GlobeNewswire Inc | Jan 25, 2021 05:31PM EST

January 25, 2021

Equity successfully acquired assets and deposits of Almena State Bank, originates $282.1 million of Main Street Lending Program loans through its continued support programs during the pandemicand adds $3.93 tangible book value per share in 2020

WICHITA, Kan., Jan. 25, 2021 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ: EQBK), (Equity, the Company, we, us, our), the Wichita-based holding company of Equity Bank, reported its unaudited results for the fourth quarter ended December 31, 2020.

Equity reported net income of $12.5 million, or $0.84, per diluted share in the quarter ended December 31, 2020, and a net loss of $75.0 million or $4.97 per share for the year ended December 31, 2020. When excluding the $104.8 million goodwill impairment recognized in the quarter ended September 30, 2020, adjusted net income totaled $23.9 million, or $1.57 per diluted share, for the year ended December 31, 2020. The results in the quarter ended December 31, 2020, reflect the Companys purchase of assets and deposit liabilities of Almena State Bank, acquired on October 23, 2020, from the Federal Deposit Insurance Corporation (FDIC) and the success of Equitys customers in obtaining forgiveness of Paycheck Protection Program (PPP) loans from the Small Business Administration (SBA) totaling $102.8 million resulting in a recognition of $3.8 million of fee income.

No one could have imagined the challenges that our employees, customers and communities faced in 2020 due to the pandemic. The perseverance exhibited in collaborating with our customers through a period of great uncertainty showed the integrity, entrepreneurship and accountability of the Equity team. I am honored to be a part of a team that worked tirelessly for customers when they needed us, and in turn, our customers were able to support our communities in a time of need, said Brad Elliott, Chairman and CEO of Equity.

In a year that was dominated by events outside of Equitys control, we took steps to fundamentally grow our franchise and position the Company for long-term stability and growth. We provided $24.3 million of reserves for potential loan losses, raised $75.0 million of proactive capital through a subordinated debt offering and grew tangible book value $3.93 per share, from $20.75 at December 31, 2019, to $24.68 at December 31, 2020, which is the highest level we have recorded as a publicly traded company.

Notable Items:

-- Tangible book value per common share was $24.68 at December 31, 2020, as compared to $20.75 at December 31, 2019, representing an increase of 18.9% or $3.93 per share. The Company authorized a second stock repurchase program in October 2020, totaling 800,000 shares. During the quarter ended December 31, 2020, the Company repurchased 313,231 shares at a weighted average cost of $20.82, totaling $6.5 million. -- The Company was anticipating adopting ASU 2016-13, also known as Current Expected Credit Losses (CECL) at December 31, 2020, effective January 1, 2020. On December 27, 2020, the President signed into law the 2021 Fiscal Year Omnibus Appropriations Bill, which included an option to delay adoption of ASU 2016-13 to January 1, 2022. The Company, after conferring with its advisors, will adopt CECL on January 1, 2021, and will not take the option to further delay adoption. -- During the year ended December 31, 2020, Equity originated $282.1 million of loans through the Main Street Lending Program (MSLP). The MSLP program ended at December 31, 2020. Pursuant to the MSLP terms, 95% of the total originations were sold to a special purpose vehicle of the Federal Reserve Bank of Boston. -- Of the $559.3 million of 2020 PPP loans originated, the Companys customers have successfully had $102.8 million of PPP loans forgiven, resulting in the recognition of fee income totaling $3.8 million and $6.1 million in the three- and twelve-month periods ended December 31, 2020. At December 31, 2020, $253.7 million loans remain from the 2020 PPP with an unrecognized $4.5 million of fee income. -- The Company completed the purchase of assets and assumption of deposit liabilities from the FDIC, as the receiver of Almena State Bank. Consequently, the Company recognized a bargain purchase gain of $2.1 million and $299 thousand of merger related expense in the quarter ended December 31, 2020.

Equitys Balance Sheet Highlights:

-- Total loans held for investment of $2.59 billion at December 31, 2020, as compared to total loans held for investment of $2.56 billion at December 31, 2019. -- Total deposits of $3.45 billion at December 31, 2020, as compared to $3.06 billion at December 31, 2019. Signature deposits, including core deposits comprised of checking, savings and money market accounts, were $2.82 billion at December 31, 2020, relative to $2.23 billion at December 31, 2019. -- Total assets were $4.01 billion at December 31, 2020, as compared to $3.95 billion at December 31, 2019.

Financial Results for the Quarter Ended December 31, 2020

Net income allocable to common stockholders was $12.5 million, or $0.84 per diluted share, for the three months ended December 31, 2020, as compared to the net loss allocable to common stockholders of $90.4 million, or $6.01 per diluted share, for the three months ended September 30, 2020, an increase of $102.9 million. This increase was primarily attributable to the goodwill impairment charge of $104.8 million taken during the quarter ended September 30, 2020, and a $2.1 million acquisition gain from the Almena State Bank transaction during the quarter ended December 31, 2020. Net income, excluding the gain on acquisition and merger expense, was $10.1 million for the quarter ended December 31, 2020, or $0.67 per diluted share. Net income, excluding the goodwill impairment and using an assumed 22.5% effective tax rate for the quarter ended September 30, 2020, totaled $9.1 million, or $0.60 per diluted share.

Net Interest Income

Net interest income was $35.6 million for the three months ended December 31, 2020, as compared to $32.1 million for the three months ended September 30, 2020, an increase of $3.5 million, or 10.8%. The increase in net interest income was driven by the recognition of fee income from PPP loan forgiveness by the SBA, totaling $3.8 million in the three months ended December 31, 2020, compared to $1.3 million in the three months ended September 30, 2020. As a result of the PPP loan forgiveness, net interest margin increased 41 basis points to 3.88% for the three months ended December 31, 2020 from 3.47% for the three months ended September 30, 2020. The yield on earning assets improved 35 basis points to 4.36% for the quarter ended December 31, 2020 from 4.01% from the previous quarter. The cost of interest-bearing liabilities declined to 0.65% or five basis points for the quarter ended December 31, 2020 from 0.70% in the quarter ended September 30, 2020. The cost of interest-bearing deposits declined seven basis points to 0.43% for the three months ended December 31, 2020 from 0.50% in the previous quarter primarily attributed to the decline in the cost of time deposits, which declined 23 basis points between the quarters. The cost of other borrowings increased to 4.71% in the three months ended December 31, 2020 from 4.45% from the quarter ended September 30, 2020, mainly due to the entire $75.0 million of subordinated debt at 7.0% not being on the balance sheet for the entire third quarter.

Provision for Loan Losses

The provision for loan losses was $1.0 million for the three months ended December 31, 2020, as compared to $815 thousand for the three months ended September 30, 2020. For the three months ended December 31, 2020, we had net charge-offs of $1.4 million as compared to $806 thousand for three months ended September 30, 2020.

Non-Interest Income

Total non-interest income was $8.5 million for the three months ended December 31, 2020, or $6.4 million with the net gain on the purchase and assumption of Almena State Bank excluded, as compared to the $6.5 million reported for the three months ended September 30, 2020. Service charges and fees were $1.8 million representing an increase of $53 thousand, or 3.1%, from the quarter ended September 30, 2020. Debit card income totaled $2.4 million in the quarter ended December 31, 2020, decreasing $90 thousand, or 3.6%, from the quarter ended September 30, 2020.

Non-Interest Expense

Total non-interest expense for the quarter ended December 31, 2020 was $28.5 million, or $28.2 million with merger expense excluded. When the goodwill impairment charge of $104.8 million is excluded from the previous quarter, pro-forma non-interest expense totaled $26.0 million for the quarter ended September 30, 2020. The $2.5 million increase is primarily attributed to a $1.5 million increase in other real estate owned expense and a $437 thousand increase in FDIC insurance assessments. The most significant contributor to the increase in other real estate owned expense was a $947 thousand valuation adjustment on two facilities that were closed in May 2020.

Asset Quality

As of December 31, 2020, Equitys allowance for loan losses to total loans was 1.30%, as compared to 0.48% at December 31, 2019. Total reserves, including purchase discounts, to total loans were approximately 2.12% as of December 31, 2020, as compared to 0.85% at December 31, 2019. Nonperforming assets were $53.6 million as of December 31, 2020, or 1.34% of total assets. Nonperforming assets were $46.9 million at December 31, 2019, or 1.19% of total assets.

Regulatory Capital

The Companys ratio of common equity tier 1 capital to risk-weighted assets was 12.8%, the total capital to risk-weighted assets was 17.4% and the total leverage ratio was 9.3% at December 31, 2020. At December 31, 2019, the Companys common equity tier 1 capital to risk-weighted assets ratio was 11.6%, the total capital to risk-weighted assets ratio was 12.6% and the total leverage ratio was 9.0%. The Companys subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.5%, a ratio of total capital to risk-weighted assets of 15.7% and a total leverage ratio of 10.1% at December 31, 2020. At December 31, 2019, Equity Banks ratio of common equity tier 1 capital to risk-weighted assets was 12.0%, the ratio of total capital to risk-weighted assets was 12.5% and the total leverage ratio was 8.9%.

Non-GAAP Financial Measures

In addition to evaluating the Companys 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 Companys GAAP financial information.

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

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

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

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

Conference Call and Webcast

Equity Chairman and Chief Executive Officer, Brad Elliott, and Executive Vice President and Chief Financial Officer, Eric Newell, will hold a conference call and webcast to discuss fourth quarter 2020 results on Tuesday, January 26, 2021, at 10:00 a.m. eastern time, 9:00 a.m. central time.

Investors, news media and other participants should register for the call or audio webcast at. On Tuesday, January 26, 2021, participants may also dial into the call toll-free at (844) 534-7311 from anywhere in the U.S. or (574) 990-1419 internationally, using conference ID no. 6781789.

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

A replay of the call and webcast will be available two hours following the close of the call until February 2, 2021, accessible at (855) 859-2056 with conference ID no. 6781789 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. Equitys 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 Equitys management with respect to, among other things, future events and Equitys 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 Equitys industry, managements beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equitys 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 Equitys 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 Equitys Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2020, and any updates to those risk factors set forth in Equitys 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 Equitys underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equitys 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 Equitys behalf may issue.

Investor Contact:

Chris NavratilSVP, FinanceEquity Bancshares, Inc.(316) 612-6014cnavratil@equitybank.com

Media Contact:

John J. HanleySVP, Senior Director of MarketingEquity Bancshares, Inc.(816) 505-4063jhanley@equitybank.com

Unaudited Financial Tables

-- Table 1. Consolidated Statements of Operations -- Table 2. Quarterly Consolidated Statements of Operations -- 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 OPERATIONS (Unaudited)(Dollars in thousands, except per share data)

Three months ended Year ended December 31, December 31, 2020 2019 2020 2019 Interest and dividend incomeLoans, including $ 35,383 $ 36,687 $ 134,664 $ 149,298 feesSecurities, 3,408 4,615 15,521 19,339 taxableSecurities, 913 1,037 3,682 4,180 nontaxableFederal funds sold 285 645 1,694 2,682 and otherTotal interest and 39,989 42,984 155,561 175,499 dividend incomeInterest expense Deposits 2,755 8,533 16,582 40,914 Federal fundspurchased and 25 39 105 155 retail repurchaseagreementsFederal Home Loan 94 1,564 2,292 6,667 Bank advancesFederal ReserveBank discount ? ? 6 ? windowBank stock loan ? 147 415 654 Subordinated debt 1,556 296 3,509 1,251 Total interest 4,430 10,579 22,909 49,641 expense Net interest 35,559 32,405 132,652 125,858 incomeProvision for loan 1,000 1,055 24,255 18,354 lossesNet interestincome after 34,559 31,350 108,397 107,504 provision for loanlossesNon-interest incomeService charges 1,759 2,241 6,856 8,672 and feesDebit card income 2,401 2,101 9,136 8,230 Mortgage banking 855 769 3,153 2,468 Increase in valueof bank-owned life 489 504 1,941 1,998 insuranceNet gain on 2,145 ? 2,145 ? acquisitionNet gains (losses)from securities (1 ) (3 ) 11 14 transactionsOther 852 1,029 2,781 3,606 Total non-interest 8,500 6,641 26,023 24,988 incomeNon-interest expenseSalaries and 14,053 11,918 54,129 52,122 employee benefitsNet occupancy and 2,206 2,342 8,784 8,674 equipmentData processing 2,748 2,688 10,991 10,124 Professional fees 1,095 1,359 4,282 4,734 Advertising andbusiness 801 901 2,498 3,075 developmentTelecommunications 510 486 1,873 2,079 FDIC insurance 797 109 2,088 1,228 Courier and 338 328 1,441 1,348 postageFree nationwide 423 440 1,609 1,680 ATM costAmortization ofcore deposit 1,044 820 3,850 3,168 intangiblesLoan expense 161 267 789 875 Other real estate 1,600 381 2,310 707 ownedMerger expenses 299 ? 299 915 Goodwill ? ? 104,831 ? impairmentOther 2,385 2,807 9,216 8,906 Total non-interest 28,460 24,846 208,990 99,635 expenseIncome (loss) 14,599 13,145 (74,570 ) 32,857 before income taxProvision for 2,111 3,131 400 7,278 income taxesNet income (loss)and net income(loss) allocable $ 12,488 $ 10,014 $ (74,970 ) $ 25,579 to commonstockholdersBasic earnings $ 0.85 $ 0.65 $ (4.97 ) $ 1.64 (loss) per shareDiluted earnings $ 0.84 $ 0.64 $ (4.97 ) $ 1.61 (loss) per shareWeighted average 14,760,810 15,442,841 15,098,512 15,619,891 common sharesWeighted averagediluted common 14,934,058 15,684,673 15,098,512 15,843,139 shares

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

As of and for the three months ended December 31, September June 30, March 31, December 31, 2020 30, 2020 2020 2019 2020Interest and dividend incomeLoans, including $ 35,383 $ 32,278 $ 32,627 $ 34,376 $ 36,687 feesSecurities, 3,408 3,476 4,017 4,620 4,615 taxableSecurities, 913 923 880 966 1,037 nontaxableFederal funds sold 285 405 409 595 645 and otherTotal interest and 39,989 37,082 37,933 40,557 42,984 dividend incomeInterest expense Deposits 2,755 3,064 3,899 6,864 8,533 Federal fundspurchased and 25 25 24 31 39 retail repurchaseagreementsFederal Home Loan 94 471 552 1,175 1,564 Bank advancesFederal ReserveBank discount ? ? 6 ? ? windowBank stock loan ? ? 306 109 147 Subordinated 1,556 1,415 255 283 296 debenturesTotal interest 4,430 4,975 5,042 8,462 10,579 expense Net interest 35,559 32,107 32,891 32,095 32,405 incomeProvision for loan 1,000 815 12,500 9,940 1,055 lossesNet interestincome after 34,559 31,292 20,391 22,155 31,350 provision for loanlossesNon-interest incomeService charges 1,759 1,706 1,365 2,026 2,241 and feesDebit card income 2,401 2,491 2,201 2,043 2,101 Mortgage banking 855 877 831 590 769 Increase in valueof bank-owned life 489 489 481 482 504 insuranceNet gain on 2,145 ? ? ? ? acquisitionNet gains (losses)from securities (1 ) ? 4 8 (3 )transactionsOther 852 922 850 157 1,029 Total non-interest 8,500 6,485 5,732 5,306 6,641 incomeNon-interest expenseSalaries and 14,053 13,877 12,695 13,504 11,918 employee benefitsNet occupancy and 2,206 2,224 2,119 2,235 2,342 equipmentData processing 2,748 2,817 2,763 2,663 2,688 Professional fees 1,095 877 943 1,367 1,359 Advertising andbusiness 801 598 403 696 901 developmentTelecommunications 510 486 390 487 486 FDIC insurance 797 360 414 517 109 Courier and 338 366 353 384 328 postageFree nationwide 423 439 327 420 440 ATM costAmortization ofcore deposit 1,044 1,030 974 802 820 intangiblesLoan expense 161 107 287 234 267 Other real estate 1,600 133 269 308 381 ownedMerger expenses 299 ? ? ? ? Goodwill ? 104,831 ? ? ? impairmentOther 2,385 2,690 2,000 2,141 2,807 Total non-interest 28,460 130,835 23,937 25,758 24,846 expenseIncome (loss) 14,599 (93,058 ) 2,186 1,703 13,145 before income taxProvision forincome taxes 2,111 (2,653 ) 497 445 3,131 (benefit)Net income (loss)and net income(loss) allocable $ 12,488 $ (90,405 ) $ 1,689 $ 1,258 $ 10,014 to commonstockholdersBasic earnings $ 0.85 $ (6.01 ) $ 0.11 $ 0.08 $ 0.65 (loss) per shareDiluted earnings $ 0.84 $ (6.01 ) $ 0.11 $ 0.08 $ 0.64 (loss) per shareWeighted average 14,760,810 15,040,407 15,209,483 15,387,697 15,442,841 common sharesWeighted averagediluted common 14,934,058 15,040,407 15,304,009 15,595,024 15,684,673 shares

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

December September June 30, March 31, December 31, 30, 2020 2020 31, 2020 2020 2019ASSETS Cash and due from $ 280,150 $ 65,534 $ 178,045 $ 141,989 $ 88,973 banksFederal funds sold 548 305 245 263 318 Cash and cash 280,698 65,839 178,290 142,252 89,291 equivalentsInterest-bearingtime deposits in 249 499 2,248 2,498 2,498 other banksAvailable-for-sale 871,827 798,576 177,228 187,812 142,067 securitiesHeld-to-maturity ? ? 662,522 721,992 769,059 securities^(1)Loans held for sale 12,394 9,053 4,802 6,494 5,933 Loans, net ofallowance for loan 2,557,987 2,691,626 2,772,256 2,485,208 2,544,420 losses^(2)Other real estate 11,733 8,727 7,374 5,870 8,293 owned, netPremises and 89,412 86,087 87,055 84,732 84,478 equipment, netBank-owned life 77,044 76,555 76,066 75,585 75,103 insuranceFederal Reserve Bankand Federal Home 16,415 32,545 31,832 31,662 31,137 Loan Bank stockInterest receivable 15,831 18,110 19,598 15,549 15,738 Goodwill 31,601 31,601 136,432 136,432 136,432 Core deposit 16,057 17,101 18,131 19,105 19,907 intangibles, netOther 32,108 29,252 31,435 28,641 25,222 Total assets $ 4,013,356 $ 3,865,571 $ 4,205,269 $ 3,943,832 $ 3,949,578 LIABILITIES AND STOCKHOLDERS? EQUITYDeposits Demand $ 791,639 $ 693,967 $ 756,613 $ 508,441 $ 481,298 Totalnon-interest-bearing 791,639 693,967 756,613 508,441 481,298 depositsSavings, NOW and 2,029,097 1,816,307 1,800,132 1,668,145 1,749,048 money marketTime 626,854 623,344 690,522 783,811 833,170 Totalinterest-bearing 2,655,951 2,439,651 2,490,654 2,451,956 2,582,218 depositsTotal deposits 3,447,590 3,133,618 3,247,267 2,960,397 3,063,516 Federal fundspurchased and retail 36,029 46,295 51,557 37,113 35,708 repurchaseagreementsFederal Home Loan 10,144 167,862 344,900 389,620 324,373 Bank advancesBank stock loan ? ? ? 40,000 8,990 Subordinated 87,684 87,537 55,575 14,638 14,561 debenturesContractual 5,189 5,478 5,571 5,781 5,836 obligationsInterest payable and 19,071 22,609 20,633 18,932 18,534 other liabilitiesTotal liabilities 3,605,707 3,463,399 3,725,503 3,466,481 3,471,518 Commitments andcontingent liabilitiesStockholders? equity Common stock 174 174 174 174 174 Additional paid-in 386,820 386,017 384,955 383,850 382,731 capitalRetained earnings 50,787 38,299 128,704 127,015 125,757 Accumulated othercomprehensive income 19,781 21,074 3,390 3,769 (3 )(loss)Employee stock loans (43 ) (43 ) (43 ) (43 ) (77 )Treasury stock (49,870 ) (43,349 ) (37,414 ) (37,414 ) (30,522 )Total stockholders? 407,649 402,172 479,766 477,351 478,060 equityTotal liabilitiesand stockholders? $ 4,013,356 $ 3,865,571 $ 4,205,269 $ 3,943,832 $ 3,949,578 equity ^(1) Fair marketvalue of $ ? $ ? $ 689,206 $ 750,900 $ 783,911 held-to-maturitysecurities^(2) Allowance for 33,709 34,087 34,078 21,915 12,232 loan losses

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

As of and for the three months ended December 31, September June 30, March 31, December 31, 30, 2020 2020 2020 2020 2019 LoansHeld-For-Investment by TypeCommercial real $ 1,188,696 $ 1,188,329 $ 1,191,336 $ 1,200,762 $ 1,158,022 estateCommercial and 734,495 857,244 883,355 542,571 592,052 industrialResidential real 382,026 402,242 442,486 480,603 503,439 estateAgricultural real 133,693 127,349 129,080 130,795 141,868 estateConsumer 58,464 67,465 71,037 64,799 68,378 Agricultural 94,322 83,084 89,040 87,593 92,893 Total loans 2,591,696 2,725,713 2,806,334 2,507,123 2,556,652 held-for-investmentAllowance for loan (33,709 ) (34,087 ) (34,078 ) (21,915 ) (12,232 )lossesNet loans $ 2,557,987 $ 2,691,626 $ 2,772,256 $ 2,485,208 $ 2,544,420 held-for-investment Asset Quality RatiosAllowance for loanlosses to total 1.30 % 1.25 % 1.21 % 0.87 % 0.48 %loansPast due ornonaccrual loans to 2.11 % 2.12 % 1.88 % 2.47 % 1.66 %total loansNonperformingassets to total 1.34 % 1.55 % 1.37 % 1.22 % 1.19 %assetsNonperformingassets to total 2.06 % 2.19 % 2.05 % 1.92 % 1.83 %loans plus otherreal estate ownedClassified assetsto bank total 25.50 % 18.35 % 20.81 % 19.50 % 21.24 %regulatory capital Selected AverageBalance Sheet Data (QTD Average)Investment $ 814,114 $ 802,525 $ 877,308 $ 907,910 $ 911,923 securitiesTotal gross loans 2,692,223 2,758,680 2,806,865 2,525,344 2,568,301 receivableInterest-earning 3,647,730 3,679,168 3,786,629 3,519,267 3,563,642 assetsTotal assets 3,910,628 4,041,187 4,159,336 3,888,205 3,932,909 Interest-bearing 2,551,219 2,430,407 2,487,187 2,531,508 2,563,519 depositsBorrowings 172,730 377,158 384,727 355,303 377,561 Totalinterest-bearing 2,723,949 2,807,565 2,871,914 2,886,811 2,941,080 liabilitiesTotal deposits 2,960,791 3,145,810 3,257,631 3,021,181 3,055,275 Total liabilities 3,501,055 3,558,100 3,675,731 3,405,638 3,459,347 Total stockholders' 409,572 483,088 483,605 482,567 473,562 equityTangible common 355,025 329,039 327,411 325,470 315,569 equity^* Performance ratios Return on averageassets (ROAA) 1.27 % (8.90 )% 0.16 % 0.13 % 1.01 %annualizedReturn on averageassets beforeincome tax, 1.59 % 1.24 % 1.42 % 1.20 % 1.43 %provision for loanlosses and goodwillimpairment*Return on averageequity (ROAE) 12.13 % (74.45 )% 1.40 % 1.05 % 8.39 %annualizedReturn on averageequity beforeincome tax, 15.15 % 10.37 % 12.21 % 9.70 % 11.90 %provision for loanlosses and goodwillimpairment*Return on averagetangible commonequity 14.93 % (108.31 )% 3.03 % 2.35 % 13.42 %(ROATCE) annualized^*Return on averagetangible commonequity 14.93 % 12.02 % 3.03 % 2.35 % 13.42 %adjusted forgoodwillimpairment*Yield on loans 5.23 % 4.65 % 4.68 % 5.47 % 5.67 %annualizedCost ofinterest-bearing 0.43 % 0.50 % 0.63 % 1.09 % 1.32 %deposits annualizedCost of total 0.37 % 0.39 % 0.48 % 0.91 % 1.11 %deposits annualizedNet interest margin 3.88 % 3.47 % 3.49 % 3.67 % 3.61 %annualizedEfficiency ratio^* 67.19 % 67.38 % 61.98 % 68.88 % 63.63 %Non-interest income 0.86 % 0.64 % 0.55 % 0.55 % 0.67 %/ average assetsNon-interestexpense / average 2.90 % 12.88 % 2.31 % 2.66 % 2.51 %assets Capital Ratios Tier 1 Leverage 9.30 % 8.76 % 8.52 % 9.02 % 9.02 %RatioCommon Equity Tier 12.82 % 12.76 % 12.02 % 11.67 % 11.63 %1 Capital RatioTier 1 Risk Based 13.38 % 13.32 % 12.57 % 12.20 % 12.15 %Capital RatioTotal Risk Based 17.36 % 17.35 % 15.33 % 13.00 % 12.59 %Capital RatioTotal stockholders'equity to total 10.16 % 10.40 % 11.41 % 12.10 % 12.10 %assetsTangible commonequity to tangible 9.05 % 9.23 % 8.00 % 8.47 % 8.45 %assets^*Book value per $ 28.04 $ 27.08 $ 31.53 $ 31.41 $ 30.95 common shareTangible book value $ 24.68 $ 23.72 $ 21.29 $ 21.10 $ 20.75 per common share^*Tangible book valueper diluted common $ 24.32 $ 23.57 $ 21.13 $ 20.96 $ 20.39 share^*

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

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

For the year ended For the year ended December 31, 2020 December 31, 2019 Average Interest Average Average Interest Average Outstanding Income/ Yield/ Outstanding Income/ Yield/ Balance Expense Rate^ Balance Expense Rate^ (3)(4) (3)(4)Interest-earning assetsLoans ^(1) Commercial and $ 763,971 $ 35,601 4.66 % $ 567,215 $ 34,225 6.03 %industrialCommercial real 952,083 50,667 5.32 % 1,012,146 57,316 5.66 %estateReal estate 238,015 10,947 4.60 % 212,658 13,776 6.48 %constructionResidential real 449,789 19,894 4.42 % 519,119 24,338 4.69 %estateAgricultural 133,813 8,008 5.98 % 140,365 8,496 6.05 %real estateConsumer 70,064 4,603 6.57 % 70,390 5,563 7.90 %Agricultural 88,206 4,944 5.61 % 85,747 5,584 6.51 %Total loans 2,695,941 134,664 5.00 % 2,607,640 149,298 5.73 %Securities Taxable 727,452 15,521 2.13 % 777,802 19,339 2.49 %securitiesNontaxable 122,783 3,682 3.00 % 142,816 4,180 2.93 %securitiesTotal securities 850,235 19,203 2.26 % 920,618 23,519 2.55 %Federal funds 112,053 1,694 1.51 % 83,887 2,682 3.20 %sold and otherTotalinterest-earning $ 3,658,229 155,561 4.25 % $ 3,612,145 175,499 4.86 %assetsInterest-bearing liabilitiesSavings, NOW andmoney market $ 1,795,108 5,893 0.33 % $ 1,699,952 21,008 1.24 %depositsTime deposits 704,921 10,689 1.52 % 967,803 19,906 2.06 %Totalinterest-bearing 2,500,029 16,582 0.66 % 2,667,755 40,914 1.53 %depositsFHLB advances 213,155 2,292 1.08 % 277,328 6,667 2.40 %Other borrowings 109,064 4,035 3.70 % 69,270 2,060 2.97 %Totalinterest-bearing $ 2,822,248 22,909 0.81 % $ 3,014,353 49,641 1.65 %liabilities Net interest $ 132,652 $ 125,858 incomeInterest rate 3.44 % 3.21 %spread Net interest 3.63 % 3.48 %margin ^(2) ^(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 ratedisclosed. 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 December 31, 2020 December 31, 2019 Average Interest Average Average Interest Average Outstanding Income/ Yield/ Outstanding Income/ Yield/ Balance Expense Rate^ Balance Expense Rate^ (3)(4) (3)(4)Interest-earning assetsLoans ^(1) Commercial and $ 782,433 $ 10,943 5.56 % $ 568,868 $ 8,657 6.04 %industrialCommercial real 980,686 12,647 5.13 % 942,447 13,966 5.88 %estateReal estate 216,714 2,301 4.22 % 236,447 3,308 5.55 %constructionResidential real 406,450 5,005 4.90 % 522,113 5,815 4.42 %estateAgricultural 135,337 2,244 6.60 % 144,824 2,236 6.13 %real estateConsumer 78,430 1,080 5.48 % 69,980 1,385 7.85 %Agricultural 92,173 1,163 5.02 % 83,622 1,320 6.26 %Total loans 2,692,223 35,383 5.23 % 2,568,301 36,687 5.67 %Securities Taxable 698,985 3,408 1.94 % 768,867 4,615 2.38 %securitiesNontaxable 115,129 913 3.15 % 143,056 1,037 2.88 %securitiesTotal securities 814,114 4,321 2.11 % 911,923 5,652 2.46 %Federal funds 141,393 285 0.80 % 83,418 645 3.07 %sold and otherTotalinterest-earning $ 3,647,730 39,989 4.36 % $ 3,563,642 42,984 4.79 %assetsInterest-bearing liabilitiesSavings, NOW andmoney market $ 1,915,280 970 0.20 % $ 1,683,157 4,094 0.97 %depositsTime deposits 635,939 1,785 1.12 % 880,362 4,438 2.00 %Totalinterest-bearing 2,551,219 2,755 0.43 % 2,563,519 8,533 1.32 %depositsFHLB advances 39,245 94 0.95 % 310,592 1,564 2.00 %Other borrowings 133,485 1,581 4.71 % 66,969 482 2.86 %Totalinterest-bearing $ 2,723,949 4,430 0.65 % $ 2,941,080 10,579 1.43 %liabilities Net interest $ 35,559 $ 32,405 incomeInterest rate 3.71 % 3.36 %spread Net interest 3.88 % 3.61 %margin ^(2) ^(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 December 31, 2020 September 30, 2020 Average Interest Average Average Interest Average Outstanding Income/ Yield/ Outstanding Income/ Yield/ Balance Expense Rate^ Balance Expense Rate^ (3)(4) (3)(4)Interest-earning assetsLoans ^(1) Commercial and $ 782,433 $ 10,943 5.56 % $ 848,096 $ 8,400 3.94 %industrialCommercial real 980,686 12,647 5.13 % 979,775 12,886 5.23 %estateReal estate 216,714 2,301 4.22 % 214,775 2,233 4.14 %constructionResidential real 406,450 5,005 4.90 % 429,965 4,733 4.38 %estateAgricultural 135,337 2,244 6.60 % 131,725 1,718 5.19 %real estateConsumer 78,430 1,080 5.48 % 69,485 1,104 6.32 %Agricultural 92,173 1,163 5.02 % 84,859 1,204 5.65 %Total loans 2,692,223 35,383 5.23 % 2,758,680 32,278 4.65 %Securities Taxable 698,985 3,408 1.94 % 683,630 3,476 2.02 %securitiesNontaxable 115,129 913 3.15 % 118,895 923 3.09 %securitiesTotal securities 814,114 4,321 2.11 % 802,525 4,399 2.18 %Federal funds 141,393 285 0.80 % 117,963 405 1.36 %sold and otherTotalinterest-earning $ 3,647,730 39,989 4.36 % $ 3,679,168 37,082 4.01 %assetsInterest-bearing liabilitiesSavings, NOW andmoney market $ 1,915,280 970 0.20 % $ 1,784,891 875 0.19 %depositsTime deposits 635,939 1,785 1.12 % 645,516 2,189 1.35 %Totalinterest-bearing 2,551,219 2,755 0.43 % 2,430,407 3,064 0.50 %depositsFHLB advances 39,245 94 0.95 % 248,437 471 0.75 %Other borrowings 133,485 1,581 4.71 % 128,721 1,440 4.45 %Totalinterest-bearing $ 2,723,949 4,430 0.65 % $ 2,807,565 4,975 0.70 %liabilities Net interest $ 35,559 $ 32,107 incomeInterest rate 3.71 % 3.31 %spread Net interest 3.88 % 3.47 %margin ^(2) ^(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 December 31, September June 30, March 31, December 31, 30, 2020 2020 2020 2020 2019 Income before $ 14,599 $ (93,058 ) $ 2,186 $ 1,703 $ 13,145 income taxesAdd: goodwill ? 104,831 ? ? ? impairmentLess: tax 2,111 2,652 497 445 3,131 effectAdjusted $ 12,488 $ 9,121 $ 1,689 $ 1,258 $ 10,014 incomeWeightedaverage 14,760,810 15,040,407 15,209,483 15,387,697 15,442,841 common sharesoutstandingEffect ofweightedaveragedilutive 173,248 82,804 94,526 207,327 241,832 sharesassumingpositive netincomeWeightedaverage 14,934,058 15,123,211 15,304,009 15,595,024 15,684,673 dilutedsharesDilutedearnings pershare $ 0.84 $ 0.60 $ 0.11 $ 0.08 $ 0.64 adjusted forgoodwillimpairment Totalstockholders' $ 407,649 $ 402,172 $ 479,766 $ 477,351 $ 478,060 equityLess: 31,601 31,601 136,432 136,432 136,432 goodwillLess: coredeposit 16,057 17,101 18,131 19,105 19,907 intangibles,netLess:mortgage ? 1 2 4 5 servicingasset, netLess: naming 1,130 1,141 1,152 1,163 1,174 rights, netTangible $ 358,861 $ 352,328 $ 324,049 $ 320,647 $ 320,542 common equityCommon sharesissued at 14,540,556 14,853,487 15,218,301 15,198,986 15,444,434 period endDilutedcommon shares 14,756,378 14,945,282 15,333,977 15,297,319 15,719,810 outstandingat period endBook valueper common $ 28.04 $ 27.08 $ 31.53 $ 31.41 $ 30.95 shareTangible bookvalue per $ 24.68 $ 23.72 $ 21.29 $ 21.10 $ 20.75 common shareTangible bookvalue per $ 24.32 $ 23.57 $ 21.13 $ 20.96 $ 20.39 dilutedcommon share Total assets $ 4,013,356 $ 3,865,571 $ 4,205,269 $ 3,943,832 $ 3,949,578 Less: 31,601 31,601 136,432 136,432 136,432 goodwillLess: coredeposit 16,057 17,101 18,131 19,105 19,907 intangibles,netLess:mortgage ? 1 2 4 5 servicingasset, netLess: naming 1,130 1,141 1,152 1,163 1,174 rights, netTangible $ 3,964,568 $ 3,815,727 $ 4,049,552 $ 3,787,128 $ 3,792,060 assetsTotalstockholders' 10.16 % 10.40 % 11.41 % 12.10 % 12.10 %equity tototal assetsTangiblecommon equity 9.05 % 9.23 % 8.00 % 8.47 % 8.45 %to tangibleassets Total averagestockholders' $ 409,572 $ 483,088 $ 483,605 $ 482,567 $ 473,562 equityLess: averageintangible 54,547 154,049 156,194 157,097 157,993 assetsAveragetangible $ 355,025 $ 329,039 $ 327,411 $ 325,470 $ 315,569 common equityNet income(loss)allocable to $ 12,488 $ (90,405 ) $ 1,689 $ 1,258 $ 10,014 commonstockholdersAdd: goodwill $ ? $ 104,831 $ ? $ ? $ ? impairmentLess: taxeffect of $ ? $ 5,305 $ ? $ ? $ ? goodwillimpairmentAdjusted netincome (loss) $ 12,488 $ 9,121 $ 1,689 $ 1,258 $ 10,014 plus goodwillimpairmentAmortizationof intangible 1,055 1,043 986 814 833 assetsLess: taxeffect ofintangible 222 234 207 171 175 assetsamortizationAdjusted netincome (loss)allocable to $ 13,321 $ 9,930 $ 2,468 $ 1,901 $ 10,672 commonstockholdersReturn ontotal average )stockholders' 12.13 % (74.45 % 1.40 % 1.05 % 8.39 %equity (ROAE)annualizedReturn onaveragetangible 14.93 % (108.31 ) 3.03 % 2.35 % 13.42 %common equity %(ROATCE)annualizedAdjustedreturn onaverage 14.93 % 12.01 % 3.03 % 2.35 % 13.42 %tangiblecommon equity Non-interest $ 28,460 $ 130,835 $ 23,937 $ 25,758 $ 24,846 expenseLess: merger 299 ? ? ? ? expenseLess:goodwill ? 104,831 ? ? ? impairmentNon-interestexpense,excluding $ 28,161 $ 26,004 $ 23,937 $ 25,758 $ 24,846 goodwillimpairmentNet interest $ 35,559 $ 32,107 $ 32,891 $ 32,095 $ 32,405 incomeNon-interest 8,500 6,485 5,732 5,306 6,641 incomeLess: netgain on 2,145 ? ? ? ? acquisitionLess: netgains(losses) from (1 ) ? 4 8 (3 )securitiestransactionsNon-interestincome,excludinggains $ 6,356 $ 6,485 $ 5,728 $ 5,298 $ 6,644 (losses) fromsecuritiestransactionsNet interestincome plusnon-interestincome,excluding net $ 41,915 $ 38,592 $ 38,619 $ 37,393 $ 39,049 gains(losses) fromsecuritiestransactionsNon-interestexpense tonet interest 64.60 % 339.02 % 61.98 % 68.87 % 63.63 %income plusnon-interestincomeEfficiency 67.19 % 67.38 % 61.98 % 68.88 % 63.63 %ratioNet income(loss)allocable to $ 12,488 $ (90,405 ) $ 1,689 $ 1,258 $ 10,014 commonstockholdersAdd: income 2,111 (2,653 ) 497 445 3,131 tax provisionAdd:provision for 1,000 815 12,500 9,940 1,055 loan lossesAdd: goodwill ? 104,831 ? ? ? impairmentAdjusted net $ 15,599 $ 12,588 $ 14,686 $ 11,643 $ 14,200 incomeTotal average $ 3,910,628 $ 4,041,187 $ 4,159,336 $ 3,888,205 $ 3,932,909 assetsTotal averagestockholders' $ 409,572 $ 483,088 $ 483,605 $ 482,567 $ 473,562 equityReturn onaverage 1.27 % (8.90 ) 0.16 % 0.13 % 1.01 %assets (ROAA) %annualizedAdjustedreturn on 1.59 % 1.24 % 1.42 % 1.20 % 1.43 %averageassetsAdjustedreturn on 15.15 % 10.37 % 12.21 % 9.70 % 11.90 %averageequity