Farmers National Banc (FMNB) 8-K Results of Operations and Financial Condition

Exhibit 99.1

July 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. REPORTS

2022 SECOND QUARTER RESULTS

• Earnings per diluted share of $0.47 ($0.49 excluding certain items, non-GAAP) for the second quarter of 2022

• Loan growth of $89.6 million for the quarter excluding PPP loans, or 15.7% on an annualized basis

• 158 consecutive quarters of profitability

• Efficiency ratio, (excluding certain items, non-GAAP), of 48.5% for the second quarter of 2022

• Return on average assets, (excluding certain items, non-GAAP), was 1.59% for the second quarter of 2022

• ROAE and ROATE, (excluding certain items, non-GAAP), 18.6% and 26.1%, respectively, for second quarter of 2022

CANFIELD, Ohio (July 27, 2022) – Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today reported second quarter net income of $16.0 million for the three months ended June 30, 2022, compared to $15.6 million for the three months ended June 30, 2021. Diluted earnings per share were $0.47 for the second quarter of 2022 versus $0.55 for the second quarter of 2021. The results for the second quarter of 2022 included pretax items of $674,000 for merger related costs, security losses of $60,000, and a gain of $92,000 on the sale of assets. Excluding these items (non-GAAP), net income for the quarter ended June 30, 2022, would have been $16.5 million, or $0.49 per diluted share.

Kevin J. Helmick, President and CEO commented, “Our results for the second quarter were very solid and we are particularly pleased with the growth of our loan portfolio. Our lending teams have been working hard over the past several quarters and we are excited to see strong organic loan growth return to our balance sheet.”

On March 23, 2022, Farmers entered into an agreement and plan of merger (the “Merger Agreement”) with Emclaire Financial Corp. (NASDAQ: EMCF), a Pennsylvania corporation (“Emclaire”), and the parent company of The Farmers National Bank of Emlenton (“Emlenton”). On July 20, 2022, the transaction received the approval of Emclaire’s shareholders. The transaction is expected to be completed after the satisfaction or waiver of the remaining closing conditions set forth in the Merger Agreement, including the receipt of all required regulatory approvals. Emclaire operates 19 branches in ten counties throughout western Pennsylvania. As of June 30, 2022, Emclaire had total assets of $1.0 billion, gross loans of $810.7 million, deposits of $937.6 million and equity of $80.2 million.

Balance Sheet

Total assets were $4.11 billion at June 30, 2022 compared to $4.21 billion at March 31, 2022 and $4.14 billion at December 31, 2021. Gross loans (excluding loans held for sale and PPP loans) grew from $2.28 billion at March 31, 2022 to $2.37 billion at June 30, 2022, or 15.7% on an annualized basis. The quarter exhibited broad based strength as the Company saw growth across every major loan category exclusive of PPP loans. At June 30, 2022, the Company has $2.5 million of PPP loans before deferred fees still to be forgiven, and $72,000 in net deferred fees associated with these loans yet to be recognized into income.

Available for sale securities decreased to $1.36 billion at June 30, 2022 compared to $1.43 billion at December 31, 2021. The increase in U.S. treasury rates during the first half of the year resulted in a gross unrealized loss of $206.1 million at June 30, 2022, compared to a gross unrealized loss of $100.7 million at March 31, 2022 and a gross unrealized gain of $11.7 million at December 31, 2021. Excluding the gross unrealized gains and losses, the portfolio has increased by $3.5 million from March 31, 2022 to June 30, 2022 and by $151.9 million from December 31, 2021 to June 30, 2022 as the Company added securities to utilize excess cash and take advantage of the higher interest rates. 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.

Deposits declined $68.3 million from $3.69 billion at March 31, 2022, to $3.63 billion at June 30, 2022 but are still above the $3.55 billion in deposits reported at December 31, 2021. The seasonality of municipal deposits was responsible for a large portion of the change in deposit balances between March 31, 2022 and June 30, 2022.

Total stockholders’ equity decreased to $321.4 million at June 30, 2022, compared to $393.9 million at March 31, 2022 and $472.4 million at December 31, 2021. The decrease in stockholders’ equity has primarily been due to declines in accumulated other comprehensive income associated with the rapid increase in U.S. treasury rates in 2022 which has 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 continues to have a negative impact on the Company’s tangible book value per share (non-GAAP), which was $6.46 at June 30, 2022 compared to $8.58 at March 31, 2022 and $10.91 at December 31, 2021.

Credit Quality

The Company recorded a provision for credit losses and unfunded commitments of $616,000 for the second quarter of 2022 compared to $50,000 for the second quarter of 2021. Growth in loans was the primary reason for the increase in the provision expense. Net charge-offs totaled $42,000 in the second quarter of 2022 compared to $179,000 in the second quarter of 2021. Net charge-offs as a percentage of average net loans was 1 basis point for the quarter ended June 30, 2022, compared to 4 basis points for the second quarter of 2021. The allowance for credit losses to total loans declined to 1.16% at June 30, 2022, compared to 1.17% and 1.26% at March 31, 2022 and December 31, 2021, respectively.

The Company’s ratio of non-performing loans to loans continues to decline. At June 30, 2022 the ratio was 0.59% compared to 0.61% at March 31, 2022 and 0.69% at December 31, 2021. Early stage delinquencies, defined as 30-89 days delinquent, were $8.7 million, or 0.37% of total loans, at June 30, 2022 compared to $8.9 million, or 0.38% of total loans at December 31, 2021.

Net Interest Income

Net interest income increased $5.2 million, or 19.7%, for the second quarter of 2022 compared to the same period in 2021 due to the acquisition of Cortland Bancorp (“Cortland”) offset by a reduction in PPP interest and fees. Interest and fees associated with PPP loans totaled $2.1 million in the second quarter of 2021 compared to $634,000 in the second quarter of 2022. The net interest margin was 3.25% in the second quarter of 2022 compared to 3.27% for the first quarter of 2022 and 3.52% for the second quarter of 2021. The decline in net interest margin in the second quarter of 2022 compared to the second quarter of 2021 was driven by the 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 second quarter of 2022 was 3.16% compared to 3.12% for the first quarter of 2022 and 3.36% for the second quarter of 2021.

Noninterest Income

The Company’s noninterest income decreased $31,000, to $9.5 million for the second quarter of 2022 compared to the second quarter of 2021. Net gains on the sale of loans decreased to $365,000 in the second quarter of 2022 compared to $2.2 million in the second quarter of 2021. This drop was caused by lower mortgage production compared to the prior year, compressed margins and a lower saleable mix due to the increase in interest rates in 2022.

For the second quarter of 2022, service charges on deposit accounts were $1.1 million compared to $790,000 for the second quarter of 2021 primarily due to the acquisition of Cortland and growth. BOLI income likewise increased due to the acquisition to $405,000 in the second quarter of 2022 from $300,000 for the second quarter of 2021. Debit card and EFT fees increased to $1.5 million in the second quarter of 2022 compared to $1.3 million in the second quarter of 2021. The increase was due to the acquisition and increased volumes. Other noninterest income increased by $1.0 million in the second quarter of 2022 compared to the second quarter of 2021. The increase was due to the acquisition of Cortland and increased income related to investments in SBIC and SBA funds.

Noninterest Expense

Total noninterest expense was $21.5 million in the second quarter of 2022 compared with $17.1 million for the second quarter ended June 30, 2021. The year-over-year increase was primarily due to the acquisition of Cortland, continued higher healthcare benefit costs and more merger related costs in the second quarter of 2022 compared to the same quarter in 2021.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $4.1 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 June 30, 2022 are $2.9 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.

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															For the Six Months Ended
	June 30, 2022			March 31, 2022			Dec. 31, 2021			Sept. 30, 2021			June 30, 2021			June 30, 2022			June 30, 2021			Percent Change
Total interest income	$	34,286		$	33,279		$	31,685		$	28,375		$	28,609		$	67,565		$	56,399			19.8	%
Total interest expense		2,575			2,037			1,986			1,841			2,119			4,612			4,642			-0.6	%
Net interest income		31,711			31,242			29,699			26,534			26,490			62,953			51,757			21.6	%
Provision (credit) for credit losses		616			(358	)		5,366			(948	)		50			258			475			-45.7	%
Noninterest income		9,477			17,698			9,538			9,015			9,508			27,175			19,640			38.4	%
Acquisition related costs		674			1,940			6,521			472			104			2,614			116			2153.4	%
Other expense		20,787			28,516			21,140			16,656			16,966			49,303			34,271			43.9	%
Income before income taxes		19,111			18,842			6,210			19,369			18,878			37,953			36,535			3.9	%
Income taxes		3,160			2,998			508			3,358			3,303			6,158			6,404			-3.8	%
Net income	$	15,951		$	15,844		$	5,702		$	16,011		$	15,575		$	31,795		$	30,131			5.5	%
Average diluted shares outstanding		33,923			33,937			32,074			28,361			28,353			33,927			28,336
Basic earnings per share		0.47			0.47			0.18			0.57			0.55			0.94			1.07
Diluted earnings per share		0.47			0.47			0.18			0.56			0.55			0.94			1.06
Cash dividends per share		0.16			0.16			0.14			0.11			0.11			0.32			0.22
Performance Ratios
Net Interest Margin (Annualized)		3.25	%		3.27	%		3.33	%		3.47	%		3.52	%		3.25	%		3.53	%
Efficiency Ratio (Tax equivalent basis)		49.95	%		61.36	%		63.61	%		46.04	%		45.70	%		55.56	%		47.17	%
Return on Average Assets (Annualized)		1.54	%		1.52	%		0.58	%		1.92	%		1.90	%		1.53	%		1.89	%
Return on Average Equity (Annualized)		17.97	%		13.89	%		5.24	%		16.93	%		17.17	%		15.67	%		17.15	%
Dividends to Net Income		33.95	%		34.18	%		82.99	%		19.41	%		19.95	%		34.07	%		20.62	%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets		1.57	%		1.55	%		0.60	%		1.97	%		1.93	%		1.56	%		1.90	%
Return on Average Tangible Equity		25.23	%		17.92	%		6.57	%		19.63	%		19.81	%		20.96	%		19.76	%

Consolidated Statements of Financial Condition

	June 30, 2022		March 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021
Assets
Cash and cash equivalents	$	65,458	$	137,627	$	112,790	$	79,808	$	149,357
Securities available for sale		1,361,682		1,463,626		1,427,677		1,183,361		996,271
Other investments		34,451		34,019		30,459		19,041		20,573
Loans held for sale		2,714		1,904		4,545		2,628		1,922
Loans		2,374,485		2,304,971		2,331,082		1,894,216		1,959,865
Less allowance for credit losses		27,454		27,015		29,386		23,136		24,806
Net Loans		2,347,031		2,277,956		2,301,696		1,871,080		1,935,059
Other assets		303,028		290,723		265,582		161,129		156,876
Total Assets	$	4,114,364	$	4,205,855	$	4,142,749	$	3,317,047	$	3,260,058
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	983,713	$	963,143	$	916,237	$	675,938	$	663,640
Interest-bearing		2,641,825		2,730,668		2,630,998		2,190,475		2,115,183
Total deposits		3,625,538		3,693,811		3,547,235		2,866,413		2,778,823
Other interest-bearing liabilities		137,985		87,872		87,758		49,649		78,369
Other liabilities		29,392		30,286		35,324		23,461		35,958
Total liabilities		3,792,915		3,811,969		3,670,317		2,939,523		2,893,150
Stockholders’ Equity		321,449		393,886		472,432		377,524		366,908
Total Liabilities and Stockholders’ Equity	$	4,114,364	$	4,205,855	$	4,142,749	$	3,317,047	$	3,260,058
Period-end shares outstanding		34,032		34,008		33,898		28,322		28,322
Book value per share	$	9.45	$	11.58	$	13.94	$	13.33	$	12.95
Tangible book value per share (Non-GAAP)*		6.46		8.58		10.91		11.61		11.23

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

Capital and Liquidity
Common Equity Tier 1 Capital Ratio (a)		13.35	%		13.31	%		13.16	%		14.58	%		13.95	%
Total Risk Based Capital Ratio (a)		17.54	%		17.59	%		17.60	%		16.25	%		15.54	%
Tier 1 Risk Based Capital Ratio (a)		13.98	%		13.95	%		13.82	%		15.18	%		14.39	%
Tier 1 Leverage Ratio (a)		9.56	%		9.56	%		10.12	%		10.17	%		9.70	%
Equity to Asset Ratio		7.81	%		9.37	%		11.40	%		11.38	%		11.25	%
Tangible Common Equity Ratio (b)		5.47	%		7.11	%		9.15	%		10.06	%		9.90	%
Net Loans to Assets		57.04	%		54.16	%		55.56	%		56.41	%		59.36	%
Loans to Deposits		65.49	%		62.40	%		65.72	%		66.08	%		70.53	%
Asset Quality
Non-performing loans	$	14,107		$	14,046		$	16,195		$	14,744		$	13,873
Other Real Estate Owned		0			0			0			0			30
Non-performing assets		14,107			14,046			16,195			14,744			13,903
Loans 30 - 89 days delinquent		8,716			7,304			8,891			6,944			7,606
Charged-off loans		177			1,590			470			411			502
Recoveries		135			149			157			125			323
Net Charge-offs		42			1,441			313			286			179
Annualized Net Charge-offs to
Average Net Loans Outstanding		0.01	%		0.25	%		0.06	%		0.06	%		0.04	%
Allowance for Credit Losses to Total Loans		1.16	%		1.17	%		1.26	%		1.22	%		1.27	%
Non-performing Loans to Total Loans		0.59	%		0.61	%		0.69	%		0.78	%		0.71	%
Allowance to Non-performing Loans		194.61	%		192.33	%		181.45	%		156.92	%		178.81	%
Non-performing Assets to Total Assets		0.34	%		0.33	%		0.39	%		0.44	%		0.43	%

(a) June 30, 2022 ratio is estimated

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

	For the Three Months Ended
End of Period Loan Balances	June 30, 2022		March 31, 2022		Dec. 31, 2021		Sept. 30, 2021		June 30, 2021
Commercial real estate	$	1,040,243	$	1,000,972	$	1,011,891	$	690,407	$	704,809
Commercial		285,981		298,903		313,836		302,356		351,261
Residential real estate		464,489		455,501		453,635		376,901		383,187
HELOC		129,392		128,221		127,433		106,750		107,153
Consumer		218,219		192,586		189,522		189,497		190,064
Agricultural loans		230,477		224,845		232,365		226,896		223,427
Total, excluding net deferred loan costs	$	2,368,801	$	2,301,028	$	2,328,682	$	1,892,807	$	1,959,901

	For the Three Months Ended													For the Six Months Ended
Noninterest Income	June 30, 2022			March 31, 2022			Dec. 31, 2021		Sept. 30, 2021		June 30, 2021			June 30, 2022			June 30, 2021
Service charges on deposit accounts	$	1,139		$	1,145		$	1,138	$	924	$	790		$	2,284		$	1,598
Bank owned life insurance income, including death benefits		405			409			414		340		300			814			584
Trust fees		2,376			2,519			2,509		2,335		2,358			4,895			4,594
Insurance agency commissions		1,086			1,047			706		799		948			2,133			1,951
Security gains (losses), including fair value changes for equity securities		(60	)		(11	)		25		459		32			(71	)		520
Retirement plan consulting fees		323			397			378		334		389			720			709
Investment commissions		557			694			611		638		523			1,251			1,027
Net gains on sale of loans		365			1,129			1,728		1,466		2,191			1,494			5,091
Other mortgage banking fee income (loss), net		39			60			2		32		(55	)		99			(170	)
Debit card and EFT fees		1,528			1,416			1,424		1,227		1,322			2,944			2,493
Other noninterest income		1,719			8,893			603		461		710			10,612			1,243
Total Noninterest Income	$	9,477		$	17,698		$	9,538	$	9,015	$	9,508		$	27,175		$	19,640
	For the Three Months Ended													For the Six Months Ended
	June 30,			March 31,			Dec. 31,		Sept. 30,		June 30,			June 30,			June 30,
Noninterest Expense	2022			2022			2021		2021		2021			2022			2021
Salaries and employee benefits	$	11,073		$	11,831		$	10,230	$	9,321	$	9,866		$	22,904		$	19,842
Occupancy and equipment		2,918			2,680			2,422		1,899		1,890			5,598			4,165
State and local taxes		697			678			620		552		551			1,375			1,105
Professional fees		1,056			3,135			1,296		1,009		830			4,191			1,886
Merger related costs		674			1,940			6,521		472		104			2,614			116
Advertising		487			392			776		466		357			879			617
FDIC insurance		282			267			152		140		120			549			290
Intangible amortization		419			420			414		316		316			839			632
Core processing charges		1,123			745			880		860		831			1,868			1,458
Other noninterest expenses		2,732			8,368			4,350		2,093		2,205			11,100			4,276
Total Noninterest Expense	$	21,461		$	30,456		$	27,661	$	17,128	$	17,070		$	51,917		$	34,387

Average Balance Sheets and Related Yields and Rates

	Three Months Ended							Three Months Ended
	June 30, 2022							June 30, 2021
	AVERAGE							AVERAGE
(Dollar Amounts in Thousands)	BALANCE		INTEREST (1)		YIELD/RATE (1)			BALANCE		INTEREST (1)		YIELD/RATE (1)
EARNING ASSETS
Loans (2)	$	2,337,251	$	25,792		4.41	%	$	2,005,151	$	23,669		4.73	%
Taxable securities		1,100,538		5,223		1.90			512,779		2,511		1.96
Tax-exempt securities (2)		474,034		3,832		3.23			340,539		2,952		3.48
Other investments		34,030		216		2.54			14,666		121		3.31
Federal funds sold and other		69,532		95		0.55			228,495		58		0.10
Total earning assets		4,015,385		35,158		3.50			3,101,630		29,311		3.79
Nonearning assets		140,334							178,686
Total assets	$	4,155,719						$	3,280,316
INTEREST-BEARING LIABILITIES
Time deposits	$	354,692	$	552		0.62	%	$	392,663	$	1,008		1.03	%
Brokered time deposits		45,767		49		0.43			15,429		29		0.75
Savings deposits		837,726		141		0.07			516,428		165		0.13
Demand deposits - interest bearing		1,430,273		909		0.25			1,226,894		627		0.20
Short term borrowings		42,527		97		0.91			4,674		3		0.26
Long term borrowings		87,914		827		3.76			74,496		287		1.55
Total interest-bearing liabilities	$	2,798,899		2,575		0.37		$	2,230,584		2,119		0.38
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand deposits - noninterest bearing		972,174							666,053
Other liabilities		29,665							19,926
Stockholders’ equity		354,981							363,753
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,155,719						$	3,280,316
Net interest income and interest rate spread			$	32,583		3.13	%			$	27,192		3.41	%
Net interest margin						3.25	%						3.52	%

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

(2) For 2022, adjustments of $78 thousand and $794 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $92 thousand and $610 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.

	Six Months Ended							Six Months Ended
	June 30, 2022							June 30, 2021
	AVERAGE							AVERAGE
	BALANCE		INTEREST (1)		YIELD/RATE (1)			BALANCE		INTEREST (1)		YIELD/RATE (1)
EARNING ASSETS
Loans (2)	$	2,326,392	$	51,438		4.42	%	$	2,029,901	$	47,569		4.73	%
Taxable securities		1,054,506		9,810		1.86			421,847		4,230		2.02
Tax-exempt securities (2)		467,947		7,559		3.23			311,453		5,565		3.60
Other investments		32,584		346		2.12			14,753		242		3.31
Federal funds sold and other		93,591		143		0.31			257,746		129		0.10
Total earning assets		3,975,020		69,296		3.49			3,035,700		57,735		3.84
Nonearning assets		192,085							182,672
Total assets	$	4,167,105						$	3,218,372
INTEREST-BEARING LIABILITIES
Time deposits	$	366,617	$	1,196		0.65	%	$	416,429	$	2,263		1.10	%
Brokered time deposits		30,745		64		0.42			23,669		75		0.64
Savings deposits		840,533		308		0.07			506,188		358		0.14
Demand deposits - interest bearing		1,420,957		1,327		0.19			1,155,642		1,359		0.24
Short term borrowings		22,486		98		0.87			3,735		7		0.38
Long term borrowings		87,856		1,619		3.69			75,248		580		1.55
Total interest-bearing liabilities	$	2,769,194		4,612		0.33		$	2,180,911		4,642		0.43
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand deposits - noninterest bearing	$	964,380						$	661,550
Other liabilities		27,842							21,577
Stockholders’ equity		405,689							354,334
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,167,105						$	3,218,372
Net interest income and interest rate spread			$	64,684		3.16	%			$	53,093		3.41	%
Net interest margin						3.25	%						3.53	%

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

(2) For 2022, adjustments of $162 thousand and $1.6 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $187 thousand and $1.1 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.

Reconciliation of Total Assets to Tangible Assets
	For the Three Months Ended																For the Six Months Ended
	June 30,			March 31,				Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2022			2022				2021			2021			2021			2022			2021
Total Assets	$	4,114,364		$	4,205,855			$	4,142,749		$	3,317,047		$	3,260,058		$	4,114,364		$	3,260,058
Less Goodwill and other intangibles		101,767			102,187				102,606			48,670			48,985			101,767			48,985
Tangible Assets	$	4,012,597		$	4,103,668			$	4,040,143		$	3,268,377		$	3,211,073		$	4,012,597		$	3,211,073
Average Assets		4,155,719			4,178,618				3,879,901			3,304,708			3,280,316			4,167,105			3,218,372
Less average Goodwill and other intangibles		102,042			102,462				84,580			48,879			49,193			102,251			49,350
Average Tangible Assets	$	4,053,677		$	4,076,156			$	3,795,321		$	3,255,829		$	3,231,123		$	4,064,854		$	3,169,022
Reconciliation of Common Stockholders’ Equity to Tangible Common Equity
	For the Three Months Ended																For the Six Months Ended
	June 30,			March 31,				Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2022			2022				2021			2021			2021			2022			2021
Stockholders’ Equity	$	321,449		$	393,886			$	472,432		$	377,524		$	366,908		$	321,449		$	366,908
Less Goodwill and other intangibles		101,767			102,187				102,606			48,670			48,985			101,767			48,985
Tangible Common Equity	$	219,682		$	291,699			$	369,826		$	328,854		$	317,923		$	219,682		$	317,923
Average Stockholders’ Equity		354,981			456,206				431,709			375,208			363,753			405,689			354,334
Less average Goodwill and other intangibles		102,042			102,462				84,580			48,879			49,193			102,251			49,350
Average Tangible Common Equity	$	252,939		$	353,744			$	347,129		$	326,329		$	314,560		$	303,438		$	304,984
Reconciliation of Net Income, Less Merger and Certain Items
	For the Three Months Ended																For the Six Months Ended
	June 30,			March 31,			��	Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2022			2022				2021			2021			2021			2022			2021
Net income	$	15,951		$	15,844			$	5,702		$	16,011		$	15,575		$	31,795		$	30,131
Acquisition related costs - after tax		564			1,540				5,232			468			83			2,104			92
Acquisition related provision - after tax		0			0				3,846			0			0			0			0
Lawsuit settlement income - after tax		0			(6,616	)			0			0			0			(6,616	)		0
Lawsuit settlement contingent legal expense - after tax		0			1,639				0			0			0			1,639			0
Charitable donation - after tax		0			4,740				0			0			0			4,740			0
FHLB prepayment penalties - after tax		0			0				1,425			257			0			0			0
Net loss (gain) on asset/security sales - after tax		(25	)		97				134			(362	)		(26	)		72			(370	)
Gain on sale of credit card portfolio - after tax		0			0				(189	)		0			0			0			0
Net income - Adjusted	$	16,490		$	17,244			$	16,150		$	16,374		$	15,632		$	33,734		$	29,853
Diluted EPS excluding merger and one-time items	$	0.49		$	0.51			$	0.50		$	0.58		$	0.55		$	0.99		$	1.05
Return on Average Assets excluding merger and certain items (Annualized)		1.59	%		1.65	%			1.65	%		1.97	%		1.91	%		1.62	%		1.86	%
Return on Average Equity excluding merger and certain items (Annualized)		18.58	%		15.12	%			14.84	%		17.31	%		17.24	%		16.63	%		16.85	%
Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)		26.08	%		19.50	%			18.46	%		19.91	%		19.93	%		22.23	%		19.58	%

Efficiency ratio excluding certain items

	For the Three Months Ended															For the Six Months Ended
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2022			2022			2021			2021			2021			2022			2021
Net interest income, after tax	$	32,583		$	32,100		$	30,486		$	27,256		$	27,192		$	64,684		$	53,093
Noninterest income		9,477			17,698			9,538			9,015			9,508			27,175			19,640
Legal settlement income		0			(8,375	)		0			0			0			(8,375	)		0
Net loss (gain) on asset/security sales		(32	)		123			170			(458	)		(33	)		91			(469	)
Gain on sale of credit card portfolio		0			0			(239	)		0			0			0			0
Net interest income and noninterest income adjusted		42,028			41,546			39,955			35,813			36,667			83,575			72,264
Noninterest expense less intangible amortization		21,042			30,036			27,247			16,813			16,755			51,078			33,757
Charitable donation		0			6,000			0			0			0			6,000			0
Contingent legal settlement expense		0			2,075			0			0			0			2,075			0
Acquisition related costs		674			1,940			6,521			472			104			2,614			116
FHLB prepayment penalties		0			0			1,804			325			0			0			0
Noninterest income adjusted		20,368			20,021			18,922			16,016			16,651			40,389			33,641
Efficiency ratio excluding one-time items		48.46	%		48.19	%		47.36	%		44.72	%		45.41	%		48.33	%		46.55	%
Net interest margin excluding acquisition marks and PPP interest and fees
	For the Three Months Ended															For the Six Months Ended
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
	2022			2022			2021			2021			2021			2022			2021
Net interest income, taxable equivalent	$	32,583		$	32,100		$	30,486		$	27,256		$	27,192		$	64,684		$	53,093
Acquisition marks		381			957			496			(35	)		200			1,338			471
PPP interest and fees		634			686			979			1,402			2,097			1,320			4,241
Adjusted and annualized net interest income		126,272			121,828			115,098			102,712			99,854			124,052			96,762
Average earning assets		4,015,385			3,931,506			3,631,320			3,120,336			3,101,630			3,975,020			3,218,372
less PPP average balances		16,019			30,003			47,939			76,990			131,856			22,972			128,531
Adjusted average earning assets		3,999,366			3,901,503			3,583,381			3,043,346			2,969,774			3,952,048			3,089,841
Net interest margin excluding marks and PPP interest and fees		3.16	%		3.12	%		3.21	%		3.37	%		3.36	%		3.14	%		3.13	%