FMNB 8-K
Farmers National Banc Corp /Oh/ (FMNB)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
On January 24, 2024, Farmers National Banc Corp. (the “Company”) announced earnings for the quarter and year ended December 31, 2023. A copy of the press release and certain financial information for those periods is attached as Exhibit 99.1 hereto and incorporated by reference herein.
Also on January 24, 2024, the Company first provided investors with a supplemental presentation regarding fourth quarter and year end earnings and other current financial information, attached as Exhibit 99.2 hereto and incorporated by reference herein.
Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 2.02 and Exhibits 99.1 and 99.2 are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Furthermore, the information in this Item 2.02 and Exhibits 99.1 and 99.2 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended (the “Securities Act”) except as may be expressly set forth by specific reference in such filing.
| Item 7.01 | Regulation FD Disclosure. |
On January 24, 2024, the Company first provided investors with a supplemental presentation regarding fourth quarter and year-end earnings and other current financial information, attached as Exhibit 99.2 hereto and incorporated by reference herein.
The presentation is furnished herein, as part of this Item 7.01, as Exhibit 99.2. Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 7.01 and Exhibit 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Furthermore, the information in this Item 7.01 and Exhibit 99.2 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act, except as may be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit |
Description | |
| 99.1 | Press Release, dated January 24, 2024 | |
| 99.2 | Investor Presentation, dated January 24, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Farmers National Banc Corp. | ||
| By: | /s/ Kevin J. Helmick | |
| Kevin J. Helmick | ||
| President and Chief Executive Officer | ||
Date: January 24, 2024
Exhibit 99.1
January 24, 2024
Press Release
| Source: Farmers | National Banc Corp. |
Kevin J. Helmick, President and CEO
20 South Broad Street, P.O. Box 555
Canfield, OH 44406
330.533.3341
Email: [email protected]
FARMERS NATIONAL BANC CORP. REPORTS
SOLID RESULTS FOR FOURTH QUARTER OF 2023
| • | Earnings per diluted share of $0.39 ($0.41 excluding certain items, non-GAAP) for the fourth quarter of 2023 |
| • | 164 consecutive quarters of profitability |
| • | Recorded a $915,000 gain during the quarter by selling $5.8 million of nonaccrual/troubled commercial loans |
| • | Loan growth of $29.6 million, or 3.7% annualized, for the fourth quarter of 2023 |
| • | Excluding impact of commercial loan sale - loan growth of $37.7 million, or 4.8% annualized, for fourth quarter 2023 |
| • | Continued strong asset quality with non-performing assets to total assets of 0.30% as of December 31, 2023 |
| • | Return on average assets of 1.17% for the fourth quarter of 2023 |
| • | ROAE and ROATE (non-GAAP) of 18.0% and 43.8%, respectively, for the fourth quarter of 2023 |
CANFIELD, Ohio (January 24, 2024) – Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $14.6 million, or $0.39 per diluted share, for the three months ended December 31, 2023, compared to $13.4 million, or $0.39 per diluted share, for the three months ended December 31, 2022. Net income for the fourth quarter of 2023 included pretax items of $452,000 for acquisition related costs, a gain of $915,000 on the sale of commercial loans, $1.0 million in expense for severance/contract payouts for staff resignations, and combined net losses of $217,000 on the sale of securities and the sale of other assets. Excluding these items (non-GAAP), net income for the fourth quarter of 2023 increased 7.8% to $15.2 million from $14.1 million for the same period last year. Net income per diluted share excluding these items (non-GAAP), was $0.41 for the fourth quarter of 2023, compared to $0.42 per diluted share for the fourth quarter of 2022.
Kevin J. Helmick, President and CEO, stated “Our solid fourth quarter results demonstrate our success enhancing profitability throughout an extremely challenging operating environment. This is a testament to our team’s focus on supporting our customers, maintaining excellent asset quality, and controlling operating costs. We expect the economic environment will remain fluid in 2024, but we believe Farmers is well positioned to navigate this period as a result of the value our team members provide our Ohio and Pennsylvania communities, as well as our continued focus on maintaining strong asset quality and profitability.”
Balance Sheet
The Company’s total assets were $5.08 billion at December 31, 2023, compared to $4.97 billion at September 30, 2023 and $4.08 billion at December 31, 2022. The increase from December was primarily due to the acquisition of Emclaire Financial Corp. (“Emclaire”) which added $977.6 million in assets in the first quarter of 2023. Loans have increased by $793.4 million since December 31, 2022 and $29.6 million, or 3.7% annualized, since September 30, 2023. Emclaire was responsible for $740.7 million of the increase in loans since December 31, 2022. Growth in the fourth quarter of 2023 was concentrated in commercial real estate.
The Company had securities available for sale of $1.30 billion at December 31, 2023, compared to $1.21 billion at September 30, 2023, and $1.27 billion at December 31, 2022. The increase since December is due to the acquisition of Emclaire which added $127.0 million in available for sale securities and a decrease in the amount of gross unrealized losses on the portfolio which totaled $266.5 million at December 31, 2022, compared to a gross unrealized loss of $217.1 million at December 31, 2023. The Company also had sales and runoff from the portfolio during the twelve months ended December 31, 2023. Bond market volatility was extreme in 2023 and this volatility may remain in 2024. The Company expects that it will continue to allow the size of the securities portfolio to shrink via runoff to optimize profitability and provide liquidity for future loan growth.
At December 31, 2023, deposits totaled $4.18 billion compared to $4.26 billion at September 30, 2023 and $4.51 billion at December 31, 2022. During the fourth quarter of 2023, the Company allowed $254.3 million in brokered time deposits to mature and replaced the funding with less expensive short term borrowings. In addition, public fund seasonality resulted in $95.3 million in shrinkage during the quarter offset by $15.3 million in growth in other deposit categories. The increase from December 31, 2022, was driven by $875.8 million in deposits assumed in the acquisition of Emclaire offset by a decline in brokered time deposits of $138.1 million and runoff in other deposit categories.
Total stockholders’ equity increased to $404.4 million at December 31, 2023, from $316.0 million at September 30, 2023, and $292.3 million at December 31, 2022. The year-over-year increase was primarily due to the acquisition of Emclaire and an increase in retained earnings and a decrease in the unrealized loss from accumulated other comprehensive income. The increase in total stockholders’ equity since September 30, 2023, was primarily due to a decline in the accumulated other comprehensive loss which decreased $79.7 million as market rates dropped rapidly during the fourth quarter of 2023.
Credit Quality
As of December 31, 2023, the Company’s non-performing loans totaled $15.1 million compared to $18.4 million at September 30, 2023, and $14.8 million at December 31, 2022. The year-over-year increase was primarily due to the addition of Emclaire while the decrease since September 30 was due to the sale of non-performing loans. The non-performing loans to total loans ratio was 0.47% at December 31, 2023, 0.58% at September 30, 2023, and 0.62% at December 31, 2022. Non-performing assets to total assets was 0.30% at December 31, 2023, 0.37% at September 30, 2023, and 0.36% at December 31, 2022. The Company also continues to experience low levels of early-stage delinquencies, defined as loans 30-89 days delinquent. At December 31, 2023, these early-stage delinquencies totaled $16.7 million, or 0.52% of total loans compared to $13.3 million, or 0.42% of total loans at September 30, 2023, and $9.6 million, or 0.40% of total loans, at December 31, 2022.
The Company recorded provision for credit losses and unfunded commitments of $286,000 for the fourth quarter of 2023 compared to $243,000 for the third quarter of 2023 and $416,000 for the fourth quarter of 2022. Annualized net charge-offs as a percentage of average loans were 0.10% for the three months ended December 31, 2023, compared to 0.10% for the same period in 2022. For the year ended December 31, 2023, net charge-offs as a percentage of average loans were 0.07% compared to 0.11% for last year. The allowance for credit losses to total loans was 1.08% at December 31, 2023, compared to 1.10% at September 30, 2023, and 1.12% at December 31, 2022.
Net Interest Income
Net interest income for the three months ended December 31, 2023, totaled $32.8 million in the fourth quarter of 2023 compared to $33.8 million in the third quarter of 2023 and $29.4 million for the fourth quarter of 2022. Earning assets were greater in the fourth quarter of 2023 compared to the fourth quarter of 2022 due to the acquisition of Emclaire but this was partially offset by a decline of 21 basis point in the net interest margin. The net interest margin was 2.78% for the quarter ending December 31, 2023, compared to 2.86% in the third quarter of 2023 and 2.99% for the fourth quarter of 2022. Excluding the impact of acquisition marks and related accretion and PPP interest and fees, the net interest margin (non-GAAP) for the fourth quarter of 2023 was 2.58% compared to 2.61% for the third quarter of 2023 and 2.97% for the fourth quarter of 2022. The decline in net interest margin between the fourth quarter of 2023 and the fourth quarter of 2022 was due to increases in funding costs outstripping the increase in yields on earning assets. This increase in funding costs has been due to the rapid increase in deposit rates due to intense competition for deposits, the Federal Reserve’s rate hiking cycle, and runoff of deposit balances which are being replaced with more costly wholesale funding.
Noninterest Income
The Company recorded $12.2 million in noninterest income during the fourth quarter of 2023 compared to $8.2 million during the fourth quarter of 2022. Service charges on deposit accounts increased to $1.7 million in the fourth quarter of 2023 compared to $1.2 million for the same period in 2022 primarily due to the acquisition of Emclaire. Bank owned life insurance income, other mortgage banking fee income and debit card income have also increased in the fourth quarter of 2023 compared to the fourth quarter of 2022 due to the Emclaire acquisition. Trust fees increased by $283,000 in the fourth quarter of 2023 compared to the fourth quarter of 2022 as growth in this line of business continued. Insurance agency commissions also exhibited outstanding growth as insurance commissions increased by $407,000 for the quarter ending December 31, 2023 compared to same quarter a year ago. Growth for the year in this business has been solid as pricing in the insurance business has been very strong and increased annuity sales have bolstered results. Investment commissions are up slightly for the quarter ended December 31, 2023 compared to the quarter ended December 31, 2022, as markets have been resilient in 2023 and the Company begins to expand into Pennsylvania. Net gains on the sale of loans have increased by over $1.0 million between the fourth quarter of 2022 and the fourth quarter of 2023. Of this increase, $915,000 was driven by the sale of commercial loans discussed previously. Traditional gains on the sale of mortgage loans remain sluggish due to high interest rates. Other noninterest income increased $910,000 in the fourth quarter of 2023 compared to the prior year’s fourth quarter. This increase was primarily driven by higher income associated with the Company’s investments in SBIC funds. The earnings on these funds can be volatile from period to period.
Noninterest Expense
The Company reported noninterest expense of $27.0 million for the three months ended December 31, 2023, compared to $21.1 million for the three months ended December 31, 2022. The increase in expense is primarily due to the acquisition of Emclaire along with the $1.0 million in severance expense associated with staff resignations. Salaries and employee benefits increased $3.5 million to $14.9 million in the fourth quarter of 2023 compared to $11.4 million during the same period in 2022. The acquisition of Emclaire, normal raise activity and the severance were the primary reasons for the increase. Occupancy and equipment expense increased $1.1 million primarily due to the acquisition. FDIC and state and local taxes increased $474,000 due to the acquisition and the increase in the rate paid for FDIC insurance in 2023. Core processing charges increased due to the acquisition. Merger related costs were $452,000 for the fourth quarter of 2023 compared to $584,000 in the fourth quarter of 2022. Other noninterest expense increased due to the acquisition.
Liquidity
At December 31, 2023, the Company’s loan to deposit ratio was 76.6% and the Company’s average deposit balance per account (excluding collateralized deposits) was $23,678. The Company has access to an additional $819.5 million of FHLB borrowing capacity at December 31, 2023 along with $214.3 million of available for sale securities that are not pledged. With a deep and diverse deposit base and access to a large amount of additional funding capacity, the Company is well positioned to navigate the current banking landscape.
About Farmers National Banc Corp.
Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $5.1 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 64 banking locations in Mahoning, Trumbull, Columbiana, Portage, Stark, Wayne, Medina, Geauga and Cuyahoga Counties in Ohio and Beaver, Butler, Allegheny, Jefferson, Clarion, Venango, Clearfield, Mercer, Elk and Crawford Counties in Pennsylvania, and Farmers Trust Company, which operates five trust offices and offers services in the same geographic markets. Total wealth management assets under care at December 31, 2023 are $3.5 billion. Farmers National Insurance, LLC, a wholly-owned subsidiary of The Farmers National Bank of Canfield, offers a variety of insurance products.
Non-GAAP Disclosure
This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity, net income excluding costs related to acquisition activities and certain items, return on average assets excluding merger costs and certain items, return on average equity excluding merger costs and certain items, net interest margin excluding acquisition marks and related accretion and PPP interest and fees and efficiency ratio less certain items, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to their GAAP equivalents are included in the tables following Consolidated Financial Highlights below.
Cautionary Statements Regarding Forward-Looking Statements
We make statements in this news release and our related investor conference call, and we may from time to time make other statements, that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in certain forward-looking statements include significant changes in near-term local, regional, and U.S. economic conditions including those resulting from continued high rates of inflation, tightening monetary policy of the Board of Governors of the Federal Reserve, and possibility of a recession; Farmers’ failure to integrate Emclaire with Farmers in accordance with expectations; deviations from performance expectations related to Emclaire; continuing impacts from the length and extent of the economic impacts of the COVID-19 pandemic; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.
Farmers National Banc Corp. and Subsidiaries
Consolidated Financial Highlights
(Amounts in thousands, except per share results) Unaudited
Consolidated Statements of Income
| For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | Percent | |||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | Change | |||||||||||||||||||||||||
| Total interest income |
$ | 55,069 | $ | 54,229 | $ | 52,804 | $ | 51,233 | $ | 38,111 | $ | 213,335 | $ | 142,086 | 50.1 | % | ||||||||||||||||
| Total interest expense |
22,239 | 20,461 | 18,226 | 14,623 | 8,679 | 75,549 | 17,920 | 321.6 | % | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net interest income |
32,830 | 33,768 | 34,578 | 36,610 | 29,432 | 137,786 | 124,166 | 11.0 | % | |||||||||||||||||||||||
| Provision (credit) for credit losses |
286 | 243 | 25 | 8,599 | 416 | 9,153 | 1,122 | 715.8 | % | |||||||||||||||||||||||
| Noninterest income |
12,156 | 9,831 | 9,449 | 10,425 | 8,200 | 41,861 | 44,202 | -5.3 | % | |||||||||||||||||||||||
| Acquisition related costs |
452 | 268 | 442 | 4,313 | 584 | 5,475 | 4,070 | 34.5 | % | |||||||||||||||||||||||
| Other expense |
26,520 | 27,448 | 25,944 | 26,409 | 20,511 | 106,321 | 90,341 | 17.7 | % | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Income before income taxes |
17,728 | 15,640 | 17,616 | 7,714 | 16,121 | 58,698 | 72,835 | -19.4 | % | |||||||||||||||||||||||
| Income taxes |
3,151 | 2,326 | 2,650 | 639 | 2,765 | 8,766 | 12,238 | -28.4 | % | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net income |
$ | 14,577 | $ | 13,314 | $ | 14,966 | $ | 7,075 | $ | 13,356 | $ | 49,932 | $ | 60,597 | -17.6 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Average diluted shares outstanding |
37,426 | 37,379 | 37,320 | 37,933 | 33,962 | 37,498 | 33,929 | |||||||||||||||||||||||||
| Basic earnings per share |
0.39 | 0.36 | 0.40 | 0.19 | 0.39 | 1.34 | 1.79 | |||||||||||||||||||||||||
| Diluted earnings per share |
0.39 | 0.36 | 0.40 | 0.19 | 0.39 | 1.33 | 1.79 | |||||||||||||||||||||||||
| Cash dividends per share |
0.17 | 0.17 | 0.17 | 0.17 | 0.17 | 0.68 | 0.65 | |||||||||||||||||||||||||
| Performance Ratios |
||||||||||||||||||||||||||||||||
| Net Interest Margin (Annualized) |
2.78 | % | 2.86 | % | 2.92 | % | 3.07 | % | 2.99 | % | 2.91 | % | 3.18 | % | ||||||||||||||||||
| Efficiency Ratio (Tax equivalent basis) |
57.84 | % | 60.11 | % | 56.28 | % | 62.53 | % | 52.59 | % | 59.24 | % | 53.68 | % | ||||||||||||||||||
| Return on Average Assets (Annualized) |
1.17 | % | 1.06 | % | 1.18 | % | 0.56 | % | 1.31 | % | 0.99 | % | 1.46 | % | ||||||||||||||||||
| Return on Average Equity (Annualized) |
17.98 | % | 14.49 | % | 16.12 | % | 7.71 | % | 20.16 | % | 13.97 | % | 17.24 | % | ||||||||||||||||||
| Dividends to Net Income |
43.68 | % | 47.82 | % | 42.54 | % | 90.50 | % | 43.10 | % | 25.64 | % | 36.31 | % | ||||||||||||||||||
| Other Performance Ratios (Non-GAAP) |
||||||||||||||||||||||||||||||||
| Return on Average Tangible Assets |
1.22 | % | 1.09 | % | 1.23 | % | 0.58 | % | 1.34 | % | 1.03 | % | 1.50 | % | ||||||||||||||||||
| Return on Average Tangible Equity |
43.77 | % | 30.29 | % | 33.55 | % | 16.31 | % | 32.81 | % | 30.23 | % | 24.31 | % | ||||||||||||||||||
Consolidated Statements of Financial Condition
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||
| Assets |
||||||||||||||||||||
| Cash and cash equivalents |
$ | 103,658 | $ | 93,923 | $ | 116,063 | $ | 128,001 | $ | 75,551 | ||||||||||
| Debt securities available for sale |
1,299,701 | 1,210,736 | 1,316,878 | 1,355,449 | 1,268,025 | |||||||||||||||
| Other investments |
35,311 | 35,342 | 44,975 | 39,670 | 33,444 | |||||||||||||||
| Loans held for sale |
3,711 | 1,910 | 2,197 | 1,703 | 858 | |||||||||||||||
| Loans |
3,198,127 | 3,168,554 | 3,155,200 | 3,152,339 | 2,404,750 | |||||||||||||||
| Less allowance for credit losses |
34,440 | 34,753 | 34,957 | 36,011 | 26,978 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net Loans |
3,163,687 | 3,133,801 | 3,120,243 | 3,116,328 | 2,377,772 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Other assets |
472,282 | 495,451 | 473,098 | 468,735 | 326,550 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Assets |
$ | 5,078,350 | $ | 4,971,163 | $ | 5,073,454 | $ | 5,109,886 | $ | 4,082,200 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Liabilities and Stockholders’ Equity |
||||||||||||||||||||
| Deposits |
||||||||||||||||||||
| Noninterest-bearing |
$ | 1,026,630 | $ | 1,039,524 | $ | 1,084,232 | $ | 1,106,870 | $ | 896,957 | ||||||||||
| Interest-bearing |
3,150,756 | 3,217,869 | 3,165,381 | 3,207,121 | 2,526,760 | |||||||||||||||
| Brokered time deposits |
0 | 254,257 | 21,135 | 82,169 | 138,051 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
4,177,386 | 4,511,650 | 4,270,748 | 4,396,160 | 3,561,768 | |||||||||||||||
| Other interest-bearing liabilities |
443,663 | 88,550 | 388,437 | 292,324 | 183,211 | |||||||||||||||
| Other liabilities |
52,886 | 54,981 | 47,278 | 46,760 | 44,926 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities |
4,673,935 | 4,655,181 | 4,706,463 | 4,735,244 | 3,789,905 | |||||||||||||||
| Stockholders’ Equity |
404,415 | 315,982 | 366,991 | 374,642 | 292,295 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Liabilities and Stockholders’ Equity |
$ | 5,078,350 | $ | 4,971,163 | $ | 5,073,454 | $ | 5,109,886 | $ | 4,082,200 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Period-end shares outstanding |
37,503 | 37,489 | 37,457 | 37,439 | 34,055 | |||||||||||||||
| Book value per share |
$ | 10.78 | $ | 8.43 | $ | 9.80 | $ | 10.01 | $ | 8.58 | ||||||||||
| Tangible book value per share (Non-GAAP)* |
5.71 | 3.33 | 4.67 | 4.84 | 5.60 | |||||||||||||||
| * | Tangible book value per share is calculated by dividing tangible common equity by outstanding shares |
| For the Three Months Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||
| Capital and Liquidity | 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||
| Common Equity Tier 1 Capital Ratio (a) |
10.63 | % | 10.37 | % | 10.25 | % | 10.04 | % | 13.71 | % | ||||||||||||||||||
| Total Risk Based Capital Ratio (a) |
14.08 | % | 13.83 | % | 13.76 | % | 13.60 | % | 17.79 | % | ||||||||||||||||||
| Tier 1 Risk Based Capital Ratio (a) |
11.11 | % | 10.86 | % | 10.74 | % | 10.54 | % | 14.32 | % | ||||||||||||||||||
| Tier 1 Leverage Ratio (a) |
8.02 | % | 7.84 | % | 7.68 | % | 7.43 | % | 9.84 | % | ||||||||||||||||||
| Equity to Asset Ratio |
7.96 | % | 6.36 | % | 7.23 | % | 7.33 | % | 7.16 | % | ||||||||||||||||||
| Tangible Common Equity Ratio (b) |
4.38 | % | 2.61 | % | 3.58 | % | 3.69 | % | 4.79 | % | ||||||||||||||||||
| Net Loans to Assets |
62.30 | % | 63.04 | % | 61.50 | % | 60.99 | % | 58.25 | % | ||||||||||||||||||
| Loans to Deposits |
76.56 | % | 70.23 | % | 73.88 | % | 71.71 | % | 67.52 | % | ||||||||||||||||||
| Asset Quality |
||||||||||||||||||||||||||||
| Non-performing loans |
$ | 15,063 | $ | 18,368 | $ | 17,956 | $ | 17,959 | $ | 14,803 | ||||||||||||||||||
| Non-performing assets |
15,321 | 18,522 | 18,167 | 18,053 | 14,876 | |||||||||||||||||||||||
| Loans 30 - 89 days delinquent |
16,705 | 13,314 | 12,321 | 10,219 | 9,605 | |||||||||||||||||||||||
| Charged-off loans |
972 | 525 | 971 | 469 | 754 | 2,937 | 3,304 | |||||||||||||||||||||
| Recoveries |
172 | 139 | 172 | 198 | 184 | 681 | 646 | |||||||||||||||||||||
| Net Charge-offs |
800 | 386 | 799 | 271 | 570 | 2,256 | 2,658 | |||||||||||||||||||||
| Annualized Net Charge-offs to Average Net Loans |
0.10 | % | 0.05 | % | 0.10 | % | 0.03 | % | 0.10 | % | 0.07 | % | 0.11 | % | ||||||||||||||
| Allowance for Credit Losses to Total Loans |
1.08 | % | 1.10 | % | 1.11 | % | 1.14 | % | 1.12 | % | ||||||||||||||||||
| Non-performing Loans to Total Loans |
0.47 | % | 0.58 | % | 0.57 | % | 0.57 | % | 0.62 | % | ||||||||||||||||||
| Loans 30 - 89 Days Delinquent to Total Loans |
0.52 | % | 0.42 | % | 0.39 | % | 0.32 | % | 0.40 | % | ||||||||||||||||||
| Allowance to Non-performing Loans |
228.64 | % | 189.20 | % | 194.68 | % | 200.52 | % | 182.25 | % | ||||||||||||||||||
| Non-performing Assets to Total Assets |
0.30 | % | 0.37 | % | 0.36 | % | 0.35 | % | 0.36 | % | ||||||||||||||||||
| (a) | December 31, 2023 ratio is estimated |
| (b) | This is a non-GAAP financial measure. A reconciliation to GAAP is shown below |
| For the Three Months Ended | ||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
| End of Period Loan Balances | 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| Commercial real estate |
$ | 1,335,806 | $ | 1,295,847 | $ | 1,284,974 | $ | 1,286,830 | $ | 1,028,050 | ||||||||||
| Commercial |
346,354 | 357,691 | 362,664 | 361,845 | 293,643 | |||||||||||||||
| Residential real estate |
843,697 | 842,729 | 849,533 | 853,074 | 475,791 | |||||||||||||||
| HELOC |
142,441 | 140,772 | 138,535 | 137,319 | 132,179 | |||||||||||||||
| Consumer |
259,784 | 261,136 | 260,326 | 260,596 | 221,260 | |||||||||||||||
| Agricultural loans |
261,288 | 261,738 | 250,807 | 244,938 | 246,937 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total, excluding net deferred loan costs |
$ | 3,189,370 | $ | 3,159,913 | $ | 3,146,839 | $ | 3,144,602 | $ | 2,397,860 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| For the Three Months Ended | ||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | ||||||||||||||||
| End of Period Customer Deposit Balances | 2023 | 2023 | 2023 | 2023 | 2022 | |||||||||||||||
| Noninterest-bearing demand |
$ | 1,026,630 | $ | 1,039,524 | $ | 1,084,232 | $ | 1,106,870 | $ | 896,957 | ||||||||||
| Interest-bearing demand |
1,362,609 | 1,426,349 | 1,383,326 | 1,473,001 | 1,224,884 | |||||||||||||||
| Money market |
593,975 | 588,043 | 610,051 | 599,037 | 435,369 | |||||||||||||||
| Savings |
468,890 | 488,991 | 511,642 | 535,321 | 441,978 | |||||||||||||||
| Certificate of deposit |
720,259 | 714,486 | 660,362 | 599,762 | 424,529 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total customer deposits |
$ | 4,172,363 | $ | 4,257,393 | $ | 4,249,613 | $ | 4,313,991 | $ | 3,423,717 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| For the Three Months Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||
| Noninterest Income | 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||
| Service charges on deposit accounts |
$ | 1,677 | $ | 1,712 | $ | 1,501 | $ | 1,432 | $ | 1,203 | $ | 6,322 | $ | 4,716 | ||||||||||||||
| Bank owned life insurance income, including death benefits |
617 | 694 | 584 | 547 | 590 | 2,442 | 1,810 | |||||||||||||||||||||
| Trust fees |
2,656 | 2,617 | 2,248 | 2,587 | 2,373 | 10,108 | 9,638 | |||||||||||||||||||||
| Insurance agency commissions |
1,540 | 1,116 | 1,332 | 1,456 | 1,133 | 5,444 | 4,402 | |||||||||||||||||||||
| Security gains (losses), including fair value changes for equity securities |
19 | (624 | ) | 13 | 121 | (366 | ) | (471 | ) | (454 | ) | |||||||||||||||||
| Retirement plan consulting fees |
357 | 360 | 382 | 307 | 337 | 1,406 | 1,389 | |||||||||||||||||||||
| Investment commissions |
589 | 520 | 476 | 393 | 508 | 1,978 | 2,183 | |||||||||||||||||||||
| Net gains on sale of loans |
1,280 | 395 | 406 | 310 | 242 | 2,391 | 2,062 | |||||||||||||||||||||
| Other mortgage banking fee income (loss), net |
139 | 185 | 234 | 153 | 98 | 711 | 291 | |||||||||||||||||||||
| Debit card and EFT fees |
1,697 | 1,763 | 1,810 | 1,789 | 1,407 | 7,059 | 5,814 | |||||||||||||||||||||
| Other noninterest income |
1,585 | 1,093 | 463 | 1,330 | 675 | 4,471 | 12,351 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Noninterest Income |
$ | 12,156 | $ | 9,831 | $ | 9,449 | $ | 10,425 | $ | 8,200 | $ | 41,861 | $ | 44,202 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| For the Three Months Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||
| Noninterest Expense | 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||
| Salaries and employee benefits |
$ | 14,871 | $ | 14,233 | $ | 13,625 | $ | 14,645 | $ | 11,385 | $ | 57,374 | $ | 45,013 | ||||||||||||||
| Occupancy and equipment |
3,896 | 3,810 | 3,859 | 3,869 | 2,753 | 15,434 | 11,379 | |||||||||||||||||||||
| FDIC insurance and state and local taxes |
1,484 | 1,648 | 1,494 | 1,222 | 1,010 | 5,848 | 3,951 | |||||||||||||||||||||
| Professional fees |
1,004 | 1,043 | 1,190 | 1,114 | 938 | 4,351 | 6,114 | |||||||||||||||||||||
| Merger related costs |
452 | 268 | 442 | 4,313 | 584 | 5,475 | 4,070 | |||||||||||||||||||||
| Advertising |
414 | 492 | 478 | 409 | 472 | 1,793 | 1,947 | |||||||||||||||||||||
| Intangible amortization |
578 | 725 | 1,222 | 909 | 702 | 3,434 | 1,973 | |||||||||||||||||||||
| Core processing charges |
1,057 | 1,274 | 1,144 | 1,164 | 742 | 4,639 | 3,348 | |||||||||||||||||||||
| Other noninterest expenses |
3,216 | 4,223 | 2,932 | 3,077 | 2,509 | 13,448 | 16,616 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Total Noninterest Expense |
$ | 26,972 | $ | 27,716 | $ | 26,386 | $ | 30,722 | $ | 21,095 | $ | 111,796 | $ | 94,411 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Business Combination
| Consideration |
||||
| Cash |
$ | 33,440 | ||
| Stock |
59,202 | |||
|
|
|
|||
| Fair value of total consideration transferred |
$ | 92,642 | ||
|
|
|
|||
| Fair value of assets acquired |
||||
| Cash and cash equivalents |
$ | 20,265 | ||
| Securities available for sale |
126,970 | |||
| Other investments |
7,795 | |||
| Loans, net |
740,659 | |||
| Premises and equipment |
14,808 | |||
| Bank owned life insurance |
22,485 | |||
| Core deposit intangible |
19,249 | |||
| Current and deferred taxes |
17,708 | |||
| Other assets |
7,682 | |||
|
|
|
|||
| Total assets acquired |
977,621 | |||
| Fair value of liabilities assumed |
||||
| Deposits |
875,813 | |||
| Short-term borrowings |
75,000 | |||
| Accrued interest payable and other liabilities |
7,104 | |||
|
|
|
|||
| Total liabilities |
957,917 | |||
|
|
|
|||
| Net assets acquired |
$ | 19,704 | ||
| Goodwill created |
72,938 | |||
|
|
|
|||
| Total net assets acquired |
$ | 92,642 | ||
|
|
|
Average Balance Sheets and Related Yields and Rates
(Dollar Amounts in Thousands)
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||
| December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
| AVERAGE | YIELD/ | AVERAGE | YIELD/ | |||||||||||||||||||||
| BALANCE | INTEREST (1) | RATE (1) | BALANCE | INTEREST (1) | RATE (1) | |||||||||||||||||||
| EARNING ASSETS |
||||||||||||||||||||||||
| Loans (2) |
$ | 3,188,581 | $ | 44,868 | 5.63 | % | $ | 2,394,872 | $ | 29,092 | 4.86 | % | ||||||||||||
| Taxable securities |
1,113,107 | 6,536 | 2.35 | 1,105,545 | 5,556 | 2.01 | ||||||||||||||||||
| Tax-exempt securities (2) |
411,860 | 3,235 | 3.14 | 453,917 | 3,580 | 3.15 | ||||||||||||||||||
| Other investments |
37,625 | 529 | 5.62 | 33,901 | 326 | 3.85 | ||||||||||||||||||
| Federal funds sold and other |
65,236 | 564 | 3.46 | 59,108 | 336 | 2.27 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total earning assets |
4,816,409 | 55,732 | 4.63 | 4,047,343 | 38,890 | 3.84 | ||||||||||||||||||
| Nonearning assets |
163,905 | 33,154 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total assets |
$ | 4,980,314 | $ | 4,080,497 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| INTEREST-BEARING LIABILITIES |
||||||||||||||||||||||||
| Time deposits |
$ | 712,485 | $ | 6,291 | 3.53 | % | $ | 370,914 | $ | 1,261 | 1.36 | % | ||||||||||||
| Brokered time deposits |
96,634 | 1,315 | 5.44 | 115,021 | 1,034 | 3.60 | ||||||||||||||||||
| Savings deposits |
1,068,465 | 2,918 | 1.09 | 871,584 | 879 | 0.40 | ||||||||||||||||||
| Demand deposits - interest bearing |
1,393,252 | 7,922 | 2.27 | 1,301,475 | 3,805 | 1.17 | ||||||||||||||||||
| Short term borrowings |
206,826 | 2,749 | 5.32 | 85,641 | 777 | 3.63 | ||||||||||||||||||
| Long term borrowings |
88,609 | 1,043 | 4.71 | 88,138 | 922 | 4.18 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing liabilities |
$ | 3,566,271 | 22,238 | 2.49 | $ | 2,832,773 | 8,678 | 1.23 | ||||||||||||||||
|
|
|
|||||||||||||||||||||||
| NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||||||||||||||
| Demand deposits - noninterest bearing |
1,035,405 | 938,881 | ||||||||||||||||||||||
| Other liabilities |
54,306 | 43,904 | ||||||||||||||||||||||
| Stockholders’ equity |
324,332 | 264,939 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 4,980,314 | $ | 4,080,497 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income and interest rate spread |
$ | 33,494 | 2.14 | % | $ | 30,212 | 2.61 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net interest margin |
2.78 | % | 2.99 | % | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| (1) | Interest and yields are calculated on a tax-equivalent basis where applicable. |
| (2) | For 2023, adjustments of $86 thousand and $577 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2022, adjustments of $72 thousand and $707 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. |
| Twelve Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
| AVERAGE | YIELD/ | AVERAGE | YIELD/ | |||||||||||||||||||||
| BALANCE | INTEREST (1) | RATE (1) | BALANCE | INTEREST (1) | RATE (1) | |||||||||||||||||||
| EARNING ASSETS |
||||||||||||||||||||||||
| Loans (2) |
$ | 3,155,858 | $ | 172,161 | 5.46 | % | $ | 2,358,724 | $ | 108,100 | 4.58 | % | ||||||||||||
| Taxable securities |
1,143,547 | 26,231 | 2.29 | 1,081,966 | 20,843 | 1.93 | ||||||||||||||||||
| Tax-exempt securities (2) |
419,557 | 13,283 | 3.17 | 465,855 | 14,952 | 3.21 | ||||||||||||||||||
| Other investments |
39,559 | 1,986 | 5.02 | 33,153 | 871 | 2.63 | ||||||||||||||||||
| Federal funds sold and other |
74,950 | 2,476 | 3.30 | 76,253 | 684 | 0.90 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total earning assets |
4,833,471 | 216,137 | 4.47 | 4,015,951 | 145,450 | 3.62 | ||||||||||||||||||
| Nonearning assets |
205,683 | 128,757 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total assets |
$ | 5,039,154 | $ | 4,144,708 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| INTEREST-BEARING LIABILITIES |
||||||||||||||||||||||||
| Time deposits |
$ | 654,717 | $ | 19,462 | 2.97 | % | $ | 360,687 | $ | 3,044 | 0.84 | % | ||||||||||||
| Brokered time deposits |
132,895 | 6,204 | 4.67 | 56,965 | 1,240 | 2.18 | ||||||||||||||||||
| Savings deposits |
1,113,561 | 9,899 | 0.89 | 846,418 | 1,352 | 0.16 | ||||||||||||||||||
| Demand deposits - interest bearing |
1,415,425 | 27,541 | 1.95 | 1,392,058 | 7,449 | 0.54 | ||||||||||||||||||
| Short term borrowings |
160,964 | 8,357 | 5.19 | 55,668 | 1,408 | 2.53 | ||||||||||||||||||
| Long term borrowings |
88,439 | 4,086 | 4.62 | 87,972 | 3,427 | 3.90 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing liabilities |
$ | 3,566,001 | 75,549 | 2.12 | $ | 2,799,768 | 17,920 | 0.64 | ||||||||||||||||
| NONINTEREST-BEARING LIABILITIES |
||||||||||||||||||||||||
| AND STOCKHOLDERS’ EQUITY |
||||||||||||||||||||||||
| Demand deposits - noninterest bearing |
$ | 1,065,389 | $ | 959,294 | ||||||||||||||||||||
| Other liabilities |
50,302 | 34,180 | ||||||||||||||||||||||
| Stockholders’ equity |
357,462 | 351,466 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 5,039,154 | $ | 4,144,708 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income and interest rate spread |
$ | 140,588 | 2.35 | % | $ | 127,530 | 2.98 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Net interest margin |
2.91 | % | 3.18 | % | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| (1) | Interest and yields are calculated on a tax-equivalent basis where applicable. |
| (2) | For 2023, adjustments of $353 thousand and $2.4 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2022, adjustments of $310 thousand and $3.1 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. |
Reconciliation of Total Assets to Tangible Assets
| For the Three Months Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| Total Assets |
$ | 5,078,350 | $ | 4,971,163 | $ | 5,073,454 | $ | 5,109,886 | $ | 4,082,200 | $ | 5,078,350 | $ | 4,082,200 | ||||||||||||||
| Less Goodwill and other intangibles |
190,288 | 191,326 | 192,052 | 193,273 | 101,666 | 190,288 | 101,666 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Tangible Assets |
$ | 4,888,062 | $ | 4,779,837 | $ | 4,881,402 | $ | 4,916,613 | $ | 3,980,534 | $ | 4,888,062 | $ | 3,980,534 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average Assets |
4,980,314 | 5,058,969 | 5,070,444 | 5,085,009 | 4,080,497 | 5,039,154 | 4,144,708 | |||||||||||||||||||||
| Less average Goodwill and other intangibles |
191,108 | 191,804 | 192,972 | 193,368 | 102,126 | 192,306 | 102,151 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average Tangible Assets |
$ | 4,789,206 | $ | 4,867,165 | $ | 4,877,472 | $ | 4,891,641 | $ | 3,978,371 | $ | 4,846,848 | $ | 4,042,557 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Reconciliation of Common Stockholders’ Equity to Tangible Common Equity
| For the Three Months Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| Stockholders’ Equity |
$ | 404,415 | $ | 315,982 | $ | 366,991 | $ | 374,642 | $ | 292,295 | $ | 404,415 | $ | 292,295 | ||||||||||||||
| Less Goodwill and other intangibles |
190,288 | 191,326 | 192,052 | 193,273 | 101,666 | 190,288 | 101,666 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Tangible Common Equity |
$ | 214,127 | $ | 124,656 | $ | 174,939 | $ | 181,369 | $ | 190,629 | $ | 214,127 | $ | 190,629 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average Stockholders’ Equity |
324,332 | 367,600 | 371,421 | 366,851 | 264,939 | 357,462 | 351,466 | |||||||||||||||||||||
| Less average Goodwill and other intangibles |
191,108 | 191,804 | 192,972 | 193,368 | 102,126 | 192,306 | 102,151 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average Tangible Common Equity |
$ | 133,224 | $ | 175,796 | $ | 178,449 | $ | 173,483 | $ | 162,813 | $ | 165,156 | $ | 249,315 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Reconciliation of Net Income, Less Merger and Certain Items
| For the Three Months Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| Net income |
$ | 14,577 | $ | 13,314 | $ | 14,966 | $ | 7,075 | $ | 13,356 | $ | 49,932 | $ | 60,597 | ||||||||||||||
| Acquisition related costs - after tax |
358 | 234 | 354 | 3,449 | 475 | 4,395 | 3,290 | |||||||||||||||||||||
| Acquisition related provision - after tax |
0 | 0 | 0 | 6,077 | 0 | 6,077 | 0 | |||||||||||||||||||||
| Employee severence - after tax |
798 | 0 | 0 | 0 | 0 | 798 | 0 | |||||||||||||||||||||
| Lawsuit settlement income - after tax |
0 | 0 | 0 | 0 | 0 | 0 | (6,616 | ) | ||||||||||||||||||||
| Lawsuit settlement contingent legal expense - after tax |
0 | 0 | 0 | 0 | 0 | 0 | 1,639 | |||||||||||||||||||||
| Lawsuit settlement expense - after tax |
0 | 620 | 0 | 0 | 0 | 620 | 0 | |||||||||||||||||||||
| Charitable donation - after tax |
0 | 0 | 0 | 0 | 0 | 0 | 4,740 | |||||||||||||||||||||
| Net (gain) on loan sale - after tax |
(723 | ) | 0 | 0 | 0 | 0 | (723 | ) | 0 | |||||||||||||||||||
| Net loss (gain) on asset/security sales - after tax |
171 | 604 | (5 | ) | (72 | ) | 268 | 698 | 344 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income - Adjusted |
$ | 15,181 | $ | 14,772 | $ | 15,315 | $ | 16,529 | $ | 14,099 | $ | 61,797 | $ | 63,994 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Diluted EPS excluding merger and certain items |
$ | 0.41 | $ | 0.40 | $ | 0.41 | $ | 0.44 | $ | 0.42 | $ | 1.65 | $ | 1.89 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Return on Average Assets excluding merger and certain items (Annualized) |
1.22 | % | 1.17 | % | 1.21 | % | 1.30 | % | 1.36 | % | 1.23 | % | 1.54 | % | ||||||||||||||
| Return on Average Equity excluding merger and certain items (Annualized) |
18.72 | % | 16.07 | % | 16.49 | % | 18.02 | % | 21.29 | % | 17.29 | % | 18.21 | % | ||||||||||||||
| Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized) |
45.58 | % | 33.61 | % | 34.33 | % | 38.11 | % | 34.64 | % | 37.42 | % | 25.67 | % | ||||||||||||||
Efficiency ratio excluding certain items
| For the Three Months Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| Net interest income, tax equated |
$ | 33,494 | $ | 34,448 | $ | 35,273 | $ | 37,374 | $ | 30,212 | $ | 140,588 | $ | 127,530 | ||||||||||||||
| Noninterest income |
12,156 | 9,831 | 9,449 | 10,425 | 8,200 | 41,861 | 44,202 | |||||||||||||||||||||
| Legal settlement income |
0 | 0 | 0 | 0 | 0 | 0 | (8,375 | ) | ||||||||||||||||||||
| Net (gain) on loan sale |
(915 | ) | 0 | 0 | 0 | 0 | (915 | ) | 0 | |||||||||||||||||||
| Net loss (gain) on asset/security sales |
217 | 764 | (6 | ) | (91 | ) | 338 | 883 | 435 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net interest income and noninterest income adjusted |
44,952 | 45,043 | 44,716 | 47,708 | 38,750 | 182,417 | 163,792 | |||||||||||||||||||||
| Noninterest expense less intangible amortization |
26,394 | 26,991 | 25,163 | 29,813 | 20,393 | 108,361 | 92,438 | |||||||||||||||||||||
| Charitable donation |
0 | 0 | 0 | 0 | 0 | 0 | 6,000 | |||||||||||||||||||||
| Legal settlement expense |
0 | 785 | 0 | 0 | 0 | 785 | 0 | |||||||||||||||||||||
| Contingent legal settlement expense |
0 | 0 | 0 | 0 | 0 | 0 | 2,075 | |||||||||||||||||||||
| Employee severence |
1,010 | 0 | 0 | 0 | 0 | 1,010 | 0 | |||||||||||||||||||||
| Acquisition related costs |
452 | 268 | 442 | 4,313 | 584 | 5,475 | 4,070 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Noninterest expense adjusted |
24,932 | 25,938 | 24,721 | 25,500 | 19,809 | 101,091 | 80,293 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Efficiency ratio excluding certain items |
55.46 | % | 57.58 | % | 55.28 | % | 53.45 | % | 51.12 | % | 55.42 | % | 49.02 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net interest margin excluding acquisition marks and PPP interest and fees
| For the Three Months Ended | For the Twelve Months Ended |
|||||||||||||||||||||||||||
| Dec. 31, | Sept. 30, | June 30, | March 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
| Net interest income, tax equated |
$ | 33,494 | $ | 34,448 | $ | 35,273 | $ | 37,374 | $ | 30,212 | $ | 140,588 | $ | 127,530 | ||||||||||||||
| Acquisition marks |
2,475 | 2,959 | 2,884 | 2,628 | 174 | 10,946 | 1,793 | |||||||||||||||||||||
| PPP interest and fees |
1 | 1 | 3 | 0 | 10 | 5 | 1,392 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Adjusted and annualized net interest income |
124,072 | 125,952 | 129,544 | 138,984 | 120,112 | 129,637 | 124,345 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average earning assets |
4,816,409 | 4,820,888 | 4,830,910 | 4,866,263 | 4,047,343 | 4,833,471 | 4,015,951 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Less PPP average balances |
229 | 247 | 277 | 310 | 485 | 254 | 11,914 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Adjusted average earning assets |
4,816,180 | 4,820,641 | 4,830,633 | 4,865,953 | 4,046,858 | 4,833,217 | 4,004,037 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net interest margin excluding marks and PPP interest and fees |
2.58 | % | 2.61 | % | 2.68 | % | 2.86 | % | 2.97 | % | 2.68 | % | 3.11 | % | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exhibit 99.2 Q4 2023 Investor Presentation NASDAQ: FMNB
Disclosure Statement Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the financial condition, results of operations, asset quality trends and profitability of Farmers National Banc Corp. (“Farmers”). Forward-looking statements are not historical facts but instead express only management’s current expectations and forecasts of future events or long-term-goals, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from those indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in the forward-looking statements include significant changes in near-term local, regional, and U.S. economic conditions including those resulting from continued high rates of inflation, tightening monetary policy of the Board of Governors of the Federal Reserve, and possibility of a recession; Farmers’ failure to integrate Emclaire and Emlenton with Farmers in accordance with expectations; deviations from performance expectations related to Emclaire and Emlenton; continuing impacts from the length and extent of the economic impacts of the COVID-19 pandemic; and the other factors contained in Farmers’ periodic reports and registration statements filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2022, and Quarterly Report on Form 10-Q, which have been filed with the Securities and Exchange Commission and are available on Farmers’ website (www.farmersbankgroup.com) and on the Securities and Exchange Commission’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers undertakes no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise. Use of Non-GAAP Financial Measures This presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”). These non-GAAP financial measures include “Core Deposits” and “Tangible Common Equity ratio.” Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of Farmers’ deposit profile and capital. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Because not all companies use the same calculation of “Core Deposits” and “Tangible Common Equity ratio,” this presentation may not be comparable to other similarly titled measures as calculated by other companies. 2
About Farmers National Banc Corp. • $5.1 billion in banking assets • $3.5 billion in wealth management assets under care • $0.68 (5.0%) annualized dividend yield* • Named a Best Employer in Ohio the past 2 years** • Founded in 1887 • 164 consecutive quarters of profitability • Strong and diverse franchise currently operating • 64 banking locations throughout Ohio and Pennsylvania • Growth plan focused on combining big bank capabilities with local bank service *Stock data as of January 19, 2024 3 **Source: Best Companies Group
Local, Established & Experienced Leadership Team Kevin Helmick (51) Troy Adair (57) Amber Wallace (57) Michael Matuszak (55) Timothy Shaffer (62) President & Senior Executive Vice President, Senior Executive Vice President, Senior Executive Vice President, Senior Executive Vice President, Chief Executive Officer Chief Financial Officer Chief Retail/Marketing Officer Chief Operating Officer Chief Credit Officer Mark Wenick (63) Brian Jackson (53) Michael Oberhaus (47) Mark Nicastro (53) William Shivers (62) Senior Executive Vice President, Executive Vice President, Executive Vice President, Executive Vice President, Senior Vice President, Chief Chief Wealth Management Officer Chief Information Officer Chief Risk Officer Chief Human Resources Officer Commercial Lending Officer Training Talent Acquisition Robust Succession Planning Alignment with Shareholders • Farmers Academy• Comprehensive recruitment • Annual review• Structure of STI and LTI programs program encourages sound business • In-house leadership/management • Multi-layered approach practices and appropriate levels of training program• High percentage of referrals come focused on core competencies of risk management from our employees position • Ohio Bankers League Bank • Recognition as Best Employer in − Linked to annual performance Management School • Retention of key executives Ohio in 2019, 2020, 2022 as voted appraisal and development plan by our employees* − Current executive team has been • Executive succession planning with the bank for over nine years • Key metrics of success reflected in reviewed at holding company consistent results board level 4 * Source: Best Companies Group
Farmers Strategic Vision Leveraging our History with Modern Banking Technologies to Support our Future Invest in our Franchise Drive Financial Excellence • Leverage technology• Strive for performance metrics in top quartile ranking vs. peer group • Drive efficiencies through Six Sigma operating framework• Focus on growing noninterest income • Strive to be customer centric and provide exceptional experiences • Proactive capital management • Assure Farmers is the best place to work • Maintain financial strength • Continued pursuit of organic and M&A opportunities • Prudent risk management and focus on asset quality 5
Proven Acquisition History and Strategy Long-term strategy of value-enhancing acquisitions $6,000 Emclaire Seven acquisitions in the Financial (2023) past eight years $5,000 Cortland Bancorp (2021) Target franchises with similar culture, compelling reputation, and strong $4,000 Maple Leaf customer base (2020) Bowers Insurance (2016) $3,000 Focus on businesses that support cross Farmers National sell opportunities and diversify footprint Trust Bancshares Company (2015) into compelling banking markets Private Client (2009) Services $2,000 (2012) Farmers Monitor National Bancorp Insurance (2017) Manageable initial tangible book value (2008) dilution st $1,000 Tri-state 1 Banc National (2015) Associates (2013) $- Reasonable price with a currency mix of 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 cash and stock Assets Wealth Management Assets • Graph in millions 6 • As of December 31, 2023
Financial Performance NASDAQ: FMNB
Balance Sheet Strengths (1) 12/31/23 12/31/22 Improved Customer Deposits** $4.2 billion* $3.4 billion ✓ Cash Balances $103.7 million $75.6 million ✓ (1) Loan-to-Deposit Ratio 76.6% 67.5% ✓ Nonperforming Loans to Total Loans 0.47% 0.62% ✓ Allowance to Nonperforming Loans 228.6% 182.3% ✓ *This figure includes $875.8 million in deposits from Emclaire acquisition. **Excludes Brokered Time Deposits. 7
Core Results Overview Core Net Income $62,316 $63,994 $61,798 $65,000 • Core EPS remains strong through challenging environments $55,000 • Robust fee businesses provide stability $44,461 $45,000 $35,927 $35,000 $25,000 $15,000 $5,000 2019 2020 2021 2022 2023 Core EPS Core Return on Assets 1.83% $2.50 $2.13 1.55% 1.54% 1.51% $1.89 $2.00 $1.65 1.23% $1.57 $1.50 $1.29 $1.00 $0.50 $0.00 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 8 Core items exclude the impact of acquisition related provision and other items. See Non-GAAP reconciliation in appendix.
Loan Portfolio Overview Overview Rate Type Segments • Total loans $3.2 billion Variable, 14% • Diverse loan mix • Farmers’ practice is to lend primarily within its market area Fixed, 53% Adjustable, 33% Total Loans (in millions) Net Loans to Assets $3,500.00 73.4% 66.9% $3,000.00 63.0% 58.3% $2,500.00 55.6% $2,000.00 $1,500.00 $1,000.00 $500.00 $0.00 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 CRE C&I Agricultural Residential Mortgage Consumer 9
CRE Overview CRE Breakdown Construction, 5% • Well diversified portfolio Multifamily, Owner • Strong credit culture 12% Occupied, 30% • Independent loan review Non-owner Occupied, 53% CRE Categories Loans by Industry Type 8% 11% Category Balance % of CRE % of Port Retail $ 354,953 27% 11% Commercial Real Estate 42% Office $ 175,020 13% 5% Residential Real Estate Medical $ 154,890 12% 5% Consumer 13% Warehouse/Industrial $ 166,291 12% 5% Commercial & Industrial Multifamily $ 153,410 11% 5% Agricultural Special Purpose $ 9 9,152 7% 3% Hotel $ 49,695 4% 2% 26% Restaurant $ 56,460 4% 2% Multifamily - Construction $ 2 7,860 2% 1% Remainder $ 9 6,869 7% 3% Total $ 1 ,334,600 10
Asset Quality Trends Overview Annualized Net Charge-Offs to Avg. Net Loans • Early-stage delinquencies were $16.7 million, or 0.52% of total 0.11% loans at December 31, 2023, compared to $9.6 million, or 0.40% of 0.09% total loans at December 31, 2022 0.07% 0.07% • Conservative underwriting practices • Sound reserve levels under CECL 0.04% 2019 2020 2021 2022 2023 NPLs/Total Loans & Leases ($ in thousands) ACL to Total Loans 1.26% $20,000 0.80% 1.12% 1.08% 1.07% 0.70% $15,000 0.60% 0.80% 0.50% $10,000 0.40% 0.30% $5,000 0.20% 0.10% $- 0.00% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 NPLs NPLs / Total Loans 11
Securities Portfolio Overview CMOs, 5.7% Mortgage Corporates, 1.6% • All of the Investment securities portfolio is categorized as U.S. Government, 9.8% Backed available for sale Securities • All MBS and CMOs are U.S. government agency issued 40.1% • All municipal securities are investment grade, majority with credit enhancements • The duration of the available for sale securities portfolio is 6.9 year at December 31, 2023 • Assuming no changes to interest rates, the AOCI is expected to have accretion of approximately $20.6 million, or 9.5% over the next four quarters • Over the next three years, the AOCI is expected to have accretion of approximately $40.0 million, or 18.4%, assuming no changes to interest rates Municipals, 42.8% 12
Deposit Trends Customer Deposit Composition (in millions) Overview • We are proud to say our bank is built on core deposits $4,500 • Total deposits: $4.2 billion $4,000 • Noninterest-bearing stood at 24.6% of total deposits $3,500 $3,000 $2,500 Customer Deposit Composition (in millions) $2,000 $4,000 $1,500 $3,151 $3,000 $2,527 $1,000 $2,000 $500 $897 $1,026 $1,000 $0 $- 2019 2020 2021 2022 2023 31-Dec-22 31-Dec-23 Noninterest-Bearing Interest-Bearing Demand Money Market Savings Time Deposits Noninterest-bearing Interest-bearing 13
Liquidity Farmers National Banc Corp. has the following sources of liquidity at the holding company as of December 31, 2023: • $57.1 million of cash and equivalents • $5.0 million in unsecured lines of credit with a zero balance Farmers National Bank has the following sources of liquidity as of December 31, 2023: • $102.5 million of cash and equivalents • $819.5 million of additional borrowing capacity at the FHLB • $25.0 million of unsecured lines of credit with a zero balance • $214.3 million of available for sale securities that are not pledged • Brokered CDs • Securities roll-off of approximately $73.5 million in next 12 months 14
Net Interest Income and NIM Trends Overview Net Interest Income (in thousands) $160,000 • Focused on growing loans to manage net interest margin $140,000 • Managing cost of funds and deposit betas through rising rate $120,000 environment $100,000 $80,000 $60,000 $40,000 $20,000 2019 2020 2021 2022 2023 Net Interest Margin (annualized) Loans to Deposits 100.00% 3.82% 3.70% 3.45% 80.00% 3.18% 2.91% 60.00% 40.00% 20.00% 0.00% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 15
Noninterest Income Trends Overview Total Noninterest Income* (in thousands) $50,000 • Robust Trust, Wealth Management and Insurance businesses $40,000 • Diverse revenue sources • Working to increase noninterest income to total revenue $30,000 $20,000 $10,000 $- 2019 2020 2021 2022 2023 Noninterest Income to Total Revenue* Components of Noninterest Income* (in thousands) $40,000 27.3% 26.1% 25.4% $35,000 22.9% 22.4% $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Wealth Mortgage Banking Svc Chgs/Debit Fees Other 16 *Noninterest income in 2022 excludes $8.4 million in income related to the proceeds of a one-time legal settlement. In 2023, it excludes $915,000 related to the gain recognized on the sale of commercial loans. See Non-GAAP reconciliation in appendix.
Noninterest Expense Trends 1) (1) Overview Noninterest Expense to Average Assets • Overall focus on driving efficiencies 2.71% 2.43% • The Company has a number of process improvement projects 2.05% 2.07% 1.98% underway. • Track record of prudent expense management 2019 2020 2021 2022 2023 (2) (1) Noninterest Expense (in thousands) Efficiency Ratio $120,000 56.3% 55.4% 49.4% 49.0% $100,000 46.3% $80,000 $60,000 $40,000 $20,000 $- 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 (1) Ratios adjusted for certain items. See Non-GAAP reconciliation in appendix. 17 (2) All periods adjusted for certain items. See Non-GAAP reconciliation in appendix.
Capital Overview Tangible Equity to Tangible Assets • All regulatory capital ratios above well-capitalized threshold 10.31% 9.30% 9.44% • Announced 1,000,000 share repurchase program in Q1 2023 8.95% 7.57% • Strong dividend payout 10.67% 9.94% 9.15% 4.38% 4.79% 2019 2020 2021 2022 2023 Tangible Equity to Tangible Assets Tangible Equity less AOCI to Tangible Assets Less Unrealized Gains (Losses) Total Risk Based Capital Tier 1 Leverage Ratio 10.69% 17.79% 17.60% 10.12% 9.84% 9.77% 14.72% 14.08% 13.82% 8.02% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 * Estimate 18
Appendix – Non GAAP Reconciliations 2019 2020 2021 2022 2023 Net income $ 35,760 $ 41,876 $ 51,844 $ 60,597 $ 4 9,932 Acquisition related costs - after tax 187 2,585 5,731 3,290 4 ,395 Acquisition related provision - after tax - - 3,846 - 6 ,077 Employee severance - - - - 798 Law suit settlement income - after tax 399 - - ( 6,616) - Law suit settlement contingent legal expense - after tax - - - 1,639 620 Charitable donation - after tax - - - 4,740 - FHLB prepayment penalties - after tax - 666 1,682 - - Net loss (gain) on asset/security sales - after tax (20) 404 (598) 344 (723) Gain on sale of credit card portfolio - after tax - - ( 189) - 698 Core net income $ 36,326 $ 45,531 $ 62,316 $ 63,994 $ 61,797 Reported EPS $ 1.28 $ 1.47 $ 1.77 $ 1.79 $ 1 .33 Core diluted EPS $ 1.29 $ 1.60 $ 2.13 $ 1.89 $ 1.65 Reported return on average assets (annualized) 1.50% 1.46% 1.52% 1.46% 0.99% Core return on average assets (annualized) 1.51% 1.59% 1.83% 1.54% 1.23% Net interest income, reported $ 82,378 $ 96,191 $ 107,990 $ 124,166 $ 1 37,786 Net interest income, tax equated $ 84,523 $ 98,582 $ 110,835 $ 127,530 $ 1 40,588 Noninterest income 28,042 36,161 38,193 44,202 4 1,861 Legal settlement income - - - (8,375) - Net loss (gain) on asset/security sales (25) 511 ( 757) 435 883 Net (gain) on commercial loan sale - - - - - Gain on sale of credit card portfolio - - ( 239) - (915) Adjusted noninterest income 28,017 36,672 37,197 36,262 4 1,829 Net interest income and noninterest income adjusted 112,540 135,254 148,032 163,792 182,417 Noninterest expense less intangible amortization 63,589 70,001 77,817 92,438 108,361 Charitable donation - - - 6,000 - Contingent legal settlement expense - - - 2,075 785 Employee severance - - - - 1,010 Acquisition related costs 187 3,223 7,109 4,070 5 ,475 FHLB prepayment penalties - - 2,129 - - Adjusted noninterest expense 63,402 66,778 68,579 80,293 1 01,091 Reported efficiency ratio (tax equivalent basis) 56.38% 52.55% 51.13% 53.68% 59.24% 19 Efficiency ratio excluding certain items 56.34% 49.37% 46.33% 49.02% 55.42%
Appendix – Non GAAP Reconciliations 2019 2020 2021 2022 2023 Total assets $ 2,449,158 $ 3,071,148 $ 4,142,749 $ 4,082,200 $ 5 ,078,350 Less goodw ill and other intangibles 42,645 49,617 102,606 101,666 1 90,287 Tangible Assets $ 2,406,513 $ 3,021,531 $ 4,040,143 $ 3,980,534 $ 4 ,888,063 Gross unrealized losses $ 12,438 $ 27,889 $ 11,718 $ ( 266,487) $ (217,140) Tangible assets less gross unrealized gains (losses) $ 2,394,075 $ 2,993,642 $ 4,028,425 $ 4,247,021 $ 5 ,105,203 Stockholders' Equity $ 299,309 $ 350,097 $ 472,432 $ 292,295 $ 404,415 Less goodw ill and other intangibles 42,645 49,617 102,606 101,666 1 90,287 Tangible common equity 256,664 300,480 369,826 190,629 2 14,128 Accumulated othe comprehensive income (loss) (AOCI) 9,826 22,032 9,295 ( 210,490) (172,554) Tangible common equity less AOCI $ 246,838 $ 278,448 $ 360,531 $ 401,119 $ 3 86,682 Equity to assets 12.22% 11.40% 11.40% 7.16% 7.96% Tangible equity to tangible assets 10.67% 9.94% 9.15% 4.79% 4.38% Tangible equity less AOCI to tangible assets less gross unrealized gains (losses) 10.31% 9.30% 8.95% 9.44% 7.57% 20