EQBK Equity Bancshares Inc

Equity Bancshares, Inc. (NASDAQ: EQBK), (“Equity”, “the Company”, “we,” “us,” “our”), the Wichita-based holding company of Equity Bank, reported net income of $15.2 million and $0.93 earnings per diluted share for the quarter ended September 30, 2022.

"In 2022, our Company has realized meaningful, organic growth while emphasizing return to our stockholders via earnings, share buybacks, and an increasing dividend. Annualized growth within our commercial and commercial real estate loan portfolios of 17.13% is a credit to our sales and operational teams,” said Brad S. Elliott, Chairman and CEO, Equity Bancshares, Inc. “We have been diligent in enhancing our sales process, expanding our marketing geography, and hiring exceptional operators which has and will continue to drive our Company’s success.”

“At the end of the quarter, our classified asset ratio is down more than 50% year-to-date and at an all-time low for our Company,” continued Mr. Elliott. “The committed efforts of our sales and credit teams to source and underwrite strong credits while meeting the financing needs of the communities we serve allows our Company to hold true to its mission as a community bank.”

Notable Items:

• During the third quarter, the Company realized continued loan growth excluding the impact of PPP assets and sold branches bringing annualized loan growth year-to-date to 7.01%.
• During the quarter, the Company realized linked period Net Interest Margin growth of 23 basis points, and Net Interest Income growth of $2.38 million.
• The Company continued to emphasize investor returns through repurchase of 126,900 shares during the quarter, at an average price of $32.51, as well as the expansion of our quarterly dividend program to $0.10 per share. Also during the quarter, the Company’s Board authorized the repurchase of up to 1 million shares and the Company received non-objection from the Federal Reserve Bank of Kansas City related to the repurchase plan.

Financial Results for the Quarter Ended September 30, 2022

Net income allocable to common stockholders was $15.2 million, or $0.93 per diluted share, for the three months ended September 30, 2022, as compared to $15.3 million, or $0.94 per diluted share, for the three months ended June 30, 2022. The decrease for the second quarter of 2022 is primarily driven by income taxes as a true-up of rate was experienced in the second quarter that, as expected, did not repeat. Pre-tax income increased $1.9 million as the Company's net interest income benefitted from increasing interest rates.

Net Interest Income

Net interest income was $41.9 million for the three months ended September 30, 2022, as compared to $39.6 million for the three months ended June 30, 2022, an increase of $2.4 million, or 6.1%. The yield on interest-earning assets increased 44 basis points to 4.18% during the quarter ended September 30, 2022, as compared to 3.74% for the quarter ended June 30, 2022. The cost of interest-bearing deposits increased by 29 basis points during the quarter, moving from 0.28% at June 30, 2022 to 0.57% at September 30, 2022.

Provision for Credit Losses

During the three months ended September 30, 2022, there was a net release of $136 thousand compared to a provision to the allowance for credit losses of $824 thousand in the previous quarter. The minimal release of provision for the quarter is the result of having a relatively similar sized loan portfolio and similar realized loss rates; however, the Company continues to estimate the allowance for credit loss with assumptions that anticipate slowing prepayments rates and continued market disruption caused by elevated inflation, supply chain issues and the impact of monetary policy on consumers and businesses. For the three months ended September 30, 2022, we had net charge-offs of $1.6 million as compared to $176 thousand for the three months ended June 30, 2022.

Non-Interest Income

Total non-interest income was $9.0 million for the three months ended September 30, 2022, as compared to $9.6 million for the three months ended June 30, 2022, or a decrease of 6.9%, quarter over quarter. The $600 thousand decrease was primarily due to a decrease in net gain on acquisition and branch sales of $540 thousand.

Non-Interest Expense

Total non-interest expense for the quarter ended September 30, 2022, was $32.2 million as compared to $31.4 million for the quarter ended June 30, 2022. The $800 thousand change was primarily due to an increase in data processing of $496 thousand and an increase in the write-off of tax investments of $423 thousand for the quarter ended September 30, 2022, compared to the quarter ended June 30, 2022.

Asset Quality

As of September 30, 2022, Equity’s allowance for credit losses to total loans decreased to 1.4% as compared to 1.5% at June 30, 2022. Nonperforming assets were $29.7 million as of September, 2022, or 0.6% of total assets, compared to $37.0 million at June 30, 2022, or 0.7% of total assets. Non-accrual loans were $23.1 million at September 30, 2022, as compared to $18.9 million at June 30, 2022. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $63.1 million, or 11.0% of regulatory capital, down from $72.1 million, or 13.1% of regulatory capital as of June 30, 2022.

During the quarter ended September 30, 2022, non-performing assets decreased $7.3 million due to decreases in other repossessed assets of $8.7 million and other real estate owned of $2.5 million, partially offset by increases in non-accrual loans of $4.3 million.

Regulatory Capital

The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.1%, the total capital to risk-weighted assets was 16.0% and the total leverage ratio was 9.7% at September 30, 2022. At June 30, 2022, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 12.1%, the total capital to risk-weighted assets ratio was 16.0% and the total leverage ratio was 9.1%.

The Company’s subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.1%, a ratio of total capital to risk-weighted assets of 15.4% and a total leverage ratio of 10.5% at September 30, 2022. At June 30, 2022, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 13.9%, the ratio of total capital to risk-weighted assets was 15.1% and the total leverage ratio was 9.9%.

Non-GAAP Financial Measures

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

The efficiency ratio is a common comparable metric used by banks to understand the expense structure relative to 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 and provision for loan losses 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 “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 6 in the following press release tables.

Conference Call and Webcast

Equity’s Chairman and Chief Executive Officer, Brad Elliott, and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss third quarter results on Wednesday, October 19, 2022 at 10 a.m. eastern time or 9 a.m. central time.

A live webcast of the call will be available on the Company’s website at investor.equitybank.com. To access the call by phone, please go to this registration link, and you will be provided with dial in details. Investors, news media, and other participants are encouraged to dial into the conference call ten minutes ahead of the scheduled start time.

A replay of the call and webcast will be available two hours following the close of the call until October 26, 2022, accessible 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, 2022, 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, except as required by law. 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. (913) 583-8004 jhanley@equitybank.com

Unaudited Financial Tables

• Table 1. Consolidated Statements of Income
• Table 2. Quarterly Consolidated Statements of Income
• Table 3. Consolidated Balance Sheets
• Table 4. Selected Financial Highlights
• Table 5. Year-To-Date Net Interest Income Analysis
• Table 6. Quarter-To-Date Net Interest Income Analysis
• Table 7. Quarter-Over-Quarter Net Interest Income Analysis
• Table 8. Non-GAAP Financial Measures

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

		Three months ended September 30,								Nine months ended September 30,
		2022				2021				2022				2021
Interest and dividend income
Loans, including fees		$	41,555			$	37,581			$	114,710			$	102,392
Securities, taxable			5,792				3,920				16,767				11,242
Securities, nontaxable			687				655				2,020				2,096
Federal funds sold and other			514				290				1,327				846
Total interest and dividend income			48,548				42,446				134,824				116,576
Interest expense
Deposits			4,403				1,881				8,308				6,316
Federal funds purchased and retail repurchase agreements			71				24				150				72
Federal Home Loan Bank advances			409				10				594				155
Subordinated debt			1,721				1,556				4,973				4,669
Total interest expense			6,604				3,471				14,025				11,212
Net interest income			41,944				38,975				120,799				105,364
Provision (reversal) for credit losses			(136	)			1,058				276				(6,355	)
Net interest income after provision (reversal) for credit losses			42,080				37,917				120,523				111,719
Non-interest income
Service charges and fees			2,788				2,360				7,927				6,125
Debit card income			2,682				2,574				8,120				7,603
Mortgage banking			310				801				1,300				2,584
Increase in value of bank-owned life insurance			754				1,169				2,355				2,446
Net gain on acquisition and branch sales			—				—				540				585
Net gains (losses) from securities transactions			(17	)			381				(9	)			398
Other			2,452				546				7,395				3,902
Total non-interest income			8,969				7,831				27,628				23,643
Non-interest expense
Salaries and employee benefits			15,442				13,588				45,893				39,079
Net occupancy and equipment			3,127				2,475				9,304				7,170
Data processing			4,138				3,257				11,549				9,394
Professional fees			1,265				1,076				3,547				3,148
Advertising and business development			1,191				760				3,139				2,241
Telecommunications			487				439				1,399				1,531
FDIC insurance			340				465				780				1,305
Courier and postage			436				344				1,348				1,040
Free nationwide ATM cost			551				519				1,593				1,504
Amortization of core deposit intangibles			957				1,030				3,118				3,094
Loan expense			174				207				566				626
Other real estate owned			188				(342	)			201				(805	)
Loss on debt extinguishment			—				372				—				372
Merger expenses			115				4,015				526				4,627
Other			3,825				2,484				10,168				7,050
Total non-interest expense			32,236				30,689				93,131				81,376
Income (loss) before income tax			18,813				15,059				55,020				53,986
Provision for income taxes			3,642				3,286				8,940				11,972
Net income (loss) and net income (loss) allocable to common stockholders		$	15,171			$	11,773			$	46,080			$	42,014
Basic earnings (loss) per share		$	0.94			$	0.82			$	2.83			$	2.92
Diluted earnings (loss) per share		$	0.93			$	0.80			$	2.79			$	2.86
Weighted average common shares			16,056,658				14,384,302				16,303,586				14,397,146
Weighted average diluted common shares			16,273,231				14,669,312				16,516,787				14,688,092

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

		As of and for the three months ended
		September 30, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021
Interest and dividend income
Loans, including fees		$	41,555			$	36,849			$	36,306			$	34,942			$	37,581
Securities, taxable			5,792				5,584				5,391				4,754				3,920
Securities, nontaxable			687				678				655				747				655
Federal funds sold and other			514				513				300				349				290
Total interest and dividend income			48,548				43,624				42,652				40,792				42,446
Interest expense
Deposits			4,403				2,183				1,722				1,939				1,881
Federal funds purchased and retail repurchase agreements			71				46				33				32				24
Federal Home Loan Bank advances			409				176				9				14				10
Subordinated debt			1,721				1,653				1,599				1,592				1,556
Total interest expense			6,604				4,058				3,363				3,577				3,471
Net interest income			41,944				39,566				39,289				37,215				38,975
Provision (reversal) for credit losses			(136	)			824				(412	)			(2,125	)			1,058
Net interest income after provision (reversal) for credit losses			42,080				38,742				39,701				39,340				37,917
Non-interest income
Service charges and fees			2,788				2,617				2,522				2,471				2,360
Debit card income			2,682				2,810				2,628				2,633				2,574
Mortgage banking			310				428				562				722				801
Increase in value of bank-owned life insurance			754				736				865				1,060				1,169
Net gain on acquisition and branch sales			—				540				—				—				—
Net gains (losses) from securities transactions			(17	)			(32	)			40				8				381
Other			2,452				2,538				2,405				2,305				546
Total non-interest income			8,969				9,637				9,022				9,199				7,831
Non-interest expense
Salaries and employee benefits			15,442				15,383				15,068				15,119				13,588
Net occupancy and equipment			3,127				3,007				3,170				2,967				2,475
Data processing			4,138				3,642				3,769				3,867				3,257
Professional fees			1,265				1,111				1,171				1,565				1,076
Advertising and business development			1,191				972				976				1,129				760
Telecommunications			487				442				470				435				439
FDIC insurance			340				260				180				360				465
Courier and postage			436				489				423				389				344
Free nationwide ATM cost			551				541				501				515				519
Amortization of core deposit intangibles			957				1,111				1,050				1,080				1,030
Loan expense			174				207				185				308				207
Other real estate owned			188				14				(1	)			617				(342	)
Loss on debt extinguishment			—				—				—				—				372
Merger expenses			115				88				323				4,562				4,015
Other			3,825				4,169				2,174				5,176				2,484
Total non-interest expense			32,236				31,436				29,459				38,089				30,689
Income (loss) before income tax			18,813				16,943				19,264				10,450				15,059
Provision for income taxes (benefit)			3,642				1,684				3,614				(16	)			3,286
Net income (loss) and net income (loss) allocable to common stockholders		$	15,171			$	15,259			$	15,650			$	10,466			$	11,773
Basic earnings (loss) per share		$	0.94			$	0.95			$	0.94			$	0.62			$	0.82
Diluted earnings (loss) per share		$	0.93			$	0.94			$	0.93			$	0.61			$	0.80
Weighted average common shares			16,056,658				16,206,978				16,652,556				16,865,167				14,384,302
Weighted average diluted common shares			16,273,231				16,413,248				16,869,152				17,141,174				14,669,312

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

		September 30, 2022				June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021
ASSETS
Cash and due from banks		$	155,039			$	103,126			$	89,764			$	259,131			$	141,645
Federal funds sold			374				458				286				823				673
Cash and cash equivalents			155,413				103,584				90,050				259,954				142,318
Available-for-sale securities			1,198,962				1,288,180				1,352,894				1,327,442				1,157,423
Loans held for sale			1,518				1,714				1,575				4,214				4,108
Loans, net of allowance for credit losses(1)			3,208,524				3,175,208				3,194,987				3,107,262				2,633,148
Other real estate owned, net			10,412				12,969				9,897				9,523				10,267
Premises and equipment, net			100,566				101,212				103,168				104,038				90,727
Bank-owned life insurance			122,418				121,665				120,928				120,787				103,431
Federal Reserve Bank and Federal Home Loan Bank stock			24,428				21,479				19,890				17,510				14,540
Interest receivable			18,497				16,519				16,923				18,048				15,519
Goodwill			53,101				53,101				54,465				54,465				31,601
Core deposit intangibles, net			11,598				12,554				13,830				14,879				12,963
Other			94,978				93,971				100,016				99,509				47,223
Total assets		$	5,000,415			$	5,002,156			$	5,078,623			$	5,137,631			$	4,263,268
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Demand		$	1,217,094			$	1,194,863			$	1,255,793			$	1,244,117			$	984,436
Total non-interest-bearing deposits			1,217,094				1,194,863				1,255,793				1,244,117				984,436
Demand, savings and money market			2,335,847				2,445,545				2,511,478				2,522,289				2,092,849
Time			673,670				651,363				612,399				653,598				585,492
Total interest-bearing deposits			3,009,517				3,096,908				3,123,877				3,175,887				2,678,341
Total deposits			4,226,611				4,291,771				4,379,670				4,420,004				3,662,777
Federal funds purchased and retail repurchase agreements			47,443				52,750				48,199				56,006				39,137
Federal Home Loan Bank advances			186,001				80,000				50,000				—				—
Subordinated debt			96,263				96,135				96,010				95,885				88,030
Contractual obligations			15,562				15,813				17,307				17,692				18,771
Interest payable and other liabilities			32,729				37,572				35,422				47,413				36,804
Total liabilities			4,604,609				4,574,041				4,626,608				4,637,000				3,845,519
Commitments and contingent liabilities
Stockholders’ equity
Common stock			204				204				204				203				178
Additional paid-in capital			482,668				480,897				480,106				478,862				392,321
Retained earnings			130,114				116,576				102,632				88,324				79,226
Accumulated other comprehensive income (loss), net of tax			(120,918	)			(77,426	)			(50,012	)			1,776				9,475
Treasury stock			(96,262	)			(92,136	)			(80,915	)			(68,534	)			(63,451	)
Total stockholders’ equity			395,806				428,115				452,015				500,631				417,749
Total liabilities and stockholders’ equity		$	5,000,415			$	5,002,156			$	5,078,623			$	5,137,631			$	4,263,268
(1) Allowance for credit losses		$	46,499			$	48,238			$	47,590			$	48,365			$	52,763

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

		As of and for the three months ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2022				2022				2022				2021				2021
Loans Held For Investment by Type
Commercial real estate		$	1,655,646			$	1,643,068			$	1,552,134			$	1,486,148			$	1,308,707
Commercial and industrial			607,722				578,899				629,181				567,497				569,513
Residential real estate			573,431				578,936				613,928				638,087				490,633
Agricultural real estate			200,415				197,938				198,844				198,330				138,793
Agricultural			115,048				124,753				150,077				166,975				93,767
Consumer			102,761				99,852				98,413				98,590				84,498
Total loans held-for-investment			3,255,023				3,223,446				3,242,577				3,155,627				2,685,911
Allowance for credit losses			(46,499	)			(48,238	)			(47,590	)			(48,365	)			(52,763	)
Net loans held for investment		$	3,208,524			$	3,175,208			$	3,194,987			$	3,107,262			$	2,633,148
Asset Quality Ratios
Allowance for credit losses on loans to total loans			1.43	%			1.50	%			1.47	%			1.53	%			1.96	%
Past due or nonaccrual loans to total loans			0.94	%			0.78	%			0.82	%			1.18	%			2.78	%
Nonperforming assets to total assets			0.59	%			0.74	%			0.74	%			1.28	%			1.74	%
Nonperforming assets to total loans plus other real estate owned			0.91	%			1.14	%			1.15	%			2.07	%			2.76	%
Classified assets to bank total regulatory capital			11.03	%			13.08	%			17.12	%			25.34	%			24.25	%
Selected Average Balance Sheet Data (QTD Average)
Investment securities		$	1,272,414			$	1,319,099			$	1,397,421			$	1,330,267			$	1,061,178
Total gross loans receivable			3,240,998				3,216,853				3,195,787				3,181,279				2,748,202
Interest-earning assets			4,602,568				4,675,967				4,715,389				4,713,817				4,005,509
Total assets			4,988,755				5,067,686				5,108,120				5,068,278				4,275,298
Interest-bearing deposits			3,081,245				3,112,300				3,163,777				3,101,657				2,702,040
Borrowings			221,514				238,062				160,094				165,941				132,581
Total interest-bearing liabilities			3,302,759				3,350,362				3,323,871				3,267,598				2,834,621
Total deposits			4,283,855				4,340,196				4,393,879				4,342,732				3,686,169
Total liabilities			4,552,564				4,630,204				4,615,521				4,505,232				3,852,419
Total stockholders' equity			436,191				437,483				492,599				563,046				422,879
Tangible common equity*			369,746				368,505				422,418				501,860				376,544
Performance ratios
Return on average assets (ROAA) annualized			1.21	%			1.21	%			1.24	%			0.82	%			1.09	%
Return on average assets before income tax and   provision for loan losses*			1.49	%			1.41	%			1.50	%			0.65	%			1.50	%
Return on average equity (ROAE) annualized			13.80	%			13.99	%			12.88	%			7.37	%			11.05	%
Return on average equity before income tax and   provision for loan losses*			16.99	%			16.29	%			15.52	%			5.87	%			15.12	%
Return on average tangible common equity   (ROATCE) annualized*			17.12	%			17.60	%			15.85	%			8.97	%			13.27	%
Yield on loans annualized			5.09	%			4.59	%			4.61	%			4.36	%			5.43	%
Cost of interest-bearing deposits annualized			0.57	%			0.28	%			0.22	%			0.25	%			0.28	%
Cost of total deposits annualized			0.41	%			0.20	%			0.16	%			0.18	%			0.20	%
Net interest margin annualized			3.62	%			3.39	%			3.38	%			3.13	%			3.86	%
Efficiency ratio*			63.07	%			64.38	%			60.36	%			72.25	%			56.65	%
Non-interest income / average assets			0.71	%			0.76	%			0.72	%			0.72	%			0.73	%
Non-interest expense / average assets			2.56	%			2.49	%			2.34	%			2.98	%			2.85	%
Capital Ratios
Tier 1 Leverage Ratio			9.46	%			9.11	%			9.07	%			9.09	%			9.02	%
Common Equity Tier 1 Capital Ratio			12.15	%			12.08	%			11.81	%			12.03	%			12.39	%
Tier 1 Risk Based Capital Ratio			12.77	%			12.71	%			12.43	%			12.67	%			12.90	%
Total Risk Based Capital Ratio			15.99	%			15.97	%			15.66	%			15.96	%			16.63	%
Total stockholders' equity to total assets			7.92	%			8.56	%			8.90	%			9.74	%			9.80	%
Tangible common equity to tangible assets*			6.68	%			7.32	%			7.63	%			8.48	%			8.82	%
Dividend payout ratio			10.78	%			8.61	%			8.58	%			13.05	%			9.96	%
Book value per common share		$	24.71			$	26.58			$	27.47			$	29.87			$	29.08
Tangible book value per common share*		$	20.59			$	22.42			$	23.24			$	25.65			$	25.90
Tangible book value per diluted common share*		$	20.33			$	22.17			$	22.95			$	25.22			$	25.42

TABLE 5. YEAR-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited) (Dollars in thousands)

	For the nine months ended												For the nine months ended
	September 30, 2022												September 30, 2021
	AverageOutstandingBalance				InterestIncome/Expense				Average Yield/Rate(3)(4)				AverageOutstandingBalance				InterestIncome/Expense				Average Yield/Rate(3)(4)
Interest-earning assets
Loans (1)
Commercial and industrial	$	579,610			$	22,994				5.30	%		$	752,795			$	34,609				6.15	%
Commercial real estate		1,236,282				45,995				4.97	%			990,803				34,943				4.72	%
Real estate construction		362,543				12,443				4.59	%			264,344				7,195				3.64	%
Residential real estate		604,218				16,336				3.61	%			457,761				14,167				4.14	%
Agricultural real estate		201,566				8,046				5.34	%			135,795				5,203				5.12	%
Agricultural		132,485				5,254				5.30	%			93,680				3,432				4.90	%
Consumer		101,341				3,642				4.80	%			84,285				2,843				4.51	%
Total loans		3,218,045				114,710				4.77	%			2,779,463				102,392				4.93	%
Securities
Taxable securities		1,220,045				16,767				1.84	%			898,461				11,242				1.67	%
Nontaxable securities		109,142				2,020				2.47	%			100,495				2,096				2.79	%
Total securities		1,329,187				18,787				1.89	%			998,956				13,338				1.79	%
Federal funds sold and other		116,997				1,327				1.52	%			175,761				846				0.64	%
Total interest-earning assets	$	4,664,229				134,824				3.86	%		$	3,954,180				116,576				3.94	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,480,113				5,461				0.29	%		$	2,076,643				2,728				0.18	%
Time deposits		638,692				2,847				0.60	%			606,151				3,588				0.79	%
Total interest-bearing deposits		3,118,805				8,308				0.36	%			2,682,794				6,316				0.31	%
FHLB advances		54,100				594				1.47	%			16,325				155				1.27	%
Other borrowings		152,682				5,123				4.49	%			131,516				4,741				4.82	%
Total interest-bearing liabilities	$	3,325,587				14,025				0.56	%		$	2,830,635				11,212				0.53	%
Net interest income					$	120,799											$	105,364
Interest rate spread										3.30	%											3.41	%
Net interest margin (2)										3.46	%											3.56	%
(1) Average loan balances include nonaccrual loans.
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.
(3) Tax exempt income is not included in the above table on a tax-equivalent basis.
(4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts.

TABLE 6. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited) (Dollars in thousands)

	For the three months ended												For the three months ended
	September 30, 2022												September 30, 2021
	AverageOutstandingBalance				InterestIncome/Expense				Average Yield/Rate(3)(4)				AverageOutstandingBalance				InterestIncome/Expense				Average Yield/Rate(3)(4)
Interest-earning assets
Loans (1)
Commercial and industrial	$	575,149			$	7,750				5.35	%		$	630,622			$	13,646				8.59	%
Commercial real estate		1,307,244				18,023				5.47	%			1,009,141				12,072				4.75	%
Real estate construction		360,579				4,847				5.33	%			283,106				2,664				3.73	%
Residential real estate		582,938				5,464				3.72	%			512,135				5,073				3.93	%
Agricultural real estate		200,534				2,740				5.42	%			134,673				1,819				5.36	%
Agricultural		113,351				1,406				4.92	%			91,878				1,370				5.92	%
Consumer		101,203				1,325				5.20	%			86,647				937				4.29	%
Total loans		3,240,998				41,555				5.09	%			2,748,202				37,581				5.43	%
Securities
Taxable securities		1,164,697				5,793				1.97	%			966,651				3,920				1.61	%
Nontaxable securities		107,717				687				2.53	%			94,527				655				2.75	%
Total securities		1,272,414				6,480				2.02	%			1,061,178				4,575				1.71	%
Federal funds sold and other		89,156				513				2.29	%			196,129				290				0.59	%
Total interest-earning assets	$	4,602,568				48,548				4.18	%		$	4,005,509				42,446				4.20	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,425,824				3,118				0.51	%		$	2,082,515				862				0.16	%
Time deposits		655,421				1,285				0.78	%			619,525				1,019				0.65	%
Total interest-bearing deposits		3,081,245				4,403				0.57	%			2,702,040				1,881				0.28	%
FHLB advances		71,415				409				2.27	%			1,401				10				2.78	%
Other borrowings		150,099				1,792				4.74	%			131,180				1,580				4.78	%
Total interest-bearing liabilities	$	3,302,759				6,604				0.79	%		$	2,834,621				3,471				0.49	%
Net interest income					$	41,944											$	38,975
Interest rate spread										3.39	%											3.71	%
Net interest margin (2)										3.62	%											3.86	%
(1) Average loan balances include nonaccrual loans.
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.
(3) Tax exempt income is not included in the above table on a tax-equivalent basis.

TABLE 7. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited) (Dollars in thousands)

	For the three months ended												For the three months ended
	September 30, 2022												June 30, 2022
	AverageOutstandingBalance				InterestIncome/Expense				Average Yield/Rate(3)(4)				AverageOutstandingBalance				InterestIncome/Expense				Average Yield/Rate(3)(4)
Interest-earning assets
Loans (1)
Commercial and industrial	$	575,149			$	7,750				5.35	%		$	588,126			$	7,483				5.10	%
Commercial real estate		1,307,244				18,023				5.47	%			1,210,185				14,521				4.81	%
Real estate construction		360,579				4,847				5.33	%			384,317				4,297				4.48	%
Residential real estate		582,938				5,464				3.72	%			597,680				5,206				3.49	%
Agricultural real estate		200,534				2,740				5.42	%			202,038				2,643				5.25	%
Agricultural		113,351				1,406				4.92	%			134,826				1,533				4.56	%
Consumer		101,203				1,325				5.20	%			99,680				1,166				4.69	%
Total loans		3,240,998				41,555				5.09	%			3,216,852				36,849				4.59	%
Securities
Taxable securities		1,164,697				5,793				1.97	%			1,210,828				5,584				1.85	%
Nontaxable securities		107,717				687				2.53	%			108,271				678				2.51	%
Total securities		1,272,414				6,480				2.02	%			1,319,099				6,262				1.90	%
Federal funds sold and other		89,156				513				2.29	%			140,016				513				1.47	%
Total interest-earning assets	$	4,602,568				48,548				4.18	%		$	4,675,967				43,624				3.74	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,425,824				3,118				0.51	%		$	2,481,602				1,346				0.22	%
Time deposits		655,421				1,285				0.78	%			630,698				837				0.53	%
Total interest-bearing deposits		3,081,245				4,403				0.57	%			3,112,300				2,183				0.28	%
FHLB advances		71,415				409				2.27	%			80,266				176				0.88	%
Other borrowings		150,099				1,792				4.74	%			157,796				1,699				4.32	%
Total interest-bearing liabilities	$	3,302,759				6,604				0.79	%		$	3,350,362				4,058				0.49	%
Net interest income					$	41,944											$	39,566
Interest rate spread										3.39	%											3.25	%
Net interest margin (2)										3.62	%											3.39	%
(1) Average loan balances include nonaccrual loans.
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.
(3) Tax exempt income is not included in the above table on a tax-equivalent basis.

TABLE 8. NON-GAAP FINANCIAL MEASURES (Unaudited) (Dollars in thousands, except per share data)

		As of and for the three months ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2022				2022				2022				2021				2021
Total stockholders' equity		$	395,806			$	428,115			$	452,015			$	500,631			$	417,749
Less: goodwill			53,101				53,101				54,465				54,465				31,601
Less: core deposit intangibles, net			11,598				12,554				13,830				14,879				12,963
Less: mortgage servicing rights, net			201				226				251				276				—
Less: naming rights, net			1,054				1,065				1,076				1,087				1,098
Tangible common equity		$	329,852			$	361,169			$	382,393			$	429,924			$	372,087
Common shares outstanding at period end			16,017,834				16,106,818				16,454,966				16,760,115				14,365,785
Diluted common shares outstanding at period end			16,225,591				16,289,635				16,662,779				17,050,115				14,637,306
Book value per common share		$	24.71			$	26.58			$	27.47			$	29.87			$	29.08
Tangible book value per common share		$	20.59			$	22.42			$	23.24			$	25.65			$	25.90
Tangible book value per diluted common share		$	20.33			$	22.17			$	22.95			$	25.22			$	25.42
Total assets		$	5,000,415			$	5,002,156			$	5,078,623			$	5,137,631			$	4,263,268
Less: goodwill			53,101				53,101				54,465				54,465				31,601
Less: core deposit intangibles, net			11,598				12,554				13,830				14,879				12,963
Less: mortgage servicing rights, net			201				226				251				276				—
Less: naming rights, net			1,054				1,065				1,076				1,087				1,098
Tangible assets		$	4,934,461			$	4,935,210			$	5,009,001			$	5,066,924			$	4,217,606
Total stockholders' equity to total assets			7.92	%			8.56	%			8.90	%			9.74	%			9.80	%
Tangible common equity to tangible assets			6.68	%			7.32	%			7.63	%			8.48	%			8.82	%
Total average stockholders' equity		$	436,191			$	437,483			$	492,599			$	563,046			$	422,879
Less: average intangible assets			66,445				68,978				70,181				61,186				46,335
Average tangible common equity		$	369,746			$	368,505			$	422,418			$	501,860			$	376,544
Net income (loss) allocable to common stockholders		$	15,171			$	15,259			$	15,650			$	10,466			$	11,773
Add: amortization of intangible assets			992				1,148				1,085				1,116				1,040
Less: tax effect of intangible assets amortization			208				241				228				234				218
Adjusted net income (loss) allocable to common   stockholders		$	15,955			$	16,166			$	16,507			$	11,348			$	12,595
Return on total average stockholders' equity   (ROAE) annualized			13.80	%			13.99	%			12.88	%			7.37	%			11.05	%
Return on average tangible common equity   (ROATCE) annualized			17.12	%			17.60	%			15.85	%			8.97	%			13.27	%
Non-interest expense		$	32,236			$	31,436			$	29,459			$	38,089			$	30,689
Less: loss on debt extinguishment			—				—				—				—			$	372
Less: merger expense			115				88				323				4,562				4,015
Adjusted non-interest expense		$	32,121			$	31,348			$	29,136			$	33,527			$	26,302
Net interest income		$	41,944			$	39,566			$	39,289			$	37,215			$	38,975
Non-interest income			8,969				9,637				9,022				9,199				7,831
Less: net gain on acquisition and branch sales			—				540				—				—				—
Less: net gains (losses) from securities transactions			(17	)			(32	)			40				8				381
Adjusted non-interest income		$	8,986			$	9,129			$	8,982			$	9,191			$	7,450
Net interest income plus adjusted non-interest income		$	50,930			$	48,695			$	48,271			$	46,406			$	46,425
Non-interest expense to   net interest income plus non-interest income			63.32	%			63.89	%			60.98	%			82.06	%			65.57	%
Efficiency ratio			63.07	%			64.38	%			60.36	%			72.25	%			56.65	%
Net income (loss) allocable to common stockholders		$	15,171			$	15,259			$	15,650			$	10,466			$	11,773
Add: income tax provision			3,642				1,684				3,614				(16	)			3,286
Add: provision (reversal) of credit losses			(136	)			824				(412	)			(2,125	)			1,058
Pre-tax, pre-provision income		$	18,677			$	17,767			$	18,852			$	8,325			$	16,117
Total average assets		$	4,988,755			$	5,067,687			$	5,108,120			$	5,068,301			$	4,275,298
Total average stockholders' equity		$	436,191			$	437,483			$	492,599			$	563,023			$	422,879
Return on average assets (ROAA) annualized			1.21	%			1.21	%			1.24	%			0.82	%			1.09	%
Adjusted return on average assets			1.49	%			1.41	%			1.50	%			0.65	%			1.50	%
Adjusted return on average equity			16.99	%			16.29	%			15.52	%			5.87	%			15.12	%