8-K - SMBC - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)	April 26, 2021

SOUTHERN MISSOURI BANCORP, INC.

(Exact name of registrant as specified in its charter)

Missouri	000-23406	43-1665523
(State or other	(Commission File No.)	(IRS Employer
jurisdiction of incorporation)		Identification Number)

2991 Oak Grove Road, Poplar Bluff, Missouri	63901
(Address of principal executive offices)	(Zip Code)


Registrant’s telephone number, including area code:	(573) 778-1800

N/A

(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 communications 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 communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications 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 Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	SMBC	The NASDAQ Stock Market LLC

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 April 26, 2021, Southern Missouri Bancorp, Inc., the parent corporation of Southern Bank, issued a press release announcing preliminary third quarter of fiscal 2021 results, and reiterating its quarterly dividend of $0.16 per common share, and the timing of its investor conference call. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference herein.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits


	99.1	Press release dated April 26, 2021<br><br>
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document).<br><br>

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.

	SOUTHERN MISSOURI BANCORP, INC.
Date: April 27, 2021	By:	/s/ Greg A. Steffens
		Greg A. Steffens
		President and Chief Executive Officer

Exhibit 99.1

FOR IMMEDIATE RELEASE	Contact: Matt Funke, CFO
April 26, 2021	(573) 778-1800

SOUTHERN MISSOURI BANCORP REPORTS PRELIMINARY RESULTS FOR THIRD QUARTER OF FISCAL 2021;

DECLARES QUARTERLY DIVIDEND OF $0.16 PER COMMON SHARE;

CONFERENCE CALL SCHEDULED FOR TUESDAY, APRIL 27, AT 3:30PM CENTRAL TIME

Poplar Bluff, Missouri - Southern Missouri Bancorp, Inc. (“Company”) (NASDAQ: SMBC), the parent corporation of Southern Bank (“Bank”), today announced preliminary net income for the third quarter of fiscal 2021 of $11.5 million, an increase of $6.4 million, or 124.7%, as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income, a decline in provision for credit losses, an increase in noninterest income, and a decline in noninterest expense, partially offset by an increase in provision for income taxes. Preliminary net income was $1.27 per fully diluted common share for the third quarter of fiscal 2021, an increase of $.72 as compared to the $.55 per fully diluted common share reported for the same period of the prior fiscal year.

Highlights for the third quarter of fiscal 2021:

●	Annualized return on average assets was 1.71%, while annualized return on average common equity was 16.9%, as compared to 0.88% and 8.1%, respectively, in the same quarter a year ago, and 1.87% and 18.3%, respectively, in the second quarter of fiscal 2021, the linked quarter.

●	Earnings per common share (diluted) were $1.27, up $.72, or 130.9%, as compared to the same quarter a year ago, and down $.05, or 3.8%, from the second quarter of fiscal 2021, the linked quarter.

●

Provision for credit losses represented a recovery of $409,000, all of which was due to a reduction in the Company’s required allowance for off-balance sheet credit exposure, while the allowance for credit losses was unchanged aside from net charge offs of $244,000 recognized during the period. In the same quarter a year ago, provision for loan losses totaled $2.9 million, and provision for off-balance sheet credit exposure totaled $300,000. Nonperforming assets were $9.4 million, or 0.34% of total assets, at March 31, 2021, as compared to $11.1 million, or 0.42% of total assets, at December 31, 2020, and $14.9 million, or 0.63% of total assets, at March 31, 2020, one year prior.

●	Net loans increased $13.5 million during the quarter, with balances of SBA Paycheck Protection Program (PPP) loans growing by $5.0 million, as new PPP originations slightly outpaced approximately $42 million in forgiveness payments received during the quarter.

●	Deposit balances increased $103.7 million in the quarter, which is typically one of our stronger quarters for deposit growth, attributable in part this year to continued receipt by depositors of economic impact payments and PPP proceeds. Deposits continued to migrate away from certificates of deposit and to nonmaturity accounts, with most growth in transaction accounts.

●	Net interest margin for the quarter was 3.68%, up from the 3.63% reported for the year ago period, and down from 3.92% reported for the second quarter of fiscal 2021, the linked quarter. Net interest income was increased significantly by accelerated accretion of deferred origination fees on PPP loans as those
loans were repaid through SBA forgiveness. Discount accretion on acquired loan portfolios was also increased in the current quarter as compared to the linked and year ago periods. Margin was negatively impacted by increased average cash balances.
---

●

Noninterest income was up 40.1% for the quarter, as compared to the year ago period, and was down 20.9% as compared to the second quarter of fiscal 2021, the linked quarter. Notable variances included nonrecurring benefits realized on bank-owned life insurance recognized during the linked quarter, without comparable items in the current period, an impairment of mortgage servicing rights recognized in the same quarter a year ago, and gains on sales of mortgage loans into the secondary market which were well above year ago levels, but down from the linked quarter.

●

Noninterest expense was down 0.3% for the quarter, as compared to the year ago period, and was up 3.7% from the second quarter of fiscal 2021, the linked quarter. To conform with regulatory accounting requirements discussed below, the Company will be reporting provision for off-balance sheet credit exposures, which was a charge of $388,000 in the linked quarter, and a charge of $300,000 in the year ago period, as a component of its provision for credit losses beginning with the 2021 fiscal year. The charges reported in the current fiscal year to date have been reclassified to provision for credit losses, as well. In the current period, as noted above, a $409,000 recovery was recognized for off-balance sheet credit exposure as a negative provision for credit losses.

Dividend Declared:

The Board of Directors, on April 20, 2021, declared a quarterly cash dividend on common stock of $0.16, payable May 28, 2021, to stockholders of record at the close of business on May 14, 2021, marking the 108^th^ consecutive quarterly dividend since the inception of the Company. The Board of Directors and management believe the payment of a quarterly cash dividend enhances stockholder value and demonstrates our commitment to and confidence in our future prospects.

Conference Call:

The Company will host a conference call to review the information provided in this press release on Tuesday, April 27, 2021, at 3:30 p.m., central time. The call will be available live to interested parties by calling 1-888-339-0709 in the United States (Canada: 1-855-669-9657, international: 1-412-902-4189). Participants should ask to be joined into the Southern Missouri Bancorp (SMBC) call. Telephone playback will be available beginning one hour following the conclusion of the call through May 10, 2021. The playback may be accessed by dialing 1-877-344-7529 (Canada: 1-855-669-9658, international: 1-412-317-0088), and using the conference passcode 10155753.

Balance Sheet Summary:

The Company experienced balance sheet growth in the first nine months of fiscal 2021, with total assets of $2.7 billion at March 31, 2021, reflecting an increase of $189.9 million, or 7.5%, as compared to June 30, 2020. Growth primarily reflected increases in cash and cash equivalents and available-for-sale (“AFS”) securities, partially offset by a decrease in net loans receivable.

Cash equivalents and time deposits were a combined $237.9 million at March 31, 2021, an increase of $182.7 million, or 330.8%, as compared to June 30, 2020. The increase was primarily a result of rapid deposit growth. AFS securities were $190.4 million at March 31, 2021, an increase of $13.9 million, or 7.9%, as compared to June 30, 2020.

Loans, net of the allowance for credit losses (ACL), were $2.1 billion at March 31, 2021, a decrease of $7.0 million, or 0.3%, as compared to June 30, 2020. Gross loans increased by $3.0 million, or 0.1%, during the first nine months of the fiscal year, while the ACL at March 31, 2021, reflected an increase of $10.1 million, as compared to the balance of our allowance for loan and lease losses (ALLL) at June 30, 2020. The Company

adopted ASU 2016-13, Financial Instruments – Credit Losses, also known as the current expected credit loss (“CECL”) standard, effective as of July 1, 2020, the beginning of our 2021 fiscal year. Adoption resulted in a $9.3 million increase in the ACL, relative to the ALLL as of June 30, 2020, while provisioning in excess of net charge offs during the first nine months of fiscal 2021 increased the ACL by an additional $755,000, as compared to July 1, 2020. The increase in loan balances in the portfolio was primarily attributable to increases in residential real estate loans, drawn construction loan balances, and commercial real estate loans, partially offset by decreases in commercial loans and consumer loans. Residential real estate loans increased primarily due to growth in 1- to 4-family residential lending, as well as increases in multifamily loans. Due to its liquidity position, the Company retained some single-family residential loans which it typically would have sold on the secondary market. Commercial real estate loans increased primarily due to loans secured by owner-occupied nonresidential property. Commercial loan balances decreased primarily as a result of forgiveness of PPP loans, which declined by $31.7 million in the fiscal year to date, but increased by $5.0 million in the quarter ended March 31, 2021, to stand at $100.5 million. “Second draw” PPP loans under the program re-opened by the SBA in January 2021, and funding of these loans more than offset forgiveness payments received during the March quarter. Management expects continued growth of second draw loans to be limited as the program draws to a close in May 2021, and we would expect forgiveness payments to pick up in the next several quarters for larger balance loans originated under the first round of activity and for forgiveness payments to begin to be received for the second round of loans. Loans anticipated to fund in the next 90 days totaled $145.8 million at March 31, 2021, as compared to $85.1 million at December 31, 2020, and $76.6 million at March 31, 2020. The pipeline figures did not include PPP loans, and the amount of PPP loans that were in process at March 31, 2021 was immaterial.

Nonperforming loans were $6.8 million, or 0.31% of gross loans, at March 31, 2021, as compared to $8.7 million, or 0.40% of gross loans at June 30, 2020, and $11.4 million, or 0.57% of gross loans at March 31, 2020. Nonperforming assets were $9.4 million, or 0.34% of total assets, at March 31, 2021, as compared to $11.2 million, or 0.44% of total assets, at June 30, 2020, and $14.9 million, or 0.63% of total assets, at March 31, 2020. The decrease in nonperforming loans over the previous twelve months was attributed primarily to the resolution of certain nonperforming loans acquired in the November 2018 acquisition of Gideon Bancshares and its subsidiary, First Commercial Bank (the “Gideon Acquisition”).

Our ACL at March 31, 2021, totaled $35.2 million, representing 1.62% of gross loans and 521.3% of nonperforming loans, as compared to an ALLL of $25.1 million, representing 1.16% of gross loans and 290.4% of nonperforming loans at June 30, 2020, and an ALLL of $23.5 million, or 1.18% of gross loans and 205.7% of nonperforming loans, at March 31, 2020. The ACL at March 31, 2021, also represented 1.70% of gross loans excluding PPP loans. The Company has estimated its credit losses as of March 31, 2021, under ASC 320-20, and management believes the allowance for credit losses as of that date is adequate based on that estimate; however, there remains significant uncertainty regarding the possible length of time before economic activity fully recovers from the COVID-19 pandemic, including uncertainty regarding the effectiveness of recent efforts by the U.S. government and Federal Reserve to respond to the pandemic and its economic impact. Management considered the impact of the pandemic on its consumer and business borrowers, particularly those business borrowers most affected by efforts to contain the pandemic, most notably including our borrowers in the hotel industry.

Provisions of the CARES Act and subsequent legislation allow financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to troubled debt restructurings (TDRs) for certain loans that were otherwise current and performing prior to the COVID-19 pandemic, but for which borrowers experienced or expected difficulties due to the impact of the pandemic. Initially, deferrals under this program were generally granted for three-month periods, while interest-only modifications were generally for six-month periods. Some borrowers were granted additional periods of deferral or interest-only modifications. The Company did not account for these loans as TDRs. As of March 31, 2021, loans for which COVID-related payment deferrals and interest-only payment modifications remained in place included approximately 18 loans with balances totaling $40.4 million, as compared to approximately 900 loans with balances totaling $380.2 million with such deferrals or modifications in place at June 30, 2020. Details by loan type are included in the

table at the conclusion of this document. For borrowers whose payment terms have not returned to the original terms under their loan agreement, the Company has generally classified the credit as a “watch” or “special mention” status credit. Loans remaining under a COVID-related payment deferral or interest-only modification which have been placed on watch or special mention status total $39.5 million. While management considers progress made by our borrowers in responding to the pandemic to be relatively strong, and the performance of our loan portfolio to be encouraging to date, we cannot predict with certainty the difficulties to be faced in coming months. Communities where our borrowers operate could experience increases in COVID-19 cases and reductions in business activity or employee attendance, and borrowers could be required by local authorities to restrict activity.

Total liabilities were $2.5 billion at March 31, 2021, an increase of $175.3 million, or 7.7%, as compared to June 30, 2020.

Deposits were $2.4 billion at March 31, 2021, an increase of $183.9 million, or 8.4%, as compared to June 30, 2020. This increase primarily reflected an increase in interest-bearing transaction accounts, noninterest-bearing transaction accounts, savings accounts, and money market deposit accounts, partially offset by a decrease in time deposits. The increase included a $27.0 million increase in public unit funds, and was net of a $13.3 million decrease in brokered deposits. Public unit balances were $332.2 million at March 31, 2021, while brokered time deposits totaled $10.0 million, and brokered money market deposits were $20.1 million. Depositors continue to hold unusually high balances in the uncertain environment. The average loan-to-deposit ratio for the third quarter of fiscal 2021 was 92.4%, as compared to 99.9% for the same period of the prior fiscal year.

FHLB advances were $62.8 million at March 31, 2021, a decrease of $7.2 million, or 10.3%, as compared to June 30, 2020, as the Company’s deposit inflows outpaced loan demand or desired investment portfolio growth. The Company has continued to monitor the availability of the Federal Reserve’s PPP Lending Facility (PPPLF), but has not utilized it to date, given our improved liquidity position and the lack of attractive alternative investment options.

The Company’s stockholders’ equity was $272.9 million at March 31, 2021, an increase of $14.6 million, or 5.6%, as compared to March 31, 2020. The increase was attributable primarily to earnings retained after cash dividends paid, partially offset by the one-time negative adjustment to retained earnings resulting from the adoption of the CECL standard and repurchases of the Company’s common stock. Since re-starting the repurchase program in October 2020, the Company has repurchased 184,384 common shares for $6.0 million through March 31, 2021, at an average price of $32.76.

Quarterly Income Statement Summary:

The Company’s net interest income for the three-month period ended March 31, 2021, was $23.1 million, an increase of $3.7 million, or 19.2%, as compared to the same period of the prior fiscal year. The increase was attributable to a 17.4% increase in the average balance of interest-earning assets, combined with an increase in net interest margin to 3.68% in the current three-month period, from 3.63% in the same period a year ago. As a material amount of PPP loans were forgiven and therefore repaid ahead of their scheduled maturity, the Company recognized accelerated accretion of interest income from deferred origination fees on these loans. In the current quarter, this component of interest income totaled $1.2 million, adding 18 basis points to the net interest margin, with no comparable item in the year ago period. In the linked quarter, ended December 31, 2020, accelerated accretion of deferred origination fees on PPP loans totaled $968,000, adding 16 basis points to the net interest margin.

Loan discount accretion and deposit premium amortization related to the Company’s August 2014 acquisition of Peoples Bank of the Ozarks, the June 2017 acquisition of Capaha Bank, the February 2018 acquisition of Southern Missouri Bank of Marshfield, the Gideon Acquisition, and the May 2020 acquisition of Central Federal Savings & Loan Association of Rolla (the Central Federal Acquisition), resulted in $614,000 in net

interest income for the three-month period ended March 31, 2021, as compared to $410,000 in net interest income for the same period a year ago. The Company generally expects this component of net interest income will continue to decline over time, although volatility may occur to the extent we have periodic resolutions of specific loans. Combined, these components of net interest income contributed ten basis points to net interest margin in the three-month period ended March 31, 2021, as compared to a contribution of eight basis points in the same period of the prior fiscal year, and as compared to the nine basis point contribution in the linked quarter, ended December 31, 2020, when net interest margin was 3.92%.

The provision for credit losses for the three-month period ended March 31, 2021, was a recovery of $409,000, as compared to a charge of $2.9 million in the same period of the prior fiscal year. The full amount of the recovery in the current period was due to a reduction in the Company’s required allowance for off-balance sheet credit exposure, while the allowance for credit losses was unchanged during the three-month period ended March 31, 2021, aside from net charge offs of $244,000 recognized during the period. The Company assesses that the outlook has generally improved as compared to the quarter ended June 30, 2020. As a percentage of average loans outstanding, the provision for credit losses in the current three-month period represented a recovery of 0.08% (annualized), while the Company recorded net charge offs during the period of 0.05% (annualized). During the same period of the prior fiscal year, the provision represented a charge of 0.58% (annualized), while the Company recorded net charge offs of 0.03% (annualized). Also in the prior period, a separate provision for off-balance sheet credit exposure was recognized for $300,000, and previously classified as noninterest expense, whereas under updated regulatory accounting guidelines, that figure will be combined with the provision for credit losses for current fiscal year and going forward. The charges reported in the current fiscal year to date have been reclassified to provision for credit losses, as well.

The Company’s noninterest income for the three-month period ended March 31, 2021, was $4.5 million, an increase of $1.3 million, or 40.1%, as compared to the same period of the prior fiscal year. In the current period, increases in gains realized on the sale of residential real estate loans originated for that purpose, loan servicing income, bank card interchange income, and a gain on sale of AFS securities were partially offset by decreases in deposit account service charges and other loan fees. Gains realized on the sale of residential real estate loans originated for that purpose increased as origination of these loans was up 180% as compared to the year ago period, while pricing was improved. Gains declined from the linked quarter, as the Company chose to retain some mortgage loans that were fully underwritten for sale on the secondary market, due to its liquidity position. Loan servicing income increased primarily due to recognition of a $395,000 impairment charge on mortgage servicing rights in the year ago period, as well as due to continued high levels of originations and an increase in the balance of serviced loans. Bank card interchange income increased due to a 15.5% increase in the number of bank card transactions and a 30.1% increase in bank card dollar volume, as compared to the same quarter a year ago. Deposit service charges decreased primarily due to a reduction in NSF activity.

Noninterest expense for the three-month period ended March 31, 2021, was $13.5 million, a decrease of $41,000, or 0.3%, as compared to the same period of the prior fiscal year. The decrease was attributable primarily to the inclusion in the year ago period of a $300,000 provision for off-balance sheet credit exposure, which, as noted above, will be combined with the provision for credit losses for the current fiscal year and going forward. Additionally, in the year ago period, the Company reported $76,000 in expenses related to the Central Federal Acquisition, with no comparable charges in the current period. Otherwise, a reduction in charges related to foreclosed property and a reduction in charges to amortize core deposit intangibles were offset by increases in compensation and benefits, occupancy expenses, deposit insurance premiums, and data processing expense. The increase in compensation and benefits as compared to the prior year primarily reflected standard increases in compensation and benefits over the prior year. Occupancy expenses increased due in part to additional locations, as well as replacement of some ATMs with ITMs with video teller capability, and timing differences in maintenance expenses and purchases of smaller equipment items not capitalized. Deposit insurance premiums reflected a return to a normalized level of premiums after the Company benefited from one-time assessment credits for much of the prior fiscal year. Data processing expenses increased primarily due to licensing of updated productivity, mobility, and security software. The efficiency ratio for the three-month period ended

March 31, 2021, was 49.0%, as compared to 59.9% in the same period of the prior fiscal year, with the improvement attributable primarily to the current period’s increases in net interest income and noninterest income, while noninterest expenses were little changed in total.

The income tax provision for the three-month period ended March 31, 2021, was $3.1 million, an increase of $2.0 million, or 174.2% as compared to the same period of the prior fiscal year, as higher pre-tax income combined with an increase in the effective tax rate, to 21.3%, as compared to 18.1% in the same period a year ago. The higher effective tax rate was attributable primarily to the significant increase in pre-tax income, without corresponding increases in tax-advantaged investments.

Forward-Looking Information:

Except for the historical information contained herein, the matters discussed in this press release may be deemed to be forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from the forward-looking statements, including: potential adverse impacts to the economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, generally, resulting from the ongoing COVID-19 pandemic and any governmental or societal responses thereto; expected cost savings, synergies and other benefits from our merger and acquisition activities might not be realized to the extent anticipated, within the anticipated time frames, or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; the strength of the United States economy in general and the strength of the local economies in which we conduct operations; fluctuations in interest rates and in real estate values; monetary and fiscal policies of the FRB and the U.S. Government and other governmental initiatives affecting the financial services industry; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; our ability to access cost-effective funding; the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services; fluctuations in real estate values and both residential and commercial real estate markets, as well as agricultural business conditions; demand for loans and deposits; legislative or regulatory changes that adversely affect our business; changes in accounting principles, policies, or guidelines; results of regulatory examinations, including the possibility that a regulator may, among other things, require an increase in our reserve for loan losses or write-down of assets; the impact of technological changes; and our success at managing the risks involved in the foregoing. Any forward-looking statements are based upon management’s beliefs and assumptions at the time they are made. We undertake no obligation to publicly update or revise any forward-looking statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed might not occur, and you should not put undue reliance on any forward-looking statements.

Southern Missouri Bancorp, Inc.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION


Summary Balance Sheet Data as of:	****	Mar. 31,		****	Dec. 31,		****	Sep. 30,		****	June 30,		****	Mar. 31,		****
(dollars in thousands, except per share data)		2021			2020			2020			2020			2020		****

Cash equivalents and time deposits		$	237,873		$	150,496		$	42,850		$	55,219		$	57,078
Available for sale (AFS) securities			190,409			181,146			175,528			176,524			180,592
FHLB/FRB membership stock			11,181			11,004			11,956			10,753			13,054
Loans receivable, gross			2,170,112			2,156,870			2,185,547			2,167,068			1,991,328
Allowance for loan losses			35,227			35,471			35,084			25,139			23,508
Loans receivable, net			2,134,885			2,121,399			2,150,463			2,141,929			1,967,820
Bank-owned life insurance			43,539			43,268			43,644			43,363			39,095
Intangible assets			21,168			21,453			21,582			21,789			21,573
Premises and equipment			63,908			63,970			64,430			65,106			64,705
Other assets			29,094			30,262			30,281			27,474			30,531
Total assets		$	2,732,057		$	2,622,998		$	2,540,734		$	2,542,157		$	2,374,448

Interest-bearing deposits		$	1,981,345		$	1,927,351		$	1,861,051		$	1,868,799		$	1,738,379
Noninterest-bearing deposits			387,416			337,736			307,023			316,048			233,268
FHLB advances			62,781			63,286			85,637			70,024			123,361
Note payable			—			—			—			—			3,000
Other liabilities			12,358			11,743			11,880			13,797			11,469
Subordinated debt			15,218			15,193			15,168			15,142			15,118
Total liabilities			2,459,118			2,355,309			2,280,759			2,283,810			2,124,595

Total stockholders’ equity			272,939			267,689			259,975			258,347			249,853

Total liabilities and stockholders’ equity		$	2,732,057		$	2,622,998		$	2,540,734		$	2,542,157		$	2,374,448

Equity to assets ratio			9.99	%		10.21	%		10.23	%		10.16	%		10.52	%

Common shares outstanding			8,959,296			9,035,232			9,126,625			9,127,390			9,128,290
Less: Restricted common shares not vested			31,845			25,410			27,260			28,025			28,925
Common shares for book value determination			8,927,451			9,009,822			9,099,365			9,099,365			9,099,365

Book value per common share		$	30.57		$	29.71		$	28.57		$	28.39		$	27.46
Closing market price			39.42			30.44			23.58			24.30			24.27


Nonperforming asset data as of:	****	Mar. 31,		****	Dec. 31,		****	Sep. 30,		****	June 30,		****	Mar. 31,		****
(dollars in thousands)		2021			2020			2020			2020			2020		****

Nonaccrual loans		$	6,757		$	8,330		$	8,775		$	8,657		$	11,428
Accruing loans 90 days or more past due			—			—			—			—			—
Total nonperforming loans			6,757			8,330			8,775			8,657			11,428
Other real estate owned (OREO)			2,651			2,707			2,466			2,561			3,401
Personal property repossessed			—			44			9			9			38
Total nonperforming assets		$	9,408		$	11,081		$	11,250		$	11,227		$	14,867

Total nonperforming assets to total assets			0.34	%		0.42	%		0.44	%		0.44	%		0.63	%
Total nonperforming loans to gross loans			0.31	%		0.39	%		0.40	%		0.40	%		0.57	%
Allowance for loan losses to nonperforming loans			521.34	%		425.82	%		399.82	%		290.39	%		205.71	%
Allowance for loan losses to gross loans			1.62	%		1.64	%		1.61	%		1.16	%		1.18	%

Performing troubled debt restructurings ^(1)^		$	7,092		$	7,897		$	7,923		$	8,580		$	14,196

(1) Nonperforming troubled debt restructurings are included with nonaccrual loans or accruing loans 90 days or more past due.

-7-


	For the three-month period ended
Quarterly Summary Income Statement Data:	Mar. 31,		****	Dec. 31,		****	Sep. 30,		****	June 30,		****	Mar. 31,
(dollars in thousands, except per share data)	2021			2020			2020			2020			2020

Interest income:
Cash equivalents	$	70		$	48		$	41		$	18		$	33
AFS securities and membership stock		1,025			997			1,024			1,146			1,218
Loans receivable		26,005			26,826			25,907			26,099			24,969
Total interest income		27,100			27,871			26,972			27,263			26,220
Interest expense:
Deposits		3,494			3,863			4,390			4,923			6,135
FHLB advances		325			347			380			398			439
Note payable		—			—			—			11			31
Subordinated debt		132			134			138			151			197
Total interest expense		3,951			4,344			4,908			5,483			6,802
Net interest income		23,149			23,527			22,064			21,780			19,418
Provision for credit losses		(409)			1,000			1,000			1,868			2,850
Noninterest income:
Deposit account charges and related fees		1,275			1,360			1,339			1,087			1,538
Bank card interchange income		1,004			836			830			954			719
Loan late charges		118			138			141			157			149
Loan servicing fees		217			368			310			248			(285)
Other loan fees		266			305			327			290			370
Net realized gains on sale of loans		853			1,390			1,206			977			178
Net realized gains on AFS securities		90			—			—			—			—
Earnings on bank owned life insurance		270			974			280			266			247
Other noninterest income		431			349			508			380			313
Total noninterest income		4,524			5,720			4,941			4,359			3,229
Noninterest expense:
Compensation and benefits		7,739			7,545			7,720			7,698			7,521
Occupancy and equipment, net		1,990			1,866			1,970			1,887			1,780
Data processing expense		1,253			1,175			1,062			2,084			974
Telecommunications expense		317			308			315			314			309
Deposit insurance premiums		174			218			201			155			—
Legal and professional fees		256			236			198			318			229
Advertising		240			219			230			391			244
Postage and office supplies		198			195			193			219			224
Intangible amortization		338			338			380			448			441
Foreclosed property expenses		48			38			50			636			282
Provision for off-balance sheet credit exposure		—			—			—			132			300
Other noninterest expense		975			908			953			1,226			1,265
Total noninterest expense		13,528			13,046			13,272			15,508			13,569
Net income before income taxes		14,554			15,201			12,733			8,763			6,228
Income taxes		3,096			3,153			2,747			1,861			1,129
Net income		11,458			12,048			9,986			6,902			5,099
Less: Distributed and undistributed earnings allocated
to participating securities		41			34			30			—			—
Net income available to common shareholders	$	11,417		$	12,014		$	9,956		$	6,902		$	5,099

Basic earnings per common share	$	1.27		$	1.33		$	1.09		$	0.76		$	0.55
Diluted earnings per common share		1.27			1.32			1.09			0.76			0.55
Dividends per common share		0.16			0.15			0.15			0.15			0.15
Average common shares outstanding:
Basic		8,972,000			9,064,000			9,100,000			9,128,000			9,197,000
Diluted		8,976,000			9,067,000			9,102,000			9,130,000			9,205,000


	For the three-month period ended
Quarterly Average Balance Sheet Data:	Mar. 31,			Dec. 31,			Sep. 30,			June 30,			Mar. 31,
(dollars in thousands)	2021			2020			2020			2020			2020

Interest-bearing cash equivalents	$	171,403		$	40,915		$	19,768		$	10,380		$	7,363
AFS securities and membership stock		197,984			184,828			181,535			188,497			184,389
Loans receivable, gross		2,146,364			2,177,989			2,162,125			2,127,181			1,950,887
Total interest-earning assets		2,515,751			2,403,732			2,363,428			2,326,058			2,142,639
Other assets		170,475			170,158			174,574			194,651			180,981
Total assets	$	2,686,226		$	2,573,890		$	2,538,002		$	2,520,709		$	2,323,620

Interest-bearing deposits	$	1,965,191		$	1,886,883		$	1,865,636		$	1,838,606		$	1,729,327
FHLB advances		63,068			69,991			70,272			83,130			83,916
Note payable		—			—			—			1,187			3,000
Subordinated debt		15,205			15,180			15,155			15,130			15,105
Total interest-bearing liabilities		2,043,464			1,972,054			1,951,063			1,938,053			1,831,348
Noninterest-bearing deposits		357,746			325,091			316,996			311,555			223,865
Other noninterest-bearing liabilities		14,563			13,021			14,673			15,937			17,634
Total liabilities		2,415,773			2,310,166			2,282,732			2,265,545			2,072,847

Total stockholders’ equity		270,453			263,724			255,270			255,164			250,773

Total liabilities and stockholders’ equity	$	2,686,226		$	2,573,890		$	2,538,002		$	2,520,709		$	2,323,620

Return on average assets		1.71	%		1.87	%		1.57	%		1.10	%		0.88	%
Return on average common stockholders’ equity		16.9	%		18.3	%		15.6	%		10.8	%		8.1	%

Net interest margin		3.68	%		3.92	%		3.73	%		3.75	%		3.63	%
Net interest spread		3.54	%		3.76	%		3.55	%		3.56	%		3.40	%

Efficiency ratio		49.0	%		44.6	%		49.1	%		59.3	%		59.9	%


	As of March 31, 2021						As of December 31, 2020
Loan portfolio balances and CARES Act modifications	Balance		Payment		Interest-only		Payment		Interest-only
(dollars in thousands)	Outstanding		Deferrals		Modifications		Deferrals		Modifications

1‑ to 4‑family residential loans	$	449,378	$	98	$	—	$	—	$	138
Multifamily residential loans		206,422		—		10,581		—		10,581
Total residential loans	****	655,800	****	98	****	10,581	****	—	****	10,719
1‑ to 4‑family owner-occupied construction loans		20,733		—		—		—		—
1‑ to 4‑family speculative construction loans		11,161		—		—		—		—
Multifamily construction loans		58,915		—		—		—		—
Other construction loans		31,933		—		—		—		—
Total construction loan balances drawn	****	122,742	****	—	****	—	****	—	****	—
Agricultural real estate loans		182,009		—		—		—		—
Loans for vacant land - developed, undeveloped, and other purposes		52,869		—		—		—		—
Owner-occupied commercial real estate loans to:
Churches and nonprofits		21,296		—		621		—		634
Non-professional services		18,686		—		151		—		—
Retail		26,306		—		—		—		—
Automobile dealerships		15,395		—		—		—		—
Healthcare providers		7,529		—		—		—		—
Restaurants		47,183		—		—		—		—
Convenience stores		20,955		—		—		—		—
Automotive services		6,310		—		—		—		—
Manufacturing		11,908		—		—		—		—
Professional services		13,182		—		—		—		—
Warehouse/distribution		5,235		—		—		—		—
Grocery		5,366		—		—		—		—
Other		44,475		—		816		—		816
Total owner-occupied commercial real estate loans		243,826		—		1,588		—		1,450
Non-owner-occupied commercial real estate loans to:
Care facilities		35,283		—		—		—		—
Non-professional services		12,716		—		—		—		—
Retail		25,825		—		—		—		—
Healthcare providers		15,433		—		—		—		—
Restaurants		45,603		—		—		—		—
Convenience stores		15,930		—		—		—		—
Automotive services		5,368		—		—		—		—
Hotels		85,525		—		28,092		—		28,092
Manufacturing		5,106		—		—		—		—
Storage units		13,942		—		—		—		—
Professional services		6,870		—		—		—		—
Multi-tenant retail		73,413		—		—		—		—
Warehouse/distribution		25,185		—		—		—		—
Other		52,547		—		—		—		—
Total non-owner-occupied commercial real estate loans		418,746		—		28,092		—		28,092
Total commercial real estate	****	897,450	****	—	****	29,680	****	—	****	29,542


		As of March 31, 2021									As of December 31, 2020
Loan portfolio balances and CARES Act modifications		Balance			Payment			Interest-only			Payment			Interest-only
(continued, dollars in thousands)		Outstanding			Deferrals			Modifications			Deferrals			Modifications

Home equity lines of credit			38,243			—			—			—			—
Deposit-secured loans			4,298			—			—			—			—
All other consumer loans			33,806			29			—			—			—
Total consumer loans	****		76,347	****		29	****		—	****		—	****		—
Agricultural production and equipment loans			89,943			—			—			—			—
Loans to municipalities or other public units			8,573			—			—			—			—
Commercial and industrial loans to:			—			—			—			—			—
Forestry, fishing, and hunting			10,817			—			—			—			—
Construction			18,045			—			—			—			—
Finance and insurance			53,505			—			—			—			—
Real estate rental and leasing			18,020			—			—			—			—
Healthcare and social assistance			22,649			—			—			—			—
Accommodations and food services			18,797			—			—			—			—
Manufacturing			11,277			—			—			—			—
Retail trade			41,045			—			—			—			—
Transportation and warehousing			29,676			—			—			—			11
Professional services			3,929			—			—			—			—
Administrative support and waste management			8,214			—			—			—			—
Arts, entertainment, and recreation			3,469			—			—			—			—
Other commercial loans			83,866			—			12			—			—
Total commercial and industrial loans			323,309			—			12			—			11
Total commercial loans	****		421,825	****		—	****		12	****		—	****		11
Total gross loans receivable, excluding deferred loan fees		$	2,174,164		$	127		$	40,273		$	—		$	40,272