GlobeNewswire Inc | Jan 27, 2022 08:00AM EST

January 27, 2022

MATTOON, Ill., Jan. 27, 2022 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the Company) today announced its financial results for the quarter and full year period ended December 31, 2021.

Highlights

-- Net income of $16.8 million, or $0.93 diluted EPS -- Adjusted net income (non-GAAP) of $17.1 million, or $0.94 diluted EPS -- Strong loan growth of 2.3% for the quarter, excluding Paycheck Protection Program (PPP) loans -- Record quarter of wealth management revenues with assets under management increasing to $5.1 billion -- Received Federal Reserve approval on January 26, 2022 for the pending Delta Bancshares acquisition

We ended 2021 on a high note with strong loan growth, record wealth management revenues and solid earnings, said Joe Dively, Chairman and Chief Executive Officer. The economic conditions in our markets are improving and our strategic emphasis on diversifying our geographic footprint is providing better opportunities for loan growth. The pipeline continues to be strong through the early part of the first quarter. The growth in our noninterest income was led by record performance in the farm management group and proves the importance of the diversification in our business units and revenue streams.

With respect to the pending acquisition of Delta Bancshares Company (Delta) and its subsidiary Jefferson Bank and Trust (Jefferson), which we announced on July 29, 2021, we received Federal Reserve approvalyesterdayand anticipate closingthe acquisition in mid-February. We remain excited about the combination with Jefferson and its enhancement and expansion to our St. Louis metro presence. We have continued to work together with the Jefferson employees in preparing for a smooth transition and we are planning for a June bank merger and conversion, Dively concluded.

Net Interest Income

Net interest income for the fourth quarter of 2021 decreased by $2.8 million, or 6.0% compared to the third quarter due to declines of $3.4 million and $0.9 million in PPP fee and accretion income, respectively. Excluding these, net interest income increased $1.5 million on a combination of loan growth, higher securities earnings and lower interest expense. For the current quarter, PPP fee income was $1.7 million and accretion income was $0.7 million. As of December 31, 2021, the Company had $0.3 million of deferred fee income on PPP loans remaining.

In comparison to the fourth quarter of 2020, net interest income increased $9.3 million, or 27.9%. The increase was primarily the result of the acquisition of LINCO Bancshares, Inc. and its subsidiary Providence Bank (Providence) in the first quarter of 2021, higher income from PPP, and the active management to lower funding costs.

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.11% for the fourth quarter of 2021, which was a decrease of 27 basis points compared to the prior quarter with the average earning asset yield down 30 basis points, partially offset by 3 basis points of lower funding costs. Excluding PPP fee income and accretion income, the net interest margin increased by 5 basis points in the quarter.

In comparison to the fourth quarter of last year, the net interest margin declined 6 basis points with earning asset yields down by 21 basis points and the average cost of funds lower by 15 basis points. Excluding PPP fee income and accretion income, the net interest margin increased by 10 basis points compared to the fourth quarter of last year.

Loan Portfolio

Total loans ended the quarter at $4.0 billion, representing an increase of $47.8 million compared to the prior quarter. Excluding the forgiveness of $43.3 million in PPP loans during the quarter, loans increased $91.1 million, or 2.3%. The Company had $16.0 million in PPP loans remaining at the end of the quarter. Increases in loans were primarily in commercial real estate and agricultural operating lines. Overall loan growth in the quarter was dispersed by market and in industry, and the pipeline remains healthy for the first quarter of 2022.

Asset Quality

The Companys asset quality measures continued to be in a very strong position. At quarter end, the ratio of non-performing loans to total loans was 0.55%, and the allowance for credit losses (ACL) to non-performing loans was 248%. Nonperforming loans and nonperforming assets decreased in the quarter. The ratio of nonperforming assets to total assets was 0.45% at quarter end. Net charge-offs were $1.8 million during the quarter. Special mention loans decreased $10.0 million to $66.2 million and substandard loans decreased $7.2 million to $43.9 million.

Provision expense for the quarter was $2.5 million compared to $0.6 million in the same quarter last year. As of December 31, 2021, the ACL, excluding $16.0 million of PPP loans, was 1.37% of total loans.

Deposits

Total deposits ended the quarter at $4.96 billion, which represented a decrease of $32.1 million from the prior quarter. The decline was primarily in time deposits where the Company continues to let non-strategic CDs mature without replacement. In addition, the Company had $26.2 million of FHLB borrowings mature and were not replaced in the quarter. The Companys average rate on cost of funds was 0.26% for the quarter compared to 0.29% in the prior quarter and 0.41% in the fourth quarter of 2020.

Noninterest Income

Noninterest income for the fourth quarter of 2021 was $18.1 million compared to $16.4 million in the third quarter of 2021. The increase was primarily due to a record quarter of wealth management revenues led by the farm management group with higher commodity prices and farmland sales. The increase was partially offset by lower mortgage banking revenues.

In comparison to the fourth quarter of last year, noninterest income increased $2.6 million, or 16.6%. Combined, insurance and wealth management business lines increased 19.5% over the same period last year, led by record wealth management revenues and partially due to the previously announced acquisitions within the brokerage and insurance lines of business. The other fee income services increased 12.8% compared to the fourth quarter of last year, partially due to the addition of Providence.

Noninterest Expenses

Noninterest expense for the fourth quarter totaled $36.4 million compared to $36.3 million in the third quarter. The current quarter included $0.3 million of acquisition and integration related costs. The prior quarter included $0.4 million in acquisition and integration related costs and $1.3 million in branch optimization costs.

In comparison to the fourth quarter of 2020, noninterest expenses increased $6.1 million. The increase was primarily due to the addition of Providence, and growth in both the insurance and wealth management businesses.

The Companys efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the fourth quarter 2021 was 55.8% compared to 52.7% in the prior quarter and 58.3% for the same period last year.

Regulatory Capital Levels and Dividend

The Companys capital levels remained strong and comfortably above the well capitalized levels. Capital levels ended the period as follows:

Total capital to risk-weighted assets 15.79%Tier 1 capital to risk-weighted assets 12.51%Common equity tier 1 capital to risk-weighted assets 12.06%Leverage ratio 9.05%

The Companys Board of Directors approved its next quarterly dividend in the amount of $0.22 payable on March 1, 2022 for shareholders of record on February 10, 2022.

About First Mid: First Mid Bancshares, Inc. (First Mid) is the parent company of First Mid Bank & Trust, N.A., First Mid Insurance Group, Inc., and First Mid Wealth Management Co. First Mid is a $6.0 billion community-focused organization that provides a full-suite of financial services including banking, wealth management, brokerage, Ag services, and insurance through a sizeable network of locations throughout Illinois, Missouri, and Texas, and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in providing solutions and services to the customers and communities and has done so over the last 156 years. More information about the Company is available on our website at www.firstmid.com.

Non-GAAP Measures: In addition to reports presented in accordance with generally accepted accounting principles (GAAP), this release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Companys financial performance. Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported. These non-GAAP financial measures are detailed as supplemental tables and include Adjusted Net Income, Adjusted Diluted EPS, Efficiency Ratio, Net Interest Margin, tax equivalent, and Tangible Book Value per Common Share. While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP. These non-GAAP financial measures may also differ from the similar measures presented by other companies.

Forward Looking StatementsThis document may contain certain forward-looking statements about First Mid and Delta Bancshares Company (Delta), such as discussions of First Mids and Deltas pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses, and planned schedules. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid and Delta, are identified by use of the words believe, expect, intend, anticipate, estimate, project, or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, the possibility that any of the anticipated benefits of the proposed transactions between First Mid and Delta will not be realized or will not be realized within the expected time period; the risk that integration of the operations of Delta with First Mid will be materially delayed or will be more costly or difficult than expected; the inability to complete the proposed transactions due to the failure to satisfy conditions to completion of the proposed transactions, including failure to obtain the required regulatory, shareholder and other approvals; the failure of the proposed transactions to close for any other reason; the effect of the announcement of the proposed transactions on customer relationships and operating results; the possibility that the proposed transactions may be more expensive to complete than anticipated, including as a result of unexpected factors or events; changes in interest rates; general economic conditions and those in the market areas of First Mid and Delta; legislative and/or regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mids and Deltas loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid and Delta; accounting principles, policies and guidelines; the severity, magnitude and duration of the COVID-19 pandemic, the direct and indirect impact of such pandemic, including responses to the pandemic by the U.S., state and local governments, customers' businesses, the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mids and Deltas liquidity and capital positions, impair the ability of First Mids and Deltas borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses, and the impact of the COVID-19 pandemic on First Mids and Deltas financial results, including possible lost revenue and increased expenses (including cost of capital), as well as possible goodwill impairment charges. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mids financial results, are included in First Mids filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

Investor Contact: Aaron HoltVP, Shareholder Relations217-258-0463 aholt@firstmid.com

Matt SmithChief Financial Officer217-258-1528msmith@firstmid.com

FIRST MID BANCSHARES, INC.Condensed Consolidated Balance Sheets(In thousands, unaudited) As of December 31, September 30, December 31, 2021 2021 2020 Assets Cash and cash $ 168,602 $ 345,206 $ 417,281 equivalentsInvestment securities 1,431,299 1,357,035 887,169 Loans (including loans 3,995,523 3,947,769 3,138,419 held for sale)Less allowance for (54,655 ) (53,983 ) (41,910 )credit lossesNet loans 3,940,868 3,893,786 3,096,509 Premises and 81,484 81,823 58,206 equipment, netGoodwill and 141,376 142,656 128,120 intangibles, netBank owned life 132,375 131,547 68,955 insuranceOther assets 90,578 91,306 70,108 Total assets $ 5,986,582 $ 6,043,359 $ 4,726,348 Liabilities and Stockholders' EquityDeposits: Non-interest bearing $ 1,246,673 $ 1,242,950 $ 936,926 Interest bearing 3,709,813 3,745,612 2,755,858 Total deposits 4,956,486 4,988,562 3,692,784 Repurchase agreement with 146,268 149,891 206,937 customersOther borrowings 86,446 112,641 93,969 Junior subordinated 19,195 19,153 19,027 debenturesSubordinated debt 94,400 94,363 94,253 Other liabilities 49,893 51,524 51,150 Total liabilities 5,352,688 5,416,134 4,158,120 Total stockholders' 633,894 627,225 568,228 equityTotal liabilities and $ 5,986,582 $ 6,043,359 $ 4,726,348 stockholders' equity

FIRST MID BANCSHARES, INC. Condensed Consolidated Statements of Income (In thousands, except per share data, unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2021 2020 2021 2020 Interest income:Interest and $ 39,711 $ 33,254 $ 159,684 $ 126,814 fees on loansInterest oninvestment 6,500 4,226 22,916 16,966 securitiesInterest onfederal funds sold 88 90 413 361 & other depositsTotalinterest 46,299 37,570 183,013 144,141 incomeInterest expense:Interest on 2,057 2,617 9,037 12,751 depositsInterest onsecuritiessold under 52 68 231 488 agreementstorepurchaseInterest onother 336 371 1,514 1,877 borrowingsInterest on jr.subordinated 125 143 541 682 debenturesInterest onsubordinated 985 931 3,939 931 debtTotalinterest 3,555 4,130 15,262 16,729 expenseNet interest 42,744 33,440 167,751 127,412 incomeProvision for 2,472 603 15,151 16,103 loan lossesNet interestincome after 40,272 32,837 152,600 111,309 provision for loanNon-interest income:Wealthmanagement 6,261 5,232 20,407 16,153 revenuesInsurance 4,150 3,477 18,927 17,477 commissionsService 2,067 1,527 6,808 5,862 chargesSecurities 36 193 124 1,106 gains, netMortgagebanking 890 1,870 4,718 5,075 revenuesATM/debit card 3,074 2,369 11,974 8,962 revenueOther 1,646 879 6,809 4,885 Totalnon-interest 18,124 15,547 69,767 59,520 incomeNon-interest expense:Salaries andemployee 20,424 19,151 89,660 66,452 benefitsNet occupancyand equipment 5,712 3,962 21,546 16,708 expenseNet other realestate owned 315 (20 ) 3,866 42 (income) expenseFDIC 406 458 1,604 1,309 insuranceAmortization ofintangible 1,462 1,200 5,391 5,062 assetsStationary 311 275 1,161 1,080 and suppliesLegal andprofessional 1,811 1,220 6,730 5,427 expenseMarketing and 1,915 434 3,603 1,616 donationsOther 4,038 3,651 22,018 13,391 Totalnon-interest 36,394 30,331 155,579 111,087 expenseIncome before 22,002 18,053 66,788 59,742 income taxesIncome taxes 5,168 4,484 15,298 14,472 Net income $ 16,834 $ 13,569 $ 51,490 $ 45,270 Per Share InformationBasic earningsper common $ 0.93 $ 0.81 $ 2.88 $ 2.71 shareDilutedearnings per 0.93 0.81 2.87 2.70 common share Weightedaverage shares 18,086,949 16,735,926 17,886,998 16,716,880 outstandingDiluted weightedaverage shares 18,135,380 16,779,129 17,939,007 16,762,856 outstanding

FIRST MID BANCSHARES, INC.Condensed Consolidated Statements of Income(In thousands, except per share data, unaudited) For the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2021 2021 2021 2021 2020 Interest income:Interest and $ 39,711 $ 43,292 $ 40,795 $ 35,886 $ 33,254 fees on loansInterest oninvestment 6,500 5,835 5,739 4,842 4,226 securitiesInterest onfederal funds sold 88 136 101 88 90 & other depositsTotalinterest 46,299 49,263 46,635 40,816 37,570 incomeInterest expense:Interest on 2,057 2,234 2,262 2,484 2,617 depositsInterest onsecurities sold under 52 52 57 70 68 agreements torepurchaseInterest onother 336 359 445 374 371 borrowingsInterest on jr.subordinated 125 137 139 140 143 debenturesInterest onsubordinated 985 985 985 984 931 debtTotalinterest 3,555 3,767 3,888 4,052 4,130 expenseNet interest 42,744 45,496 42,747 36,764 33,440 incomeProvision for 2,472 1,103 (560 ) 12,136 603 loan lossesNet interestincome after 40,272 44,393 43,307 24,628 32,837 provision for loanNon-interest income:Wealthmanagement 6,261 4,204 5,016 4,926 5,232 revenuesInsurance 4,150 3,932 4,988 5,857 3,477 commissionsService 2,067 1,838 1,539 1,364 1,527 chargesSecurities 36 11 73 4 193 gains, netMortgagebanking 890 1,477 1,691 1,409 1,870 revenuesATM/debit card 3,074 3,060 3,141 2,699 2,369 revenueOther 1,646 1,837 1,836 1,490 879 Totalnon-interest 18,124 16,359 18,284 17,749 15,547 incomeNon-interest expense:Salaries andemployee 20,424 21,092 24,908 23,487 19,151 benefitsNet occupancyand equipment 5,712 5,382 5,482 4,970 3,962 expenseNet other realestate owned 315 1,507 1,966 78 (20 )(income) expenseFDIC 406 268 478 452 458 insuranceAmortization ofintangible 1,462 1,414 1,295 1,220 1,200 assetsStationary 311 299 235 316 275 and suppliesLegal andprofessional 1,811 1,878 1,639 1,402 1,220 expenseMarketing and 1,915 679 507 502 434 donationsOther 4,038 3,802 9,503 5,173 3,651 Totalnon-interest 36,394 36,321 46,013 37,600 30,331 expenseIncome before 22,002 24,431 15,578 4,777 18,053 income taxesIncome taxes 5,168 6,105 3,357 668 4,484 Net income $ 16,834 $ 18,326 $ 12,221 $ 4,109 $ 13,569 Per Share InformationBasic earningsper common $ 0.93 $ 1.01 $ 0.68 $ 0.24 $ 0.81 shareDilutedearnings per 0.93 1.01 0.68 0.24 0.81 common share Weightedaverage shares 18,086,949 18,083,126 18,067,190 17,299,927 16,735,926 outstandingDiluted weightedaverage shares 18,135,380 18,136,146 18,120,210 17,352,947 16,779,129 outstanding

FIRST MID BANCSHARES, INC. Consolidated Financial Highlights and Ratios (Dollars in thousands, except per share data) (Unaudited) As of and for the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2021 2021 2021 2021 2020 Loan PortfolioConstructionand land $ 145,118 $ 180,061 $ 141,568 $ 165,376 $ 122,479 developmentFarm real 279,272 278,788 277,362 269,652 254,341 estate loans1-4 Familyresidential 400,313 412,565 394,902 412,470 325,762 propertiesMultifamilyresidential 298,942 306,911 274,910 297,984 189,632 propertiesCommercial 1,666,198 1,583,255 1,480,198 1,402,885 1,174,300 real estateLoans secured 2,789,843 2,761,580 2,568,940 2,548,367 2,066,514 by real estateAgriculturaloperating 151,484 126,534 123,101 121,070 137,352 loansCommercial andindustrial 832,008 835,860 864,554 1,017,400 738,313 loansConsumer 78,442 80,064 84,541 91,705 78,002 loansAll other 143,746 143,731 155,168 164,557 118,238 loansTotal loans 3,995,523 3,947,769 3,796,304 3,943,099 3,138,419 Deposit PortfolioNon-interestbearing demand $ 1,246,673 $ 1,242,950 $ 1,157,009 $ 1,185,181 $ 936,926 depositsInterestbearing demand 1,452,765 1,416,361 1,418,717 1,268,882 1,031,183 depositsSavings 626,523 612,404 598,232 668,098 499,427 depositsMoney 1,068,473 1,075,852 842,771 803,946 748,179 MarketTime 562,052 640,995 722,593 811,586 477,069 depositsTotal 4,956,486 4,988,562 4,739,322 4,737,693 3,692,784 deposits Asset QualityNon-performing $ 22,036 $ 27,723 $ 30,410 $ 31,984 $ 28,123 loansNon-performing 27,055 33,359 37,648 45,323 30,616 assetsNet 1,800 1,717 261 702 608 charge-offsAllowance forcredit losses to 248.03 % 194.72 % 179.54 % 173.27 % 149.02 % non-performingloansAllowance forcredit losses to 1.37%^1 1.39%^1 1.50%^1 1.50%^1 1.41%^1 total loansoutstandingNonperformingloans to total 0.55 % 0.70 % 0.80 % 0.81 % 0.90 % loansNonperformingassets to 0.45 % 0.55 % 0.65 % 0.78 % 0.65 % total assets Common Share DataCommon shares 18,080,303 18,083,126 18,078,474 18,042,256 16,741,208 outstandingBook value per $ 35.06 $ 34.69 $ 34.08 $ 33.36 $ 33.94 common shareTangible bookvalue per common 27.24 26.80 26.33 25.68 26.29 share ^(2)Market price 42.79 41.06 40.51 43.93 33.66 of stock KeyPerformance Ratios andMetricsEnd of period $ 5,504,517 $ 5,542,199 $ 5,269,882 $ 5,374,848 $ 4,367,717 earning assetsAverage 5,539,819 5,396,239 5,380,411 4,769,975 4,238,388 earning assetsAverage rate onaverage earning 3.37 % 3.67 % 3.52 % 3.52 % 3.58 % assets (taxequivalent)Average rateon cost of 0.26 % 0.29 % 0.30 % 0.36 % 0.41 % fundsNet interestmargin (tax 3.11 % 3.38 % 3.22 % 3.16 % 3.17 % equivalent) ^(2)Return on 1.12 % 1.25 % 0.84 % 0.32 % 1.18 % average assetsReturn onaverage common 10.74 % 11.67 % 8.00 % 2.78 % 9.66 % equityEfficiencyratio (tax 55.75 % 52.73 % 59.91 % 61.20 % 58.27 % equivalent) ^(2)Full-timeequivalent 965 960 960 983 824 employees ^1 ExcludesPaycheck ProtectionProgram loans.^2 Non-GAAP financial measure.Refer to reconciliation to the comparable GAAP measure.

FIRST MID BANCSHARES, INC. Net Interest Margin (In thousands, unaudited) For the Quarter Ended December 31, 2021 QTD Average Average Balance Interest Rate INTEREST EARNING ASSETS Interest bearing deposits $ 177,018 $ 74 0.17 % Federal funds sold 1,355 - 0.00 % Certificates of deposits 2,591 14 2.14 % investmentsInvestment Securities: Taxable (total less 1,061,070 4,342 1.64 % municipals)Tax-exempt (Municipals) 366,367 2,732 2.98 % Loans (net of unearned 3,931,418 39,885 4.02 % income) Total interest earning 5,539,819 47,047 3.37 % assets NONEARNING ASSETS Cash and due from banks 106,944 Premises and equipment 81,650 Other nonearning assets 349,884 Allowance for loan losses (54,874 ) Total assets $ 6,023,423 INTEREST BEARING LIABILITIESDemand deposits $ 2,474,758 $ 1,168 0.19 % Savings deposits 618,900 117 0.08 % Time deposits 598,414 772 0.51 % Total interest bearing 3,692,072 2,057 0.22 % depositsRepurchase agreements 159,268 52 0.13 % FHLB advances 102,590 336 1.30 % Subordinated debt 94,376 985 4.14 % Jr. subordinated debentures 19,168 125 2.59 % Total borrowings 375,402 1,498 1.58 % Total interest bearing 4,067,474 3,555 0.35 % liabilities NONINTEREST BEARING LIABILITIESDemand deposits 1,278,866 Average cost 0.26 % of fundsOther liabilities 50,305 Stockholders' equity 626,778 Total liabilities & $ 6,023,423 stockholders' equity Net Interest Earnings / $ 43,492 3.02 % Spread Impact of Non-Interest 0.09 % Bearing Funds Tax effected yield on interest earning assets 3.11 %

FIRST MID BANCSHARES, INC. Reconciliation of Non-GAAP Financial Measures (In thousands, unaudited) As of and for the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2021 2021 2021 2021 2020 Net interest income $ 42,744 $ 45,496 $ 42,747 $ 36,764 $ 33,440 as reportedNet interest income, 43,492 46,165 43,359 37,359 34,040 (tax equivalent)Average earning 5,539,819 5,396,239 5,380,411 4,769,975 4,238,388 assetsNet interest margin 3.11 % 3.38 % 3.22 % 3.16 % 3.17 % (tax equivalent) Common stockholder's $ 633,894 $ 627,225 $ 616,066 $ 601,884 $ 568,228 equityGoodwill and 141,376 142,656 139,995 138,606 128,120 intangibles, netCommon shares 18,080 18,083 18,078 18,042 16,741 outstandingTangible Book Value per $ 27.24 $ 26.80 $ 26.33 $ 25.68 $ 26.29 common share

FIRST MID BANCSHARES, INC. Reconciliation of Non-GAAP Financial Measures (In thousands, except per share data, unaudited) As of and for the Quarter Ended December 31, September 30, June 30, March 31, December 31, 2021 2021 2021 2021 2020 Adjusted earnings ReconciliationNet Income $ 16,834 $ 18,326 $ 12,221 $ 4,109 $ 13,569 - GAAPAdjustments(post-tax): ^ (1)Acquisition ACL onnon-PCD assets in - - - 9,072 - provision expenseBranchoptimization - 999 960 - - costsIntegration andacquisition 225 348 4,634 2,036 292 expensesTotal non-recurringadjustments $ 225 $ 1,347 $ 5,595 $ 11,108 $ 292 (non-GAAP) Adjustedearnings - $ 17,059 $ 19,673 $ 17,816 $ 15,217 $ 13,861 non-GAAPAdjusted dilutedearnings per share $ 0.94 $ 1.08 $ 0.98 $ 0.88 $ 0.83 (non-GAAP) EfficiencyRatio ReconciliationNoninterest $ 36,394 $ 36,321 $ 46,013 $ 37,600 $ 30,331 expense - GAAPOther real estateowned property (315 ) (242 ) (751 ) (78 ) 20 income (expense)Amortization (1,462 ) (1,414 ) (1,295 ) (1,220 ) (1,200 ) of intangiblesBranchoptimization - (1,265 ) (1,215 ) - - costsintegration andacquisition (285 ) (440 ) (5,866 ) (2,578 ) (369 ) expensesAdjustednoninterest $ 34,332 $ 32,960 $ 36,886 $ 33,724 $ 28,782 expense(non-GAAP) Net interest $ 42,744 $ 45,496 $ 42,747 $ 36,764 $ 33,440 income -GAAPEffect oftax-exempt 748 669 612 595 601 income ^(1)Adjusted netinterest income $ 43,492 $ 46,165 $ 43,359 $ 37,359 $ 34,041 (non-GAAP) Noninterest $ 18,124 $ 16,359 $ 18,284 $ 17,749 $ 15,547 income - GAAPGain on sales ofinvestment (36 ) (11 ) (73 ) (4 ) (193 ) securities, netAdjustednoninterest $ 18,088 $ 16,348 $ 18,211 $ 17,745 $ 15,354 income (non-GAAP) Adjustedtotal revenue $ 61,580 $ 62,513 $ 61,570 $ 55,104 $ 49,395 (non-GAAP) Efficiencyratio 55.75 % 52.73 % 59.91 % 61.20 % 58.27 % (non-GAAP) (1) Nonrecurring items (post-tax) and tax-exemptincome are calculated using an estimated effective tax rate of 21%.