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

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

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

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

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

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

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

Notable Items:

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

Equity’s Balance Sheet Highlights:

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

Financial Results for the Quarter Ended March 31, 2021

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

Net Interest Income

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

Provision for Credit Losses

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

Non-Interest Income

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

Non-Interest Expense

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

Asset Quality

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

Regulatory Capital

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

Non-GAAP Financial Measures

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

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

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

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

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

Conference Call and Webcast

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

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

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

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

About Equity Bancshares, Inc.

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

Special Note Concerning Forward-Looking Statements

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

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

Investor Contact:

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

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

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

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

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

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

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

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

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

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

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

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

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

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