Equity successfully acquired assets and deposits of Almena State Bank, originates $282.1 million of Main Street Lending Program loans through its continued support programs during the pandemic
and adds $3.93 tangible book value per share in 2020
WICHITA, Kan., Jan. 25, 2021 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ: EQBK), (“Equity”, “the Company”, “we”, “us”, “our”), the Wichita-based holding company of Equity Bank, reported its unaudited results for the fourth quarter ended December 31, 2020.
Equity reported net income of $12.5 million, or $0.84, per diluted share in the quarter ended December 31, 2020, and a net loss of $75.0 million or $4.97 per share for the year ended December 31, 2020. When excluding the $104.8 million goodwill impairment recognized in the quarter ended September 30, 2020, adjusted net income totaled $23.9 million, or $1.57 per diluted share, for the year ended December 31, 2020. The results in the quarter ended December 31, 2020, reflect the Company’s purchase of assets and deposit liabilities of Almena State Bank, acquired on October 23, 2020, from the Federal Deposit Insurance Corporation (“FDIC”) and the success of Equity’s customers in 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.
“No one could have imagined the challenges that our employees, customers and communities faced in 2020 due to the pandemic. The perseverance exhibited in collaborating with our customers through a period of great uncertainty showed the integrity, entrepreneurship and accountability of the Equity team. I am honored to be a part of a team that worked tirelessly for customers when they needed us, and in turn, our customers were able to support our communities in a time of need,” said Brad Elliott, Chairman and CEO of Equity.
“In a year that was dominated by events outside of Equity’s control, we took steps to fundamentally grow our franchise and position the Company for long-term stability and growth. We provided $24.3 million of reserves for potential loan losses, raised $75.0 million of proactive capital through a subordinated debt offering and grew tangible book value $3.93 per share, from $20.75 at December 31, 2019, to $24.68 at December 31, 2020, which is the highest level we have recorded as a publicly traded company.”
Notable Items:
- Tangible book value per common share was $24.68 at December 31, 2020, as compared to $20.75 at December 31, 2019, representing an increase of 18.9% or $3.93 per share. The Company authorized a second stock repurchase program in October 2020, totaling 800,000 shares. During the quarter ended December 31, 2020, the Company repurchased 313,231 shares at a weighted average cost of $20.82, totaling $6.5 million.
- The Company was anticipating adopting ASU 2016-13, also known as Current Expected Credit Losses (“CECL”) at December 31, 2020, effective January 1, 2020. On December 27, 2020, the President signed into law the 2021 Fiscal Year Omnibus Appropriations Bill, which included an option to delay adoption of ASU 2016-13 to January 1, 2022. The Company, after conferring with its advisors, will adopt CECL on January 1, 2021, and will not take the option to further delay adoption.
- During the year ended December 31, 2020, Equity originated $282.1 million of loans through the Main Street Lending Program (“MSLP”). The MSLP program ended at December 31, 2020. Pursuant to the MSLP terms, 95% of the total originations were sold to a special purpose vehicle of the Federal Reserve Bank of Boston.
- Of the $559.3 million of 2020 PPP loans originated, the Company’s customers have successfully had $102.8 million of PPP loans forgiven, resulting in the recognition of fee income totaling $3.8 million and $6.1 million in the three- and twelve-month periods ended December 31, 2020. At December 31, 2020, $253.7 million loans remain from the 2020 PPP with an unrecognized $4.5 million of fee income.
- The Company completed the purchase of assets and assumption of deposit liabilities from the FDIC, as the receiver of Almena State Bank. Consequently, the Company recognized a bargain purchase gain of $2.1 million and $299 thousand of merger related expense in the quarter ended December 31, 2020.
Equity’s Balance Sheet Highlights:
- Total loans held for investment of $2.59 billion at December 31, 2020, as compared to total loans held for investment of $2.56 billion at December 31, 2019.
- Total deposits of $3.45 billion at December 31, 2020, as compared to $3.06 billion at December 31, 2019. Signature deposits, including core deposits comprised of checking, savings and money market accounts, were $2.82 billion at December 31, 2020, relative to $2.23 billion at December 31, 2019.
- Total assets were $4.01 billion at December 31, 2020, as compared to $3.95 billion at December 31, 2019.
Financial Results for the Quarter Ended December 31, 2020
Net income allocable to common stockholders was $12.5 million, or $0.84 per diluted share, for the three months ended December 31, 2020, as compared to the net loss allocable to common stockholders of $90.4 million, or $6.01 per diluted share, for the three months ended September 30, 2020, an increase of $102.9 million. This increase was primarily attributable to the goodwill impairment charge of $104.8 million taken during the quarter ended September 30, 2020, and a $2.1 million acquisition gain from the Almena State Bank transaction during the quarter ended December 31, 2020. Net income, excluding the gain on acquisition and merger expense, was $10.1 million for the quarter ended December 31, 2020, or $0.67 per diluted share. Net income, excluding the goodwill impairment and using an assumed 22.5% effective tax rate for the quarter ended September 30, 2020, totaled $9.1 million, or $0.60 per diluted share.
Net Interest Income
Net interest income was $35.6 million for the three months ended December 31, 2020, as compared to $32.1 million for the three months ended September 30, 2020, an increase of $3.5 million, or 10.8%. The increase in net interest income was driven by the recognition of fee income from PPP loan forgiveness by the SBA, totaling $3.8 million in the three months ended December 31, 2020, compared to $1.3 million in the three months ended September 30, 2020. As a result of the PPP loan forgiveness, net interest margin increased 41 basis points to 3.88% for the three months ended December 31, 2020 from 3.47% for the three months ended September 30, 2020. The yield on earning assets improved 35 basis points to 4.36% for the quarter ended December 31, 2020 from 4.01% from the previous quarter. The cost of interest-bearing liabilities declined to 0.65% or five basis points for the quarter ended December 31, 2020 from 0.70% in the quarter ended September 30, 2020. The cost of interest-bearing deposits declined seven basis points to 0.43% for the three months ended December 31, 2020 from 0.50% in the previous quarter primarily attributed to the decline in the cost of time deposits, which declined 23 basis points between the quarters. The cost of other borrowings increased to 4.71% in the three months ended December 31, 2020 from 4.45% from the quarter ended September 30, 2020, mainly due to the entire $75.0 million of subordinated debt at 7.0% not being on the balance sheet for the entire third quarter.
Provision for Loan Losses
The provision for loan losses was $1.0 million for the three months ended December 31, 2020, as compared to $815 thousand for the three months ended September 30, 2020. For the three months ended December 31, 2020, we had net charge-offs of $1.4 million as compared to $806 thousand for three months ended September 30, 2020.
Non-Interest Income
Total non-interest income was $8.5 million for the three months ended December 31, 2020, or $6.4 million with the net gain on the purchase and assumption of Almena State Bank excluded, as compared to the $6.5 million reported for the three months ended September 30, 2020. Service charges and fees were $1.8 million representing an increase of $53 thousand, or 3.1%, from the quarter ended September 30, 2020. Debit card income totaled $2.4 million in the quarter ended December 31, 2020, decreasing $90 thousand, or 3.6%, from the quarter ended September 30, 2020.
Non-Interest Expense
Total non-interest expense for the quarter ended December 31, 2020 was $28.5 million, or $28.2 million with merger expense excluded. When the goodwill impairment charge of $104.8 million is excluded from the previous quarter, pro-forma non-interest expense totaled $26.0 million for the quarter ended September 30, 2020. The $2.5 million increase is primarily attributed to a $1.5 million increase in other real estate owned expense and a $437 thousand increase in FDIC insurance assessments. The most significant contributor to the increase in other real estate owned expense was a $947 thousand valuation adjustment on two facilities that were closed in May 2020.
Asset Quality
As of December 31, 2020, Equity’s allowance for loan losses to total loans was 1.30%, as compared to 0.48% at December 31, 2019. Total reserves, including purchase discounts, to total loans were approximately 2.12% as of December 31, 2020, as compared to 0.85% at December 31, 2019. Nonperforming assets were $53.6 million as of December 31, 2020, or 1.34% of total assets. Nonperforming assets were $46.9 million at December 31, 2019, or 1.19% of total assets.
Regulatory Capital
The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.8%, the total capital to risk-weighted assets was 17.4% and the total leverage ratio was 9.3% at December 31, 2020. At December 31, 2019, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 11.6%, the total capital to risk-weighted assets ratio was 12.6% and the total leverage ratio was 9.0%. The Company’s subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.5%, a ratio of total capital to risk-weighted assets of 15.7% and a total leverage ratio of 10.1% at December 31, 2020. At December 31, 2019, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 12.0%, the ratio of total capital to risk-weighted assets was 12.5% and the total leverage ratio was 8.9%.
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 we recognize, how much of that dollar is expended. In order to improve the comparability of the ratio to our peers, we remove non-core items. 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 we believe it can be used 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 fourth quarter 2020 results on Tuesday, January 26, 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. On Tuesday, January 26, 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. 6781789.
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 February 2, 2021, accessible at (855) 859-2056 with conference ID no. 6781789 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 10, 2020, and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity’s behalf may issue.
Investor Contact:
Chris Navratil
SVP, Finance
Equity Bancshares, Inc.
(316) 612-6014
cnavratil@equitybank.com
Media Contact:
John J. Hanley
SVP, Senior Director of Marketing
Equity Bancshares, Inc.
(816) 505-4063
jhanley@equitybank.com
Unaudited Financial Tables
- Table 1. Consolidated Statements of Operations
- Table 2. Quarterly Consolidated Statements of Operations
- Table 3. Consolidated Balance Sheets
- Table 4. Selected Financial Highlights
- Table 5. Year-to-Date Net Interest Income Analysis
- Table 6. Quarter-to-Date Net Interest Income Analysis
- Table 7. Quarter-Over-Quarter Net Interest Income Analysis
- Table 8. Non-GAAP Financial Measures
TABLE 1. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share data)
| Three months ended December 31, | Year ended December 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Interest and dividend income | ||||||||||||||||
| Loans, including fees | $ | 35,383 | $ | 36,687 | $ | 134,664 | $ | 149,298 | ||||||||
| Securities, taxable | 3,408 | 4,615 | 15,521 | 19,339 | ||||||||||||
| Securities, nontaxable | 913 | 1,037 | 3,682 | 4,180 | ||||||||||||
| Federal funds sold and other | 285 | 645 | 1,694 | 2,682 | ||||||||||||
| Total interest and dividend income | 39,989 | 42,984 | 155,561 | 175,499 | ||||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 2,755 | 8,533 | 16,582 | 40,914 | ||||||||||||
| Federal funds purchased and retail repurchase agreements | 25 | 39 | 105 | 155 | ||||||||||||
| Federal Home Loan Bank advances | 94 | 1,564 | 2,292 | 6,667 | ||||||||||||
| Federal Reserve Bank discount window | — | — | 6 | — | ||||||||||||
| Bank stock loan | — | 147 | 415 | 654 | ||||||||||||
| Subordinated debt | 1,556 | 296 | 3,509 | 1,251 | ||||||||||||
| Total interest expense | 4,430 | 10,579 | 22,909 | 49,641 | ||||||||||||
| Net interest income | 35,559 | 32,405 | 132,652 | 125,858 | ||||||||||||
| Provision for loan losses | 1,000 | 1,055 | 24,255 | 18,354 | ||||||||||||
| Net interest income after provision for loan losses | 34,559 | 31,350 | 108,397 | 107,504 | ||||||||||||
| Non-interest income | ||||||||||||||||
| Service charges and fees | 1,759 | 2,241 | 6,856 | 8,672 | ||||||||||||
| Debit card income | 2,401 | 2,101 | 9,136 | 8,230 | ||||||||||||
| Mortgage banking | 855 | 769 | 3,153 | 2,468 | ||||||||||||
| Increase in value of bank-owned life insurance | 489 | 504 | 1,941 | 1,998 | ||||||||||||
| Net gain on acquisition | 2,145 | — | 2,145 | — | ||||||||||||
| Net gains (losses) from securities transactions | (1 | ) | (3 | ) | 11 | 14 | ||||||||||
| Other | 852 | 1,029 | 2,781 | 3,606 | ||||||||||||
| Total non-interest income | 8,500 | 6,641 | 26,023 | 24,988 | ||||||||||||
| Non-interest expense | ||||||||||||||||
| Salaries and employee benefits | 14,053 | 11,918 | 54,129 | 52,122 | ||||||||||||
| Net occupancy and equipment | 2,206 | 2,342 | 8,784 | 8,674 | ||||||||||||
| Data processing | 2,748 | 2,688 | 10,991 | 10,124 | ||||||||||||
| Professional fees | 1,095 | 1,359 | 4,282 | 4,734 | ||||||||||||
| Advertising and business development | 801 | 901 | 2,498 | 3,075 | ||||||||||||
| Telecommunications | 510 | 486 | 1,873 | 2,079 | ||||||||||||
| FDIC insurance | 797 | 109 | 2,088 | 1,228 | ||||||||||||
| Courier and postage | 338 | 328 | 1,441 | 1,348 | ||||||||||||
| Free nationwide ATM cost | 423 | 440 | 1,609 | 1,680 | ||||||||||||
| Amortization of core deposit intangibles | 1,044 | 820 | 3,850 | 3,168 | ||||||||||||
| Loan expense | 161 | 267 | 789 | 875 | ||||||||||||
| Other real estate owned | 1,600 | 381 | 2,310 | 707 | ||||||||||||
| Merger expenses | 299 | — | 299 | 915 | ||||||||||||
| Goodwill impairment | — | — | 104,831 | — | ||||||||||||
| Other | 2,385 | 2,807 | 9,216 | 8,906 | ||||||||||||
| Total non-interest expense | 28,460 | 24,846 | 208,990 | 99,635 | ||||||||||||
| Income (loss) before income tax | 14,599 | 13,145 | (74,570 | ) | 32,857 | |||||||||||
| Provision for income taxes | 2,111 | 3,131 | 400 | 7,278 | ||||||||||||
| Net income (loss) and net income (loss) allocable to common stockholders | $ | 12,488 | $ | 10,014 | $ | (74,970 | ) | $ | 25,579 | |||||||
| Basic earnings (loss) per share | $ | 0.85 | $ | 0.65 | $ | (4.97 | ) | $ | 1.64 | |||||||
| Diluted earnings (loss) per share | $ | 0.84 | $ | 0.64 | $ | (4.97 | ) | $ | 1.61 | |||||||
| Weighted average common shares | 14,760,810 | 15,442,841 | 15,098,512 | 15,619,891 | ||||||||||||
| Weighted average diluted common shares | 14,934,058 | 15,684,673 | 15,098,512 | 15,843,139 | ||||||||||||
TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share data)
| As of and for the three months ended | ||||||||||||||||||||
| December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | ||||||||||||||||
| Interest and dividend income | ||||||||||||||||||||
| Loans, including fees | $ | 35,383 | $ | 32,278 | $ | 32,627 | $ | 34,376 | $ | 36,687 | ||||||||||
| Securities, taxable | 3,408 | 3,476 | 4,017 | 4,620 | 4,615 | |||||||||||||||
| Securities, nontaxable | 913 | 923 | 880 | 966 | 1,037 | |||||||||||||||
| Federal funds sold and other | 285 | 405 | 409 | 595 | 645 | |||||||||||||||
| Total interest and dividend income | 39,989 | 37,082 | 37,933 | 40,557 | 42,984 | |||||||||||||||
| Interest expense | ||||||||||||||||||||
| Deposits | 2,755 | 3,064 | 3,899 | 6,864 | 8,533 | |||||||||||||||
| Federal funds purchased and retail repurchase agreements | 25 | 25 | 24 | 31 | 39 | |||||||||||||||
| Federal Home Loan Bank advances | 94 | 471 | 552 | 1,175 | 1,564 | |||||||||||||||
| Federal Reserve Bank discount window | — | — | 6 | — | — | |||||||||||||||
| Bank stock loan | — | — | 306 | 109 | 147 | |||||||||||||||
| Subordinated debentures | 1,556 | 1,415 | 255 | 283 | 296 | |||||||||||||||
| Total interest expense | 4,430 | 4,975 | 5,042 | 8,462 | 10,579 | |||||||||||||||
| Net interest income | 35,559 | 32,107 | 32,891 | 32,095 | 32,405 | |||||||||||||||
| Provision for loan losses | 1,000 | 815 | 12,500 | 9,940 | 1,055 | |||||||||||||||
| Net interest income after provision for loan losses | 34,559 | 31,292 | 20,391 | 22,155 | 31,350 | |||||||||||||||
| Non-interest income | ||||||||||||||||||||
| Service charges and fees | 1,759 | 1,706 | 1,365 | 2,026 | 2,241 | |||||||||||||||
| Debit card income | 2,401 | 2,491 | 2,201 | 2,043 | 2,101 | |||||||||||||||
| Mortgage banking | 855 | 877 | 831 | 590 | 769 | |||||||||||||||
| Increase in value of bank-owned life insurance | 489 | 489 | 481 | 482 | 504 | |||||||||||||||
| Net gain on acquisition | 2,145 | — | — | — | — | |||||||||||||||
| Net gains (losses) from securities transactions | (1 | ) | — | 4 | 8 | (3 | ) | |||||||||||||
| Other | 852 | 922 | 850 | 157 | 1,029 | |||||||||||||||
| Total non-interest income | 8,500 | 6,485 | 5,732 | 5,306 | 6,641 | |||||||||||||||
| Non-interest expense | ||||||||||||||||||||
| Salaries and employee benefits | 14,053 | 13,877 | 12,695 | 13,504 | 11,918 | |||||||||||||||
| Net occupancy and equipment | 2,206 | 2,224 | 2,119 | 2,235 | 2,342 | |||||||||||||||
| Data processing | 2,748 | 2,817 | 2,763 | 2,663 | 2,688 | |||||||||||||||
| Professional fees | 1,095 | 877 | 943 | 1,367 | 1,359 | |||||||||||||||
| Advertising and business development | 801 | 598 | 403 | 696 | 901 | |||||||||||||||
| Telecommunications | 510 | 486 | 390 | 487 | 486 | |||||||||||||||
| FDIC insurance | 797 | 360 | 414 | 517 | 109 | |||||||||||||||
| Courier and postage | 338 | 366 | 353 | 384 | 328 | |||||||||||||||
| Free nationwide ATM cost | 423 | 439 | 327 | 420 | 440 | |||||||||||||||
| Amortization of core deposit intangibles | 1,044 | 1,030 | 974 | 802 | 820 | |||||||||||||||
| Loan expense | 161 | 107 | 287 | 234 | 267 | |||||||||||||||
| Other real estate owned | 1,600 | 133 | 269 | 308 | 381 | |||||||||||||||
| Merger expenses | 299 | — | — | — | — | |||||||||||||||
| Goodwill impairment | — | 104,831 | — | — | — | |||||||||||||||
| Other | 2,385 | 2,690 | 2,000 | 2,141 | 2,807 | |||||||||||||||
| Total non-interest expense | 28,460 | 130,835 | 23,937 | 25,758 | 24,846 | |||||||||||||||
| Income (loss) before income tax | 14,599 | (93,058 | ) | 2,186 | 1,703 | 13,145 | ||||||||||||||
| Provision for income taxes (benefit) | 2,111 | (2,653 | ) | 497 | 445 | 3,131 | ||||||||||||||
| Net income (loss) and net income (loss) allocable to common stockholders | $ | 12,488 | $ | (90,405 | ) | $ | 1,689 | $ | 1,258 | $ | 10,014 | |||||||||
| Basic earnings (loss) per share | $ | 0.85 | $ | (6.01 | ) | $ | 0.11 | $ | 0.08 | $ | 0.65 | |||||||||
| Diluted earnings (loss) per share | $ | 0.84 | $ | (6.01 | ) | $ | 0.11 | $ | 0.08 | $ | 0.64 | |||||||||
| Weighted average common shares | 14,760,810 | 15,040,407 | 15,209,483 | 15,387,697 | 15,442,841 | |||||||||||||||
| Weighted average diluted common shares | 14,934,058 | 15,040,407 | 15,304,009 | 15,595,024 | 15,684,673 | |||||||||||||||
TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
| December 31, 2020 | September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and due from banks | $ | 280,150 | $ | 65,534 | $ | 178,045 | $ | 141,989 | $ | 88,973 | ||||||||||
| Federal funds sold | 548 | 305 | 245 | 263 | 318 | |||||||||||||||
| Cash and cash equivalents | 280,698 | 65,839 | 178,290 | 142,252 | 89,291 | |||||||||||||||
| Interest-bearing time deposits in other banks | 249 | 499 | 2,248 | 2,498 | 2,498 | |||||||||||||||
| Available-for-sale securities | 871,827 | 798,576 | 177,228 | 187,812 | 142,067 | |||||||||||||||
| Held-to-maturity securities(1) | — | — | 662,522 | 721,992 | 769,059 | |||||||||||||||
| Loans held for sale | 12,394 | 9,053 | 4,802 | 6,494 | 5,933 | |||||||||||||||
| Loans, net of allowance for loan losses(2) | 2,557,987 | 2,691,626 | 2,772,256 | 2,485,208 | 2,544,420 | |||||||||||||||
| Other real estate owned, net | 11,733 | 8,727 | 7,374 | 5,870 | 8,293 | |||||||||||||||
| Premises and equipment, net | 89,412 | 86,087 | 87,055 | 84,732 | 84,478 | |||||||||||||||
| Bank-owned life insurance | 77,044 | 76,555 | 76,066 | 75,585 | 75,103 | |||||||||||||||
| Federal Reserve Bank and Federal Home Loan Bank stock | 16,415 | 32,545 | 31,832 | 31,662 | 31,137 | |||||||||||||||
| Interest receivable | 15,831 | 18,110 | 19,598 | 15,549 | 15,738 | |||||||||||||||
| Goodwill | 31,601 | 31,601 | 136,432 | 136,432 | 136,432 | |||||||||||||||
| Core deposit intangibles, net | 16,057 | 17,101 | 18,131 | 19,105 | 19,907 | |||||||||||||||
| Other | 32,108 | 29,252 | 31,435 | 28,641 | 25,222 | |||||||||||||||
| Total assets | $ | 4,013,356 | $ | 3,865,571 | $ | 4,205,269 | $ | 3,943,832 | $ | 3,949,578 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Deposits | ||||||||||||||||||||
| Demand | $ | 791,639 | $ | 693,967 | $ | 756,613 | $ | 508,441 | $ | 481,298 | ||||||||||
| Total non-interest-bearing deposits | 791,639 | 693,967 | 756,613 | 508,441 | 481,298 | |||||||||||||||
| Savings, NOW and money market | 2,029,097 | 1,816,307 | 1,800,132 | 1,668,145 | 1,749,048 | |||||||||||||||
| Time | 626,854 | 623,344 | 690,522 | 783,811 | 833,170 | |||||||||||||||
| Total interest-bearing deposits | 2,655,951 | 2,439,651 | 2,490,654 | 2,451,956 | 2,582,218 | |||||||||||||||
| Total deposits | 3,447,590 | 3,133,618 | 3,247,267 | 2,960,397 | 3,063,516 | |||||||||||||||
| Federal funds purchased and retail repurchase agreements | 36,029 | 46,295 | 51,557 | 37,113 | 35,708 | |||||||||||||||
| Federal Home Loan Bank advances | 10,144 | 167,862 | 344,900 | 389,620 | 324,373 | |||||||||||||||
| Bank stock loan | — | — | — | 40,000 | 8,990 | |||||||||||||||
| Subordinated debentures | 87,684 | 87,537 | 55,575 | 14,638 | 14,561 | |||||||||||||||
| Contractual obligations | 5,189 | 5,478 | 5,571 | 5,781 | 5,836 | |||||||||||||||
| Interest payable and other liabilities | 19,071 | 22,609 | 20,633 | 18,932 | 18,534 | |||||||||||||||
| Total liabilities | 3,605,707 | 3,463,399 | 3,725,503 | 3,466,481 | 3,471,518 | |||||||||||||||
| Commitments and contingent liabilities | ||||||||||||||||||||
| Stockholders’ equity | ||||||||||||||||||||
| Common stock | 174 | 174 | 174 | 174 | 174 | |||||||||||||||
| Additional paid-in capital | 386,820 | 386,017 | 384,955 | 383,850 | 382,731 | |||||||||||||||
| Retained earnings | 50,787 | 38,299 | 128,704 | 127,015 | 125,757 | |||||||||||||||
| Accumulated other comprehensive income (loss) | 19,781 | 21,074 | 3,390 | 3,769 | (3 | ) | ||||||||||||||
| Employee stock loans | (43 | ) | (43 | ) | (43 | ) | (43 | ) | (77 | ) | ||||||||||
| Treasury stock | (49,870 | ) | (43,349 | ) | (37,414 | ) | (37,414 | ) | (30,522 | ) | ||||||||||
| Total stockholders’ equity | 407,649 | 402,172 | 479,766 | 477,351 | 478,060 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 4,013,356 | $ | 3,865,571 | $ | 4,205,269 | $ | 3,943,832 | $ | 3,949,578 | ||||||||||
| (1) Fair market value of held-to-maturity securities | $ | — | $ | — | $ | 689,206 | $ | 750,900 | $ | 783,911 | ||||||||||
| (2) Allowance for loan losses | 33,709 | 34,087 | 34,078 | 21,915 | 12,232 | |||||||||||||||
TABLE 4. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)
| As of and for the three months ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2020 | 2020 | 2020 | 2020 | 2019 | ||||||||||||||||
| Loans Held-For-Investment by Type | ||||||||||||||||||||
| Commercial real estate | $ | 1,188,696 | $ | 1,188,329 | $ | 1,191,336 | $ | 1,200,762 | $ | 1,158,022 | ||||||||||
| Commercial and industrial | 734,495 | 857,244 | 883,355 | 542,571 | 592,052 | |||||||||||||||
| Residential real estate | 382,026 | 402,242 | 442,486 | 480,603 | 503,439 | |||||||||||||||
| Agricultural real estate | 133,693 | 127,349 | 129,080 | 130,795 | 141,868 | |||||||||||||||
| Consumer | 58,464 | 67,465 | 71,037 | 64,799 | 68,378 | |||||||||||||||
| Agricultural | 94,322 | 83,084 | 89,040 | 87,593 | 92,893 | |||||||||||||||
| Total loans held-for-investment | 2,591,696 | 2,725,713 | 2,806,334 | 2,507,123 | 2,556,652 | |||||||||||||||
| Allowance for loan losses | (33,709 | ) | (34,087 | ) | (34,078 | ) | (21,915 | ) | (12,232 | ) | ||||||||||
| Net loans held-for-investment | $ | 2,557,987 | $ | 2,691,626 | $ | 2,772,256 | $ | 2,485,208 | $ | 2,544,420 | ||||||||||
| Asset Quality Ratios | ||||||||||||||||||||
| Allowance for loan losses to total loans | 1.30 | % | 1.25 | % | 1.21 | % | 0.87 | % | 0.48 | % | ||||||||||
| Past due or nonaccrual loans to total loans | 2.11 | % | 2.12 | % | 1.88 | % | 2.47 | % | 1.66 | % | ||||||||||
| Nonperforming assets to total assets | 1.34 | % | 1.55 | % | 1.37 | % | 1.22 | % | 1.19 | % | ||||||||||
| Nonperforming assets to total loans plus other real estate owned | 2.06 | % | 2.19 | % | 2.05 | % | 1.92 | % | 1.83 | % | ||||||||||
| Classified assets to bank total regulatory capital | 25.50 | % | 18.35 | % | 20.81 | % | 19.50 | % | 21.24 | % | ||||||||||
| Selected Average Balance Sheet Data (QTD Average) | ||||||||||||||||||||
| Investment securities | $ | 814,114 | $ | 802,525 | $ | 877,308 | $ | 907,910 | $ | 911,923 | ||||||||||
| Total gross loans receivable | 2,692,223 | 2,758,680 | 2,806,865 | 2,525,344 | 2,568,301 | |||||||||||||||
| Interest-earning assets | 3,647,730 | 3,679,168 | 3,786,629 | 3,519,267 | 3,563,642 | |||||||||||||||
| Total assets | 3,910,628 | 4,041,187 | 4,159,336 | 3,888,205 | 3,932,909 | |||||||||||||||
| Interest-bearing deposits | 2,551,219 | 2,430,407 | 2,487,187 | 2,531,508 | 2,563,519 | |||||||||||||||
| Borrowings | 172,730 | 377,158 | 384,727 | 355,303 | 377,561 | |||||||||||||||
| Total interest-bearing liabilities | 2,723,949 | 2,807,565 | 2,871,914 | 2,886,811 | 2,941,080 | |||||||||||||||
| Total deposits | 2,960,791 | 3,145,810 | 3,257,631 | 3,021,181 | 3,055,275 | |||||||||||||||
| Total liabilities | 3,501,055 | 3,558,100 | 3,675,731 | 3,405,638 | 3,459,347 | |||||||||||||||
| Total stockholders' equity | 409,572 | 483,088 | 483,605 | 482,567 | 473,562 | |||||||||||||||
| Tangible common equity* | 355,025 | 329,039 | 327,411 | 325,470 | 315,569 | |||||||||||||||
| Performance ratios | ||||||||||||||||||||
| Return on average assets (ROAA) annualized | 1.27 | % | (8.90 | )% | 0.16 | % | 0.13 | % | 1.01 | % | ||||||||||
| Return on average assets before income tax, provision for loan losses and goodwill impairment* | 1.59 | % | 1.24 | % | 1.42 | % | 1.20 | % | 1.43 | % | ||||||||||
| Return on average equity (ROAE) annualized | 12.13 | % | (74.45 | )% | 1.40 | % | 1.05 | % | 8.39 | % | ||||||||||
| Return on average equity before income tax, provision for loan losses and goodwill impairment* | 15.15 | % | 10.37 | % | 12.21 | % | 9.70 | % | 11.90 | % | ||||||||||
| Return on average tangible common equity (ROATCE) annualized* | 14.93 | % | (108.31 | )% | 3.03 | % | 2.35 | % | 13.42 | % | ||||||||||
| Return on average tangible common equity adjusted for goodwill impairment* | 14.93 | % | 12.02 | % | 3.03 | % | 2.35 | % | 13.42 | % | ||||||||||
| Yield on loans annualized | 5.23 | % | 4.65 | % | 4.68 | % | 5.47 | % | 5.67 | % | ||||||||||
| Cost of interest-bearing deposits annualized | 0.43 | % | 0.50 | % | 0.63 | % | 1.09 | % | 1.32 | % | ||||||||||
| Cost of total deposits annualized | 0.37 | % | 0.39 | % | 0.48 | % | 0.91 | % | 1.11 | % | ||||||||||
| Net interest margin annualized | 3.88 | % | 3.47 | % | 3.49 | % | 3.67 | % | 3.61 | % | ||||||||||
| Efficiency ratio* | 67.19 | % | 67.38 | % | 61.98 | % | 68.88 | % | 63.63 | % | ||||||||||
| Non-interest income / average assets | 0.86 | % | 0.64 | % | 0.55 | % | 0.55 | % | 0.67 | % | ||||||||||
| Non-interest expense / average assets | 2.90 | % | 12.88 | % | 2.31 | % | 2.66 | % | 2.51 | % | ||||||||||
| Capital Ratios | ||||||||||||||||||||
| Tier 1 Leverage Ratio | 9.30 | % | 8.76 | % | 8.52 | % | 9.02 | % | 9.02 | % | ||||||||||
| Common Equity Tier 1 Capital Ratio | 12.82 | % | 12.76 | % | 12.02 | % | 11.67 | % | 11.63 | % | ||||||||||
| Tier 1 Risk Based Capital Ratio | 13.38 | % | 13.32 | % | 12.57 | % | 12.20 | % | 12.15 | % | ||||||||||
| Total Risk Based Capital Ratio | 17.36 | % | 17.35 | % | 15.33 | % | 13.00 | % | 12.59 | % | ||||||||||
| Total stockholders' equity to total assets | 10.16 | % | 10.40 | % | 11.41 | % | 12.10 | % | 12.10 | % | ||||||||||
| Tangible common equity to tangible assets* | 9.05 | % | 9.23 | % | 8.00 | % | 8.47 | % | 8.45 | % | ||||||||||
| Book value per common share | $ | 28.04 | $ | 27.08 | $ | 31.53 | $ | 31.41 | $ | 30.95 | ||||||||||
| Tangible book value per common share* | $ | 24.68 | $ | 23.72 | $ | 21.29 | $ | 21.10 | $ | 20.75 | ||||||||||
| Tangible book value per diluted common share* | $ | 24.32 | $ | 23.57 | $ | 21.13 | $ | 20.96 | $ | 20.39 | ||||||||||
* 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 5. YEAR-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
| For the year ended | For the year ended | ||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) | Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) | ||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||
| Loans (1) | |||||||||||||||||||||||
| Commercial and industrial | $ | 763,971 | $ | 35,601 | 4.66 | % | $ | 567,215 | $ | 34,225 | 6.03 | % | |||||||||||
| Commercial real estate | 952,083 | 50,667 | 5.32 | % | 1,012,146 | 57,316 | 5.66 | % | |||||||||||||||
| Real estate construction | 238,015 | 10,947 | 4.60 | % | 212,658 | 13,776 | 6.48 | % | |||||||||||||||
| Residential real estate | 449,789 | 19,894 | 4.42 | % | 519,119 | 24,338 | 4.69 | % | |||||||||||||||
| Agricultural real estate | 133,813 | 8,008 | 5.98 | % | 140,365 | 8,496 | 6.05 | % | |||||||||||||||
| Consumer | 70,064 | 4,603 | 6.57 | % | 70,390 | 5,563 | 7.90 | % | |||||||||||||||
| Agricultural | 88,206 | 4,944 | 5.61 | % | 85,747 | 5,584 | 6.51 | % | |||||||||||||||
| Total loans | 2,695,941 | 134,664 | 5.00 | % | 2,607,640 | 149,298 | 5.73 | % | |||||||||||||||
| Securities | |||||||||||||||||||||||
| Taxable securities | 727,452 | 15,521 | 2.13 | % | 777,802 | 19,339 | 2.49 | % | |||||||||||||||
| Nontaxable securities | 122,783 | 3,682 | 3.00 | % | 142,816 | 4,180 | 2.93 | % | |||||||||||||||
| Total securities | 850,235 | 19,203 | 2.26 | % | 920,618 | 23,519 | 2.55 | % | |||||||||||||||
| Federal funds sold and other | 112,053 | 1,694 | 1.51 | % | 83,887 | 2,682 | 3.20 | % | |||||||||||||||
| Total interest-earning assets | $ | 3,658,229 | 155,561 | 4.25 | % | $ | 3,612,145 | 175,499 | 4.86 | % | |||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||
| Savings, NOW and money market deposits | $ | 1,795,108 | 5,893 | 0.33 | % | $ | 1,699,952 | 21,008 | 1.24 | % | |||||||||||||
| Time deposits | 704,921 | 10,689 | 1.52 | % | 967,803 | 19,906 | 2.06 | % | |||||||||||||||
| Total interest-bearing deposits | 2,500,029 | 16,582 | 0.66 | % | 2,667,755 | 40,914 | 1.53 | % | |||||||||||||||
| FHLB advances | 213,155 | 2,292 | 1.08 | % | 277,328 | 6,667 | 2.40 | % | |||||||||||||||
| Other borrowings | 109,064 | 4,035 | 3.70 | % | 69,270 | 2,060 | 2.97 | % | |||||||||||||||
| Total interest-bearing liabilities | $ | 2,822,248 | 22,909 | 0.81 | % | $ | 3,014,353 | 49,641 | 1.65 | % | |||||||||||||
| Net interest income | $ | 132,652 | $ | 125,858 | |||||||||||||||||||
| Interest rate spread | 3.44 | % | 3.21 | % | |||||||||||||||||||
| Net interest margin (2) | 3.63 | % | 3.48 | % | |||||||||||||||||||
| (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. | |||||||||||||||||||||||
| (4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts. | |||||||||||||||||||||||
TABLE 6. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
| For the three months ended | For the three months ended | ||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) | Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) | ||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||
| Loans (1) | |||||||||||||||||||||||
| Commercial and industrial | $ | 782,433 | $ | 10,943 | 5.56 | % | $ | 568,868 | $ | 8,657 | 6.04 | % | |||||||||||
| Commercial real estate | 980,686 | 12,647 | 5.13 | % | 942,447 | 13,966 | 5.88 | % | |||||||||||||||
| Real estate construction | 216,714 | 2,301 | 4.22 | % | 236,447 | 3,308 | 5.55 | % | |||||||||||||||
| Residential real estate | 406,450 | 5,005 | 4.90 | % | 522,113 | 5,815 | 4.42 | % | |||||||||||||||
| Agricultural real estate | 135,337 | 2,244 | 6.60 | % | 144,824 | 2,236 | 6.13 | % | |||||||||||||||
| Consumer | 78,430 | 1,080 | 5.48 | % | 69,980 | 1,385 | 7.85 | % | |||||||||||||||
| Agricultural | 92,173 | 1,163 | 5.02 | % | 83,622 | 1,320 | 6.26 | % | |||||||||||||||
| Total loans | 2,692,223 | 35,383 | 5.23 | % | 2,568,301 | 36,687 | 5.67 | % | |||||||||||||||
| Securities | |||||||||||||||||||||||
| Taxable securities | 698,985 | 3,408 | 1.94 | % | 768,867 | 4,615 | 2.38 | % | |||||||||||||||
| Nontaxable securities | 115,129 | 913 | 3.15 | % | 143,056 | 1,037 | 2.88 | % | |||||||||||||||
| Total securities | 814,114 | 4,321 | 2.11 | % | 911,923 | 5,652 | 2.46 | % | |||||||||||||||
| Federal funds sold and other | 141,393 | 285 | 0.80 | % | 83,418 | 645 | 3.07 | % | |||||||||||||||
| Total interest-earning assets | $ | 3,647,730 | 39,989 | 4.36 | % | $ | 3,563,642 | 42,984 | 4.79 | % | |||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||
| Savings, NOW and money market deposits | $ | 1,915,280 | 970 | 0.20 | % | $ | 1,683,157 | 4,094 | 0.97 | % | |||||||||||||
| Time deposits | 635,939 | 1,785 | 1.12 | % | 880,362 | 4,438 | 2.00 | % | |||||||||||||||
| Total interest-bearing deposits | 2,551,219 | 2,755 | 0.43 | % | 2,563,519 | 8,533 | 1.32 | % | |||||||||||||||
| FHLB advances | 39,245 | 94 | 0.95 | % | 310,592 | 1,564 | 2.00 | % | |||||||||||||||
| Other borrowings | 133,485 | 1,581 | 4.71 | % | 66,969 | 482 | 2.86 | % | |||||||||||||||
| Total interest-bearing liabilities | $ | 2,723,949 | 4,430 | 0.65 | % | $ | 2,941,080 | 10,579 | 1.43 | % | |||||||||||||
| Net interest income | $ | 35,559 | $ | 32,405 | |||||||||||||||||||
| Interest rate spread | 3.71 | % | 3.36 | % | |||||||||||||||||||
| Net interest margin (2) | 3.88 | % | 3.61 | % | |||||||||||||||||||
| (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 7. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
| For the three months ended | For the three months ended | ||||||||||||||||||||||
| December 31, 2020 | September 30, 2020 | ||||||||||||||||||||||
| Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) | Average Outstanding Balance | Interest Income/ Expense | Average Yield/Rate(3)(4) | ||||||||||||||||||
| Interest-earning assets | |||||||||||||||||||||||
| Loans (1) | |||||||||||||||||||||||
| Commercial and industrial | $ | 782,433 | $ | 10,943 | 5.56 | % | $ | 848,096 | $ | 8,400 | 3.94 | % | |||||||||||
| Commercial real estate | 980,686 | 12,647 | 5.13 | % | 979,775 | 12,886 | 5.23 | % | |||||||||||||||
| Real estate construction | 216,714 | 2,301 | 4.22 | % | 214,775 | 2,233 | 4.14 | % | |||||||||||||||
| Residential real estate | 406,450 | 5,005 | 4.90 | % | 429,965 | 4,733 | 4.38 | % | |||||||||||||||
| Agricultural real estate | 135,337 | 2,244 | 6.60 | % | 131,725 | 1,718 | 5.19 | % | |||||||||||||||
| Consumer | 78,430 | 1,080 | 5.48 | % | 69,485 | 1,104 | 6.32 | % | |||||||||||||||
| Agricultural | 92,173 | 1,163 | 5.02 | % | 84,859 | 1,204 | 5.65 | % | |||||||||||||||
| Total loans | 2,692,223 | 35,383 | 5.23 | % | 2,758,680 | 32,278 | 4.65 | % | |||||||||||||||
| Securities | |||||||||||||||||||||||
| Taxable securities | 698,985 | 3,408 | 1.94 | % | 683,630 | 3,476 | 2.02 | % | |||||||||||||||
| Nontaxable securities | 115,129 | 913 | 3.15 | % | 118,895 | 923 | 3.09 | % | |||||||||||||||
| Total securities | 814,114 | 4,321 | 2.11 | % | 802,525 | 4,399 | 2.18 | % | |||||||||||||||
| Federal funds sold and other | 141,393 | 285 | 0.80 | % | 117,963 | 405 | 1.36 | % | |||||||||||||||
| Total interest-earning assets | $ | 3,647,730 | 39,989 | 4.36 | % | $ | 3,679,168 | 37,082 | 4.01 | % | |||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||||||
| Savings, NOW and money market deposits | $ | 1,915,280 | 970 | 0.20 | % | $ | 1,784,891 | 875 | 0.19 | % | |||||||||||||
| Time deposits | 635,939 | 1,785 | 1.12 | % | 645,516 | 2,189 | 1.35 | % | |||||||||||||||
| Total interest-bearing deposits | 2,551,219 | 2,755 | 0.43 | % | 2,430,407 | 3,064 | 0.50 | % | |||||||||||||||
| FHLB advances | 39,245 | 94 | 0.95 | % | 248,437 | 471 | 0.75 | % | |||||||||||||||
| Other borrowings | 133,485 | 1,581 | 4.71 | % | 128,721 | 1,440 | 4.45 | % | |||||||||||||||
| Total interest-bearing liabilities | $ | 2,723,949 | 4,430 | 0.65 | % | $ | 2,807,565 | 4,975 | 0.70 | % | |||||||||||||
| Net interest income | $ | 35,559 | $ | 32,107 | |||||||||||||||||||
| Interest rate spread | 3.71 | % | 3.31 | % | |||||||||||||||||||
| Net interest margin (2) | 3.88 | % | 3.47 | % | |||||||||||||||||||
| (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 8. NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in thousands, except per share data)
| As of and for the three months ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2020 | 2020 | 2020 | 2020 | 2019 | ||||||||||||||||
| Income before income taxes | $ | 14,599 | $ | (93,058 | ) | $ | 2,186 | $ | 1,703 | $ | 13,145 | |||||||||
| Add: goodwill impairment | — | 104,831 | — | — | — | |||||||||||||||
| Less: tax effect | 2,111 | 2,652 | 497 | 445 | 3,131 | |||||||||||||||
| Adjusted income | $ | 12,488 | $ | 9,121 | $ | 1,689 | $ | 1,258 | $ | 10,014 | ||||||||||
| Weighted average common shares outstanding | 14,760,810 | 15,040,407 | 15,209,483 | 15,387,697 | 15,442,841 | |||||||||||||||
| Effect of weighted average dilutive shares assuming positive net income | 173,248 | 82,804 | 94,526 | 207,327 | 241,832 | |||||||||||||||
| Weighted average diluted shares | 14,934,058 | 15,123,211 | 15,304,009 | 15,595,024 | 15,684,673 | |||||||||||||||
| Diluted earnings per share adjusted for goodwill impairment | $ | 0.84 | $ | 0.60 | $ | 0.11 | $ | 0.08 | $ | 0.64 | ||||||||||
| Total stockholders' equity | $ | 407,649 | $ | 402,172 | $ | 479,766 | $ | 477,351 | $ | 478,060 | ||||||||||
| Less: goodwill | 31,601 | 31,601 | 136,432 | 136,432 | 136,432 | |||||||||||||||
| Less: core deposit intangibles, net | 16,057 | 17,101 | 18,131 | 19,105 | 19,907 | |||||||||||||||
| Less: mortgage servicing asset, net | — | 1 | 2 | 4 | 5 | |||||||||||||||
| Less: naming rights, net | 1,130 | 1,141 | 1,152 | 1,163 | 1,174 | |||||||||||||||
| Tangible common equity | $ | 358,861 | $ | 352,328 | $ | 324,049 | $ | 320,647 | $ | 320,542 | ||||||||||
| Common shares issued at period end | 14,540,556 | 14,853,487 | 15,218,301 | 15,198,986 | 15,444,434 | |||||||||||||||
| Diluted common shares outstanding at period end | 14,756,378 | 14,945,282 | 15,333,977 | 15,297,319 | 15,719,810 | |||||||||||||||
| Book value per common share | $ | 28.04 | $ | 27.08 | $ | 31.53 | $ | 31.41 | $ | 30.95 | ||||||||||
| Tangible book value per common share | $ | 24.68 | $ | 23.72 | $ | 21.29 | $ | 21.10 | $ | 20.75 | ||||||||||
| Tangible book value per diluted common share | $ | 24.32 | $ | 23.57 | $ | 21.13 | $ | 20.96 | $ | 20.39 | ||||||||||
| Total assets | $ | 4,013,356 | $ | 3,865,571 | $ | 4,205,269 | $ | 3,943,832 | $ | 3,949,578 | ||||||||||
| Less: goodwill | 31,601 | 31,601 | 136,432 | 136,432 | 136,432 | |||||||||||||||
| Less: core deposit intangibles, net | 16,057 | 17,101 | 18,131 | 19,105 | 19,907 | |||||||||||||||
| Less: mortgage servicing asset, net | — | 1 | 2 | 4 | 5 | |||||||||||||||
| Less: naming rights, net | 1,130 | 1,141 | 1,152 | 1,163 | 1,174 | |||||||||||||||
| Tangible assets | $ | 3,964,568 | $ | 3,815,727 | $ | 4,049,552 | $ | 3,787,128 | $ | 3,792,060 | ||||||||||
| Total stockholders' equity to total assets | 10.16 | % | 10.40 | % | 11.41 | % | 12.10 | % | 12.10 | % | ||||||||||
| Tangible common equity to tangible assets | 9.05 | % | 9.23 | % | 8.00 | % | 8.47 | % | 8.45 | % | ||||||||||
| Total average stockholders' equity | $ | 409,572 | $ | 483,088 | $ | 483,605 | $ | 482,567 | $ | 473,562 | ||||||||||
| Less: average intangible assets | 54,547 | 154,049 | 156,194 | 157,097 | 157,993 | |||||||||||||||
| Average tangible common equity | $ | 355,025 | $ | 329,039 | $ | 327,411 | $ | 325,470 | $ | 315,569 | ||||||||||
| Net income (loss) allocable to common stockholders | $ | 12,488 | $ | (90,405 | ) | $ | 1,689 | $ | 1,258 | $ | 10,014 | |||||||||
| Add: goodwill impairment | $ | — | $ | 104,831 | $ | — | $ | — | $ | — | ||||||||||
| Less: tax effect of goodwill impairment | $ | — | $ | 5,305 | $ | — | $ | — | $ | — | ||||||||||
| Adjusted net income (loss) plus goodwill impairment | $ | 12,488 | $ | 9,121 | $ | 1,689 | $ | 1,258 | $ | 10,014 | ||||||||||
| Amortization of intangible assets | 1,055 | 1,043 | 986 | 814 | 833 | |||||||||||||||
| Less: tax effect of intangible assets amortization | 222 | 234 | 207 | 171 | 175 | |||||||||||||||
| Adjusted net income (loss) allocable to common stockholders | $ | 13,321 | $ | 9,930 | $ | 2,468 | $ | 1,901 | $ | 10,672 | ||||||||||
| Return on total average stockholders' equity (ROAE) annualized | 12.13 | % | (74.45 | )% | 1.40 | % | 1.05 | % | 8.39 | % | ||||||||||
| Return on average tangible common equity (ROATCE) annualized | 14.93 | % | (108.31 | )% | 3.03 | % | 2.35 | % | 13.42 | % | ||||||||||
| Adjusted return on average tangible common equity | 14.93 | % | 12.01 | % | 3.03 | % | 2.35 | % | 13.42 | % | ||||||||||
| Non-interest expense | $ | 28,460 | $ | 130,835 | $ | 23,937 | $ | 25,758 | $ | 24,846 | ||||||||||
| Less: merger expense | 299 | — | — | — | — | |||||||||||||||
| Less: goodwill impairment | — | 104,831 | — | — | — | |||||||||||||||
| Non-interest expense, excluding goodwill impairment | $ | 28,161 | $ | 26,004 | $ | 23,937 | $ | 25,758 | $ | 24,846 | ||||||||||
| Net interest income | $ | 35,559 | $ | 32,107 | $ | 32,891 | $ | 32,095 | $ | 32,405 | ||||||||||
| Non-interest income | 8,500 | 6,485 | 5,732 | 5,306 | 6,641 | |||||||||||||||
| Less: net gain on acquisition | 2,145 | — | — | — | — | |||||||||||||||
| Less: net gains (losses) from securities transactions | (1 | ) | — | 4 | 8 | (3 | ) | |||||||||||||
| Non-interest income, excluding gains (losses) from securities transactions | $ | 6,356 | $ | 6,485 | $ | 5,728 | $ | 5,298 | $ | 6,644 | ||||||||||
| Net interest income plus non-interest income, excluding net gains (losses) from securities transactions | $ | 41,915 | $ | 38,592 | $ | 38,619 | $ | 37,393 | $ | 39,049 | ||||||||||
| Non-interest expense to net interest income plus non-interest income | 64.60 | % | 339.02 | % | 61.98 | % | 68.87 | % | 63.63 | % | ||||||||||
| Efficiency ratio | 67.19 | % | 67.38 | % | 61.98 | % | 68.88 | % | 63.63 | % | ||||||||||
| Net income (loss) allocable to common stockholders | $ | 12,488 | $ | (90,405 | ) | $ | 1,689 | $ | 1,258 | $ | 10,014 | |||||||||
| Add: income tax provision | 2,111 | (2,653 | ) | 497 | 445 | 3,131 | ||||||||||||||
| Add: provision for loan losses | 1,000 | 815 | 12,500 | 9,940 | 1,055 | |||||||||||||||
| Add: goodwill impairment | — | 104,831 | — | — | — | |||||||||||||||
| Adjusted net income | $ | 15,599 | $ | 12,588 | $ | 14,686 | $ | 11,643 | $ | 14,200 | ||||||||||
| Total average assets | $ | 3,910,628 | $ | 4,041,187 | $ | 4,159,336 | $ | 3,888,205 | $ | 3,932,909 | ||||||||||
| Total average stockholders' equity | $ | 409,572 | $ | 483,088 | $ | 483,605 | $ | 482,567 | $ | 473,562 | ||||||||||
| Return on average assets (ROAA) annualized | 1.27 | % | (8.90 | )% | 0.16 | % | 0.13 | % | 1.01 | % | ||||||||||
| Adjusted return on average assets | 1.59 | % | 1.24 | % | 1.42 | % | 1.20 | % | 1.43 | % | ||||||||||
| Adjusted return on average equity | 15.15 | % | 10.37 | % | 12.21 | % | 9.70 | % | 11.90 | % | ||||||||||