Farmers National Banc (FMNB) 425 Business combination disclosure

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 27, 2022

Farmers National Banc Corp.

(Exact name of registrant as specified in its charter)

Ohio	001-35296	34-1371693
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

20 South Broad Street, P.O. Box 555, Canfield, Ohio	44406-0555
(Address of principal executive offices)	(Zip Code)

(330) 533-3341

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☒ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, No Par Value	FMNB	The NASDAQ Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On April 27, 2022, Farmers National Banc Corp. (the “Company”) announced earnings for the quarter ended March 31, 2022. A copy of the press release and certain financial information for that period is attached as Exhibit 99.1 hereto and incorporated by reference herein.

Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in this Item 2.02 and Exhibit 99.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. Furthermore, the information in this Item 2.02 and Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended (the “Securities Act”) except as may be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d)          Exhibits.

Exhibit Number	Description
99.1	Press Release, dated April 27, 2022
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Farmers National Banc Corp.
By:	/s/ Kevin J. Helmick
Kevin J. Helmick
President and Chief Executive Officer

Date: April 27, 2022

Exhibit 99.1

April 27, 2022

Press Release

Source: Farmers National Banc Corp.

Kevin J. Helmick, President and CEO

20 South Broad Street, P.O. Box 555

Canfield, OH 44406

330.533.3341

Email: exec@farmersbankgroup.com

FARMERS NATIONAL BANC CORP. ANNOUNCES

2022 FIRST QUARTER RESULTS

• Earnings per diluted share of $0.47 ($0.51 excluding certain items, non-GAAP) for the first quarter of 2022

• Completed the systems integration with previously acquired Cortland Bancorp

• 157 consecutive quarters of profitability

• Efficiency ratio, (excluding one-time items, non-GAAP), of 48.2% for the first quarter of 2022

• Return on average assets, (excluding certain items, non-GAAP), was 1.65% for the first quarter of 2022

• ROAE and ROATE, (excluding certain items, non-GAAP), 15.1% and 19.5%, respectively, for first quarter of 2022

CANFIELD, Ohio (April 27, 2022) – Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced financial results for the three months ended March 31, 2022.

Net income for the first quarter of 2022 was $15.8 million, or $0.47 per diluted share, compared to $14.6 million, or $0.51 per diluted share, for the first quarter of 2021. The results for the first quarter of 2022 included pretax items of $1.9 million for merger related costs, $8.4 million in other noninterest income for the net proceeds of a legal settlement, a $6.0 million charitable contribution to the Farmers Charitable Foundation, $2.1 million in legal expenses associated with the legal settlement, security losses of $11,000, and a loss of $112,000 on the sale of assets. The Company determined to use the legal settlement funds to make the large contribution to the charitable foundation so that the foundation can increase the scale of its commitments to the communities the Company serves. Excluding these items (non-GAAP), net income for the quarter ended March 31, 2022, would have been $17.2 million, or $0.51 per diluted share.

On March 23, 2022, Farmers entered into an agreement and plan of merger with Emclaire Financial Corp. (NASDAQ: EMCF), a Pennsylvania corporation (“Emclaire”), and the parent company of The Farmers National Bank of Emlenton (“Emlenton”). The transaction is subject to receipt of Emclaire shareholder approval and customary regulatory approvals and is expected to close in the second half of 2022. The transaction will mark the Company’s expansion into Pennsylvania including the attractive Pittsburgh market. Emclaire operates 19 branches in ten counties throughout western Pennsylvania. As of March 31, 2022, Emclaire had total assets of $1.1 billion, gross loans of $794.9 million, deposits of $936.0 million and equity of $86.7 million.

Kevin J. Helmick, President and CEO, commented, “We produced outstanding results again in the first quarter amidst an increasingly volatile economic landscape. Our loan pipelines are very strong as we enter the second quarter and, as always, we will continue to look for opportunities to effectively manage our balance sheet and expense levels while looking to expand our fee based businesses. Our recently announced acquisition of Emclaire Financial Corp. opens up growth opportunities in Pennsylvania, including the attractive Pittsburgh markets, and we look forward to welcoming Emclaire’s team into the Farmers family.” Helmick continued, “We also demonstrated our continued commitment to the communities in which we serve with a significant contribution to the Farmers Charitable Foundation which was established several years ago. We are extremely proud of the work that is done through the foundation.”

Balance Sheet

Total assets grew to $4.21 billion at March 31, 2022 compared to $4.14 billion at December 31, 2021. Gross loans (excluding loans held for sale) were $2.30 billion at March 31, 2022, compared to $2.33 billion at December 31, 2021. Gross loans declined $26.1 million for the quarter, but excluding the run off in PPP balances during the quarter the decline was $12.4 million. The loss of some commercial loan originators hurt results in the first quarter, but the pipelines are solid as the Company enters the second quarter and the Company expects to hit mid-single digit loan growth for fiscal year 2022. At March 31, 2022, the Company has $23.2 million of PPP loans before deferred fees still to be forgiven, and $672,000 in net deferred fees associated with these loans yet to be recognized into income.

Available for sale securities increased to $1.46 billion at March 31, 2022 from $1.43 billion at December 31, 2021. The Company continued to purchase securities in the first quarter of 2022 to invest excess cash and to take advantage of the increase in U.S. treasury rates. While providing more attractive rates for investment purposes, the rise in U.S. treasury rates during the quarter also resulted in a gross unrealized loss of $100.7 million at March 31, 2022, compared to a gross unrealized gain of $11.7 million at December 31, 2021. The volatility in the bond market is expected to continue in 2022, which may result in increased volatility in the fair value of the Company’s available for sale securities.

Total deposits at March 31, 2022, were $3.69 billion compared to $3.55 billion at December 31, 2021. The increase of $146.6 million since December 31, 2021 is due to seasonality in public fund balances and continued growth in business and consumer deposits. In addition, the Company added $40.0 million in brokered deposits during the quarter.

Total stockholders’ equity decreased to $393.9 million at March 31, 2022, compared to $472.4 million at December 31, 2021. The decrease in stockholders’ equity was primarily due to an $88.8 million decline in accumulated other comprehensive income and dividends paid to stockholders offset by net income for the quarter. As mentioned previously, the rapid increase in U.S. treasury rates had a negative effect on the value of the Company’s available for sale securities, and in turn, the dollar amount that flows through accumulated other comprehensive income. This also had a negative impact on the Company’s tangible book value per share (non-GAAP), which declined to $8.58 at March 31, 2022 from $10.91 at December 31, 2021.

Credit Quality

Non-performing loans to loans declined to 0.61% at March 31, 2022, compared to 0.69% at December 31, 2021 as the Company sold the note of one large non-performing loan and wrote off a large portion of another non-performing loan, which was specifically reserved. Early stage delinquencies, defined as 30-89 days delinquent, were $7.3 million, or 0.32% of total loans, at March 31, 2022, compared to $8.9 million, or 0.38% of total loans at December 31, 2021.

The allowance for credit losses for the first quarter of 2022 includes net charge-offs of $1.4 million and a recovery for credit losses of $930,000 offset by a provision for unfunded loans of $572,000. This compares to net charge-offs of $84,000 and a provision for credit losses of $425,000 for the same period in 2021. The net charge-offs were driven by the one loan mentioned above. As an overall percentage of loans, the allowance for credit losses declined to 1.17% at March 31, 2022, compared to 1.26% at December 31, 2021. Total net charge-offs as a percentage of average net loans was 25 basis points for the quarter ended March 31, 2022, compared to 2 basis points for the first quarter of 2021.

Net Interest Income

Net interest income was $31.2 million for the first quarter of 2022 compared to $25.3 million for the first quarter of 2021. The increase was due to growth in average interest earning assets, including the acquisition of Cortland Bancorp (“Cortland”), offset by a decline in net interest margin of 27 basis points. The net interest margin was 3.27% for the first quarter of 2022 compared to 3.33% for the fourth quarter of 2021 and 3.54% for the first quarter of 2021. The decline in net interest margin in the first quarter of 2022 compared to the first quarter of 2021 was driven by the acquisition of Cortland, lower PPP income in 2022 compared to 2021 and a greater percentage of earning assets invested in securities rather than loans. Excluding the impact of acquisition marks and related accretion and PPP interest and fees, the net interest margin (non-GAAP) for the first quarter of 2022 was 3.12% compared to 3.21% for the fourth quarter of 2021 and 3.35% for the first quarter of 2021.

Noninterest Income

Noninterest income increased to $17.7 million for the first quarter of 2022 compared to $10.1 million for the quarter ended March 31, 2021. The first quarter of 2022 increased over the same period in 2021 primarily due to $8.4 million in income related to the proceeds of a one-time legal settlement and increases in other noninterest income categories offset by a decline in security gains of $499,000 and a decline in net gains on the sale of loans of $1.8 million. The net gain on sale of loans has declined because of lower origination volumes due to increasing rates along with tighter gain on sale margins. Other categories of noninterest income that increased year over year include service charges on deposit accounts - $337,000 increase, bank owned life insurance - $125,000 increase, trust fees - $283,000 increase, investment commissions - $190,000 increase and debit card and EFT fees - $245,000 increase.

Noninterest Expense

Total noninterest expense for the quarter ended March 31, 2022 was $30.5 million compared to $17.3 million in the first quarter of 2021. The increase in expense year over year was due to the Company making a charitable contribution of $6.0 million to the Farmers Charitable Foundation, $2.1 million in legal expense associated with the legal settlement and $1.9 million in merger expense incurred in the first quarter of 2022. The increase in the other categories of noninterest expense was due to the Cortland acquisition which closed on November 1, 2021. The system conversion for Cortland also didn’t take place until late February so the Company did not have a full quarter of cost savings in place for the first quarter of 2022.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $4.2 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 46 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 March 31, 2022 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 Emclaire and Emlenton with Farmers in accordance with expectations; deviations from performance expectations related to Emclaire and Emlenton; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2021 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.

IMPORTANT ADDITIONAL INFORMATION

In connection with the proposed merger with Emclaire, the Company will file with the SEC a Registration Statement on Form S-4 that will include a proxy statement of Emclaire and a prospectus of the Company, as well as other relevant documents concerning the proposed transaction.

SHAREHOLDERS OF EMCLAIRE AND OTHER INVESTORS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT AND PROSPECTUS TO BE INCLUDED IN THE REGISTRATION STATEMENT ON FORM S-4, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, EMCLAIRE, THE PROPOSED MERGER, THE PERSONS SOLICITING PROXIES WITH RESPECT TO THE PROPOSED MERGER, AND THEIR INTERESTS IN THE PROPOSED MERGER AND RELATED MATTERS.

Investors and security holders will be able to obtain free copies of the Registration Statement on Form S-4 (when available) and other documents filed with the SEC by the Company through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by the Company will be available free of charge on the Company’s website at https://www.farmersbankgroup.com or may be obtained from the Company by written request to Farmers National Banc Corp., 20 South Broad Street, Canfield, Ohio 44406, Attention: Investor Relations.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale is unlawful before registration or qualification of the securities under the securities laws of the jurisdiction. No offer of securities shall be made except by means of a prospectus satisfying the requirements of Section 10 of the Securities Act.

The respective directors and executive officers of the Company and Emclaire and other persons may be deemed to be participants in the solicitation of proxies from Emclaire shareholders with respect to the proposed merger. Information regarding the directors of the Company is available in its proxy statement filed with the SEC on March 17, 2022 in connection with its 2022 Annual Meeting of Shareholders and information regarding the executive officers of the Company is available in its Form 10-K filed with the SEC on March 9, 2022. Information regarding the directors and executive officers of Emclaire is available in its Form 10-K filed with the SEC on March 16, 2022 and other documents filed by Emclaire with the SEC. Other information regarding the participants in the solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and prospectus to be included in the Registration Statement on Form S-4 and other relevant materials to be filed with the SEC when they become available.

Farmers National Banc Corp. and Subsidiaries

Consolidated Financial Highlights

(Amounts in thousands, except per share results) Unaudited

Consolidated Statements of Income

	For the Three Months Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2022			2021			2021			2021			2021
Total interest and dividend income	$	33,279		$	31,685		$	28,375		$	28,609		$	27,790
Total interest expense		2,037			1,986			1,841			2,119			2,523
Net interest income		31,242			29,699			26,534			26,490			25,267
(Credit) provision for credit losses		(358	)		5,366			(948	)		50			425
Noninterest income		17,698			9,538			9,015			9,508			10,132
Acquisition related costs		1,940			6,521			472			104			12
Other expense		28,516			21,140			16,656			16,966			17,305
Income before income taxes		18,842			6,210			19,369			18,878			17,657
Income taxes		2,998			508			3,358			3,303			3,101
Net income	$	15,844		$	5,702		$	16,011		$	15,575		$	14,556
Average diluted shares outstanding		33,937			32,074			28,361			28,353			28,336
Basic earnings per share		0.47			0.18			0.57			0.55			0.52
Diluted earnings per share		0.47			0.18			0.56			0.55			0.51
Cash dividends per share		0.16			0.14			0.11			0.11			0.11
Performance Ratios
Net Interest Margin (Annualized)		3.27	%		3.33	%		3.47	%		3.52	%		3.54	%
Efficiency Ratio (Tax equivalent basis)		61.36	%		63.61	%		46.04	%		45.70	%		47.76	%
Return on Average Assets (Annualized)		1.52	%		0.58	%		1.92	%		1.90	%		1.87	%
Return on Average Equity (Annualized)		13.89	%		5.24	%		16.93	%		17.17	%		16.81	%
Dividends to Net Income		34.18	%		82.99	%		19.41	%		19.95	%		21.35	%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets		1.55	%		0.60	%		1.97	%		1.93	%		1.87	%
Return on Average Tangible Equity		17.92	%		6.57	%		19.63	%		19.81	%		19.30	%

Consolidated Statements of Financial Condition

	March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
	2022		2021		2021		2021		2021
Assets
Cash and cash equivalents	$	137,627	$	112,790	$	79,808	$	149,357	$	326,385
Securities available for sale		1,463,626		1,427,677		1,183,361		996,271		802,866
Other investments		34,019		30,459		19,041		20,573		21,317
Loans held for sale		1,904		4,545		2,628		1,922		3,993
Loans		2,304,971		2,331,082		1,894,216		1,959,865		2,037,404
Less allowance for credit losses		27,015		29,386		23,136		24,806		24,935
Net Loans		2,277,956		2,301,696		1,871,080		1,935,059		2,012,469
Other assets		290,723		265,582		161,129		156,876		157,494
Total Assets	$	4,205,855	$	4,142,749	$	3,317,047	$	3,260,058	$	3,324,524
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	963,143	$	916,237	$	675,938	$	663,640	$	675,045
Interest-bearing		2,730,668		2,630,998		2,190,475		2,115,183		2,158,009
Total deposits		3,693,811		3,547,235		2,866,413		2,778,823		2,833,054
Borrowings		87,872		87,758		49,649		78,369		79,683
Other liabilities		30,286		35,324		23,461		35,958		64,432
Total liabilities		3,811,969		3,670,317		2,939,523		2,893,150		2,977,169
Stockholders’ Equity		393,886		472,432		377,524		366,908		347,355
Total Liabilities and Stockholders’ Equity	$	4,205,855	$	4,142,749	$	3,317,047	$	3,260,058	$	3,324,524
Period-end shares outstanding		34,008		33,898		28,322		28,322		28,308
Book value per share	$	11.58	$	13.94	$	13.33	$	12.95	$	12.27
Tangible book value per share (Non-GAAP)*		8.58		10.91		11.61		11.23		10.53

* Tangible book value per share is calculated by dividing tangible common equity by period-end shares outstanding

Capital and Liquidity
Common Equity Tier 1 Capital Ratio (a)		13.51	%		13.16	%		14.58	%		13.95	%		13.49	%
Total Risk Based Capital Ratio (a)		17.85	%		17.60	%		16.25	%		15.54	%		15.10	%
Tier 1 Risk Based Capital Ratio (a)		14.16	%		13.82	%		15.18	%		14.39	%		13.93	%
Tier 1 Leverage Ratio (a)		9.56	%		10.12	%		10.17	%		9.70	%		9.69	%
Equity to Asset Ratio		9.37	%		11.40	%		11.38	%		11.25	%		10.45	%
Tangible Common Equity Ratio (b)		7.11	%		9.15	%		10.06	%		9.90	%		9.10	%
Net Loans to Assets		54.16	%		55.56	%		56.41	%		59.36	%		60.53	%
Loans to Deposits		62.40	%		65.72	%		66.08	%		70.53	%		71.92	%
Asset Quality
Non-performing loans	$	14,046		$	16,195		$	14,744		$	13,873		$	11,640
Other Real Estate Owned		0			0			0			30			30
Non-performing assets		14,046			16,195			14,744			13,903			11,670
Loans 30 - 89 days delinquent		7,304			8,891			6,944			7,606			7,183
Charged-off loans		1,590			470			411			502			284
Recoveries		149			157			125			323			200
Net Charge-offs		1,441			313			286			179			84
Annualized Net Charge-offs to
Average Net Loans Outstanding		0.25	%		0.06	%		0.06	%		0.04	%		0.02	%
Allowance for Credit Losses to Total Loans		1.17	%		1.26	%		1.22	%		1.27	%		1.22	%
Non-performing Loans to Total Loans		0.61	%		0.69	%		0.78	%		0.71	%		0.57	%
Allowance to Non-performing Loans		192.33	%		181.45	%		156.92	%		178.81	%		214.22	%
Non-performing Assets to Total Assets		0.33	%		0.39	%		0.44	%		0.43	%		0.35	%

(a) March 31, 2022 ratio is estimated    

(b) This is a non-GAAP financial measure. A reconciliation to GAAP is shown below.    

		End of Period Loan Balances
		March 31,			Dec. 31,		Sept. 30,		June 30,			March 31,
		2022			2021		2021		2021			2021
Commercial real estate		$	1,000,972		$	1,011,891	$	690,407	$	704,809		$	702,556
Commercial			298,903			313,836		302,356		351,261			406,064
Residential real estate			455,501			453,635		376,901		383,187			400,982
HELOC			128,221			127,433		106,750		107,153			107,501
Consumer			192,586			189,522		189,497		190,064			193,295
Agricultural loans			224,845			232,365		226,896		223,427			227,073
Total, excluding net deferred loan costs		$	2,301,028		$	2,328,682	$	1,892,807	$	1,959,901		$	2,037,471
		For the Three Months Ended
		March 31,			Dec. 31,		Sept. 30,		June 30,			March 31,
Noninterest Income		2022			2021		2021		2021			2021
Service charges on deposit accounts		$	1,145		$	1,138	$	924	$	790		$	808
Bank owned life insurance income, including death benefits			409			414		340		300			284
Trust fees			2,519			2,509		2,335		2,358			2,236
Insurance agency commissions	��		1,047			706		799		948			1,003
Security gains (losses), including fair value changes for equity securities			(11	)		25		459		32			488
Retirement plan consulting fees			397			378		334		389			320
Investment commissions			694			611		638		523			504
Net gains on sale of loans			1,129			1,728		1,466		2,191			2,900
Other mortgage banking fee income (loss), net			60			2		32		(55	)		(115	)
Debit card and EFT fees			1,416			1,424		1,227		1,322			1,171
Other operating income			8,893			603		461		710			533
Total Noninterest Income		$	17,698		$	9,538	$	9,015	$	9,508		$	10,132
		For the Three Months Ended
		March 31,			Dec. 31,		Sept. 30,		June 30,			March 31,
Noninterest Expense		2022			2021		2021		2021			2021
Salaries and employee benefits		$	11,831		$	10,230	$	9,321	$	9,866		$	9,976
Occupancy and equipment			2,680			2,422		1,899		1,890			2,275
State and local taxes			678			620		552		551			554
Professional fees			1,041			1,296		1,009		830			1,056
Merger related costs			1,940			6,521		472		104			12
Advertising			392			776		466		357			260
FDIC insurance			267			152		140		120			170
Intangible amortization			420			414		316		316			316
Core processing charges			745			880		860		831			627
Other noninterest expenses			10,462			4,350		2,093		2,205			2,071
Total Noninterest Expense		$	30,456		$	27,661	$	17,128	$	17,070		$	17,317

Average Balance Sheets and Related Yields and Rates

	Three Months Ended							Three Months Ended
	March 31, 2022							March 31, 2021
	AVERAGE							AVERAGE
(Dollar Amounts in Thousands)	BALANCE		INTEREST (1)		YIELD/RATE (1)			BALANCE		INTEREST (1)		YIELD/RATE (1)
EARNING ASSETS
Loans (2)	$	2,312,712	$	25,646		4.44	%	$	2,054,925	$	23,900		4.72	%
Taxable securities		1,007,963		4,587		1.82			329,903		1,719		2.11
Tax-exempt securities (2)		461,793		3,726		3.23			282,044		2,613		3.76
Other investments		31,122		130		1.67			14,840		121		3.31
Federal funds sold and other		117,916		48		0.16			287,323		71		0.10
Total earning assets		3,931,506		34,137		3.47			2,969,035		28,424		3.88
Nonearning assets		247,112							186,660
Total assets	$	4,178,618						$	3,155,695
INTEREST-BEARING LIABILITIES
Time deposits	$	378,675	$	643		0.68	%	$	440,452	$	1,255		1.16	%
Brokered time deposits		15,555		15		0.39			32,000		46		0.58
Savings deposits		843,371		167		0.08			495,832		193		0.16
Demand deposits - interest bearing		1,412,291		418		0.12			1,083,597		732		0.27
Short term borrowings		2,222		1		0.18			2,808		4		0.58
Long term borrowings		87,798		793		3.61			76,007		293		1.56
Total interest-bearing liabilities	$	2,739,912		2,037		0.30		$	2,130,696		2,523		0.48
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand deposits - noninterest bearing		956,499							650,588
Other liabilities		26,001							23,221
Stockholders’ equity		456,206							351,190
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,178,618						$	3,155,695
Net interest income and interest rate spread			$	32,100		3.17	%			$	25,901		3.40	%
Net interest margin						3.27	%						3.54	%

(1) Interest and yields are calculated on a tax-equivalent basis where applicable.

(2) For 2022, adjustments of $84 thousand and $774 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $95 thousand and $539 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.

Reconciliation of Total Assets to Tangible Assets
	For the Three Months Ended
	March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
	2022		2021		2021		2021		2021
Total Assets	$	4,205,855	$	4,142,749	$	3,317,047	$	3,260,058	$	3,324,524
Less Goodwill and other intangibles		102,187		102,606		48,670		48,985		49,301
Tangible Assets	$	4,103,668	$	4,040,143	$	3,268,377	$	3,211,073	$	3,275,223
Average Assets		4,178,618		3,879,901		3,304,708		3,280,316		3,155,695
Less average Goodwill and other intangibles		102,462		84,580		48,879		49,193		49,509
Average Tangible Assets	$	4,076,156	$	3,795,321	$	3,255,829	$	3,231,123	$	3,106,186
Reconciliation of Common Stockholders’ Equity to Tangible Common Equity
	For the Three Months Ended
	March 31,		Dec. 31,		Sept. 30,		June 30,		March 31,
	2022		2021		2021		2021		2021
Stockholders’ Equity	$	393,886	$	472,432	$	377,524	$	366,908	$	347,355
Less Goodwill and other intangibles		102,187		102,606		48,670		48,985		49,301
Tangible Common Equity	$	291,699	$	369,826	$	328,854	$	317,923	$	298,054
Average Stockholders’ Equity		456,206		431,709		375,208		363,753		351,190
Less average Goodwill and other intangibles		102,462		84,580		48,879		49,193		49,509
Average Tangible Common Equity	$	353,744	$	347,129	$	326,329	$	314,560	$	301,681

Reconciliation of Net Income, Less Merger and Certain Items    

	For the Three Months Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2022			2021			2021			2021			2021
Net income	$	15,844		$	5,702		$	16,011		$	15,575		$	14,556
Acquisition related costs - after tax		1,540			5,232			468			83			9
Acquisition related provision - after tax		0			3,846			0			0			0
Lawsuit settlement income - after tax		(6,616	)		0			0			0			0
Lawsuit settlement contingent legal expense - after tax		1,639			0			0			0			0
Charitable donation - after tax		4,740			0			0			0			0
FHLB prepayment penalties - after tax		0			1,425			257			0			0
Net loss (gain) on asset/security sales - after tax		97			134			(362	)		(26	)		(344	)
Gain on sale of credit card portfolio - after tax		0			(189	)		0			0			0
Net income - Adjusted	$	17,244		$	16,150		$	16,374		$	15,632		$	14,221
Diluted EPS excluding merger and one-time items	$	0.51		$	0.50		$	0.58		$	0.55		$	0.50
Return on Average Assets excluding merger and one-time items (Annualized)		1.65	%		1.65	%		1.97	%		1.91	%		1.83	%
Return on Average Equity excluding merger and one-time items (Annualized)		15.12	%		14.84	%		17.31	%		17.24	%		16.42	%
Return on Average Tangible Equity excluding merger and one-time items (Annualized)		19.50	%		18.46	%		19.91	%		19.93	%		19.12	%
Efficiency ratio excluding certain items
	For the Three Months Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2022			2021			2021			2021			2021
Net interest income - taxable equivalent	$	32,100		$	30,486		$	27,256		$	27,192		$	25,901
Noninterest income		17,698			9,538			9,015			9,508			10,132
Legal settlement income		(8,375	)		0			0			0			0
Net loss (gain) on asset/security sales		123			170			(458	)		(33	)		(436	)
Gain on sale of credit card portfolio		0			(239	)		0			0			0
Net interest income and noninterest income adjusted		41,546			39,955			35,813			36,667			35,597
Noninterest expense less intangible amortization		30,036			27,247			16,813			16,755			17,002
Charitable donation		6,000			0			0			0			0
Contingent legal settlement expense		2,075			0			0			0			0
Acquisition related costs		1,940			6,521			472			104			12
FHLB prepayment penalties		0			1,804			325			0			0
Noninterest income adjusted		20,021			18,922			16,016			16,651			16,990
Efficiency ratio excluding one-time items		48.19	%		47.36	%		44.72	%		45.41	%		47.73	%
Net interest margin excluding acquisition marks and PPP interest and fees
	For the Three Months Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2022			2021			2021			2021			2021
Net interest income - taxable equivalent	$	32,100		$	30,486		$	27,256		$	27,192		$	25,901
Acquisition marks		957			496			(35	)		200			271
PPP interest and fees		686			979			1,402			2,097			2,144
Adjusted and annualized net interest income		121,828			115,098			102,712			99,854			95,249
Average earning assets		3,931,506			3,631,320			3,120,336			3,101,630			2,969,035
Less PPP average balances		30,003			47,939			76,990			131,856			125,168
Adjusted average earning assets		3,901,503			3,583,381			3,043,346			2,969,774			2,843,867
Net interest margin excluding marks and PPP interest and fees		3.12	%		3.21	%		3.37	%		3.36	%		3.35	%