GlobeNewswire Inc | Oct 20, 2020 04:50PM EDT

October 20, 2020

Equity continues stakeholder support programs during pandemic,while deferring less than 1% of commercial loans, maintains Tier 1 Capital ratio of 13.3%and adds $2.97tangible book per share year-to-date in 2020

WICHITA, Kan., Oct. 20, 2020 (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 third quarter ended September 30, 2020.

Equity recorded a $104.8 million impairment in the value of goodwill and a resulting net loss of $90.4 million or $6.01 per diluted share in the quarter ended September 30, 2020, while maintaining a Tier 1 capital ratio of 13.3%, growing tangible book value by $2.43 per share and continuing to grow core deposits and relationships. Net income, adjusted to exclude the impairment charge on goodwill, was $9.1 million, or $0.60 per diluted share.

Im very proud of our relationship bankers in each of our markets for their continued collaboration and support of our communities. As a result of our collaborative approach with our customers, we currently have approximately 1% of loans on deferral as of September 30, 2020, down from approximately 24% on June 30, 2020. We continue to be positioned for loan opportunities in all regional pipelines, said Brad Elliott, Chairman and CEO of Equity.

Despite the non-recurring impact of goodwill impairment on our earnings during the third quarter, our regulatory capital ratios and tangible book value, which grew to $23.72 during the third quarter, are the highest levels weve reported as a publicly-traded company and are indicative of a safe and sound bank under the regulatory capital framework. Our capital levels position Equity to support continued growth, long-term stability and core earnings. We continue to support our small business, commercial and family customers and we are confident that our leadership during the pandemic crisis indicates the resolve and importance of community banking and will be a key component of our Equity story.

Through September 30, 2020, Equity reported net growth of more than 3,389 new consumer core deposit customers and $279.9 million in core deposit growth. Equitys digital adoption among core banking customers through September 30, 2020, was 48.4% compared to 42.4% at September 30, 2019, with online bill payment and mobile deposit totals of $30.1 million, an 11.0% increase compared to the nine-month period ended September 30, 2019.

We continue to be responsive and adaptive to our changing customer bases and upgrades to our online banking platform have resulted in continued customer satisfaction, as well as increased treasury service relationships and Equity Trust and Wealth Management customers, said Mr. Elliott. Our mission is to deliver sophisticated banking products to customers throughout a diverse range of markets. Upgraded online tools and savvy relationship bankers have helped us provide value to small businesses in our regions as well as consumers accessing their money in new and different ways.

Equity received two local honors for work within our regions and collaboration by our team members. The Company earned the honor of Leaders in Diversity and Inclusion 2020, its second straight year and third overall earning the honor from the Wichita Business Journal. Companies recognized are leading efforts to develop inclusive working environments, products and delivery that are impactful to their communities. Equity was also recognized as one of the Top Innovative Companies in Wichita in 2020, also awarded by the Wichita Business Journal, for its improvement in processes and outcomes for customers, including its digital upgrades and PPP implementation.

Notable Items:

-- Tangible book value per common share was $23.72 at September 30, 2020, as compared to $20.75 at December 31, 2019, representing an increase of 14.3% or $2.97. During the quarter ended September 30, 2020, the Company repurchased 383,523 shares at a weighted average cost of $15.48, totaling $5.9 million -- At September 30, 2020, $40.2 million of loans were under deferment in connection to the COVID-19 crisis, as compared to $673.9 million, or 24.0% of total loans, under deferment at June 30, 2020.

Equitys Balance Sheet Highlights:

-- Total loans held for investment of $2.73 billion at September 30, 2020, as compared to total loans held for investment of $2.56 billion at December 31, 2019. -- Total deposits of $3.13 billion at September 30, 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 $2.51 billion at September 30, 2020, relative to $2.23 billion at December 31, 2019. -- Total assets were $3.87 billion at September 30, 2020, as compared to $3.95 billion at December 31, 2019.

Financial Results for the Quarter Ended September 30, 2020

Net loss allocable to common stockholders was $90.4 million, or $6.01 per diluted share, for the three months ended September 30, 2020, as compared to net income allocable to common stockholders of $1.7 million, or $0.11 per diluted share, for the three months ended June 30, 2020, a decrease of $92.1 million. This decrease was primarily attributable to a goodwill impairment charge of $104.8 million taken during the quarter. Net income, excluding the goodwill impairment, using a projected 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 $32.1 million for the three months ended September 30, 2020, as compared to $32.9 million for the three months ended June 30, 2020, a $784 thousand, or 2.4% decrease. The decrease in net interest income was driven by a decrease in net interest margin of two basis points, declining to 3.47% for the three months ended September 30, 2020 from 3.49% for the three months ended June 30, 2020. The yield on earning assets declined two basis points to 4.01% for the quarter ended September 30, 2020 from 4.03% from the previous quarter. The cost of interest-bearing liabilities declined to 0.70% or one basis point for the quarter ended September 30, 2020 from 0.71% in the quarter ended June 30, 2020. The cost of interest-bearing deposits declined 13 basis points to 0.50% for the three months ended September 30, 2020 from 0.63% in the previous quarter primarily attributed to the decline in the cost of time deposits, which declined 28 basis points between the quarters. The cost of other borrowings increased to 4.45% in the three months ended September 30, 2020 from 2.09% from the quarter ended June 30, 2020, due the addition of subordinated debt issued by the Company in late June and late July, cumulatively adding $75 million of debt with a coupon of 7.0%.

Provision for Loan Losses

The provision for loan losses was $815 thousand for the three months ended September 30, 2020, as compared to $12.5 million for the three months ended June 30, 2020. For the three months ended September 30, 2020, we had net charge-offs of $806 thousand as compared to $337 thousand for three months ended June 30, 2020.

Non-Interest Income

Total non-interest income was $6.5 million for the three months ended September 30, 2020 increasing $753 thousand from the $5.7 million reported for the three months ended June 30, 2020. Service charges and fees were $1.7 million representing an increase of $341 thousand, or 25.0%, from the quarter ended June 30, 2020. The most significant driver of the increase was an improvement in overdraft fees. Debit card income totaled $2.5 million in the quarter ended September 30, 2020, increasing $290 thousand, or 13.2%, from the quarter ended June 30, 2020. Debit card transaction volume increased approximately 12% in the third quarter as compared to the second quarter of 2020.

Non-Interest Expense

Total non-interest expense for the quarter ended September 30, 2020 was $130.8 million; when the goodwill impairment charge of $104.8 million is excluded, pro-forma non-interest expense totals $26.0 million, compared to $23.9 million in the previous quarter. The $2.1 million increase is primarily attributed to a $1.2 million increase in salaries and employee benefits. The most significant contributor to the increase in salaries and benefits was a $791 thousand unfavorable change, due to the effect of salaries and benefits deferred as loan origination costs recognized in the three months ended June 30, 2020, related to PPP loan originations.

Asset Quality

As of September 30, 2020, Equitys allowance for loan losses to total loans was 1.25%, as compared to 0.48% at December 31, 2019. Total reserves, including purchase discounts, to total loans were approximately 1.61% as of September 30, 2020, as compared to 0.85% at December 31, 2019. Nonperforming assets were $61.7 million as of September 30, 2020, or 1.60% 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 8.8% at September 30, 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 14.2%, a ratio of total capital to risk-weighted assets of 15.4% and a total leverage ratio of 9.3% at September 30, 2020. At December 31, 2019, Equity Banks ratio of common equity tier 1 capital to risk-weighted assets was 12.0%, their ratio of total capital to risk-weighted assets was 12.5% and their 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 third quarter 2020 results on Wednesday, October 21, 2020, 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 Wednesday, October 21, 2020, 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. 4668766.

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, 2020, accessible at (855) 859-2056 with conference ID no. 4668766 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 Nine months ended September 30, September 30, 2020 2019 2020 2019 Interest and dividend incomeLoans, including $ 32,278 $ 38,051 $ 99,281 $ 112,611 feesSecurities, 3,476 4,673 12,113 14,724 taxableSecurities, 923 1,045 2,769 3,143 nontaxableFederal funds sold 405 780 1,409 2,037 and otherTotal interest and 37,082 44,549 115,572 132,515 dividend incomeInterest expense Deposits 3,064 10,507 13,827 32,381 Federal fundspurchased and 25 50 80 116 retail repurchaseagreementsFederal Home Loan 471 1,957 2,198 5,103 Bank advancesFederal ReserveBank discount ? ? 6 ? windowBank stock loan ? 198 415 507 Subordinated 1,415 311 1,953 955 debenturesTotal interest 4,975 13,023 18,479 39,062 expense Net interest 32,107 31,526 97,093 93,453 incomeProvision for loan 815 679 23,255 17,299 lossesNet interestincome after 31,292 30,847 73,838 76,154 provision for loanlossesNon-interest incomeService charges 1,706 2,268 5,097 6,431 and feesDebit card income 2,491 2,205 6,735 6,129 Mortgage banking 877 820 2,298 1,699 Increase in valueof bank-owned life 489 507 1,452 1,494 insuranceNet gains fromsecurities ? 4 12 17 transactionsOther 922 768 1,929 2,577 Total non-interest 6,485 6,572 17,523 18,347 incomeNon-interest expenseSalaries and 13,877 13,039 40,076 40,204 employee benefitsNet occupancy and 2,224 2,177 6,578 6,332 equipmentData processing 2,817 2,673 8,243 7,436 Professional fees 877 991 3,187 3,375 Advertising andbusiness 598 806 1,697 2,174 developmentTelecommunications 486 523 1,363 1,593 FDIC insurance 360 111 1,291 1,119 Courier and 366 352 1,103 1,020 postageFree nationwide 439 459 1,186 1,240 ATM costAmortization ofcore deposit 1,030 784 2,806 2,348 intangiblesLoan expense 107 165 628 608 Other real estate 133 (88 ) 710 326 ownedMerger expenses ? ? ? 915 Goodwill 104,831 ? 104,831 ? impairmentOther 2,690 2,231 6,831 6,099 Total non-interest 130,835 24,223 180,530 74,789 expenseIncome (loss) (93,058 ) 13,196 (89,169 ) 19,712 before income taxProvision forincome taxes (2,653 ) 2,790 (1,711 ) 4,147 (benefit)Net income (loss)and net income(loss) allocable $ (90,405 ) $ 10,406 $ (87,458 ) $ 15,565 to commonstockholdersBasic earnings $ (6.01 ) $ 0.67 $ (5.75 ) $ 0.99 (loss) per shareDiluted earnings $ (6.01 ) $ 0.66 $ (5.75 ) $ 0.98 (loss) per shareWeighted average 15,040,407 15,514,042 15,211,901 15,679,556 common sharesWeighted averagediluted common 15,040,407 15,708,038 15,211,901 15,896,605 shares

TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS (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, 2020 2020 2019 30, 2020 2019Interest and dividend incomeLoans, including $ 32,278 $ 32,627 $ 34,376 $ 36,687 $ 38,051 feesSecurities, 3,476 4,017 4,620 4,615 4,673 taxableSecurities, 923 880 966 1,037 1,045 nontaxableFederal funds sold 405 409 595 645 780 and otherTotal interest and 37,082 37,933 40,557 42,984 44,549 dividend incomeInterest expense Deposits 3,064 3,899 6,864 8,533 10,507 Federal fundspurchased and 25 24 31 39 50 retail repurchaseagreementsFederal Home Loan 471 552 1,175 1,564 1,957 Bank advancesFederal ReserveBank discount ? 6 ? ? ? windowBank stock loan ? 306 109 147 198 Subordinated 1,415 255 283 296 311 debenturesTotal interest 4,975 5,042 8,462 10,579 13,023 expense Net interest 32,107 32,891 32,095 32,405 31,526 incomeProvision for loan 815 12,500 9,940 1,055 679 lossesNet interestincome after 31,292 20,391 22,155 31,350 30,847 provision for loanlossesNon-interest incomeService charges 1,706 1,365 2,026 2,241 2,268 and feesDebit card income 2,491 2,201 2,043 2,101 2,205 Mortgage banking 877 831 590 769 820 Increase in valueof bank-owned life 489 481 482 504 507 insuranceNet gains (losses)from securities ? 4 8 (3 ) 4 transactionsOther 922 850 157 1,029 768 Total non-interest 6,485 5,732 5,306 6,641 6,572 incomeNon-interest expenseSalaries and 13,877 12,695 13,504 11,918 13,039 employee benefitsNet occupancy and 2,224 2,119 2,235 2,342 2,177 equipmentData processing 2,817 2,763 2,663 2,688 2,673 Professional fees 877 943 1,367 1,359 991 Advertising andbusiness 598 403 696 901 806 developmentTelecommunications 486 390 487 486 523 FDIC insurance 360 414 517 109 111 Courier and 366 353 384 328 352 postageFree nationwide 439 327 420 440 459 ATM costAmortization ofcore deposit 1,030 974 802 820 784 intangiblesLoan expense 107 287 234 267 165 Other real estate 133 269 308 381 (88 )ownedGoodwill 104,831 ? ? ? ? impairmentOther 2,690 2,000 2,141 2,807 2,231 Total non-interest 130,835 23,937 25,758 24,846 24,223 expenseIncome (loss) (93,058 ) 2,186 1,703 13,145 13,196 before income taxProvision forincome taxes (2,653 ) 497 445 3,131 2,790 (benefit)Net income (loss)and net income(loss) allocable $ (90,405 ) $ 1,689 $ 1,258 $ 10,014 $ 10,406 to commonstockholdersBasic earnings $ (6.01 ) $ 0.11 $ 0.08 $ 0.65 $ 0.67 (loss) per shareDiluted earnings $ (6.01 ) $ 0.11 $ 0.08 $ 0.64 $ 0.66 (loss) per shareWeighted average 15,040,407 15,209,483 15,387,697 15,442,841 15,514,042 common sharesWeighted averagediluted common 15,040,407 15,304,009 15,595,024 15,684,673 15,708,038 shares

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

September June 30, March 31, December September 30, 2020 2020 31, 30, 2020 2019 2019ASSETS Cash and due from $ 65,534 $ 178,045 $ 141,989 $ 88,973 $ 167,895 banksFederal funds sold 305 245 263 318 158 Cash and cash 65,839 178,290 142,252 89,291 168,053 equivalentsInterest-bearingtime deposits in 499 2,248 2,498 2,498 3,497 other banksAvailable-for-sale 798,576 177,228 187,812 142,067 152,680 securitiesHeld-to-maturity ? 662,522 721,992 769,059 764,163 securities^(1)Loans held for sale 9,053 4,802 6,494 5,933 8,784 Loans, net ofallowance for loan 2,691,626 2,772,256 2,485,208 2,544,420 2,583,049 losses^(2)Other real estate 8,727 7,374 5,870 8,293 5,944 owned, netPremises and 86,087 87,055 84,732 84,478 84,481 equipment, netBank-owned life 76,555 76,066 75,585 75,103 74,599 insuranceFederal Reserve Bankand Federal Home 32,545 31,832 31,662 31,137 31,710 Loan Bank stockInterest receivable 18,110 19,598 15,549 15,738 16,994 Goodwill 31,601 136,432 136,432 136,432 136,432 Core deposit 17,101 18,131 19,105 19,907 20,727 intangibles, netOther 29,252 31,435 28,641 25,222 23,550 Total assets $ 3,865,571 $ 4,205,269 $ 3,943,832 $ 3,949,578 $ 4,074,663 LIABILITIES AND STOCKHOLDERS? EQUITYDeposits Demand $ 693,967 $ 756,613 $ 508,441 $ 481,298 $ 488,214 Totalnon-interest-bearing 693,967 756,613 508,441 481,298 488,214 depositsSavings, NOW and 1,816,307 1,800,132 1,668,145 1,749,048 1,689,606 money marketTime 623,344 690,522 783,811 833,170 929,109 Totalinterest-bearing 2,439,651 2,490,654 2,451,956 2,582,218 2,618,715 depositsTotal deposits 3,133,618 3,247,267 2,960,397 3,063,516 3,106,929 Federal fundspurchased and retail 46,295 51,557 37,113 35,708 40,652 repurchaseagreementsFederal Home Loan 167,862 344,900 389,620 324,373 410,093 Bank advancesBank stock loan ? ? 40,000 8,990 14,770 Subordinated 87,537 55,575 14,638 14,561 14,485 debenturesContractual 5,478 5,571 5,781 5,836 3,744 obligationsInterest payable and 22,609 20,633 18,932 18,534 16,940 other liabilitiesTotal liabilities 3,463,399 3,725,503 3,466,481 3,471,518 3,607,613 Commitments andcontingent liabilitiesStockholders? equity Common stock 174 174 174 174 174 Additional paid-in 386,016 384,955 383,850 382,731 382,155 capitalRetained earnings 38,300 128,704 127,015 125,757 115,743 Accumulated othercomprehensive income 21,074 3,390 3,769 (3 ) (423 )(loss)Employee stock loans (43 ) (43 ) (43 ) (77 ) (77 )Treasury stock (43,349 ) (37,414 ) (37,414 ) (30,522 ) (30,522 )Total stockholders? 402,172 479,766 477,351 478,060 467,050 equityTotal liabilitiesand stockholders? $ 3,865,571 $ 4,205,269 $ 3,943,832 $ 3,949,578 $ 4,074,663 equity ^(1) Fair marketvalue of $ ? $ 689,206 $ 750,900 $ 783,911 $ 778,966 held-to-maturitysecurities^(2) Allowance for 34,087 34,078 21,915 12,232 17,875 loan 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, 2020 2020 2020 2019 2019 LoansHeld-For-Investment by TypeCommercial real $ 1,188,329 $ 1,191,336 $ 1,200,762 $ 1,158,022 $ 1,183,305 estateCommercial and 857,244 883,355 542,571 592,052 585,797 industrialResidential real 402,242 442,486 480,603 503,439 531,257 estateAgricultural real 127,349 129,080 130,795 141,868 143,718 estateConsumer 67,465 71,037 64,799 68,378 70,944 Agricultural 83,084 89,040 87,593 92,893 85,903 Total loans 2,725,713 2,806,334 2,507,123 2,556,652 2,600,924 held-for-investmentAllowance for loan (34,087 ) (34,078 ) (21,915 ) (12,232 ) (17,875 )lossesNet loans $ 2,691,626 $ 2,772,256 $ 2,485,208 $ 2,544,420 $ 2,583,049 held-for-investment Asset Quality RatiosAllowance for loanlosses to total 1.25 % 1.21 % 0.87 % 0.48 % 0.69 %loansPast due ornonaccrual loans to 2.12 % 1.88 % 2.47 % 1.66 % 2.23 %total loansNonperformingassets to total 1.60 % 1.37 % 1.22 % 1.19 % 1.40 %assetsNonperformingassets to total 2.26 % 2.05 % 1.92 % 1.83 % 2.19 %loans plus otherreal estate ownedClassified assetsto bank total 18.85 % 20.81 % 19.50 % 21.24 % 29.79 %regulatory capital Selected AverageBalance Sheet Data (QTD Average)Investment $ 802,525 $ 877,308 $ 907,910 $ 911,923 $ 926,839 securitiesTotal gross loans 2,758,680 2,806,865 2,525,344 2,568,301 2,646,454 receivableInterest-earning 3,679,168 3,786,629 3,519,267 3,563,642 3,657,970 assetsTotal assets 4,041,187 4,159,336 3,888,205 3,932,909 4,030,606 Interest-bearing 2,430,407 2,487,187 2,531,508 2,563,519 2,673,007 depositsBorrowings 377,158 384,727 355,303 377,561 390,562 Totalinterest-bearing 2,807,565 2,871,914 2,886,811 2,941,080 3,063,569 liabilitiesTotal deposits 3,145,810 3,257,631 3,021,181 3,055,275 3,152,785 Total liabilities 3,558,099 3,675,731 3,405,638 3,459,347 3,567,354 Total stockholders' 483,088 483,605 482,567 473,562 463,252 equityTangible common 329,039 327,411 325,470 315,569 304,492 equity^* Performance ratios Return on averageassets (ROAA) (8.90 )% 0.16 % 0.13 % 1.01 % 1.02 %annualizedReturn on averageassets beforeincome tax, 1.24 % 1.42 % 1.20 % 1.43 % 1.37 %provision for loanlosses and goodwillimpairment*Return on averageequity (ROAE) (74.45 )% 1.40 % 1.05 % 8.39 % 8.91 %annualizedReturn on averageequity beforeincome tax, 10.37 % 12.21 % 9.70 % 11.90 % 11.88 %provision for loanlosses and goodwillimpairment*Return on averagetangible commonequity (108.31 )% 3.03 % 2.35 % 13.42 % 14.38 %(ROATCE) annualized^*Return on averagetangible commonequity 12.02 % 3.03 % 2.35 % 13.42 % 14.38 %adjusted forgoodwillimpairment*Yield on loans 4.65 % 4.68 % 5.47 % 5.67 % 5.70 %annualizedCost ofinterest-bearing 0.50 % 0.63 % 1.09 % 1.32 % 1.56 %deposits annualizedCost of total 0.39 % 0.48 % 0.91 % 1.11 % 1.32 %deposits annualizedNet interest margin 3.47 % 3.49 % 3.67 % 3.61 % 3.42 %annualizedEfficiency ratio^* 67.38 % 61.98 % 68.88 % 63.63 % 63.59 %Non-interest income 0.64 % 0.55 % 0.55 % 0.67 % 0.65 %/ average assetsNon-interestexpense / average 12.88 % 2.31 % 2.66 % 2.51 % 2.38 %assets Capital Ratios Tier 1 Leverage 8.76 % 8.52 % 9.02 % 9.02 % 8.49 %RatioCommon Equity Tier 12.76 % 12.02 % 11.67 % 11.63 % 11.08 %1 Capital RatioTier 1 Risk Based 13.32 % 12.57 % 12.20 % 12.15 % 11.59 %Capital RatioTotal Risk Based 17.35 % 15.33 % 13.00 % 12.59 % 12.21 %Capital RatioTotal stockholders'equity to total 10.40 % 11.41 % 12.10 % 12.10 % 11.46 %assetsTangible commonequity to tangible 9.23 % 8.00 % 8.47 % 8.45 % 7.88 %assets^*Book value per $ 27.08 $ 31.53 $ 31.41 $ 30.95 $ 30.25 common shareTangible book value $ 23.72 $ 21.29 $ 21.10 $ 20.75 $ 19.99 per common share^*Tangible book valueper diluted common $ 23.57 $ 21.13 $ 20.96 $ 20.39 $ 19.73 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 nine months ended For the nine months ended September 30, 2020 September 30, 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 $ 757,772 $ 26,788 4.72 % $ 566,658 $ 28,221 6.66 %industrialCommercial real 942,478 36,533 5.18 % 1,035,634 41,401 5.34 %estateReal estate 245,167 8,644 4.71 % 204,642 10,449 6.83 %constructionResidential real 464,340 14,528 4.18 % 518,110 18,192 4.69 %estateAgricultural 133,302 5,574 5.59 % 138,861 6,105 5.88 %real estateConsumer 67,255 3,461 6.87 % 70,529 4,060 7.70 %Agricultural 86,874 3,753 5.77 % 86,463 4,183 6.47 %Total loans 2,697,188 99,281 4.92 % 2,620,897 112,611 5.74 %Securities Taxable 737,010 12,113 2.20 % 780,813 14,724 2.52 %securitiesNontaxable 125,352 2,769 2.95 % 142,735 3,143 2.94 %securitiesTotal securities 862,362 14,882 2.31 % 923,548 17,867 2.59 %Federal funds 102,202 1,409 1.84 % 84,045 2,037 3.24 %sold and otherTotalinterest-earning $ 3,661,752 115,572 4.22 % $ 3,628,490 132,515 4.88 %assetsInterest-bearing liabilitiesSavings, NOW andmoney market $ 1,754,759 4,923 0.37 % $ 1,705,612 16,914 1.33 %depositsTime deposits 728,083 8,904 1.63 % 997,270 15,467 2.07 %Totalinterest-bearing 2,482,842 13,827 0.74 % 2,702,882 32,381 1.60 %depositsFHLB advances 271,548 2,198 1.08 % 266,118 5,103 2.56 %Other borrowings 100,864 2,454 3.25 % 70,044 1,578 3.01 %Totalinterest-bearing $ 2,855,254 18,479 0.86 % $ 3,039,044 39,062 1.72 %liabilities Net interest $ 97,093 $ 93,453 incomeInterest rate 3.36 % 3.16 %spread Net interest 3.54 % 3.44 %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, 2020 September 30, 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 $ 848,096 $ 8,400 3.94 % $ 562,399 $ 8,845 6.24 %industrialCommercial real 979,775 12,886 5.23 % 1,012,393 14,678 5.75 %estateReal estate 214,775 2,233 4.14 % 211,235 3,191 6.00 %constructionResidential real 429,965 4,733 4.38 % 561,423 6,402 4.52 %estateAgricultural 131,725 1,718 5.19 % 140,693 2,115 5.96 %real estateConsumer 69,485 1,104 6.32 % 71,688 1,441 7.97 %Agricultural 84,859 1,204 5.65 % 86,623 1,379 6.32 %Total loans 2,758,680 32,278 4.65 % 2,646,454 38,051 5.70 %Securities Taxable 683,630 3,476 2.02 % 782,994 4,673 2.37 %securitiesNontaxable 118,895 923 3.09 % 143,845 1,045 2.88 %securitiesTotal securities 802,525 4,399 2.18 % 926,839 5,718 2.45 %Federal funds 117,963 405 1.36 % 84,677 780 3.66 %sold and otherTotalinterest-earning $ 3,679,168 37,082 4.01 % $ 3,657,970 44,549 4.83 %assetsInterest-bearing liabilitiesSavings, NOW andmoney market $ 1,784,891 875 0.19 % $ 1,707,459 5,389 1.25 %depositsTime deposits 645,516 2,189 1.35 % 965,548 5,118 2.10 %Totalinterest-bearing 2,430,407 3,064 0.50 % 2,673,007 10,507 1.56 %depositsFHLB advances 248,437 471 0.75 % 320,528 1,957 2.42 %Other borrowings 128,721 1,440 4.45 % 70,034 559 3.17 %Totalinterest-bearing $ 2,807,565 4,975 0.70 % $ 3,063,569 13,023 1.69 %liabilities Net interest $ 32,107 $ 31,526 incomeInterest rate 3.31 % 3.14 %spread Net interest 3.47 % 3.42 %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, 2020 June 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 $ 848,096 $ 8,400 3.94 % $ 868,302 $ 8,378 3.88 %industrialCommercial real 979,775 12,886 5.23 % 934,186 12,192 5.25 %estateReal estate 214,775 2,233 4.14 % 253,672 2,837 4.50 %constructionResidential real 429,965 4,733 4.38 % 467,246 4,854 4.18 %estateAgricultural 131,725 1,718 5.19 % 130,533 1,955 6.02 %real estateConsumer 69,485 1,104 6.32 % 65,096 1,145 7.07 %Agricultural 84,859 1,204 5.65 % 87,830 1,266 5.80 %Total loans 2,758,680 32,278 4.65 % 2,806,865 32,627 4.68 %Securities Taxable 683,630 3,476 2.02 % 753,332 4,017 2.14 %securitiesNontaxable 118,895 923 3.09 % 123,976 880 2.86 %securitiesTotal securities 802,525 4,399 2.18 % 877,308 4,897 2.24 %Federal funds 117,963 405 1.36 % 102,456 409 1.61 %sold and otherTotalinterest-earning $ 3,679,168 37,082 4.01 % $ 3,786,629 37,933 4.03 %assetsInterest-bearing liabilitiesSavings, NOW andmoney market $ 1,784,891 875 0.19 % $ 1,754,280 923 0.21 %depositsTime deposits 645,516 2,189 1.35 % 732,907 2,976 1.63 %Totalinterest-bearing 2,430,407 3,064 0.50 % 2,487,187 3,899 0.63 %depositsFHLB advances 248,437 471 0.75 % 270,785 552 0.82 %Other borrowings 128,721 1,440 4.45 % 113,942 591 2.08 %Totalinterest-bearing $ 2,807,565 4,975 0.70 % $ 2,871,914 5,042 0.71 %liabilities Net interest $ 32,107 $ 32,891 incomeInterest rate 3.31 % 3.32 %spread Net interest 3.47 % 3.49 %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, 2020 2020 2020 2019 2019 Income before $ (93,058 ) $ 2,186 $ 1,703 $ 13,145 $ 13,196 income taxesAdd: goodwill 104,831 ? ? ? ? impairmentLess: tax 2,649 497 445 3,131 2,790 effectAdjusted $ 9,124 $ 1,689 $ 1,258 $ 10,014 $ 10,406 incomeWeightedaverage 15,040,407 15,209,483 15,387,697 15,442,841 15,514,042 common sharesoutstandingEffect ofweightedaveragedilutive 82,804 94,526 207,327 241,832 193,996 sharesassumingpositive netincomeWeightedaverage 15,123,211 15,304,009 15,595,024 15,684,673 15,708,038 dilutedsharesDilutedearnings pershare $ 0.60 $ 0.11 $ 0.08 $ 0.64 $ 0.66 adjusted forgoodwillimpairment Totalstockholders' $ 402,172 $ 479,766 $ 477,351 $ 478,060 $ 467,050 equityLess: 31,601 136,432 136,432 136,432 136,432 goodwillLess: coredeposit 17,101 18,131 19,105 19,907 20,727 intangibles,netLess:mortgage 1 2 4 5 7 servicingasset, netLess: naming 1,141 1,152 1,163 1,174 1,184 rights, netTangible $ 352,328 $ 324,049 $ 320,647 $ 320,542 $ 308,700 common equityCommon sharesissued at 14,853,487 15,218,301 15,198,986 15,444,434 15,440,334 period endDilutedcommon shares 14,945,282 15,333,977 15,297,319 15,719,810 15,647,456 outstandingat period endBook valueper common $ 27.08 $ 31.53 $ 31.41 $ 30.95 $ 30.25 shareTangible bookvalue per $ 23.72 $ 21.29 $ 21.10 $ 20.75 $ 19.99 common shareTangible bookvalue per $ 23.57 $ 21.13 $ 20.96 $ 20.39 $ 19.73 dilutedcommon share Total assets $ 3,865,571 $ 4,205,269 $ 3,943,832 $ 3,949,578 $ 4,074,663 Less: 31,601 136,432 136,432 136,432 136,432 goodwillLess: coredeposit 17,101 18,131 19,105 19,907 20,727 intangibles,netLess:mortgage 1 2 4 5 7 servicingasset, netLess: naming 1,141 1,152 1,163 1,174 1,184 rights, netTangible $ 3,815,727 $ 4,049,552 $ 3,787,128 $ 3,792,060 $ 3,916,313 assetsTotalstockholders' 10.40 % 11.41 % 12.10 % 12.10 % 11.46 %equity tototal assetsTangiblecommon equity 9.23 % 8.00 % 8.47 % 8.45 % 7.88 %to tangibleassets Total averagestockholders' $ 483,088 $ 483,605 $ 482,567 $ 473,562 $ 463,252 equityLess: averageintangible 154,049 156,194 157,097 157,993 158,760 assetsAveragetangible $ 329,039 $ 327,411 $ 325,470 $ 315,569 $ 304,492 common equityNet income(loss)allocable to $ (90,405 ) $ 1,689 $ 1,258 $ 10,014 $ 10,406 commonstockholdersAdd: goodwill $ 104,831 $ ? $ ? $ ? $ ? impairmentLess: taxeffect of $ 5,305 $ ? $ ? $ ? $ ? goodwillimpairmentAdjusted netincome (loss) $ 9,121 $ 1,689 $ 1,258 $ 10,014 $ 10,406 plus goodwillimpairmentAmortizationof intangible 1,043 986 814 833 797 assetsLess: taxeffect ofintangible 234 207 171 175 167 assetsamortizationAdjusted netincome (loss)allocable to $ 9,930 $ 2,468 $ 1,901 $ 10,672 $ 11,036 commonstockholdersReturn ontotal average )stockholders' (74.45 % 1.40 % 1.05 % 8.39 % 8.91 %equity (ROAE)annualizedReturn onaveragetangible (108.31 ) 3.03 % 2.35 % 13.42 % 14.38 %common equity %(ROATCE)annualizedAdjustedreturn onaverage 12.01 % 3.03 % 2.35 % 13.42 % 14.38 %tangiblecommon equity Non-interest $ 130,835 $ 23,937 $ 25,758 $ 24,846 $ 24,223 expenseLess:goodwill 104,831 ? ? ? ? impairmentNon-interestexpense,excluding $ 26,004 $ 23,937 $ 25,758 $ 24,846 $ 24,223 goodwillimpairmentNet interest $ 32,107 $ 32,891 $ 32,095 $ 32,405 $ 31,526 incomeNon-interest 6,485 5,732 5,306 6,641 6,572 incomeLess: netgains(losses) from ? 4 8 (3 ) 4 securitiestransactionsNon-interestincome,excludinggains $ 6,485 $ 5,728 $ 5,298 $ 6,644 $ 6,568 (losses) fromsecuritiestransactionsNet interestincome plusnon-interestincome,excluding net $ 38,592 $ 38,619 $ 37,393 $ 39,049 $ 38,094 gains(losses) fromsecuritiestransactionsNon-interestexpense tonet interest 339.02 % 61.98 % 68.87 % 63.63 % 63.58 %income plusnon-interestincomeEfficiency 67.38 % 61.98 % 68.88 % 63.63 % 63.59 %ratioNet income(loss)allocable to $ (90,405 ) $ 1,689 $ 1,258 $ 10,014 $ 10,406 commonstockholdersAdd: income (2,653 ) 497 445 3,131 2,790 tax provisionAdd:provision for 815 12,500 9,940 1,055 679 loan lossesAdd: goodwill 104,831 ? ? ? ? impairmentAdjusted net $ 12,588 $ 14,686 $ 11,643 $ 14,200 $ 13,875 incomeTotal average $ 4,041,187 $ 4,159,336 $ 3,888,205 $ 3,932,909 $ 4,030,606 assetsTotal averagestockholders' $ 483,088 $ 483,605 $ 482,567 $ 473,562 $ 463,252 equityReturn onaverage (8.90 ) 0.16 % 0.13 % 1.01 % 1.02 %assets (ROAA) %annualizedAdjustedreturn on 1.24 % 1.42 % 1.20 % 1.43 % 1.37 %averageassetsAdjustedreturn on 10.37 % 12.21 % 9.70 % 11.90 % 11.88 %averageequity