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

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Company's expanding banking franchise earns net income of $15.7 million, sustains momentum following fourth quarter acquisitions

WICHITA, Kan., April 19, 2022 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ: EQBK), ("Equity", "the Company", "we", "us", "our"), the Wichita-based holding company of Equity Bank, reported net income of $15.7 million and $0.93 earnings per diluted share for the quarter ended March 31, 2022.

"I'm pleased with the entrepreneurial spirit of our bankers, including our market leaders, bank leaders and our support and operations teams for their collaboration and their continued focus on our customers," said Brad Elliott, Chairman and CEO. "We began 2022 as a franchise of nearly 70 bank locations in our four-state network and we've continued to sustain momentum in our first quarter with customers by being responsive and open, and providing additional products and services to our new communities."

"Our first quarter reflects our approach as a brand, providing sophisticated and innovative solutions delivered with trusted expertise of bankers dedicated to local communities," said Mr. Elliott. "As we continue to review opportunities to expand our brand via merger, our service and sales teams continue to boost organic growth, by delivering new solutions each and every day to our customers."

Notable Items:

  • During the first quarter, the Company realized period over period growth in loans held for investment of 14.53% excluding the impact of PPP assets, effectively deploying excess cash balances from the end of the year into higher yielding asset classes.
  • The Company realized economic benefit of $5.7 million from the American State Bancshares and Almena State Bank acquisitions during the quarter as specific credits saw improvement resulting in release of specific reserves generated against these assets. In addition to the release of specific reserves, the Company also reversed repurchase obligations associated with certain of these assets further benefiting income by $500 thousand.
  • The Company continued to successfully manage our problem asset portfolio to positive outcomes for the Company and its shareholders. As compared to December 31, 2021, all non-performing ratios have improved in excess of 30%, while classified assets to regulatory capital has fallen to 17.1%, its lowest level since December 31, 2015.
  • The Company continued to position itself in the event of the realization of losses following economic turmoil domestically due in part to inflation and monetary policy as well as geopolitical concerns arising from Russia's actions in Ukraine.
  • The Company continued to emphasize investor returns through repurchase of 384,383 shares during the quarter, at an average price of $32.21, as well as the continuation of our quarterly dividend program at $0.08 per share. Under the currently active repurchase program, the Company is authorized to purchase an additional 482,744 shares.

Financial Results for the Quarter Ended March 31, 2022

Net income allocable to common stockholders was $15.7 million, or $0.93 per diluted share, for the three months ended March 31, 2022, as compared to $10.5 million, or $0.61 per diluted share, for the three months ended December 31, 2021, an increase of $5.2 million. The increase for the first quarter of 2022 is primarily due to increases in loan and investment security interest income of $1.4 million and $545 thousand, respectively, and decreases in non-interest expenses of $8.6 million.

Net Interest Income

Net interest income was $39.3 million for the three months ended March 31, 2022, as compared to $37.2 million for the three months ended December 31, 2021, an increase of $2.1 million, or 5.6%. The increase was mainly due to increasing yields on interest-earning assets with relatively unchanged yields on interest-bearing liabilities. Loans were responsible for the majority of the increase in interest income, with a $14.5 million increase in average balance and a 25 basis point increase in yield. The cost of time deposits fell by 9 basis points during the quarter, moving from 0.56% at December 31, 2021 to 0.47% at March 31, 2022. Total yield on interest-earning assets increased 24 basis points, while total cost of interest-bearing liabilities decreased 2 basis points.

Provision for Credit Losses

During the three months ended March 31, 2022, there was a net release of $412 thousand from the allowance for credit losses recognized through the provision for credit losses as compared to a net release of $2.1 million from the allowance for credit losses for the three months ended December 31, 2021. The net release of allowance for credit losses was mainly driven by decreases in specific reserves on purchased credit deteriorated loans due to improvement in credit quality during the quarter. Offsetting the reduction in allowance for loans specifically analyzed for impairment was an increase in general reserves driven by increasing loan balances as well as perceived risk associated with near term economic turmoil including significant inflation, supply chain concerns which are potentially exacerbated by geopolitical issues, and uncertainty around the impact of monetary policy on consumers and businesses. For the three months ended March 31, 2022, we had net charge-offs of $362 thousand as compared to $7.9 million for the three months ended December 31, 2021.

Non-Interest Income

Total non-interest income was $9.0 million for the three months ended March 31, 2022, as compared to $9.2 million for the three months ended December 31, 2021, or a decrease of 1.9%, quarter over quarter. The decrease was due to decreased income from the valuation of bank-owned life insurance of $195 thousand, insurance commissions and fees of $157 thousand, and mortgage banking revenue of $160 thousand, partially offset by an increase in fee income and other of $152 thousand and an increase of $104 thousand of income related to derivative transactions in the quarter ending March 31, 2022.

Non-Interest Expense

Total non-interest expense for the quarter ended March 31, 2022, was $29.5 million as compared to $38.1 million for the quarter ended December 31, 2021. The $8.6 million change was primarily due to decreases in merger expenses of $4.2 million and other non-interest expense of $3.0 million. The comparative change in other non-interest expense was primarily driven by a release of reserve for unfunded commitments of $1.0 million and a reduction in the cost of our solar investments of an additional $900 thousand.

Asset Quality

As of March 31, 2022, Equity's allowance for credit losses to total loans had remained constant at 1.5%, as compared to December 31, 2021. Nonperforming assets were $37.5 million as of March 31, 2022, or 0.7% of total assets, compared to $66.0 million at December 31, 2021, or 1.3% of total assets. Non-accrual loans were $20.7 million at March 31, 2022, as compared to $29.4 million at December 31, 2021. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $94.2 million, or 17.1% of regulatory capital, down from $138.5 million, or 25.3% of regulatory capital as of December 31, 2021.

During the quarter ended March 31, 2022, non-performing assets decreased $28.5 million due to decreases in non-accrual loans of $8.7 million and other repossessed assets of $20.0 million. The decrease in non-accrual loans was largely due to $8.2 million in loans upgraded to accrual status during the quarter due to repayment performance and improvements in specific credit concerns. The change in other repossessed assets was primarily due to the sale of a group of assets that were moved to other repossessed assets in the fourth quarter of 2021.

Regulatory Capital

The Company's ratio of common equity tier 1 capital to risk-weighted assets was 11.8%, the total capital to risk-weighted assets was 15.7% and the total leverage ratio was 9.1% at March 31, 2022. At December 31, 2021, the Company's common equity tier 1 capital to risk-weighted assets ratio was 12.0%, the total capital to risk-weighted assets ratio was 16.0% and the total leverage ratio was 9.1%.

The Company's subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 13.7%, a ratio of total capital to risk-weighted assets of 14.9% and a total leverage ratio of 10.0% at March 31, 2022. At December 31, 2021, Equity Bank's ratio of common equity tier 1 capital to risk-weighted assets was 14.0%, the ratio of total capital to risk-weighted assets was 15.3% and the total leverage ratio was 10.1%.

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 Chairman and Chief Executive Officer, Brad Elliott, and Executive Vice President and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss the 2022 first quarter results on Wednesday, April 20, 2022, at 10:00 a.m. eastern time, 9:00 a.m. central time.

Investors, news media and other participants should register for the call or audio webcast at investor.equitybank.com. On Wednesday, April 20, 2022, participants may also dial into the call toll-free at (844) 534-7311 from anywhere in the U.S. or (574) 990-1419 internationally, using conference ID no. 1392188.

Participants are encouraged to dial into the call or access the webcast approximately 10 minutes prior to the start time. Presentation slides to pair with the call or webcast will be posted one hour prior to the call at investor.equitybank.com.

A replay of the call and webcast will be available two hours following the close of the call until April 27, 2022, accessible at (855) 859-2056 with conference ID no. 1392188 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. 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
[email protected]

Media Contact:

John J. Hanley
SVP, Senior Director of Marketing
Equity Bancshares, Inc.
(913) 583-8004
[email protected]

Unaudited Financial Tables

  • Table 1. Quarterly Consolidated Statements of Income
  • Table 2. Consolidated Balance Sheets
  • Table 3. Selected Financial Highlights
  • Table 4. Quarter-To-Date Net Interest Income Analysis
  • Table 5. Quarter-Over-Quarter Net Interest Income Analysis
  • Table 6. Non-GAAP Financial Measures

TABLE 1. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)

As of and for the three months ended
March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
Interest and dividend income
Loans, including fees $36,306 $34,942 $37,581 $33,810 $31,001
Securities, taxable 5,391 4,754 3,920 3,523 3,799
Securities, nontaxable 655 747 655 717 724
Federal funds sold and other 300 349 290 268 288
Total interest and dividend income 42,652 40,792 42,446 38,318 35,812
Interest expense
Deposits 1,722 1,939 1,881 2,025 2,410
Federal funds purchased and retail repurchase agreements 33 32 24 26 22
Federal Home Loan Bank advances 9 14 10 80 65
Subordinated debt 1,599 1,592 1,556 1,557 1,556
Total interest expense 3,363 3,577 3,471 3,688 4,053
Net interest income 39,289 37,215 38,975 34,630 31,759
Provision (reversal) for credit losses (412) (2,125) 1,058 (1,657) (5,756)
Net interest income after provision (reversal) for credit losses 39,701 39,340 37,917 36,287 37,515
Non-interest income
Service charges and fees 2,522 2,471 2,360 2,169 1,596
Debit card income 2,628 2,633 2,574 2,679 2,350
Mortgage banking 562 722 801 848 935
Increase in value of bank-owned life insurance 865 1,060 1,169 676 601
Net gain on acquisition -- -- -- 663 (78)
Net gains (losses) from securities transactions 40 8 381 -- 17
Other 2,405 2,305 546 2,065 1,291
Total non-interest income 9,022 9,199 7,831 9,100 6,712
Non-interest expense
Salaries and employee benefits 15,068 15,119 13,588 12,769 12,722
Net occupancy and equipment 3,170 2,967 2,475 2,327 2,368
Data processing 3,769 3,867 3,257 3,474 2,663
Professional fees 1,171 1,565 1,076 999 1,073
Advertising and business development 976 1,129 760 799 682
Telecommunications 470 435 439 512 580
FDIC insurance 180 360 465 425 415
Courier and postage 423 389 344 327 369
Free nationwide ATM cost 501 515 519 513 472
Amortization of core deposit intangibles 1,050 1,080 1,030 1,030 1,034
Loan expense 185 308 207 181 238
Other real estate owned (1) 617 (342) (468) 5
Loss on debt extinguishment -- -- 372 -- --
Merger expenses 323 4,562 4,015 460 152
Other 2,174 5,176 2,484 2,458 2,108
Total non-interest expense 29,459 38,089 30,689 25,806 24,881
Income (loss) before income tax 19,264 10,450 15,059 19,581 19,346
Provision for income taxes (benefit) 3,614 (16) 3,286 4,415 4,271
Net income (loss) and net income (loss) allocable to common stockholders $15,650 $10,466 $11,773 $15,166 $15,075
Basic earnings (loss) per share $0.94 $0.62 $0.82 $1.06 $1.04
Diluted earnings (loss) per share $0.93 $0.61 $0.80 $1.03 $1.02
Weighted average common shares 16,652,556 16,865,167 14,384,302 14,356,958 14,464,291
Weighted average diluted common shares 16,869,152 17,141,174 14,669,312 14,674,838 14,734,083

TABLE 2. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

March 31,
2022
December 31,
2021
September 30,
2021
June 30,
2021
March 31,
2021
ASSETS
Cash and due from banks $89,764 $259,131 $141,645 $138,869 $136,190
Federal funds sold 286 823 673 452 498
Cash and cash equivalents 90,050 259,954 142,318 139,321 136,688
Interest-bearing time deposits in other banks -- -- -- -- 249
Available-for-sale securities 1,352,894 1,327,442 1,157,423 1,041,613 998,100
Loans held for sale 1,575 4,214 4,108 6,183 8,609
Loans, net of allowance for credit losses(1) 3,194,987 3,107,262 2,633,148 2,763,227 2,740,215
Other real estate owned, net 9,897 9,523 10,267 10,861 10,559
Premises and equipment, net 103,168 104,038 90,727 90,876 90,322
Bank-owned life insurance 120,928 120,787 103,431 103,321 102,645
Federal Reserve Bank and Federal Home Loan Bank stock 19,890 17,510 14,540 18,454 15,174
Interest receivable 16,923 18,048 15,519 15,064 16,655
Goodwill 54,465 54,465 31,601 31,601 31,601
Core deposit intangibles, net 13,830 14,879 12,963 13,993 15,023
Other 100,016 99,509 47,223 33,702 30,344
Total assets $5,078,623 $5,137,631 $4,263,268 $4,268,216 $4,196,184
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand $1,255,793 $1,244,117 $984,436 $992,565 $972,364
Total non-interest-bearing deposits 1,255,793 1,244,117 984,436 992,565 972,364
Savings, NOW and money market 2,511,478 2,522,289 2,092,849 2,035,496 2,074,261
Time 612,399 653,598 585,492 659,494 587,905
Total interest-bearing deposits 3,123,877 3,175,887 2,678,341 2,694,990 2,662,166
Total deposits 4,379,670 4,420,004 3,662,777 3,687,555 3,634,530
Federal funds purchased and retail repurchase agreements 48,199 56,006 39,137 47,184 40,339
Federal Home Loan Bank advances 50,000 -- -- 9,208 9,926
Subordinated debt 96,010 95,885 88,030 87,908 87,788
Contractual obligations 17,307 17,692 18,771 4,469 4,856
Interest payable and other liabilities 35,422 47,413 36,804 18,897 20,930
Total liabilities 4,626,608 4,637,000 3,845,519 3,855,221 3,798,369
Commitments and contingent liabilities
Stockholders' equity
Common stock 204 203 178 176 175
Additional paid-in capital 480,106 478,862 392,321 389,394 387,939
Retained earnings 102,632 88,324 79,226 68,625 53,459
Accumulated other comprehensive income, net of tax (50,012) 1,776 9,475 13,450 12,019
Treasury stock (80,915) (68,534) (63,451) (58,650) (55,777)
Total stockholders' equity 452,015 500,631 417,749 412,995 397,815
Total liabilities and stockholders' equity $5,078,623 $5,137,631 $4,263,268 $4,268,216 $4,196,184
(1) Allowance for credit losses $47,590 $48,365 $52,763 $51,834 $55,525

TABLE 3. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)

As of and for the three months ended
March 31, December 31, September 30, June 30, March 31,
2022 2021 2021 2021 2021
Loans Held For Investment by Type
Commercial real estate $1,552,134 $1,486,148 $1,308,707 $1,261,214 $1,218,537
Commercial and industrial 629,181 567,497 569,513 732,126 820,736
Residential real estate 613,928 638,087 490,633 503,110 438,503
Agricultural real estate 198,844 198,330 138,793 129,020 134,944
Agricultural 150,077 166,975 93,767 97,912 93,764
Consumer 98,413 98,590 84,498 91,679 89,256
Total loans held-for-investment 3,242,577 3,155,627 2,685,911 2,815,061 2,795,740
Allowance for credit losses (47,590) (48,365) (52,763) (51,834) (55,525)
Net loans held for investment $3,194,987 $3,107,262 $2,633,148 $2,763,227 $2,740,215
Asset Quality Ratios
Allowance for credit losses on loans to total loans 1.47% 1.53% 1.96% 1.84% 1.99%
Past due or nonaccrual loans to total loans 0.82% 1.18% 2.78% 2.09% 2.30%
Nonperforming assets to total assets 0.74% 1.28% 1.74% 1.56% 1.67%
Nonperforming assets to total loans plus other real estate owned 1.15% 2.07% 2.76% 2.36% 2.50%
Classified assets to bank total regulatory capital 17.12% 25.34% 24.25% 23.20% 26.45%
Selected Average Balance Sheet Data (QTD Average)
Investment securities $1,397,421 $1,330,267 $1,061,178 $986,986 $947,453
Total gross loans receivable 3,195,787 3,181,279 2,748,202 2,853,145 2,736,918
Interest-earning assets 4,715,389 4,713,817 4,005,509 3,964,633 3,891,140
Total assets 5,108,120 5,068,278 4,275,298 4,231,439 4,143,752
Interest-bearing deposits 3,163,777 3,101,657 2,702,040 2,656,052 2,690,159
Borrowings 160,094 165,941 132,581 171,658 139,360
Total interest-bearing liabilities 3,323,871 3,267,598 2,834,621 2,827,710 2,829,519
Total deposits 4,393,879 4,342,732 3,686,169 3,624,950 3,577,625
Total liabilities 4,615,521 4,505,232 3,852,419 3,827,400 3,748,114
Total stockholders' equity 492,599 563,046 422,879 404,039 395,638
Tangible common equity* 422,418 501,860 376,544 356,705 347,262
Performance ratios
Return on average assets (ROAA) annualized 1.24% 0.82% 1.09% 1.44% 1.48%
Return on average assets before income tax and provision for loan losses* 1.50% 0.65% 1.50% 1.70% 1.33%
Return on average equity (ROAE) annualized 12.88% 7.37% 11.05% 15.06% 15.45%
Return on average equity before income tax and provision for loan losses* 15.52% 5.87% 15.12% 17.79% 13.93%
Return on average tangible common equity (ROATCE) annualized* 15.85% 8.97% 13.27% 17.98% 18.57%
Yield on loans annualized 4.61% 4.36% 5.43% 4.75% 4.59%
Cost of interest-bearing deposits annualized 0.22% 0.25% 0.28% 0.31% 0.36%
Cost of total deposits annualized 0.16% 0.18% 0.20% 0.22% 0.27%
Net interest margin annualized 3.38% 3.13% 3.86% 3.50% 3.31%
Efficiency ratio* 60.36% 72.25% 56.65% 58.85% 64.18%
Non-interest income / average assets 0.72% 0.72% 0.73% 0.86% 0.66%
Non-interest expense / average assets 2.34% 2.98% 2.85% 2.45% 2.44%
Capital Ratios
Tier 1 Leverage Ratio 9.07% 9.09% 9.02% 8.88% 8.73%
Common Equity Tier 1 Capital Ratio 11.81% 12.03% 12.39% 12.41% 12.53%
Tier 1 Risk Based Capital Ratio 12.43% 12.67% 12.90% 12.93% 13.08%
Total Risk Based Capital Ratio 15.66% 15.96% 16.63% 16.74% 17.02%
Total stockholders' equity to total assets 8.90% 9.74% 9.80% 9.68% 9.48%
Tangible common equity to tangible assets* 7.63% 8.48% 8.82% 8.68% 8.44%
Dividend payout ratio 8.60% 13.05% 9.96% 0.00% 0.00%
Book value per common share $27.47 $29.87 $29.08 $28.76 $27.66
Tangible book value per common share* $23.24 $25.65 $25.90 $25.51 $24.34
Tangible book value per diluted common share* $22.95 $25.22 $25.42 $24.98 $23.87

* The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures, see Table 8. Non-GAAP Financial Measures

TABLE 4. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)

For the three months ended For the three months ended
March 31, 2022 March 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$575,563 $7,761 5.47% $803,012 $9,234 4.66%
Commercial real estate 1,190,128 13,451 4.58% 971,825 11,441 4.77%
Real estate construction 342,536 3,299 3.91% 255,677 2,178 3.45%
Residential real estate 632,581 5,665 3.63% 394,329 4,452 4.58%
Agricultural real estate 202,145 2,663 5.34% 140,875 1,696 4.88%
Agricultural 149,676 2,316 6.28% 94,787 1,037 4.44%
Consumer 103,158 1,151 4.53% 76,413 963 5.11%
Total loans 3,195,787 36,306 4.61% 2,736,918 31,001 4.59%
Securities
Taxable securities 1,285,942 5,391 1.70% 839,349 3,799 1.84%
Nontaxable securities 111,479 655 2.38% 108,104 724 2.72%
Total securities 1,397,421 6,046 1.75% 947,453 4,523 1.94%
Federal funds sold and other 122,181 300 1.00% 206,769 288 0.56%
Total interest-earning assets$4,715,389 42,652 3.67% $3,891,140 35,812 3.73%
Interest-bearing liabilities
Savings, NOW and money market deposits$2,534,102 996 0.16% $2,079,057 971 0.19%
Time deposits 629,675 726 0.47% 611,102 1,439 0.96%
Total interest-bearing deposits 3,163,777 1,722 0.22% 2,690,159 2,410 0.36%
FHLB advances 9,943 9 0.38% 10,013 65 2.63%
Other borrowings 150,151 1,632 4.41% 129,347 1,578 4.95%
Total interest-bearing liabilities$3,323,871 3,363 0.41% $2,829,519 4,053 0.58%
Net interest income $39,289 $31,759
Interest rate spread 3.26% 3.15%
Net interest margin (2) 3.38% 3.31%
(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 5. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)

For the three months ended For the three months ended
March 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$575,563 $7,761 5.47% $601,103 $6,971 4.60%
Commercial real estate 1,190,128 13,451 4.58% 1,187,747 13,732 4.59%
Real estate construction 342,536 3,299 3.91% 315,774 3,062 3.85%
Residential real estate 632,581 5,665 3.63% 618,057 5,174 3.32%
Agricultural real estate 202,145 2,663 5.34% 206,462 2,919 5.61%
Agricultural 149,676 2,316 6.28% 151,589 1,929 5.05%
Consumer 103,158 1,151 4.53% 100,547 1,155 4.56%
Total loans 3,195,787 36,306 4.61% 3,181,279 34,942 4.36%
Securities
Taxable securities 1,285,942 5,391 1.70% 1,209,826 4,754 1.56%
Nontaxable securities 111,479 655 2.38% 120,441 747 2.46%
Total securities 1,397,421 6,046 1.75% 1,330,267 5,501 1.64%
Federal funds sold and other 122,181 300 1.00% 202,271 348 0.68%
Total interest-earning assets$4,715,389 42,652 3.67% $4,713,817 40,791 3.43%
Interest-bearing liabilities
Savings, NOW and money market deposits$2,534,102 996 0.16% $2,418,492 978 0.16%
Time deposits 629,675 726 0.47% 683,165 962 0.56%
Total interest-bearing deposits 3,163,777 1,722 0.22% 3,101,657 1,940 0.25%
FHLB advances 9,943 9 0.38% 18,197 15 0.32%
Other borrowings 150,151 1,632 4.41% 147,744 1,624 4.36%
Total interest-bearing liabilities$3,323,871 3,363 0.41% $3,267,598 3,579 0.43%
Net interest income $39,289 $37,212
Interest rate spread 3.26% 3.00%
Net interest margin (2) 3.38% 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 6. NON-GAAP FINANCIAL MEASURES (Unaudited)

As of and for the three months ended
March 31, December 31, September 30, June 30, March 31,
2022 2021 2021 2021 2021
Total stockholders' equity $452,015 $500,631 $417,749 $412,995 $397,815
Less: goodwill 54,465 56,609 31,601 31,601 31,601
Less: core deposit intangibles, net 13,830 14,879 12,963 13,993 15,023
Less: mortgage servicing asset, net 251 276 -- -- --
Less: naming rights, net 1,076 1,087 1,098 1,109 1,119
Tangible common equity $382,393 $427,780 $372,087 $366,292 $350,072
Common shares issued at period end 16,454,966 16,779,029 14,365,785 14,360,172 14,383,913
Diluted common shares outstanding at period end 16,662,779 17,050,115 14,637,306 14,664,603 14,668,287
Book value per common share $27.47 $29.84 $29.08 $28.76 $27.66
Tangible book value per common share $23.24 $25.49 $25.90 $25.51 $24.34
Tangible book value per diluted common share $22.95 $25.09 $25.42 $24.98 $23.87
Total assets $5,078,623 $5,139,775 $4,263,268 $4,268,216 $4,196,184
Less: goodwill 54,465 56,609 31,601 31,601 31,601
Less: core deposit intangibles, net 13,830 14,879 12,963 13,993 15,023
Less: mortgage servicing asset, net 251 276 -- -- --
Less: naming rights, net 1,076 1,087 1,098 1,109 1,119
Tangible assets $5,009,001 $5,066,924 $4,217,606 $4,221,513 $4,148,441
Total stockholders' equity to total assets 8.90% 9.74% 9.80% 9.68% 9.48%
Tangible common equity to tangible assets 7.63% 8.44% 8.82% 8.68% 8.44%
Total average stockholders' equity $492,599 $563,023 $422,879 $404,039 $395,638
Less: average intangible assets 70,181 61,209 46,335 47,334 48,376
Average tangible common equity $422,418 $501,814 $376,544 $356,705 $347,262
Net income (loss) allocable to common stockholders $15,650 $10,466 $11,773 $15,166 $15,075
Amortization of intangible assets 1,085 1,116 1,040 1,041 1,045
Less: tax effect of intangible assets amortization 228 234 218 219 219
Adjusted net income (loss) allocable to common stockholders $16,507 $11,348 $12,595 $15,988 $15,901
Return on total average stockholders' equity (ROAE) annualized 12.88% 7.37% 11.05% 15.06% 15.45%
Return on average tangible common equity (ROATCE) annualized 15.85% 8.97% 13.27% 17.98% 18.57%
Non-interest expense $29,459 $38,089 $30,689 $25,806 $24,881
Less: merger expense 323 4,562 4,015 460 152
Non-interest epense, excluding merge expense and loss on debt extinguishment $29,136 $33,527 $26,674 $25,346 $24,729
Net interest income $39,289 $37,215 $38,975 $34,630 $31,759
Non-interest income 9,022 9,199 7,831 9,100 6,712
Less: net gain on acquisition -- -- -- 663 (78)
Less: net gains (losses) from securities transactions 40 8 381 -- 17
Non-interest income, excluding gains (losses) from securities transactions $8,982 $9,191 $7,450 $8,437 $6,773
Net interest income plus non-interest income, excluding net gain on acquisition and net gains (losses) from securities transactions $48,271 $46,406 $46,425 $43,067 $38,532
Non-interest expense to net interest income plus non-interest income 60.98% 82.06% 65.57% 59.01% 64.67%
Efficiency ratio 60.36% 72.25% 57.46% 58.85% 64.18%
Net income (loss) allocable to common stockholders $15,650 $10,466 $11,773 $15,166 $15,075
Add: income tax provision 3,614 (16) 3,286 4,415 4,271
Add: provision (reversal) of credit losses (412) (2,125) 1,058 (1,657) (5,756)
Adjusted net income $18,852 $8,325 $16,117 $17,924 $13,590
Total average assets $5,108,120 $5,068,301 $4,275,298 $4,231,439 $4,143,752
Total average stockholders' equity $492,599 $563,023 $422,879 $404,039 $395,638
Return on average assets (ROAA) annualized 1.24% 0.82% 1.09% 1.44% 1.48%
Adjusted return on average assets 1.50% 0.65% 1.50% 1.70% 1.33%
Adjusted return on average equity 15.52% 5.87% 15.12% 17.79% 13.93%

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