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Equity Bancshares, Inc. Reports Third Quarter Results

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Equity Bancshares, Inc.
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Equity continues stakeholder support programs during pandemic,  
while deferring approximately  1% of commercial loans, maintains Tier 1 Capital ratio of 13.3 %
and a dds $2.97 t angible b ook per share year-to-date in 2020

WICHITA, Kan., Oct. 20, 2020 (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 third quarter ended September 30, 2020.

Equity recorded a $104.8 million impairment in the value of goodwill and a resulting net loss of $90.4 million or $6.01 per diluted share in the quarter ended September 30, 2020, while maintaining a Tier 1 capital ratio of 13.3%, growing tangible book value by $2.43 per share and continuing to grow core deposits and relationships. Net income, adjusted to exclude the impairment charge on goodwill, was $9.1 million, or $0.60 per diluted share.

Im very proud of our relationship bankers in each of our markets for their continued collaboration and support of our communities. As a result of our collaborative approach with our customers, we currently have approximately 1% of loans on deferral as of September 30, 2020, down from approximately 24% on June 30, 2020. We continue to be positioned for loan opportunities in all regional pipelines, said Brad Elliott, Chairman and CEO of Equity.

Despite the non-recurring impact of goodwill impairment on our earnings during the third quarter, our regulatory capital ratios and tangible book value, which grew to $23.72 during the third quarter, are the highest levels weve reported as a publicly-traded company and are indicative of a safe and sound bank under the regulatory capital framework. Our capital levels position Equity to support continued growth, long-term stability and core earnings. We continue to support our small business, commercial and family customers and we are confident that our leadership during the pandemic crisis indicates the resolve and importance of community banking and will be a key component of our Equity story.

Through September 30, 2020, Equity reported net growth of more than 3,389 new consumer core deposit customers and $279.9 million in core deposit growth. Equitys digital adoption among core banking customers through September 30, 2020, was 48.4% compared to 42.4% at September 30, 2019, with online bill payment and mobile deposit totals of $30.1 million, an 11.0% increase compared to the nine-month period ended September 30, 2019.

We continue to be responsive and adaptive to our changing customer bases and upgrades to our online banking platform have resulted in continued customer satisfaction, as well as increased treasury service relationships and Equity Trust and Wealth Management customers, said Mr. Elliott. Our mission is to deliver sophisticated banking products to customers throughout a diverse range of markets. Upgraded online tools and savvy relationship bankers have helped us provide value to small businesses in our regions as well as consumers accessing their money in new and different ways.

Equity received two local honors for work within our regions and collaboration by our team members. The Company earned the honor of Leaders in Diversity and Inclusion 2020, its second straight year and third overall earning the honor from the Wichita Business Journal . Companies recognized are leading efforts to develop inclusive working environments, products and delivery that are impactful to their communities. Equity was also recognized as one of the Top Innovative Companies in Wichita in 2020, also awarded by the Wichita Business Journal , for its improvement in processes and outcomes for customers, including its digital upgrades and PPP implementation.

Notable Items:

  • Tangible book value per common share was $23.72 at September 30, 2020, as compared to $20.75 at December 31, 2019, representing an increase of 14.3% or $2.97. During the quarter ended September 30, 2020, the Company repurchased 383,523 shares at a weighted average cost of $15.48, totaling $5.9 million

  • At September 30, 2020, $40.2 million of loans were under deferment in connection to the COVID-19 crisis, as compared to $673.9 million, or 24.0% of total loans, under deferment at June 30, 2020.

Equitys Balance Sheet Highlights:

  • Total loans held for investment of $2.73 billion at September 30, 2020, as compared to total loans held for investment of $2.56 billion at December 31, 2019.

  • Total deposits of $3.13 billion at September 30, 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 $2.51 billion at September 30, 2020, relative to $2.23 billion at December 31, 2019.

  • Total assets were $3.87 billion at September 30, 2020, as compared to $3.95 billion at December 31, 2019.

Financial Results for the Quarter Ended September 3 0 , 20 20

Net loss allocable to common stockholders was $90.4 million, or $6.01 per diluted share, for the three months ended September 30, 2020, as compared to net income allocable to common stockholders of $1.7 million, or $0.11 per diluted share, for the three months ended June 30, 2020, a decrease of $92.1 million. This decrease was primarily attributable to a goodwill impairment charge of $104.8 million taken during the quarter. Net income, excluding the goodwill impairment, using a projected 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 $32.1 million for the three months ended September 30, 2020, as compared to $32.9 million for the three months ended June 30, 2020, a $784 thousand, or 2.4% decrease. The decrease in net interest income was driven by a decrease in net interest margin of two basis points, declining to 3.47% for the three months ended September 30, 2020 from 3.49% for the three months ended June 30, 2020. The yield on earning assets declined two basis points to 4.01% for the quarter ended September 30, 2020 from 4.03% from the previous quarter. The cost of interest-bearing liabilities declined to 0.70% or one basis point for the quarter ended September 30, 2020 from 0.71% in the quarter ended June 30, 2020. The cost of interest-bearing deposits declined 13 basis points to 0.50% for the three months ended September 30, 2020 from 0.63% in the previous quarter primarily attributed to the decline in the cost of time deposits, which declined 28 basis points between the quarters. The cost of other borrowings increased to 4.45% in the three months ended September 30, 2020 from 2.09% from the quarter ended June 30, 2020, due the addition of subordinated debt issued by the Company in late June and late July, cumulatively adding $75 million of debt with a coupon of 7.0%.

Provision for Loan Losses

The provision for loan losses was $815 thousand for the three months ended September 30, 2020, as compared to $12.5 million for the three months ended June 30, 2020. For the three months ended September 30, 2020, we had net charge-offs of $806 thousand as compared to $337 thousand for three months ended June 30, 2020.

Non-Interest Income

Total non-interest income was $6.5 million for the three months ended September 30, 2020 increasing $753 thousand from the $5.7 million reported for the three months ended June 30, 2020. Service charges and fees were $1.7 million representing an increase of $341 thousand, or 25.0%, from the quarter ended June 30, 2020. The most significant driver of the increase was an improvement in overdraft fees. Debit card income totaled $2.5 million in the quarter ended September 30, 2020, increasing $290 thousand, or 13.2%, from the quarter ended June 30, 2020. Debit card transaction volume increased approximately 12% in the third quarter as compared to the second quarter of 2020.

Non-Interest Expense

Total non-interest expense for the quarter ended September 30, 2020 was $130.8 million; when the goodwill impairment charge of $104.8 million is excluded, pro-forma non-interest expense totals $26.0 million, compared to $23.9 million in the previous quarter. The $2.1 million increase is primarily attributed to a $1.2 million increase in salaries and employee benefits. The most significant contributor to the increase in salaries and benefits was a $791 thousand unfavorable change, due to the effect of salaries and benefits deferred as loan origination costs recognized in the three months ended June 30, 2020, related to PPP loan originations.

Asset Quality

As of September 30, 2020, Equitys allowance for loan losses to total loans was 1.25%, as compared to 0.48% at December 31, 2019. Total reserves, including purchase discounts, to total loans were approximately 1.61% as of September 30, 2020, as compared to 0.85% at December 31, 2019. Nonperforming assets were $61.7 million as of September 30, 2020, or 1.60% of total assets. Nonperforming assets were $46.9 million at December 31, 2019, or 1.19% of total assets.

Regulatory Capital

The Companys 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 8.8% at September 30, 2020. At December 31, 2019, the Companys 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 Companys subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.2%, a ratio of total capital to risk-weighted assets of 15.4% and a total leverage ratio of 9.3% at September 30, 2020. At December 31, 2019, Equity Banks ratio of common equity tier 1 capital to risk-weighted assets was 12.0%, their ratio of total capital to risk-weighted assets was 12.5% and their total leverage ratio was 8.9%.

Non-GAAP Financial Measures

In addition to evaluating the Companys 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 Companys GAAP financial information.

The efficiency ratio is used as a common measure by banks as a comparable metric to understand the Companys 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 Companys 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 third quarter 2020 results on Wednesday, October 21, 2020, 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 Wednesday, October 21, 2020, 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. 4668766.

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 October 27, 2020, accessible at (855) 859-2056 with conference ID no. 4668766 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. Equitys 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 Equitys management with respect to, among other things, future events and Equitys 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 Equitys industry, managements beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equitys 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 Equitys 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 Equitys 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 Equitys 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 Equitys 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 Equitys 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 Equitys 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
September 30,

 

 

Nine months ended
September 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

$

32,278

 

 

$

38,051

 

 

$

99,281

 

 

$

112,611

 

Securities, taxable

 

3,476

 

 

 

4,673

 

 

 

12,113

 

 

 

14,724

 

Securities, nontaxable

 

923

 

 

 

1,045

 

 

 

2,769

 

 

 

3,143

 

Federal funds sold and other

 

405

 

 

 

780

 

 

 

1,409

 

 

 

2,037

 

Total interest and dividend income

 

37,082

 

 

 

44,549

 

 

 

115,572

 

 

 

132,515

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

3,064

 

 

 

10,507

 

 

 

13,827

 

 

 

32,381

 

Federal funds purchased and retail repurchase agreements

 

25

 

 

 

50

 

 

 

80

 

 

 

116

 

Federal Home Loan Bank advances

 

471

 

 

 

1,957

 

 

 

2,198

 

 

 

5,103

 

Federal Reserve Bank discount window

 

 

 

 

 

 

 

6

 

 

 

 

Bank stock loan

 

 

 

 

198

 

 

 

415

 

 

 

507

 

Subordinated debentures

 

1,415

 

 

 

311

 

 

 

1,953

 

 

 

955

 

Total interest expense

 

4,975

 

 

 

13,023

 

 

 

18,479

 

 

 

39,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

32,107

 

 

 

31,526

 

 

 

97,093

 

 

 

93,453

 

Provision for loan losses

 

815

 

 

 

679

 

 

 

23,255

 

 

 

17,299

 

Net interest income after provision for loan losses

 

31,292

 

 

 

30,847

 

 

 

73,838

 

 

 

76,154

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and fees

 

1,706

 

 

 

2,268

 

 

 

5,097

 

 

 

6,431

 

Debit card income

 

2,491

 

 

 

2,205

 

 

 

6,735

 

 

 

6,129

 

Mortgage banking

 

877

 

 

 

820

 

 

 

2,298

 

 

 

1,699

 

Increase in value of bank-owned life insurance

 

489

 

 

 

507

 

 

 

1,452

 

 

 

1,494

 

Net gains from securities transactions

 

 

 

 

4

 

 

 

12

 

 

 

17

 

Other

 

922

 

 

 

768

 

 

 

1,929

 

 

 

2,577

 

Total non-interest income

 

6,485

 

 

 

6,572

 

 

 

17,523

 

 

 

18,347

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

13,877

 

 

 

13,039

 

 

 

40,076

 

 

 

40,204

 

Net occupancy and equipment

 

2,224

 

 

 

2,177

 

 

 

6,578

 

 

 

6,332

 

Data processing

 

2,817

 

 

 

2,673

 

 

 

8,243

 

 

 

7,436

 

Professional fees

 

877

 

 

 

991

 

 

 

3,187

 

 

 

3,375

 

Advertising and business development

 

598

 

 

 

806

 

 

 

1,697

 

 

 

2,174

 

Telecommunications

 

486

 

 

 

523

 

 

 

1,363

 

 

 

1,593

 

FDIC insurance

 

360

 

 

 

111

 

 

 

1,291

 

 

 

1,119

 

Courier and postage

 

366

 

 

 

352

 

 

 

1,103

 

 

 

1,020

 

Free nationwide ATM cost

 

439

 

 

 

459

 

 

 

1,186

 

 

 

1,240

 

Amortization of core deposit intangibles

 

1,030

 

 

 

784

 

 

 

2,806

 

 

 

2,348

 

Loan expense

 

107

 

 

 

165

 

 

 

628

 

 

 

608

 

Other real estate owned

 

133

 

 

 

(88

)

 

 

710

 

 

 

326

 

Merger expenses

 

 

 

 

 

 

 

 

 

 

915

 

Goodwill impairment

 

104,831

 

 

 

 

 

 

104,831

 

 

 

 

Other

 

2,690

 

 

 

2,231

 

 

 

6,831

 

 

 

6,099

 

Total non-interest expense

 

130,835

 

 

 

24,223

 

 

 

180,530

 

 

 

74,789

 

Income (loss) before income tax

 

(93,058

)

 

 

13,196

 

 

 

(89,169

)

 

 

19,712

 

Provision for income taxes (benefit)

 

(2,653

)

 

 

2,790

 

 

 

(1,711

)

 

 

4,147

 

Net income (loss) and net income (loss) allocable to common stockholders

$

(90,405

)

 

$

10,406

 

 

$

(87,458

)

 

$

15,565

 

Basic earnings (loss) per share

$

(6.01

)

 

$

0.67

 

 

$

(5.75

)

 

$

0.99

 

Diluted earnings (loss) per share

$

(6.01

)

 

$

0.66

 

 

$

(5.75

)

 

$

0.98

 

Weighted average common shares

 

15,040,407

 

 

 

15,514,042

 

 

 

15,211,901

 

 

 

15,679,556

 

Weighted average diluted common shares

 

15,040,407

 

 

 

15,708,038

 

 

 

15,211,901

 

 

 

15,896,605

 

TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share data)

 

As of and for the three months ended

 

 

September 30,
2020

 

 

June 30,
2020

 

 

March 31,
2020

 

 

December 31,
2019

 

 

September 30,
2019

 

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

$

32,278

 

 

$

32,627

 

 

$

34,376

 

 

$

36,687

 

 

$

38,051

 

Securities, taxable

 

3,476

 

 

 

4,017

 

 

 

4,620

 

 

 

4,615

 

 

 

4,673

 

Securities, nontaxable

 

923

 

 

 

880

 

 

 

966

 

 

 

1,037

 

 

 

1,045

 

Federal funds sold and other

 

405

 

 

 

409

 

 

 

595

 

 

 

645

 

 

 

780

 

Total interest and dividend income

 

37,082

 

 

 

37,933

 

 

 

40,557

 

 

 

42,984

 

 

 

44,549

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

3,064

 

 

 

3,899

 

 

 

6,864

 

 

 

8,533

 

 

 

10,507

 

Federal funds purchased and retail repurchase agreements

 

25

 

 

 

24

 

 

 

31

 

 

 

39

 

 

 

50

 

Federal Home Loan Bank advances

 

471

 

 

 

552

 

 

 

1,175

 

 

 

1,564

 

 

 

1,957

 

Federal Reserve Bank discount window

 

 

 

 

6

 

 

 

 

 

 

 

 

 

 

Bank stock loan

 

 

 

 

306

 

 

 

109

 

 

 

147

 

 

 

198

 

Subordinated debentures

 

1,415

 

 

 

255

 

 

 

283

 

 

 

296

 

 

 

311

 

Total interest expense

 

4,975

 

 

 

5,042

 

 

 

8,462

 

 

 

10,579

 

 

 

13,023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

32,107

 

 

 

32,891

 

 

 

32,095

 

 

 

32,405

 

 

 

31,526

 

Provision for loan losses

 

815

 

 

 

12,500

 

 

 

9,940

 

 

 

1,055

 

 

 

679

 

Net interest income after provision for loan losses

 

31,292

 

 

 

20,391

 

 

 

22,155

 

 

 

31,350

 

 

 

30,847

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and fees

 

1,706

 

 

 

1,365

 

 

 

2,026

 

 

 

2,241

 

 

 

2,268

 

Debit card income

 

2,491

 

 

 

2,201

 

 

 

2,043

 

 

 

2,101

 

 

 

2,205

 

Mortgage banking

 

877

 

 

 

831

 

 

 

590

 

 

 

769

 

 

 

820

 

Increase in value of bank-owned life insurance

 

489

 

 

 

481

 

 

 

482

 

 

 

504

 

 

 

507

 

Net gains (losses) from securities transactions

 

 

 

 

4

 

 

 

8

 

 

 

(3

)

 

 

4

 

Other

 

922

 

 

 

850

 

 

 

157

 

 

 

1,029

 

 

 

768

 

Total non-interest income

 

6,485

 

 

 

5,732

 

 

 

5,306

 

 

 

6,641

 

 

 

6,572

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

13,877

 

 

 

12,695

 

 

 

13,504

 

 

 

11,918

 

 

 

13,039

 

Net occupancy and equipment

 

2,224

 

 

 

2,119

 

 

 

2,235

 

 

 

2,342

 

 

 

2,177

 

Data processing

 

2,817

 

 

 

2,763

 

 

 

2,663

 

 

 

2,688

 

 

 

2,673

 

Professional fees

 

877

 

 

 

943

 

 

 

1,367

 

 

 

1,359

 

 

 

991

 

Advertising and business development

 

598

 

 

 

403

 

 

 

696

 

 

 

901

 

 

 

806

 

Telecommunications

 

486

 

 

 

390

 

 

 

487

 

 

 

486

 

 

 

523

 

FDIC insurance

 

360

 

 

 

414

 

 

 

517

 

 

 

109

 

 

 

111

 

Courier and postage

 

366

 

 

 

353

 

 

 

384

 

 

 

328

 

 

 

352

 

Free nationwide ATM cost

 

439

 

 

 

327

 

 

 

420

 

 

 

440

 

 

 

459

 

Amortization of core deposit intangibles

 

1,030

 

 

 

974

 

 

 

802

 

 

 

820

 

 

 

784

 

Loan expense

 

107

 

 

 

287

 

 

 

234

 

 

 

267

 

 

 

165

 

Other real estate owned

 

133

 

 

 

269

 

 

 

308

 

 

 

381

 

 

 

(88

)

Goodwill impairment

 

104,831

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

2,690

 

 

 

2,000

 

 

 

2,141

 

 

 

2,807

 

 

 

2,231

 

Total non-interest expense

 

130,835

 

 

 

23,937

 

 

 

25,758

 

 

 

24,846

 

 

 

24,223

 

Income (loss) before income tax

 

(93,058

)

 

 

2,186

 

 

 

1,703

 

 

 

13,145

 

 

 

13,196

 

Provision for income taxes (benefit)

 

(2,653

)

 

 

497

 

 

 

445

 

 

 

3,131

 

 

 

2,790

 

Net income (loss) and net income (loss) allocable to common stockholders

$

(90,405

)

 

$

1,689

 

 

$

1,258

 

 

$

10,014

 

 

$

10,406

 

Basic earnings (loss) per share

$

(6.01

)

 

$

0.11

 

 

$

0.08

 

 

$

0.65

 

 

$

0.67

 

Diluted earnings (loss) per share

$

(6.01

)

 

$

0.11

 

 

$

0.08

 

 

$

0.64

 

 

$

0.66

 

Weighted average common shares

 

15,040,407

 

 

 

15,209,483

 

 

 

15,387,697

 

 

 

15,442,841

 

 

 

15,514,042

 

Weighted average diluted common shares

 

15,040,407

 

 

 

15,304,009

 

 

 

15,595,024

 

 

 

15,684,673

 

 

 

15,708,038

 

TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

 

September 30,
2020

 

 

June 30,
2020

 

 

March 31,
2020

 

 

December 31,
2019

 

 

September 30,
2019

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

65,534

 

 

$

178,045

 

 

$

141,989

 

 

$

88,973

 

 

$

167,895

 

Federal funds sold

 

305

 

 

 

245

 

 

 

263

 

 

 

318

 

 

 

158

 

Cash and cash equivalents

 

65,839

 

 

 

178,290

 

 

 

142,252

 

 

 

89,291

 

 

 

168,053

 

Interest-bearing time deposits in other banks

 

499

 

 

 

2,248

 

 

 

2,498

 

 

 

2,498

 

 

 

3,497

 

Available-for-sale securities

 

798,576

 

 

 

177,228

 

 

 

187,812

 

 

 

142,067

 

 

 

152,680

 

Held-to-maturity securities (1)

 

 

 

 

662,522

 

 

 

721,992

 

 

 

769,059

 

 

 

764,163

 

Loans held for sale

 

9,053

 

 

 

4,802

 

 

 

6,494

 

 

 

5,933

 

 

 

8,784

 

Loans, net of allowance for loan losses (2)

 

2,691,626

 

 

 

2,772,256

 

 

 

2,485,208

 

 

 

2,544,420

 

 

 

2,583,049

 

Other real estate owned, net

 

8,727

 

 

 

7,374

 

 

 

5,870

 

 

 

8,293

 

 

 

5,944

 

Premises and equipment, net

 

86,087

 

 

 

87,055

 

 

 

84,732

 

 

 

84,478

 

 

 

84,481

 

Bank-owned life insurance

 

76,555

 

 

 

76,066

 

 

 

75,585

 

 

 

75,103

 

 

 

74,599

 

Federal Reserve Bank and Federal Home Loan Bank stock

 

32,545

 

 

 

31,832

 

 

 

31,662

 

 

 

31,137

 

 

 

31,710

 

Interest receivable

 

18,110

 

 

 

19,598

 

 

 

15,549

 

 

 

15,738

 

 

 

16,994

 

Goodwill

 

31,601

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

Core deposit intangibles, net

 

17,101

 

 

 

18,131

 

 

 

19,105

 

 

 

19,907

 

 

 

20,727

 

Other

 

29,252

 

 

 

31,435

 

 

 

28,641

 

 

 

25,222

 

 

 

23,550

 

Total assets

$

3,865,571

 

 

$

4,205,269

 

 

$

3,943,832

 

 

$

3,949,578

 

 

$

4,074,663

 

LIABILITIES AND STOCKHOLDERS EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand

$

693,967

 

 

$

756,613

 

 

$

508,441

 

 

$

481,298

 

 

$

488,214

 

Total non-interest-bearing deposits

 

693,967

 

 

 

756,613

 

 

 

508,441

 

 

 

481,298

 

 

 

488,214

 

Savings, NOW and money market

 

1,816,307

 

 

 

1,800,132

 

 

 

1,668,145

 

 

 

1,749,048

 

 

 

1,689,606

 

Time

 

623,344

 

 

 

690,522

 

 

 

783,811

 

 

 

833,170

 

 

 

929,109

 

Total interest-bearing deposits

 

2,439,651

 

 

 

2,490,654

 

 

 

2,451,956

 

 

 

2,582,218

 

 

 

2,618,715

 

Total deposits

 

3,133,618

 

 

 

3,247,267

 

 

 

2,960,397

 

 

 

3,063,516

 

 

 

3,106,929

 

Federal funds purchased and retail repurchase agreements

 

46,295

 

 

 

51,557

 

 

 

37,113

 

 

 

35,708

 

 

 

40,652

 

Federal Home Loan Bank advances

 

167,862

 

 

 

344,900

 

 

 

389,620

 

 

 

324,373

 

 

 

410,093

 

Bank stock loan

 

 

 

 

 

 

 

40,000

 

 

 

8,990

 

 

 

14,770

 

Subordinated debentures

 

87,537

 

 

 

55,575

 

 

 

14,638

 

 

 

14,561

 

 

 

14,485

 

Contractual obligations

 

5,478

 

 

 

5,571

 

 

 

5,781

 

 

 

5,836

 

 

 

3,744

 

Interest payable and other liabilities

 

22,609

 

 

 

20,633

 

 

 

18,932

 

 

 

18,534

 

 

 

16,940

 

Total liabilities

 

3,463,399

 

 

 

3,725,503

 

 

 

3,466,481

 

 

 

3,471,518

 

 

 

3,607,613

 

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

174

 

 

 

174

 

 

 

174

 

 

 

174

 

 

 

174

 

Additional paid-in capital

 

386,016

 

 

 

384,955

 

 

 

383,850

 

 

 

382,731

 

 

 

382,155

 

Retained earnings

 

38,300

 

 

 

128,704

 

 

 

127,015

 

 

 

125,757

 

 

 

115,743

 

Accumulated other comprehensive income (loss)

 

21,074

 

 

 

3,390

 

 

 

3,769

 

 

 

(3

)

 

 

(423

)

Employee stock loans

 

(43

)

 

 

(43

)

 

 

(43

)

 

 

(77

)

 

 

(77

)

Treasury stock

 

(43,349

)

 

 

(37,414

)

 

 

(37,414

)

 

 

(30,522

)

 

 

(30,522

)

Total stockholders equity

 

402,172

 

 

 

479,766

 

 

 

477,351

 

 

 

478,060

 

 

 

467,050

 

Total liabilities and stockholders equity

$

3,865,571

 

 

$

4,205,269

 

 

$

3,943,832

 

 

$

3,949,578

 

 

$

4,074,663

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Fair market value of held-to-maturity securities

$

 

 

$

689,206

 

 

$

750,900

 

 

$

783,911

 

 

$

778,966

 

(2) Allowance for loan losses

 

34,087

 

 

 

34,078

 

 

 

21,915

 

 

 

12,232

 

 

 

17,875

 

TABLE 4 . SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)

 

As of and for the three months ended

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

Loans Held-For-Investment by Type

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

$

1,188,329

 

 

$

1,191,336

 

 

$

1,200,762

 

 

$

1,158,022

 

 

$

1,183,305

 

Commercial and industrial

 

857,244

 

 

 

883,355

 

 

 

542,571

 

 

 

592,052

 

 

 

585,797

 

Residential real estate

 

402,242

 

 

 

442,486

 

 

 

480,603

 

 

 

503,439

 

 

 

531,257

 

Agricultural real estate

 

127,349

 

 

 

129,080

 

 

 

130,795

 

 

 

141,868

 

 

 

143,718

 

Consumer

 

67,465

 

 

 

71,037

 

 

 

64,799

 

 

 

68,378

 

 

 

70,944

 

Agricultural

 

83,084

 

 

 

89,040

 

 

 

87,593

 

 

 

92,893

 

 

 

85,903

 

Total loans held-for-investment

 

2,725,713

 

 

 

2,806,334

 

 

 

2,507,123

 

 

 

2,556,652

 

 

 

2,600,924

 

Allowance for loan losses

 

(34,087

)

 

 

(34,078

)

 

 

(21,915

)

 

 

(12,232

)

 

 

(17,875

)

Net loans held-for-investment

$

2,691,626

 

 

$

2,772,256

 

 

$

2,485,208

 

 

$

2,544,420

 

 

$

2,583,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses to total loans

 

1.25

%

 

 

1.21

%

 

 

0.87

%

 

 

0.48

%

 

 

0.69

%

Past due or nonaccrual loans to total loans

 

2.12

%

 

 

1.88

%

 

 

2.47

%

 

 

1.66

%

 

 

2.23

%

Nonperforming assets to total assets

 

1.60

%

 

 

1.37

%

 

 

1.22

%

 

 

1.19

%

 

 

1.40

%

Nonperforming assets to total loans plus other real estate owned

 

2.26

%

 

 

2.05

%

 

 

1.92

%

 

 

1.83

%

 

 

2.19

%

Classified assets to bank total regulatory capital

 

18.85

%

 

 

20.81

%

 

 

19.50

%

 

 

21.24

%

 

 

29.79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Average Balance Sheet Data (QTD Average)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

$

802,525

 

 

$

877,308

 

 

$

907,910

 

 

$

911,923

 

 

$

926,839

 

Total gross loans receivable

 

2,758,680

 

 

 

2,806,865

 

 

 

2,525,344

 

 

 

2,568,301

 

 

 

2,646,454

 

Interest-earning assets

 

3,679,168

 

 

 

3,786,629

 

 

 

3,519,267

 

 

 

3,563,642

 

 

 

3,657,970

 

Total assets

 

4,041,187

 

 

 

4,159,336

 

 

 

3,888,205

 

 

 

3,932,909

 

 

 

4,030,606

 

Interest-bearing deposits

 

2,430,407

 

 

 

2,487,187

 

 

 

2,531,508

 

 

 

2,563,519

 

 

 

2,673,007

 

Borrowings

 

377,158

 

 

 

384,727

 

 

 

355,303

 

 

 

377,561

 

 

 

390,562

 

Total interest-bearing liabilities

 

2,807,565

 

 

 

2,871,914

 

 

 

2,886,811

 

 

 

2,941,080

 

 

 

3,063,569

 

Total deposits

 

3,145,810

 

 

 

3,257,631

 

 

 

3,021,181

 

 

 

3,055,275

 

 

 

3,152,785

 

Total liabilities

 

3,558,099

 

 

 

3,675,731

 

 

 

3,405,638

 

 

 

3,459,347

 

 

 

3,567,354

 

Total stockholders' equity

 

483,088

 

 

 

483,605

 

 

 

482,567

 

 

 

473,562

 

 

 

463,252

 

Tangible common equity *

 

329,039

 

 

 

327,411

 

 

 

325,470

 

 

 

315,569

 

 

 

304,492

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA) annualized

 

(8.90

)%

 

 

0.16

%

 

 

0.13

%

 

 

1.01

%

 

 

1.02

%

Return on average assets before income tax,
provision for loan losses and goodwill
impairment*

 

1.24

%

 

 

1.42

%

 

 

1.20

%

 

 

1.43

%

 

 

1.37

%

Return on average equity (ROAE) annualized

 

(74.45

)%

 

 

1.40

%

 

 

1.05

%

 

 

8.39

%

 

 

8.91

%

Return on average equity before income tax,
provision for loan losses and goodwill
impairment*

 

10.37

%

 

 

12.21

%

 

 

9.70

%

 

 

11.90

%

 

 

11.88

%

Return on average tangible common equity
(ROATCE) annualized *

 

(108.31

)%

 

 

3.03

%

 

 

2.35

%

 

 

13.42

%

 

 

14.38

%

Return on average tangible common equity
adjusted for goodwill impairment*

 

12.02

%

 

 

3.03

%

 

 

2.35

%

 

 

13.42

%

 

 

14.38

%

Yield on loans annualized

 

4.65

%

 

 

4.68

%

 

 

5.47

%

 

 

5.67

%

 

 

5.70

%

Cost of interest-bearing deposits annualized

 

0.50

%

 

 

0.63

%

 

 

1.09

%

 

 

1.32

%

 

 

1.56

%

Cost of total deposits annualized

 

0.39

%

 

 

0.48

%

 

 

0.91

%

 

 

1.11

%

 

 

1.32

%

Net interest margin annualized

 

3.47

%

 

 

3.49

%

 

 

3.67

%

 

 

3.61

%

 

 

3.42

%

Efficiency ratio *

 

67.38

%

 

 

61.98

%

 

 

68.88

%

 

 

63.63

%

 

 

63.59

%

Non-interest income / average assets

 

0.64

%

 

 

0.55

%

 

 

0.55

%

 

 

0.67

%

 

 

0.65

%

Non-interest expense / average assets

 

12.88

%

 

 

2.31

%

 

 

2.66

%

 

 

2.51

%

 

 

2.38

%

 

 

 

&nbs...

p;                                    Capital Ratios                   Tier 1 Leverage Ratio 8.76%  8.52%  9.02%  9.02%  8.49%Common Equity Tier 1 Capital Ratio 12.76%  12.02%  11.67%  11.63%  11.08%Tier 1 Risk Based Capital Ratio 13.32%  12.57%  12.20%  12.15%  11.59%Total Risk Based Capital Ratio 17.35%  15.33%  13.00%  12.59%  12.21%Total stockholders' equity to total assets 10.40%  11.41%  12.10%  12.10%  11.46%Tangible common equity to tangible assets* 9.23%  8.00%  8.47%  8.45%  7.88%Book value per common share$27.08  $31.53  $31.41  $30.95  $30.25 Tangible book value per common share*$23.72  $21.29  $21.10  $20.75  $19.99 Tangible book value per diluted common share*$23.57  $21.13  $20.96  $20.39  $19.73 

* 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 nine months ended

 

 

For the nine months ended

 

 

September 30, 2020

 

 

September 30, 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

$

757,772

 

 

$

26,788

 

 

 

4.72

%

 

$

566,658

 

 

$

28,221

 

 

 

6.66

%

Commercial real estate

 

942,478

 

 

 

36,533

 

 

 

5.18

%

 

 

1,035,634

 

 

 

41,401

 

 

 

5.34

%

Real estate construction

 

245,167

 

 

 

8,644

 

 

 

4.71

%

 

 

204,642

 

 

 

10,449

 

 

 

6.83

%

Residential real estate

 

464,340

 

 

 

14,528

 

 

 

4.18

%

 

 

518,110

 

 

 

18,192

 

 

 

4.69

%

Agricultural real estate

 

133,302

 

 

 

5,574

 

 

 

5.59

%

 

 

138,861

 

 

 

6,105

 

 

 

5.88

%

Consumer

 

67,255

 

 

 

3,461

 

 

 

6.87

%

 

 

70,529

 

 

 

4,060

 

 

 

7.70

%

Agricultural

 

86,874

 

 

 

3,753

 

 

 

5.77

%

 

 

86,463

 

 

 

4,183

 

 

 

6.47

%

Total loans

 

2,697,188

 

 

 

99,281

 

 

 

4.92

%

 

 

2,620,897

 

 

 

112,611

 

 

 

5.74

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable securities

 

737,010

 

 

 

12,113

 

 

 

2.20

%

 

 

780,813

 

 

 

14,724

 

 

 

2.52

%

Nontaxable securities

 

125,352

 

 

 

2,769

 

 

 

2.95

%

 

 

142,735

 

 

 

3,143

 

 

 

2.94

%

Total securities

 

862,362

 

 

 

14,882

 

 

 

2.31

%

 

 

923,548

 

 

 

17,867

 

 

 

2.59

%

Federal funds sold and other

 

102,202

 

 

 

1,409

 

 

 

1.84

%

 

 

84,045

 

 

 

2,037

 

 

 

3.24

%

Total interest-earning assets

$

3,661,752

 

 

 

115,572

 

 

 

4.22

%

 

$

3,628,490

 

 

 

132,515

 

 

 

4.88

%

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings, NOW and money market deposits

$

1,754,759

 

 

 

4,923

 

 

 

0.37

%

 

$

1,705,612

 

 

 

16,914

 

 

 

1.33

%

Time deposits

 

728,083

 

 

 

8,904

 

 

 

1.63

%

 

 

997,270

 

 

 

15,467

 

 

 

2.07

%

Total interest-bearing deposits

 

2,482,842

 

 

 

13,827

 

 

 

0.74

%

 

 

2,702,882

 

 

 

32,381

 

 

 

1.60

%

FHLB advances

 

271,548

 

 

 

2,198

 

 

 

1.08

%

 

 

266,118

 

 

 

5,103

 

 

 

2.56

%

Other borrowings

 

100,864

 

 

 

2,454

 

 

 

3.25

%

 

 

70,044

 

 

 

1,578

 

 

 

3.01

%

Total interest-bearing liabilities

$

2,855,254

 

 

 

18,479

 

 

 

0.86

%

 

$

3,039,044

 

 

 

39,062

 

 

 

1.72

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

97,093

 

 

 

 

 

 

 

 

 

 

$

93,453

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

 

 

3.36

%

 

 

 

 

 

 

 

 

 

 

3.16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (2)

 

 

 

 

 

 

 

 

 

3.54

%

 

 

 

 

 

 

 

 

 

 

3.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

September 30, 2020

 

 

September 30, 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

$

848,096

 

 

$

8,400

 

 

 

3.94

%

 

$

562,399

 

 

$

8,845

 

 

 

6.24

%

Commercial real estate

 

979,775

 

 

 

12,886

 

 

 

5.23

%

 

 

1,012,393

 

 

 

14,678

 

 

 

5.75

%

Real estate construction

 

214,775

 

 

 

2,233

 

 

 

4.14

%

 

 

211,235

 

 

 

3,191

 

 

 

6.00

%

Residential real estate

 

429,965

 

 

 

4,733

 

 

 

4.38

%

 

 

561,423

 

 

 

6,402

 

 

 

4.52

%

Agricultural real estate

 

131,725

 

 

 

1,718

 

 

 

5.19

%

 

 

140,693

 

 

 

2,115

 

 

 

5.96

%

Consumer

 

69,485

 

 

 

1,104

 

 

 

6.32

%

 

 

71,688

 

 

 

1,441

 

 

 

7.97

%

Agricultural

 

84,859

 

 

 

1,204

 

 

 

5.65

%

 

 

86,623

 

 

 

1,379

 

 

 

6.32

%

Total loans

 

2,758,680

 

 

 

32,278

 

 

 

4.65

%

 

 

2,646,454

 

 

 

38,051

 

 

 

5.70

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable securities

 

683,630

 

 

 

3,476

 

 

 

2.02

%

 

 

782,994

 

 

 

4,673

 

 

 

2.37

%

Nontaxable securities

 

118,895

 

 

 

923

 

 

 

3.09

%

 

 

143,845

 

 

 

1,045

 

 

 

2.88

%

Total securities

 

802,525

 

 

 

4,399

 

 

 

2.18

%

 

 

926,839

 

 

 

5,718

 

 

 

2.45

%

Federal funds sold and other

 

117,963

 

 

 

405

 

 

 

1.36

%

 

 

84,677

 

 

 

780

 

 

 

3.66

%

Total interest-earning assets

$

3,679,168

 

 

 

37,082

 

 

 

4.01

%

 

$

3,657,970

 

 

 

44,549

 

 

 

4.83

%

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings, NOW and money market deposits

$

1,784,891

 

 

 

875

 

 

 

0.19

%

 

$

1,707,459

 

 

 

5,389

 

 

 

1.25

%

Time deposits

 

645,516

 

 

 

2,189

 

 

 

1.35

%

 

 

965,548

 

 

 

5,118

 

 

 

2.10

%

Total interest-bearing deposits

 

2,430,407

 

 

 

3,064

 

 

 

0.50

%

 

 

2,673,007

 

 

 

10,507

 

 

 

1.56

%

FHLB advances

 

248,437

 

 

 

471

 

 

 

0.75

%

 

 

320,528

 

 

 

1,957

 

 

 

2.42

%

Other borrowings

 

128,721

 

 

 

1,440

 

 

 

4.45

%

 

 

70,034

 

 

 

559

 

 

 

3.17

%

Total interest-bearing liabilities

$

2,807,565

 

 

 

4,975

 

 

 

0.70

%

 

$

3,063,569

 

 

 

13,023

 

 

 

1.69

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

32,107

 

 

 

 

 

 

 

 

 

 

$

31,526

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

 

 

3.31

%

 

 

 

 

 

 

 

 

 

 

3.14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (2)

 

 

 

 

 

 

 

 

 

3.47

%

 

 

 

 

 

 

 

 

 

 

3.42

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

September 30, 2020

 

 

June 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

$

848,096

 

 

$

8,400

 

 

 

3.94

%

 

$

868,302

 

 

$

8,378

 

 

 

3.88

%

Commercial real estate

 

979,775

 

 

 

12,886

 

 

 

5.23

%

 

 

934,186

 

 

 

12,192

 

 

 

5.25

%

Real estate construction

 

214,775

 

 

 

2,233

 

 

 

4.14

%

 

 

253,672

 

 

 

2,837

 

 

 

4.50

%

Residential real estate

 

429,965

 

 

 

4,733

 

 

 

4.38

%

 

 

467,246

 

 

 

4,854

 

 

 

4.18

%

Agricultural real estate

 

131,725

 

 

 

1,718

 

 

 

5.19

%

 

 

130,533

 

 

 

1,955

 

 

 

6.02

%

Consumer

 

69,485

 

 

 

1,104

 

 

 

6.32

%

 

 

65,096

 

 

 

1,145

 

 

 

7.07

%

Agricultural

 

84,859

 

 

 

1,204

 

 

 

5.65

%

 

 

87,830

 

 

 

1,266

 

 

 

5.80

%

Total loans

 

2,758,680

 

 

 

32,278

 

 

 

4.65

%

 

 

2,806,865

 

 

 

32,627

 

 

 

4.68

%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable securities

 

683,630

 

 

 

3,476

 

 

 

2.02

%

 

 

753,332

 

 

 

4,017

 

 

 

2.14

%

Nontaxable securities

 

118,895

 

 

 

923

 

 

 

3.09

%

 

 

123,976

 

 

 

880

 

 

 

2.86

%

Total securities

 

802,525

 

 

 

4,399

 

 

 

2.18

%

 

 

877,308

 

 

 

4,897

 

 

 

2.24

%

Federal funds sold and other

 

117,963

 

 

 

405

 

 

 

1.36

%

 

 

102,456

 

 

 

409

 

 

 

1.61

%

Total interest-earning assets

$

3,679,168

 

 

 

37,082

 

 

 

4.01

%

 

$

3,786,629

 

 

 

37,933

 

 

 

4.03

%

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings, NOW and money market deposits

$

1,784,891

 

 

 

875

 

 

 

0.19

%

 

$

1,754,280

 

 

 

923

 

 

 

0.21

%

Time deposits

 

645,516

 

 

 

2,189

 

 

 

1.35

%

 

 

732,907

 

 

 

2,976

 

 

 

1.63

%

Total interest-bearing deposits

 

2,430,407

 

 

 

3,064

 

 

 

0.50

%

 

 

2,487,187

 

 

 

3,899

 

 

 

0.63

%

FHLB advances

 

248,437

 

 

 

471

 

 

 

0.75

%

 

 

270,785

 

 

 

552

 

 

 

0.82

%

Other borrowings

 

128,721

 

 

 

1,440

 

 

 

4.45

%

 

 

113,942

 

 

 

591

 

 

 

2.08

%

Total interest-bearing liabilities

$

2,807,565

 

 

 

4,975

 

 

 

0.70

%

 

$

2,871,914

 

 

 

5,042

 

 

 

0.71

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

32,107

 

 

 

 

 

 

 

 

 

 

$

32,891

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

 

 

3.31

%

 

 

 

 

 

 

 

 

 

 

3.32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (2)

 

 

 

 

 

 

 

 

 

3.47

%

 

 

 

 

 

 

 

 

 

 

3.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

$

(93,058

)

 

$

2,186

 

 

$

1,703

 

 

$

13,145

 

 

$

13,196

 

Add: goodwill impairment

 

104,831

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: tax effect

 

2,649

 

 

 

497

 

 

 

445

 

 

 

3,131

 

 

 

2,790

 

Adjusted income

$

9,124

 

 

$

1,689

 

 

$

1,258

 

 

$

10,014

 

 

$

10,406

 

Weighted average common shares outstanding

 

15,040,407

 

 

 

15,209,483

 

 

 

15,387,697

 

 

 

15,442,841

 

 

 

15,514,042

 

Effect of weighted average dilutive shares assuming positive net income

 

82,804

 

 

 

94,526

 

 

 

207,327

 

 

 

241,832

 

 

 

193,996

 

Weighted average diluted shares

 

15,123,211

 

 

 

15,304,009

 

 

 

15,595,024

 

 

 

15,684,673

 

 

 

15,708,038

 

Diluted earnings per share adjusted for goodwill impairment

$

0.60

 

 

$

0.11

 

 

$

0.08

 

 

$

0.64

 

 

$

0.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

$

402,172

 

 

$

479,766

 

 

$

477,351

 

 

$

478,060

 

 

$

467,050

 

Less: goodwill

 

31,601

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

Less: core deposit intangibles, net

 

17,101

 

 

 

18,131

 

 

 

19,105

 

 

 

19,907

 

 

 

20,727

 

Less: mortgage servicing asset, net

 

1

 

 

 

2

 

 

 

4

 

 

 

5

 

 

 

7

 

Less: naming rights, net

 

1,141

 

 

 

1,152

 

 

 

1,163

 

 

 

1,174

 

 

 

1,184

 

Tangible common equity

$

352,328

 

 

$

324,049

 

 

$

320,647

 

 

$

320,542

 

 

$

308,700

 

Common shares issued at period end

 

14,853,487

 

 

 

15,218,301

 

 

 

15,198,986

 

 

 

15,444,434

 

 

 

15,440,334

 

Diluted common shares outstanding at period end

 

14,945,282

 

 

 

15,333,977

 

 

 

15,297,319

 

 

 

15,719,810

 

 

 

15,647,456

 

Book value per common share

$

27.08

 

 

$

31.53

 

 

$

31.41

 

 

$

30.95

 

 

$

30.25

 

Tangible book value per common share

$

23.72

 

 

$

21.29

 

 

$

21.10

 

 

$

20.75

 

 

$

19.99

 

Tangible book value per diluted common share

$

23.57

 

 

$

21.13

 

 

$

20.96

 

 

$

20.39

 

 

$

19.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

$

3,865,571

 

 

$

4,205,269

 

 

$

3,943,832

 

 

$

3,949,578

 

 

$

4,074,663

 

Less: goodwill

 

31,601

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

Less: core deposit intangibles, net

 

17,101

 

 

 

18,131

 

 

 

19,105

 

 

 

19,907

 

 

 

20,727

 

Less: mortgage servicing asset, net

 

1

 

 

 

2

 

 

 

4

 

 

 

5

 

 

 

7

 

Less: naming rights, net

 

1,141

 

 

 

1,152

 

 

 

1,163

 

 

 

1,174

 

 

 

1,184

 

Tangible assets

$

3,815,727

 

 

$

4,049,552

 

 

$

3,787,128

 

 

$

3,792,060

 

 

$

3,916,313

 

Total stockholders' equity to total assets

 

10.40

%

 

 

11.41

%

 

 

12.10

%

 

 

12.10

%

 

 

11.46

%

Tangible common equity to tangible assets

 

9.23

%

 

 

8.00

%

 

 

8.47

%

 

 

8.45

%

 

 

7.88

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total average stockholders' equity

$

483,088

 

 

$

483,605

 

 

$

482,567

 

 

$

473,562

 

 

$

463,252

 

Less: average intangible assets

 

154,049

 

 

 

156,194

 

 

 

157,097

 

 

 

157,993

 

 

 

158,760

 

Average tangible common equity

$

329,039

 

 

$

327,411

 

 

$

325,470

 

 

$

315,569

 

 

$

304,492

 

Net income (loss) allocable to common stockholders

$

(90,405

)

 

$

1,689

 

 

$

1,258

 

 

$

10,014

 

 

$

10,406

 

Add: goodwill impairment

$

104,831

 

 

$

 

 

$

 

 

$

 

 

$

 

Less: tax effect of goodwill impairment

$

5,305

 

 

$

 

 

$

 

 

$

 

 

$

 

Adjusted net income (loss) plus goodwill impairment

$

9,121

 

 

$

1,689

 

 

$

1,258

 

 

$

10,014

 

 

$

10,406

 

Amortization of intangible assets

 

1,043

 

 

 

986

 

 

 

814

 

 

 

833

 

 

 

797

 

Less: tax effect of intangible assets amortization

 

234

 

 

 

207

 

 

 

171

 

 

 

175

 

 

 

167

 

Adjusted net income (loss) allocable to common stockholders

$

9,930

 

 

$

2,468

 

 

$

1,901

 

 

$

10,672

 

 

$

11,036

 

Return on total average stockholders' equity (ROAE) annualized

 

(74.45

)%

 

 

1.40

%

 

 

1.05

%

 

 

8.39

%

 

 

8.91

%

Return on average tangible common equity (ROATCE) annualized

 

(108.31

)%

 

 

3.03

%

 

 

2.35

%

 

 

13.42

%

 

 

14.38

%

Adjusted return on average tangible common equity

 

12.01

%

 

 

3.03

%

 

 

2.35

%

 

 

13.42

%

 

 

14.38

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

$

130,835

 

 

$

23,937

 

 

$

25,758

 

 

$

24,846

 

 

$

24,223

 

Less: goodwill impairment

 

104,831

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense, excluding goodwill impairment

$

26,004

 

 

$

23,937

 

 

$

25,758

 

 

$

24,846

 

 

$

24,223

 

Net interest income

$

32,107

 

 

$

32,891

 

 

$

32,095

 

 

$

32,405

 

 

$

31,526

 

Non-interest income

 

6,485

 

 

 

5,732

 

 

 

5,306

 

 

 

6,641

 

 

 

6,572

 

Less: net gains (losses) from securities transactions

 

 

 

 

4

 

 

 

8

 

 

 

(3

)

 

 

4

 

Non-interest income, excluding gains (losses) from securities transactions

$

6,485

 

 

$

5,728

 

 

$

5,298

 

 

$

6,644

 

 

$

6,568

 

Net interest income plus non-interest income, excluding net gains (losses) from securities transactions

$

38,592

 

 

$

38,619

 

 

$

37,393

 

 

$

39,049

 

 

$

38,094

 

Non-interest expense to net interest income plus non-interest income

 

339.02

%

 

 

61.98

%

 

 

68.87

%

 

 

63.63

%

 

 

63.58

%

Efficiency ratio

 

67.38

%

 

 

61.98

%

 

 

68.88

%

 

 

63.63

%

 

 

63.59

%

Net income (loss) allocable to common stockholders

$

(90,405

)

 

$

1,689

 

 

$

1,258

 

 

$

10,014

 

 

$

10,406

 

Add: income tax provision

 

(2,653

)

 

 

497

 

 

 

445

 

 

 

3,131

 

 

 

2,790

 

Add: provision for loan losses

 

815

 

 

 

12,500

 

 

 

9,940

 

 

 

1,055

 

 

 

679

 

Add: goodwill impairment

 

104,831

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

$

12,588

 

 

$

14,686

 

 

$

11,643

 

 

$

14,200

 

 

$

13,875

 

Total average assets

$

4,041,187

 

 

$

4,159,336

 

 

$

3,888,205

 

 

$

3,932,909

 

 

$

4,030,606

 

Total average stockholders' equity

$

483,088

 

 

$

483,605

 

 

$

482,567

 

 

$

473,562

 

 

$

463,252

 

Return on average assets (ROAA) annualized

 

(8.90

)%

 

 

0.16

%

 

 

0.13

%

 

 

1.01

%

 

 

1.02

%

Adjusted return on average assets

 

1.24

%

 

 

1.42

%

 

 

1.20

%

 

 

1.43

%

 

 

1.37

%

Adjusted return on average equity

 

10.37

%

 

 

12.21

%

 

 

9.70

%

 

 

11.90

%

 

 

11.88

%