First Mid Bancshares : Announces Fourth Quarter and Full Year 2021 Results - Form 8-K

First Mid Bancshares, Inc. Announces Fourth Quarter and Full Year 2021 Results

MATTOON, Ill., Jan. 27, 2022 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the "Company") today announced its financial results for the quarter and full year period ended December 31, 2021.

Highlights

• Net income of $16.8 million, or $0.93 diluted EPS
• Adjusted net income (non-GAAP) of $17.1 million, or $0.94 diluted EPS
• Strong loan growth of 2.3% for the quarter, excluding Paycheck Protection Program ("PPP") loans
• Record quarter of wealth management revenues with assets under management increasing to $5.1 billion
• Received Federal Reserve approval on January 26, 2022 for the pending Delta Bancshares acquisition

"We ended 2021 on a high note with strong loan growth, record wealth management revenues and solid earnings," said Joe Dively, Chairman and Chief Executive Officer. "The economic conditions in our markets are improving and our strategic emphasis on diversifying our geographic footprint is providing better opportunities for loan growth. The pipeline continues to be strong through the early part of the first quarter. The growth in our noninterest income was led by record performance in the farm management group and proves the importance of the diversification in our business units and revenue streams."

"With respect to the pending acquisition of Delta Bancshares Company ("Delta") and its subsidiary Jefferson Bank and Trust ("Jefferson"), which we announced on July 29, 2021, we received Federal Reserve approval yesterday and anticipate closing the acquisition in mid-February. We remain excited about the combination with Jefferson and its enhancement and expansion to our St. Louis metro presence. We have continued to work together with the Jefferson employees in preparing for a smooth transition and we are planning for a June bank merger and conversion," Dively concluded.

Net Interest Income

Net interest income for the fourth quarter of 2021 decreased by $2.8 million, or 6.0% compared to the third quarter due to declines of $3.4 million and $0.9 million in PPP fee and accretion income, respectively. Excluding these, net interest income increased $1.5 million on a combination of loan growth, higher securities earnings and lower interest expense. For the current quarter, PPP fee income was $1.7 million and accretion income was $0.7 million. As of December 31, 2021, the Company had $0.3 million of deferred fee income on PPP loans remaining.

In comparison to the fourth quarter of 2020, net interest income increased $9.3 million, or 27.9%. The increase was primarily the result of the acquisition of LINCO Bancshares, Inc. and its subsidiary Providence Bank ("Providence") in the first quarter of 2021, higher income from PPP, and the active management to lower funding costs.

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.11% for the fourth quarter of 2021, which was a decrease of 27 basis points compared to the prior quarter with the average earning asset yield down 30 basis points, partially offset by 3 basis points of lower funding costs. Excluding PPP fee income and accretion income, the net interest margin increased by 5 basis points in the quarter.

In comparison to the fourth quarter of last year, the net interest margin declined 6 basis points with earning asset yields down by 21 basis points and the average cost of funds lower by 15 basis points. Excluding PPP fee income and accretion income, the net interest margin increased by 10 basis points compared to the fourth quarter of last year.

Loan Portfolio

Total loans ended the quarter at $4.0 billion, representing an increase of $47.8 million compared to the prior quarter. Excluding the forgiveness of $43.3 million in PPP loans during the quarter, loans increased $91.1 million, or 2.3%. The Company had $16.0 million in PPP loans remaining at the end of the quarter. Increases in loans were primarily in commercial real estate and agricultural operating lines. Overall loan growth in the quarter was dispersed by market and in industry, and the pipeline remains healthy for the first quarter of 2022.

Asset Quality

The Company's asset quality measures continued to be in a very strong position. At quarter end, the ratio of non-performing loans to total loans was 0.55%, and the allowance for credit losses ("ACL") to non-performing loans was 248%. Nonperforming loans and nonperforming assets decreased in the quarter. The ratio of nonperforming assets to total assets was 0.45% at quarter end. Net charge-offs were $1.8 million during the quarter. Special mention loans decreased $10.0 million to $66.2 million and substandard loans decreased $7.2 million to $43.9 million.

Provision expense for the quarter was $2.5 million compared to $0.6 million in the same quarter last year. As of December 31, 2021, the ACL, excluding $16.0 million of PPP loans, was 1.37% of total loans.

Deposits

Total deposits ended the quarter at $4.96 billion, which represented a decrease of $32.1 million from the prior quarter. The decline was primarily in time deposits where the Company continues to let non-strategic CD's mature without replacement. In addition, the Company had $26.2 million of FHLB borrowings mature and were not replaced in the quarter. The Company's average rate on cost of funds was 0.26% for the quarter compared to 0.29% in the prior quarter and 0.41% in the fourth quarter of 2020.

Noninterest Income

Noninterest income for the fourth quarter of 2021 was $18.1 million compared to $16.4 million in the third quarter of 2021. The increase was primarily due to a record quarter of wealth management revenues led by the farm management group with higher commodity prices and farmland sales. The increase was partially offset by lower mortgage banking revenues.

In comparison to the fourth quarter of last year, noninterest income increased $2.6 million, or 16.6%. Combined, insurance and wealth management business lines increased 19.5% over the same period last year, led by record wealth management revenues and partially due to the previously announced acquisitions within the brokerage and insurance lines of business. The other fee income services increased 12.8% compared to the fourth quarter of last year, partially due to the addition of Providence.

Noninterest Expenses

Noninterest expense for the fourth quarter totaled $36.4 million compared to $36.3 million in the third quarter. The current quarter included $0.3 million of acquisition and integration related costs. The prior quarter included $0.4 million in acquisition and integration related costs and $1.3 million in branch optimization costs.

In comparison to the fourth quarter of 2020, noninterest expenses increased $6.1 million. The increase was primarily due to the addition of Providence, and growth in both the insurance and wealth management businesses.

The Company's efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the fourth quarter 2021 was 55.8% compared to 52.7% in the prior quarter and 58.3% for the same period last year.

Regulatory 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	15.79%
Tier 1 capital to risk-weighted assets	12.51%
Common equity tier 1 capital to risk-weighted assets	12.06%
Leverage ratio	9.05%

The Company's Board of Directors approved its next quarterly dividend in the amount of $0.22 payable on March 1, 2022 for shareholders of record on February 10, 2022.

About First Mid: First Mid Bancshares, Inc. ("First Mid") is the parent company of First Mid Bank & Trust, N.A., First Mid Insurance Group, Inc., and First Mid Wealth Management Co. First Mid is a $6.0 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 156 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 and Delta Bancshares Company ("Delta"), such as discussions of First Mid's and Delta'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 and Delta, 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 possibility that any of the anticipated benefits of the proposed transactions between First Mid and Delta will not be realized or will not be realized within the expected time period; 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; the inability to complete the proposed transactions due to the failure to satisfy conditions to completion of the proposed transactions, including failure to obtain the required regulatory, shareholder and other approvals; the failure of the proposed transactions to close for any other reason; the effect of the announcement of the proposed transactions on customer relationships and operating results; the possibility that the proposed transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events; changes in interest rates; general economic conditions and those in the market areas of First Mid and Delta; 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 and Delta'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 and Delta; 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 and Delta's liquidity and capital positions, impair the ability of First Mid's and Delta'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 and Delta'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
[e-mail]

Matt Smith
Chief Financial Officer
217-258-1528
[e-mail]

FIRST MID BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
			As of
			December 31,		September 30,		December 31,
				2021				2021				2020
Assets
Cash and cash equivalents		$	168,602			$	345,206			$	417,281
Investment securities			1,431,299				1,357,035				887,169
Loans (including loans held for sale)		3,995,523				3,947,769				3,138,419
Less allowance for credit losses			(54,655	)			(53,983	)			(41,910	)
Net loans				3,940,868				3,893,786				3,096,509
Premises and equipment, net			81,484				81,823				58,206
Goodwill and intangibles, net			141,376				142,656				128,120
Bank owned life insurance			132,375				131,547				68,955
Other assets				90,578				91,306				70,108
Total assets			$	5,986,582			$	6,043,359			$	4,726,348
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing		$	1,246,673			$	1,242,950			$	936,926
Interest bearing				3,709,813				3,745,612				2,755,858
Total deposits				4,956,486				4,988,562				3,692,784
Repurchase agreement with customers		146,268				149,891				206,937
Other borrowings			86,446				112,641				93,969
Junior subordinated debentures		19,195				19,153				19,027
Subordinated debt			94,400				94,363				94,253
Other liabilities				49,893				51,524				51,150
Total liabilities				5,352,688				5,416,134				4,158,120
Total stockholders' equity			633,894				627,225				568,228
Total liabilities and stockholders' equity	$	5,986,582			$	6,043,359			$	4,726,348

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
			Three Months Ended			Twelve Months Ended
			December 31,			December 31,
				2021			2020					2021			2020
Interest income:
Interest and fees on loans		$	39,711		$	33,254				$	159,684		$	126,814
Interest on investment securities			6,500			4,226					22,916			16,966
Interest on federal funds sold & other deposits		88			90					413			361
Total interest income				46,299			37,570					183,013			144,141
Interest expense:
Interest on deposits				2,057			2,617					9,037			12,751
Interest on securities sold under agreements to repurchase				52			68					231			488
Interest on other borrowings			336			371					1,514			1,877
Interest on jr. subordinated debentures			125			143					541			682
Interest on subordinated debt			985			931					3,939			931
Total interest expense				3,555			4,130					15,262			16,729
Net interest income				42,744			33,440					167,751			127,412
Provision for loan losses			2,472			603					15,151			16,103
Net interest income after provision for loan		40,272			32,837					152,600			111,309
Non-interest income:
Wealth management revenues			6,261			5,232					20,407			16,153
Insurance commissions				4,150			3,477					18,927			17,477
Service charges				2,067			1,527					6,808			5,862
Securities gains, net				36			193					124			1,106
Mortgage banking revenues			890			1,870					4,718			5,075
ATM/debit card revenue			3,074			2,369					11,974			8,962
Other				1,646			879					6,809			4,885
Total non-interest income			18,124			15,547					69,767			59,520
Non-interest expense:
Salaries and employee benefits			20,424			19,151					89,660			66,452
Net occupancy and equipment expense			5,712			3,962					21,546			16,708
Net other real estate owned (income) expense		315			(20	)				3,866			42
FDIC insurance				406			458					1,604			1,309
Amortization of intangible assets			1,462			1,200					5,391			5,062
Stationary and supplies				311			275					1,161			1,080
Legal and professional expense			1,811			1,220					6,730			5,427
Marketing and donations			1,915			434					3,603			1,616
Other				4,038			3,651					22,018			13,391
Total non-interest expense			36,394			30,331					155,579			111,087
Income before income taxes			22,002			18,053					66,788			59,742
Income taxes				5,168			4,484					15,298			14,472
Net income			$	16,834		$	13,569				$	51,490		$	45,270
Per Share Information
Basic earnings per common share		$	0.93		$	0.81				$	2.88		$	2.71
Diluted earnings per common share			0.93			0.81					2.87			2.70
Weighted average shares outstanding			18,086,949			16,735,926					17,886,998			16,716,880
Diluted weighted average shares outstanding		18,135,380			16,779,129					17,939,007			16,762,856

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
					For the Quarter Ended
					December 31,		September 30,		June 30,		March 31,		December 31,
							2021			2021			2021				2021			2020
Interest income:
Interest and fees on loans					$	39,711		$	43,292		$	40,795			$	35,886		$	33,254
Interest on investment securities						6,500			5,835			5,739				4,842			4,226
Interest on federal funds sold & other deposits					88			136			101				88			90
Total interest income							46,299			49,263			46,635				40,816			37,570
Interest expense:
Interest on deposits							2,057			2,234			2,262				2,484			2,617
Interest on securities sold under agreements to repurchase				52			52			57				70			68
Interest on other borrowings						336			359			445				374			371
Interest on jr. subordinated debentures						125			137			139				140			143
Interest on subordinated debt						985			985			985				984			931
Total interest expense							3,555			3,767			3,888				4,052			4,130
Net interest income							42,744			45,496			42,747				36,764			33,440
Provision for loan losses						2,472			1,103			(560	)			12,136			603
Net interest income after provision for loan					40,272			44,393			43,307				24,628			32,837
Non-interest income:
Wealth management revenues						6,261			4,204			5,016				4,926			5,232
Insurance commissions							4,150			3,932			4,988				5,857			3,477
Service charges							2,067			1,838			1,539				1,364			1,527
Securities gains, net							36			11			73				4			193
Mortgage banking revenues						890			1,477			1,691				1,409			1,870
ATM/debit card revenue						3,074			3,060			3,141				2,699			2,369
Other							1,646			1,837			1,836				1,490			879
Total non-interest income						18,124			16,359			18,284				17,749			15,547
Non-interest expense:
Salaries and employee benefits						20,424			21,092			24,908				23,487			19,151
Net occupancy and equipment expense						5,712			5,382			5,482				4,970			3,962
Net other real estate owned (income) expense					315			1,507			1,966				78			(20	)
FDIC insurance							406			268			478				452			458
Amortization of intangible assets						1,462			1,414			1,295				1,220			1,200
Stationary and supplies							311			299			235				316			275
Legal and professional expense						1,811			1,878			1,639				1,402			1,220
Marketing and donations						1,915			679			507				502			434
Other							4,038			3,802			9,503				5,173			3,651
Total non-interest expense						36,394			36,321			46,013				37,600			30,331
Income before income taxes						22,002			24,431			15,578				4,777			18,053
Income taxes							5,168			6,105			3,357				668			4,484
Net income						$	16,834		$	18,326		$	12,221			$	4,109		$	13,569
Per Share Information
Basic earnings per common share					$	0.93		$	1.01		$	0.68			$	0.24		$	0.81
Diluted earnings per common share						0.93			1.01			0.68				0.24			0.81
Weighted average shares outstanding						18,086,949			18,083,126			18,067,190				17,299,927			16,735,926
Diluted weighted average shares outstanding					18,135,380			18,136,146			18,120,210				17,352,947			16,779,129

FIRST MID BANCSHARES, INC.
Consolidated Financial Highlights and Ratios
(Dollars in thousands, except per share data)
(Unaudited)
			As of and for the Quarter Ended
			December 31,		September 30,	June 30,		March 31,		December 31,
				2021				2021				2021				2021				2020
Loan Portfolio
Construction and land development		$	145,118			$	180,061			$	141,568			$	165,376			$	122,479
Farm real estate loans			279,272				278,788				277,362				269,652				254,341
1-4 Family residential properties			400,313				412,565				394,902				412,470				325,762
Multifamily residential properties			298,942				306,911				274,910				297,984				189,632
Commercial real estate			1,666,198				1,583,255				1,480,198				1,402,885				1,174,300
Loans secured by real estate			2,789,843				2,761,580				2,568,940				2,548,367				2,066,514
Agricultural operating loans			151,484				126,534				123,101				121,070				137,352
Commercial and industrial loans			832,008				835,860				864,554				1,017,400				738,313
Consumer loans				78,442				80,064				84,541				91,705				78,002
All other loans				143,746				143,731				155,168				164,557				118,238
Total loans				3,995,523				3,947,769				3,796,304				3,943,099				3,138,419
Deposit Portfolio
Non-interest bearing demand deposits		$	1,246,673			$	1,242,950			$	1,157,009			$	1,185,181			$	936,926
Interest bearing demand deposits			1,452,765				1,416,361				1,418,717				1,268,882				1,031,183
Savings deposits				626,523				612,404				598,232				668,098				499,427
Money Market				1,068,473				1,075,852				842,771				803,946				748,179
Time deposits				562,052				640,995				722,593				811,586				477,069
Total deposits				4,956,486				4,988,562				4,739,322				4,737,693				3,692,784
Asset Quality
Non-performing loans		$	22,036			$	27,723			$	30,410			$	31,984			$	28,123
Non-performing assets			27,055				33,359				37,648				45,323				30,616
Net charge-offs				1,800				1,717				261				702				608
Allowance for credit losses to non-performing loans		248.03	%			194.72	%			179.54	%			173.27	%			149.02	%
Allowance for credit losses to total loans outstanding	1.37%1		1.39%1		1.50%1		1.50%1		1.41%1
Nonperforming loans to total loans			0.55	%			0.70	%			0.80	%			0.81	%			0.90	%
Nonperforming assets to total assets			0.45	%			0.55	%			0.65	%			0.78	%			0.65	%
Common Share Data
Common shares outstanding			18,080,303				18,083,126				18,078,474				18,042,256				16,741,208
Book value per common share		$	35.06			$	34.69			$	34.08			$	33.36			$	33.94
Tangible book value per common share (2)		27.24				26.80				26.33				25.68				26.29
Market price of stock			42.79				41.06				40.51				43.93				33.66
Key Performance Ratios and Metrics
End of period earning assets		$	5,504,517			$	5,542,199			$	5,269,882			$	5,374,848			$	4,367,717
Average earning assets			5,539,819				5,396,239				5,380,411				4,769,975				4,238,388
Average rate on average earning assets (tax equivalent)		3.37	%			3.67	%			3.52	%			3.52	%			3.58	%
Average rate on cost of funds			0.26	%			0.29	%			0.30	%			0.36	%			0.41	%
Net interest margin (tax equivalent) (2)			3.11	%			3.38	%			3.22	%			3.16	%			3.17	%
Return on average assets			1.12	%			1.25	%			0.84	%			0.32	%			1.18	%
Return on average common equity			10.74	%			11.67	%			8.00	%			2.78	%			9.66	%
Efficiency ratio (tax equivalent) (2)			55.75	%			52.73	%			59.91	%			61.20	%			58.27	%
Full-time equivalent employees			965				960				960				983				824
1 Excludes Paycheck Protection Program loans.
2 Non-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 December 31, 2021
		QTD Average				Average
		Balance		Interest		Rate
INTEREST EARNING ASSETS
Interest bearing deposits	$	177,018			$	74		0.17	%
Federal funds sold		1,355				-		0.00	%
Certificates of deposits investments		2,591				14		2.14	%
Investment Securities:
Taxable (total less municipals)		1,061,070				4,342		1.64	%
Tax-exempt (Municipals)		366,367				2,732		2.98	%
Loans (net of unearned income)		3,931,418				39,885		4.02	%
Total interest earning assets		5,539,819				47,047		3.37	%
NONEARNING ASSETS
Cash and due from banks		106,944
Premises and equipment		81,650
Other nonearning assets		349,884
Allowance for loan losses		(54,874	)
Total assets	$	6,023,423
INTEREST BEARING LIABILITIES
Demand deposits	$	2,474,758			$	1,168		0.19	%
Savings deposits		618,900				117		0.08	%
Time deposits		598,414				772		0.51	%
Total interest bearing deposits		3,692,072				2,057		0.22	%
Repurchase agreements		159,268				52		0.13	%
FHLB advances		102,590				336		1.30	%
Subordinated debt		94,376				985		4.14	%
Jr. subordinated debentures		19,168				125		2.59	%
Total borrowings		375,402				1,498		1.58	%
Total interest bearing liabilities		4,067,474				3,555		0.35	%
NONINTEREST BEARING LIABILITIES
Demand deposits		1,278,866			Average cost of funds	0.26	%
Other liabilities		50,305
Stockholders' equity		626,778
Total liabilities & stockholders' equity	$	6,023,423
Net Interest Earnings / Spread			$	43,492		3.02	%
Impact of Non-Interest Bearing Funds					0.09	%
Tax effected yield on interest earning assets				3.11	%

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, unaudited)
					As of and for the Quarter Ended
					December 31,		September 30,	June 30,		March 31,		December 31,
						2021				2021				2021				2021				2020
Net interest income as reported			$	42,744			$	45,496			$	42,747			$	36,764			$	33,440
Net interest income, (tax equivalent)			43,492				46,165				43,359				37,359				34,040
Average earning assets				5,539,819				5,396,239				5,380,411				4,769,975				4,238,388
Net interest margin (tax equivalent)			3.11	%			3.38	%			3.22	%			3.16	%			3.17	%
Common stockholder's equity			$	633,894			$	627,225			$	616,066			$	601,884			$	568,228
Goodwill and intangibles, net				141,376				142,656				139,995				138,606				128,120
Common shares outstanding				18,080				18,083				18,078				18,042				16,741
Tangible Book Value per common share		$	27.24			$	26.80			$	26.33			$	25.68			$	26.29

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except per share data, unaudited)
					As of and for the Quarter Ended
					December 31,		September 30,	June 30,		March 31,		December 31,
						2021				2021				2021				2021				2020
Adjusted earnings Reconciliation
Net Income - GAAP				$	16,834			$	18,326			$	12,221			$	4,109			$	13,569
Adjustments (post-tax): (1)
Acquisition ACL on non-PCD assets in provision expense		-				-				-				9,072				-
Branch optimization costs				-				999				960				-				-
Integration and acquisition expenses			225				348				4,634				2,036				292
Total non-recurring adjustments (non-GAAP)	$	225			$	1,347			$	5,595			$	11,108			$	292
Adjusted earnings - non-GAAP			$	17,059			$	19,673			$	17,816			$	15,217			$	13,861
Adjusted diluted earnings per share (non-GAAP)	$	0.94			$	1.08			$	0.98			$	0.88			$	0.83
Efficiency Ratio Reconciliation
Noninterest expense - GAAP			$	36,394			$	36,321			$	46,013			$	37,600			$	30,331
Other real estate owned property income (expense)		(315	)			(242	)			(751	)			(78	)			20
Amortization of intangibles				(1,462	)			(1,414	)			(1,295	)			(1,220	)			(1,200	)
Branch optimization costs				-				(1,265	)			(1,215	)			-				-
integration and acquisition expenses			(285	)			(440	)			(5,866	)			(2,578	)			(369	)
Adjusted noninterest expense (non-GAAP)		$	34,332			$	32,960			$	36,886			$	33,724			$	28,782
Net interest income -GAAP			$	42,744			$	45,496			$	42,747			$	36,764			$	33,440
Effect of tax-exempt income (1)				748				669				612				595				601
Adjusted net interest income (non-GAAP)		$	43,492			$	46,165			$	43,359			$	37,359			$	34,041
Noninterest income - GAAP			$	18,124			$	16,359			$	18,284			$	17,749			$	15,547
Gain on sales of investment securities, net			(36	)			(11	)			(73	)			(4	)			(193	)
Adjusted noninterest income (non-GAAP)		$	18,088			$	16,348			$	18,211			$	17,745			$	15,354
Adjusted total revenue (non-GAAP)		$	61,580			$	62,513			$	61,570			$	55,104			$	49,395
Efficiency ratio (non-GAAP)				55.75	%			52.73	%			59.91	%			61.20	%			58.27	%
(1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%.