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First Mid Bancshares, Inc. Announces First Quarter 2022 Results
Source: Nasdaq GlobeNewswire / 27 Apr 2022 16:30:01 America/New_York
MATTOON, Ill., April 27, 2022 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended March 31, 2022.
Highlights
- Net income of $16.6 million, or $0.86 diluted EPS
- Adjusted net income (non-GAAP) of $18.7 million, or $0.96 diluted EPS
- Completed the acquisition of Delta Bancshares Company (“Delta”) and its subsidiary Jefferson Bank and Trust (“Jefferson”) on February 14, 2022
- Strong quarter of wealth management and insurance revenues delivering on our unique diversification
- Board of Directors declared regular quarterly dividend of $0.22 per share
“We are off to a great start in 2022 with strong earnings across our diversified revenue streams,” said Joe Dively, Chairman and Chief Executive Officer. “The quarter was highlighted by the closing of the Delta acquisition, which brings additional depth and an expanded retail presence to our St. Louis Metro footprint. The reception from Jefferson’s customers has been positive and our experienced integration team is preparing for a mid-June bank system conversion.”
“Our wealth management group had a great quarter led by higher farm services revenue with increasing commodity prices and farmland sales. Assets under management for the group increased to $5.4 billion. Our insurance group also had a strong start to the year, and combined with wealth management, these two business units recognized year-over-year revenue growth of 21.3%. In what has historically been a seasonally slow quarter for us, loan growth was 1.1%, normalized for acquired and Paycheck Protection Program (“PPP”) loans. I am pleased with the first quarter momentum and expect that to carry forward throughout the year,” Dively concluded.
Net Interest Income
Net interest income for the first quarter of 2022 increased by $0.8 million, or 1.8% compared to the fourth quarter of 2021. Interest income increased by $0.8 million and interest expense was flat from the previous quarter. The increase in interest income was primarily driven by a combination of organic growth and acquisitions. Accretion income increased by $0.4 million in the quarter to $1.1 million and ended the quarter with a remaining discount of $9.3 million. Interest expense was flat with slightly higher interest on deposits offset by lower interest on FHLB borrowings.
In comparison to the first quarter of 2021, net interest income increased $6.8 million, or 18.4%. The increase was primarily the result of organic loan growth and the impact of acquisitions. Total interest expense was lower by $0.4 million compared to the same quarter last year, despite the Delta acquisition and the first quarter 2021 acquisition of Providence Bank (“Providence”).
Net Interest Margin
Net interest margin, on a tax equivalent basis, was 3.07% for the first quarter of 2022, which was 4 basis points lower compared to the prior quarter. Earning asset yields declined by 4 basis points, with a decline in loan yields partially offset by higher rates on securities. Average cost of funds was flat at 26 basis points.
In comparison to the first quarter of last year, the net interest margin decreased 9 basis points, with earning asset yields down 19 basis points and average cost of funds lower by 10 basis points. The first quarter of 2021 included 19 basis points of PPP fee income.
Loan Portfolio
Total loans ended the quarter at $4.45 billion, representing an increase of $459.0 million compared to the prior quarter. The increase was primarily driven by the addition of Jefferson, which added $426.4 million. PPP loans declined by $11.0 million and ended the period with $5.8 million outstanding, including $0.8 million from Jefferson. Excluding PPP loans and the addition of Jefferson, loans increased $43.6 million, or 1.1%. Growth was primarily within our CRE and C&I sectors, partially offset by the seasonal paydowns in Ag operating lines and elevated commercial payoffs. The pipeline for loan growth continues to look solid across our footprint.
Asset Quality
The Company has always prided itself on a strong credit culture and the asset quality metrics for March 31, 2022 reflect those efforts. The allowance for credit losses at the end of the quarter was 1.31% of total loans. Also at quarter end, the ratio of non-performing loans to total loans was 0.50%, and the allowance for credit losses to non-performing loans was 260.3%. The ratio of nonperforming assets to total assets was 0.41% at quarter end. Nonperforming loans and nonperforming assets increased slightly in the period with the addition of Jefferson. The Company recognized a small amount of net recoveries during the first quarter compared to $1.8 million in net charge-offs during the prior quarter.
Provision expense was recorded in the amount of $3.0 million in the first quarter. The Company recorded $2.0 million for the non-PCD CECL requirement tied to the Jefferson acquisition. In addition to the non-PCD requirement related to the Jefferson acquisition, the Company added $0.9 million in PCD reserve through purchase accounting. In total, the allowance for credit losses increased $3.8 million to $58.5 million in the quarter.
Deposits
Total deposits ended the quarter at $5.49 billion, which represented an increase of $530.8 million from the prior quarter primarily from the addition of Jefferson, which added $558.6 million in deposits at the time the acquisition closed. Excluding Jefferson, total deposits decreased by $27.8 million driven primarily from maturing single-service time deposits. The Company’s average rate on cost of funds was 0.26%, flat compared to last quarter, and down from 0.36% in the first quarter of 2021.
Noninterest Income
Noninterest income for the first quarter of 2022 was $21.1 million compared to $18.1 million in the fourth quarter of 2021. The increase compared to the prior quarter was partially due to the addition of Jefferson. Insurance and wealth management revenues represented 62% of total noninterest income reflecting the diversification of our revenue sources. Wealth management had a strong quarter of farm management fee income on higher commodity prices and farmland sales. Both the wealth management and insurance business are well diversified within their revenue sources and deliver consistent cash flows. Mortgage banking revenues declined by $0.4 million due to the macro conditions with limited housing supply and higher mortgage interest rates. As a percent of noninterest income, mortgage banking was 2.1%.
In comparison to the first quarter of 2021, noninterest income increased $3.3 million, or 18.8%. The year-over-year increase was driven by strong growth in our wealth management and insurance businesses and the addition of Jefferson, partially offset by a $1.0 million decline in mortgage banking revenue.
Noninterest Expenses
Noninterest expense for the first quarter of 2022 totaled $40.4 million compared to $36.4 million in the fourth quarter. The increase was primarily driven by the addition of Jefferson, the producer incentive compensation tied to the strong business unit revenue growth, and overall inflationary pressures. The quarter included $0.6 million of acquisition related costs.
In comparison to the first quarter of 2021, noninterest expenses increased $2.8 million. The increase was primarily due to the addition of Jefferson and Providence, incentive compensation on business unit revenue growth, and overall inflationary pressures.
The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the first quarter 2022 was 58.6% compared to 55.8% in the prior quarter and 61.2% for the same period last year.
Capital Levels and Dividend
The Company’s capital levels remained strong and comfortably above the “well capitalized” levels. Capital levels ended the period as follows:
Total capital to risk-weighted assets 15.41% Tier 1 capital to risk-weighted assets 12.42% Common equity tier 1 capital to risk-weighted assets 12.03% Leverage ratio 9.28% The Company’s Board of Directors approved a regular quarterly dividend in the amount of $0.22 payable on June 1, 2022 for shareholders of record on May 18, 2022.
While regulatory capital levels were strong, the Company’s tangible book value per common share declined in the period by approximately 11.6%. A portion of this decline was anticipated pursuant to the Jefferson acquisition where we announced an expected 3.0% dilution to tangible book value per common share at closing. However, the rapid move in interest rates during the quarter was the primary driver for the decline as the unrealized loss position on the investment portfolio increased to $74.0 million.
About First Mid: First Mid Bancshares, Inc. (“First Mid”) is the parent company of First Mid Bank & Trust, N.A., Jefferson Bank & Trust, First Mid Insurance Group, Inc., and First Mid Wealth Management Co. First Mid is a $6.6 billion community-focused organization that provides a full-suite of financial services including banking, wealth management, brokerage, Ag services, and insurance through a sizeable network of locations throughout Illinois, Missouri, and Texas, and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in providing solutions and services to the customers and communities and has done so over the last 157 years. More information about the Company is available on our website at www.firstmid.com.
Non-GAAP Measures: In addition to reports presented in accordance with generally accepted accounting principles (“GAAP”), this release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance. Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported. These non-GAAP financial measures are detailed as supplemental tables and include “Adjusted Net Income,” “Adjusted Diluted EPS,” “Efficiency Ratio,” “Net Interest Margin, tax equivalent,” and “Tangible Book Value per Common Share”. While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP. These non-GAAP financial measures may also differ from the similar measures presented by other companies.
Forward Looking Statements
This document may contain certain forward-looking statements about First Mid, such as discussions of First Mid’s pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses, and planned schedules. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid, are identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, the risk that integration of the operations of Delta with First Mid will be materially delayed or will be more costly or difficult than expected; changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative and/or regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mid’s loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; accounting principles, policies and guidelines; the severity, magnitude and duration of the COVID-19 pandemic, the direct and indirect impact of such pandemic, including responses to the pandemic by the U.S., state and local governments, customers' businesses, the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mid’s liquidity and capital positions, impair the ability of First Mid’s borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses, and the impact of the COVID-19 pandemic on First Mid’s financial results, including possible lost revenue and increased expenses (including cost of capital), as well as possible goodwill impairment charges. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mid’s financial results, are included in First Mid’s filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.Investor Contact:
Aaron Holt
VP, Shareholder Relations
217-258-0463
aholt@firstmid.comMatt Smith
Chief Financial Officer
217-258-1528
msmith@firstmid.com– Tables Follow –
FIRST MID BANCSHARES, INC. Condensed Consolidated Balance Sheets (In thousands, unaudited) As of March 31, December 31, March 31, 2022 2021 2021 Assets Cash and cash equivalents $ 223,980 $ 168,602 $ 410,017 Investment securities 1,472,277 1,431,299 1,099,532 Loans (including loans held for sale) 4,454,561 3,995,523 3,943,099 Less allowance for credit losses (58,474 ) (54,655 ) (55,418 ) Net loans 4,396,087 3,940,868 3,887,681 Premises and equipment, net 89,319 81,484 86,654 Goodwill and intangibles, net 174,499 141,376 138,606 Bank owned life insurance 149,041 132,375 124,925 Other assets 126,803 90,578 89,855 Total assets $ 6,632,006 $ 5,986,582 $ 5,837,270 Liabilities and Stockholders' Equity Deposits: Non-interest bearing $ 1,373,881 $ 1,246,673 $ 1,185,181 Interest bearing 4,113,424 3,709,813 3,552,512 Total deposits 5,487,305 4,956,486 4,737,693 Repurchase agreement with customers 187,326 146,268 212,503 Other borrowings 126,396 86,446 116,861 Junior subordinated debentures 19,237 19,195 19,069 Subordinated debt 94,438 94,400 94,289 Other liabilities 50,919 49,893 54,971 Total liabilities 5,965,621 5,352,688 5,235,386 Total stockholders' equity 666,385 633,894 601,884 Total liabilities and stockholders' equity $ 6,632,006 $ 5,986,582 $ 5,837,270 FIRST MID BANCSHARES, INC. Condensed Consolidated Statements of Income (In thousands, except per share data, unaudited) Three Months Ended March 31, 2022 2021 Interest income: Interest and fees on loans $ 39,908 $ 35,886 Interest on investment securities 7,170 4,842 Interest on federal funds sold & other deposits 67 88 Total interest income 47,145 40,816 Interest expense: Interest on deposits 2,148 2,484 Interest on securities sold under agreements to repurchase 67 70 Interest on other borrowings 276 374 Interest on jr. subordinated debentures 146 140 Interest on subordinated debt 986 984 Total interest expense 3,623 4,052 Net interest income 43,522 36,764 Provision for loan losses 2,952 12,136 Net interest income after provision for loan 40,570 24,628 Non-interest income: Wealth management revenues 5,975 4,926 Insurance commissions 7,104 5,857 Service charges 2,056 1,364 Securities gains, net 0 4 Mortgage banking revenues 444 1,409 ATM/debit card revenue 2,898 2,699 Other 2,611 1,490 Total non-interest income 21,088 17,749 Non-interest expense: Salaries and employee benefits 24,302 23,487 Net occupancy and equipment expense 6,155 4,970 Net other real estate owned (income) expense (33 ) 78 FDIC insurance 426 452 Amortization of intangible assets 1,522 1,220 Stationary and supplies 311 316 Legal and professional expense 1,734 1,402 Marketing and donations 873 502 Other 5,098 5,173 Total non-interest expense 40,388 37,600 Income before income taxes 21,270 4,777 Income taxes 4,654 668 Net income $ 16,616 $ 4,109 Per Share Information Basic earnings per common share $ 0.86 $ 0.24 Diluted earnings per common share 0.86 0.24 Weighted average shares outstanding 19,295,860 17,299,927 Diluted weighted average shares outstanding 19,358,457 17,352,947 FIRST MID BANCSHARES, INC. Condensed Consolidated Statements of Income (In thousands, except per share data, unaudited) For the Quarter Ended March 31, December 31, September 30, June 30, March 31, 2022 2021 2021 2021 2021 Interest income: Interest and fees on loans $ 39,908 $ 39,711 $ 43,292 $ 40,795 $ 35,886 Interest on investment securities 7,170 6,500 5,835 5,739 4,842 Interest on federal funds sold & other deposits 67 88 136 101 88 Total interest income 47,145 46,299 49,263 46,635 40,816 Interest expense: Interest on deposits 2,148 2,057 2,234 2,262 2,484 Interest on securities sold under agreements to repurchase 67 52 52 57 70 Interest on other borrowings 276 336 359 445 374 Interest on jr. subordinated debentures 146 125 137 139 140 Interest on subordinated debt 986 985 985 985 984 Total interest expense 3,623 3,555 3,767 3,888 4,052 Net interest income 43,522 42,744 45,496 42,747 36,764 Provision for loan losses 2,952 2,472 1,103 (560 ) 12,136 Net interest income after provision for loan 40,570 40,272 44,393 43,307 24,628 Non-interest income: Wealth management revenues 5,975 6,261 4,204 5,016 4,926 Insurance commissions 7,104 4,150 3,932 4,988 5,857 Service charges 2,056 2,067 1,838 1,539 1,364 Securities gains, net 0 36 11 73 4 Mortgage banking revenues 444 890 1,477 1,691 1,409 ATM/debit card revenue 2,898 3,074 3,060 3,141 2,699 Other 2,611 1,646 1,837 1,836 1,490 Total non-interest income 21,088 18,124 16,359 18,284 17,749 Non-interest expense: Salaries and employee benefits 24,302 20,424 21,092 24,908 23,487 Net occupancy and equipment expense 6,155 5,712 5,382 5,482 4,970 Net other real estate owned (income) expense (33 ) 315 1,507 1,966 78 FDIC insurance 426 406 268 478 452 Amortization of intangible assets 1,522 1,462 1,414 1,295 1,220 Stationary and supplies 311 311 299 235 316 Legal and professional expense 1,734 1,811 1,878 1,639 1,402 Marketing and donations 873 1,915 679 507 502 Other 5,098 4,038 3,802 9,503 5,173 Total non-interest expense 40,388 36,394 36,321 46,013 37,600 Income before income taxes 21,270 22,002 24,431 15,578 4,777 Income taxes 4,654 5,168 6,105 3,357 668 Net income $ 16,616 $ 16,834 $ 18,326 $ 12,221 $ 4,109 Per Share Information Basic earnings per common share $ 0.86 $ 0.93 $ 1.01 $ 0.68 $ 0.24 Diluted earnings per common share 0.86 0.93 1.01 0.68 0.24 Weighted average shares outstanding 19,295,860 18,086,949 18,083,126 18,067,190 17,299,927 Diluted weighted average shares outstanding 19,358,457 18,135,380 18,136,146 18,120,210 17,352,947 FIRST MID BANCSHARES, INC. Consolidated Financial Highlights and Ratios (Dollars in thousands, except per share data) (Unaudited) As of and for the Quarter Ended March 31, December 31, September 30, June 30, March 31, 2022 2021 2021 2021 2021 Loan Portfolio Construction and land development $ 131,504 $ 145,118 $ 180,061 $ 141,568 $ 165,376 Farm real estate loans 280,993 279,272 278,788 277,362 269,652 1-4 Family residential properties 417,232 400,313 412,565 394,902 412,470 Multifamily residential properties 369,926 298,942 306,911 274,910 297,984 Commercial real estate 1,965,321 1,666,198 1,583,255 1,480,198 1,402,885 Loans secured by real estate 3,164,976 2,789,843 2,761,580 2,568,940 2,548,367 Agricultural operating loans 121,708 151,484 126,534 123,101 121,070 Commercial and industrial loans 935,454 832,008 835,860 864,554 1,017,400 Consumer loans 89,685 78,442 80,064 84,541 91,705 All other loans 142,738 143,746 143,731 155,168 164,557 Total loans 4,454,561 3,995,523 3,947,769 3,796,304 3,943,099 Deposit Portfolio Non-interest bearing demand deposits $ 1,373,881 $ 1,246,673 $ 1,242,950 $ 1,157,009 $ 1,185,181 Interest bearing demand deposits 1,482,556 1,452,765 1,416,361 1,418,717 1,268,882 Savings deposits 685,228 626,523 612,404 598,232 668,098 Money Market 1,280,129 1,068,473 1,075,852 842,771 803,946 Time deposits 665,511 562,052 640,995 722,593 811,586 Total deposits 5,487,305 4,956,486 4,988,562 4,739,322 4,737,693 Asset Quality Non-performing loans $ 22,465 $ 22,036 $ 27,723 $ 30,410 $ 31,984 Non-performing assets 27,269 27,055 33,359 37,648 45,323 Net charge-offs (recoveries) (5 ) 1,800 1,717 261 702 Allowance for credit losses to non-performing loans 260.29 % 248.03 % 194.72 % 179.54 % 173.27 % Allowance for credit losses to total loans outstanding 1.31 % 1.37 %1 1.39 %1 1.50 %1 1.50 %1 Nonperforming loans to total loans 0.50 % 0.55 % 0.70 % 0.80 % 0.81 % Nonperforming assets to total assets 0.41 % 0.45 % 0.55 % 0.65 % 0.78 % Common Share Data Common shares outstanding 20,437,183 18,080,303 18,083,126 18,078,474 18,042,256 Book value per common share $ 32.61 $ 35.06 $ 34.69 $ 34.08 $ 33.36 Tangible book value per common share(2) 24.07 27.24 26.80 26.33 25.68 Market price of stock 38.49 42.79 41.06 40.51 43.93 Key Performance Ratios and Metrics End of period earning assets $ 6,038,542 $ 5,504,517 $ 5,542,199 $ 5,269,882 $ 5,374,848 Average earning assets 5,817,752 5,539,819 5,396,239 5,380,411 4,769,975 Average rate on average earning assets (tax equivalent) 3.33 % 3.37 % 3.67 % 3.52 % 3.52 % Average rate on cost of funds 0.26 % 0.26 % 0.29 % 0.30 % 0.36 % Net interest margin (tax equivalent)(2) 3.07 % 3.11 % 3.38 % 3.22 % 3.16 % Return on average assets 1.05 % 1.12 % 1.25 % 0.84 % 0.32 % Return on average common equity 9.95 % 10.74 % 11.67 % 8.00 % 2.78 % Efficiency ratio (tax equivalent)(2) 58.59 % 55.75 % 52.73 % 59.91 % 61.20 % Full-time equivalent employees 1,050 965 960 960 983 1Excludes Paycheck Protection Program loans. 2Non-GAAP financial measure. Refer to reconciliation to the comparable GAAP measure. FIRST MID BANCSHARES, INC. Net Interest Margin (In thousands, unaudited) For the Quarter Ended March 31, 2022 QTD Average Average Balance Interest Rate INTEREST EARNING ASSETS Interest bearing deposits $ 135,176 $ 55 0.16 % Federal funds sold 3,714 1 0.13 % Certificates of deposits investments 2,238 11 2.04 % Investment Securities: Taxable (total less municipals) 1,111,109 4,905 1.77 % Tax-exempt (Municipals) 382,909 2,867 2.99 % Loans (net of unearned income) 4,182,606 40,076 3.88 % Total interest earning assets 5,817,752 47,915 3.33 % NONEARNING ASSETS Cash and due from banks 114,257 Premises and equipment 83,883 Other nonearning assets 367,966 Allowance for loan losses (58,462 ) Total assets $ 6,325,396 INTEREST BEARING LIABILITIES Demand deposits $ 2,610,573 $ 1,321 0.21 % Savings deposits 658,038 119 0.07 % Time deposits 615,142 708 0.47 % Total interest bearing deposits 3,883,753 2,148 0.22 % Repurchase agreements 173,491 67 0.16 % FHLB advances 115,852 276 0.97 % Federal funds purchased 44 - 0.00 % Subordinated debt 94,413 986 4.24 % Jr. subordinated debentures 19,210 146 3.08 % Total borrowings 403,010 1,475 1.48 % Total interest bearing liabilities 4,286,763 3,623 0.34 % NONINTEREST BEARING LIABILITIES Demand deposits 1,329,554 Average cost of funds 0.26 % Other liabilities 41,345 Stockholders' equity 667,734 Total liabilities & stockholders' equity $ 6,325,396 Net Interest Earnings / Spread $ 44,292 2.99 % Impact of Non-Interest Bearing Funds 0.08 % Tax effected yield on interest earning assets 3.07 % FIRST MID BANCSHARES, INC. Reconciliation of Non-GAAP Financial Measures (In thousands, unaudited) As of and for the Quarter Ended March 31, December 31, September 30, June 30, March 31, 2022 2021 2021 2021 2021 Net interest income as reported $ 43,522 $ 42,744 $ 45,496 $ 42,747 $ 36,764 Net interest income, (tax equivalent) 44,292 43,492 46,165 43,359 37,359 Average earning assets 5,817,752 5,539,819 5,396,239 5,380,411 4,769,975 Net interest margin (tax equivalent) 3.07 % 3.11 % 3.38 % 3.22 % 3.16 % Common stockholder's equity $ 666,385 $ 633,894 $ 627,225 $ 616,066 $ 601,884 Goodwill and intangibles, net 174,499 141,376 142,656 139,995 138,606 Common shares outstanding 20,437 18,080 18,083 18,078 18,042 Tangible Book Value per common share $ 24.07 $ 27.24 $ 26.80 $ 26.33 $ 25.68 FIRST MID BANCSHARES, INC. Reconciliation of Non-GAAP Financial Measures (In thousands, except per share data, unaudited) As of and for the Quarter Ended March 31, December 31, September 30, June 30, March 31, 2022 2021 2021 2021 2021 Adjusted earnings Reconciliation Net Income - GAAP $ 16,616 $ 16,834 $ 18,326 $ 12,221 $ 4,109 Adjustments (post-tax):(1) Acquisition ACL on non-PCD assets in provision expense 1,580 - - - 9,072 Branch optimization costs - - 999 960 - Integration and acquisition expenses 469 225 348 4,634 2,036 Total non-recurring adjustments (non-GAAP) $ 2,049 $ 225 $ 1,347 $ 5,595 $ 11,108 Adjusted earnings - non-GAAP $ 18,665 $ 17,059 $ 19,673 $ 17,816 $ 15,217 Adjusted diluted earnings per share (non-GAAP) $ 0.96 $ 0.94 $ 1.08 $ 0.98 $ 0.88 Efficiency Ratio Reconciliation Noninterest expense - GAAP $ 40,388 $ 36,394 $ 36,321 $ 46,013 $ 37,600 Other real estate owned property income (expense) 33 (315 ) (242 ) (751 ) (78 ) Amortization of intangibles (1,522 ) (1,462 ) (1,414 ) (1,295 ) (1,220 ) Branch optimization costs - - (1,265 ) (1,215 ) - integration and acquisition expenses (594 ) (285 ) (440 ) (5,866 ) (2,578 ) Adjusted noninterest expense (non-GAAP) $ 38,305 $ 34,332 $ 32,960 $ 36,886 $ 33,724 Net interest income -GAAP $ 43,522 $ 42,744 $ 45,496 $ 42,747 $ 36,764 Effect of tax-exempt income(1) 770 748 669 612 595 Adjusted net interest income (non-GAAP) $ 44,292 $ 43,492 $ 46,165 $ 43,359 $ 37,359 Noninterest income - GAAP $ 21,088 $ 18,124 $ 16,359 $ 18,284 $ 17,749 Gain on sales of investment securities, net 0 (36 ) (11 ) (73 ) (4 ) Adjusted noninterest income (non-GAAP) $ 21,088 $ 18,088 $ 16,348 $ 18,211 $ 17,745 Adjusted total revenue (non-GAAP) $ 65,380 $ 61,580 $ 62,513 $ 61,570 $ 55,104 Efficiency ratio (non-GAAP) 58.59 % 55.75 % 52.73 % 59.91 % 61.20 % (1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%. 
