive income tax expense during the fourth quarter calculated as the full year’s pre-tax income multiplied by the change in effective tax rate expectation.

    The increase in the effective tax rate was driven by the Company’s investment in solar tax credits for which timing of implementation and credit receipt is not certain. During the quarter, the timing on one of the investments moved back compared to expectations as of the end of September, resulting in less credits being received in 2022. The timing issue is expected to be resolved in the first quarter of 2023 with no material impact to the overall return on the investment.

    Loans, Total Assets and Funding

    Loans held for investments were $3.3 billion at December 31, 2022, increasing 6.9% on an annualized basis compared to previous quarter end. Excluding the impact of PPP loans and loans sold in branch transactions, balances have increased $220.0 million, or 9.5% year-over-year. Included in the annual growth, is $301.7 million within the commercial and industrial and commercial real estate portfolios, or 15.0%. Total assets were $5.0 billion as of December 31, 2022.

    Total deposits were $4.2 billion at December 31, 2022, increasing 1.4% annualized compared to previous quarter end. Of this balance, non-interesting bearing accounts comprise approximately 25.9%. Borrowings from the FHLB declined $47.1 million to $138.9 million during the quarter.

    Asset Quality

    As of December 31, 2022, Equity’s allowance for credit losses to total loans remained materially consistent at 1.4% as compared to September 30, 2022. Nonperforming assets were $18.2 million as of December 31, 2022, or 0.4% of total assets, compared to $29.7 million at September 30, 2022, or 0.6% of total assets. Non-accrual loans were $17.6 million at December 31, 2022, as compared to $23.1 million at September 30, 2022. Total classified assets, including loans rated special mention or worse, other real estate owned, excluding previous branch locations, and other repossessed assets were $58.7 million, or 10.0% of regulatory capital, down from $63.1 million, or 11.0% of regulatory capital as of September 30, 2022.

    During the quarter ended December 31, 2022, non-performing assets decreased $11.4 million due to decreases in other real estate owned of $5.7 million, non-accrual loans of $5.5 million and other repossessed assets of $174 thousand.

    Capital

    During the quarter, the Company realized expansion in both book and tangible capital, as well as book and tangible capital per share as dividends and costs incurred to repurchase shares were outpaced by earnings and partial recovery of the negative fair value mark on the investment portfolio.

    The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.3%, the total capital to risk-weighted assets was 16.1% and the total leverage ratio was 9.6% at December 31, 2022. At September 30, 2022, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 12.2%, the total capital to risk-weighted assets ratio was 16.1% and the total leverage ratio was 9.5%.

    The Company’s subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.5%, a ratio of total capital to risk-weighted assets of 15.7% and a total leverage ratio of 10.8% at December 31, 2022. At September 30, 2022, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 14.2%, the ratio of total capital to risk-weighted assets was 15.5% and the total leverage ratio was 10.5%.

    Non-GAAP Financial Measures

    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.

    Conference Call and Webcast

    Equity’s Chairman and Chief Executive Officer, Brad Elliott, and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss fourth quarter results on Thursday, January 26, 2023, 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 investor.equitybank.com. To access the call by phone, please go to this registration link, 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 February 3, 2023, accessible at investor.equitybank.com.

    About Equity Bancshares, Inc.
    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 www.equitybank.com.

    Special Note Concerning Forward-Looking Statements

    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.

    Investor Contact:

    Chris Navratil
    SVP, Finance
    Equity Bancshares, Inc.
    (316) 612-6014
    cnavratil@equitybank.com        

    Media Contact:

    John J. Hanley
    SVP, Senior Director of Marketing
    Equity Bancshares, Inc.
    (913) 583-8004
    jhanley@equitybank.com

    Unaudited Financial Tables

    • 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
    December 31,    		  Year ended
    December 31,    		 
     2022  2021  2022  2021 
    Interest and dividend income           
    Loans, including fees$46,149  $34,942  $160,859  $137,334 
    Securities, taxable 5,946   4,754   22,713   15,996 
    Securities, nontaxable 678   747   2,698   2,843 
    Federal funds sold and other 651   349   1,978   1,195 
    Total interest and dividend income 53,424   40,792   188,248   157,368 
    Interest expense           
    Deposits 8,013   1,939   16,321   8,255 
    Federal funds purchased and retail repurchase agreements 82   32   232   104 
    Federal Home Loan Bank advances 1,500   14   2,094   169 
    Subordinated debt 1,798   1,592   6,771   6,261 
    Total interest expense 11,393   3,577   25,418   14,789 
                
    Net interest income 42,031   37,215   162,830   142,579 
    Provision (reversal) for credit losses (151)  (2,125)  125   (8,480)
    Net interest income after provision (reversal) for credit losses 42,182   39,340   162,705   151,059 
    Non-interest income           
    Service charges and fees 2,705   2,471   10,632   8,596 
    Debit card income 2,557   2,633   10,677   10,236 
    Mortgage banking 116   722   1,416   3,306 
    Increase in value of bank-owned life insurance 758   1,060   3,113   3,506 
    Net gain on acquisition and branch sales 422   —   962   585 
    Net gains (losses) from securities transactions 14   8   5   406 
    Other 1,757   2,305   9,152   6,207 
    Total non-interest income 8,329   9,199   35,957   32,842 
    Non-interest expense           
    Salaries and employee benefits 16,113   15,119   62,006   54,198 
    Net occupancy and equipment 2,919   2,967   12,223   10,137 
    Data processing 4,334   3,867   15,883   13,261 
    Professional fees 1,404   1,565   4,951   4,713 
    Advertising and business development 1,903   1,129   5,042   3,370 
    Telecommunications 517   435   1,916   1,966 
    FDIC insurance 360   360   1,140   1,665 
    Courier and postage 533   389   1,881   1,429 
    Free nationwide ATM cost 510   515   2,103   2,019 
    Amortization of core deposit intangibles 924   1,080   4,042   4,174 
    Loan expense 262   308   828   934 
    Other real estate owned 388   617   589   (188)
    Loss on debt extinguishment —   —   —   372 
    Merger expenses 68   4,562   594   9,189 
    Other 5,014   5,176   15,182   12,226 
    Total non-interest expense 35,249   38,089   128,380   119,465 
    Income (loss) before income tax 15,262   10,450   70,282   64,436 
    Provision for income taxes 3,654   (16)  12,594   11,956 
    Net income (loss) and net income (loss) allocable to common stockholders$11,608  $10,466  $57,688  $52,480 
    Basic earnings (loss) per share$0.73  $0.62  $3.56  $3.49 
    Diluted earnings (loss) per share$0.72  $0.61  $3.51  $3.43 
    Weighted average common shares 15,948,360   16,865,167   16,214,049   15,019,221 
    Weighted average diluted common shares 16,204,185   17,141,174   16,437,906   15,306,431 

    TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
    (Dollars in thousands, except per share data)

     As of and for the three months ended 
     December 31,
    2022    		  September 30,
    2022    		  June 30,
    2022    		  March 31,
    2022    		  December 31,
    2021    		 
    Interest and dividend income              
    Loans, including fees$46,149  $41,555  $36,849  $36,306  $34,942 
    Securities, taxable 5,946   5,792   5,584   5,391   4,754 
    Securities, nontaxable 678   687   678   655   747 
    Federal funds sold and other 651   514   513   300   349 
    Total interest and dividend income 53,424   48,548   43,624   42,652   40,792 
    Interest expense              
    Deposits 8,013   4,403   2,183   1,722   1,939 
    Federal funds purchased and retail repurchase agreements 82   71   46   33   32 
    Federal Home Loan Bank advances 1,500   409   176   9   14 
    Subordinated debt 1,798   1,721   1,653   1,599   1,592 
    Total interest expense 11,393   6,604   4,058   3,363   3,577 
                   
    Net interest income 42,031   41,944   39,566   39,289   37,215 
    Provision (reversal) for credit losses (151)  (136)  824   (412)  (2,125)
    Net interest income after provision (reversal) for credit losses 42,182   42,080   38,742   39,701   39,340 
    Non-interest income              
    Service charges and fees 2,705   2,788   2,617   2,522   2,471 
    Debit card income 2,557   2,682   2,810   2,628   2,633 
    Mortgage banking 116   310   428   562   722 
    Increase in value of bank-owned life insurance 758   754   736   865   1,060 
    Net gain on acquisition and branch sales 422   —   540   —   — 
    Net gains (losses) from securities transactions 14   (17)  (32)  40   8 
    Other 1,757   2,452   2,538   2,405   2,305 
    Total non-interest income 8,329   8,969   9,637   9,022   9,199 
    Non-interest expense              
    Salaries and employee benefits 16,113   15,442   15,383   15,068   15,119 
    Net occupancy and equipment 2,919   3,127   3,007   3,170   2,967 
    Data processing 4,334   4,138   3,642   3,769   3,867 
    Professional fees 1,404   1,265   1,111   1,171   1,565 
    Advertising and business development 1,903   1,191   972   976   1,129 
    Telecommunications 517   487   442   470   435 
    FDIC insurance 360   340   260   180   360 
    Courier and postage 533   436   489   423   389 
    Free nationwide ATM cost 510   551   541   501   515 
    Amortization of core deposit intangibles 924   957   1,111   1,050   1,080 
    Loan expense 262   174   207   185   308 
    Other real estate owned 388   188   14   (1)  617 
    Loss on debt extinguishment —   —   —   —   — 
    Merger expenses 68   115   88   323   4,562 
    Other 5,014   3,825   4,169   2,174   5,176 
    Total non-interest expense 35,249   32,236   31,436   29,459   38,089 
    Income (loss) before income tax 15,262   18,813   16,943   19,264   10,450 
    Provision for income taxes (benefit) 3,654   3,642   1,684   3,614   (16)
    Net income (loss) and net income (loss) allocable to common stockholders$11,608  $15,171  $15,259  $15,650  $10,466 
    Basic earnings (loss) per share$0.73  $0.94  $0.95  $0.94  $0.62 
    Diluted earnings (loss) per share$0.72  $0.93  $0.94  $0.93  $0.61 
    Weighted average common shares 15,948,360   16,056,658   16,206,978   16,652,556   16,865,167 
    Weighted average diluted common shares 16,204,185   16,273,231   16,413,248   16,869,152   17,141,174 

    TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)
    (Dollars in thousands)

     December 31,
    2022    		  September 30,
    2022    		  June 30,
    2022    		  March 31,
    2022    		  December 31,
    2021    		 
    ASSETS              
    Cash and due from banks$101,662  $155,039  $103,126  $89,764  $259,131 
    Federal funds sold 415   374   458   286   823 
    Cash and cash equivalents 102,077   155,413   103,584   90,050   259,954 
    Available-for-sale securities 1,184,390   1,198,962   1,288,180   1,352,894   1,327,442 
    Held-to-maturity securities 1,948   —   —   —   — 
    Loans held for sale 349   1,518   1,714   1,575   4,214 
    Loans, net of allowance for credit losses(1) 3,265,701   3,208,524   3,175,208   3,194,987   3,107,262 
    Other real estate owned, net 4,409   10,412   12,969   9,897   9,523 
    Premises and equipment, net 101,492   100,566   101,212   103,168   104,038 
    Bank-owned life insurance 123,176   122,418   121,665   120,928   120,787 
    Federal Reserve Bank and Federal Home Loan Bank stock 21,695   24,428   21,479   19,890   17,510 
    Interest receivable 20,630   18,497   16,519   16,923   18,048 
    Goodwill 53,101   53,101   53,101   54,465   54,465 
    Core deposit intangibles, net 10,596   11,598   12,554   13,830   14,879 
    Other 92,087   94,978   93,971   100,016   99,509 
    Total assets$4,981,651  $5,000,415  $5,002,156  $5,078,623  $5,137,631 
    LIABILITIES AND STOCKHOLDERS’ EQUITY              
    Deposits              
    Demand$1,097,899  $1,217,094  $1,194,863  $1,255,793  $1,244,117 
    Total non-interest-bearing deposits 1,097,899   1,217,094   1,194,863   1,255,793   1,244,117 
    Demand, savings and money market 2,329,584   2,335,847   2,445,545   2,511,478   2,522,289 
    Time 814,324   673,670   651,363   612,399   653,598 
    Total interest-bearing deposits 3,143,908   3,009,517   3,096,908   3,123,877   3,175,887 
    Total deposits 4,241,807   4,226,611   4,291,771   4,379,670   4,420,004 
    Federal funds purchased and retail repurchase agreements 46,478   47,443   52,750   48,199   56,006 
    Federal Home Loan Bank advances 138,864   186,001   80,000   50,000   — 
    Subordinated debt 96,392   96,263   96,135   96,010   95,885 
    Contractual obligations 15,218   15,562   15,813   17,307   17,692 
    Interest payable and other liabilities 32,834   32,729   37,572   35,422   47,413 
    Total liabilities 4,571,593   4,604,609   4,574,041   4,626,608   4,637,000 
    Commitments and contingent liabilities              
    Stockholders’ equity              
    Common stock 205   204   204   204   203 
    Additional paid-in capital 484,989   482,668   480,897   480,106   478,862 
    Retained earnings 140,095   130,114   116,576   102,632   88,324 
    Accumulated other comprehensive income (loss), net of tax (113,511)  (120,918)  (77,426)  (50,012)  1,776 
    Treasury stock (101,720)  (96,262)  (92,136)  (80,915)  (68,534)
    Total stockholders’ equity 410,058   395,806   428,115   452,015   500,631 
    Total liabilities and stockholders’ equity$4,981,651  $5,000,415  $5,002,156  $5,078,623  $5,137,631 
                   
    (1) Allowance for credit losses$45,847  $46,499  $48,238  $47,590  $48,365 

    TABLE 4. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
    (Dollars in thousands, except per share data)

     As of and for the three months ended 
     December 31,  September 30,  June 30,  March 31,  December 31, 
     2022  2022  2022  2022  2021 
    Loans Held For Investment by Type              
    Commercial real estate$1,721,269  $1,655,646  $1,643,068  $1,552,134  $1,486,148 
    Commercial and industrial 594,862   607,722   578,899   629,181   567,497 
    Residential real estate 570,550   573,431   578,936   613,928   638,087 
    Agricultural real estate 199,189   200,415   197,938   198,844   198,330 
    Agricultural 120,003   115,048   124,753   150,077   166,975 
    Consumer 105,675   102,761   99,852   98,413   98,590 
    Total loans held-for-investment 3,311,548   3,255,023   3,223,446   3,242,577   3,155,627 
    Allowance for credit losses (45,847)  (46,499)  (48,238)  (47,590)  (48,365)
    Net loans held for investment$3,265,701  $3,208,524  $3,175,208  $3,194,987  $3,107,262 
                   
                   
    Asset Quality Ratios              
    Allowance for credit losses on loans to total loans 1.38%  1.43%  1.50%  1.47%  1.53%
    Past due or nonaccrual loans to total loans 0.72%  0.94%  0.78%  0.82%  1.18%
    Nonperforming assets to total assets 0.37%  0.59%  0.74%  0.74%  1.28%
    Nonperforming assets to total loans plus other
    real estate owned    		 0.55%  0.91%  1.14%  1.15%  2.07%
    Classified assets to bank total regulatory capital 9.98%  11.03%  13.08%  17.12%  25.34%
                   
                   
    Selected Average Balance Sheet Data (QTD Average)              
    Investment securities$1,184,452  $1,272,414  $1,319,099  $1,397,421  $1,330,267 
    Total gross loans receivable 3,275,284   3,240,998   3,216,853   3,195,787   3,181,279 
    Interest-earning assets 4,538,177   4,602,568   4,675,967   4,715,389   4,713,817 
    Total assets 4,930,231   4,988,755   5,067,686   5,108,120   5,068,278 
    Interest-bearing deposits 3,032,902   3,081,245   3,112,300   3,163,777   3,101,657 
    Borrowings 299,191   221,514   238,062   160,094   165,941 
    Total interest-bearing liabilities 3,335,557   3,302,759   3,350,362   3,323,871   3,267,598 
    Total deposits 4,185,904   4,283,855   4,340,196   4,393,879   4,342,732 
    Total liabilities 4,531,959   4,552,564   4,630,204   4,615,521   4,505,232 
    Total stockholders' equity 398,270   436,191   437,483   492,599   563,046 
    Tangible common equity* 332,820   369,746   368,505   422,418   501,860 
                   
                   
    Performance ratios              
    Return on average assets (ROAA) annualized 0.93%  1.21%  1.21%  1.24%  0.82%
    Return on average assets before income tax and
    provision for loan losses*    		 1.22%  1.49%  1.41%  1.50%  0.65%
    Return on average equity (ROAE) annualized 11.56%  13.80%  13.99%  12.88%  7.37%
    Return on average equity before income tax and
    provision for loan losses*    		 15.05%  16.99%  16.29%  15.52%  5.87%
    Return on average tangible common equity
    (ROATCE) annualized*    		 14.74%  17.12%  17.60%  15.85%  8.97%
    Yield on loans annualized 5.59%  5.09%  4.59%  4.61%  4.36%
    Cost of interest-bearing deposits annualized 1.05%  0.57%  0.28%  0.22%  0.25%
    Cost of total deposits annualized 0.76%  0.41%  0.20%  0.16%  0.18%
    Net interest margin annualized 3.67%  3.62%  3.39%  3.38%  3.13%
    Efficiency ratio* 70.47%  63.07%  64.38%  60.36%  72.25%
    Non-interest income / average assets 0.67%  0.71%  0.76%  0.72%  0.72%
    Non-interest expense / average assets 2.84%  2.56%  2.49%  2.34%  2.98%
                   
                   
    Capital Ratios              
    Tier 1 Leverage Ratio 9.61%  9.46%  9.11%  9.07%  9.09%
    Common Equity Tier 1 Capital Ratio 12.26%  12.15%  12.08%  11.81%  12.03%
    Tier 1 Risk Based Capital Ratio 12.88%  12.77%  12.71%  12.43%  12.67%
    Total Risk Based Capital Ratio 16.08%  15.99%  15.97%  15.66%  15.96%
    Total stockholders' equity to total assets 8.23%  7.92%  8.56%  8.90%  9.74%
    Tangible common equity to tangible assets* 7.02%  6.68%  7.32%  7.63%  8.48%
    Dividend payout ratio 14.01%  10.78%  8.61%  8.58%  13.05%
    Book value per common share$25.74  $24.71  $26.58  $27.47  $29.87 
    Tangible book value per common share*$21.67  $20.59  $22.42  $23.24  $25.65 
    Tangible book value per diluted common share*$21.35  $20.33  $22.17  $22.95  $25.22 

    TABLE 5. YEAR-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
    (Dollars in thousands)

     For the year ended  For the year ended 
     December 31, 2022  December 31, 2021 
     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             
    Loans (1)             
    Commercial and industrial$583,295 $32,258  5.53% $714,561 $41,580 5.82%
    Commercial real estate 1,259,257  65,122  5.17%  1,040,443  48,676 4.68%
    Real estate construction 363,902  18,269  5.02%  277,307  10,256 3.70%
    Residential real estate 597,196  22,004  3.68%  498,164  19,341 3.88%
    Agricultural real estate 201,295  11,399  5.66%  153,607  8,122 5.29%
    Agricultural 125,342  6,697  5.34%  108,276  5,361 4.95%
    Consumer 102,185  5,110  5.00%  88,383  3,998 4.52%
    Total loans 3,232,472  160,859  4.98%  2,880,741  137,334 4.77%
    Securities             
    Taxable securities 1,185,750  22,713  1.92%  976,942  15,996 1.64%
    Nontaxable securities 106,955  2,698  2.52%  105,522  2,843 2.69%
    Total securities 1,292,705  25,411  1.97%  1,082,464  18,839 1.74%
    Federal funds sold and other 107,278  1,978  1.84%  182,443  1,195 0.65%
    Total interest-earning assets$4,632,455  188,248  4.06% $4,145,648  157,368 3.80%
    Interest-bearing liabilities             
    Demand, savings and money market deposits$2,433,364  10,797  0.44% $2,162,807  3,705 0.17%
    Time deposits 663,790  5,524  0.83%  625,562  4,550 0.73%
    Total interest-bearing deposits 3,097,154  16,321  0.53%  2,788,369  8,255 0.30%
    FHLB advances 79,775  2,094  2.63%  16,797  169 1.01%
    Other borrowings 151,172  7,003  4.63%  135,607  6,365 4.69%
    Total interest-bearing liabilities$3,328,101  25,418  0.76% $2,940,773  14,789 0.50%
                  
    Net interest income  $162,830      $142,579   
    Interest rate spread     3.30%     3.30%
                  
    Net interest margin (2)     3.52%     3.44%
                  
    (1) Average loan balances include nonaccrual loans. 
    (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 
     December 31, 2022  December 31, 2021 
     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             
    Loans (1)             
    Commercial and industrial$594,221 $9,264 6.19% $601,103 $6,971 4.60%
    Commercial real estate 1,327,438  19,127 5.72%  1,187,747  13,732 4.59%
    Real estate construction 367,935  5,827 6.28%  315,774  3,062 3.85%
    Residential real estate 576,357  5,667 3.90%  618,057  5,174 3.32%
    Agricultural real estate 200,492  3,353 6.64%  206,462  2,919 5.61%
    Agricultural 104,146  1,443 5.50%  151,589  1,929 5.05%
    Consumer 104,695  1,468 5.57%  100,547  1,155 4.56%
    Total loans 3,275,284  46,149 5.59%  3,181,279  34,942 4.36%
    Securities             
    Taxable securities 1,083,986  5,946 2.18%  1,209,826  4,754 1.56%
    Nontaxable securities 100,466  678 2.68%  120,441  747 2.46%
    Total securities 1,184,452  6,624 2.22%  1,330,267  5,501 1.64%
    Federal funds sold and other 78,441  651 3.29%  202,271  348 0.68%
    Total interest-earning assets$4,538,177  53,424 4.67% $4,713,817  40,791 3.43%
    Interest-bearing liabilities             
    Demand, savings and money market deposits$2,294,639  5,336 0.92% $2,418,492  978 0.16%
    Time deposits 738,263  2,677 1.44%  683,165  962 0.56%
    Total interest-bearing deposits 3,032,902  8,013 1.05%  3,101,657  1,940 0.25%
    FHLB advances 155,964  1,500 3.82%  18,197  15 0.32%
    Other borrowings 146,691  1,880 5.09%  147,744  1,624 4.36%
    Total interest-bearing liabilities$3,335,557  11,393 1.36% $3,267,598  3,579 0.43%
                  
    Net interest income  $42,031      $37,212   
    Interest rate spread    3.31%     3.00%
                  
    Net interest margin (2)    3.67%     3.13%
                  
    (1) Average loan balances include nonaccrual loans. 
    (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 
     December 31, 2022  September 30, 2022 
     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             
    Loans (1)             
    Commercial and industrial$594,221 $9,264 6.19% $575,149 $7,750 5.35%
    Commercial real estate 1,327,438  19,127 5.72%  1,307,244  18,023 5.47%
    Real estate construction 367,935  5,827 6.28%  360,579  4,847 5.33%
    Residential real estate 576,357  5,667 3.90%  582,938  5,464 3.72%
    Agricultural real estate 200,492  3,353 6.64%  200,534  2,740 5.42%
    Agricultural 104,146  1,443 5.50%  113,351  1,406 4.92%
    Consumer 104,695  1,468 5.57%  101,203  1,325 5.20%
    Total loans 3,275,284  46,149 5.59%  3,240,998  41,555 5.09%
    Securities             
    Taxable securities 1,083,986  5,946 2.18%  1,164,697  5,793 1.97%
    Nontaxable securities 100,466  678 2.68%  107,717  687 2.53%
    Total securities 1,184,452  6,624 2.22%  1,272,414  6,480 2.02%
    Federal funds sold and other 78,441  651 3.29%  89,156  513 2.29%
    Total interest-earning assets$4,538,177  53,424 4.67% $4,602,568  48,548 4.18%
    Interest-bearing liabilities             
    Demand savings and money market deposits$2,294,639  5,336 0.92% $2,425,824  3,118 0.51%
    Time deposits 738,263  2,677 1.44%  655,421  1,285 0.78%
    Total interest-bearing deposits 3,032,902  8,013 1.05%  3,081,245  4,403 0.57%
    FHLB advances 155,964  1,500 3.82%  71,415  409 2.27%
    Other borrowings 146,691  1,880 5.09%  150,099  1,792 4.74%
    Total interest-bearing liabilities$3,335,557  11,393 1.36% $3,302,759  6,604 0.79%
                  
    Net interest income  $42,031      $41,944   
    Interest rate spread    3.31%     3.39%
                  
    Net interest margin (2)    3.67%     3.62%
                  
    (1) Average loan balances include nonaccrual loans. 
    (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 
     December 31,  September 30,  June 30,  March 31,  December 31, 
     2022  2022  2022  2022  2021 
                   
    Total stockholders' equity$410,058  $395,806  $428,115  $452,015  $500,631 
    Less: goodwill 53,101   53,101   53,101   54,465   54,465 
    Less: core deposit intangibles, net 10,596   11,598   12,554   13,830   14,879 
    Less: mortgage servicing rights, net 176   201   226   251   276 
    Less: naming rights, net 1,044   1,054   1,065   1,076   1,087 
    Tangible common equity$345,141  $329,852  $361,169  $382,393  $429,924 
    Common shares outstanding at period end 15,930,112   16,017,834   16,106,818   16,454,966   16,760,115 
    Diluted common shares outstanding at period end 16,163,253   16,225,591   16,289,635   16,662,779   17,050,115 
    Book value per common share$25.74  $24.71  $26.58  $27.47  $29.87 
    Tangible book value per common share$21.67  $20.59  $22.42  $23.24  $25.65 
    Tangible book value per diluted common share$21.35  $20.33  $22.17  $22.95  $25.22 
                   
    Total assets$4,981,651  $5,000,415  $5,002,156  $5,078,623  $5,137,631 
    Less: goodwill 53,101   53,101   53,101   54,465   54,465 
    Less: core deposit intangibles, net 10,596   11,598   12,554   13,830   14,879 
    Less: mortgage servicing rights, net 176   201   226   251   276 
    Less: naming rights, net 1,044   1,054   1,065   1,076   1,087 
    Tangible assets$4,916,734  $4,934,461  $4,935,210  $5,009,001  $5,066,924 
    Total stockholders' equity to total assets 8.23%  7.92%  8.56%  8.90%  9.74%
    Tangible common equity to tangible assets 7.02%  6.68%  7.32%  7.63%  8.48%
                   
    Total average stockholders' equity$398,270  $436,191  $437,483  $492,599  $563,046 
    Less: average intangible assets 65,450   66,445   68,978   70,181   61,186 
    Average tangible common equity$332,820  $369,746  $368,505  $422,418  $501,860 
    Net income (loss) allocable to common stockholders$11,608  $15,171  $15,259  $15,650  $10,466 
    Add: amortization of intangible assets 961   992   1,148   1,085   1,116 
    Less: tax effect of intangible assets amortization 202   208   241   228   234 
    Adjusted net income (loss) allocable to common
    stockholders    		$12,367  $15,955  $16,166  $16,507  $11,348 
    Return on total average stockholders' equity
    (ROAE) annualized    		 11.56%  13.80%  13.99%  12.88%  7.37%
    Return on average tangible common equity
    (ROATCE) annualized    		 14.74%  17.12%  17.60%  15.85%  8.97%
                   
    Non-interest expense$35,248  $32,236  $31,436  $29,459  $38,089 
    Less: loss on debt extinguishment —   —   —   —   — 
    Less: merger expense 68   115   88   323   4,562 
    Adjusted non-interest expense$35,180  $32,121  $31,348  $29,136  $33,527 
    Net interest income$42,031  $41,944  $39,566  $39,289  $37,215 
    Non-interest income 8,330   8,969   9,637   9,022   9,199 
    Less: net gain on acquisition and branch sales 422   —   540   —   — 
    Less: net gains (losses) from securities transactions 14   (17)  (32)  40   8 
    Adjusted non-interest income$7,894  $8,986  $9,129  $8,982  $9,191 
    Net interest income plus adjusted non-interest income$49,925  $50,930  $48,695  $48,271  $46,406 
    Non-interest expense to
    net interest income plus non-interest income    		 69.99%  63.32%  63.89%  60.98%  82.06%
    Efficiency ratio 70.47%  63.07%  64.38%  60.36%  72.25%
    Net income (loss) allocable to common stockholders$11,608  $15,171  $15,259  $15,650  $10,466 
    Add: income tax provision 3,654   3,642   1,684   3,614   (16)
    Add: provision (reversal) of credit losses (151)  (136)  824   (412)  (2,125)
    Pre-tax, pre-provision income$15,111  $18,677  $17,767  $18,852  $8,325 
    Total average assets$4,930,231  $4,988,755  $5,067,687  $5,108,120  $5,068,301 
    Total average stockholders' equity$398,270  $436,191  $437,483  $492,599  $563,023 
    Return on average assets (ROAA) annualized 0.93%  1.21%  1.21%  1.24%  0.82%
    Adjusted return on average assets 1.22%  1.49%  1.41%  1.50%  0.65%
    Adjusted return on average equity 15.05%  16.99%  16.29%  15.52%  5.87%

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