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

Exhibit 99.1

October 26, 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 THIRD QUARTER RESULTS

• Earnings per diluted share of $0.46 ($0.48 excluding certain items, non-GAAP) for the third quarter of 2022

• Loan growth of $27.3 million for the quarter excluding PPP loans, or 4.6% on an annualized basis

• 159 consecutive quarters of profitability

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

• Return on average assets, (excluding certain items, non-GAAP), was 1.55% for the third quarter of 2022

• ROAE and ROATE, (excluding certain items, non-GAAP), 19.6% and 28.3%, respectively, for third quarter of 2022

CANFIELD, Ohio (October 26, 2022) – Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced third quarter net income of $15.4 million for the three months ended September 30, 2022. This compares to $16.0 million for the three months ended September 30, 2021. Diluted earnings per share were $0.46 for the third quarter of 2022 versus $0.56 for the third quarter of 2021. The third quarter of 2022 results included pretax items of $872,000 for merger related costs and combined net losses of $6,000 on the sale of securities and the sale of other assets. Excluding these items (non-GAAP), net income for the quarter ended September 30, 2022, would have been $16.2 million, or $0.48 per diluted share.

“We’re extremely pleased with another quarter of solid loan growth and continue to see good lending opportunities in the market”, said Kevin J. Helmick, President and CEO. “Our earnings were strong during a quarter in which we opened a new lab branch in Canton, Ohio to continue the expansion of our legendary customer service and digital offerings.”

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 September 30, 2022, Emclaire had total assets of $1.0 billion, gross loans of $810.1 million, deposits of $926.7 million and equity of $71.0 million.

Balance Sheet

At September 30, 2022, total assets were $4.12 billion compared to $4.11 billion at June 30, 2022 and $4.14 billion at December 31, 2021. Gross loans (excluding loans held for sale and PPP loans) increased to $2.40 billion at September 30, 2022 compared to $2.37 billion at June 30, 2022. The growth of $27.3 million for the quarter was equal to growth of 4.6% on an annualized basis. The quarter again exhibited strength across multiple sectors of the loan portfolio with loan pipelines still showing solid volume. At September 30, 2022, the Company’s PPP loans had declined to a minimal $637,000 before deferred fees still to be forgiven, and $13,000 in net deferred fees associated with these loans yet to be recognized into income.

The Company’s available for sale securities decreased $66.5 million from $1.36 billion at June 30, 2022 to $1.30 billion at September 30, 2022. The continued increase in U.S. treasury rates during the third quarter of 2022 resulted in a gross unrealized loss of $290.1 million compared to $206.1 million at June 30, 2022 and a gross unrealized gain of $11.7 million at December 31, 2021. With continued loan growth and the acquisition of Emclaire, the Company plans on allowing the securities portfolio to shrink and provide liquidity. 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.

The Company’s deposits declined from $3.63 billion at June 30, 2022 to $3.57 billion at September 30, 2022. Deposit balances at December 31, 2021 were $3.55 billion. Competition for deposits increased during the back half of the third quarter of 2022 as interest rates continued to increase. The Company expects competition for deposits to remain elevated which will increase funding costs moving forward.

Total stockholders’ equity decreased to $265.6 million at September 30, 2022 from $321.4 million at June 30, 2022 and $472.4 million at December 31, 2021. The decrease in stockholders’ equity has primarily been due to the decline 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. The Company’s tangible book value per share (non-GAAP) was $4.79 at September 30, 2022 compared to $6.46 at June 30, 2022, and $10.91 at December 31, 2021.

Credit Quality

Non-performing loans (NPLs) have continued to decline and the NPL to loans ratio was 0.54% at September 30, 2022 compared to 0.69% at December 31, 2021. Non-performing assets to assets has also declined from 0.39% at December 31, 2021 to 0.32% at September 30, 2022. In addition, early stage delinquencies, defined as 30-89 days delinquent, were $6.7 million, or 0.28% of total loans, at September 30, 2022 compared to $8.9 million, or 0.38% of total loans at December 31, 2021.

During the third quarter of 2022, the Company had a provision for credit losses and unfunded commitments of $448,000 compared to a credit for credit losses of $948,000 in the third quarter of 2021. Growth in loans was the primary reason for the increase in the provision expense. The Company experienced net charge-offs of $605,000 during the third quarter of 2022 compared to $286,000 in the third quarter of 2021. Net charge-offs as a percentage of average net loans was 10 basis point for the quarter ended September 30, 2022, compared to 6 basis points for the third quarter of 2021. The allowance for credit losses to total loans declined to 1.14% at September 30, 2022, compared to 1.26% at December 31, 2021, respectively. The low level of charge-off activity over the last several years continues to result in less allowance for credit losses being required.

Net Interest Income

Net interest income increased to $31.8 million for the quarter ended September 30, 2022 from $26.5 million for the quarter ended September 30, 2021. The increase was due to the acquisition of Cortland Bancorp (“Cortland”) offset by a reduction in PPP interest and fees. During the third quarter of 2021, the Company recognized $1.4 million in interest and fees associated with PPP loans compared to $62,000 in the third quarter of 2022. The net interest margin was 3.21% for the third quarter of 2022 compared to 3.25% for the second quarter of 2022 and 3.49% for the third quarter of 2021. The decline in net interest margin in the third quarter of 2022 compared to the third 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 third quarter of 2022 was 3.18% compared to 3.16% for the second quarter of 2022 and 3.37% for the third quarter of 2021.

Noninterest Income

Noninterest income decreased $188,000, to $8.8 million for the third quarter of 2022 compared to the third quarter of 2021. Service charges on deposit accounts increased $305,000 to $1.2 million in the third quarter of 2022 compared to $924,000 for the third quarter of 2021. The increase was primarily due to the acquisition of Cortland and growth. Insurance commissions increased to $1.1 million in the third quarter of 2022 compared to $799,000 in the third quarter of 2021. This business line continues to exhibit good growth. Net gains on the sale of loans decreased to $326,000 in the third quarter of 2022 compared to $1.5 million in the third 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 dramatic increase in interest rates in 2022.

Security losses for the third quarter of 2022 totaled $17,000 compared to security gains of $459,000 for the same period in 2021. Debit card and EFT fees increased to $1.5 million in the third quarter of 2022 compared to $1.2 million in the third quarter of 2021. This increase was due to the Cortland acquisition and increased volumes. Other noninterest income increased to $1.1 million in the third quarter of 2022 compared to $461,000 in the third quarter of 2021. This increase was due to the acquisition of Cortland and increased income related to investments in SBIC and SBA funds.

Noninterest Expense

Total noninterest expense increased to $21.4 million for the quarter ended September 30, 2022 compared to $17.1 million for the third quarter of 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 third quarter of 2022 compared to the third quarter of 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 September 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 and certain items, return on average assets excluding merger costs and certain items, return on average equity excluding merger costs and certain items, 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.

Cautionary Statements Regarding Forward-Looking Statements

We make statements in this news release and our related investor conference call, and we may from time to time make other statements, that are 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 certain forward-looking statements include impacts from the length and extent of the economic impacts of the COVID-19 pandemic; significant changes in near-term local, regional, and U.S. economic conditions resulting from continued high rates of inflation, tightening monetary policy of the Board of Governors of the Federal Reserve, and possibility of a recession; 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 Nine Months Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,			Percent
	2022			2022			2022			2021			2021			2022			2021			Change
Total interest income	$	36,410		$	34,286		$	33,279		$	31,685		$	28,375		$	103,975		$	84,774			22.6	%
Total interest expense		4,629			2,575			2,037			1,986			1,841			9,241			6,483			42.5	%
Net interest income		31,781			31,711			31,242			29,699			26,534			94,734			78,291			21.0	%
Provision (credit) for credit losses		448			616			(358	)		5,366			(948	)		706			(473	)		-249.3	%
Noninterest income		8,827			9,477			17,698			9,538			9,015			36,002			28,655			25.6	%
Acquisition related costs		872			674			1,940			6,521			472			3,486			588			492.9	%
Other expense		20,527			20,787			28,516			21,140			16,656			69,830			50,927			37.1	%
Income before income taxes		18,761			19,111			18,842			6,210			19,369			56,714			55,904			1.4	%
Income taxes		3,315			3,160			2,998			508			3,358			9,473			9,762			-3.0	%
Net income	$	15,446		$	15,951		$	15,844		$	5,702		$	16,011		$	47,241		$	46,142			2.4	%
Average diluted shares outstanding		33,932			33,923			33,937			32,074			28,361			33,925			28,339
Basic earnings per share		0.46			0.47			0.47			0.18			0.57			1.40			1.63
Diluted earnings per share		0.46			0.47			0.47			0.18			0.56			1.39			1.63
Cash dividends per share		0.16			0.16			0.16			0.14			0.11			0.48			0.33
Performance Ratios
Net Interest Margin (Annualized)		3.21	%		3.25	%		3.27	%		3.33	%		3.49	%		3.24	%		3.49	%
Efficiency Ratio (Tax equivalent basis)		50.55	%		49.95	%		61.36	%		63.61	%		46.04	%		54.00	%		46.49	%
Return on Average Assets (Annualized)		1.48	%		1.54	%		1.52	%		0.58	%		1.92	%		1.51	%		1.90	%
Return on Average Equity (Annualized)		18.71	%		17.97	%		13.89	%		5.24	%		16.93	%		16.55	%		17.05	%
Dividends to Net Income		35.06	%		33.95	%		34.18	%		82.99	%		19.41	%		34.39	%		20.20	%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets		1.52	%		1.57	%		1.55	%		0.60	%		1.97	%		1.55	%		1.92	%
Return on Average Tangible Equity		27.06	%		25.23	%		17.92	%		6.57	%		19.63	%		22.62	%		19.64	%

Consolidated Statements of Financial Condition

	Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,
	2022		2022		2022		2021		2021
Assets
Cash and cash equivalents	$	79,981	$	65,458	$	137,627	$	112,790	$	79,808
Securities available for sale		1,295,133		1,361,682		1,463,626		1,427,677		1,183,361
Other investments		34,399		34,451		34,019		30,459		19,041
Loans held for sale		2,142		2,714		1,904		4,545		2,628
Loans		2,399,981		2,374,485		2,304,971		2,331,082		1,894,216
Less allowance for credit losses		27,282		27,454		27,015		29,386		23,136
Net Loans		2,372,699		2,347,031		2,277,956		2,301,696		1,871,080
Other assets		335,668		303,028		290,723		265,582		161,129
Total Assets	$	4,120,022	$	4,114,364	$	4,205,855	$	4,142,749	$	3,317,047
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	934,638	$	983,713	$	963,143	$	916,237	$	675,938
Interest-bearing		2,632,513		2,641,825		2,730,668		2,630,998		2,190,475
Total deposits		3,567,151		3,625,538		3,693,811		3,547,235		2,866,413
Other interest-bearing liabilities		243,098		137,985		87,872		87,758		49,649
Other liabilities		44,154		29,392		30,286		35,324		23,461
Total liabilities		3,854,403		3,792,915		3,811,969		3,670,317		2,939,523
Stockholders’ Equity		265,619		321,449		393,886		472,432		377,524
Total Liabilities and Stockholders’ Equity	$	4,120,022	$	4,114,364	$	4,205,855	$	4,142,749	$	3,317,047

Period-end shares outstanding		34,060			34,032			34,008			33,898			28,322
Book value per share	$	7.80		$	9.45		$	11.58		$	13.94		$	13.33
Tangible book value per share (Non-GAAP)*		4.79			6.46			8.58			10.91			11.61
*  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)		13.46	%		13.30	%		13.31	%		13.16	%		14.58	%
Total Risk Based Capital Ratio (a)		17.57	%		17.46	%		17.59	%		17.60	%		16.25	%
Tier 1 Risk Based Capital Ratio (a)		14.08	%		13.92	%		13.95	%		13.82	%		15.18	%
Tier 1 Leverage Ratio (a)		9.67	%		9.56	%		9.56	%		10.12	%		10.17	%
Equity to Asset Ratio		6.45	%		7.81	%		9.37	%		11.40	%		11.38	%
Tangible Common Equity Ratio (b)		4.06	%		5.47	%		7.11	%		9.15	%		10.06	%
Net Loans to Assets		57.59	%		57.04	%		54.16	%		55.56	%		56.41	%
Loans to Deposits		67.28	%		65.49	%		62.40	%		65.72	%		66.08	%
Asset Quality
Non-performing loans	$	12,976		$	14,107		$	14,046		$	16,195		$	14,744
Non-performing assets		13,042			14,107			14,046			16,195			14,744
Loans 30 - 89 days delinquent		6,659			8,716			7,304			8,891			6,944
Charged-off loans		783			177			1,590			470			411
Recoveries		178			135			149			157			125
Net Charge-offs		605			42			1,441			313			286
Annualized Net Charge-offs to
Average Net Loans Outstanding		0.10	%		0.01	%		0.25	%		0.06	%		0.06	%
Allowance for Credit Losses to Total Loans		1.14	%		1.16	%		1.17	%		1.26	%		1.22	%
Non-performing Loans to Total Loans		0.54	%		0.59	%		0.61	%		0.69	%		0.78	%
Allowance to Non-performing Loans		210.25	%		194.61	%		192.33	%		181.45	%		156.92	%
Non-performing Assets to Total Assets		0.32	%		0.34	%		0.33	%		0.39	%		0.44	%

(a) September 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
	Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,
End of Period Loan Balances	2022		2022		2022		2021		2021
Commercial real estate	$	1,028,484	$	1,040,243	$	1,000,972	$	1,011,891	$	690,407
Commercial		296,932		285,981		298,903		313,836		302,356
Residential real estate		474,014		464,489		455,501		453,635		376,901
HELOC		132,267		129,392		128,221		127,433		106,750
Consumer		222,706		218,219		192,586		189,522		189,497
Agricultural loans		239,081		230,477		224,845		232,365		226,896
Total, excluding net deferred loan costs	$	2,393,484	$	2,368,801	$	2,301,028	$	2,328,682	$	1,892,807

	For the Three Months Ended													For the Nine Months Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,		Sept. 30,		Sept. 30,			Sept. 30,
Noninterest Income	2022			2022			2022			2021		2021		2022			2021
Service charges on deposit accounts	$	1,229		$	1,139		$	1,145		$	1,138	$	924	$	3,513		$	2,522
Bank owned life insurance income, including death benefits		406			405			409			414		340		1,220			924
Trust fees		2,370			2,376			2,519			2,509		2,335		7,265			6,930
Insurance agency commissions		1,136			1,086			1,047			706		799		3,269			2,750
Security gains (losses), including fair value changes for equity securities		(17	)		(60	)		(11	)		25		459		(88	)		979
Retirement plan consulting fees		332			323			397			378		334		1,052			1,043
Investment commissions		424			557			694			611		638		1,675			1,665
Net gains on sale of loans		326			365			1,129			1,728		1,466		1,820			6,557
Other mortgage banking fee income (loss), net		94			39			60			2		32		193			(138	)
Debit card and EFT fees		1,463			1,528			1,416			1,424		1,227		4,407			3,720
Other noninterest income		1,064			1,719			8,893			603		461		11,676			1,703
Total Noninterest Income	$	8,827		$	9,477		$	17,698		$	9,538	$	9,015	$	36,002		$	28,655

	For the Three Months Ended										For the Nine Months Ended
	Sept. 30,		June 30,		March 31,		Dec. 31,		Sept. 30,		Sept. 30,		Sept. 30,
Noninterest Expense	2022		2022		2022		2021		2021		2022		2021
Salaries and employee benefits	$	10,724	$	11,073	$	11,831	$	10,230	$	9,321	$	33,628	$	29,163
Occupancy and equipment		3,028		2,918		2,680		2,422		1,899		8,626		6,065
FDIC insurance and state and local taxes		1,017		979		945		772		692		2,941		2,086
Professional fees		985		1,056		3,135		1,296		1,009		5,176		2,895
Merger related costs		872		674		1,940		6,521		472		3,486		588
Advertising		596		487		392		776		466		1,475		1,083
Intangible amortization		432		419		420		414		316		1,271		948
Core processing charges		738		1,123		745		880		860		2,606		2,318
Other noninterest expenses		3,007		2,732		8,368		4,350		2,093		14,107		6,369
Total Noninterest Expense	$	21,399	$	21,461	$	30,456	$	27,661	$	17,128	$	73,316	$	51,515

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

	Three Months Ended								Three Months Ended
	September 30, 2022								September 30, 2021
	AVERAGE					YIELD/			AVERAGE				YIELD/
	BALANCE			INTEREST (1)		RATE (1)			BALANCE		INTEREST (1)		RATE (1)
EARNING ASSETS
Loans (2)	$	2,386,184		$	27,570		4.62	%	$	1,917,443	$	22,665		4.73	%
Taxable securities		1,112,411			5,477		1.97			727,271		3,222		1.77
Tax-exempt securities (2)		473,677			3,814		3.22			360,371		3,065		3.40
Other investments		33,524			199		2.37			19,380		113		2.33
Federal funds sold and other		59,289			205		1.38			95,871		32		0.13
Total earning assets		4,065,085			37,265		3.67			3,120,336		29,097		3.73
Nonearning assets		99,770								184,372
Total assets	$	4,164,855							$	3,304,708
INTEREST-BEARING LIABILITIES
Time deposits	$	338,794		$	586		0.69	%	$	361,566	$	692		0.77	%
Brokered time deposits		50,494			142		1.12			0		0		0.00
Savings deposits		832,828			165		0.08			525,560		152		0.12
Demand deposits - interest bearing		1,426,801			2,317		0.65			1,278,099		502		0.16
Short term borrowings		90,978			533		2.34			5,671		0		0.00
Long term borrowings		88,031			886		4.03			51,767		495		3.82
Total interest-bearing liabilities	$	2,827,926			4,629		0.65		$	2,222,663		1,841		0.33
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand deposits - noninterest bearing		969,700								684,419
Other liabilities		36,929								22,418
Stockholders’ equity		330,300	��							375,208
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,164,855							$	3,304,708
Net interest income and interest rate spread				$	32,636		3.02	%			$	27,256		3.40	%
Net interest margin							3.21	%						3.49	%

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

(2) For 2022, adjustments of $76 thousand and $779 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $87 thousand and $635 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.

	Nine Months Ended							Nine Months Ended
	September 30, 2022							September 30, 2021
	AVERAGE				YIELD/			AVERAGE				YIELD/
	BALANCE		INTEREST (1)		RATE (1)			BALANCE		INTEREST (1)		RATE (1)
EARNING ASSETS
Loans (2)	$	2,346,542	$	79,008		4.49	%	$	1,994,687	$	70,234		4.69	%
Taxable securities		1,074,020		15,287		1.90			524,774		7,452		1.89
Tax-exempt securities (2)		469,878		11,372		3.23			327,938		8,630		3.51
Other investments		32,901		545		2.21			20,372		355		2.32
Federal funds sold and other		82,031		348		0.57			204,037		161		0.11
Total earning assets		4,005,372		106,560		3.55			3,071,808		86,832		3.77
Nonearning assets		160,975							189,358
Total assets	$	4,166,347						$	3,261,166
INTEREST-BEARING LIABILITIES
Time deposits	$	357,241	$	1,782		0.67	%	$	393,704	$	2,955		1.00	%
Brokered time deposits		37,400		206		0.73			15,692		75		0.64
Savings deposits		837,937		473		0.07			512,716		510		0.13
Demand deposits - interest bearing		1,422,583		3,644		0.34			1,200,584		1,861		0.21
Short term borrowings		45,568		631		1.85			3,155		7		0.30
Long term borrowings		87,915		2,505		3.80			68,306		1,075		2.10
Total interest-bearing liabilities	$	2,788,644		9,241		0.44		$	2,194,157		6,483		0.39
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand deposits - noninterest bearing	$	966,173						$	682,584
Other liabilities		30,904							22,026
Stockholders’ equity		380,626							362,399
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	4,166,347						$	3,261,166
Net interest income and interest rate spread			$	97,319		3.11	%			$	80,349		3.38	%
Net interest margin						3.24	%						3.49	%

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

(2) For 2022, adjustments of $238 thousand and $2.3 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $274 thousand and $1.8 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 Nine Months Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,
	2022			2022			2022			2021			2021			2022			2021
Total Assets	$	4,120,022		$	4,114,364		$	4,205,855		$	4,142,749		$	3,317,047		$	4,120,022		$	3,317,047
Less Goodwill and other intangibles		102,368			101,767			102,187			102,606			48,670			102,368			48,670
Tangible Assets	$	4,017,654		$	4,012,597		$	4,103,668		$	4,040,143		$	3,268,377		$	4,017,654		$	3,268,377
Average Assets		4,164,855			4,155,719			4,178,618			3,879,901			3,304,708			4,166,347			3,261,166
Less average Goodwill and other intangibles		101,981			102,042			102,462			84,580			48,879			102,160			49,192
Average Tangible Assets	$	4,062,874		$	4,053,677		$	4,076,156		$	3,795,321		$	3,255,829		$	4,064,187		$	3,211,974
Reconciliation of Common Stockholders’ Equity to Tangible Common Equity
	For the Three Months Ended															For the Nine Months Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,
	2022			2022			2022			2021			2021			2022			2021
Stockholders’ Equity	$	265,619		$	321,449		$	393,886		$	472,432		$	377,524		$	265,619		$	377,524
Less Goodwill and other intangibles		102,368			101,767			102,187			102,606			48,670			102,368			48,670
Tangible Common Equity	$	163,251		$	219,682		$	291,699		$	369,826		$	328,854		$	163,251		$	328,854
Average Stockholders’ Equity		330,300			354,981			456,206			431,709			375,208			380,626			362,399
Less average Goodwill and other intangibles		101,981			102,042			102,462			84,580			48,879			102,160			49,192
Average Tangible Common Equity	$	228,319		$	252,939		$	353,744		$	347,129		$	326,329		$	278,466		$	313,207
Reconciliation of Net Income, Less Merger and Certain Items
	For the Three Months Ended															For the Nine Months Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,
	2022			2022			2022			2021			2021			2022			2021
Net income	$	15,446		$	15,951		$	15,844		$	5,702		$	16,011		$	47,241		$	46,142
Acquisition related costs - after tax		711			564			1,540			5,232			468			2,815			499
Acquisition related provision - after tax		0			0			0			3,846			0			0			0
Lawsuit settlement income - after tax		0			0			(6,616	)		0			0			(6,616	)		0
Lawsuit settlement contingent legal expense - after tax		0			0			1,639			0			0			1,639			0
Charitable donation - after tax		0			0			4,740			0			0			4,740			0
FHLB prepayment penalties - after tax		0			0			0			1,425			257			0			257
Net loss (gain) on asset/security sales - after tax		4			(25	)		97			134			(362	)		76			(732	)
Gain on sale of credit card portfolio - after tax		0			0			0			(189	)		0			0			0
Net income - Adjusted	$	16,161		$	16,490		$	17,244		$	16,150		$	16,374		$	49,895		$	46,166
Diluted EPS excluding merger and one-time items	$	0.48		$	0.49		$	0.51		$	0.50		$	0.58		$	1.47		$	1.63
Return on Average Assets excluding merger and certain items (Annualized)		1.55	%		1.59	%		1.65	%		1.65	%		1.97	%		1.60	%		1.89	%
Return on Average Equity excluding merger and certain items (Annualized)		19.57	%		18.58	%		15.12	%		14.84	%		17.31	%		17.48	%		16.99	%
Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)		28.31	%		26.08	%		19.50	%		18.46	%		19.91	%		23.89	%		19.65	%

Efficiency ratio excluding certain items

	For the Three Months Ended															For the Nine Months Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,
	2022			2022			2022			2021			2021			2022			2021
Net interest income, after tax	$	32,636		$	32,583		$	32,100		$	30,486		$	27,256		$	97,319		$	80,349
Noninterest income		8,827			9,477			17,698			9,538			9,015			36,002			28,655
Legal settlement income		0			0			(8,375	)		0			0			(8,375	)		0
Net loss (gain) on asset/security sales		6			(32	)		123			170			(458	)		97			(927	)
Gain on sale of credit card portfolio		0			0			0			(239	)		0			0			0
Net interest income and noninterest income adjusted		41,469			42,028			41,546			39,955			35,813			125,043			108,077
Noninterest expense less intangible amortization		20,967			21,042			30,036			27,247			16,813			72,045			50,570
Charitable donation		0			0			6,000			0			0			6,000			0
Contingent legal settlement expense		0			0			2,075			0			0			2,075			0
Acquisition related costs		872			674			1,940			6,521			472			3,486			588
FHLB prepayment penalties		0			0			0			1,804			325			0			325
Noninterest income adjusted		20,095			20,368			20,021			18,922			16,016			60,484			49,657
Efficiency ratio excluding one-time items		48.46	%		48.46	%		48.19	%		47.36	%		44.72	%		48.37	%		45.95	%
Net interest margin excluding acquisition marks and PPP interest and fees
	For the Three Months Ended															For the Nine Months Ended
	Sept. 30,			June 30,			March 31,			Dec. 31,			Sept. 30,			Sept. 30,			Sept. 30,
	2022			2022			2022			2021			2021			2022			2021
Net interest income, taxable equivalent	$	32,636		$	32,583		$	32,100		$	30,486		$	27,256		$	97,319		$	80,349
Acquisition marks		246			381			957			496			(35	)		1,584			436
PPP interest and fees		62			634			686			979			1,402			1,382			5,643
Adjusted and annualized net interest income		129,312			126,272			121,828			115,098			102,712			125,804			99,027
Average earning assets		4,065,085			4,015,385			3,931,506			3,631,320			3,120,336			4,005,372			3,261,166
Less PPP average balances		1,586			16,019			30,003			47,939			76,990			15,766			111,162
Adjusted average earning assets		4,063,499			3,999,366			3,901,503			3,583,381			3,043,346			3,989,606			3,150,004
Net interest margin excluding marks and PPP interest and fees		3.18	%		3.16	%		3.12	%		3.21	%		3.37	%		3.15	%		3.14	%