Equity Bancshares, Inc. Reports First-Quarter Net Income of $15.1 million and $1.02 Earnings Per Diluted Share Nasdaq:EQBK

Equity Bancshares, Inc. Reports First-Quarter Net Income of $15.1 million and $1.02 Earnings Per Diluted Share Nasdaq:EQBK

News Highlights

WICHITA, Kan., April 20, 2021 (News) — Equity Bancshares, Inc. (NASDAQ: EQBK), (“Equity”, “the Company”, “we”, “us”, “our”), the Wichita-based holding company of Equity Bank, reported net income of $15.1 million and $1.02 per diluted share, including $0.65 of core earnings per diluted share the first quarter ended March 31, 2021.

Core earnings of $0.65 per diluted share for the quarter were driven by non-Paycheck Protection Program (“PPP”) loan growth of $43.7 million, representing growth of 1.9%, or 7.6% annualized growth from December 31, 2020. Further driving results this quarter was the recognition of origination fee income from the successful forgiveness of PPP loans by the SBA; improved operating performance with many of our fee-based initiatives such as wealth management and trust business lines, and debit card and commercial credit card interchange income. Expense control remained a focus with non-interest expenses, excluding merger related expenses, down from the linked-and-comparable-quarters in 2020.

“I’m very proud of the collaboration and entrepreneurial spirit of our Equity teams. Our lending, operations, and customer service teams have worked together to create innovative processes and efficiencies that benefit our customers” said Brad S. Elliott, Chairman and CEO of Equity. “Our teams have worked to onboard new core deposit customers, and we have seen sustained increases in usage of our digital products, including online banking, mobile deposit, and bill pay – while continuing to service customers from fully opened lobbies. Entrepreneurial spirit is one of our core values, and we believe business, commercial, and retail customers continue to choose Equity Bank for our approach.”

“Throughout our footprint, our Equity Bank teams worked incredibly hard on behalf of our customers to secure PPP funds and help our customers maintain their businesses and livelihoods,” said Mr. Elliott. “A community bank prioritizes its customers and delivers dependable, innovative and round the clock service when our customers need it. We’ve remained open, ready and available to our customers to serve loan and business growth needs in all facets.”

In the quarter ended March 31, 2021, Equity originated $233.6 million in total PPP loans, and Equity’s total outstanding PPP loans were $414.1 million at the end of the quarter. The Company’s customers successfully had $99.7 million of PPP loans forgiven during the quarter, resulting in the recognition of fee income totaling $2.3 million in the three-month period ended March 31, 2021. At March 31, 2021, the total unrecognized fee income associated with PPP loans was $12.7 million. Through two rounds of PPP, Equity originated more than $610 million in PPP loans.

The results in the quarter ended December 31, 2020, reflect the Company’s purchase of assets and deposit liabilities of Almena State Bank. Equity completed the data system conversion of Almena State Bank on January 16, 2021, following the acquisition of Almena State Bank branches from the Federal Deposit Insurance Corporation (“FDIC”) in October 2020. Results also reflect Equity customers’ obtaining forgiveness of Paycheck Protection Program (“PPP”) loans from the Small Business Administration (“SBA”) totaling $102.8 million resulting in a recognition of $3.8 million of fee income.

Notable Items:

  • The Company authorized a second stock repurchase program in the third quarter of 2020 totaling 800,000 shares. During the quarter ended March 31, 2021, the Company repurchased 233,012 shares at a weighted average cost of $25.35 per share, totaling $5.9 million. At the end of the quarter, capacity of 253,757 shares remained under the current repurchase program.
  • The Company adopted ASU 2016-13, also known as Current Expected Credit Losses (“CECL”) at January 1, 2021. Upon implementation, the Company recognized a day one after tax $12.4 million reduction in stockholders’ equity and transferred $11.8 million of purchase credit impaired (“PCI”) marks to the allowance for credit losses (“ACL”) as purchase credit deteriorated (“PCD”) reserves. On implementation, the allowance for credit losses, including reserve on unfunded commitments, increased to $62.1 million from $33.7 million at December 31, 2020.
  • During the quarter ended March 31, 2021, there was a release of reserve for credit losses of $5.8 million as compared to a $1.0 million provision for loan losses in the quarter ended December 31, 2020.

Equity’s Balance Sheet Highlights:

  • Total loans held for investment of $2.80 billion at March 31, 2021, as compared to total loans held for investment of $2.59 billion at December 31, 2020.
  • Total deposits of $3.63 billion at March 31, 2021, as compared to $3.45 billion at December 31, 2020.  Signature deposits, including core deposits comprised of checking, savings and money market accounts, were $3.05 billion at March 31, 2021, relative to $2.82 billion at December 31, 2020. Included in this signature deposit growth was a $180.7 million increase in non-interest-bearing deposits, from $791.6 million at December 31, 2020, to $972.4 million at March 31, 2021.
  • Total assets were $4.20 billion at March 31, 2021, as compared to $4.01 billion at December 31, 2020.

Financial Results for the Quarter Ended March 31, 2021

Net income allocable to common stockholders was $15.1 million, or $1.02 per diluted share, for the three months ended March 31, 2021, as compared to $12.5 million, or $0.84 per diluted share, for the three months ended December 31, 2020, an increase of $2.6 million. This increase was attributable to a release of reserve for credit losses of $5.8 million during the quarter as compared to a provision for loan losses of $1.0 million during the fourth quarter of 2020. This $6.8 million provision improvement as well as the decrease in non-interest expense of $3.6 million and increase in non-interest income, exclusive of gain on acquisition, of $435 thousand were partially offset by a $3.8 million decrease in net interest income, a $2.2 million increase in provision for income taxes and a $2.2 million reduction in gain on acquisition.

Net Interest Income

Net interest income was $31.8 million for the three months ended March 31, 2021, as compared to $35.6 million for the three months ended December 31, 2020, a decrease of $3.8 million, or 10.7%. The decrease in net interest income was primarily driven by a 63-basis point decrease in average rate earned on interest-earning assets, to 3.73% for the quarter ended March 31, 2021, from 4.36% for the quarter ended December 31, 2020.   The decline in yield on earning assets was driven, in part, by the success of our forgiveness program with regard to the first round of PPP funding during the fourth quarter of 2020 resulting in a comparative reduction in interest income of $651 thousand; the success of the special assets team in processing program assets in the fourth quarter of 2020 resulting in a comparable decline of $1.1 million; and a reduction in loan fee recognition. The cost of interest-bearing liabilities declined to 0.58% or seven basis points for the quarter ended March 31, 2021 from 0.65% in the quarter ended December 31, 2020. The cost of interest-bearing deposits declined by seven basis points to 0.36% for the three months ended March 31, 2021 from 0.43% in the previous quarter primarily attributed to the reduction in the cost of time deposits, that slipped to 16 basis points between the quarters.

Provision for Credit Losses

During the three months ended March 31, 2021, there was a reversal of $5.8 million in the allowance for credit losses recognized through the provision for credit losses as compared to a $1.0 million provision for loan losses for the three months ended December 31, 2020. For the three months ended March 31, 2021, we had net charge-offs of $65 thousand as compared to $1.4 million for the three months ended December 31, 2020. The reversal is attributed primarily to improved economic inputs into the CECL model and, to a lesser extent, an improvement in historical loss experience and associated impact on the allowance for credit losses.

Non-Interest Income

Total non-interest income was $6.7 million for the three months ended March 31, 2021, as compared to $8.5 million for the three months ended December 31, 2020, or $6.4 million excluding the $2.1 million net gain on the purchase and assumption of Almena State Bank. Other non-interest income was $1.3 million, an increase of $439 thousand, or 51.5%, from the quarter ended December 31, 2020. The largest contributor was a $197 thousand increase from derivative transactions. The first quarter increase in value of bank-owned life insurance was $601 thousand, as compared to $489 thousand during the fourth quarter of 2020.

Non-Interest Expense

Total non-interest expense for the quarter ended March 31, 2021, was $24.9 million as compared to $28.5 million for the quarter ended December 31, 2020. The $3.6 million reduction is attributed to $1.6 million less in other real estate owned expense and a $1.3 million decline in salaries and employee benefits. The most significant contributor to the decrease in other real estate owned expense was a $947 thousand valuation adjustment during the fourth quarter of 2020 on two facilities that were closed in May 2020.

Asset Quality

As of March 31, 2021, Equity’s allowance for credit losses, plus reserve for unfunded commitments, to total loans was 2.02%, as compared to 1.30% at December 31, 2020. Total reserves to total loans were approximately 2.30% as of March 31, 2021, as compared to 2.12% at December 31, 2020. Nonperforming assets were $70.1 million as of March 31, 2021, or 1.67% of total assets. Nonperforming assets were $54.6 million at December 31, 2020, or 1.36% of total assets. Total other real estate owned declined to $10.6 million at March 31, 2021 from $11.7 million in the linked quarter. The increase of non-performing assets is attributed to the Company’s adoption of ASC 326 on January 1, 2021, and consequently transferring $11.8 million of PCI loan marks to PCD which is included in the ACL. The PCI marks, primarily attributed to acquired loans associated with Almena State Bank, previously reduced the amortized cost basis of the acquired loans before the January 1, 2021 CECL implementation.

Regulatory Capital

The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.5%, the total capital to risk-weighted assets was 17.0% and the total leverage ratio was 8.7% at March 31, 2021. At December 31, 2020, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 12.8%, the total capital to risk-weighted assets ratio was 17.4% and the total leverage ratio was 9.3%. The Company’s subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.4%, a ratio of total capital to risk-weighted assets of 15.7% and a total leverage ratio of 9.6% at March 31, 2021. At December 31, 2020, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 14.5%, the ratio of total capital to risk-weighted assets was 15.7% and the total leverage ratio was 10.1%.

Non-GAAP Financial Measures

In addition to evaluating the Company’s results of operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures that are intended to provide the reader with additional perspectives on operating results, financial condition and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company’s GAAP financial information.

The efficiency ratio is used as a common measure by banks as a comparable metric to understand the Company’s expense structure relative to its total revenue; in other words, for every dollar of total revenue recognized, how much of that dollar is expended. To improve the comparability of the ratio to our peers, non-core items are excluded. To improve transparency and acknowledging that banks are not consistent in their definition of the efficiency ratio, we include our calculation of this non-GAAP measure.

Return on average assets before income tax provision, provision for loan losses and goodwill impairment is a measure that the Company uses to understand fundamental operating performance before these expenses. Used as a ratio relative to average assets, we believe it demonstrates the “core” performance and can be viewed as an alternative measure of how efficiently the Company services its asset base. Used as a ratio relative to average equity, it can function as an alternative measure of the Company’s earnings performance in relationship to its equity.

Tangible common equity and related measures are non-GAAP financial measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These financial measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Return on average tangible common equity is used by management and readers of our financial statements to understand how efficiently the Company is deploying its common equity. Companies that are able to demonstrate more efficient use of common equity are more likely to be viewed favorably by current and prospective investors.

The Company believes that disclosing these non-GAAP financial measures is both useful internally and is expected by our investors and analysts in order to understand the overall performance of the Company. Other companies may calculate and define their non-GAAP financial measures and supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in Table 8 in the following press release tables.

Conference Call and Webcast

Equity Chairman and Chief Executive Officer, Brad Elliott, and Executive Vice President and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss the 2021 first quarter results on Wednesday, April 21, 2021, at 10:00 a.m. eastern time, 9:00 a.m. central time.

Investors, news media and other participants should register for the call or audio webcast at investor.equitybank.com. On Wednesday, April 21, 2021, participants may also dial into the call toll-free at (844) 534-7311 from anywhere in the U.S. or (574) 990-1419 internationally, using conference ID no. 9542529.

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

A replay of the call and webcast will be available two hours following the close of the call until April 28, 2021, accessible at (855) 859-2056 with conference ID no. 9542529 at investor.equitybank.com.

About Equity Bancshares, Inc.

Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions, including commercial loans, consumer banking, mortgage loans, trust and wealth management services and treasury management services, while delivering the high-quality, relationship-based customer service of a community bank. Equity’s common stock is traded on the NASDAQ Global Select Market under the symbol “EQBK.” Learn more at www.equitybank.com.

Special Note Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of Equity’s management with respect to, among other things, future events and Equity’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity’s control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from Equity’s expectations include COVID-19 related impacts; competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses; and similar variables. The foregoing list of factors is not exhaustive.

For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Equity’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2021, and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity’s behalf may issue.

Investor Contact:

Chris NavratilSVP, FinanceEquity Bancshares, Inc.(316) 612-6014cnavratil@equitybank.com        

Media Contact:

John J. HanleySVP, Senior Director of MarketingEquity Bancshares, Inc.(816) 505-4063jhanley@equitybank.com

Unaudited Financial Tables

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

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

  As of and for the three months ended 
  March 31,2021  December 31,2020  September 30,2020  June 30,2020  March 31,2020 
Interest and dividend income                    
Loans, including fees $31,001  $35,383  $32,278  $32,627  $34,376 
Securities, taxable  3,799   3,408   3,476   4,017   4,620 
Securities, nontaxable  724   913   923   880   966 
Federal funds sold and other  288   285   405   409   595 
Total interest and dividend income  35,812   39,989   37,082   37,933   40,557 
Interest expense                    
Deposits  2,410   2,755   3,064   3,899   6,864 
Federal funds purchased and retail repurchase agreements  22   25   25   24   31 
Federal Home Loan Bank advances  65   94   471   552   1,175 
Federal Reserve Bank discount window           6    
Bank stock loan           306   109 
Subordinated debentures  1,556   1,556   1,415   255   283 
Total interest expense  4,053   4,430   4,975   5,042   8,462 
                     
Net interest income  31,759   35,559   32,107   32,891   32,095 
Provision for credit losses  (5,756)  1,000   815   12,500   9,940 
Net interest income after provision for credit losses  37,515   34,559   31,292   20,391   22,155 
Non-interest income                    
Service charges and fees  1,596   1,759   1,706   1,365   2,026 
Debit card income  2,350   2,401   2,491   2,201   2,043 
Mortgage banking  935   855   877   831   590 
Increase in value of bank-owned life insurance  601   489   489   481   482 
Net gain on acquisition  (78)  2,145          
Net gains (losses) from securities transactions  17   (1)     4   8 
Other  1,291   852   922   850   157 
Total non-interest income  6,712   8,500   6,485   5,732   5,306 
Non-interest expense                    
Salaries and employee benefits  12,722   14,053   13,877   12,695   13,504 
Net occupancy and equipment  2,368   2,206   2,224   2,119   2,235 
Data processing  2,663   2,748   2,817   2,763   2,663 
Professional fees  1,073   1,095   877   943   1,367 
Advertising and business development  682   801   598   403   696 
Telecommunications  580   510   486   390   487 
FDIC insurance  415   797   360   414   517 
Courier and postage  369   338   366   353   384 
Free nationwide ATM cost  472   423   439   327   420 
Amortization of core deposit intangibles  1,034   1,044   1,030   974   802 
Loan expense  238   161   107   287   234 
Other real estate owned  5   1,600   133   269   308 
Merger expenses  152   299          
Goodwill impairment        104,831       
Other  2,108   2,385   2,690   2,000   2,141 
Total non-interest expense  24,881   28,460   130,835   23,937   25,758 
Income (loss) before income tax  19,346   14,599   (93,058)  2,186   1,703 
Provision for income taxes (benefit)  4,271   2,111   (2,653)  497   445 
Net income (loss) and net income (loss) allocable to common stockholders $15,075  $12,488  $(90,405) $1,689  $1,258 
Basic earnings (loss) per share $1.04  $0.85  $(6.01) $0.11  $0.08 
Diluted earnings (loss) per share $1.02  $0.84  $(6.01) $0.11  $0.08 
Weighted average common shares  14,464,291   14,760,810   15,040,407   15,209,483   15,387,697 
Weighted average diluted common shares  14,734,083   14,934,058   15,040,407   15,304,009   15,595,024 

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

  March 31,2021  December 31,2020  September 30,2020  June 30,2020  March 31,2020 
ASSETS                    
Cash and due from banks $136,190  $280,150  $65,534  $178,045  $141,989 
Federal funds sold  498   548   305   245   263 
Cash and cash equivalents  136,688   280,698   65,839   178,290   142,252 
Interest-bearing time deposits in other banks  249   249   499   2,248   2,498 
Available-for-sale securities  998,100   871,827   798,576   177,228   187,812 
Held-to-maturity securities(1)           662,522   721,992 
Loans held for sale  8,609   12,394   9,053   4,802   6,494 
Loans, net of allowance for credit losses(2)  2,740,215   2,557,987   2,691,626   2,772,256   2,485,208 
Other real estate owned, net  10,559   11,733   8,727   7,374   5,870 
Premises and equipment, net  90,322   89,412   86,087   87,055   84,732 
Bank-owned life insurance  102,645   77,044   76,555   76,066   75,585 
Federal Reserve Bank and Federal Home Loan Bank stock  15,174   16,415   32,545   31,832   31,662 
Interest receivable  16,655   15,831   18,110   19,598   15,549 
Goodwill  31,601   31,601   31,601   136,432   136,432 
Core deposit intangibles, net  15,023   16,057   17,101   18,131   19,105 
Other  30,344   32,108   29,252   31,435   28,641 
Total assets $4,196,184  $4,013,356  $3,865,571  $4,205,269  $3,943,832 
LIABILITIES AND STOCKHOLDERS’ EQUITY                    
Deposits                    
Demand $972,364  $791,639  $693,967  $756,613  $508,441 
Total non-interest-bearing deposits  972,364   791,639   693,967   756,613   508,441 
Savings, NOW and money market  2,074,261   2,029,097   1,816,307   1,800,132   1,668,145 
Time  587,905   626,854   623,344   690,522   783,811 
Total interest-bearing deposits  2,662,166   2,655,951   2,439,651   2,490,654   2,451,956 
Total deposits  3,634,530   3,447,590   3,133,618   3,247,267   2,960,397 
Federal funds purchased and retail repurchase agreements  40,339   36,029   46,295   51,557   37,113 
Federal Home Loan Bank advances  9,926   10,144   167,862   344,900   389,620 
Bank stock loan              40,000 
Subordinated debentures  87,788   87,684   87,537   55,575   14,638 
Contractual obligations  4,856   5,189   5,478   5,571   5,781 
Interest payable and other liabilities  20,930   19,071   22,609   20,633   18,932 
Total liabilities  3,798,369   3,605,707   3,463,399   3,725,503   3,466,481 
Commitments and contingent liabilities                    
Stockholders’ equity                    
Common stock  175   174   174   174   174 
Additional paid-in capital  387,939   386,820   386,017   384,955   383,850 
Retained earnings  53,459   50,787   38,299   128,704   127,015 
Accumulated other comprehensive income (loss)  12,019   19,781   21,074   3,390   3,769 
Employee stock loans     (43)  (43)  (43)  (43)
Treasury stock  (55,777)  (49,870)  (43,349)  (37,414)  (37,414)
Total stockholders’ equity  397,815   407,649   402,172   479,766   477,351 
Total liabilities and stockholders’ equity $4,196,184  $4,013,356  $3,865,571  $4,205,269  $3,943,832 
                     
(1) Fair market value of held-to-maturity securities $  $  $  $689,206  $750,900 
(2) Allowance for credit losses  55,525   33,709   34,087   34,078   21,915 

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

  As of and for the three months ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
  2021  2020  2020  2020  2020 
Loans Held-For-Investment by Type                    
Commercial real estate $1,218,545  $1,188,696  $1,188,329  $1,191,336  $1,200,762 
Commercial and industrial  820,728   734,495   857,244   883,355   542,571 
Residential real estate  438,503   381,958   402,242   442,486   480,603 
Agricultural real estate  134,944   133,693   127,349   129,080   130,795 
Consumer  89,256   58,532   67,465   71,037   64,799 
Agricultural  93,764   94,322   83,084   89,040   87,593 
Total loans held-for-investment  2,795,740   2,591,696   2,725,713   2,806,334   2,507,123 
Allowance for credit losses  (55,525)  (33,709)  (34,087)  (34,078)  (21,915)
Net loans held-for-investment $2,740,215  $2,557,987  $2,691,626  $2,772,256  $2,485,208 
                     
                     
Asset Quality Ratios                    
Allowance for credit losses on loans andunfunded commitments to total loans  2.02%  1.30%  1.25%  1.21%  0.87%
Past due or nonaccrual loans to total loans  2.58%  1.99%  2.12%  1.88%  2.47%
Nonperforming assets to total assets  1.67%  1.36%  1.55%  1.37%  1.22%
Nonperforming assets to total loans plus otherreal estate owned  2.50%  2.10%  2.19%  2.05%  1.92%
Classified assets to bank total regulatory capital  26.45%  25.50%  18.35%  20.81%  19.50%
                     
                     
Selected Average Balance Sheet Data (QTD Average)                    
Investment securities $947,453  $814,114  $802,525  $877,308  $907,910 
Total gross loans receivable  2,736,918   2,692,223   2,758,680   2,806,865   2,525,344 
Interest-earning assets  3,891,140   3,647,730   3,679,168   3,786,629   3,519,267 
Total assets  4,143,752   3,910,628   4,041,187   4,159,336   3,888,205 
Interest-bearing deposits  2,690,159   2,551,219   2,430,407   2,487,187   2,531,508 
Borrowings  139,360   172,730   377,158   384,727   355,303 
Total interest-bearing liabilities  2,829,519   2,723,949   2,807,565   2,871,914   2,886,811 
Total deposits  3,577,625   2,960,791   3,145,810   3,257,631   3,021,181 
Total liabilities  3,748,114   3,501,056   3,558,099   3,675,731   3,405,638 
Total stockholders’ equity  395,638   409,572   483,088   483,605   482,567 
Tangible common equity*  347,262   355,025   329,039   327,411   325,470 
                     
                     
Performance ratios                    
Return on average assets (ROAA) annualized  1.48%  1.27%  (8.90)%  0.16%  0.13%
Return on average assets before income tax,provision for loan losses and goodwillimpairment*  1.33%  1.59%  1.24%  1.42%  1.20%
Return on average equity (ROAE) annualized  15.45%  12.13%  (74.45)%  1.40%  1.05%
Return on average equity before income tax,provision for loan losses and goodwillimpairment*  13.93%  15.15%  10.37%  12.21%  9.70%
Return on average tangible common equity(ROATCE) annualized*  18.57%  14.93%  (108.31)%  3.03%  2.35%
Return on average tangible common equityadjusted for goodwill impairment*  18.57%  14.93%  12.01%  3.03%  2.35%
Yield on loans annualized  4.59%  5.23%  4.65%  4.68%  5.47%
Cost of interest-bearing deposits annualized  0.36%  0.43%  0.50%  0.63%  1.09%
Cost of total deposits annualized  0.27%  0.37%  0.39%  0.48%  0.91%
Net interest margin annualized  3.31%  3.88%  3.47%  3.49%  3.67%
Efficiency ratio*  64.18%  67.19%  67.38%  61.98%  68.88%
Non-interest income / average assets  0.66%  0.86%  0.64%  0.55%  0.55%
Non-interest expense / average assets  2.44%  2.90%  12.88%  2.31%  2.66%
                     
                     
Capital Ratios                    
Tier 1 Leverage Ratio  8.73%  9.30%  8.76%  8.52%  9.02%
Common Equity Tier 1 Capital Ratio  12.52%  12.82%  12.76%  12.02%  11.67%
Tier 1 Risk Based Capital Ratio  13.07%  13.37%  13.32%  12.57%  12.20%
Total Risk Based Capital Ratio  17.02%  17.35%  17.35%  15.33%  13.00%
Total stockholders’ equity to total assets  9.48%  10.16%  10.40%  11.41%  12.10%
Tangible common equity to tangible assets*  8.44%  9.05%  9.23%  8.00%  8.47%
Book value per common share $27.66  $28.04  $27.08  $31.53  $31.41 
Tangible book value per common share* $24.34  $24.68  $23.72  $21.29  $21.10 
Tangible book value per diluted common share* $23.87  $24.32  $23.57  $21.13  $20.96 

* The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures, see Table 6. Non-GAAP Financial Measures

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

 For the three months ended  For the three months ended 
 March 31, 2021  March 31, 2020 
 Average Outstanding Balance  Interest Income/ Expense  AverageYield/Rate(3)(4)  Average Outstanding Balance  Interest Income/ Expense  AverageYield/Rate(3)(4) 
Interest-earning assets                       
Loans (1)                       
Commercial and industrial$803,012  $9,234   4.66% $555,927  $7,881   5.70%
Commercial real estate 971,825   11,441   4.77%  913,065   12,942   5.70%
Real estate construction 255,677   2,178   3.45%  267,388   3,575   5.38%
Residential real estate 394,329   4,452   4.58%  496,186   5,302   4.30%
Agricultural real estate 140,875   1,696   4.88%  137,664   2,091   6.11%
Consumer 76,413   963   5.11%  67,160   1,275   7.64%
Agricultural 94,787   1,037   4.44%  87,954   1,310   5.99%
Total loans 2,736,918   31,001   4.59%  2,525,344   34,376   5.47%
Securities                       
Taxable securities 839,349   3,799   1.84%  774,653   4,620   2.40%
Nontaxable securities 108,104   724   2.72%  133,257   966   2.92%
Total securities 947,453   4,523   1.94%  907,910   5,586   2.47%
Federal funds sold and other 206,769   288   0.56%  86,013   595   2.78%
Total interest-earning assets$3,891,140   35,812   3.73% $3,519,267   40,557   4.64%
Interest-bearing liabilities                       
Savings, NOW and money market deposits$2,079,057   971   0.19% $1,724,774   3,125   0.73%
Time deposits 611,102   1,439   0.96%  806,734   3,739   1.86%
Total interest-bearing deposits 2,690,159   2,410   0.36%  2,531,508   6,864   1.09%
FHLB advances 10,013   65   2.63%  295,677   1,175   1.60%
Other borrowings 129,347   1,578   4.95%  59,626   423   2.85%
Total interest-bearing liabilities$2,829,519   4,053   0.58% $2,886,811   8,462   1.18%
                        
Net interest income    $31,759          $32,095     
Interest rate spread         3.15%          3.46%
                        
Net interest margin (2)         3.31%          3.67%
                        
(1) Average loan balances include nonaccrual loans. 
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period. 
(3) Tax exempt income is not included in the above table on a tax-equivalent basis. 

TABLE 5. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)(Dollars in thousands)

 For the three months ended  For the three months ended 
 March 31, 2021  December 31, 2020 
 Average Outstanding Balance  Interest Income/ Expense  AverageYield/Rate(3)(4)  Average Outstanding Balance  Interest Income/ Expense  AverageYield/Rate(3)(4) 
Interest-earning assets                       
Loans (1)                       
Commercial and industrial$803,012  $9,234   4.66% $782,433  $10,943   5.56%
Commercial real estate 971,825   11,441   4.77%  980,686   12,647   5.13%
Real estate construction 255,677   2,178   3.45%  216,714   2,301   4.22%
Residential real estate 394,329   4,452   4.58%  406,450   5,005   4.90%
Agricultural real estate 140,875   1,696   4.88%  135,337   2,244   6.60%
Consumer 76,413   963   5.11%  78,430   1,080   5.48%
Agricultural 94,787   1,037   4.44%  92,173   1,163   5.02%
Total loans 2,736,918   31,001   4.59%  2,692,223   35,383   5.23%
Securities                       
Taxable securities 839,349   3,799   1.84%  698,985   3,408   1.94%
Nontaxable securities 108,104   724   2.72%  115,129   913   3.15%
Total securities 947,453   4,523   1.94%  814,114   4,321   2.11%
Federal funds sold and other 206,769   288   0.56%  141,393   285   0.80%
Total interest-earning assets$3,891,140   35,812   3.73% $3,647,730   39,989   4.36%
Interest-bearing liabilities                       
Savings, NOW and money market deposits$2,079,057   971   0.19% $1,915,280   970   0.20%
Time deposits 611,102   1,439   0.96%  635,939   1,785   1.12%
Total interest-bearing deposits 2,690,159   2,410   0.36%  2,551,219   2,755   0.43%
FHLB advances 10,013   65   2.63%  39,245   94   0.95%
Other borrowings 129,347   1,578   4.95%  133,485   1,581   4.71%
Total interest-bearing liabilities$2,829,519   4,053   0.58% $2,723,949   4,430   0.65%
                        
Net interest income    $31,759          $35,559     
Interest rate spread         3.15%          3.71%
                        
Net interest margin (2)         3.31%          3.88%
                        
(1) Average loan balances include nonaccrual loans. 
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period. 
(3) Tax exempt income is not included in the above table on a tax-equivalent basis. 

TABLE 6. NON-GAAP FINANCIAL MEASURES (Unaudited)(Dollars in thousands, except per share data)

  As of and for the three months ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
  2021  2020  2020  2020  2020 
                     
Income before income taxes $19,346  $14,599  $(93,058) $2,186  $1,703 
Add: goodwill impairment        104,831       
Less: tax effect  4,271   2,111   2,652   497   445 
Adjusted income $15,075  $12,488  $9,121  $1,689  $1,258 
Weighted average common shares outstanding  14,464,291   14,760,810   15,040,407   15,209,483   15,387,697 
Effect of weighted average dilutive shares assuming positive net income  269,792   173,248   82,804   94,526   207,327 
Weighted average diluted shares  14,734,083   14,934,058   15,123,211   15,304,009   15,595,024 
Diluted earnings per share adjusted for goodwill impairment $1.02  $0.84  $0.60  $0.11  $0.08 
                     
Total stockholders’ equity $397,815  $407,649  $402,172  $479,766  $477,351 
Less: goodwill  31,601   31,601   31,601   136,432   136,432 
Less: core deposit intangibles, net  15,023   16,057   17,101   18,131   19,105 
Less: mortgage servicing asset, net        1   2   4 
Less: naming rights, net  1,119   1,130   1,141   1,152   1,163 
Tangible common equity $350,072  $358,861  $352,328  $324,049  $320,647 
Common shares issued at period end  14,383,913   14,540,556   14,853,487   15,218,301   15,198,986 
Diluted common shares outstanding at period end  14,668,287   14,756,378   14,945,282   15,333,977   15,297,319 
Book value per common share $27.66  $28.04  $27.08  $31.53  $31.41 
Tangible book value per common share $24.34  $24.68  $23.72  $21.29  $21.10 
Tangible book value per diluted common share $23.87  $24.32  $23.57  $21.13  $20.96 
                     
Total assets $4,196,184  $4,013,356  $3,865,571  $4,205,269  $3,943,832 
Less: goodwill  31,601   31,601   31,601   136,432   136,432 
Less: core deposit intangibles, net  15,023   16,057   17,101   18,131   19,105 
Less: mortgage servicing asset, net        1   2   4 
Less: naming rights, net  1,119   1,130   1,141   1,152   1,163 
Tangible assets $4,148,441  $3,964,568  $3,815,727  $4,049,552  $3,787,128 
Total stockholders’ equity to total assets  9.48%  10.16%  10.40%  11.41%  12.10%
Tangible common equity to tangible assets  8.44%  9.05%  9.23%  8.00%  8.47%
                     
Total average stockholders’ equity $395,638  $409,572  $483,088  $483,605  $482,567 
Less: average intangible assets  48,376   54,547   154,049   156,194   157,097 
Average tangible common equity $347,262  $355,025  $329,039  $327,411  $325,470 
Net income (loss) allocable to common stockholders $15,075  $12,488  $(90,405) $1,689  $1,258 
Add: goodwill impairment        104,831       
Less: tax effect of goodwill impairment        5,305       
Adjusted net income (loss) plus goodwill impairment  15,075   12,488   9,121   1,689   1,258 
Amortization of intangible assets  1,045   1,055   1,043   986   814 
Less: tax effect of intangible assets amortization  219   222   234   207   171 
Adjusted net income (loss) allocable to common stockholders $15,901  $13,321  $9,930  $2,468  $1,901 
Return on total average stockholders’ equity (ROAE) annualized  15.45%  12.13%  (74.45)%  1.40%  1.05%
Return on average tangible common equity (ROATCE) annualized  18.57%  14.93%  (108.31)%  3.03%  2.35%
Adjusted return on average tangible common equity  18.57%  14.93%  12.01%  3.03%  2.35%
                     
                     
                     
Non-interest expense $24,881  $28,460  $130,835  $23,937  $25,758 
Less: merger expense  152   299          
Less: goodwill impairment        104,831       
Non-interest expense, excluding merger expense and goodwill impairment $24,729  $28,161  $26,004  $23,937  $25,758 
Net interest income $31,759  $35,559  $32,107  $32,891  $32,095 
Non-interest income  6,712   8,500   6,485   5,732   5,306 
Less: net gain on acquisition  (78)  2,145          
Less: net gains (losses) from securities transactions  17   (1)     4   8 
Non-interest income, excluding gains (losses) from securities transactions $6,773  $6,356  $6,485  $5,728  $5,298 
Net interest income plus non-interest income, excluding net gains (losses) from securities transactions $38,532  $41,915  $38,592  $38,619  $37,393 
Non-interest expense to net interest income plus non-interest income  64.67%  64.60%  339.02%  61.98%  68.87%
Efficiency ratio  64.18%  67.19%  67.38%  61.98%  68.88%
Net income (loss) allocable to common stockholders $15,075  $12,488  $(90,405) $1,689  $1,258 
Add: income tax provision  4,271   2,111   (2,653)  497   445 
Add: provision for loan losses  (5,756)  1,000   815   12,500   9,940 
Add: goodwill impairment        104,831       
Adjusted net income $13,590  $15,599  $12,588  $14,686  $11,643 
Total average assets $4,143,752  $3,910,628  $4,041,187  $4,159,336  $3,888,205 
Total average stockholders’ equity $395,638  $409,572  $483,088  $483,605  $482,567 
Return on average assets (ROAA) annualized  1.48%  1.27%  (8.90)%  0.16%  0.13%
Adjusted return on average assets  1.33%  1.59%  1.24%  1.42%  1.20%
Adjusted return on average equity  13.93%  15.15%  10.37%  12.21%  9.70%

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