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Farmers National Banc Corp. Reports Earnings for Second Quarter of 2024

  • Earnings per diluted share of $0.31 ($0.33 excluding certain items, non-GAAP) for the second quarter of 2024
  • 166 consecutive quarters of profitability
  • Sequential net interest margin stabilization and expansion
  • Loan growth of $56.1 million, or 7.0% annualized, for the second quarter of 2024
  • Strong asset quality as non-performing loans to total loans were 0.40% at June 30, 2024

Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $11.8 million, or $0.31 per diluted share, for the three months ended June 30, 2024, compared to $15.0 million, or $0.40 per diluted share, for the three months ended June 30, 2023. Net income for the second quarter of 2024 included pretax items of $515,000 for the loss on the sale of investment securities and write downs on certain other assets held for sale. Excluding these items (non-GAAP), net income for the second quarter of 2024 was $12.2 million, or $0.33 per diluted share.

Kevin J. Helmick, President and CEO, stated, “Our second quarter financial results are encouraging as we experienced strong loan growth along with sequential improvement in net interest income. We are pleased that asset quality also continues to be a source of strength. Over the near term, we remain focused on supporting the financial needs of our communities, while ensuring the Company is well positioned to create long-term value for our shareholders.”

Balance Sheet

Total assets were $5.16 billion at June 30, 2024, up from $5.08 billion at March 31, 2024, and $5.08 billion at December 31, 2023. Loans increased to $3.24 billion at June 30, 2024 compared to $3.18 billion at March 31, 2024 and $3.20 billion at December 31, 2023. While loan growth accelerated sharply in the second quarter of 2024, the Company still anticipates total loan growth of approximately 1.5% - 2% in 2024, reflecting the challenging economic and interest rate environment, as well as the Company’s focus on maintaining excellent asset quality.

The Company had securities available for sale of $1.25 billion at June 30, 2024, compared to $1.27 billion at March 31, 2024, and $1.30 billion at December 31, 2023. Gross unrealized losses on the portfolio totaled $242.3 million at June 30, 2024, an increase from $234.2 million at March 31, 2024, and $217.1 million at December 31, 2023. The Company expects bond market volatility to continue in 2024 and anticipates that it will continue to reduce the size of the securities portfolio via runoff to optimize profitability and enhance liquidity.

Total deposits increased to $4.21 billion at June 30, 2024, up slightly from $4.20 billion at March 31, 2024, and $4.18 billion at December 31, 2023. Noninterest bearing deposits declined to $968.7 million at June 30, 2024, from $977.5 million at March 31, 2024, and $1.03 billion at December 31, 2023 even as growth in interest bearing deposits offset this decline. Customers continue to seek higher rates on their deposit balances but the pace of activity continues to slow.

Total stockholders’ equity was $396.7 million at June 30, 2024, compared to $397.0 million at March 31, 2024, and $404.4 million at December 31, 2023. The decline since December has been driven by an increase in the unrealized losses on investment securities offset by earnings net of dividend payments to shareholders.

Credit Quality

The Company’s non-performing loans increased slightly to $12.9 million at June 30, 20024, compared to $12.0 million at March 31, 2024, but were down from $15.1 million at December 31, 2023. Non-performing loans to total loans were 0.40% at June 30, 2024, 0.38% at March 31, 2024, and 0.47% at December 31, 2023. Non-performing assets to total assets were 0.25% at June 30, 2024, 0.24% at March 31, 2024, and 0.30% at December 31, 2023. The Company’s loans which were 30-89 days delinquent were $18.5 million at June 30, 2024, or 0.57% of total loans, compared to $16.7 million, or 0.52% of total loans, at December 31, 2023.

The provision for credit losses and unfunded commitments totaled $1.1 million for the three months ended June 30, 2024, compared to $25,000 for the three months ended June 30, 2023. The increased provision for credit losses was primarily due to loan growth of $56.1 million in the second quarter of 2024 compared to loan shrinkage of $2.9 million in the second quarter of 2023. Annualized net charge-offs as a percentage of average loans were 0.07% for the second quarter of 2024, compared to 0.10% for the second quarter of 2023. The allowance for credit losses to total loans was 1.05% at June 30, 2024, compared to 1.04% at March 31, 2024 and 1.08% at December 31, 2023.

Net Interest Income

Net interest income for the second quarter of 2024 was $32.1 million compared to $34.6 million in the second quarter of 2023. Average interest earning assets are down $5.4 million when comparing the second quarter of 2024 to the second quarter of 2023. The net interest margin has declined from 2.92% for the second quarter of 2023 to 2.71% for the second quarter of 2024. This decline in net interest margin was due to increased funding costs outstripping the increase in yields on earning assets. The increase in funding costs has been due to the rapid increase in deposit rates due to intense competition for deposits, the Federal Reserve’s rate hiking cycle, and runoff of deposit balances which are being replaced with more costly wholesale funding. Excluding acquisition marks and PPP interest, non-GAAP, the Company’s net interest margin was 2.51% in the second quarter of 2024 compared to 2.68% in the second quarter of 2023.

Noninterest Income

The Company recorded noninterest income of $9.6 million for the second quarter of 2024 compared to $9.4 million for the second quarter of 2023. This increase is due to increases in several categories of noninterest income offset by declines in other noninterest income and losses on the sale of securities.

Service charges on deposit accounts were $1.8 million for the second quarter of 2024 compared to $1.5 million for the same period in 2023. The Company undertook a review of all service charges in late 2023 and early 2024 and implemented fee increases across deposit product lines in the second quarter. Bank owned life insurance income increased from $584,000 in the second quarter of 2023 to $652,000 in the second quarter of 2024 as crediting rates on the insurance policies continue to increase. Trust fees increased to $2.6 million in the second quarter of 2024 from $2.2 million in the second quarter of 2023 due to continued strong growth in this line of business. Losses on the sale of securities totaled $124,000 in the second quarter of 2024 compared to gains on the sale of securities of $13,000 during the second quarter of 2023. Other noninterest income declined from $463,000 in the second quarter of 2023 to $162,000 in the second quarter of 2024. The Company recorded write downs totaling $391,000 on other assets held for sale during the second quarter of 2024. No write downs occurred in the second quarter of 2023.

Noninterest Expense

The Company’s noninterest expense totaled $26.4 million for the three months ended June 30, 2024 compared to $26.4 million for the three months ended June 30, 2023. The second quarter of 2023 included $442,000 of merger related charges. There were no merger related expenses during the second quarter of 2024. Salaries and employee benefits were $14.6 million in the second quarter of 2024 compared to $13.6 million in the second quarter of 2023. The increase was primarily driven by higher salaries associated with employee raises along with higher health care expenses. FDIC and state and local taxes decreased by $309,000 to $1.2 million for the first three months of 2024 compared to $1.5 million for the first three months of 2023 due to lower FDIC premiums. Intangible amortization declined to $630,000 in the second quarter of 2024 from $1.2 million for the second quarter of 2023. This decrease was driven by accelerated amortization that occurred in the second quarter of 2023 that did not reoccur in 2024 and amortization from a prior acquisition running off. Other noninterest expense increased $545,000 in the second quarter of 2024 compared to the second quarter of 2023. Timing surrounding postage expense and ATM/debit card charges drove much of this increase.

Liquidity

The Company’s loan to deposit ratio was 77.0% at June 30, 2024 while the Company’s average deposit balance per account (excluding collateralized deposits) was $22,375 for the same period. At June 30, 2024, the Company had access to an additional $679.7 million of FHLB borrowing capacity, along with $238.1 million in available for sale securities that are not pledged.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $5.2 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 62 banking locations in Mahoning, Trumbull, Columbiana, Portage, Stark, Wayne, Medina, Geauga and Cuyahoga Counties in Ohio and Beaver, Butler, Allegheny, Jefferson, Clarion, Venango, Clearfield, Mercer, Elk and Crawford Counties in Pennsylvania, and Farmers Trust Company, which operates five trust offices and offers services in the same geographic markets. Total wealth management assets under care at June 30, 2024 are $3.7 billion. Farmers National Insurance, LLC, a wholly-owned subsidiary of The Farmers National Bank of Canfield, offers a variety of insurance products.

Non-GAAP Disclosure

This press release includes disclosures of Farmers’ tangible common equity ratio, return on average tangible assets, return on average tangible equity, net income excluding costs related to acquisition activities and certain items, return on average assets excluding merger costs and certain items, return on average equity excluding merger costs and certain items, net interest margin excluding acquisition marks and related accretion and PPP interest and fees and efficiency ratio less certain items, which are financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers’ marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to their GAAP equivalents are included in the tables following Consolidated Financial Highlights below.

Cautionary Statements Regarding Forward-Looking Statements

We make statements in this news release and our related investor conference call, and we may from time to time make other statements, that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers’ financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management’s current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers’ control. Forward-looking statements are preceded by terms such as “expects,” “believes,” “anticipates,” “intends” and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as “will,” “would,” “should,” “could” or “may.” Farmers’ actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers’ actual results to differ materially from those described in certain forward-looking statements include significant changes in near-term local, regional, and U.S. economic conditions including those resulting from continued high rates of inflation, tightening monetary policy of the Board of Governors of the Federal Reserve, and possibility of a recession; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and available on Farmers’ website (www.farmersbankgroup.com) and on the SEC’s website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management’s views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

Farmers National Banc Corp. and Subsidiaries
Consolidated Financial Highlights
(Amounts in thousands, except per share results) Unaudited
 
 
Consolidated Statements of Income For the Three Months Ended For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30, Percent

 

2024

2024

2023

2023

2023

2024

2023

 

Change

Total interest income

$

56,846

 

$

55,054

 

$

55,069

 

$

54,229

 

$

52,804

 

$

111,900

 

$

104,037

 

7.6

%

Total interest expense

 

24,780

 

 

23,367

 

 

22,239

 

 

20,461

 

 

18,226

 

 

48,147

 

 

32,849

 

46.6

%

Net interest income

 

32,066

 

 

31,687

 

 

32,830

 

 

33,768

 

 

34,578

 

 

63,753

 

 

71,188

 

-10.4

%

Provision (credit) for credit losses

 

1,112

 

 

(449

)

 

286

 

 

243

 

 

25

 

 

663

 

 

8,624

 

-92.3

%

Noninterest income

 

9,606

 

 

8,357

 

 

12,156

 

 

9,831

 

 

9,449

 

 

17,963

 

 

19,874

 

-9.6

%

Acquisition related costs

 

0

 

 

0

 

 

452

 

 

268

 

 

442

 

 

0

 

 

4,755

 

-100.0

%

Other expense

 

26,403

 

 

27,039

 

 

26,520

 

 

27,448

 

 

25,944

 

 

53,442

 

 

52,353

 

2.1

%

Income before income taxes

 

14,157

 

 

13,454

 

 

17,728

 

 

15,640

 

 

17,616

 

 

27,611

 

 

25,330

 

9.0

%

Income taxes

 

2,374

 

 

2,214

 

 

3,151

 

 

2,326

 

 

2,650

 

 

4,588

 

 

3,289

 

39.5

%

Net income

$

11,783

 

$

11,240

 

$

14,577

 

$

13,314

 

$

14,966

 

$

23,023

 

$

22,041

 

4.5

%

 
Average diluted shares outstanding

 

37,487

 

 

37,479

 

 

37,426

 

 

37,379

 

 

37,320

 

 

37,480

 

 

37,624

 

Basic earnings per share

 

0.32

 

 

0.30

 

 

0.39

 

 

0.36

 

 

0.40

 

 

0.62

 

 

0.59

 

Diluted earnings per share

 

0.31

 

 

0.30

 

 

0.39

 

 

0.36

 

 

0.40

 

 

0.61

 

 

0.59

 

Cash dividends per share

 

0.17

 

 

0.17

 

 

0.17

 

 

0.17

 

 

0.17

 

 

0.34

 

 

0.34

 

Performance Ratios
Net Interest Margin (Annualized)

 

2.71

%

 

2.70

%

 

2.78

%

 

2.86

%

 

2.92

%

 

2.70

%

 

3.00

%

Efficiency Ratio (Tax equivalent basis)

 

60.80

%

 

61.54

%

 

57.84

%

 

60.11

%

 

56.28

%

 

61.17

%

 

59.50

%

Return on Average Assets (Annualized)

 

0.93

%

 

0.90

%

 

1.17

%

 

1.06

%

 

1.18

%

 

0.91

%

 

0.87

%

Return on Average Equity (Annualized)

 

12.15

%

 

11.47

%

 

17.98

%

 

14.49

%

 

16.12

%

 

11.76

%

 

11.94

%

Dividends to Net Income

 

54.04

%

 

56.65

%

 

43.68

%

 

47.82

%

 

42.54

%

 

55.61

%

 

58.09

%

Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets

 

0.97

%

 

0.93

%

 

1.22

%

 

1.09

%

 

1.23

%

 

0.95

%

 

0.90

%

Return on Average Tangible Equity

 

23.74

%

 

21.88

%

 

43.77

%

 

30.29

%

 

33.55

%

 

22.79

%

 

25.05

%

 
Consolidated Statements of Financial Condition
June 30, March 31, Dec. 31, Sept. 30, June 30,

 

2024

2024

2023

2023

2023

 

 

 

 

Assets
Cash and cash equivalents

$

180,987

 

$

148,630

 

$

103,658

 

$

93,923

 

$

116,063

 

Debt securities available for sale

 

1,246,730

 

 

1,270,149

 

 

1,299,701

 

 

1,210,736

 

 

1,316,878

 

Other investments

 

37,594

 

 

34,619

 

 

35,311

 

 

35,342

 

 

44,975

 

 
Loans held for sale

 

2,577

 

 

1,854

 

 

3,711

 

 

1,910

 

 

2,197

 

Loans

 

3,237,369

 

 

3,181,318

 

 

3,198,127

 

 

3,168,554

 

 

3,155,200

 

Less allowance for credit losses

 

33,991

 

 

33,159

 

 

34,440

 

 

34,753

 

 

34,957

 

Net Loans

 

3,203,378

 

 

3,148,159

 

 

3,163,687

 

 

3,133,801

 

 

3,120,243

 

 
Other assets

 

485,587

 

 

476,599

 

 

472,282

 

 

495,451

 

 

473,098

 

Total Assets

$

5,156,853

 

$

5,080,010

 

$

5,078,350

 

$

4,971,163

 

$

5,073,454

 

 
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing

$

968,693

 

$

977,475

 

$

1,026,630

 

$

1,039,524

 

$

1,084,232

 

Interest-bearing

 

3,237,142

 

 

3,220,650

 

 

3,150,756

 

 

3,217,869

 

 

3,165,381

 

Brokered time deposits

 

0

 

 

0

 

 

0

 

 

254,257

 

 

21,135

 

Total deposits

 

4,205,835

 

 

4,198,125

 

 

4,177,386

 

 

4,511,650

 

 

4,270,748

 

Other interest-bearing liabilities

 

494,890

 

 

433,777

 

 

443,663

 

 

88,550

 

 

388,437

 

Other liabilities

 

59,434

 

 

51,082

 

 

52,886

 

 

54,981

 

 

47,278

 

Total liabilities

 

4,760,159

 

 

4,682,984

 

 

4,673,935

 

 

4,655,181

 

 

4,706,463

 

Stockholders' Equity

 

396,694

 

 

397,026

 

 

404,415

 

 

315,982

 

 

366,991

 

Total Liabilities
and Stockholders' Equity

$

5,156,853

 

$

5,080,010

 

$

5,078,350

 

$

4,971,163

 

$

5,073,454

 

 
Period-end shares outstanding

 

37,575

 

 

37,546

 

 

37,503

 

 

37,489

 

 

37,457

 

Book value per share

$

10.56

 

$

10.57

 

$

10.78

 

$

8.43

 

$

9.80

 

Tangible book value per share (Non-GAAP)*

 

5.53

 

 

5.52

 

 

5.71

 

 

3.33

 

 

4.67

 

 
* Tangible book value per share is calculated by dividing tangible common equity by outstanding shares

 

For the Three Months Ended For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

Capital and Liquidity

2024

2024

2023

2023

2023

2024

2023

 

 

Common Equity Tier 1 Capital Ratio (a)

 

10.95

%

 

10.88

%

 

10.61

%

 

10.37

%

 

10.25

%

Total Risk Based Capital Ratio (a)

 

14.39

%

 

14.38

%

 

14.06

%

 

13.83

%

 

13.76

%

Tier 1 Risk Based Capital Ratio (a)

 

11.44

%

 

11.37

%

 

11.10

%

 

10.86

%

 

10.74

%

Tier 1 Leverage Ratio (a)

 

8.26

%

 

8.19

%

 

8.02

%

 

7.84

%

 

7.68

%

Equity to Asset Ratio

 

7.69

%

 

7.82

%

 

7.96

%

 

6.36

%

 

7.23

%

Tangible Common Equity Ratio (b)

 

4.18

%

 

4.24

%

 

4.38

%

 

2.61

%

 

3.58

%

Net Loans to Assets

 

62.12

%

 

61.97

%

 

62.30

%

 

63.04

%

 

61.50

%

Loans to Deposits

 

76.97

%

 

75.78

%

 

76.56

%

 

70.23

%

 

73.88

%

Asset Quality
Non-performing loans

$

12,870

 

$

11,951

 

$

15,063

 

$

18,368

 

$

17,956

 

Non-performing assets

 

12,975

 

 

12,215

 

 

15,321

 

 

18,522

 

 

18,167

 

Loans 30 - 89 days delinquent

 

18,546

 

 

14,069

 

 

16,705

 

 

13,314

 

 

12,321

 

Charged-off loans

 

661

 

 

1,282

 

 

972

 

 

525

 

 

971

 

 

1,943

 

 

1,440

 

Recoveries

 

98

 

 

271

 

 

172

 

 

139

 

 

172

 

 

369

 

 

370

 

Net Charge-offs

 

563

 

 

1,011

 

 

800

 

 

386

 

 

799

 

 

1,574

 

 

1,070

 

Annualized Net Charge-offs to Average Net Loans

 

0.07

%

 

0.13

%

 

0.10

%

 

0.05

%

 

0.10

%

 

0.10

%

 

0.07

%

Allowance for Credit Losses to Total Loans

 

1.05

%

 

1.04

%

 

1.08

%

 

1.10

%

 

1.11

%

Non-performing Loans to Total Loans

 

0.40

%

 

0.38

%

 

0.47

%

 

0.58

%

 

0.57

%

Loans 30 - 89 Days Delinquent to Total Loans

 

0.57

%

 

0.44

%

 

0.52

%

 

0.42

%

 

0.39

%

Allowance to Non-performing Loans

 

264.11

%

 

277.46

%

 

228.64

%

 

189.20

%

 

194.68

%

Non-performing Assets to Total Assets

 

0.25

%

 

0.24

%

 

0.30

%

 

0.37

%

 

0.36

%

 
(a) June 30, 2024 ratio is estimated
(b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below
 
For the Three Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30,
End of Period Loan Balances

2024

2024

2023

2023

2023

Commercial real estate

$

1,348,675

 

$

1,339,372

 

$

1,335,806

 

$

1,295,847

 

$

1,284,974

 

Commercial

 

343,694

 

 

335,747

 

 

346,354

 

 

357,691

 

 

362,664

 

Residential real estate

 

849,561

 

 

836,252

 

 

843,697

 

 

842,729

 

 

849,533

 

HELOC

 

151,511

 

 

143,696

 

 

142,441

 

 

140,772

 

 

138,535

 

Consumer

 

268,606

 

 

256,846

 

 

259,784

 

 

261,136

 

 

260,326

 

Agricultural loans

 

265,035

 

 

260,425

 

 

261,288

 

 

261,738

 

 

250,807

 

Total, excluding net deferred loan costs

$

3,227,082

 

$

3,172,338

 

$

3,189,370

 

$

3,159,913

 

$

3,146,839

 

 
 
For the Three Months Ended
End of Period Customer Deposit Balances June 30,

2024
March 31,

2024
Dec. 31,

2023
Sept. 30,

2023
June 30,

2023
Noninterest-bearing demand

$

968,693

 

$

977,474

 

$

1,026,630

 

$

1,039,524

 

$

1,084,232

 

Interest-bearing demand

 

1,380,266

 

 

1,381,383

 

 

1,362,609

 

 

1,426,349

 

 

1,383,326

 

Money market

 

677,058

 

 

646,308

 

 

593,975

 

 

588,043

 

 

610,051

 

Savings

 

433,166

 

 

452,949

 

 

468,890

 

 

488,991

 

 

511,642

 

Certificate of deposit

 

746,652

 

 

740,011

 

 

725,282

 

 

714,486

 

 

660,362

 

Total customer deposits

$

4,205,835

 

$

4,198,125

 

$

4,177,386

 

$

4,257,393

 

$

4,249,613

 

 
 
For the Three Months Ended For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,
Noninterest Income

2024

2024

2023

2023

2023

2024

2023

Service charges on deposit accounts

$

1,846

 

$

1,583

 

$

1,677

 

$

1,712

 

$

1,501

 

$

3,429

 

$

2,933

 

Bank owned life insurance income, including death benefits

 

652

 

 

707

 

 

617

 

 

694

 

 

584

 

 

1,359

 

 

1,131

 

Trust fees

 

2,638

 

 

2,793

 

 

2,656

 

 

2,617

 

 

2,248

 

 

5,431

 

 

4,835

 

Insurance agency commissions

 

1,255

 

 

1,528

 

 

1,540

 

 

1,116

 

 

1,332

 

 

2,783

 

 

2,788

 

Security gains (losses), including fair value changes for equity securities

 

(124

)

 

(2,120

)

 

19

 

 

(624

)

 

13

 

 

(2,244

)

 

134

 

Retirement plan consulting fees

 

330

 

 

334

 

 

357

 

 

360

 

 

382

 

 

664

 

 

689

 

Investment commissions

 

478

 

 

432

 

 

589

 

 

520

 

 

476

 

 

910

 

 

869

 

Net gains on sale of loans

 

417

 

 

297

 

 

1,280

 

 

395

 

 

406

 

 

714

 

 

716

 

Other mortgage banking fee income (loss), net

 

192

 

 

125

 

 

139

 

 

185

 

 

234

 

 

317

 

 

387

 

Debit card and EFT fees

 

1,760

 

 

1,567

 

 

1,697

 

 

1,763

 

 

1,810

 

 

3,327

 

 

3,599

 

Other noninterest income

 

162

 

 

1,111

 

 

1,585

 

 

1,093

 

 

463

 

 

1,273

 

 

1,793

 

Total Noninterest Income

$

9,606

 

$

8,357

 

$

12,156

 

$

9,831

 

$

9,449

 

$

17,963

 

$

19,874

 

 
 
For the Three Months Ended For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,
Noninterest Expense

2024

2024

2023

2023

2023

2024

2023

Salaries and employee benefits

$

14,558

 

$

15,069

 

$

14,871

 

$

14,233

 

$

13,625

 

$

29,627

 

$

28,270

 

Occupancy and equipment

 

3,815

 

 

3,730

 

 

3,896

 

 

3,810

 

 

3,859

 

 

7,545

 

 

7,728

 

FDIC insurance and state and local taxes

 

1,185

 

 

1,345

 

 

1,484

 

 

1,648

 

 

1,494

 

 

2,530

 

 

2,716

 

Professional fees

 

1,194

 

 

1,254

 

 

1,004

 

 

1,043

 

 

1,190

 

 

2,448

 

 

2,304

 

Merger related costs

 

0

 

 

0

 

 

452

 

 

268

 

 

442

 

 

0

 

 

4,755

 

Advertising

 

445

 

 

431

 

 

414

 

 

492

 

 

478

 

 

876

 

 

887

 

Intangible amortization

 

630

 

 

688

 

 

578

 

 

725

 

 

1,222

 

 

1,318

 

 

2,131

 

Core processing charges

 

1,099

 

 

1,135

 

 

1,057

 

 

1,274

 

 

1,144

 

 

2,234

 

 

2,308

 

Other noninterest expenses

 

3,477

 

 

3,387

 

 

3,216

 

 

4,223

 

 

2,932

 

 

6,864

 

 

6,009

 

Total Noninterest Expense

$

26,403

 

$

27,039

 

$

26,972

 

$

27,716

 

$

26,386

 

$

53,442

 

$

57,108

 

Average Balance Sheets and Related Yields and Rates
(Dollar Amounts in Thousands)
 
Three Months Ended Three Months Ended
June 30, 2024 June 30, 2023
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1)
EARNING ASSETS
Loans (2)

$

3,215,141

$

46,590

5.80

%

$

3,144,461

$

42,422

5.40

%

Taxable securities

 

1,118,598

 

6,813

2.44

 

 

1,157,284

 

6,654

2.30

 

Tax-exempt securities (2)

 

379,761

 

2,973

3.13

 

 

415,003

 

3,278

3.16

 

Other investments

 

33,441

 

322

3.85

 

 

41,361

 

594

5.74

 

Federal funds sold and other

 

78,591

 

743

3.78

 

 

72,801

 

551

3.03

 

Total earning assets

 

4,825,532

 

57,441

4.76

 

 

4,830,910

 

53,499

4.43

 

Nonearning assets

 

218,984

 

225,131

Total assets

$

5,044,516

$

5,056,041

INTEREST-BEARING LIABILITIES
Time deposits

$

744,422

$

7,233

3.89

%

$

646,782

$

4,525

2.80

%

Brokered time deposits

 

0

 

0

0.00

 

 

59,402

 

686

4.62

 

Savings deposits

 

1,102,443

 

4,117

1.49

 

 

1,133,371

 

2,402

0.85

 

Demand deposits - interest bearing

 

1,391,767

 

8,810

2.53

 

 

1,428,409

 

6,878

1.93

 

Total interest-bearing deposits

 

3,238,632

 

20,160

2.49

 

 

3,267,964

 

14,491

1.77

 

 
Short term borrowings

 

299,543

 

3,585

4.79

 

 

213,549

 

2,727

5.11

 

Long term borrowings

 

88,834

 

1,035

4.66

 

 

88,382

 

1,008

4.56

 

Total borrowed funds

 

388,377

 

4,620

4.76

 

 

301,931

 

3,735

4.95

 

 
Total interest-bearing liabilities

 

3,627,009

 

24,780

2.73

 

 

3,569,895

 

18,226

2.04

 

 
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits - noninterest bearing

 

972,290

 

1,067,605

Other liabilities

 

57,336

 

47,120

Stockholders' equity

 

387,881

 

371,421

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY

$

5,044,516

$

5,056,041

Net interest income and interest rate spread

$

32,661

2.03

%

$

35,273

2.39

%

Net interest margin

2.71

%

2.92

%

 
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2024, adjustments of $77 thousand and $518 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $91 thousand and $604 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.
Six Months Ended Six Months Ended
June 30, 2024 June 30, 2023
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1)
EARNING ASSETS
Loans (2)

$

3,198,239

$

91,686

5.73

%

$

3,140,500

$

83,365

5.31

%

Taxable securities

 

1,109,972

 

13,227

2.38

 

 

1,164,400

 

13,204

2.27

 

Tax-exempt securities (2)

 

393,918

 

6,182

3.14

 

 

426,743

 

6,797

3.19

 

Other investments

 

33,924

 

684

4.03

 

 

38,976

 

970

4.98

 

Federal funds sold and other

 

75,174

 

1,369

3.64

 

 

77,870

 

1,161

2.98

 

Total earning assets

 

4,811,227

 

113,148

4.70

 

 

4,848,489

 

105,497

4.35

 

Nonearning assets

 

223,014

 

221,955

Total assets

$

5,034,241

$

5,070,444

INTEREST-BEARING LIABILITIES
Time deposits

$

738,159

$

14,281

3.87

%

$

618,637

$

7,864

2.54

%

Brokered time deposits

 

0

 

0

0.00

 

 

144,747

 

3,007

4.15

 

Savings deposits

 

1,093,511

 

7,716

1.41

 

 

1,143,539

 

4,356

0.76

 

Demand deposits - interest bearing

 

1,371,058

 

16,553

2.41

 

 

1,423,211

 

11,971

1.68

 

Total interest-bearing deposits

 

3,202,728

 

38,550

2.41

 

 

3,330,134

 

27,198

1.63

 

 
Short term borrowings

 

312,167

 

7,524

4.82

 

 

147,436

 

3,648

4.95

 

Long term borrowings

 

88,778

 

2,073

4.67

 

 

88,326

 

2,003

4.54

 

Total borrowed funds

 

400,945

 

9,597

4.79

 

 

235,762

 

5,651

4.79

 

 
Total interest-bearing liabilities

 

3,603,673

 

48,147

2.67

 

 

3,565,896

 

32,849

1.84

 

 
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY
Demand deposits - noninterest bearing

$

983,728

$

1,087,403

Other liabilities

 

55,125

 

47,996

Stockholders' equity

 

391,715

 

369,149

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY

$

5,034,241

$

5,070,444

Net interest income and interest rate spread

$

65,001

2.03

%

$

72,648

2.51

%

Net interest margin

2.70

%

3.00

%

 
(1) Interest and yields are calculated on a tax-equivalent basis where applicable.
(2) For 2024, adjustments of $156 thousand and $1.1 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $178 thousand and $1.3 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.
Reconciliation of Total Assets to Tangible Assets For the Three Months Ended For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

2024

2024

2023

2023

2023

2024

2023

Total Assets

$

5,156,853

 

$

5,080,010

 

$

5,078,350

 

$

4,971,163

 

$

5,073,454

 

$

5,156,853

 

$

5,073,454

 

Less Goodwill and other intangibles

 

188,970

 

 

189,599

 

 

190,288

 

 

191,326

 

 

192,052

 

 

188,970

 

 

192,052

 

Tangible Assets

$

4,967,883

 

$

4,890,411

 

$

4,888,062

 

$

4,779,837

 

$

4,881,402

 

$

4,967,883

 

$

4,881,402

 

Average Assets

 

5,044,516

 

 

5,023,966

 

 

4,980,314

 

 

5,058,969

 

 

5,070,444

 

 

5,034,241

 

 

5,070,444

 

Less average Goodwill and other intangibles

 

189,382

 

 

190,040

 

 

191,108

 

 

191,804

 

 

192,972

 

 

189,712

 

 

193,169

 

Average Tangible Assets

$

4,855,134

 

$

4,833,926

 

$

4,789,206

 

$

4,867,165

 

$

4,877,472

 

$

4,844,529

 

$

4,877,275

 

 
 
Reconciliation of Common Stockholders' Equity to Tangible Common Equity For the Three Months Ended For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

2024

2024

2023

2023

2023

2024

2023

Stockholders' Equity

$

396,694

 

$

397,026

 

$

404,415

 

$

315,982

 

$

366,991

 

$

396,694

 

$

366,991

 

Less Goodwill and other intangibles

 

188,970

 

 

189,599

 

 

190,288

 

 

191,326

 

 

192,052

 

 

188,970

 

 

192,052

 

Tangible Common Equity

$

207,724

 

$

207,427

 

$

214,127

 

$

124,656

 

$

174,939

 

$

207,724

 

$

174,939

 

Average Stockholders' Equity

 

387,881

 

 

395,549

 

 

324,332

 

 

367,600

 

 

371,421

 

 

391,715

 

 

369,149

 

Less average Goodwill and other intangibles

 

189,382

 

 

190,040

 

 

191,108

 

 

191,804

 

 

192,972

 

 

189,712

 

 

193,169

 

Average Tangible Common Equity

$

198,499

 

$

205,509

 

$

133,224

 

$

175,796

 

$

178,449

 

$

202,003

 

$

175,980

 

 
 
Reconciliation of Net Income, Less Merger and Certain Items For the Three Months Ended For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

 

2024

2024

2023

2023

2023

2024

2023

Net income

$

11,783

 

$

11,240

 

$

14,577

 

$

13,314

 

$

14,966

 

$

23,023

 

$

22,041

 

Acquisition related costs - after tax

 

0

 

 

0

 

 

358

 

 

234

 

 

354

 

 

0

 

 

3,803

 

Acquisition related provision - after tax

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

0

 

 

6,077

 

Employee severence - after tax

 

0

 

 

0

 

 

798

 

 

0

 

 

0

 

 

0

 

 

0

 

Lawsuit settlement expense - after tax

 

0

 

 

0

 

 

0

 

 

620

 

 

0

 

 

0

 

 

0

 

Net (gain) on loan sale - after tax

 

0

 

 

0

 

 

(723

)

 

0

 

 

0

 

 

0

 

 

0

 

Net loss (gain) on asset/security sales - after tax

 

407

 

 

1,675

 

 

171

 

 

604

 

 

(5

)

 

2,082

 

 

(77

)

Net income - Adjusted

$

12,190

 

$

12,915

 

$

15,181

 

$

14,772

 

$

15,315

 

$

25,105

 

$

31,844

 

Diluted EPS excluding merger and certain items

$

0.33

 

$

0.34

 

$

0.41

 

$

0.40

 

$

0.41

 

$

0.67

 

$

0.85

 

Return on Average Assets excluding merger and certain items (Annualized)

 

0.97

%

 

1.03

%

 

1.22

%

 

1.17

%

 

1.21

%

 

1.00

%

 

1.26

%

Return on Average Equity excluding merger and certain items (Annualized)

 

12.57

%

 

13.06

%

 

18.72

%

 

16.07

%

 

16.49

%

 

12.82

%

 

17.25

%

Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)

 

24.56

%

 

25.14

%

 

45.58

%

 

33.61

%

 

34.33

%

 

24.86

%

 

36.19

%

 
 
Efficiency ratio excluding certain items For the Three Months Ended For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

 

2024

2024

2023

2023

2023

2024

2023

Net interest income, tax equated

$

32,661

 

$

32,341

 

$

33,494

 

$

34,448

 

$

35,273

 

$

65,001

 

$

72,648

 

Noninterest income

 

9,606

 

 

8,357

 

 

12,156

 

 

9,831

 

 

9,449

 

 

17,963

 

 

19,874

 

Net (gain) on loan sale

 

0

 

 

0

 

 

(915

)

 

0

 

 

0

 

 

0

 

 

0

 

Net loss (gain) on asset/security sales

 

515

 

 

2,120

 

 

217

 

 

764

 

 

(6

)

 

2,635

 

 

(97

)

Net interest income and noninterest income adjusted

 

42,782

 

 

42,818

 

 

44,952

 

 

45,043

 

 

44,716

 

 

85,599

 

 

92,425

 

Noninterest expense less intangible amortization

 

25,773

 

 

26,351

 

 

26,394

 

 

26,991

 

 

25,163

 

 

52,124

 

 

54,976

 

Legal settlement expense

 

0

 

 

0

 

 

0

 

 

785

 

 

0

 

 

0

 

 

0

 

Employee severence

 

0

 

 

0

 

 

1,010

 

 

0

 

 

0

 

 

0

 

 

0

 

Acquisition related costs

 

0

 

 

0

 

 

452

 

 

268

 

 

442

 

 

0

 

 

4,755

 

Noninterest expense adjusted

 

25,773

 

 

26,351

 

 

24,932

 

 

25,938

 

 

24,721

 

 

52,124

 

 

50,221

 

Efficiency ratio excluding certain items

 

60.24

%

 

61.54

%

 

55.46

%

 

57.58

%

 

55.28

%

 

60.89

%

 

54.34

%

 
 
Net interest margin excluding acquisition marks and PPP interest and fees For the Three Months Ended For the Six Months Ended
June 30, March 31, Dec. 31, Sept. 30, June 30, June 30, June 30,

 

2024

2024

2023

2023

2023

2024

2023

Net interest income, tax equated

$

32,661

 

$

32,341

 

$

33,494

 

$

34,448

 

$

35,273

 

$

65,001

 

$

72,648

 

Acquisition marks

 

2,391

 

 

2,370

 

 

2,475

 

 

2,959

 

 

2,884

 

 

4,761

 

 

5,512

 

PPP interest and fees

 

1

 

 

1

 

 

1

 

 

1

 

 

2

 

 

2

 

 

3

 

Adjusted and annualized net interest income

 

121,076

 

 

119,880

 

 

124,072

 

 

125,952

 

 

129,548

 

 

120,476

 

 

134,266

 

Average earning assets

 

4,825,532

 

 

4,796,922

 

 

4,816,409

 

 

4,820,888

 

 

4,830,910

 

 

4,811,227

 

 

4,848,489

 

Less PPP average balances

 

171

 

 

213

 

 

229

 

 

247

 

 

277

 

 

192

 

 

271

 

Adjusted average earning assets

 

4,825,361

 

 

4,796,709

 

 

4,816,180

 

 

4,820,641

 

 

4,830,633

 

 

4,811,035

 

 

4,848,218

 

Net interest margin excluding marks and PPP interest and fees

 

2.51

%

 

2.50

%

 

2.58

%

 

2.61

%

 

2.68

%

 

2.50

%

 

2.77

%

 

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