First Mid Bancshares, Inc. Announces Second Quarter 2022 Results

MATTOON, Ill., July 28, 2022 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended June 30, 2022.

Highlights

• Net income of $17.8 million, or $0.86 diluted EPS
• Adjusted net income (non-GAAP) of $18.5 million, or $0.90 diluted EPS
• Strong loan growth of $194.1 million, or 4.4% for the quarter
• Successful completion of bank merger and system conversion with Jefferson Bank and Trust (“Jefferson”)
• Board of Directors increases quarterly dividend by $0.01, or 4.5% to $0.23 per share
  

“Our second quarter was highlighted by our successful system conversion and integration of Jefferson Bank,” said Joe Dively, Chairman and Chief Executive Officer. “In addition, we had an unprecedented quarter of loan growth and delivered solid earnings through our multiple sources of income diversification. We continue to stress test our loans for the various macro-economic challenges and feel confident in the strength of our portfolio if there were to be an extended downturn.”

Net Interest Income

Net interest income for the second quarter of 2022 increased by $3.3 million, or 7.6% compared to the first quarter of 2022. Both interest income and interest expense increased in the quarter by $4.1 million and $0.8 million, respectively.   The increase in interest income was primarily driven by the full quarter benefit from the Jefferson acquisition, organic loan growth, and higher interest rates. Accretion income decreased by $0.2 million in the quarter to $0.9 million. Interest expense increased primarily from the full quarter of Jefferson, and rising rates in money market deposits and Federal Home Loan Bank borrowings.      

In comparison to the second quarter of 2021, net interest income increased $4.1 million, or 9.5%. The increase was primarily the result of organic loan growth, the impact of the Jefferson acquisition, and rising interest rates.               

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.20% for the second quarter of 2022, which was 13 basis points higher compared to the prior quarter. Earning asset yields increased by 17 basis points and the average cost of funds increased 4 basis points.   

In comparison to the second quarter of last year, the net interest margin decreased 2 basis points, and average cost of funds were flat.   The primary reason for the decrease was due to lower accretion income and PPP fee income compared to the second quarter of 2021.

Loan Portfolio

Total loans ended the quarter at $4.65 billion, representing an increase of $194.1 million compared to the prior quarter. Growth was primarily within our C&I and farm real estate sectors, partially offset by a decline in multifamily. We had a strong pipeline going into the quarter and most of the loans closed within the period. We also experienced an increase in utilization of lines of credit, which was partially offset by higher payoffs in the multifamily sector.            

Asset Quality

The Company has always prided itself on a strong credit culture and the asset quality metrics for June 30, 2022 were strong. The allowance for credit losses (‘ACL’) increased by $0.6 million to $59.1 million with an ending ACL to total loans ratio of 1.27%. Provision expense was recorded in the amount of $0.9 million and net charge offs totaled $0.3 million. Also, at the end of the second quarter, the ratio of non-performing loans to total loans was 0.43%, and the ACL to non-performing loans was 296%.   The ratio of nonperforming assets to total assets was 0.36% at quarter end. Nonperforming loans declined by $2.5 million in the period to $19.9 million representing the lowest amount since the first quarter of 2018, which illustrates the strength of our asset quality position. Outstanding special mention and substandard loans improved in the quarter, declining to $35.8 million and $38.2 million, respectively.   

Deposits

Total deposits ended the quarter at $5.32 billion, which represented a decrease of $168.3 million from the prior quarter. The decline was primarily in money market balances in the depository agreement with Promontory and Stifel, Nicolaus & Company, Inc. that was setup with the loan purchase in April of 2020. The Company’s average rate on cost of funds was 0.30% compared to 0.26% in the prior quarter, and flat versus the second quarter of 2021.                  

Noninterest Income

Noninterest income for the second quarter of 2022 was $18.6 million compared to $21.1 million in the first quarter of 2022.   The decrease compared to the prior quarter was primarily due to the seasonality of the insurance business, which was down by $1.5 million. In addition, other income includes an unrealized loss on equity securities of $0.7 million. Increases in service charges and debit card income were offset by decreases in mortgage banking and wealth management. The decrease in wealth management was the result of a combination of seasonally lower farmland sales and lower equity market values.

In comparison to the second quarter of 2021, noninterest income increased $0.3 million, or 1.5%. The year-over-year increase was driven by strong growth in our wealth management and insurance businesses and the addition of Jefferson, partially offset by a $1.4 million decline in mortgage banking revenue.           

Noninterest Expenses     

Noninterest expense for the second quarter of 2022 totaled $41.5 million compared to $40.4 million in the prior quarter. The increase was primarily driven by the full quarter inclusion of expenses from the Jefferson acquisition, including $1.0 million in nonrecurring integration expenses tied to the successful bank merger and system conversion.   

In comparison to the second quarter of 2021, noninterest expenses decreased $4.5 million. The decrease was primarily driven by lower nonrecurring expenses from the integration of Providence and the branch consolidation efforts that occurred in the second quarter of 2021.

The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the second quarter 2022 was 58.5% compared to 58.6% in the prior quarter and 59.9% for the same period last year.

Capital Levels and Dividend

The Company’s capital levels remained strong and comfortably above the “well capitalized” levels. During the second quarter, significant loan growth increased risk-weighted assets resulting in a modest decrease in certain of the ratios. Capital levels ended the period as follows:

Total capital to risk-weighted assets	15.05%
Tier 1 capital to risk-weighted assets	12.16%
Common equity tier 1 capital to risk-weighted assets	11.79%
Leverage ratio	9.70%

The Company’s Board of Directors approved an increase of $0.01 to $0.23 to its quarterly dividend payable on September 1, 2022 for shareholders of record on August 18, 2022.

The Company’s tangible book value decreased in the quarter as a result of an increase in the unrealized loss position in the investment portfolio from higher interest rates. Had such impact not occurred in the unrealized loss position of the investment portfolio, tangible book value per share would have increased by 3.1% in the period.   

About First Mid: First Mid Bancshares, Inc. (“First Mid”) is the parent company of First Mid Bank & Trust, N.A., First Mid Insurance Group, Inc., and First Mid Wealth Management Co. First Mid is a $6.7 billion community-focused organization that provides a full-suite of financial services including banking, wealth management, brokerage, Ag services, and insurance through a sizeable network of locations throughout Illinois, Missouri, and Texas, and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in providing solutions and services to the customers and communities and has done so over the last 157 years. More information about the Company is available on our website at www.firstmid.com.

Non-GAAP Measures: In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance. Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported. These non-GAAP financial measures are detailed as supplemental tables and include “Adjusted Net Income,” “Adjusted Diluted EPS,” “Efficiency Ratio,” “Net Interest Margin, tax equivalent,” and “Tangible Book Value per Common Share”. While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP. These non-GAAP financial measures may also differ from the similar measures presented by other companies.

Forward Looking Statements
This document may contain certain forward-looking statements about First Mid, such as discussions of First Mid’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses, and planned schedules. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid, are identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative and/or regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mid’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; accounting principles, policies and guidelines; the severity, magnitude and duration of the COVID-19 pandemic, the direct and indirect impact of such pandemic, including responses to the pandemic by the U.S., state and local governments, customers' businesses, the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mid’s liquidity and capital positions, impair the ability of First Mid’s borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses, and the impact of the COVID-19 pandemic on First Mid’s financial results, including possible lost revenue and increased expenses (including cost of capital), as well as possible goodwill impairment charges. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mid’s financial results, are included in First Mid’s filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

Investor Contact:
Aaron Holt
VP, Shareholder Relations
217-258-0463
aholt@firstmid.com 

Matt Smith
Chief Financial Officer
217-258-1528
msmith@firstmid.com 

– Tables Follow –

FIRST MID BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
		As of
		June 30,				December 31,				June 30,
			2022				2021				2021
Assets
Cash and cash equivalents		$	137,544			$	168,602			$	340,741
Investment securities			1,354,943				1,431,299				1,231,998
Loans (including loans held for sale)			4,648,663				3,995,523				3,796,304
Less allowance for credit losses			(59,075	)			(54,655	)			(54,597	)
Net loans			4,589,588				3,940,868				3,741,707
Premises and equipment, net			90,766				81,484				82,099
Goodwill and intangibles, net			172,871				141,376				139,995
Bank owned life insurance			149,917				132,375				130,734
Other assets			165,293				90,578				123,308
Total assets		$	6,660,922			$	5,986,582			$	5,790,582
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing		$	1,369,756			$	1,246,673			$	1,157,009
Interest bearing			3,949,222				3,709,813				3,582,313
Total deposits			5,318,978				4,956,486				4,739,322
Repurchase agreement with customers			174,934				146,268				151,394
Other borrowings			386,286				86,446				112,753
Junior subordinated debentures			19,279				19,195				19,111
Subordinated debt			94,476				94,400				94,326
Other liabilities			40,701				49,893				57,610
Total liabilities			6,034,654				5,352,688				5,174,516
Total stockholders' equity			626,268				633,894				616,066
Total liabilities and stockholders' equity		$	6,660,922			$	5,986,582			$	5,790,582

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
		Three Months Ended							Six Months Ended
		June 30, 2022							June 30, 2022
		2022				2021				2022		2021
Interest income:
Interest and fees on loans		$	43,555		$	40,795			$	83,463		$	76,681
Interest on investment securities			7,623			5,739				14,793			10,581
Interest on federal funds sold & other deposits			105			101				172			189
Total interest income			51,283			46,635				98,428			87,451
Interest expense:
Interest on deposits			2,523			2,262				4,671			4,746
Interest on securities sold under agreements to repurchase			137			57				204			127
Interest on other borrowings			645			445				921			819
Interest on jr. subordinated debentures			166			139				312			279
Interest on subordinated debt			986			985				1,972			1,969
Total interest expense			4,457			3,888				8,080			7,940
Net interest income			46,826			42,747				90,348			79,511
Provision for loan losses			907			(560	)			3,859			11,576
Net interest income after provision for loan			45,919			43,307				86,489			67,935
Non-interest income:
Wealth management revenues			5,473			5,016				11,448			9,942
Insurance commissions			5,641			4,988				12,745			10,845
Service charges			2,236			1,539				4,292			2,903
Securities gains, net			2			73				2			77
Mortgage banking revenues			289			1,691				770			3,100
ATM/debit card revenue			3,214			3,141				6,112			5,840
Other			1,704			1,836				4,315			3,326
Total non-interest income			18,559			18,284				39,684			36,033
Non-interest expense:
Salaries and employee benefits			25,768			24,908				50,107			48,395
Net occupancy and equipment expense			6,073			5,482				12,228			10,452
Net other real estate owned (income) expense			218			1,966				185			2,044
FDIC insurance			436			478				862			930
Amortization of intangible assets			1,633			1,295				3,155			2,515
Stationary and supplies			325			235				636			551
Legal and professional expense			1,885			1,639				3,619			3,041
Marketing and donations			706			507				1,579			1,009
Other			4,471			9,503				9,569			14,676
Total non-interest expense			41,515			46,013				81,940			83,613
Income before income taxes			22,963			15,578				44,233			20,355
Income taxes			5,205			3,357				9,859			4,025
Net income		$	17,758		$	12,221			$	34,374		$	16,330
Per Share Information
Basic earnings per common share		$	0.87		$	0.68			$	1.73		$	0.92
Diluted earnings per common share			0.86			0.68				1.72			0.92
Weighted average shares outstanding			20,448,799			18,067,190				19,875,516			17,685,679
Diluted weighted average shares outstanding			20,529,523			18,120,210				19,947,227			17,738,699

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
		For the Quarter Ended
		June 30,			March 31,				December 31,			September 30,			June 30,
		2022				2022			2021			2021				2021
Interest income:
Interest and fees on loans		$	43,555		$	39,908			$	39,711		$	43,292		$	40,795
Interest on investment securities			7,623			7,170				6,500			5,835			5,739
Interest on federal funds sold & other deposits			105			67				88			136			101
Total interest income			51,283			47,145				46,299			49,263			46,635
Interest expense:
Interest on deposits			2,523			2,148				2,057			2,234			2,262
Interest on securities sold under agreements to repurchase			137			67				52			52			57
Interest on other borrowings			645			276				336			359			445
Interest on jr. subordinated debentures			166			146				125			137			139
Interest on subordinated debt			986			986				985			985			985
Total interest expense			4,457			3,623				3,555			3,767			3,888
Net interest income			46,826			43,522				42,744			45,496			42,747
Provision for loan losses			907			2,952				2,472			1,103			(560	)
Net interest income after provision for loan			45,919			40,570				40,272			44,393			43,307
Non-interest income:
Wealth management revenues			5,473			5,975				6,261			4,204			5,016
Insurance commissions			5,641			7,104				4,150			3,932			4,988
Service charges			2,236			2,056				2,067			1,838			1,539
Securities gains, net			2			-				36			11			73
Mortgage banking revenues			289			444				890			1,477			1,691
ATM/debit card revenue			3,214			2,898				3,074			3,060			3,141
Other			1,704			2,611				1,646			1,837			1,836
Total non-interest income			18,559			21,088				18,124			16,359			18,284
Non-interest expense:
Salaries and employee benefits			25,768			24,302				20,424			21,092			24,908
Net occupancy and equipment expense			6,073			6,155				5,712			5,382			5,482
Net other real estate owned (income) expense			218			(33	)			315			1,507			1,966
FDIC insurance			436			426				406			268			478
Amortization of intangible assets			1,633			1,522				1,462			1,414			1,295
Stationary and supplies			325			311				311			299			235
Legal and professional expense			1,885			1,734				1,811			1,878			1,639
Marketing and donations			706			873				1,915			679			507
Other			4,471			5,098				4,038			3,802			9,503
Total non-interest expense			41,515			40,388				36,394			36,321			46,013
Income before income taxes			22,963			21,270				22,002			24,431			15,578
Income taxes			5,205			4,654				5,168			6,105			3,357
Net income		$	17,758		$	16,616			$	16,834		$	18,326		$	12,221
Per Share Information
Basic earnings per common share		$	0.87		$	0.86			$	0.93		$	1.01		$	0.68
Diluted earnings per common share			0.86			0.86				0.93			1.01			0.68
Weighted average shares outstanding			20,448,799			19,295,860				18,086,949			18,083,126			18,067,190
Diluted weighted average shares outstanding			20,529,523			19,358,457				18,135,380			18,136,146			18,120,210

FIRST MID BANCSHARES, INC.
Consolidated Financial Highlights and Ratios
(Dollars in thousands, except per share data)
(Unaudited)
		As of and for the Quarter Ended
		June 30,				March 31,				December 31,				September 30,				June 30,
			2022				2022				2021				2021				2021
Loan Portfolio
Construction and land development		$	141,072			$	131,504			$	145,118			$	180,061			$	141,568
Farm real estate loans			350,159				280,993				279,272				278,788				277,362
1-4 Family residential properties			424,230				417,232				400,313				412,565				394,902
Multifamily residential properties			330,600				369,926				298,942				306,911				274,910
Commercial real estate			1,976,654				1,965,321				1,666,198				1,583,255				1,480,198
Loans secured by real estate			3,222,715				3,164,976				2,789,843				2,761,580				2,568,940
Agricultural operating loans			142,406				121,708				151,484				126,534				123,101
Commercial and industrial loans			1,036,987				935,454				832,008				835,860				864,554
Consumer loans			94,828				89,685				78,442				80,064				84,541
All other loans			151,727				142,738				143,746				143,731				155,168
Total loans			4,648,663				4,454,561				3,995,523				3,947,769				3,796,304
Deposit Portfolio
Non-interest bearing demand deposits		$	1,369,756			$	1,373,881			$	1,246,673			$	1,242,950			$	1,157,009
Interest bearing demand deposits			1,453,932				1,482,556				1,452,765				1,416,361				1,418,717
Savings deposits			683,944				685,228				626,523				612,404				598,232
Money Market			1,158,724				1,280,129				1,068,473				1,075,852				842,771
Time deposits			652,622				665,511				562,052				640,995				722,593
Total deposits			5,318,978				5,487,305				4,956,486				4,988,562				4,739,322
Asset Quality
Non-performing loans		$	19,981			$	22,465			$	22,036			$	27,723			$	30,410
Non-performing assets			24,190				27,269				27,055				33,359				37,648
Net charge-offs (recoveries)			307				(5	)			1,800				1,717				261
Allowance for credit losses to non-performing loans			295.66	%			260.29	%			248.03	%			194.72	%			179.54	%
Allowance for credit losses to total loans outstanding			1.27	%			1.31	%		1.37%1				1.39%1				1.50%1
Nonperforming loans to total loans			0.43	%			0.50	%			0.55	%			0.70	%			0.80	%
Nonperforming assets to total assets			0.36	%			0.41	%			0.45	%			0.55	%			0.65	%
Special Mention loans			35,849				64,160				66,235				76,222				86,915
Substandard and Doubtful loans			38,155				38,801				46,862				51,119				56,387
Common Share Data
Common shares outstanding			20,448,799				20,437,183				18,080,303				18,083,126				18,078,474
Book value per common share		$	30.63			$	32.61			$	35.06			$	34.69			$	34.08
Tangible book value per common share(2)			22.17				24.07				27.24				26.80				26.33
Market price of stock			35.67				38.49				42.79				41.06				40.51
Key Performance Ratios and Metrics
End of period earning assets		$	6,024,815			$	6,038,542			$	5,504,517			$	5,542,199			$	5,269,882
Average earning assets			5,975,821				5,817,752				5,539,819				5,396,239				5,380,411
Average rate on average earning assets (tax equivalent)			3.50	%			3.33	%			3.37	%			3.67	%			3.52	%
Average rate on cost of funds			0.30	%			0.26	%			0.26	%			0.29	%			0.30	%
Net interest margin (tax equivalent)(2)			3.20	%			3.07	%			3.11	%			3.38	%			3.22	%
Return on average assets			1.08	%			1.05	%			1.12	%			1.25	%			0.84	%
Return on average common equity			11.02	%			9.95	%			10.74	%			11.67	%			8.00	%
Efficiency ratio (tax equivalent)(2)			58.45	%			58.59	%			55.75	%			52.73	%			59.91	%
Full-time equivalent employees			1,025				1,050				965				960				960
1Excludes Paycheck Protection Loans
2Non-GAAP financial measure. Refer to reconciliation to the comparable GAAP measure.

FIRST MID BANCSHARES, INC.
Net Interest Margin
(In thousands, unaudited)
	For the Quarter Ended June 30, 2022
	QTD Average							Average
	Balance				Interest			Rate
INTEREST EARNING ASSETS
Interest bearing deposits	$	52,006			$	89		0.69	%
Federal funds sold		4,660				6		0.52	%
Certificates of deposits investments		1,912				10		2.10	%
Investment Securities:
Taxable (total less municipals)		1,098,389				5,346		1.95	%
Tax-exempt (Municipals)		337,261				2,882		3.42	%
Loans (net of unearned income)		4,481,593				43,749		3.92	%
Total interest earning assets		5,975,821				52,082		3.50	%
NONEARNING ASSETS
Cash and due from banks		114,362
Premises and equipment		89,605
Other nonearning assets		442,860
Allowance for loan losses		(58,744	)
Total assets	$	6,563,904
INTEREST BEARING LIABILITIES
Demand deposits	$	2,656,507			$	1,804		0.27	%
Savings deposits		684,708				124		0.07	%
Time deposits		646,565				595		0.37	%
Total interest bearing deposits		3,987,780				2,523		0.25	%
Repurchase agreements		178,632				137		0.31	%
FHLB advances		230,636				640		1.11	%
Federal funds purchased		1,341				5		1.50	%
Subordinated debt		94,451				986		4.19	%
Jr. subordinated debentures		19,252				166		3.46	%
Other debt		55				-		0.00	%
Total borrowings		524,367				1,934		1.48	%
Total interest bearing liabilities		4,512,147				4,457		0.40	%
NONINTEREST BEARING LIABILITIES
Demand deposits		1,363,548			Average cost of funds			0.30	%
Other liabilities		43,900
Stockholders' equity		644,309
Total liabilities & stockholders' equity	$	6,563,904
Net Interest Earnings / Spread					$	47,625		3.10	%
Impact of Non-Interest Bearing Funds								0.10	%
Tax effected yield on interest earning assets								3.20	%

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, unaudited)
		As of and for the Quarter Ended
		June 30,				March 31,				December 31,				September 30,				June 30,
			2022				2022				2021				2021				2021
Net interest income as reported		$	46,826			$	43,522			$	42,744			$	45,496			$	42,747
Net interest income, (tax equivalent)			47,625				44,292				43,492				46,165				43,359
Average earning assets			5,975,821				5,817,752				5,539,819				5,396,239				5,380,411
Net interest margin (tax equivalent)			3.20	%			3.07	%			3.11	%			3.38	%			3.22	%
Common stockholder's equity		$	626,268			$	666,385			$	633,894			$	627,225			$	616,066
Goodwill and intangibles, net			172,871				174,499				141,376				142,656				139,995
Common shares outstanding			20,449				20,437				18,080				18,083				18,078
Tangible Book Value per common share		$	22.17			$	24.07			$	27.24			$	26.80			$	26.33

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except per share data, unaudited)
		As of and for the Quarter Ended
		June 30,				March 31,				December 31,				September 30,				June 30,
			2022				2022				2021				2021				2021
Adjusted earnings Reconciliation
Net Income - GAAP		$	17,758			$	16,616			$	16,834			$	18,326			$	12,221
Adjustments (post-tax):(1)
Acquisition ACL on non-PCD assets in provision expense			-				1,580				-				-				-
Branch optimization costs			-				-				-				999				960
Integration and acquisition expenses			777				469				225				348				4,634
Total non-recurring adjustments (non-GAAP)		$	777			$	2,049			$	225			$	1,347			$	5,595
Adjusted earnings - non-GAAP		$	18,535			$	18,665			$	17,059			$	19,673			$	17,816
Adjusted diluted earnings per share (non-GAAP)		$	0.90			$	0.96			$	0.94			$	1.08			$	0.98
Efficiency Ratio Reconciliation
Noninterest expense - GAAP		$	41,515			$	40,388			$	36,394			$	36,321			$	46,013
Other real estate owned property income (expense)			(218	)			33				(315	)			(242	)			(751	)
Amortization of intangibles			(1,633	)			(1,522	)			(1,462	)			(1,414	)			(1,295	)
Branch optimization costs			-				-				-				(1,265	)			(1,215	)
integration and acquisition expenses			(983	)			(594	)			(285	)			(440	)			(5,866	)
Adjusted noninterest expense (non-GAAP)		$	38,681			$	38,305			$	34,332			$	32,960			$	36,886
Net interest income -GAAP		$	46,826			$	43,522			$	42,744			$	45,496			$	42,747
Effect of tax-exempt income(1)			799				770				748				669				612
Adjusted net interest income (non-GAAP)		$	47,625			$	44,292			$	43,492			$	46,165			$	43,359
Noninterest income - GAAP		$	18,559			$	21,088			$	18,124			$	16,359			$	18,284
Gain on sales of investment securities, net			(2	)			-				(36	)			(11	)			(73	)
Adjusted noninterest income (non-GAAP)		$	18,557			$	21,088			$	18,088			$	16,348			$	18,211
Adjusted total revenue (non-GAAP)		$	66,182			$	65,380			$	61,580			$	62,513			$	61,570
Efficiency ratio (non-GAAP)			58.45	%			58.59	%			55.75	%			52.73	%			59.91	%
(1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%.