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First Mid Bancshares, Inc. Announces Fourth Quarter 2022 Results
Источник: Nasdaq GlobeNewswire / 26 янв 2023 07:00:02 America/New_York
MATTOON, Ill., Jan. 26, 2023 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter and year ended December 31, 2022.
Highlights
- Net income of $20.6 million, or $1.01 diluted EPS
- Adjusted net income (non-GAAP) of $20.8 million, or $1.01 diluted EPS
- Strong loan growth of 2.2% for the quarter and 10.3% for the year (excluding acquired loans)
- Tangible book value per share increased 7.8% for the quarter
- Improved on already strong asset quality ratios reflecting strength if economic downturn transpires
- Board of Directors declares regular quarterly dividend of $0.23 per share
“Our fourth quarter results capped off a strong, but challenging year,” said Joe Dively, Chairman and Chief Executive Officer. “For 2022, we delivered exceptional loan growth and excellent credit quality. Our noninterest income grew by over 7% for the year, driven by double digit growth in our wealth management and insurance businesses that more than offset lower mortgage banking revenues. We successfully integrated Jefferson Bank and Trust (“Jefferson”) and met all of our acquisition related financial targets. While funding costs have increased at a faster pace than we anticipated placing pressure on margin, we have offset this challenge with stringent expense management and our relationship driven strategy to provide our expanded services to customers.”
Net Interest Income
Net interest income for the fourth quarter of 2022 decreased by $2.6 million, or 5.4% compared to the third quarter of 2022. Interest income increased by $4.0 million primarily driven by loan growth and higher interest rates. Interest expense increased by $6.5 million on increased rates and aggressive competition. Accretion income declined by $0.3 million for the quarter to $0.6 million.
In comparison to the fourth quarter of 2021, net interest income increased $2.9 million, or 6.9%. The increase was primarily the result of organic loan growth, higher interest rates, and the acquisition of Jefferson.
Net Interest Margin
Net interest margin, on a tax equivalent basis, was 3.07% for the fourth quarter of 2022, which was a decrease of 14 basis points compared to the prior quarter. Lower accretion income represented 2 basis points of the decline for the quarter. Earning asset yields increased by 30 basis points, while the average cost of funds increased 44 basis points.
In comparison to the fourth quarter of last year, the net interest margin decreased 4 basis points. The primary reason for the decrease was due to PPP fee income being lower by $1.7 million compared to the fourth quarter of 2021. Earning asset yields increased 70 basis points, while the average cost of funds increased 74 basis points.
Loan Portfolio
Total loans ended the quarter at $4.83 billion, representing an increase of $105.9 million, or 2.2%, compared to the prior quarter. The growth in the quarter was primarily in farm real estate, CRE and C&I. While the pipeline remains solid, we do anticipate it softening based on the macroeconomic conditions. As we have experienced in the past, we expect seasonal line paydowns in agricultural operating lines during the first quarter of 2023.
Asset Quality
First Mid’s asset quality continues to be very strong and well positioned if an economic downturn occurs. Nonperforming loans decreased by $1.6 million in the period and the ratio of nonperforming loans to total loans decreased to 0.40%. The allowance for credit losses (“ACL”) to nonperforming loans increased to 308.3%. As of December 31, 2022, the ACL increased by $0.3 million to $59.1 million with an ending ACL to total loans ratio of 1.22%. In addition, the Company has $7.0 million, or 15 basis points, of discount remaining on purchased loans. Provision expense was recorded in the amount of $0.8 million and net charge offs totaled $0.5 million. Special mention loans increased by $14.6 million, while substandard loans decreased by $3.0 million.
Deposits
Total deposits ended the quarter at $5.26 billion, which represented a decrease of $226.2 million, or 4.1%, from the prior quarter. The decrease was primarily in money market and noninterest bearing deposits. The Company has experienced increased competition from brokerage firms and community banks. In some cases, we are successful in maintaining the customer’s funds within the Company, but off balance sheet by providing our own wealth management solutions. The Company’s average rate on cost of funds was 1.00% compared to 0.56% in the prior quarter, and 0.26% versus the fourth quarter of 2021.
Noninterest Income
Noninterest income for the fourth quarter of 2022 was $18.2 million compared to $16.8 million in the third quarter of 2022. The increase was primarily driven by the seasonality in insurance and wealth management revenues from farmland sales. Wealth management and insurance revenue increased $1.4 million and $0.6 million, respectively, from the prior quarter. Mortgage banking represented the largest decline in the period.
In comparison to the fourth quarter of 2021, noninterest income increased $0.1 million, or 0.5%. The increase was primarily driven by a $0.6 million increase in insurance and a $0.3 million increase in service charges, offsetting a $0.8 million decline in mortgage banking.
Noninterest Expenses
Noninterest expense for the fourth quarter of 2022 totaled $39.4 million, which was a decrease of $2.2 million compared to the prior quarter. The current quarter included $0.2 million of nonrecurring integration expenses for the Jefferson acquisition compared to $0.7 million in the third quarter. The Company has increased its emphasis in its ongoing effort to identify and implement cost savings initiatives to drive a more efficient operations.
In comparison to the fourth quarter of 2021, noninterest expenses increased $3.0 million. The increase was primarily driven by the additional expense related to the Jefferson acquisition and inflationary cost increases.
The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the fourth quarter 2022 was 58.1% compared to 59.6% in the prior quarter and 55.8% for the same period last year.
Capital Levels, Dividend and Taxes
The Company’s capital levels remained strong and comfortably above the “well capitalized” levels. Capital levels ended the period as follows:
Total capital to risk-weighted assets 15.20% Tier 1 capital to risk-weighted assets 12.40% Common equity tier 1 capital to risk-weighted assets 12.03% Leverage ratio 9.62% The Company’s Board of Directors approved a regular quarterly dividend of $0.23 payable on March 1, 2023 for shareholders of record on February 15, 2023.
The Company’s effective tax rate for the fourth quarter was 12.9% compared to 23.2% in the prior quarter. The primary reason for the lower tax rate was a $2.5 million credit in the current quarter. The credit was due to the removal of a deferred tax liability that was no longer applicable.
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 $6.7 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 157 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 Company’s 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 Statements
This document may contain certain forward-looking statements about First Mid, such as discussions of First Mid’s 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, 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, changes in interest rates; general economic conditions and those in the market areas of First Mid; 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 Mid’s 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; 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 Mid’s liquidity and capital positions, impair the ability of First Mid’s 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 Mid’s 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 Mid’s financial results, are included in First Mid’s 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 Holt
VP, Shareholder Relations
217-258-0463
aholt@firstmid.comMatt Smith
Chief Financial Officer
217-258-1528
msmith@firstmid.com– Tables Follow –
FIRST MID BANCSHARES, INC. Condensed Consolidated Balance Sheets (In thousands, unaudited) As of December 31, September 30, December 31, 2022 2022 2021 Assets Cash and cash equivalents $ 152,433 $ 160,954 $ 168,602 Investment securities 1,223,720 1,235,505 1,431,299 Loans (including loans held for sale) 4,826,212 4,720,290 3,995,523 Less allowance for credit losses (59,093 ) (58,777 ) (54,655 ) Net loans 4,767,119 4,661,513 3,940,868 Premises and equipment, net 90,473 90,659 81,484 Goodwill and intangibles, net 169,897 170,897 141,376 Bank owned life insurance 151,756 150,831 132,375 Other assets 188,817 181,024 90,578 Total assets $ 6,744,215 $ 6,651,383 $ 5,986,582 Liabilities and Stockholders' Equity Deposits: Non-interest bearing $ 1,256,514 $ 1,334,686 $ 1,246,673 Interest bearing 4,000,487 4,148,512 3,709,813 Total deposits 5,257,001 5,483,198 4,956,486 Repurchase agreement with customers 221,414 220,707 146,268 Other borrowings 465,071 181,232 86,446 Junior subordinated debentures 19,364 19,322 19,195 Subordinated debt 94,553 94,515 94,400 Other liabilities 53,657 51,694 49,893 Total liabilities 6,111,060 6,050,668 5,352,688 Total stockholders' equity 633,155 600,715 633,894 Total liabilities and stockholders' equity $ 6,744,215 $ 6,651,383 $ 5,986,582 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, 2022 2021 2022 2021 Interest income: Interest and fees on loans $ 53,128 $ 39,711 $ 185,869 $ 159,684 Interest on investment securities 7,285 6,500 29,380 22,916 Interest on federal funds sold & other deposits 296 88 642 413 Total interest income 60,709 46,299 215,891 183,013 Interest expense: Interest on deposits 9,227 2,057 18,813 9,037 Interest on securities sold under agreements to repurchase 1,163 52 1,795 231 Interest on other borrowings 3,345 336 6,193 1,514 Interest on jr. subordinated debentures 315 125 868 541 Interest on subordinated debt 987 985 3,945 3,939 Total interest expense 15,037 3,555 31,614 15,262 Net interest income 45,672 42,744 184,277 167,751 Provision for loan losses 805 2,472 4,806 15,151 Net interest income after provision for loan 44,867 40,272 179,471 152,600 Non-interest income: Wealth management revenues 6,201 6,261 22,492 20,407 Insurance commissions 4,719 4,150 21,622 18,927 Service charges 2,375 2,067 9,112 6,808 Securities gains, net (48 ) 36 33 124 Mortgage banking revenues 65 890 1,190 4,718 ATM/debit card revenue 3,209 3,074 12,422 11,974 Other 1,686 1,646 7,811 6,809 Total non-interest income 18,207 18,124 74,682 69,767 Non-interest expense: Salaries and employee benefits 23,610 20,424 98,594 89,660 Net occupancy and equipment expense 6,126 5,712 24,257 21,546 Net other real estate owned (income) expense 87 315 330 3,866 FDIC insurance 464 406 1,805 1,604 Amortization of intangible assets 1,537 1,462 6,290 5,391 Stationary and supplies 298 311 1,295 1,161 Legal and professional expense 1,607 1,811 6,996 6,730 ATM/debit card expense 1,309 586 4,300 3,116 Marketing and donations 681 1,915 2,999 3,603 Other 3,653 3,452 15,995 18,902 Total non-interest expense 39,372 36,394 162,861 155,579 Income before income taxes 23,702 22,002 91,292 66,788 Income taxes 3,063 5,168 18,340 15,298 Net income $ 20,639 $ 16,834 $ 72,952 $ 51,490 Per Share Information Basic earnings per common share $ 1.01 $ 0.93 $ 3.62 $ 2.88 Diluted earnings per common share 1.01 0.93 3.60 2.87 Weighted average shares outstanding 20,461,046 18,086,949 20,169,077 17,886,998 Diluted weighted average shares outstanding 20,535,220 18,135,380 20,243,635 17,939,007 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, 2022 2022 2022 2022 2021 Interest income: Interest and fees on loans $ 53,128 $ 49,278 $ 43,555 $ 39,908 $ 39,711 Interest on investment securities 7,285 7,302 7,623 7,170 6,500 Interest on federal funds sold & other deposits 296 174 105 67 88 Total interest income 60,709 56,754 51,283 47,145 46,299 Interest expense: Interest on deposits 9,227 4,915 2,523 2,148 2,057 Interest on securities sold under agreements to repurchase 1,163 428 137 67 52 Interest on other borrowings 3,345 1,927 645 276 336 Interest on jr. subordinated debentures 315 241 166 146 125 Interest on subordinated debt 987 986 986 986 985 Total interest expense 15,037 8,497 4,457 3,623 3,555 Net interest income 45,672 48,257 46,826 43,522 42,744 Provision for loan losses 805 142 907 2,952 2,472 Net interest income after provision for loan 44,867 48,115 45,919 40,570 40,272 Non-interest income: Wealth management revenues 6,201 4,843 5,473 5,975 6,261 Insurance commissions 4,719 4,158 5,641 7,104 4,150 Service charges 2,375 2,445 2,236 2,056 2,067 Securities gains, net (48 ) 79 2 - 36 Mortgage banking revenues 65 355 289 444 890 ATM/debit card revenue 3,209 3,101 3,214 2,898 3,074 Other 1,686 1,810 1,704 2,611 1,646 Total non-interest income 18,207 16,791 18,559 21,088 18,124 Non-interest expense: Salaries and employee benefits 23,610 24,877 25,768 24,302 20,424 Net occupancy and equipment expense 6,126 5,903 6,073 6,155 5,712 Net other real estate owned (income) expense 87 58 218 (33 ) 315 FDIC insurance 464 479 436 426 406 Amortization of intangible assets 1,537 1,598 1,633 1,522 1,462 Stationary and supplies 298 361 325 311 311 Legal and professional expense 1,607 1,770 1,885 1,734 1,811 ATM/debit card expense 1,309 1,243 670 1,078 586 Marketing and donations 681 739 706 873 1,915 Other 3,653 4,521 3,801 4,020 3,452 Total non-interest expense 39,372 41,549 41,515 40,388 36,394 Income before income taxes 23,702 23,357 22,963 21,270 22,002 Income taxes 3,063 5,418 5,205 4,654 5,168 Net income $ 20,639 $ 17,939 $ 17,758 $ 16,616 $ 16,834 Per Share Information Basic earnings per common share $ 1.01 $ 0.88 $ 0.87 $ 0.86 $ 0.93 Diluted earnings per common share 1.01 0.88 0.86 0.86 0.93 Weighted average shares outstanding 20,461,046 20,454,669 20,448,799 19,295,860 18,086,949 Diluted weighted average shares outstanding 20,535,220 20,535,215 20,529,523 19,358,457 18,135,380 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, 2022 2022 2022 2022 2021 Loan Portfolio Construction and land development $ 144,264 $ 142,801 $ 141,072 $ 131,504 $ 145,118 Farm real estate loans 410,327 360,424 350,159 280,993 279,272 1-4 Family residential properties 440,180 436,625 424,230 417,232 400,313 Multifamily residential properties 294,346 298,321 330,600 369,926 298,942 Commercial real estate 2,030,011 1,996,338 1,976,654 1,965,321 1,666,198 Loans secured by real estate 3,319,128 3,234,509 3,222,715 3,164,976 2,789,843 Agricultural operating loans 166,838 160,511 142,406 121,708 151,484 Commercial and industrial loans 1,082,960 1,064,033 1,036,987 935,454 832,008 Consumer loans 97,775 100,783 94,828 89,685 78,442 All other loans 159,511 160,454 151,727 142,738 143,746 Total loans 4,826,212 4,720,290 4,648,663 4,454,561 3,995,523 Deposit Portfolio Non-interest bearing demand deposits $ 1,256,514 $ 1,334,686 $ 1,369,756 $ 1,373,881 $ 1,246,673 Interest bearing demand deposits 1,389,283 1,364,306 1,453,932 1,482,556 1,452,765 Savings deposits 636,699 657,592 683,944 685,228 626,523 Money Market 1,267,726 1,443,060 1,158,724 1,280,129 1,068,473 Time deposits 706,779 683,554 652,622 665,511 562,052 Total deposits 5,257,001 5,483,198 5,318,978 5,487,305 4,956,486 Asset Quality Non-performing loans $ 19,170 $ 20,812 $ 19,981 $ 22,465 $ 22,036 Non-performing assets 23,539 25,143 24,190 27,269 27,055 Net charge-offs (recoveries) 489 440 307 (5 ) 1,800 Allowance for credit losses to non-performing loans 308.26 % 282.42 % 295.66 % 260.29 % 248.03 % Allowance for credit losses to total loans outstanding 1.22 % 1.25 % 1.27 % 1.31 % 1.37%1 Nonperforming loans to total loans 0.40 % 0.44 % 0.43 % 0.50 % 0.55 % Nonperforming assets to total assets 0.35 % 0.38 % 0.36 % 0.41 % 0.45 % Special Mention loans 39,853 25,298 35,849 64,160 66,235 Substandard and Doubtful loans 34,352 37,378 38,155 38,801 46,862 Common Share Data Common shares outstanding 20,452,376 20,454,636 20,448,799 20,437,183 18,080,303 Book value per common share $ 30.96 $ 29.37 $ 30.63 $ 32.61 $ 35.06 Tangible book value per common share (2) 22.65 21.01 22.17 24.07 27.24 Market price of stock 32.08 31.97 35.67 38.49 42.79 Key Performance Ratios and Metrics End of period earning assets $ 6,063,953 $ 5,975,619 $ 6,024,815 $ 6,038,542 $ 5,504,517 Average earning assets 6,000,106 6,063,061 5,975,821 5,817,752 5,539,819 Average rate on average earning assets (tax equivalent) 4.07 % 3.77 % 3.50 % 3.33 % 3.37 % Average rate on cost of funds 1.00 % 0.56 % 0.30 % 0.26 % 0.26 % Net interest margin (tax equivalent) (2) 3.07 % 3.21 % 3.20 % 3.07 % 3.11 % Return on average assets 1.24 % 1.07 % 1.08 % 1.05 % 1.12 % Return on average common equity 13.51 % 11.18 % 11.02 % 9.95 % 10.74 % Efficiency ratio (tax equivalent) (2) 58.07 % 59.64 % 58.45 % 58.59 % 55.75 % Full-time equivalent employees 1,043 1,051 1,025 1,050 965 1 Excludes Paycheck Protection 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, 2022 QTD Average Average Balance Interest Rate INTEREST EARNING ASSETS Interest bearing deposits $ 18,419 $ 220 4.74% Federal funds sold 7,507 68 3.59% Certificates of deposits investments 1,470 8 2.16% Investment Securities: Taxable (total less municipals) 958,380 5,238 2.19% Tax-exempt (Municipals) 278,128 2,592 3.73% Loans (net of unearned income) 4,736,202 53,374 4.47% Total interest earning assets 6,000,106 61,500 4.07% NONEARNING ASSETS Cash and due from banks 141,696 Premises and equipment 90,679 Other nonearning assets 486,896 Allowance for loan losses (58,967 ) Total assets $ 6,660,410 INTEREST BEARING LIABILITIES Demand deposits $ 2,582,114 $ 7,014 1.08% Savings deposits 648,084 178 0.11% Time deposits 686,100 2,034 1.18% Total interest bearing deposits 3,916,298 9,226 0.93% Repurchase agreements 248,886 1,163 1.85% FHLB advances 399,574 3,342 3.32% Federal funds purchased 266 3 4.47% Subordinated debt 94,528 987 4.14% Jr. subordinated debentures 19,343 315 6.46% Other debt - - 0.00% Total borrowings 762,597 5,810 3.02% Total interest bearing liabilities 4,678,895 15,036 1.27% NONINTEREST BEARING LIABILITIES Demand deposits 1,315,996 Average cost of funds 1.00% Other liabilities 54,647 Stockholders' equity 610,872 Total liabilities & stockholders' equity $ 6,660,410 Net Interest Earnings / Spread $ 46,464 2.80% Impact of Non-Interest Bearing Funds 0.27% Tax effected yield on interest earning assets 3.07% 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, 2022 2022 2022 2022 2021 Net interest income as reported $ 45,672 $ 48,257 $ 46,826 $ 43,522 $ 42,744 Net interest income, (tax equivalent) 46,464 49,060 47,625 44,292 43,492 Average earning assets 6,000,106 6,063,061 5,975,821 5,817,752 5,539,819 Net interest margin (tax equivalent) 3.07 % 3.21 % 3.20 % 3.07 % 3.11 % Common stockholder's equity $ 633,155 $ 600,715 $ 626,268 $ 666,385 $ 633,894 Goodwill and intangibles, net 169,897 170,897 172,871 174,499 141,376 Common shares outstanding 20,452 20,455 20,449 20,437 18,080 Tangible Book Value per common share $ 22.65 $ 21.01 $ 22.17 $ 24.07 $ 27.24 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, 2022 2022 2022 2022 2021 Adjusted earnings Reconciliation Net Income - GAAP $ 20,639 $ 17,939 $ 17,758 $ 16,616 $ 16,834 Adjustments (post-tax): (1) Acquisition ACL on non-PCD assets in provision expense - - - 1,580 - Integration and acquisition expenses 131 524 777 469 225 Total non-recurring adjustments (non-GAAP) $ 131 $ 524 $ 777 $ 2,049 $ 225 Adjusted earnings - non-GAAP $ 20,770 $ 18,463 $ 18,535 $ 18,665 $ 17,059 Adjusted diluted earnings per share (non-GAAP) $ 1.01 $ 0.90 $ 0.90 $ 0.96 $ 0.94 Efficiency Ratio Reconciliation Noninterest expense - GAAP $ 39,372 $ 41,549 $ 41,515 $ 40,388 $ 36,394 Other real estate owned property income (expense) (87 ) (58 ) (218 ) 33 (315 ) Amortization of intangibles (1,537 ) (1,598 ) (1,633 ) (1,522 ) (1,462 ) Branch optimization costs - - - - - integration and acquisition expenses (166 ) (663 ) (983 ) (594 ) (285 ) Adjusted noninterest expense (non-GAAP) $ 37,582 $ 39,230 $ 38,681 $ 38,305 $ 34,332 Net interest income -GAAP $ 45,672 $ 48,257 $ 46,826 $ 43,522 $ 42,744 Effect of tax-exempt income (1) 792 803 799 770 748 Adjusted net interest income (non-GAAP) $ 46,464 $ 49,060 $ 47,625 $ 44,292 $ 43,492 Noninterest income - GAAP $ 18,207 $ 16,791 $ 18,559 $ 21,088 $ 18,124 Loss/(Gain) on sales of investment securities, net 48 (79 ) (2 ) - (36 ) Adjusted noninterest income (non-GAAP) $ 18,255 $ 16,712 $ 18,557 $ 21,088 $ 18,088 Adjusted total revenue (non-GAAP) $ 64,719 $ 65,772 $ 66,182 $ 65,380 $ 61,580 Efficiency ratio (non-GAAP) 58.07 % 59.64 % 58.45 % 58.59 % 55.75 % (1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%. 
