Business Wire | Jan 27, 2022 04:15PM EST

Farmers National Banc Corp. Announces Record 2021 Results

Jan. 27, 2022

CANFIELD, Ohio--(BUSINESS WIRE)--Jan. 27, 2022--Farmers National Banc Corp. ("Farmers" or the "Company") (NASDAQ: FMNB) today announced financial results for the three and twelve months ended December 31, 2021.

On a GAAP basis, net income for the fourth quarter of 2021 was $5.7 million, or $0.18 per diluted share, compared to $11.4 million, or $0.40 per diluted share, for the three months ended December 31, 2020. The results for the quarter included pretax items for acquisition related provision for credit loss expense of $4.9 million, $6.5 million for acquisition costs, $1.8 million for a prepayment penalty on an FHLB advance, security gains of $25,000, a loss of $195,000 on the sale of assets, and a one-time gain of $239,000 for the sale of Farmers' credit card portfolio. Excluding these items (non-GAAP), core net income for the quarter ended December 31, 2021, would have been $16.2 million, or $0.50 per diluted share.

Net income for the twelve months ended December 31, 2021, totaled $51.8 million, or $1.77 per diluted share, compared to $41.9 million, or $1.47 per diluted share for the twelve months ended December 31, 2020. Results for the year ended December 31, 2021, included pre-tax items for acquisition related provision for credit loss expense of $4.9 million, acquisition costs of $7.1 million, prepayment penalties on FHLB advances of $2.1 million, security gains of $1.0 million, a loss of $247,000 on the sale of assets, and the one-time gain of $239,000 on the sale of the credit card portfolio. Net income for the twelve months ended December 31, 2021, excluding these items (non-GAAP), was $62.3 million, or $2.13 per share.

On November 1, 2021, Farmers and Cortland Bancorp ("Cortland") completed the previously announced merger of Cortland into Farmers in a cash and stock transaction. Under the terms of the merger agreement, shareholders of Cortland were able to elect to receive either $28.00 per share in cash or 1.75 shares of Farmers' common stock, subject to an overall limitation of 75% of the Cortland shares being exchanged for Farmers shares and 25% for cash. The merger combines two complementary banking institutions with similar culture and operating philosophies, and will further solidify Farmers' market share in Trumbull and Mahoning counties while expanding Farmers' presence in the greater Cleveland market. In February 2022, the systems integration of Farmers and Cortland will be completed, bringing the combined 48 branches together under one name.

At the closing of the merger, Farmers issued 5.6 million shares of its common stock along with cash of $29.6 million, which represented a transaction value of approximately $128.5 million based on its closing stock price of $17.82 on October 31, 2021. The transaction value has been allocated to assets acquired and liabilities assumed, including $482.2 million in loans and loans held for sale, $305.2 million in other tangible assets, $695.3 million in deposits, $17.9 million in other liabilities and $54.4 million in goodwill and other intangible assets. Prior to closing, Cortland incurred $3.3 million of merger-related costs. The year-over-year comparison of Farmers results is impacted by the Cortland merger, with 2021 including two months of combined operations from Cortland compared to none in the prior year.

Kevin J. Helmick, President and CEO, stated, "The last two years have brought unbelievable challenges to the world and our industry. Through it all, the Farmers team has continued to deliver record earnings and superior returns while catering to the needs of the communities we serve. I am extremely proud of our staff for all of their hard work. With the closing of the Cortland acquisition, I look forward to the possibilities in 2022."

Balance Sheet

Total assets at December 31, 2021, grew to $4.14 billion compared to $3.32 billion at September 30, 2021 and $3.07 billion at December 31, 2020. The acquisition of Cortland added $841.7 million in assets to the balance sheet. Gross loans (excluding loans held for sale) were $2.33 billion at December 31, 2021, compared to $1.89 billion at September 30, 2021 and $2.08 billion at December 31, 2020. Gross loan growth for the quarter totaled $436.9 million and included $470.6 million in gross loans associated with the acquisition of Cortland (excluding Cortland's PPP loans) offset by a decline in PPP loan balances of $26.3 million (inclusive of Cortland's PPP loans) and a decline in other loan balances of $7.4 million which includes the sale of the Company's credit card portfolio. The credit card portfolio had a balance of $3.0 million at the time of sale. At December 31, 2021, the Company has $37.5 million of PPP loans before deferred fees still to be forgiven and $1.3 million in net deferred fees associated with these loans still to be recognized into income.

Available for sale securities increased to $1.43 billion at December 31, 2021, an increase of $852.1 million from December 31, 2020. During 2021, the Company continued to deploy excess cash balances into securities. The Cortland acquisition in the fourth quarter was responsible for $130.6 million of the growth in the portfolio.

Total deposits at December 31, 2021, were $3.55 billion compared to $2.87 billion at September 30, 2021, and $2.61 billion at December 31, 2020. The growth, year over year, was due to $695.3 million in deposits obtained in the acquisition of Cortland and $241.1 million of organic growth, or 9.2% organically. After adjusting for Cortland in the fourth quarter, deposits shrank $14.5 million for the quarter.

Total stockholders' equity increased to $472.4 million at December 31, 2021, compared to $377.5 million at September 30, 2021 and $350.1 million at December 31, 2020. The increase in stockholders' equity was due to the Cortland acquisition and the Company's earnings offset by dividends paid to common shareholders and changes in other comprehensive income.

Credit Quality

Non-performing loans to loans declined to 0.69% at December 31, 2021, compared to 0.78% at September 30, 2021. Early stage delinquencies, defined as 30-89 days past due, were $8.9 million, or 0.38% of total loans, at December 31, 2021, compared to $6.9 million, or 0.37% of total loans, for the prior quarter.

On January 1, 2021, Farmers adopted the Current Expected Credit Loss ("CECL") model of accounting for credit losses. At adoption, Farmers recorded a $2.16 million increase to its allowance for loan losses and a $0.29 million increase to its reserve for off-balance sheet commitments for a combined $2.45 million, of which $1.94 million was recorded as a reduction to retained earnings with the remainder to deferred taxes. In connection with the Cortland acquisition, on November 1, 2021, Farmers recorded a $6.16 million increase to its allowance for loan losses, which was comprised of $4.87 million required to be recorded as a provision for credit losses related to non-purchased credit deteriorated loans and $1.29 million required to be recorded as a reduction of loan balances for purchased credit deteriorated loans.

Excluding the merger impact noted above, the fourth quarter 2021 results include net charge-offs of $313,000 and a provision for credit loss of $691,000 compared to net charge-offs of $197,000 and a provision expense of $3.0 million for the same period in 2020. As an overall percentage of loans, the allowance for credit losses increased to 1.26% at December 31, 2021, compared to 1.22% for the quarter ended September 30, 2021. Excluding the PPP loans, this allowance for credit losses to gross loans ratio increases to 1.28% (non-GAAP) as of December 31, 2021. Total net charge-offs as a percentage of average net loans outstanding was 6 basis points for the quarter ended December 31, 2021, compared to 4 basis points for the fourth quarter of 2020.

Net interest income

Net interest income was $29.7 million for the fourth quarter of 2021 compared to $25.8 million for the fourth quarter of 2020. The increase was due to growth in average interest earning assets, including the acquisition of Cortland, offset by a decline in net interest margin of 36 basis points. The net interest margin was 3.33% for the current quarter which is down from the 3.47% net interest margin reported in the third quarter of 2021 and lower than the 3.69% net interest margin reported in the fourth quarter of 2020. The decline in net interest margin in the fourth quarter of 2021 compared to the third quarter of 2021 was driven by the acquisition of Cortland and the issuance of subordinated debt, the proceeds of which were used to purchase securities. Excluding the impact of acquisition marks and related accretion and PPP interest and fees (non-GAAP), the net interest margin for the fourth quarter of 2021 was 3.21% compared to 3.37% for the third quarter of 2021 and 3.51% for the fourth quarter of 2020.

Noninterest income

Noninterest income declined to $9.5 million for the quarter ended December 31, 2021 compared to $10.5 million for the fourth quarter in 2020. Net gains on the sale of loans decreased to $1.7 million for the fourth quarter of 2021 compared to $3.6 million in the fourth quarter of 2020 due to lower origination volumes and tighter margins. In addition, security gains and other noninterest income were lower by $154,000 and $251,000, respectively, in the fourth quarter of 2021 compared to the same period in 2020. These declines have been partially offset by increases to service charges on deposit of $208,000, a 22.4% increase, trust fees of $559,000, a 28.7% increase, investment commissions of $161,000, a 35.8% increase, and an increase in bank owned life insurance (BOLI) income of $227,000 from the purchase of additional insurance in December 2020 and the addition of Cortland's BOLI.

Noninterest expense

Total noninterest expense for the fourth quarter of 2021 increased to $27.7 million compared to $19.6 million in the fourth quarter of 2020. Excluding merger related costs and a $1.8 million prepayment penalty for the payoff of a $40 million FHLB advance, noninterest expense in the fourth quarter of 2021 was $19.3 million compared to $17.8 million of noninterest expense in the fourth quarter of 2020 after excluding merger related costs in that quarter. This increase in noninterest expense after adjusting for these items was primarily due to the acquisition of Cortland.

Covid Support Efforts

Farmers offered special financial assistance to support customers who were experiencing financial hardships related to the COVID-19 pandemic. The Company offered three month deferrals upon request by the borrowers, beginning in the middle of March, 2020 and concluding at the end of the three month deferral period. For those borrowers in industries that were greatly impacted by COVID-19, additional deferrals were considered and granted beyond the initial three month period. The range of deferred months for subsequent requests was three to nine months. The decline in deferred loans and balances was due to borrowers not requesting additional deferments and beginning to restart payments under the original terms of their loan. At December 31, 2021, Farmers had no customers still on deferral.

Farmers is also a preferred SBA lender and we dedicated significant additional staff and other resources to help our customers complete and submit their applications and supporting documentation for loans offered under the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, so that they could obtain SBA approval and receive funding as quickly as possible. During the initial 2020 period of the PPP program, the Company facilitated PPP assistance to 1,714 business customers totaling $199.8 million. The Company, on behalf of its customers, began processing borrower applications for PPP forgiveness at the beginning of September 2020. The SBA has up to ninety days to review an application for PPP forgiveness and provide a decision at the end of that review. Once forgiveness of the PPP loans has been communicated and payment is received from the SBA, the Company will record the cash received from the SBA, pay-off the loans based on the amount of forgiveness provided and accelerate the amount of net deferred loan fees/costs recognized for the portion of the PPP loans that are forgiven.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $4.4 billion in banking assets. Farmers National Banc Corp.'s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 48 banking locations in Mahoning, Trumbull, Columbiana, Portage, Stark, Wayne, Medina, Geauga and Cuyahoga Counties in Ohio and Beaver County in Pennsylvania, and Farmers Trust Company, which operates five trust offices and offers services in the same geographic markets. Total wealth management assets under care at December 31, 2021 are $3.1 billion. Farmers National Insurance, LLC, a wholly-owned subsidiary of The Farmers National Bank of Canfield, offers a variety of insurance products.

Non-GAAP Disclosure

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

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Farmers' financial condition, results of operations, asset quality trends and profitability. Forward-looking statements are not historical facts but instead represent only management's current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Farmers' control. Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions, as well as any statements related to future expectations of performance or conditional verbs, such as "will," "would," "should," "could" or "may." Farmers' actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Farmers' actual results to differ materially from those described in the forward-looking statements include impacts from the COVID-19 pandemic, including further resurgence in the spread of COVID-19, on local, national and global economic conditions; higher default rates on loans made to our customers related to COVID-19 and its impact on our customers' operations and financial condition; unexpected changes in interest rates or disruptions in the mortgage markets related to COVID-19 or other responses to the health crisis; impacts of the upcoming U.S. elections on the regulatory landscape, capital markets, and response to and management of the COVID-19 pandemic including further economic stimulus from the federal government; Farmers' failure to integrate Cortland and Cortland Bank with Farmers in accordance with expectations; deviations from performance expectations related to Cortland and Cortland Bank; and the other factors contained in Farmers' Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (SEC) and available on Farmers' website (www.farmersbankgroup.com) and on the SEC's website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management's views as of any subsequent date. Farmers does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

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

2021 2021 2021 2021 2020 2021 2020 Change

Total $31,685 $28,375 $28,609 $27,790 $28,833 $116,459 $112,327 3.7%interestincomeTotal 1,986 1,841 2,119 2,523 3,030 8,469 16,136 -47.5%interestexpenseNet interest 29,699 26,534 26,490 25,267 25,803 107,990 96,191 12.3%incomeProvision for 5,366 (948) 50 425 3,000 4,893 9,100 -46.2%credit lossesNoninterest 9,538 9,015 9,508 10,132 10,499 38,193 36,161 5.6%incomeAcquisition 6,521 472 104 12 1,798 7,109 3,223 120.6%related costsOther expense 21,140 16,656 16,966 17,305 17,796 72,067 69,757 3.3%

Income before 6,210 19,369 18,878 17,657 13,708 62,114 50,272 23.6%income taxesIncome taxes 508 3,358 3,303 3,101 2,351 10,270 8,396 22.3%

Net income $5,702 $16,011 $15,575 $14,556 $11,357 $51,844 $41,876 23.8%

Averagediluted 32,074 28,361 28,353 28,336 28,322 29,280 28,394sharesoutstandingBasic 0.18 0.57 0.55 0.52 0.40 1.78 1.48earnings pershareDiluted 0.18 0.56 0.55 0.51 0.40 1.77 1.47earnings pershareCash 0.14 0.11 0.11 0.11 0.11 0.47 0.44dividends persharePerformanceRatiosNet Interest 3.33% 3.47% 3.52% 3.54% 3.69% 3.45% 3.70%Margin(Annualized)EfficiencyRatio (Tax 63.61% 46.04% 45.70% 47.76% 50.07% 51.13% 52.55%equivalentbasis)Return onAverage 0.58% 1.92% 1.90% 1.87% 1.49% 1.52% 1.46%Assets(Annualized)Return onAverage 5.24% 16.93% 17.17% 16.81% 13.10% 13.64% 12.80%Equity(Annualized)Dividends to 82.99% 19.41% 19.95% 21.35% 27.30% 27.11% 29.62%Net IncomeOtherPerformanceRatios(Non-GAAP)Return onAverage 0.60% 1.97% 1.93% 1.87% 1.52% 1.55% 1.48%TangibleAssetsReturn onAverage 6.57% 19.63% 19.81% 19.30% 15.48% 16.13% 15.07%TangibleEquityConsolidated Statements of Financial ConditionDec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

2021

2021

2021

2021

2020

AssetsCash and cash equivalents$112,790

$79,808

$149,357

$326,385

$254,621

Securities available for sale1,427,677

1,183,361

996,271

802,866

575,600

Other investments30,459

19,041

20,573

21,317

21,528

Loans held for sale4,545

2,628

1,922

3,993

4,766

Loans2,331,082

1,894,216

1,959,865

2,037,404

2,078,044

Less allowance for credit losses (a)29,386

23,136

24,806

24,935

22,144

Net Loans2,301,696

1,871,080

1,935,059

2,012,469

2,055,900

Other assets265,582

161,129

156,876

157,494

158,733

Total Assets$4,142,749

$3,317,047

$3,260,058

$3,324,524

$3,071,148

Liabilities and Stockholders' EquityDepositsNoninterest-bearing$916,237

$675,938

$663,640

$675,045

$608,791

Interest-bearing2,630,998

2,190,475

2,115,183

2,158,009

2,002,087

Total deposits3,547,235

2,866,413

2,778,823

2,833,054

2,610,878

Other interest-bearing liabilities87,758

49,649

78,369

79,683

78,906

Other liabilities35,324

23,461

35,958

64,432

31,267

Total liabilities3,670,317

2,939,523

2,893,150

2,977,169

2,721,051

Stockholders' Equity472,432

377,524

366,908

347,355

350,097

Total Liabilitiesand Stockholders' Equity$4,142,749

$3,317,047

$3,260,058

$3,324,524

$3,071,148

Period-end shares outstanding33,898

28,322

28,322

28,308

28,258

Book value per share$13.94

$13.33

$12.95

$12.27

$12.39

Tangible book value per share (Non-GAAP)*10.91

11.61

11.23

10.53

10.63

* Tangible book value per share is calculated by dividing tangible common equity by outstanding sharesCapital and LiquidityCommon Equity Tier 1 Capital Ratio (b)13.13%

14.58%

13.95%

13.49%

13.22%

Total Risk Based Capital Ratio (b)17.56%

16.25%

15.54%

15.10%

14.72%

Tier 1 Risk Based Capital Ratio (b)13.79%

15.18%

14.39%

13.93%

13.67%

Tier 1 Leverage Ratio (b)10.11%

10.17%

9.70%

9.69%

9.77%

Equity to Asset Ratio11.40%

11.38%

11.25%

10.45%

11.40%

Tangible Common Equity Ratio (c)9.15%

10.06%

9.90%

9.10%

9.94%

Net Loans to Assets55.56%

56.41%

59.36%

60.53%

66.94%

Loans to Deposits65.72%

66.08%

70.53%

71.92%

79.59%

Asset QualityNon-performing loans$16,195

$14,744

$13,873

$11,640

$13,835

Other Real Estate Owned0

0

30

30

0

Non-performing assets16,195

14,744

13,903

11,670

13,835

Loans 30 - 89 days delinquent8,891

6,944

7,606

7,183

9,297

Charged-off loans470

411

502

284

387

Recoveries157

125

323

200

190

Net Charge-offs313

286

179

84

197

Annualized Net Charge-offs toAverage Net Loans Outstanding0.06%

0.06%

0.04%

0.02%

0.04%

Allowance for Credit Losses to Total Loans (a)1.26%

1.22%

1.27%

1.22%

1.07%

Non-performing Loans to Total Loans0.69%

0.78%

0.71%

0.57%

0.67%

Allowance to Non-performing Loans (a)181.45%

156.92%

178.81%

214.22%

160.06%

Non-performing Assets to Total Assets0.39%

0.44%

0.43%

0.35%

0.45%

(a) CECL methodology used during 2021. Prior periods used the incurred loss methodology.(b) December 31, 2021 ratio is estimated(c) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below Consolidated Statements of Financial Condition Dec. 31, Sept. 30, June 30, March 31, Dec. 31,

2021 2021 2021 2021 2020

AssetsCash and cash $112,790 $79,808 $149,357 $326,385 $254,621equivalentsSecurities available for 1,427,677 1,183,361 996,271 802,866 575,600saleOther investments 30,459 19,041 20,573 21,317 21,528

Loans held for sale 4,545 2,628 1,922 3,993 4,766

Loans 2,331,082 1,894,216 1,959,865 2,037,404 2,078,044

Less allowance for 29,386 23,136 24,806 24,935 22,144credit losses (a)Net Loans 2,301,696 1,871,080 1,935,059 2,012,469 2,055,900

Other assets 265,582 161,129 156,876 157,494 158,733

Total Assets $4,142,749 $3,317,047 $3,260,058 $3,324,524 $3,071,148

Liabilities andStockholders' EquityDepositsNoninterest-bearing $916,237 $675,938 $663,640 $675,045 $608,791

Interest-bearing 2,630,998 2,190,475 2,115,183 2,158,009 2,002,087

Total deposits 3,547,235 2,866,413 2,778,823 2,833,054 2,610,878

Other interest-bearing 87,758 49,649 78,369 79,683 78,906liabilitiesOther liabilities 35,324 23,461 35,958 64,432 31,267

Total liabilities 3,670,317 2,939,523 2,893,150 2,977,169 2,721,051

Stockholders' Equity 472,432 377,524 366,908 347,355 350,097

Total Liabilities and $4,142,749 $3,317,047 $3,260,058 $3,324,524 $3,071,148Stockholders' Equity Period-end shares 33,898 28,322 28,322 28,308 28,258outstandingBook value per share $13.94 $13.33 $12.95 $12.27 $12.39

Tangible book value per 10.91 11.61 11.23 10.53 10.63share (Non-GAAP)* * Tangible book value per share is calculated by dividing tangible commonequity by outstanding shares Capital and LiquidityCommon Equity Tier 1 13.13% 14.58% 13.95% 13.49% 13.22%Capital Ratio (b)Total Risk Based Capital 17.56% 16.25% 15.54% 15.10% 14.72%Ratio (b)Tier 1 Risk Based 13.79% 15.18% 14.39% 13.93% 13.67%Capital Ratio (b)Tier 1 Leverage Ratio 10.11% 10.17% 9.70% 9.69% 9.77%(b)Equity to Asset Ratio 11.40% 11.38% 11.25% 10.45% 11.40%

Tangible Common Equity 9.15% 10.06% 9.90% 9.10% 9.94%Ratio (c)Net Loans to Assets 55.56% 56.41% 59.36% 60.53% 66.94%

Loans to Deposits 65.72% 66.08% 70.53% 71.92% 79.59%

Asset QualityNon-performing loans $16,195 $14,744 $13,873 $11,640 $13,835

Other Real Estate Owned 0 0 30 30 0

Non-performing assets 16,195 14,744 13,903 11,670 13,835

Loans 30 - 89 days 8,891 6,944 7,606 7,183 9,297delinquentCharged-off loans 470 411 502 284 387

Recoveries 157 125 323 200 190

Net Charge-offs 313 286 179 84 197

Annualized NetCharge-offs toAverage Net Loans 0.06% 0.06% 0.04% 0.02% 0.04%OutstandingAllowance for Credit 1.26% 1.22% 1.27% 1.22% 1.07%Losses to Total Loans(a)Non-performing Loans to 0.69% 0.78% 0.71% 0.57% 0.67%Total LoansAllowance to 181.45% 156.92% 178.81% 214.22% 160.06%Non-performing Loans (a)Non-performing Assets to 0.39% 0.44% 0.43% 0.35% 0.45%Total Assets (a) CECL methodology used during 2021. Prior periods used the incurred lossmethodology.(b) December 31, 2021 ratio is estimated(c) This is a non-GAAP financial measure. A reconciliation to GAAP is shownbelowFor the Three Months Ended

Dec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

End of Period Loan Balances2021

2021

2021

2021

2020

Commercial real estate$1,011,891

$690,407

$704,809

$702,556

$713,936

Commercial313,836

302,356

351,261

406,064

404,492

Residential real estate453,635

376,901

383,187

400,982

413,841

HELOC127,433

106,750

107,153

107,501

110,352

Consumer189,522

189,497

190,064

193,295

203,061

Agricultural loans232,365

226,896

223,427

227,073

232,129

Total, excluding net deferred loan costs$2,328,682

$1,892,807

$1,959,901

$2,037,471

$2,077,811

For the Three Months Ended

For the Twelve Months Ended

Dec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

Dec. 31,

Dec. 31,

Noninterest Income2021

2021

2021

2021

2020

2021

2020

Service charges on deposit accounts$1,138

$924

$790

$808

$930

$3,660

$3,682

Bank owned life insurance income414

340

300

284

187

1,338

795

Trust fees2,509

2,335

2,358

2,236

1,950

9,438

7,632

Insurance agency commissions706

799

948

1,003

776

3,456

3,124

Security gains, including fair value changes25

459

32

488

179

1,004

380

Retirement plan consulting fees378

334

389

320

394

1,421

1,523

Investment commissions611

638

523

504

450

2,276

1,530

Net gains on sale of loans1,728

1,466

2,191

2,900

3,610

8,285

11,362

Other mortgage banking fee income, net2

32

(55)

(115)

108

(136)

(83)

Debit card and EFT fees1,424

1,227

1,322

1,171

1,061

5,144

4,264

Other noninterest income603

461

710

533

854

2,307

1,952

Total Noninterest Income$9,538

$9,015

$9,508

$10,132

$10,499

$38,193

$36,161

For the Three Months Ended

For the Twelve Months Ended

Dec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

Dec. 31,

Dec. 31,

Noninterest Expense2021

2021

2021

2021

2020

2021

2020

Salaries and employee benefits$10,230

$9,321

$9,866

$9,976

$9,638

$39,393

$39,826

Occupancy and equipment2,422

1,899

1,890

2,275

2,060

8,486

7,254

State and local taxes620

552

551

554

515

2,277

2,138

Professional fees1,296

1,009

830

1,056

341

4,191

2,733

Merger related costs6,521

472

104

12

1,798

7,109

3,223

Advertising776

466

357

260

478

1,859

1,531

FDIC insurance152

140

120

170

100

582

750

Intangible amortization414

316

316

316

332

1,362

1,327

Core processing charges880

860

831

627

831

3,198

3,551

Other noninterest expenses4,350

2,093

2,205

2,071

3,501

10,719

10,647

Total Noninterest Expense$27,661

$17,128

$17,070

$17,317

$19,594

$79,176

$72,980

For the Three Months Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31,

End of 2021 2021 2021 2021 2020Period LoanBalancesCommercial $1,011,891 $690,407 $704,809 $702,556 $713,936real estateCommercial 313,836 302,356 351,261 406,064 404,492

Residential 453,635 376,901 383,187 400,982 413,841real estateHELOC 127,433 106,750 107,153 107,501 110,352

Consumer 189,522 189,497 190,064 193,295 203,061

Agricultural 232,365 226,896 223,427 227,073 232,129loansTotal,excluding $2,328,682 $1,892,807 $1,959,901 $2,037,471 $2,077,811net deferredloan costs For the Three Months Ended For the Twelve Months Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. Dec. 31, 31,

Noninterest 2021 2021 2021 2021 2020 2021 2020IncomeServicecharges on $1,138 $924 $790 $808 $930 $3,660 $3,682depositaccountsBank ownedlife 414 340 300 284 187 1,338 795insuranceincomeTrust fees 2,509 2,335 2,358 2,236 1,950 9,438 7,632

Insurance 706 799 948 1,003 776 3,456 3,124agencycommissionsSecuritygains, 25 459 32 488 179 1,004 380includingfair valuechangesRetirementplan 378 334 389 320 394 1,421 1,523consultingfeesInvestment 611 638 523 504 450 2,276 1,530commissionsNet gains on 1,728 1,466 2,191 2,900 3,610 8,285 11,362sale ofloansOthermortgage 2 32 (55) (115) 108 (136) (83)banking feeincome, netDebit card 1,424 1,227 1,322 1,171 1,061 5,144 4,264and EFT feesOther 603 461 710 533 854 2,307 1,952noninterestincomeTotal $9,538 $9,015 $9,508 $10,132 $10,499 $38,193 $36,161NoninterestIncome For the Three Months Ended For the Twelve Months Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. Dec. 31, 31,

Noninterest 2021 2021 2021 2021 2020 2021 2020ExpenseSalaries and $10,230 $9,321 $9,866 $9,976 $9,638 $39,393 $39,826employeebenefitsOccupancy 2,422 1,899 1,890 2,275 2,060 8,486 7,254andequipmentState and 620 552 551 554 515 2,277 2,138local taxesProfessional 1,296 1,009 830 1,056 341 4,191 2,733feesMerger 6,521 472 104 12 1,798 7,109 3,223relatedcostsAdvertising 776 466 357 260 478 1,859 1,531

FDIC 152 140 120 170 100 582 750insuranceIntangible 414 316 316 316 332 1,362 1,327amortizationCore 880 860 831 627 831 3,198 3,551processingchargesOther 4,350 2,093 2,205 2,071 3,501 10,719 10,647noninterestexpensesTotal $27,661 $17,128 $17,070 $17,317 $19,594 $79,176 $72,980NoninterestExpenseBusiness CombinationConsiderationCash$ 29,618

Stock98,921

Fair value of total consideration transferred$ 128,539

Fair value of assets acquiredCash and cash equivalents$ 113,391

Securities available for sale130,574

Other investments16,092

Loans, net482,168

Premises and equipment12,644

Bank owned life insurance21,547

Core deposit intangible5,886

Current and deferred taxes3,135

Other assets7,805

Total assets acquired793,242

Fair value of liabilities assumedDeposits695,274

Short-term borrowings4,246

Long-term borrowings4,262

Accrued interest payable and other liabilities9,386

Total liabilities713,168

Net assets acquired$ 80,074

Goodwill created48,465

Total net assets acquired$ 128,539

Business Combination Consideration Cash $ 29,618

Stock 98,921

Fair value of total consideration transferred $ 128,539

Fair value of assets acquired Cash and cash equivalents $ 113,391

Securities available for sale 130,574

Other investments 16,092

Loans, net 482,168

Premises and equipment 12,644

Bank owned life insurance 21,547

Core deposit intangible 5,886

Current and deferred taxes 3,135

Other assets 7,805

Total assets acquired 793,242

Fair value of liabilities assumed Deposits 695,274

Short-term borrowings 4,246

Long-term borrowings 4,262

Accrued interest payable and other liabilities 9,386

Total liabilities 713,168

Net assets acquired $ 80,074

Goodwill created 48,465

Total net assets acquired $ 128,539

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

Three Months Ended

Three Months Ended

December 31, 2021

December 31, 2020

AVERAGE

YIELD/

AVERAGE

YIELD/

BALANCE

INTEREST (1)

RATE (1)

BALANCE

INTEREST (1)

RATE (1)

EARNING ASSETSLoans (2)$2,187,770

$24,946

4.52%

$2,110,031

$25,409

4.79%

Taxable securities892,563

3,948

1.75

223,306

1,335

2.38

Tax-exempt securities (2)410,016

3,397

3.29

262,829

2,514

3.81

Other investments26,475

142

2.13

15,138

128

3.36

Federal funds sold and other114,496

39

0.14

237,357

67

0.11

Total earning assets3,631,320

32,472

3.55

2,848,661

29,453

4.11

Nonearning assets248,581

184,344

Total assets$3,879,901

$3,033,005

INTEREST-BEARING LIABILITIESTime deposits$379,786

$697

0.73%

$458,340

$1,591

1.38%

Brokered time deposits0

0

0.00

43,685

98

0.89

Savings deposits736,732

202

0.11

489,071

236

0.19

Demand deposits - interest bearing1,367,921

475

0.14

995,977

804

0.32

Short term borrowings0

2

0.00

3,859

7

0.72

Long term borrowings80,799

610

3.00

76,400

294

1.53

Total interest-bearing liabilities$2,565,238

1,986

0.31

$2,067,332

3,030

0.58

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITYDemand deposits - noninterest bearing851,130

593,955

Other liabilities31,824

26,769

Stockholders' equity431,709

344,949

TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY$3,879,901

$3,033,005

Net interest income and interest rate spread$30,486

3.24%

$26,423

3.53%

Net interest margin3.33%

3.69%

(1) Interest and yields are calculated on a tax-equivalent basis where applicable.(2) For 2021, adjustments of $86 thousand and $701 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2020, adjustments of $101 thousand and $519 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)



Three Months Ended Three Months Ended

December 31, 2021 December 31, 2020

AVERAGE YIELD AVERAGE YIELD / /

BALANCE INTEREST RATE BALANCE INTEREST RATE (1) (1) (1) (1)

EARNING ASSETSLoans (2) $2,187,770 $24,946 4.52% $2,110,031 $25,409 4.79%

Taxable securities 892,563 3,948 1.75 223,306 1,335 2.38

Tax-exempt securities (2) 410,016 3,397 3.29 262,829 2,514 3.81

Other investments 26,475 142 2.13 15,138 128 3.36

Federal funds sold and 114,496 39 0.14 237,357 67 0.11otherTotal earning assets 3,631,320 32,472 3.55 2,848,661 29,453 4.11

Nonearning assets 248,581 184,344

Total assets $3,879,901 $3,033,005

INTEREST-BEARINGLIABILITIESTime deposits $379,786 $697 0.73% $458,340 $1,591 1.38%

Brokered time deposits 0 0 0.00 43,685 98 0.89

Savings deposits 736,732 202 0.11 489,071 236 0.19

Demand deposits - interest 1,367,921 475 0.14 995,977 804 0.32bearingShort term borrowings 0 2 0.00 3,859 7 0.72

Long term borrowings 80,799 610 3.00 76,400 294 1.53

Total interest-bearing $2,565,238 1,986 0.31 $2,067,332 3,030 0.58liabilitiesNONINTEREST-BEARINGLIABILITIES ANDSTOCKHOLDERS' EQUITYDemand deposits - 851,130 593,955noninterest bearingOther liabilities 31,824 26,769

Stockholders' equity 431,709 344,949

TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY $3,879,901 $3,033,005

Net interest income and $30,486 3.24% $26,423 3.53%interest rate spreadNet interest margin 3.33% 3.69%

(1) Interest and yields are calculated on a tax-equivalent basis whereapplicable.(2) For 2021, adjustments of $86 thousand and $701 thousand, respectively, weremade to tax equate income on tax exempt loans and tax exempt securities. For2020, adjustments of $101 thousand and $519 thousand, respectively, were madeto tax equate income on tax exempt loans and tax exempt securities. Theseadjustments were based on a marginal federal income tax rate of 21%, lessdisallowances.Twelve Months Ended

Twelve Months Ended

December 31, 2021

December 31, 2020

AVERAGE

YIELD/

AVERAGE

YIELD/

BALANCE

INTEREST (1)

RATE (1)

BALANCE

INTEREST (1)

RATE (1)

EARNING ASSETSLoans (2)$2,041,347

$95,180

4.66%

$2,062,936

$98,779

4.79%

Taxable securities617,475

11,399

1.85

209,817

5,423

2.58

Tax-exempt securities (2)348,627

12,027

3.45

250,394

9,675

3.86

Other investments21,912

498

2.27

16,073

543

3.38

Federal funds sold and other180,718

201

0.11

124,447

298

0.24

Total earning assets3,210,079

119,305

3.72

2,663,667

114,718

4.31

Nonearning assets195,805

205,727

Total assets$3,405,884

$2,869,394

INTEREST-BEARING LIABILITIESTime deposits$393,039

$3,652

0.93%

$480,302

$8,083

1.68%

Brokered time deposits11,737

75

0.64

72,472

1,057

1.46

Savings deposits569,179

712

0.13

462,021

1,080

0.23

Demand deposits - interest bearing1,240,014

2,336

0.19

856,462

4,161

0.49

Short term borrowings3,957

11

0.28

20,764

359

1.73

Long term borrowings70,057

1,683

2.40

82,451

1,396

1.69

Total interest-bearing liabilities$2,287,983

8,469

0.37

$1,974,472

16,136

0.82

NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS' EQUITYDemand deposits - noninterest bearing$714,978

$546,177

Other liabilities23,498

21,570

Stockholders' equity379,425

327,175

TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY$3,405,884

$2,869,394

Net interest income and interest rate spread$110,836

3.35%

$98,582

3.49%

Net interest margin3.45%

3.70%

(1) Interest and yields are calculated on a tax-equivalent basis where applicable.(2) For 2021, adjustments of $360 thousand and $2.5 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2020, adjustments of $400 thousand and $2.0 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances. Twelve Months Ended Twelve Months Ended

December 31, 2021 December 31, 2020

AVERAGE YIELD AVERAGE YIELD / /

BALANCE INTEREST RATE BALANCE INTEREST RATE (1) (1) (1) (1)

EARNING ASSETSLoans (2) $2,041,347 $95,180 4.66% $2,062,936 $98,779 4.79%

Taxable securities 617,475 11,399 1.85 209,817 5,423 2.58

Tax-exempt securities (2) 348,627 12,027 3.45 250,394 9,675 3.86

Other investments 21,912 498 2.27 16,073 543 3.38

Federal funds sold and 180,718 201 0.11 124,447 298 0.24otherTotal earning assets 3,210,079 119,305 3.72 2,663,667 114,718 4.31

Nonearning assets 195,805 205,727

Total assets $3,405,884 $2,869,394

INTEREST-BEARINGLIABILITIESTime deposits $393,039 $3,652 0.93% $480,302 $8,083 1.68%

Brokered time deposits 11,737 75 0.64 72,472 1,057 1.46

Savings deposits 569,179 712 0.13 462,021 1,080 0.23

Demand deposits - interest 1,240,014 2,336 0.19 856,462 4,161 0.49bearingShort term borrowings 3,957 11 0.28 20,764 359 1.73

Long term borrowings 70,057 1,683 2.40 82,451 1,396 1.69

Total interest-bearing $2,287,983 8,469 0.37 $1,974,472 16,136 0.82liabilitiesNONINTEREST-BEARINGLIABILITIES ANDSTOCKHOLDERS' EQUITYDemand deposits - $714,978 $546,177noninterest bearingOther liabilities 23,498 21,570

Stockholders' equity 379,425 327,175

TOTAL LIABILITIES ANDSTOCKHOLDERS' EQUITY $3,405,884 $2,869,394

Net interest income and $110,836 3.35% $98,582 3.49%interest rate spreadNet interest margin 3.45% 3.70%

(1) Interest and yields are calculated on atax-equivalent basis where applicable.(2) For 2021, adjustments of $360 thousand and $2.5 million, respectively, weremade to tax equate income on tax exempt loans and tax exempt securities. For2020, adjustments of $400 thousand and $2.0 million, respectively, were made totax equate income on tax exempt loans and tax exempt securities. Theseadjustments were based on a marginal federal income tax rate of 21%, lessdisallowances.Reconciliation of Total Assets to Tangible AssetsFor the Three Months Ended

For the Twelve Months Ended

Dec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

Dec. 31,

Dec. 31,

2021

2021

2021

2021

2020

2021

2020

Total Assets$4,142,749

$3,317,047

$3,260,058

$3,324,524

$3,071,148

$4,142,749

$3,071,148

Less Goodwill and other intangibles102,606

48,670

48,985

49,301

49,617

102,606

49,617

Tangible Assets$4,040,143

$3,268,377

$3,211,073

$3,275,223

$3,021,531

$4,040,143

$3,021,531

Average Assets3,879,901

3,304,708

3,280,316

3,155,695

3,033,005

3,405,912

2,869,394

Less average Goodwill and other intangibles84,580

48,879

49,193

49,509

51,476

58,111

49,363

Average Tangible Assets$3,795,321

$3,255,829

$3,231,123

$3,106,186

$2,981,529

$3,347,801

$2,820,031

Reconciliation of Common Stockholders' Equity to Tangible Common EquityFor the Three Months Ended

For the Twelve Months Ended

Dec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

Dec. 31,

Dec. 31,

2021

2021

2021

2021

2020

2021

2020

Stockholders' Equity$472,432

$377,524

$366,908

$347,355

$350,097

$472,432

$350,097

Less Goodwill and other intangibles102,606

48,670

48,985

49,301

49,617

102,606

49,617

Tangible Common Equity$369,826

$328,854

$317,923

$298,054

$300,480

$369,826

$300,480

Average Stockholders' Equity431,709

375,208

363,753

351,190

344,949

379,425

327,175

Less average Goodwill and other intangibles84,580

48,879

49,193

49,509

51,476

58,111

49,363

Average Tangible Common Equity$347,129

$326,329

$314,560

$301,681

$293,473

$321,314

$277,812

Reconciliation of Net Income, Less Merger and One-Time ItemsFor the Three Months Ended

For the Twelve Months Ended

Dec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

Dec. 31,

Dec. 31,

2021

2021

2021

2021

2020

2021

2020

Net income$5,702

$16,011

$15,575

$14,556

$11,357

$51,844

$41,876

Acquisition related costs - after tax5,232

468

83

9

1,431

5,731

2,585

Acquisition related provision - after tax3,846

0

0

0

0

3,846

0

FHLB prepayment penalties - after tax1,425

257

0

0

0

1,682

666

Net loss (gain) on asset/security sales - after tax134

(362)

(26)

(344)

502

(598)

404

Gain on sale of credit card portfolio - after tax(189)

0

0

0

0

(189)

0

Net income - Adjusted$16,150

$16,374

$15,632

$14,221

$13,290

$62,316

$45,531

Diluted EPS excluding merger and one-time items$0.50

$0.58

$0.55

$0.50

$0.47

$2.13

$1.60

Return on Average Assets excluding merger and one-time items (Annualized)1.65%

1.97%

1.91%

1.83%

1.74%

1.83%

1.59%

Return on Average Equity excluding merger and one-time items (Annualized)14.84%

17.31%

17.24%

16.42%

15.29%

16.42%

13.92%

Return on Average Tangible Equity excluding acquisition costs and one-time items (Annualized)18.46%

19.91%

19.93%

19.12%

17.97%

19.39%

16.39%

Reconciliation of Total Assets to Tangible Assets For the Three Months Ended For the Twelve Months Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,

2021 2021 2021 2021 2020 2021 2020

Total Assets $4,142,749 $3,317,047 $3,260,058 $3,324,524 $3,071,148 $4,142,749 $3,071,148

Less Goodwill 102,606 48,670 48,985 49,301 49,617 102,606 49,617and otherintangiblesTangible $4,040,143 $3,268,377 $3,211,073 $3,275,223 $3,021,531 $4,040,143 $3,021,531AssetsAverage 3,879,901 3,304,708 3,280,316 3,155,695 3,033,005 3,405,912 2,869,394AssetsLess averageGoodwill and 84,580 48,879 49,193 49,509 51,476 58,111 49,363otherintangiblesAverage $3,795,321 $3,255,829 $3,231,123 $3,106,186 $2,981,529 $3,347,801 $2,820,031TangibleAssets Reconciliation of Common Stockholders' Equity to Tangible Common Equity For the Three Months Ended For the Twelve Months Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,

2021 2021 2021 2021 2020 2021 2020

Stockholders' $472,432 $377,524 $366,908 $347,355 $350,097 $472,432 $350,097EquityLess Goodwill 102,606 48,670 48,985 49,301 49,617 102,606 49,617and otherintangiblesTangible $369,826 $328,854 $317,923 $298,054 $300,480 $369,826 $300,480Common EquityAverage 431,709 375,208 363,753 351,190 344,949 379,425 327,175Stockholders'EquityLess averageGoodwill and 84,580 48,879 49,193 49,509 51,476 58,111 49,363otherintangiblesAverage $347,129 $326,329 $314,560 $301,681 $293,473 $321,314 $277,812TangibleCommon Equity Reconciliation of Net Income, Less Merger and One-Time Items For the Three Months Ended For the Twelve Months Ended

Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,

2021 2021 2021 2021 2020 2021 2020

Net income $5,702 $16,011 $15,575 $14,556 $11,357 $51,844 $41,876

Acquisition 5,232 468 83 9 1,431 5,731 2,585related costs- after taxAcquisitionrelated 3,846 0 0 0 0 3,846 0provision -after taxFHLBprepayment 1,425 257 0 0 0 1,682 666penalties -after taxNet loss(gain) onasset/ 134 (362) (26) (344) 502 (598) 404securitysales - aftertaxGain on saleof credit (189) 0 0 0 0 (189) 0cardportfolio -after taxNet income - $16,150 $16,374 $15,632 $14,221 $13,290 $62,316 $45,531AdjustedDiluted EPSexcluding $0.50 $0.58 $0.55 $0.50 $0.47 $2.13 $1.60merger andone-timeitemsReturn onAverageAssetsexcluding 1.65% 1.97% 1.91% 1.83% 1.74% 1.83% 1.59%merger andone-timeitems(Annualized)Return onAverageEquityexcluding 14.84% 17.31% 17.24% 16.42% 15.29% 16.42% 13.92%merger andone-timeitems(Annualized)Return onAverageTangibleEquityexcluding 18.46% 19.91% 19.93% 19.12% 17.97% 19.39% 16.39%acquisitioncosts andone-timeitems(Annualized)Efficiency ratio excluding one-time itemsFor the Three Months Ended

For the Twelve Months Ended

Dec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

Dec. 31,

Dec. 31,

2021

2021

2021

2021

2020

2021

2020

Net interest income, after tax$30,492

$27,256

$27,192

$25,901

$26,423

$110,840

$98,582

Noninterest income9,538

9,015

9,508

10,132

10,499

38,193

36,161

Net loss (gain) on asset/security sales170

(458)

(33)

(436)

635

(757)

511

Gain on sale of credit card portfolio(239)

0

0

0

0

(239)

0

Net interest income and noninterest income adjusted39,961

35,813

36,667

35,597

37,557

148,037

135,254

Noninterest expense less intangible amortization27,247

16,813

16,755

17,002

19,213

77,817

70,001

Acquisition related costs6,521

472

104

12

1,798

7,109

3,223

FHLB prepayment penalties1,804

325

0

0

0

2,129

0

Noninterest income adjusted18,922

16,016

16,651

16,990

17,415

68,579

66,778

Efficiency ratio excluding one-time items47.35%

44.72%

45.41%

47.73%

46.37%

46.33%

49.37%

Net interest margin excluding acquisition marks and PPP interest and feesFor the Three Months Ended

For the Twelve Months Ended

Dec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

Dec. 31,

Dec. 31,

2021

2021

2021

2021

2020

2021

2020

Net interest income, fully-taxable equivalent$ 30,486

$ 27,256

$ 27,192

$ 25,901

$ 26,423

$ 110,836

$ 98,582

Acquisition marks496

(35)

200

271

308

932

1,126

PPP interest and fees979

1,402

2,097

2,144

2,456

6,621

4,914

Adjusted and annualized net interest income115,098

102,712

99,854

95,249

93,865

103,283

92,542

Average earning assets3,631,320

3,120,336

3,077,915

2,937,144

2,848,661

3,210,079

2,663,667

less PPP average balances47,939

76,990

131,856

125,168

177,382

95,226

121,641

Adjusted average earning assets3,583,381

3,043,346

2,946,059

2,811,976

2,671,279

3,114,853

2,542,026

Net interest margin excluding marks and PPP interest and fees3.21%

3.37%

3.39%

3.39%

3.51%

3.32%

3.64%

Reconciliation of Allowance for Credit Losses to Gross Loans, Excluding PPP Loans and Acquired LoansFor the Three Months Ended

Dec. 31,

Sept. 30,

June 30,

March 31,

Dec. 31,

2021

2021

2021

2020

2020

Gross Loans$ 2,331,082

$ 1,894,216

$ 1,959,865

$ 2,037,404

$ 2,078,044

PPP Loans, net36,215

53,580

92,073

136,826

125,396

Loans less PPP2,294,867

1,840,636

1,867,792

1,900,578

1,952,648

Allowance for Credit Losses to Gross Loans Excluding PPP (a)1.28%

1.26%

1.33%

1.31%

1.13%

Acquired Loans654,552

211,954

233,790

251,616

272,150

(a) CECL methodology used for the 2021 quarters. Prior period used the incurred loss methodology. View source version on businesswire.com: https://www.businesswire.com/news/home/20220126005946/en/

CONTACT: Kevin J. Helmick, President and CEO 330.533.3341 Email: exec@farmersbankgroup.com