• Horizon Bancorp, Inc. Reports Third Quarter 2024 Results, Including EPS of $0.41 and Continued Profitability Improvement, as well as Accretive Balance Sheet Initiatives

    来源: Nasdaq GlobeNewswire / 23 10月 2024 15:15:01   America/Chicago

    MICHIGAN CITY, Ind., Oct. 23, 2024 (GLOBE NEWSWIRE) -- (NASDAQ GS: HBNC) – Horizon Bancorp, Inc. (“Horizon” or the “Company”), the parent company of Horizon Bank (the “Bank”), announced its unaudited financial results for the three and nine months ended September 30, 2024.

    Net income for the three months ended September 30, 2024 was $18.2 million, or $0.41 per diluted share, compared to net income of $14.1 million, or $0.32, for the second quarter of 2024 and compared to net income of $16.2 million, or $0.37 per diluted share, for the third quarter of 2023.

    Net income for the nine months ended September 30, 2024 was $46.3 million, or $1.05 per diluted share, compared to net income of $53.2 million, or $1.21, for the nine months ended September 30, 2023.

    Third Quarter 2024 Highlights

    • Net interest income increased for the fourth consecutive quarter to $46.9 million, compared to $45.3 million in the linked quarter of 2024. Net interest margin, on a fully taxable equivalent ("FTE") basis1, expanded for the fourth consecutive quarter to 2.66%, compared to 2.64% in the linked quarter of 2024.
    • Total loans held for investment ("HFI") were $4.8 billion at September 30, 2024, relatively unchanged from June 30, 2024 balances. However, consistent with the Company's stated growth strategy, the commercial portfolio showed continued organic growth momentum during the quarter, which was offset with planned run-off of lower-yielding indirect auto loans in the consumer loan portfolio. 
    • Positive deposit growth of 1.7% during the quarter, to $5.7 billion at period end. The quarter was highlighted by stable non-interest bearing deposit balances and growth in core relationship consumer and commercial portfolios. 
    • Credit quality remains strong, with annualized net charge offs of 0.03% of average loans during the third quarter. Non-performing assets to total assets of 0.32% remains well within expected ranges, with no material change in the loss outlook. Provision for loan losses of $1.0 million reflects continued positive credit performance.

    “Horizon continues to execute well on its key strategic initiatives of consistently improving our operating performance through a more productive balance sheet, growth in non-interest income and continued disciplined in our operating model. As a result, we are optimistic on the positive momentum of the franchise through year-end 2024 and into 2025. During the quarter, our commercial team was able to deliver another quarter of quality loan growth, even coming off a strong end to the second quarter. The strength of Horizon's core deposit franchise showed solid performance, and our credit metrics remain well managed. These efforts led to a third consecutive quarter of sequential growth in pre-tax pre-provision income," President and Chief Executive Officer Thomas M. Prame said. "Importantly, we continue our efforts to optimize our business model, and are pleased to announce the repositioning of a portion of our securities portfolio and the intended sale of our mortgage warehouse business during the fourth quarter. These shareholder accretive actions are expected to yield sustainable improvement in the profitability of our business that will be evident in the fourth quarter, and positively impact Horizon's financial performance in 2025."

    _________________________
    1
    Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.

    Accretive Fourth Quarter 2024 Strategic Actions

    Horizon announced strategic actions taking place in the fourth quarter of 2024, which are designed to simplify its business, strengthen the balance sheet and improve long-term structural profitability. In October, the Company completed the repositioning of about $325 million of available-for-sale securities. Additionally, the Company has signed a letter of intent to sell its mortgage warehouse business, which is expected to generate a gain-on-sale. Details on these actions, the use of proceeds, and the expected financial impact are available in the Company's third quarter 2024 investor presentation published at investor.horizonbank.com.

     
    Financial Highlights
    (Dollars in Thousands Except Share and Per Share Data and Ratios, Unaudited)
     Three Months Ended
     September 30, June 30, March 31, December 31, September 30,
     2024 2024 2024 2023 2023
    Income statement:         
    Net interest income$46,910  $45,279  $43,288  $42,257  $42,090 
    Credit loss expense 1,044   2,369   805   1,274   263 
    Non-interest income 11,511   10,485   9,929   (20,449)  11,830 
    Non-interest expense 39,272   37,522   37,107   39,330   36,168 
    Income tax expense (75)  1,733   1,314   6,419   1,284 
    Net income$18,180  $14,140  $13,991  $(25,215) $16,205 
              
    Per share data:         
    Basic earnings per share$0.42  $0.32  $0.32  $(0.58) $0.37 
    Diluted earnings per share 0.41   0.32   0.32   (0.58)  0.37 
    Cash dividends declared per common share 0.16   0.16   0.16   0.16   0.16 
    Book value per common share 17.27   16.62   16.49   16.47   15.89 
    Market value - high 16.57   12.74   14.44   14.65   12.68 
    Market value - low 11.89   11.29   11.75   9.33   9.90 
    Weighted average shares outstanding - Basic 43,712,059   43,712,059   43,663,610   43,649,585   43,646,609 
    Weighted average shares outstanding - Diluted 44,112,321   43,987,187   43,874,036   43,649,585   43,796,069 
    Common shares outstanding (end of period) 43,712,059   43,712,059   43,726,380   43,652,063   43,648,501 
              
    Key ratios:         
    Return on average assets 0.92%  0.73%  0.72% (1.27)        %  0.81%
    Return on average stockholders' equity 9.80   7.83   7.76   (14.23)  8.99 
    Total equity to total assets 9.52   9.18   9.18   9.06   8.71 
    Total loans to deposit ratio 83.92   85.70   82.78   78.01   76.52 
    Allowance for credit losses to HFI loans 1.10   1.08   1.09   1.13   1.14 
    Annualized net charge-offs of average total loans(1) 0.03   0.05   0.04   0.07   0.07 
    Efficiency ratio 67.22   67.29   69.73   180.35   67.08 
              
    Key metrics (Non-GAAP)(2) :         
    Net FTE interest margin 2.66%  2.64%  2.50%  2.43%  2.41%
    Return on average tangible common equity 12.65   10.18   10.11   (18.76)  11.79 
    Tangible common equity to tangible assets 7.58   7.22   7.20   7.08   6.72 
    Tangible book value per common share$13.46  $12.80  $12.65  $12.60  $12.00 
              
              
    (1) Average total loans includes loans held for investment and held for sale.
    (2) Non-GAAP financial metrics. See non-GAAP reconciliation included herein for the most directly comparable GAAP measures.
     

    Income Statement Highlights

    Net Interest Income

    Net interest income was $46.9 million in the third quarter of 2024, compared to $45.3 million in the second quarter of 2024, driven by net growth in average interest earning assets of $117.5 million and continued net FTE interest margin expansion during the quarter. Horizon’s net FTE interest margin1 was 2.66% for the third quarter of 2024, compared to 2.64% for the second quarter of 2024, attributable to the favorable mix shift in average interest earning assets toward higher-yielding loans and in the average funding mix toward lower-cost deposit balances. Interest accretion from the fair value of acquired loans did not contribute significantly to the third quarter net interest income, or net FTE interest margin.

    Provision for Credit Losses

    During the third quarter of 2024, the Company recorded a provision for credit losses of $1.0 million. This compares to a provision for credit losses of $2.4 million during the second quarter of 2024, and $0.3 million during the third quarter of 2023. The decrease in the provision for credit losses during the third quarter of 2024 when compared with the second quarter of 2024 was primarily attributable to less total loan growth in the current quarter relative to the prior quarter.

    For the third quarter of 2024, the allowance for credit losses included net charge-offs of $0.4 million, or an annualized 0.03% of average loans outstanding, compared to net charge-offs of $0.6 million, or an annualized 0.05% of average loans outstanding for the second quarter of 2024, and net charge-offs of $0.7 million, or an annualized 0.07% of average loans outstanding, in the third quarter of 2023.

    The Company’s allowance for credit losses as a percentage of period-end loans HFI was 1.10% at September 30, 2024, compared to 1.08% at June 30, 2024 and 1.14% at September 30, 2023.

    Non-Interest Income

    For the Quarter EndedSeptember 30, June 30, March 31, December 31, September 30,
    (Dollars in Thousands)2024
     2024
     2024
     2023 2023
    Non-interest Income         
    Service charges on deposit accounts$3,320  $3,130  $3,214  $3,092  $3,086 
    Wire transfer fees 123   113   101   103   120 
    Interchange fees 3,511   3,826   3,109   3,224   3,186 
    Fiduciary activities 1,394   1,372   1,315   1,352   1,206 
    Gains (losses) on sale of investment securities          (31,572)   
    Gain on sale of mortgage loans 1,622   896   626   951   1,582 
    Mortgage servicing income net of impairment 412   450   439   724   631 
    Increase in cash value of bank owned life insurance 349   318   298   658   1,055 
    Other income 780   380   827   1,019   964 
    Total non-interest income$11,511  $10,485  $9,929  $(20,449) $11,830 
                        

    Total non-interest income was $11.5 million in the third quarter of 2024, compared to $10.5 million in the second quarter of 2024, due primarily to higher realized gains on sale of mortgage loans and increased other income.

    _________________________
    1
    Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.

    Non-Interest Expense

    For the Quarter EndedSeptember 30, June 30, March 31, December 31, September 30,
    (Dollars in Thousands)2024
     2024
     2024
     2023
     2023
    Non-interest Expense         
    Salaries and employee benefits$21,829  $20,583  $20,268  $21,877  $20,058 
    Net occupancy expenses 3,207   3,192   3,546   3,260   3,283 
    Data processing 2,977   2,579   2,464   2,942   2,999 
    Professional fees 676   714   607   772   707 
    Outside services and consultants 3,677   3,058   3,359   2,394   2,316 
    Loan expense 1,034   1,038   719   1,345   1,120 
    FDIC insurance expense 1,204   1,315   1,320   1,200   1,300 
    Core deposit intangible amortization 844   844   872   903   903 
    Other losses 297   515   16   508   188 
    Other expense 3,527   3,684   3,936   4,129   3,294 
    Total non-interest expense$39,272  $37,522  $37,107  $39,330  $36,168 
                        

    Total non-interest expense was $39.3 million in the third quarter of 2024, compared with $37.5 million in the second quarter of 2024. The increase in non-interest expense during the third quarter of 2024 was primarily driven by a $1.2 million increase in salaries and employee benefits expense, which is partially attributable to a legacy benefits program expense, and a $0.6 million increase in outside services and consultants expense related to strategic initiatives.

    Income Taxes

    Horizon's effective tax rate was -0.4% for the third quarter of 2024, as compared to 10.9% for the second quarter of 2024. The decrease in the effective tax rate during the third quarter was primarily due to an increase in net realizable tax credits for the current year, which reduced the Company's estimated annual effective tax rate.

    Balance Sheet

    Total assets increased by $14.9 million, or 0.2%, to $7.93 billion as of September 30, 2024, from $7.91 billion as of June 30, 2024. The increase in total assets is primarily due to increases in federal funds sold of $79.5 million, or 230.6%, to $113.9 million as of September 30, 2024, compared to $34.5 million as of June 30, 2024. The increase in federal funds sold during the period was partially offset by a decrease in other assets of $46.6 million, or 28.1%, to $119.0 million as of September 30, 2024, from $165.7 million as of June 30, 2024.

    Total investment securities remained unchanged, at $2.4 billion as of September 30, 2024, compared to June 30, 2024, as the positive market impact to available for sale securities was offset by normal pay-downs and maturities. There were no purchases of investment securities during the third quarter of 2024.

    Total loans HFI and loans held for sale were relatively consistent at $4.8 billion as of September 30, 2024 compared to $4.8 billion as of June 30, 2024, as growth in commercial loans of $9.5 million were offset by a decline in consumer loans of $43.3 million.

    Total deposit balances increased by $96.9 million, or 1.7%, to $5.7 billion as of September 30, 2024 when compared to balances as of June 30, 2024. Non-interest bearing deposit balances were essentially unchanged during the quarter.

    Total borrowings decreased by $86.4 million, or 7.0%, to $1.1 billion as of September 30, 2024, primarily related to the repayment of a portion of Federal Home Loan Bank advances, when compared to balances as of June 30, 2024.

    Capital

    The following table presents the consolidated regulatory capital ratios of the Company for the previous three quarters:

    For the Quarter EndedSeptember 30, June 30, March 31,December 31,
     2024* 2024 2024**2023**
    Consolidated Capital Ratios      
    Total capital (to risk-weighted assets) 13.52%  13.41%  13.75% 14.04%
    Tier 1 capital (to risk-weighted assets) 11.70%  11.59%  11.89% 12.13%
    Common equity tier 1 capital (to risk-weighted assets) 10.74%  10.63%  10.89% 11.11%
    Tier 1 capital (to average assets) 9.01%  9.02%  8.91% 8.61%
    *Preliminary estimate - may be subject to change 
    **Prior periods were previously revised (see disclosure in Form 10-Q for the quarterly period ending June 30, 2024) 
      

    As of September 30, 2024, the ratio of total stockholders’ equity to total assets is 9.52%. Book value per common share was $17.27, increasing $0.65 during the third quarter of 2024.

    Tangible common equity1 totaled $588.5 million at September 30, 2024, and the ratio of tangible common equity to tangible assets1 was 7.58% at September 30, 2024, up from 7.22% at June 30, 2024. Tangible book value, which excludes intangible assets from total equity, per common share1 was $13.46, increasing $0.66 during the third quarter of 2024.

    Credit Quality

    As of September 30, 2024, total non-accrual loans increased by $5.3 million, or 29.0%, from June 30, 2024, to 0.49% of total loans HFI. Total non-performing assets increased $5.1 million, or 25.0%, to $25.6 million, compared to $20.5 million as of June 30, 2024. The ratio of non-performing assets to total assets increased to 0.32% compared to 0.26% as of June 30, 2024.

    As of September 30, 2024, net charge-offs decreased by $0.2 million to $0.4 million, compared to $0.6 million as of June 30, 2024 and remain just 0.03% annualized of average loans.

    _________________________
    1
    Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.

    Earnings Conference Call

    As previously announced, Horizon will host a conference call to review its third quarter financial results and operating performance.

    Participants may access the live conference call on October 24, 2024 at 7:30 a.m. CT (8:30 a.m. ET) by dialing 833-974-2379 from the United States, 866-450-4696 from Canada or 1-412-317-5772 from international locations and requesting the “Horizon Bancorp Call.” Participants are asked to dial in approximately 10 minutes prior to the call.

    A telephone replay of the call will be available approximately one hour after the end of the conference through November 1, 2024. The replay may be accessed by dialing 877-344-7529 from the United States, 855-669-9658 from Canada or 1–412–317-0088 from other international locations, and entering the access code 9847279.

    About Horizon Bancorp, Inc.

    Horizon Bancorp, Inc. (NASDAQ GS: HBNC) is the $7.9 billion-asset commercial bank holding company for Horizon Bank, which serves customers across diverse and economically attractive Midwestern markets through convenient digital and virtual tools, as well as its Indiana and Michigan branches. Horizon's retail offerings include prime residential and other secured consumer lending to in-market customers, as well as a range of personal banking and wealth management solutions. Horizon also provides a comprehensive array of in-market business banking and treasury management services, as well as equipment financing solutions for customers regionally and nationally, with commercial lending representing over half of total loans. More information on Horizon, headquartered in Northwest Indiana's Michigan City, is available at horizonbank.com and investor.horizonbank.com.

    Use of Non-GAAP Financial Measures

    Certain information set forth in this press release refers to financial measures determined by methods other than in accordance with GAAP. Specifically, we have included non-GAAP financial measures relating to net income, diluted earnings per share, pre-tax, pre-provision net income, net interest margin, tangible stockholders’ equity and tangible book value per share, efficiency ratio, the return on average assets, the return on average common equity, and return on average tangible equity. In each case, we have identified special circumstances that we consider to be non-recurring and have excluded them. We believe that this shows the impact of such events as acquisition-related purchase accounting adjustments and swap termination fees, among others we have identified in our reconciliations. Horizon believes these non-GAAP financial measures are helpful to investors and provide a greater understanding of our business and financial results without giving effect to the purchase accounting impacts and one-time costs of acquisitions and non–recurring items. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the tables and other information below and contained elsewhere in this press release for reconciliations of the non-GAAP information identified herein and its most comparable GAAP measures.

    Forward Looking Statements

    This press release may contain forward–looking statements regarding the financial performance, business prospects, growth and operating strategies of Horizon Bancorp, Inc. and its affiliates (collectively, “Horizon”). For these statements, Horizon claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about Horizon, including the information in the filings we make with the Securities and Exchange Commission (the “SEC”). Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “project,” “intend,” “plan,” “believe,” “will” and similar expressions in connection with any discussion of future operating or financial performance.

    Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include: current financial conditions within the banking industry; changes in the level and volatility of interest rates, changes in spreads on earning assets and changes in interest bearing liabilities; increased interest rate sensitivity; the aggregate effects of elevated inflation levels in recent years; loss of key Horizon personnel; increases in disintermediation; potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms take a greater market share of the payment systems; estimates of fair value of certain of Horizon’s assets and liabilities; changes in prepayment speeds, loan originations, credit losses, market values, collateral securing loans and other assets; changes in sources of liquidity; macroeconomic conditions and their impact on Horizon and its customers; legislative and regulatory actions and reforms; changes in accounting policies or procedures as may be adopted and required by regulatory agencies; litigation, regulatory enforcement, and legal compliance risk and costs; rapid technological developments and changes; cyber terrorism and data security breaches; the rising costs of cybersecurity; the ability of the U.S. federal government to manage federal debt limits; climate change and social justice initiatives; the inability to realize cost savings or revenues or to effectively implement integration plans and other consequences associated with mergers, acquisitions, and divestitures; acts of terrorism, war and global conflicts, such as the Russia and Ukraine conflict and the Israel and Hamas conflict; and supply chain disruptions and delays. These and additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Horizon’s reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K) filed with the SEC and available at the SEC’s website (www.sec.gov). Undue reliance should not be placed on the forward–looking statements, which speak only as of the date hereof. Horizon does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward–looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

      
     Condensed Consolidated Statements of Income
     (Dollars in Thousands Except Per Share Data, Unaudited)
     Three Months Ended Nine Months Ended
     September 30, June 30, March 31, December 31, September 30, September 30, September 30,
     2024 2024
     2024
     2023 2023
     2024
     2023
    Interest Income             
    Loans receivable$75,488  $71,880  $66,954  $65,583  $63,003  $214,322  $178,961 
    Investment securities - taxable 8,133   7,986   7,362   8,157   8,788   23,481   26,253 
    Investment securities - tax-exempt 6,310   6,377   6,451   6,767   7,002   19,138   21,617 
    Other 957   738   4,497   3,007   1,332   6,192   1,960 
    Total interest income 90,888   86,981   85,264   83,514   80,125   263,133   228,791 
    Interest Expense             
    Deposits 30,787   28,447   27,990   27,376   24,704   87,224   58,481 
    Borrowed funds 11,131   11,213   11,930   11,765   11,224   34,274   30,713 
    Subordinated notes 830   829   831   870   880   2,490   2,641 
    Junior subordinated debentures issued to capital trusts 1,230   1,213   1,225   1,246   1,227   3,668   3,469 
    Total interest expense 43,978   41,702   41,976   41,257   38,035   127,656   95,304 
    Net Interest Income 46,910   45,279   43,288   42,257   42,090   135,477   133,487 
    Provision for loan losses 1,044   2,369   805   1,274   263   4,218   1,185 
    Net Interest Income after Provision for Loan Losses 45,866   42,910   42,483   40,983   41,827   131,259   132,302 
    Non-interest Income             
    Service charges on deposit accounts 3,320   3,130   3,214   3,092   3,086   9,664   9,135 
    Wire transfer fees 123   113   101   103   120   337   345 
    Interchange fees 3,511   3,826   3,109   3,224   3,186   10,446   9,637 
    Fiduciary activities 1,394   1,372   1,315   1,352   1,206   4,081   3,728 
    Gains (losses) on sale of investment securities          (31,572)        (480)
    Gain on sale of mortgage loans 1,622   896   626   951   1,582   3,144   3,372 
    Mortgage servicing income net of impairment 412   450   439   724   631   1,301   1,984 
    Increase in cash value of bank owned life insurance 349   318   298   658   1,055   965   3,051 
    Other income 780   380   827   1,019   964   1,987   1,675 
    Total non-interest income 11,511   10,485   9,929   (20,449)  11,830   31,925   32,447 
    Non-interest Expense             
    Salaries and employee benefits 21,829   20,583   20,268   21,877   20,058   62,680   58,932 
    Net occupancy expenses 3,207   3,192   3,546   3,260   3,283   9,945   10,095 
    Data processing 2,977   2,579   2,464   2,942   2,999   8,020   8,684 
    Professional fees 676   714   607   772   707   1,997   1,873 
    Outside services and consultants 3,677   3,058   3,359   2,394   2,316   10,094   7,548 
    Loan expense 1,034   1,038   719   1,345   1,120   2,791   3,635 
    FDIC insurance expense 1,204   1,315   1,320   1,200   1,300   3,839   2,680 
    Core deposit intangible amortization 844   844   872   903   903   2,560   2,709 
    Other losses 297   515   16   508   188   828   543 
    Other expense 3,527   3,684   3,936   4,129   3,294   11,147   10,255 
    Total non-interest expense 39,272   37,522   37,107   39,330   36,168   113,901   106,954 
    Income /(Loss) Before Income Taxes 18,105   15,873   15,305   (18,796)  17,489   49,283   57,795 
    Income tax expense (75)  1,733   1,314   6,419   1,284   2,972   4,599 
    Net Income /(Loss)$18,180  $14,140  $13,991  $(25,215) $16,205  $46,311  $53,196 
    Basic Earnings /(Loss) Per Share$0.42  $0.32  $0.32  $(0.58) $0.37  $1.06  $1.22 
    Diluted Earnings/(Loss) Per Share 0.41   0.32   0.32   (0.58)  0.37   1.05   1.21 
                                


     Condensed Consolidated Balance Sheets
     (Dollars in Thousands)
     September 30,
    2024
     June 30,
    2024
     March 31,
    2024
     December 31,
    2023
     September 30,
    2023
    Assets         
    Interest earning assets         
    Federal funds sold$113,912  $34,453  $161,704  $401,672  $71,576 
    Interest earning deposits 12,107   4,957   9,178   12,071   4,718 
    Interest earning time deposits 735   1,715   1,715   2,205   2,207 
    Federal Home Loan Bank stock 53,826   53,826   53,826   34,509   34,509 
    Investment securities, available for sale 541,170   527,054   535,319   547,251   865,168 
    Investment securities, held to maturity 1,888,379   1,904,281   1,925,725   1,945,638   1,966,483 
    Loans held for sale 2,069   2,440   922   1,418   2,828 
    Gross loans held for investment (HFI) 4,803,996   4,822,840   4,618,175   4,417,630   4,359,002 
    Total Interest earning assets 7,416,194   7,351,566   7,306,564   7,362,394   7,306,491 
    Non-interest earning assets         
    Allowance for credit losses (52,881)  (52,215)  (50,387)  (50,029)  (49,699)
    Cash 108,815   106,691   100,206   112,772   98,843 
    Cash value of life insurance 37,115   36,773   36,455   36,157   149,212 
    Other assets 119,026   165,656   160,593   177,061   152,280 
    Goodwill 155,211   155,211   155,211   155,211   155,211 
    Other intangible assets 11,067   11,910   12,754   13,626   14,530 
    Premises and equipment, net 93,544   93,695   94,303   94,583   94,716 
    Interest receivable 39,366   43,240   40,008   38,710   37,850 
    Total non-interest earning assets 511,263   560,961   549,143   578,091   652,943 
    Total assets$7,927,457  $7,912,527  $7,855,707  $7,940,485  $7,959,434 
    Liabilities         
    Savings and money market deposits$3,420,827  $3,364,726  $3,350,673  $3,369,149  $3,322,788 
    Time deposits 1,220,653   1,178,389   1,136,121   1,179,739   1,250,606 
    Borrowings 1,142,744   1,229,165   1,219,812   1,217,020   1,214,016 
    Repurchase agreements 122,399   128,169   139,309   136,030   142,494 
    Subordinated notes 55,703   55,668   55,634   55,543   59,007 
    Junior subordinated debentures issued to capital trusts 57,423   57,369   57,315   57,258   57,201 
    Total interest earning liabilities 6,019,749   6,013,486   5,958,864   6,014,739   6,046,112 
    Non-interest bearing deposits 1,085,535   1,087,040   1,093,076   1,116,005   1,126,703 
    Interest payable 11,400   11,240   7,853   22,249   16,281 
    Other liabilities 55,951   74,096   74,664   68,680   76,969 
    Total liabilities 7,172,635   7,185,862   7,134,457   7,221,673   7,266,065 
    Stockholders’ Equity         
    Preferred stock              
    Common stock              
    Additional paid-in capital 358,453   357,673   356,599   356,400   355,478 
    Retained earnings 454,050   442,977   435,927   429,021   461,325 
    Accumulated other comprehensive income (loss) (57,681)  (73,985)  (71,276)  (66,609)  (123,434)
    Total stockholders’ equity 754,822   726,665   721,250   718,812   693,369 
    Total liabilities and stockholders’ equity$7,927,457  $7,912,527  $7,855,707  $7,940,485  $7,959,434 
                        


     Loans and Deposits    
     (Dollars in Thousands, Unaudited)    
     September 30, June 30, March 31, December 31, September 30, % Change
     2024 2024 2024 2023 2023 Q3'24 vs Q2'24 Q3'24 vs Q3'23
    Commercial:             
    Commercial real estate$2,105,459  $2,117,772  $1,984,723  $1,962,097  $1,916,056   (1)%  10%
    Commercial & Industrial 808,600   786,788   765,043   712,863   673,188   3%  20%
    Total commercial 2,914,059   2,904,560   2,749,766   2,674,960   2,589,244   %  13%
    Residential Real estate 801,356   797,956   782,071   681,136   675,399   %  19%
    Mortgage warehouse 80,437   68,917   56,548   45,078   65,923   17%  22%
    Consumer 1,008,144   1,051,407   1,029,790   1,016,456   1,028,436   (4)%  (2)%
    Total loans held for investment 4,803,996   4,822,840   4,618,175   4,417,630   4,359,002   %  10%
    Loans held for sale 2,069   2,440   922   1,418   2,828   (15)%  (27)%
    Total loans$4,806,065  $4,825,280  $4,619,097  $4,419,048  $4,361,830   %  10%
                  
    Deposits:             
    Interest bearing deposits             
    Savings and money market deposits$3,420,827  $3,364,726  $3,350,673  $3,369,149  $3,322,788   2%  3%
    Time deposits 1,220,653   1,178,389   1,136,121   1,179,739   1,250,606   4%  (2)%
    Total Interest bearing deposits 4,641,480   4,543,115   4,486,794   4,548,888   4,573,394   2%  1%
    Non-interest bearing deposits             
    Non-interest bearing deposits 1,085,535   1,087,040   1,093,076   1,116,005   1,126,703   %  (4)%
    Total deposits$5,727,015  $5,630,155  $5,579,870  $5,664,893  $5,700,097   2%  %
                                


     Average Balance Sheet
     (Dollars in Thousands, Unaudited)
     Three Months Ended
     September 30, 2024 June 30, 2024 September 30, 2023
     Average
    Balance
    Interest(4) Average
    Rate(4)
     Average
    Balance
    Interest(4) Average
    Rate(4)
     Average
    Balance
    Interest(4)Average
    Rate(4)
    Assets
    Interest earning assets           
    Federal funds sold$64,743 $860  5.28% $47,805 $645  5.43% $92,305 $1,247  5.36%
    Interest earning deposits 8,781  97  4.39%  7,662  93  4.88%  8,018  85  4.21%
    Federal Home Loan Bank stock 53,826  1,607  11.88%  53,827  1,521  11.36%  34,509  618  7.10%
    Investment securities - taxable (1) 1,301,830  6,526  1.99%  1,309,305  6,465  1.99%  1,650,081  8,170  1.96%
    Investment securities - non-taxable (1) 1,125,295  7,987  2.82%  1,132,065  8,072  2.87%  1,220,998  8,863  2.88%
    Total investment securities 2,427,125  14,513  2.38%  2,441,370  14,537  2.39%  2,871,079  17,033  2.35%
    Loans receivable (2) (3) 4,775,788  75,828  6.32%  4,662,124  72,208  6.23%  4,280,700  63,254  5.89%
    Total interest earning assets$7,330,263 $92,905  5.04% $7,212,788 $89,004  4.96% $7,286,611 $82,237  4.59%
    Non-interest earning assets           
    Cash and due from banks$108,609    $108,319    $100,331   
    Allowance for credit losses (52,111)    (50,334)    (49,705)  
    Other assets 471,259     508,555     587,514   
    Total average assets$7,858,020    $7,779,328    $7,924,751   
                
    Liabilities and Stockholders' Equity
    Interest bearing liabilities           
    Interest bearing deposits$3,386,177 $18,185  2.14% $3,334,490 $16,814  2.03% $3,267,594 $12,661  1.54%
    Time deposits 1,189,148  12,602  4.22%  1,134,590  11,633  4.12%  1,271,104  12,043  3.76%
    Borrowings 1,149,952  10,221  3.54%  1,184,172  10,278  3.49%  1,180,452  10,399  3.50%
    Repurchase agreements 123,524  910  2.93%  125,144  935  3.00%  136,784  825  2.39%
    Subordinated notes 55,681  830  5.93%  55,647  829  5.99%  58,983  880  5.92%
    Junior subordinated debentures issued to capital trusts 57,389  1,230  8.53%  57,335  1,213  8.51%  57,166  1,227  8.52%
    Total interest bearing liabilities$5,961,871 $43,978  2.93% $5,891,378 $41,702  2.85% $5,972,083 $38,035  2.53%
    Non-interest bearing liabilities
    Demand deposits$1,083,214    $1,080,676    $1,159,241   
    Accrued interest payable and other liabilities 74,563     80,942     77,942   
    Stockholders' equity 738,372     726,332     715,485   
    Total average liabilities and stockholders' equity$7,858,020    $7,779,328    $7,924,751   
    Net FTE interest income (non-GAAP) (5) $48,927    $47,302    $44,202  
    Less FTE adjustments (4)  2,017     2,023     2,112  
    Net Interest Income $46,910    $45,279    $42,090  
    Net FTE interest margin (Non-GAAP) (4)(5)   2.66%    2.64%    2.41%
     
    (1) Securities balances represent daily average balances for the fair value of securities. The average rate is calculated based on the daily average balance for the amortized cost of securities.
    (2) Includes fees on loans held for sale and held for investment. The inclusion of loan fees does not have a material effect on the average interest rate.
    (3) Non-accruing loans for the purpose of the computation above are included in the daily average loan amounts outstanding. Loan totals are shown net of unearned income and deferred loan fees.
    (4) Management believes fully taxable equivalent, or FTE, interest income is useful to investors in evaluating the Company's performance as a comparison of the returns between a tax-free investment and a taxable alternative. The Company adjusts interest income and average rates for tax-exempt loans and securities to an FTE basis utilizing a 21% tax rate
    (5) Non-GAAP financial metric. See non-GAAP reconciliation included herein for the most directly comparable GAAP measure.
     


     Credit Quality    
     (Dollars in Thousands Except Ratios, Unaudited)    
     Quarter Ended    
     September 30, June 30, March 31, December 31, September 30, % Change
     2024 2024 2024 2023 2023 3Q24 vs 2Q24 3Q24 vs 3Q23
    Non-accrual loans             
    Commercial$6,830  $4,321  $5,493  $7,362  $6,919   58%  (1)%
    Residential Real estate 9,529   8,489   8,725   8,058   7,644   12%  25%
    Mortgage warehouse                %  %
    Consumer 7,208   5,453   4,835   4,290   4,493   32%  60%
    Total non-accrual loans 23,567   18,263   19,053   19,710   19,056   29%  24%
    90 days and greater delinquent - accruing interest 819   1,039   108   559   392   (21)%  109%
    Total non-performing loans 24,386   19,302   19,161   20,269   19,448   26%  25%
                  
    Other real estate owned             
    Commercial$1,158  $1,111  $1,124  $1,124  $1,287   4%  (10)%
    Residential Real estate          182   32   %  (100)%
    Mortgage warehouse                %  %
    Consumer 36   57   50   205   72   (37)%  (50)%
    Total other real estate owned$1,194  $1,168  $1,174  $1,511  $1,391   2%  (14)%
                  
    Total non-performing assets$25,580  $20,470  $20,335  $21,780  $20,839   25%  23%
                  
    Loan data:             
    Accruing 30 to 89 days past due loans$18,087  $19,785  $15,154  $16,595  $13,089   (9)%  38%
    Substandard loans 59,775   51,221   47,469   49,526   47,563   17%  26%
    Net charge-offs (recoveries)             
    Commercial (55)  57   (57)  233   142   (196)%  (139)%
    Residential Real estate (9)  (4)  (5)  21   (39)  (125)%  77%
    Mortgage warehouse                %  %
    Consumer 439   534   488   531   619   (18)%  (29)%
    Total net charge-offs 375   587   426   785   722   (36)%  (48)%
                  
    Allowance for credit losses             
    Commercial 32,854   31,941   30,514   29,736   29,472   3%  11%
    Residential Real estate 2,675   2,588   2,655   2,503   2,794   3%  (4)%
    Mortgage warehouse 862   736   659   481   714   17%  21%
    Consumer 16,490   16,950   16,559   17,309   16,719   (3)%  (1)%
    Total allowance for credit losses$52,881  $52,215  $50,387  $50,029  $49,699   1%  6%
                  
    Credit quality ratios             
    Non-accrual loans to HFI loans 0.49%  0.38%  0.41%  0.45%  0.44%    
    Non-performing assets to total assets 0.32%  0.26%  0.26%  0.27%  0.26%    
    Annualized net charge-offs of average total loans 0.03%  0.05%  0.04%  0.07%  0.07%    
    Allowance for credit losses to HFI loans 1.10%  1.08%  1.09%  1.13%  1.14%    
                            


    Non–GAAP Reconciliation of Net Fully-Taxable Equivalent ("FTE") Interest Margin
    (Dollars in Thousands, Unaudited)
      Three Months Ended
      September 30, June 30, March 31, December 31, September 30,
      2024 2024 2024 2023 2023
    Interest income (GAAP)(A)$90,888  $86,981  $85,264  $83,514  $80,125 
    Taxable-equivalent adjustment:          
    Investment securities - tax exempt (1)  1,677   1,695   1,715   1,799   1,861 
    Loan receivable (2)  340   328   353   314   251 
    Interest income (non-GAAP)(B) 92,905   89,004   87,332   85,627   82,237 
    Interest expense (GAAP)(C) 43,978   41,702   41,976   41,257   38,035 
    Net interest income (GAAP)(D) =(A) - (C) 46,910   45,279   43,288   42,257   42,090 
    Net FTE interest income (non-GAAP)(E) = (B) - (C) 48,927   47,302   45,356   44,370   44,202 
    Average interest earning assets(F) 7,330,263   7,212,788   7,293,559   7,239,034   7,286,611 
    Net FTE interest margin (non-GAAP)(G) = (E*) / (F) 2.66%  2.64%  2.50%  2.43%  2.41%
               
    (1) The following represents municipal securities interest income for investment securities classified as available-for-sale and held-to-maturity
    (2) The following represents municipal loan interest income for loan receivables classified as held for sale and held for investment
    *Annualized
     


    Non–GAAP Reconciliation of Return on Average Tangible Common Equity
    (Dollars in Thousands, Unaudited)
      Three Months Ended
      September 30, June 30, March 31, December 31, September 30,
      2024 2024 2024 2023 2023
               
    Net income (loss) (GAAP)(A)$18,180  $14,140  $13,991  $(25,215) $16,205 
               
    Average stockholders' equity(B) 738,372   726,332   725,083   702,793   715,485 
    Average intangible assets(C) 166,819   167,659   168,519   169,401   170,301 
    Average tangible equity (Non-GAAP)(D) = (B) - (C)$571,553  $558,673  $556,564  $533,392  $545,184 
    Return on average tangible common equity ("ROACE") (non-GAAP)(E) = (A*) / (D) 12.65%  10.18%  10.11% (18.76)%  11.79%
    *Annualized          
               


    Non–GAAP Reconciliation of Tangible Common Equity to Tangible Assets
    (Dollars in Thousands, Unaudited)
      Three Months Ended
      September 30, June 30, March 31, December 31, September 30,
      2024 2024 2024 2023 2023
    Total stockholders' equity (GAAP)(A)$754,822  $726,665  $721,250  $718,812  $693,369 
    Intangible assets (end of period)(B) 166,278   167,121   167,965   168,837   169,741 
    Total tangible common equity (non-GAAP)(C) = (A) - (B)$588,544  $559,544  $553,285  $549,975  $523,628 
               
    Total assets (GAAP)(D) 7,927,457   7,912,527   7,855,707   7,940,485   7,959,434 
    Intangible assets (end of period)(B) 166,278   167,121   167,965   168,837   169,741 
    Total tangible assets (non-GAAP)(E) = (D) - (B)$7,761,179  $7,745,406  $7,687,742  $7,771,648  $7,789,693 
               
    Tangible common equity to tangible assets (Non-GAAP)(G) = (C) / (E) 7.58%  7.22%  7.20%  7.08%  6.72%
                         


    Non–GAAP Reconciliation of Tangible Book Value Per Share
    (Dollars in Thousands, Unaudited)
      Three Months Ended
      September 30, June 30, March 31, December 31, September 30,
      2024
     2024
     2024
     2023
     2023
    Total stockholders' equity (GAAP)(A)$754,822  $726,665  $721,250  $718,812  $693,369 
    Intangible assets (end of period)(B) 166,278   167,121   167,965   168,837   169,741 
    Total tangible common equity (non-GAAP)(C) = (A) - (B)$588,544  $559,544  $553,285  $549,975  $523,628 
    Common shares outstanding(D) 43,712,059   43,712,059   43,726,380   43,652,063   43,648,501 
               
    Tangible book value per common share (non-GAAP)(E) = (C) / (D)$13.46  $12.80  $12.65  $12.60  $12.00 
                         


    Contact:John R. Stewart, CFA
     EVP, Chief Financial Officer
    Phone:(219) 814–5833
    Fax:(219) 874–9280
    Date:October 23, 2024
      

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