GlobeNewswire Inc | Oct 19, 2021 06:17PM EDT

October 19, 2021

WICHITA, Kan., Oct. 19, 2021 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ: EQBK), (Equity, the Company, we, us, our), the Wichita-based holding company of Equity Bank, reported net income of $11.8 million and $0.80 earnings per diluted share for the quarter ended September 30, 2021. Equitys results occurred as the Company completed its acquisition of American State Bancshares, Inc. on October 1, 2021.

As the founder of Equity Bank, our results this quarter are particularly satisfying, as we celebrate continued loan growth, excellent earnings and our first cash stock dividend while simultaneously closing the largest acquisition in our history. I am grateful to our loyal employees and stockholders as we continue to grow and improve Equity Bank, said Brad S. Elliott, Chairman and CEO of Equity.

Im pleased with the growth of the Equity Bank brand and the hard work and collaboration of our team members throughout our regions, including our bank employees, lenders, and operations professionals who placed the customer first and executed with open doors, expertise, and availability, said Mr. Elliott. Weve successfully integrated American State Bank & Trust Company into our platform while continuing to provide momentum, support and expertise to our customers throughout our franchise.

Equity customers successfully had $175.7 million of Paycheck Protection Program (PPP) loans forgiven during the quarter, resulting in the recognition of fee income totaling $7.7 million in the three-month period ended September 30, 2021. At September 30, 2021, the total unrecognized fee income associated with PPP loans was $3.0 million.

Our entrepreneurial culture drives the efficiency of our merger process, assists in building a solid community banking network that is responsive to a diverse customer base and excels at adding core deposits and new households in a changing environment. Our mission as a community bank is to continue to prioritize local customers, local service, and bankers willing to go above and beyond. As we continue to grow, expand and deliver, our focus will drive value for our shareholders, said Mr. Elliott.

Notable Items:

-- Diluted earnings per share of $0.80, adjusted to reflect core operating results, was $0.96 per diluted share. The adjustments to earnings were comprised of the exclusion of merger expenses of $4.0 million, non-accrual interest income of $1.4 million, bank-owned life insurance death benefit of $486 thousand and additional reserving for repurchase obligations associated with the Companys Federal Deposit Insurance Corporation (FDIC) assisted transaction of $771 thousand. -- Linked quarter service fee revenue, including deposit services, mortgage banking, trust and wealth and insurance services increased to $6.7 million from $6.4 million, or 3.7%. -- The Company authorized a second stock repurchase program in the third quarter of 2020 totaling 800,000 shares. During the quarter ended September 30, 2021, the Company repurchased 57,239 shares at a weighted average cost of $30.64 per share, totaling $1.8 million. At the end of the quarter, capacity of 123,448 shares remained under the current repurchase program. The Board authorized the repurchase of up to an additional 1,000,000 shares of Equitys outstanding common stock, beginning October 29, 2021, and concluding October 28, 2022, subject to non-objection by the Companys primary regulators. -- The Company announced and paid its first common stock dividend of $0.08 per share to shareholders of record as of September 30, 2021.

Equitys Balance Sheet Highlights:

-- During the quarter total loans decreased from $2.82 billion to $2.69 billion, including a reduction in PPP assets of $175.7 million. Excluding the impact of PPP, organic growth linked quarter was $41.8 million, or 7.1% annualized. -- Total deposits of $3.66 billion at September 30, 2021, as compared to $3.69 billion at June 30, 2021. Checking, savings and money market accounts were $3.08 billion at September 30, 2021, relative to $3.03 billion at June 30, 2021. As compared to December 31, 2020, the Bank has increased non-interest-bearing deposits by $192.8 million, or 24.4%. -- As excess liquidity continues to impact the operating environment at quarter end, securities and interest-earning cash and cash equivalents comprise 31.4% of average earnings assets, up from 28.0% at the end of the linked quarter and 25.0% at the end of the comparable quarter in the previous year.

Financial Results for the Quarter Ended September 30, 2021

Net income allocable to common stockholders was $11.8 million, or $0.80 per diluted share, for the three months ended September 30, 2021, as compared to $15.2 million, or $1.03 per diluted share, for the three months ended June 30, 2021, a decrease of $3.4 million. This third quarter decrease was attributable to an increase in non-interest expense of $4.9 million, an increase in provision for credit losses of $2.7 million and a decrease of $1.3 million in non-interest income, partially offset by an increase in net interest income $4.3 million and a decrease in provision for income taxes of $1.1 million.

Net Interest Income

Net interest income was $39.0 million for the three months ended September 30, 2021, as compared to $34.6 million for the three months ended June 30, 2021, an increase of $4.3 million, or 12.6%. The increase in net interest income was primarily driven by an increase in loan fees, due to the forgiveness of PPP assets, of $2.0 million for the quarter ended September 30, 2021, compared to the quarter ended June 30, 2021. The yield on interest-earning assets increased 32-basis points to 4.20% during the quarter ended September 30, 2021, as compared to 3.88% for the quarter ended June 30, 2021. The cost of interest-bearing deposits declined by 3-basis points to 0.28% for the three months ended September 30, 2021, from 0.31% in the previous quarter.

Provision for Credit Losses

During the three months ended September 30, 2021, there was a provision of $1.1 million in the allowance for credit losses recognized through the provision for credit losses as compared to a net release of $1.7 million of provision for credit losses for the three months ended June 30, 2021. The comparative increase was primarily driven by an increase in reserves on specifically assessed assets which was partially offset by improving trends in the Companys loss experience and moderating economic impacts. For the three months ended September 30, 2021, we had net charge-offs of $129 thousand as compared to $567 thousand for the three months ended June 30, 2021.

Non-Interest Income

Total non-interest income was $7.8 million for the three months ended September 30, 2021, as compared to $9.1 million for the three months ended June 30, 2021, or a decline of 14.0% quarter over quarter. Other non-interest income was $546 thousand, a decrease of $1.5 million, or 73.6%, from the quarter ended June 30, 2021. The decrease in other non-interest income was primarily due to the accounting for potential repurchase obligations associated with assets previously purchased through a FDIC assisted transaction. In the second quarter, the Company trued up the guarantee on a number of assets resulting in income recognition of $917 thousand. In the third quarter, two unrelated assets were identified to have experienced deterioration requiring the recognition of a reserve, resulting in $771 thousand in expense. The net change in these inputs account for the change in the line item.

During the quarter, service fee revenue, including deposit services, mortgage banking, trust and wealth management, credit cards and insurance increased to $6.7 million from $6.4 million during the second quarter. The growth was driven by increasing transaction activity and insurance commissions and fees.

Non-Interest Expense

Total non-interest expense for the quarter ended September 30, 2021, was $30.7 million as compared to $25.8 million for the quarter ended June 30, 2021. The $4.9 million change is primarily attributed to increases of $3.6 million in merger expenses, $819 thousand in salaries and employee benefits, driven by a comparative reduction in the deferral of cost associated with loan originations, and $372 thousand loss on debt extinguishment, related to the repayment of fixed-rate term advances with Federal Home Loan Bank that were acquired through a prior merger.

Asset Quality

As of September 30, 2021, Equitys allowance for credit losses to total loans was 2.0%, as compared to 1.8% at June 30, 2021. Nonperforming assets were $74.3 million as of September 30, 2021, or 1.7% of total assets, compared to $66.7 million at June 30, 2021, or 1.6% of total assets. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $112.4 million, or 24.3% of regulatory capital, up from $103.5 million, or 23.2% of regulatory capital as of June 30, 2021.

During the quarter non-performing assets increased by $7.5 million due to the transition of one significant relationship to non-accrual. The Company provided $1.1 million to the allowance for credit losses, comprised of an increase in specific reserves, primarily driven by the migration of this asset to non-accrual, partially offset by improving historical loss performance and the continued moderation of economic conditions following the height of the pandemic.

Regulatory Capital

The Companys ratio of common equity tier 1 capital to risk-weighted assets was 12.4%, the total capital to risk-weighted assets was 16.6% and the total leverage ratio was 9.0% at September 30, 2021. At December 31, 2020, the Companys common equity tier 1 capital to risk-weighted assets ratio was 12.8%, the total capital to risk-weighted assets ratio was 17.4% and the total leverage ratio was 9.3%.

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 15.8% and a total leverage ratio of 10.1% at September 30, 2021. At December 31, 2020, Equity Banks ratio of common equity tier 1 capital to risk-weighted assets was 14.5%, the ratio of total capital to risk-weighted assets was 15.7% and the total leverage ratio was 10.1%.

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 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, 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, it can function 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 the 2021 third quarter results on Wednesday, October 20, 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 investor.equitybank.com. On Wednesday, October 20, 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. 7698604.

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 October 27, 2021, accessible at (855) 859-2056 with conference ID no. 7698604 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 9, 2021, 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.(913) 583-8004jhanley@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 Nine months ended September 30, September 30, 2021 2020 2021 2020 Interest and dividend incomeLoans, including $ 37,581 $ 32,278 $ 102,392 $ 99,281 feesSecurities, 3,920 3,476 11,242 12,113 taxableSecurities, 655 923 2,096 2,769 nontaxableFederal funds sold 290 405 846 1,409 and otherTotal interest and 42,446 37,082 116,576 115,572 dividend incomeInterest expense Deposits 1,881 3,064 6,316 13,827 Federal fundspurchased and 24 25 72 80 retail repurchaseagreementsFederal Home Loan 10 471 155 2,198 Bank advancesFederal ReserveBank discount ? ? ? 6 windowBank stock loan ? ? ? 415 Subordinated debt 1,556 1,415 4,669 1,953 Total interest 3,471 4,975 11,212 18,479 expense Net interest 38,975 32,107 105,364 97,093 incomeProvision(reversal) for 1,058 815 (6,355 ) 23,255 credit lossesNet interestincome afterprovision 37,917 31,292 111,719 73,838 (reversal) forcredit lossesNon-interest incomeService charges 2,360 1,706 6,125 5,097 and feesDebit card income 2,574 2,491 7,603 6,735 Mortgage banking 801 877 2,584 2,298 Increase in valueof bank-owned life 1,169 489 2,446 1,452 insuranceNet gain on ? ? 585 ? acquisitionNet gains (losses)from securities 381 ? 398 12 transactionsOther 546 922 3,902 1,929 Total non-interest 7,831 6,485 23,643 17,523 incomeNon-interest expenseSalaries and 13,588 13,877 39,079 40,076 employee benefitsNet occupancy and 2,475 2,224 7,170 6,578 equipmentData processing 3,257 2,817 9,394 8,243 Professional fees 1,076 877 3,148 3,187 Advertising andbusiness 760 598 2,241 1,697 developmentTelecommunications 439 486 1,531 1,363 FDIC insurance 465 360 1,305 1,291 Courier and 344 366 1,040 1,103 postageFree nationwide 519 439 1,504 1,186 ATM costAmortization ofcore deposit 1,030 1,030 3,094 2,806 intangiblesLoan expense 207 107 626 628 Other real estate (342 ) 133 (805 ) 710 ownedLoss on debt 372 ? 372 ? extinguishmentMerger expenses 4,015 ? 4,627 ? Goodwill ? 104,831 ? 104,831 impairmentOther 2,484 2,690 7,050 6,831 Total non-interest 30,689 130,835 81,376 180,530 expenseIncome (loss) 15,059 (93,058 ) 53,986 (89,169 )before income taxProvision for 3,286 (2,653 ) 11,972 (1,711 )income taxesNet income (loss)and net income(loss) allocable $ 11,773 $ (90,405 ) $ 42,014 $ (87,458 )to commonstockholdersBasic earnings $ 0.82 $ (6.01 ) $ 2.92 $ (5.75 )(loss) per shareDiluted earnings $ 0.80 $ (6.01 ) $ 2.86 $ (5.75 )(loss) per shareWeighted average 14,384,302 15,040,407 14,397,146 15,211,901 common sharesWeighted averagediluted common 14,669,312 15,040,407 14,688,092 15,211,901 shares

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

As of and for the three months ended September June 30, March 31, December 31, September 30, 2021 2021 2020 30, 2021 2020Interest and dividend incomeLoans, including $ 37,581 $ 33,810 $ 31,001 $ 35,383 $ 32,278 feesSecurities, 3,920 3,523 3,799 3,408 3,476 taxableSecurities, 655 717 724 913 923 nontaxableFederal funds sold 290 268 288 285 405 and otherTotal interest and 42,446 38,318 35,812 39,989 37,082 dividend incomeInterest expense Deposits 1,881 2,025 2,410 2,755 3,064 Federal fundspurchased and 24 26 22 25 25 retail repurchaseagreementsFederal Home Loan 10 80 65 94 471 Bank advancesSubordinated debt 1,556 1,557 1,556 1,556 1,415 Total interest 3,471 3,688 4,053 4,430 4,975 expense Net interest 38,975 34,630 31,759 35,559 32,107 incomeProvision(reversal) for 1,058 (1,657 ) (5,756 ) 1,000 815 credit lossesNet interestincome afterprovision 37,917 36,287 37,515 34,559 31,292 (reversal) forcredit lossesNon-interest incomeService charges 2,360 2,169 1,596 1,759 1,706 and feesDebit card income 2,574 2,679 2,350 2,401 2,491 Mortgage banking 801 848 935 855 877 Increase in valueof bank-owned life 1,169 676 601 489 489 insuranceNet gain on ? 663 (78 ) 2,145 ? acquisitionNet gains (losses)from securities 381 ? 17 (1 ) ? transactionsOther 546 2,065 1,291 852 922 Total non-interest 7,831 9,100 6,712 8,500 6,485 incomeNon-interest expenseSalaries and 13,588 12,769 12,722 14,053 13,877 employee benefitsNet occupancy and 2,475 2,327 2,368 2,206 2,224 equipmentData processing 3,257 3,474 2,663 2,748 2,817 Professional fees 1,076 999 1,073 1,095 877 Advertising andbusiness 760 799 682 801 598 developmentTelecommunications 439 512 580 510 486 FDIC insurance 465 425 415 797 360 Courier and 344 327 369 338 366 postageFree nationwide 519 513 472 423 439 ATM costAmortization ofcore deposit 1,030 1,030 1,034 1,044 1,030 intangiblesLoan expense 207 181 238 161 107 Other real estate (342 ) (468 ) 5 1,600 133 ownedLoss on debt 372 ? ? ? ? extinguishmentMerger expenses 4,015 460 152 299 ? Goodwill ? ? ? ? 104,831 impairmentOther 2,484 2,458 2,108 2,385 2,690 Total non-interest 30,689 25,806 24,881 28,460 130,835 expenseIncome (loss) 15,059 19,581 19,346 14,599 (93,058 )before income taxProvision forincome taxes 3,286 4,415 4,271 2,111 (2,653 )(benefit)Net income (loss)and net income(loss) allocable $ 11,773 $ 15,166 $ 15,075 $ 12,488 $ (90,405 )to commonstockholdersBasic earnings $ 0.82 $ 1.06 $ 1.04 $ 0.85 $ (6.01 )(loss) per shareDiluted earnings $ 0.80 $ 1.03 $ 1.02 $ 0.84 $ (6.01 )(loss) per shareWeighted average 14,384,302 14,356,958 14,464,291 14,760,810 15,040,407 common sharesWeighted averagediluted common 14,669,312 14,674,838 14,734,083 14,934,058 15,040,407 shares

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

September June 30, March 31, December September 30, 2021 2021 31, 30, 2021 2020 2020ASSETS Cash and due from $ 141,645 $ 138,869 $ 136,190 $ 280,150 $ 65,534 banksFederal funds sold 673 452 498 548 305 Cash and cash 142,318 139,321 136,688 280,698 65,839 equivalentsInterest-bearingtime deposits in ? ? 249 249 499 other banksAvailable-for-sale 1,157,423 1,041,613 998,100 871,827 798,576 securitiesLoans held for sale 4,108 6,183 8,609 12,394 9,053 Loans, net ofallowance for credit 2,633,148 2,763,227 2,740,215 2,557,987 2,691,626 losses^(^1)Other real estate 10,267 10,861 10,559 11,733 8,727 owned, netPremises and 90,727 90,876 90,322 89,412 86,087 equipment, netBank-owned life 103,431 103,321 102,645 77,044 76,555 insuranceFederal Reserve Bankand Federal Home 14,540 18,454 15,174 16,415 32,545 Loan Bank stockInterest receivable 15,519 15,064 16,655 15,831 18,110 Goodwill 31,601 31,601 31,601 31,601 31,601 Core deposit 12,963 13,993 15,023 16,057 17,101 intangibles, netOther 47,223 33,702 30,344 32,108 29,252 Total assets $ 4,263,268 $ 4,268,216 $ 4,196,184 $ 4,013,356 $ 3,865,571 LIABILITIES AND STOCKHOLDERS? EQUITYDeposits Demand $ 984,436 $ 992,565 $ 972,364 $ 791,639 $ 693,967 Totalnon-interest-bearing 984,436 992,565 972,364 791,639 693,967 depositsSavings, NOW and 2,092,849 2,035,496 2,074,261 2,029,097 1,816,307 money marketTime 585,492 659,494 587,905 626,854 623,344 Totalinterest-bearing 2,678,341 2,694,990 2,662,166 2,655,951 2,439,651 depositsTotal deposits 3,662,777 3,687,555 3,634,530 3,447,590 3,133,618 Federal fundspurchased and retail 39,137 47,184 40,339 36,029 46,295 repurchaseagreementsFederal Home Loan ? 9,208 9,926 10,144 167,862 Bank advancesSubordinated debt 88,030 87,908 87,788 87,684 87,537 Contractual 18,771 4,469 4,856 5,189 5,478 obligationsInterest payable and 36,804 18,897 20,930 19,071 22,609 other liabilitiesTotal liabilities 3,845,519 3,855,221 3,798,369 3,605,707 3,463,399 Commitments andcontingent liabilitiesStockholders? equity Common stock 178 176 175 174 174 Additional paid-in 392,321 389,394 387,939 386,820 386,017 capitalRetained earnings 79,226 68,625 53,459 50,787 38,299 Accumulated othercomprehensive 9,475 13,450 12,019 19,781 21,074 income, net of taxEmployee stock loans ? ? ? (43 ) (43 )Treasury stock (63,451 ) (58,650 ) (55,777 ) (49,870 ) (43,349 )Total stockholders? 417,749 412,995 397,815 407,649 402,172 equityTotal liabilitiesand stockholders? $ 4,263,268 $ 4,268,216 $ 4,196,184 $ 4,013,356 $ 3,865,571 equity ^(1) Allowance for $ 52,763 $ 51,834 $ 55,525 $ 33,709 $ 34,087 credit losses

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

As of and for the three months ended September June 30, March 31, December 31, September 30, 30, 2021 2021 2021 2020 2020 Loans Held For Investment by TypeCommercial real $ 1,308,707 $ 1,261,214 $ 1,218,537 $ 1,188,696 $ 1,188,329 estateCommercial and 569,513 732,126 820,736 734,495 857,244 industrialResidential real 490,633 503,110 438,503 381,958 402,242 estateAgricultural real 138,793 129,020 134,944 133,693 127,349 estateAgricultural 93,767 97,912 93,764 94,322 83,084 Consumer 84,498 91,679 89,256 58,532 67,465 Total loans 2,685,911 2,815,061 2,795,740 2,591,696 2,725,713 held-for-investmentAllowance for (52,763 ) (51,834 ) (55,525 ) (33,709 ) (34,087 )credit lossesNet loans held for $ 2,633,148 $ 2,763,227 $ 2,740,215 $ 2,557,987 $ 2,691,626 investment Asset Quality RatiosAllowance forcredit losses on 1.96 % 1.84 % 1.99 % 1.30 % 1.25 %loans to totalloansPast due ornonaccrual loans to 2.78 % 2.09 % 2.30 % 1.99 % 2.12 %total loansNonperformingassets to total 1.74 % 1.56 % 1.67 % 1.36 % 1.55 %assetsNonperformingassets to total 2.76 % 2.36 % 2.50 % 2.10 % 2.19 %loans plus otherreal estate ownedClassified assetsto bank total 24.25 % 23.20 % 26.45 % 25.50 % 18.35 %regulatory capital Selected AverageBalance Sheet Data (QTD Average)Investment $ 1,061,178 $ 986,986 $ 947,453 $ 814,114 $ 802,525 securitiesTotal gross loans 2,748,202 2,853,145 2,736,918 2,692,223 2,758,680 receivableInterest-earning 4,005,509 3,964,633 3,891,140 3,647,730 3,679,168 assetsTotal assets 4,275,298 4,231,439 4,143,752 3,910,628 4,041,187 Interest-bearing 2,702,040 2,656,052 2,690,159 2,551,219 2,430,407 depositsBorrowings 132,581 171,658 139,360 172,730 377,158 Totalinterest-bearing 2,834,621 2,827,710 2,829,519 2,723,949 2,807,565 liabilitiesTotal deposits 3,686,169 3,624,950 3,577,625 2,960,791 3,145,810 Total liabilities 3,852,419 3,827,400 3,748,114 3,501,056 3,558,099 Total stockholders' 422,879 404,039 395,638 409,572 483,088 equityTangible common 376,544 356,705 347,262 355,025 329,039 equity^* Performance ratios Return on averageassets (ROAA) 1.09 % 1.44 % 1.48 % 1.27 % (8.90 )%annualizedReturn on averageassets beforeincome tax, 1.50 % 1.70 % 1.33 % 1.59 % 1.24 %provision for loanlosses and goodwillimpairment*Return on averageequity (ROAE) 11.05 % 15.06 % 15.45 % 12.13 % (74.45 )%annualizedReturn on averageequity beforeincome tax, 15.12 % 17.79 % 13.93 % 15.15 % 10.37 %provision for loanlosses and goodwillimpairment*Return on averagetangible commonequity 13.27 % 17.98 % 18.57 % 14.93 % (108.31 )%(ROATCE) annualized^*Return on averagetangible commonequity adjusted for 13.27 % 17.98 % 18.57 % 14.93 % 12.01 %goodwillimpairment*Yield on loans 5.43 % 4.75 % 4.59 % 5.23 % 4.65 %annualizedCost ofinterest-bearing 0.28 % 0.31 % 0.36 % 0.43 % 0.50 %deposits annualizedCost of total 0.20 % 0.22 % 0.27 % 0.37 % 0.39 %deposits annualizedNet interest margin 3.86 % 3.50 % 3.31 % 3.88 % 3.47 %annualizedEfficiency ratio^* 56.65 % 58.85 % 64.18 % 67.19 % 67.38 %Non-interest income 0.73 % 0.86 % 0.66 % 0.86 % 0.64 %/ average assetsNon-interestexpense / average 2.85 % 2.45 % 2.44 % 2.90 % 12.88 %assets Capital Ratios Tier 1 Leverage 9.02 % 8.88 % 8.73 % 9.30 % 8.76 %RatioCommon Equity Tier 12.39 % 12.41 % 12.53 % 12.82 % 12.76 %1 Capital RatioTier 1 Risk Based 12.90 % 12.93 % 13.08 % 13.37 % 13.32 %Capital RatioTotal Risk Based 16.63 % 16.73 % 17.02 % 17.35 % 17.35 %Capital RatioTotal stockholders'equity to total 9.80 % 9.68 % 9.48 % 10.16 % 10.40 %assetsTangible commonequity to tangible 8.82 % 8.68 % 8.44 % 9.05 % 9.23 %assets^*Book value per $ 29.08 $ 28.76 $ 27.66 $ 28.04 $ 27.08 common shareTangible book value $ 25.90 $ 25.51 $ 24.34 $ 24.68 $ 23.72 per common share^*Tangible book valueper diluted common $ 25.42 $ 24.98 $ 23.87 $ 24.32 $ 23.57 share^*

* The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures, see Table 8. Non-GAAP Financial Measures

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, 2021 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 $ 752,795 $ 34,609 6.15 % $ 757,773 $ 26,789 4.72 %industrialCommercial real 990,803 34,943 4.72 % 942,478 36,533 5.18 %estateReal estate 264,344 7,195 3.64 % 245,167 8,644 4.71 %constructionResidential real 457,761 14,167 4.14 % 464,340 14,528 4.18 %estateAgricultural 135,795 5,203 5.12 % 133,302 5,574 5.59 %real estateAgricultural 93,680 3,432 4.90 % 86,873 3,752 5.77 %Consumer 84,285 2,843 4.51 % 67,255 3,461 6.87 %Total loans 2,779,463 102,392 3.94 % 2,697,188 99,281 4.92 %Securities Taxable 898,461 11,242 1.67 % 737,009 12,113 2.20 %securitiesNontaxable 100,495 2,096 2.79 % 125,352 2,769 2.95 %securitiesTotal securities 998,956 13,338 1.79 % 862,361 14,882 2.31 %Federal funds 175,761 846 0.64 % 102,202 1,409 1.84 %sold and otherTotalinterest-earning $ 3,954,180 116,576 3.94 % $ 3,661,751 115,572 4.22 %assetsInterest-bearing liabilitiesSavings, NOW andmoney market $ 2,076,643 2,728 0.18 % $ 1,754,759 4,923 0.37 %depositsTime deposits 606,151 3,588 0.79 % 728,083 8,904 1.63 %Totalinterest-bearing 2,682,794 6,316 0.31 % 2,482,842 13,827 0.74 %depositsFHLB advances 16,325 155 1.27 % 271,548 2,198 0.24 %Other borrowings 131,516 4,741 4.82 % 100,865 2,454 3.25 %Totalinterest-bearing $ 2,830,635 11,212 0.53 % $ 2,855,255 18,479 0.86 %liabilities Net interest $ 105,364 $ 97,093 incomeInterest rate 3.41 % 3.36 %spread Net interest 3.56 % 3.54 %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 September 30, 2021 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 $ 630,622 $ 13,646 8.59 % $ 848,096 $ 8,400 3.94 %industrialCommercial real 1,009,141 12,072 4.75 % 979,775 12,886 5.23 %estateReal estate 283,106 2,664 3.73 % 214,775 2,233 4.14 %constructionResidential real 512,135 5,073 3.93 % 429,965 4,733 4.38 %estateAgricultural 134,673 1,819 5.36 % 131,725 1,718 5.19 %real estateAgricultural 91,878 1,370 5.92 % 84,859 1,204 5.65 %Consumer 86,647 937 4.29 % 69,485 1,104 6.32 %Total loans 2,748,202 37,581 5.43 % 2,758,680 32,278 4.65 %Securities Taxable 966,651 3,920 1.61 % 683,630 3,476 2.02 %securitiesNontaxable 94,527 655 2.75 % 118,895 923 3.09 %securitiesTotal securities 1,061,178 4,575 1.71 % 802,525 4,399 2.18 %Federal funds 196,129 290 0.59 % 117,963 405 1.36 %sold and otherTotalinterest-earning $ 4,005,509 42,446 4.20 % $ 3,679,168 37,082 4.01 %assetsInterest-bearing liabilitiesSavings, NOW andmoney market $ 2,082,515 862 0.16 % $ 1,784,891 875 0.19 %depositsTime deposits 619,525 1,019 0.65 % 645,516 2,189 1.35 %Totalinterest-bearing 2,702,040 1,881 0.28 % 2,430,407 3,064 0.50 %depositsFHLB advances 1,401 10 2.78 % 248,437 471 0.75 %Other borrowings 131,180 1,580 4.78 % 128,721 1,440 4.45 %Totalinterest-bearing $ 2,834,621 3,471 0.49 % $ 2,807,565 4,975 0.70 %liabilities Net interest $ 38,975 $ 32,107 incomeInterest rate 3.71 % 3.31 %spread Net interest 3.86 % 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 7. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)(Dollars in thousands)

For the three months ended For the three months ended September 30, 2021 June 30, 2021 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 $ 630,622 $ 13,646 8.59 % $ 826,647 $ 11,729 5.69 %industrialCommercial real 1,009,141 12,072 4.75 % 991,033 11,433 4.63 %estateReal estate 283,106 2,664 3.73 % 253,947 2,352 3.71 %constructionResidential real 512,135 5,073 3.93 % 465,525 4,642 4.00 %estateAgricultural 134,673 1,819 5.36 % 131,906 1,687 5.13 %real estateAgricultural 91,878 1,370 5.92 % 94,407 1,024 4.35 %Consumer 86,647 937 4.29 % 89,680 943 4.22 %Total loans 2,748,202 37,581 5.43 % 2,853,145 33,810 4.75 %Securities Taxable 966,651 3,920 1.61 % 887,983 3,523 1.59 %securitiesNontaxable 94,527 655 2.75 % 99,003 717 2.90 %securitiesTotal securities 1,061,178 4,575 1.71 % 986,986 4,240 1.72 %Federal funds 196,129 290 0.59 % 124,502 268 0.86 %sold and otherTotalinterest-earning $ 4,005,509 42,446 4.20 % $ 3,964,633 38,318 3.88 %assetsInterest-bearing liabilitiesSavings, NOW andmoney market $ 2,082,515 862 0.16 % $ 2,068,319 895 0.17 %depositsTime deposits 619,525 1,019 0.65 % 587,733 1,130 0.77 %Totalinterest-bearing 2,702,040 1,881 0.28 % 2,656,052 2,025 0.31 %depositsFHLB advances 1,401 10 2.78 % 37,656 80 0.86 %Other borrowings 131,180 1,580 4.78 % 134,002 1,583 4.74 %Totalinterest-bearing $ 2,834,621 3,471 0.49 % $ 2,827,710 3,688 0.52 %liabilities Net interest $ 38,975 $ 34,630 incomeInterest rate 3.71 % 3.36 %spread Net interest 3.86 % 3.50 %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 September June 30, March 31, December 31, September 30, 30, 2021 2021 2021 2020 2020 Income before $ 15,059 $ 19,581 $ 19,346 $ 14,599 $ (93,058 )income taxesAdd: goodwill ? ? ? ? 104,831 impairmentLess: tax effect 3,286 4,415 4,271 2,111 2,652 Adjusted income $ 11,773 $ 15,166 $ 15,075 $ 12,488 $ 9,121 Weighted averagecommon shares 14,384,302 14,356,958 14,464,291 14,760,810 15,040,407 outstandingEffect of weightedaverage dilutive 285,010 317,880 269,792 173,248 82,804 shares assumingpositive net incomeWeighted average 14,669,312 14,674,838 14,734,083 14,934,058 15,123,211 diluted sharesDiluted earningsper share adjusted $ 0.80 $ 1.03 $ 1.02 $ 0.84 $ 0.60 for goodwillimpairment Total stockholders' $ 417,749 $ 412,995 $ 397,815 $ 407,649 $ 402,172 equityLess: goodwill 31,601 31,601 31,601 31,601 31,601 Less: core deposit 12,963 13,993 15,023 16,057 17,101 intangibles, netLess: mortgageservicing asset, ? ? ? ? 1 netLess: naming 1,098 1,109 1,119 1,130 1,141 rights, netTangible common $ 372,087 $ 366,292 $ 350,072 $ 358,861 $ 352,328 equityCommon sharesissued at period 14,365,785 14,360,172 14,383,913 14,540,556 14,853,487 endDiluted commonshares outstanding 14,637,306 14,664,603 14,668,287 14,756,378 14,945,282 at period endBook value per $ 29.08 $ 28.76 $ 27.66 $ 28.04 $ 27.08 common shareTangible book value $ 25.90 $ 25.51 $ 24.34 $ 24.68 $ 23.72 per common shareTangible book valueper diluted common $ 25.42 $ 24.98 $ 23.87 $ 24.32 $ 23.57 share Total assets $ 4,263,268 $ 4,268,216 $ 4,196,184 $ 4,013,356 $ 3,865,571 Less: goodwill 31,601 31,601 31,601 31,601 31,601 Less: core deposit 12,963 13,993 15,023 16,057 17,101 intangibles, netLess: mortgageservicing asset, ? ? ? ? 1 netLess: naming 1,098 1,109 1,119 1,130 1,141 rights, netTangible assets $ 4,217,606 $ 4,221,513 $ 4,148,441 $ 3,964,568 $ 3,815,727 Total stockholders'equity to total 9.80 % 9.68 % 9.48 % 10.16 % 10.40 %assetsTangible commonequity to tangible 8.82 % 8.68 % 8.44 % 9.05 % 9.23 %assets Total averagestockholders' $ 422,879 $ 404,039 $ 395,638 $ 409,572 $ 483,088 equityLess: average 46,335 47,334 48,376 54,547 154,049 intangible assetsAverage tangible $ 376,544 $ 356,705 $ 347,262 $ 355,025 $ 329,039 common equityNet income (loss)allocable to common $ 11,773 $ 15,166 $ 15,075 $ 12,488 $ (90,405 )stockholdersAdd: goodwill ? ? ? ? 104,831 impairmentLess: tax effect of ? ? ? ? 5,305 goodwill impairmentAdjusted net income(loss) plus 11,773 15,166 15,075 12,488 9,121 goodwillimpairmentAmortization of 1,040 1,041 1,045 1,055 1,043 intangible assetsLess: tax effect ofintangible assets 218 219 219 222 234 amortizationAdjusted net income(loss) allocable to $ 12,595 $ 15,988 $ 15,901 $ 13,321 $ 9,930 commonstockholdersReturn on totalaverage )stockholders' 11.05 % 15.06 % 15.45 % 12.13 % (74.45 %equity(ROAE) annualizedReturn on averagetangible common 13.27 % 17.98 % 18.57 % 14.93 % (108.31 )equity %(ROATCE) annualizedAdjusted return onaverage tangible 13.27 % 17.98 % 18.57 % 14.93 % 12.01 %commonequity Non-interest $ 30,689 $ 25,806 $ 24,881 $ 28,460 $ 130,835 expenseLess: merger 4,015 460 152 299 ? expenseLess: loss on debt 372 ? ? ? ? extinguishmentLess: goodwill ? ? ? ? 104,831 impairmentNon-interestexpense, excludingmerger expense, $ 26,302 $ 25,346 $ 24,729 $ 28,161 $ 26,004 loss on debtextinguishment andgoodwill impairmentNet interest income $ 38,975 $ 34,630 $ 31,759 $ 35,559 $ 32,107 Non-interest income 7,831 9,100 6,712 8,500 6,485 Less: net gain on ? 663 (78 ) 2,145 ? acquisitionLess: net gains(losses) from 381 ? 17 (1 ) ? securitiestransactionsNon-interestincome, excludinggains (losses) from $ 7,450 $ 8,437 $ 6,773 $ 6,356 $ 6,485 securitiestransactionsNet interest incomeplus non-interestincome,excludingnet gain on $ 46,425 $ 43,067 $ 38,532 $ 41,915 $ 38,592 acquisition and netgains(losses) fromsecuritiestransactionsNon-interestexpense lessgoodwill impairment 65.57 % 59.01 % 64.67 % 64.60 % 67.38 %tonet interestincome plusnon-interest incomeEfficiency ratio 56.65 % 58.85 % 64.18 % 67.19 % 67.38 %Net income (loss)allocable to common $ 11,773 $ 15,166 $ 15,075 $ 12,488 $ (90,405 )stockholdersAdd: income tax 3,286 4,415 4,271 2,111 (2,653 )provisionAdd: provision(reversal) of 1,058 (1,657 ) (5,756 ) 1,000 815 credit lossesAdd: goodwill ? ? ? ? 104,831 impairmentAdjusted net income $ 16,117 $ 17,924 $ 13,590 $ 15,599 $ 12,588 Total average $ 4,275,298 $ 4,231,439 $ 4,143,752 $ 3,910,628 $ 4,041,187 assetsTotal averagestockholders' $ 422,879 $ 404,039 $ 395,638 $ 409,572 $ 483,088 equityReturn on average )assets (ROAA) 1.09 % 1.44 % 1.48 % 1.27 % (8.90 %annualizedAdjusted return on 1.50 % 1.70 % 1.33 % 1.59 % 1.24 %average assetsAdjusted return on 15.12 % 17.79 % 13.93 % 15.15 % 10.37 %average equity