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First Mid Bancshares, Inc. Announces Third Quarter 2024 Results
Источник: Nasdaq GlobeNewswire / 31 окт 2024 07:00:01 America/Chicago
MATTOON, Ill., Oct. 31, 2024 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter ended September 30, 2024.
Highlights
- Net income of $19.5 million, or $0.81 diluted EPS
- Adjusted net income (non-GAAP) of $19.8 million, or $0.83 diluted EPS
- Loan growth of 1% helped drive second consecutive quarter of net interest income expansion
- 16.6% year-over-year growth for wealth management and insurance combined
- Tangible book value per share increased 6.6% in the quarter
- Board of Directors declares regular quarterly dividend of $0.24 per share
“We are pleased to deliver another solid and consistent quarter of financial results,” said Joe Dively, Chairman and Chief Executive Officer. “Healthy growth in loans, core deposits, and noninterest income, along with the sustainable strength in our asset quality, helped fuel our operating results for the period. We strengthened our balance sheet with a reduction in borrowings and subordinated debt while increasing tangible book value per share by nearly 7% in the quarter and 26% from last September. We continue to advance on our strategic initiatives to deliver exceptional value to our customers, communities, and shareholders,” Dively concluded.
Net Interest Income
Net interest income for the third quarter of 2024 increased by $0.8 million, or 1.4% compared to the second quarter of 2024. Interest income increased by $2.5 million primarily driven by loan growth and repricing of maturing loans, as well as a remix of lower yielding securities into cash. Interest expense increased by $1.7 million primarily in higher rates on money market accounts and repricing of CD’s. The increase was primarily early in the quarter and stabilized in the second half of the period. In addition, the Company paid off $55.0 million of brokered CD’s that matured at the end of September and carried an average rate of 5.3%.
In comparison to the third quarter of 2023, net interest income increased $7.1 million, or 14.1%. Interest income increased by $10.7 million and interest expense increased $3.6 million. The increases were partially driven by the addition of Blackhawk, which closed in the middle of the third quarter last year. In addition, higher rates on new loan originations and refinancing have outpaced higher interest costs.
Net Interest Margin
Net interest margin, on a tax equivalent basis, was 3.35% for the third quarter of 2024, which was a decline of one basis point compared to the prior quarter. Earning asset yields increased by eight basis points, while the average cost of funds increased by nine basis points. Accretion income for the quarter was $3.6 million, which was a decrease of $0.1 million from the prior quarter.
In comparison to the third quarter of last year, the net interest margin increased 29 basis points, with an average earnings asset increase of 46 basis points versus the average cost of funds increase of 17 basis points. The increases were due to higher rates on new and renewed loans and deposits.
Loan Portfolio
Total loans ended the quarter at $5.62 billion, representing an increase of $54.0 million, or 1.0% compared to the prior quarter. Loan growth was well diversified primarily between commercial real estate, agricultural operating, and commercial and industrial. The largest decline was in consumer loans.
Asset Quality
The Company’s asset quality metrics were solid again in the third quarter reflecting the strength of the credit culture. The allowance for credit losses (“ACL”) increased by $0.5 million to $68.8 million with an ending ACL to total loans ratio of 1.22%. Provision expense was recorded in the amount of $1.3 million and the Company had net charge offs of $0.8 million in the period. Also, at the end of the third quarter, the ratio of non-performing loans to total loans was 0.32%, and the ACL to non-performing loans was 377%. The ratio of non-performing assets to total assets was 0.27% at quarter end. Non-performing loans decreased by $0.8 million in the period to $18.2 million. Special mention loans increased $7.4 million in the quarter to $38.2 million. Substandard loans increased $1.4 million in the period to $29.0 million.
Deposits and Borrowings
Total deposits ended the quarter at $6.09 billion, which represented a decrease of $26.9 million, or 0.04% from the prior quarter. The decrease included $55.0 million of brokered CD’s that had an average rate of 5.30% and matured at the end of the quarter. Excluding these brokered CD’s, deposits increased in the period primarily with higher CD’s more than offsetting a decline in interest bearing demand deposits. In addition, the Company reduced its FHLB advances by $25.0 million in the quarter. In comparison to the prior quarter, the average cost of funds increased in the third quarter of 2024 to 2.00%.
During the quarter, the Company repurchased and cancelled $16.0 million of its outstanding 3.95% fixed-to-floating rate subordinated notes due 2030 (“Notes”). The Notes were purchased at a discount in the open market and generated a gain, net of the discount and fees, of $0.4 million.
Noninterest Income
Noninterest income for the third quarter of 2024 was $23.0 million compared to $22.4 million in the prior quarter. Wealth management revenues increased $0.4 million primarily on higher brokerage and trust fees and ended the period with $6.4 billion in assets under management. Ag services revenue totaled $1.8 million in the quarter most of which was farm management income versus land sales. Insurance revenues declined $0.5 million compared to the prior quarter due to regular seasonality in the business. Other income increased $0.9 million in the period and included a net gain on the repurchase of a portion of the Company’s subordinated Notes.
In comparison to the third quarter of 2023, noninterest income increased $3.6 million when excluding the impacts from securities gains and losses. The increase was primarily driven by the addition of Blackhawk and growth in insurance revenues.
Noninterest Expenses
Noninterest expense for the third quarter of 2024 totaled $53.9 million compared to $51.4 million in the prior quarter. The increase was partially driven by the acquisition of Mid Rivers Insurance Group, which closed on July 9th. In addition, expenses were higher in salaries and benefits driven by higher incentive compensation and medical insurance expenses. Debit card expense increased $0.6 million due to higher usage and the annual service provider incentive credit in the second quarter. Net occupancy and equipment increased by $0.5 million on higher software license costs. The current quarter included $0.2 million in acquisition and integration costs.
In comparison to the third quarter of 2023, noninterest expenses increased $6.8 million. The increase was primarily driven by the addition of Blackhawk and organic growth, including the impacts from higher inflation, partially offset with lower acquisition and integration costs.
The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the third quarter 2024 was 61.3% compared to 59.6% in the prior quarter and 58.6% for the same period last year.
Capital Levels and Dividend
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 15.24% Tier 1 capital to risk-weighted assets 12.70% Common equity tier 1 capital to risk-weighted assets 12.29% Leverage ratio 10.14% The Company’s Board of Directors approved its regular quarterly dividend of $0.24 payable on November 29, 2024 for shareholders of record on November 14, 2024.
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 $7.6 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, Texas, and Wisconsin 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 159 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; and the impact of pandemics on First Mid’s businesses. 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:
Austin Frank
SVP, Shareholder Relations
217-258-5522
afrank@firstmid.comMatt Smith
Chief Financial Officer
217-258-1528
msmith@firstmid.comFIRST MID BANCSHARES, INC. Condensed Consolidated Balance Sheets (In thousands, unaudited) As of September 30, December 31, September 30, 2024 2023 2023 Assets Cash and cash equivalents $ 164,191 $ 143,064 $ 383,237 Investment securities 1,125,774 1,179,402 1,226,746 Loans (including loans held for sale) 5,614,591 5,580,565 5,540,065 Less allowance for credit losses (68,774 ) (68,675 ) (68,241 ) Net loans 5,545,817 5,511,890 5,471,824 Premises and equipment, net 101,464 101,396 102,004 Goodwill and intangibles, net 265,139 264,231 267,793 Bank Owned Life Insurance 169,635 166,125 165,022 Other assets 190,469 220,686 238,668 Total assets $ 7,562,489 $ 7,586,794 $ 7,855,294 Liabilities and Stockholders' Equity Deposits: Non-interest bearing $ 1,387,290 $ 1,398,234 $ 1,389,022 Interest bearing 4,701,544 4,725,425 4,957,302 Total deposits 6,088,834 6,123,659 6,346,324 Repurchase agreements with customers 204,343 213,721 214,978 Other borrowings 238,712 263,787 364,953 Junior subordinated debentures 24,224 24,058 24,003 Subordinated debt 87,373 106,755 106,648 Other liabilities 60,506 61,610 60,440 Total liabilities 6,703,992 6,793,590 7,117,346 Total stockholders' equity 858,497 793,204 737,948 Total liabilities and stockholders' equity $ 7,562,489 $ 7,586,794 $ 7,855,294 FIRST MID BANCSHARES, INC. Condensed Consolidated Statements of Income (In thousands, except per share data, unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Interest income: Interest and fees on loans $ 81,775 $ 69,143 $ 239,158 $ 183,747 Interest on investment securities 7,036 9,284 21,846 23,604 Interest on federal funds sold & other deposits 2,371 2,011 6,533 2,888 Total interest income 91,182 80,438 267,537 210,239 Interest expense: Interest on deposits 28,341 22,047 80,775 51,394 Interest on securities sold under agreements to repurchase 1,444 1,625 5,115 4,811 Interest on other borrowings 2,195 4,749 6,757 13,716 Interest on jr. subordinated debentures 567 545 1,646 1,314 Interest on subordinated debt 1,092 1,029 3,466 3,003 Total interest expense 33,639 29,995 97,759 74,238 Net interest income 57,543 50,443 169,778 136,001 Provision for credit losses 1,266 5,911 1,992 5,552 Net interest income after provision for loan 56,277 44,532 167,786 130,449 Non-interest income: Wealth management revenues 5,816 4,940 16,543 15,795 Insurance commissions 6,003 5,199 21,747 19,416 Service charges 3,121 2,994 9,304 7,583 Net securities gains/(losses) (277 ) 3,389 (433 ) 3,337 Mortgage banking revenues 1,109 846 2,853 1,328 ATM/debit card revenue 4,267 3,766 12,603 10,114 Other 2,984 1,919 7,306 7,445 Total non-interest income 23,023 23,053 69,923 65,018 Non-interest expense: Salaries and employee benefits 31,565 25,422 92,177 75,037 Net occupancy and equipment expense 8,055 6,929 23,122 18,969 Net other real estate owned (income) expense 107 902 171 1,062 FDIC insurance 829 785 2,600 2,324 Amortization of intangible assets 3,405 2,568 10,242 5,567 Stationary and supplies 482 335 1,243 942 Legal and professional expense 2,573 1,844 7,558 5,314 ATM/debit card expense 1,869 1,751 4,341 3,990 Marketing and donations 836 764 2,512 2,326 Other 4,212 5,796 14,720 13,184 Total non-interest expense 53,933 47,096 158,686 128,715 Income before income taxes 25,367 20,489 79,023 66,752 Income taxes 5,885 5,372 19,293 15,888 Net income $ 19,482 $ 15,117 $ 59,730 $ 50,864 Per Share Information Basic earnings per common share $ 0.81 $ 0.81 $ 2.50 $ 1.74 Diluted earnings per common share 0.81 0.80 2.49 1.74 Weighted average shares outstanding 23,905,099 20,528,717 23,891,430 20,510,585 Diluted weighted average shares outstanding 24,006,647 20,628,239 23,988,478 20,596,283 FIRST MID BANCSHARES, INC. Condensed Consolidated Statements of Income (In thousands, except per share data, unaudited) For the Quarter Ended September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Interest income: Interest and fees on loans $ 81,775 $ 79,560 $ 77,823 $ 78,676 $ 69,143 Interest on investment securities 7,036 7,405 7,405 8,515 9,284 Interest on federal funds sold & other deposits 2,371 1,718 2,444 2,736 2,011 Total interest income 91,182 88,683 87,672 89,927 80,438 Interest expense: Interest on deposits 28,341 26,338 26,096 25,900 22,047 Interest on securities sold under agreements to repurchase 1,444 1,615 2,056 1,754 1,625 Interest on other borrowings 2,195 2,248 2,314 3,073 4,749 Interest on jr. subordinated debentures 567 537 542 545 545 Interest on subordinated debt 1,092 1,180 1,194 1,193 1,029 Total interest expense 33,639 31,918 32,202 32,465 29,995 Net interest income 57,543 56,765 55,470 57,462 50,443 Provision for credit losses 1,266 1,083 (357 ) 552 5,911 Net interest income after provision for loan 56,277 55,682 55,827 56,910 44,532 Non-interest income: Wealth management revenues 5,816 5,405 5,322 4,998 4,940 Insurance commissions 6,003 6,531 9,213 5,398 5,199 Service charges 3,121 3,227 2,956 3,298 2,994 Net securities gains/(losses) (277 ) (156 ) 0 46 3,389 Mortgage banking revenues 1,109 1,038 706 954 846 ATM/debit card revenue 4,267 4,281 4,055 4,233 3,766 Other 2,984 2,096 2,226 2,841 1,919 Total non-interest income 23,023 22,422 24,478 21,768 23,053 Non-interest expense: Salaries and employee benefits 31,565 30,164 30,448 29,925 25,422 Net occupancy and equipment expense 8,055 7,507 7,560 7,977 6,929 Net other real estate owned (income) expense 107 85 (21 ) 800 902 FDIC insurance 829 902 869 1,015 785 Amortization of intangible assets 3,405 3,340 3,497 3,560 2,568 Stationary and supplies 482 370 391 404 335 Legal and professional expense 2,573 2,536 2,449 2,065 1,844 ATM/debit card expense 1,869 1,281 1,191 1,332 1,751 Marketing and donations 836 814 862 679 764 Other 4,212 4,392 6,116 9,268 5,796 Total non-interest expense 53,933 51,391 53,362 57,025 47,096 Income before income taxes 25,367 26,713 26,943 21,653 20,489 Income taxes 5,885 6,968 6,440 3,582 5,372 Net income $ 19,482 $ 19,745 $ 20,503 $ 18,071 $ 15,117 Per Share Information Basic earnings per common share $ 0.81 $ 0.83 $ 0.86 $ 0.76 $ 0.68 Diluted earnings per common share 0.81 0.82 0.86 0.76 0.68 Weighted average shares outstanding 23,905,099 23,896,210 23,872,731 23,837,853 22,220,438 Diluted weighted average shares outstanding 24,006,647 23,998,152 23,960,335 23,921,758 22,319,334 FIRST MID BANCSHARES, INC. Consolidated Financial Highlights and Ratios (Dollars in thousands, except per share data) (Unaudited) As of and for the Quarter Ended September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Loan Portfolio Construction and land development $ 190,857 $ 195,389 $ 186,851 $ 205,077 $ 189,206 Farm real estate loans 384,620 387,015 388,941 391,132 399,834 1-4 Family residential properties 505,342 507,517 518,641 542,469 531,699 Multifamily residential properties 338,167 334,446 312,758 319,129 327,067 Commercial real estate 2,440,120 2,406,955 2,396,092 2,384,704 2,392,834 Loans secured by real estate 3,859,106 3,831,322 3,803,283 3,842,511 3,840,640 Agricultural operating loans 233,414 213,997 213,217 196,272 179,447 Commercial and industrial loans 1,283,631 1,268,646 1,227,906 1,266,159 1,242,653 Consumer loans 63,222 70,841 79,569 91,014 99,542 All other loans 175,218 175,811 175,320 184,609 177,783 Total loans 5,614,591 5,560,617 5,499,295 5,580,565 5,540,065 Deposit Portfolio Non-interest bearing demand deposits $ 1,387,290 $ 1,393,336 $ 1,448,299 $ 1,398,234 $ 1,389,022 Interest bearing demand deposits 1,834,123 1,909,993 1,974,857 1,837,296 1,940,162 Savings deposits 648,582 673,381 704,777 710,586 734,377 Money Market 1,183,594 1,127,699 1,107,177 1,129,950 1,161,957 Time deposits 1,035,245 1,011,370 1,007,826 1,047,593 1,120,806 Total deposits 6,088,834 6,115,779 6,242,936 6,123,659 6,346,324 Asset Quality Non-performing loans $ 18,242 $ 19,079 $ 20,064 $ 20,128 $ 21,269 Non-performing assets 20,076 20,557 21,471 21,292 23,565 Net charge-offs (recoveries) 804 708 381 118 181 Allowance for credit losses to non-performing loans 377.01 % 358.05 % 338.60 % 341.19 % 320.85 % Allowance for credit losses to total loans outstanding 1.22 % 1.23 % 1.24 % 1.23 % 1.23 % Nonperforming loans to total loans 0.32 % 0.34 % 0.36 % 0.36 % 0.38 % Nonperforming assets to total assets 0.27 % 0.27 % 0.28 % 0.28 % 0.30 % Special Mention loans 38,151 30,767 65,693 74,050 73,732 Substandard and Doubtful loans 29,037 27,594 29,296 28,945 30,575 Common Share Data Common shares outstanding 23,904,051 23,895,868 23,888,929 23,827,137 23,830,038 Book value per common share $ 35.91 $ 34.05 $ 33.40 $ 33.29 $ 30.97 Tangible book value per common share (1) 24.82 23.28 22.49 22.20 19.73 Tangible book value per common share excluding other comprehensive income at period end (1) 29.70 29.43 28.67 27.93 27.24 Market price of stock 38.91 32.88 32.68 34.66 26.56 Key Performance Ratios and Metrics End of period earning assets $ 6,786,458 $ 6,812,574 $ 6,923,742 $ 6,780,160 $ 7,007,282 Average earning assets 6,857,070 6,815,932 6,884,855 6,948,309 6,593,781 Average rate on average earning assets (tax equivalent) 5.35 % 5.27 % 5.16 % 5.18 % 4.89 % Average rate on cost of funds 2.00 % 1.91 % 1.91 % 1.85 % 1.83 % Net interest margin (tax equivalent) (1) 3.35 % 3.36 % 3.25 % 3.33 % 3.06 % Return on average assets 1.03 % 1.05 % 1.07 % 0.93 % 0.90 % Adjusted return on average assets (1) 1.05 % 1.07 % 1.17 % 1.16 % 0.94 % Return on average common equity 9.40 % 9.92 % 10.37 % 9.76 % 8.70 % Adjusted return on average common equity (1) 9.58 % 10.11 % 11.28 % 12.11 % 9.82 % Efficiency ratio (tax equivalent) (1) 61.33 % 59.61 % 59.09 % 58.91 % 58.60 % Full-time equivalent employees 1,207 1,185 1,188 1,187 1,224 1 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 September 30, 2024 QTD Average Average Balance Interest Rate INTEREST EARNING ASSETS Interest bearing deposits $ 160,050 $ 2,304 5.73 % Federal funds sold 26 28 428.43 % Certificates of deposits investments 3,415 39 4.54 % Investment Securities: Taxable (total less municipals) 873,865 5,241 2.40 % Tax-exempt (Municipals) 273,799 2,272 3.32 % Loans (net of unearned income) 5,545,915 82,382 5.91 % Total interest earning assets 6,857,070 92,266 5.35 % NONEARNING ASSETS Cash and due from banks 98,906 Premises and equipment 101,576 Other nonearning assets 594,609 Allowance for loan losses (68,646 ) Total assets $ 7,583,515 INTEREST BEARING LIABILITIES Demand deposits $ 2,999,374 $ 17,563 2.33 % Savings deposits 663,494 265 0.16 % Time deposits 1,065,176 10,513 3.93 % Total interest bearing deposits 4,728,044 28,341 2.38 % Repurchase agreements 202,973 1,444 2.83 % FHLB advances 238,723 2,194 3.66 % Federal funds purchased - 1 0.00 % Subordinated debt 97,177 1,092 4.47 % Jr. subordinated debentures 24,195 567 9.32 % Other debt - - 0.00 % Total borrowings 563,068 5,298 3.74 % Total interest bearing liabilities 5,291,112 33,639 2.53 % NONINTEREST BEARING LIABILITIES Demand deposits 1,415,861 Average cost of funds 2.00 % Other liabilities 47,848 Stockholders' equity 828,694 Total liabilities & stockholders' equity $ 7,583,515 Net Interest Earnings / Spread $ 58,627 2.82 % Impact of Non-Interest Bearing Funds 0.53 % Tax effected yield on interest earning assets 3.35 % FIRST MID BANCSHARES, INC. Reconciliation of Non-GAAP Financial Measures (In thousands, unaudited) As of and for the Quarter Ended September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Net interest income as reported $ 57,543 $ 56,765 $ 55,470 $ 57,462 $ 50,443 Net interest income, (tax equivalent) 58,627 57,361 56,086 58,255 51,212 Average earning assets 6,857,070 6,815,932 6,884,855 6,948,309 6,593,781 Net interest margin (tax equivalent) 3.35 % 3.36 % 3.25 % 3.33 % 3.06 % Common stockholder's equity $ 858,497 $ 813,645 $ 797,952 $ 793,204 $ 737,948 Goodwill and intangibles, net 265,139 257,377 260,699 264,231 267,793 Common shares outstanding 23,904 23,896 23,889 23,827 23,830 Tangible Book Value per common share $ 24.82 $ 23.28 $ 22.49 $ 22.20 $ 19.73 Accumulated other comprehensive loss (AOCI) (116,692 ) (146,998 ) (147,667 ) (136,427 ) (178,903 ) Adjusted tangible book value per common share $ 29.70 $ 29.43 $ 28.67 $ 27.93 $ 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 September 30, June 30, March 31, December 31, September 30, 2024 2024 2024 2023 2023 Adjusted earnings Reconciliation Net Income - GAAP $ 19,482 $ 19,745 $ 20,503 $ 18,071 $ 15,117 Adjustments (post-tax): (1) Acquisition ACL on non-PCD assets in provision expense - - - - 2,985 Net (gain)/loss on securities sales 219 123 - (36 ) (2,677 ) Integration and acquisition expenses 137 250 1,804 4,385 1,653 Total non-recurring adjustments (non-GAAP) $ 356 $ 373 $ 1,804 $ 4,348 $ 1,962 Adjusted earnings - non-GAAP $ 19,838 $ 20,118 $ 22,307 $ 22,419 $ 17,079 Adjusted diluted earnings per share (non-GAAP) $ 0.83 $ 0.84 $ 0.93 $ 0.94 $ 0.77 Adjusted return on average assets - non-GAAP 1.05 % 1.07 % 1.17 % 1.16 % 0.94 % Adjusted return on average common equity - non-GAAP 9.58 % 10.11 % 11.28 % 12.11 % 9.82 % Efficiency Ratio Reconciliation Noninterest expense - GAAP $ 53,933 $ 51,391 $ 53,362 $ 57,025 $ 47,096 Other real estate owned property income (expense) (107 ) (85 ) 21 (800 ) (902 ) Amortization of intangibles (3,405 ) (3,340 ) (3,497 ) (3,560 ) (2,568 ) Nonrecurring severance expense - - - - - Integration and acquisition expenses (174 ) (316 ) (2,283 ) (5,550 ) (2,093 ) Adjusted noninterest expense (non-GAAP) $ 50,247 $ 47,650 $ 47,603 $ 47,115 $ 41,533 Net interest income -GAAP $ 57,543 $ 56,765 $ 55,470 $ 57,462 $ 50,443 Effect of tax-exempt income (1) 1,084 596 616 793 769 Adjusted net interest income (non-GAAP) $ 58,627 $ 57,361 $ 56,086 $ 58,255 $ 51,212 Noninterest income - GAAP $ 23,023 $ 22,422 $ 24,478 $ 21,768 $ 23,053 Net (gain)/loss on securities sales 277 156 0 (46 ) (3,389 ) Adjusted noninterest income (non-GAAP) $ 23,300 $ 22,578 $ 24,478 $ 21,722 $ 19,664 Adjusted total revenue (non-GAAP) $ 81,927 $ 79,939 $ 80,564 $ 79,977 $ 70,876 Efficiency ratio (non-GAAP) 61.33 % 59.61 % 59.09 % 58.91 % 58.60 % (1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%. 
