Farmers National Banc (FMNB) 8-K Farmers National Banc Corp. Reports Results for Fourth Quarter 2022

Exhibit 99.1

January 25, 2023

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

RESULTS FOR FOURTH QUARTER 2022

• Earnings per diluted share of $0.39 ($0.42 excluding certain items, non-GAAP) for the fourth quarter of 2022

• Loan growth of $5.2 million for the quarter, excluding PPP loans

• 160 consecutive quarters of profitability

• Efficiency ratio, (excluding certain items, non-GAAP), of 51.1% for the fourth quarter of 2022

• Return on average assets, (excluding certain items, non-GAAP), was 1.36% for the fourth quarter of 2022

• ROAE and ROATE, (excluding certain items, non-GAAP), 21.3% and 34.6%, respectively, for fourth quarter of 2022

CANFIELD, Ohio (January 25, 2023) – Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) reported today net income of $13.4 million for the three months ended December 31, 2022 compared to $5.7 million for the three months ended December 31, 2021. The Company reported diluted earnings per share of $0.39 for the fourth quarter of 2022 versus $0.18 for the same period in 2021. Results for the fourth quarter of 2022 included pretax items of $584,000 for merger related costs and combined net losses of $338,000 on the sale of securities and the sale of other assets. Excluding these items (non-GAAP), net income for the quarter ended December 31, 2022, would have been $14.1 million, or $0.42 per diluted share.

Net income for the twelve months ended December 31, 2022, totaled $60.6 million, or $1.79 per diluted share, compared to $51.8 million, or $1.77 per diluted share for the twelve months ended December 31, 2021. Results for the year ended December 31, 2022, included pre-tax items for acquisition costs of $4.1 million, security losses of $454,000, $8.4 million in other noninterest income for the 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 and gains of $19,000 on the sale of assets. Net income for the twelve months ended December 31, 2022, excluding these items (non-GAAP), was $64.0 million, or $1.89 per share.

Kevin J. Helmick, President and CEO, stated, “2022 was a strong year for Farmers as we produced record net income, which drove strong returns on assets, equity, and tangible equity. In addition, we successfully integrated the 2021 Cortland Bancorp acquisition, focused on completing the 2023 Emclaire Financial Corp. acquisition, and enhanced our leadership team and board. With the January 2023 completion of the Emclaire Financial Corp. acquisition, we have expanded our presence throughout Pennsylvania and significantly increased our scale with over $5.0 billion in bank assets and $3.0 billion in wealth assets. I believe Farmers is well positioned to navigate an increasingly difficult economic and interest rate environment as a result of our strong asset quality and capital levels, experienced leadership team, and dedication to provide our communities with exceptional financial products and services.”

On March 23, 2022, Farmers entered into an agreement and plan of merger (the “Merger Agreement”) with Emclaire Financial Corp. (formerly 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 and on December 2, 2022, the transaction received regulatory approval. The transaction closed on January 1, 2023. Emclaire operated 19 branches in ten counties throughout western Pennsylvania and as of December 31, 2022, had total assets of $1.02 billion, gross loans of $797.3 million and deposits of $874.6 million.

Balance Sheet

Total assets declined to $4.08 billion at December 31, 2022 compared to $4.12 billion at September 30, 2022. Gross loans (excluding loans held for sale and PPP loans) increased by $5.2 million to $2.40 billion at December 30, 2022 from the prior quarter.

Securities available for sale decreased $27.1 million to $1.27 billion at December 31, 2022 from $1.30 billion at September 30, 2022. The decrease was primarily driven by runoff and the sale of securities during the quarter offset by improvement in the gross unrealized loss. The gross unrealized loss at December 31, 2022 was $266.5 million compared to $290.1 million at September 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 2023, which may result in increased volatility in the fair value of the Company’s available for sale securities.

Total customer deposits (excluding brokered time deposits) declined to $3.42 billion at December 31, 2022 from $3.52 billion at September 30, 2022. Customer deposit balances at December 31, 2021 were $3.55 billion. Intense competition from both other banks and the treasury market itself drove the decline in deposits. In addition, it appears that some customers are utilizing deposit balances to counter the higher cost of living brought on by the inflationary environment in 2022. The Company expects competition for deposits to remain highly elevated for the foreseeable future which will continue to increase funding costs.    

Total stockholders’ equity increased to $292.3 million at December 31, 2022 from $265.6 million at September 30, 2022 but has declined from $472.4 million at December 31, 2021. The decrease in stockholders’ equity since December 31, 2021 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 $5.60 at December 31, 2022 compared to $4.79 at September 30, 2022, and $10.91 at December 31, 2021.

Credit Quality

Non-performing loans (NPLs) were $14.8 million at December 31, 2022 compared to $16.2 million at December 31, 2021. The NPL to loans ratio was 0.62% at December 31, 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 0.36% at December 31, 2022. Early stage delinquencies, defined as 30-89 days delinquent, were $9.6 million, or 0.40% of total loans, at December 31, 2022 compared to $8.9 million, or 0.38% of total loans at December 31, 2021.

The Company recorded a provision for credit losses and unfunded commitments of $416,000 in the fourth quarter of 2022 compared to a provision for credit losses of $5.4 million in the fourth quarter of 2021. During the fourth quarter of 2021, the Company completed the acquisition of Cortland Bancorp and recorded a $4.9 million provision for credit losses related to the acquisition which accounts for the majority of the difference in provision costs between the 4^th quarter of 2022 and the 4^th quarter of 2021. The Company experienced net charge-offs of $570,000 during the fourth quarter of 2022 compared to $313,000 in the fourth quarter of 2021. Net charge-offs as a percentage of average net loans was 10 basis points for the quarter ended December 31, 2022, compared to 6 basis points for the fourth quarter of 2021. The allowance for credit losses to total loans declined to 1.12% at December 31, 2022, compared to 1.26% at December 31, 2021. 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

The net interest margin was 2.99% for the fourth quarter of 2022 compared to 3.21% for the third quarter of 2022 and 3.33% for the fourth quarter of 2021. The decline in net interest margin during the fourth quarter of 2022 compared to the prior quarter and the fourth quarter of 2021 was caused by a rapid increase in deposit rates due to intense competition for deposits, the continued Federal Reserve rate hiking cycle and runoff of deposit balances which are being replaced by much costlier wholesale funding. Loans continue to reprice higher but cannot keep up with the increase in funding costs. Excluding the impact of acquisition marks and related accretion and PPP interest and fees, the net interest margin (non-GAAP) for the fourth quarter of 2022 was 2.96% compared to 3.18% for the third quarter of 2022 and 3.21% for the fourth quarter of 2021. Net interest income decreased to $29.4 million for the fourth quarter of 2022 from $29.7 million for the quarter ended December 31, 2021. The decrease was due to net interest margin compression discussed above offset somewhat by larger average assets. In addition, during the fourth quarter of 2021, the Company recognized $979,000 in interest and fees associated with PPP loans compared to $10,000 in the fourth quarter of 2022.

Noninterest Income

Noninterest income decreased $1.3 million from the fourth quarter of 2021 to the fourth quarter of 2022. The primary reason for the decline was a drop of $1.5 million in the net gains on the sale of loans. This drop was caused by lower mortgage production compared to the prior year due to the dramatic increase in interest rates in 2022 and a lower saleable mix. Bank owned life insurance increased $176,000 in the fourth quarter of 2022 compared to the fourth quarter of 2021. This increase was primarily due to a death benefit of $184,000 received in the fourth quarter of 2022.    Insurance commissions increased to $1.1 million in the fourth quarter of 2022 compared to $706,000 in the fourth quarter of 2021. This business exhibited strong growth throughout 2022. Security losses for the fourth quarter of 2022 totaled $366,000 compared to security gains of $25,000 for the same period in 2021. The Company used the proceeds from the sales to pay down wholesale borrowings.

Noninterest Expense

Total noninterest expense decreased to $21.1 million in the fourth quarter of 2022 compared to $27.7 million for the fourth quarter of 2021. The year-over-year decrease was primarily due to the merger costs of $6.5 million incurred in the fourth quarter of 2021 compared to merger costs of $584,000 incurred in the fourth quarter of 2022. In addition, the Company incurred $1.8 million of expense in the fourth quarter of 2021 for prepayment penalties on FHLB advances. There were no prepayment penalties in the fourth quarter of 2022. Offsetting, these decreases were increases in salaries and employee benefits primarily related to increased healthcare costs, increased occupancy and equipment expense and increased FDIC insurance expense.

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 65 banking locations in Mahoning, Trumbull, Columbiana, Portage, Stark, Wayne, Medina, Geauga and Cuyahoga Counties in Ohio and Beaver, Butler, Allegheny, Jefferson, Clarion, Venango, Clearfield, Mercer, Elk and Crawford Counties 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 December 31, 2022 are $3.0 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 including those 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 Twelve Months Ended
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Dec. 31,			Dec. 31,			Percent
	2022			2022			2022			2022			2021			2022			2021			Change
Total interest income	$	38,111		$	36,410		$	34,286		$	33,279		$	31,685		$	142,086		$	116,459			22.0	%
Total interest expense		8,679			4,629			2,575			2,037			1,986			17,920			8,469			111.6	%
Net interest income		29,432			31,781			31,711			31,242			29,699			124,166			107,990			15.0	%
Provision (credit) for credit losses		416			448			616			(358	)		5,366			1,122			4,893			-77.1	%
Noninterest income		8,200			8,827			9,477			17,698			9,538			44,202			38,193			15.7	%
Acquisition related costs		584			872			674			1,940			6,521			4,070			7,109			-42.7	%
Other expense		20,511			20,527			20,787			28,516			21,140			90,341			72,067			25.4	%
Income before income taxes		16,121			18,761			19,111			18,842			6,210			72,835			62,114			17.3	%
Income taxes		2,765			3,315			3,160			2,998			508			12,238			10,270			19.2	%
Net income	$	13,356		$	15,446		$	15,951		$	15,844		$	5,702		$	60,597		$	51,844			16.9	%
Average diluted shares outstanding		33,962			33,932			33,923			33,937			32,074			33,929			29,280
Basic earnings per share		0.39			0.46			0.47			0.47			0.18			1.79			1.78
Diluted earnings per share		0.39			0.46			0.47			0.47			0.18			1.79			1.77
Cash dividends per share		0.17			0.16			0.16			0.16			0.14			0.65			0.47
Performance Ratios
Net Interest Margin (Annualized)		2.99	%		3.21	%		3.25	%		3.27	%		3.33	%		3.18	%		3.45	%
Efficiency Ratio (Tax equivalent basis)		52.59	%		50.55	%		49.95	%		61.36	%		63.61	%		53.68	%		51.13	%
Return on Average Assets (Annualized)		1.31	%		1.48	%		1.54	%		1.52	%		0.58	%		1.46	%		1.52	%
Return on Average Equity (Annualized)		20.16	%		18.71	%		17.97	%		13.89	%		5.24	%		17.24	%		13.64	%
Dividends to Net Income		43.10	%		35.06	%		33.95	%		34.18	%		82.99	%		36.31	%		27.11	%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets		1.32	%		1.52	%		1.57	%		1.55	%		0.60	%		1.50	%		1.55	%
Return on Average Tangible Equity		32.81	%		27.06	%		25.23	%		17.92	%		6.57	%		24.31	%		16.13	%

Consolidated Statements of Financial Condition    

	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
	2022		2022		2022		2022		2021
Assets
Cash and cash equivalents	$	75,551	$	79,981	$	65,458	$	137,627	$	112,790
Securities available for sale		1,268,025		1,295,133		1,361,682		1,463,626		1,427,677
Other investments		33,444		34,399		34,451		34,019		30,459
Loans held for sale		858		2,142		2,714		1,904		4,545
Loans		2,404,750		2,399,981		2,374,485		2,304,971		2,331,082
Less allowance for credit losses		26,978		27,282		27,454		27,015		29,386
Net Loans		2,377,772		2,372,699		2,347,031		2,277,956		2,301,696
Other assets		326,550		335,668		303,028		290,723		265,582
Total Assets	$	4,082,200	$	4,120,022	$	4,114,364	$	4,205,855	$	4,142,749
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	896,957	$	934,638	$	983,713	$	963,143	$	916,237
Interest-bearing		2,526,760		2,590,054		2,586,829		2,690,668		2,630,998
Brokered time deposits		138,051		42,459		54,996		40,000		0
Total deposits		3,561,768		3,567,151		3,625,538		3,693,811		3,547,235
Other interest-bearing liabilities		183,211		243,098		137,985		87,872		87,758
Other liabilities		44,926		44,154		29,392		30,286		35,324
Total liabilities		3,789,905		3,854,403		3,792,915		3,811,969		3,670,317
Stockholders’ Equity		292,295		265,619		321,449		393,886		472,432
Total Liabilities and Stockholders’ Equity	$	4,082,200	$	4,120,022	$	4,114,364	$	4,205,855	$	4,142,749
Period-end shares outstanding		34,055		34,060		34,032		34,008		33,898
Book value per share	$	8.58	$	7.80	$	9.45	$	11.58	$	13.94
Tangible book value per share (Non-GAAP)*		5.60		4.79		6.46		8.58		10.91

* 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)		13.61	%		13.36	%		13.30	%		13.31	%		13.16	%
Total Risk Based Capital Ratio (a)		17.66	%		17.44	%		17.46	%		17.59	%		17.60	%
Tier 1 Risk Based Capital Ratio (a)		14.22	%		13.97	%		13.92	%		13.95	%		13.82	%
Tier 1 Leverage Ratio (a)		9.84	%		10.24	%		9.56	%		9.56	%		10.12	%
Equity to Asset Ratio		7.16	%		6.45	%		7.81	%		9.37	%		11.40	%
Tangible Common Equity Ratio (b)		4.79	%		4.06	%		5.47	%		7.11	%		9.15	%
Net Loans to Assets		58.25	%		57.59	%		57.04	%		54.16	%		55.56	%
Loans to Deposits		67.52	%		67.28	%		65.49	%		62.40	%		65.72	%
Asset Quality
Non-performing loans	$	14,803		$	12,976		$	14,107		$	14,046		$	16,195
Non-performing assets		14,876			13,042			14,107			14,046			16,195
Loans 30—89 days delinquent		9,605			6,659			8,716			7,304			8,891
Charged-off loans		754			783			177			1,590			470
Recoveries		184			178			135			149			157
Net Charge-offs		570			605			42			1,441			313
Annualized Net Charge-offs to
Average Net Loans Outstanding		0.10	%		0.10	%		0.01	%		0.25	%		0.06	%
Allowance for Credit Losses to Total Loans		1.12	%		1.14	%		1.16	%		1.17	%		1.26	%
Non-performing Loans to Total Loans		0.62	%		0.54	%		0.59	%		0.61	%		0.69	%
Allowance to Non-performing Loans		182.25	%		210.25	%		194.61	%		192.33	%		181.45	%
Non-performing Assets to Total Assets		0.36	%		0.32	%		0.34	%		0.33	%		0.39	%

(a) December 31, 2022 ratio is estimated    

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

	For the Three Months Ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,
End of Period Loan Balances	2022		2022		2022		2022		2021
Commercial real estate	$	1,028,050	$	1,028,484	$	1,040,243	$	1,000,972	$	1,011,891
Commercial		293,643		296,932		285,981		298,903		313,836
Residential real estate		475,791		474,014		464,489		455,501		453,635
HELOC		132,179		132,267		129,392		128,221		127,433
Consumer		221,260		222,706		218,219		192,586		189,522
Agricultural loans		246,937		239,081		230,477		224,845		232,365
Total, excluding net deferred loan costs	$	2,397,860	$	2,393,484	$	2,368,801	$	2,301,028	$	2,328,682

	For the Three Months Ended														For the Twelve Months Ended
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,		Dec. 31,			Dec. 31,
Noninterest Income	2022			2022			2022			2022			2021		2022			2021
Service charges on deposit accounts	$	1,203		$	1,229		$	1,139		$	1,145		$	1,138	$	4,716		$	3,660
Bank owned life insurance income, including death benefits		590			406			405			409			414		1,810			1,338
Trust fees		2,373			2,370			2,376			2,519			2,509		9,638			9,438
Insurance agency commissions		1,133			1,136			1,086			1,047			706		4,402			3,456
Security gains (losses), including fair value changes for equity securities		(366	)		(17	)		(60	)		(11	)		25		(454	)		1,004
Retirement plan consulting fees		337			332			323			397			378		1,389			1,421
Investment commissions		508			424			557			694			611		2,183			2,276
Net gains on sale of loans		242			326			365			1,129			1,728		2,062			8,285
Other mortgage banking fee income (loss), net		98			94			39			60			2		291			(136	)
Debit card and EFT fees		1,407			1,463			1,528			1,416			1,424		5,814			5,144
Other noninterest income		675			1,064			1,719			8,893			603		12,351			2,307
Total Noninterest Income	$	8,200		$	8,827		$	9,477		$	17,698		$	9,538	$	44,202		$	38,193

	For the Three Months Ended										For the Twelve Months Ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,		Dec. 31,
Noninterest Expense	2022		2022		2022		2022		2021		2022		2021
Salaries and employee benefits	$	11,385	$	10,724	$	11,073	$	11,831	$	10,230	$	45,013	$	39,393
Occupancy and equipment		2,753		3,028		2,918		2,680		2,422		11,379		8,486
FDIC insurance and state and local taxes		1,010		1,017		979		945		772		3,951		2,859
Professional fees		938		985		1,056		3,135		1,296		6,114		4,191
Merger related costs		584		872		674		1,940		6,521		4,070		7,109
Advertising		472		596		487		392		776		1,947		1,859
Intangible amortization		702		432		419		420		414		1,973		1,362
Core processing charges		742		738		1,123		745		880		3,348		3,198
Other noninterest expenses		2,509		3,007		2,732		8,368		4,350		16,616		10,719
Total Noninterest Expense	$	21,095	$	21,399	$	21,461	$	30,456	$	27,661	$	94,411	$	79,176

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

	Three Months Ended							Three Months Ended
	December 31, 2022							December 31, 2021
	AVERAGE				YIELD/			AVERAGE				YIELD/
	BALANCE		INTEREST (1)		RATE (1)			BALANCE		INTEREST (1)		RATE (1)
EARNING ASSETS
Loans (2)	$	2,394,872	$	29,092		4.86	%	$	2,187,770	$	24,946		4.52	%
Taxable securities		1,105,545		5,556		2.01			892,563		3,948		1.75
Tax-exempt securities (2)		453,917		3,580		3.15			410,016		3,397		3.29
Other investments		33,901		326		3.85			26,475		142		2.13
Federal funds sold and other		59,108		336		2.27			114,496		39		0.14
Total earning assets		4,047,343		38,890		3.84			3,631,320		32,472		3.55
Nonearning assets		33,154							248,581
Total assets	$	4,080,497						$	3,879,901
INTEREST-BEARING LIABILITIES
Time deposits	$	370,914	$	1,261		1.36	%	$	379,786	$	697		0.73	%
Brokered time deposits		115,021		1,034		3.60			0		0		0.00
Savings deposits		871,584		879		0.40			736,732		202		0.11
Demand deposits - interest bearing		1,301,475		3,805		1.17			1,367,921		475		0.14
Short term borrowings		85,641		777		3.63			0		2		0.00
Long term borrowings		88,138		922		4.18			80,799		610		3.00
Total interest-bearing liabilities	$	2,832,773		8,678		1.23		$	2,565,238		1,986		0.31
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS’ EQUITY
Demand deposits - noninterest bearing		938,881							851,130
Other liabilities		43,904							31,824
Stockholders’ equity		264,939							431,709
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY	$	4,080,497						$	3,879,901
Net interest income and interest rate spread			$	30,212		2.61	%			$	30,486		3.24	%
Net interest margin						2.99	%						3.33	%

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

(2) For 2022, adjustments of $72 thousand and $707 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $86 thousand and $701 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.

	Twelve Months Ended							Twelve Months Ended
	December 31, 2022							December 31, 2021
	AVERAGE				YIELD/			AVERAGE				YIELD/
	BALANCE		INTEREST (1)		RATE (1)			BALANCE		INTEREST (1)		RATE (1)
EARNING ASSETS
Loans (2)	$	2,358,724	$	108,100		4.58	%	$	2,041,347	$	95,180		4.66	%
Taxable securities		1,081,966		20,843		1.93			617,475		11,399		1.85
Tax-exempt securities (2)		465,855		14,952		3.21			348,627		12,027		3.45
Other investments		33,153		871		2.63			21,912		498		2.27
Federal funds sold and other		76,253		684		0.90			180,718		200		0.11
Total earning assets		4,015,951		145,450		3.62			3,210,079		119,304		3.72
Nonearning assets		128,757							195,805
Total assets	$	4,144,708						$	3,405,884
INTEREST-BEARING LIABILITIES
Time deposits	$	360,687	$	3,044		0.84	%	$	393,039	$	3,652		0.93	%
Brokered time deposits		56,965		1,240		2.18			11,737		75		0.64
Savings deposits		846,418		1,352		0.16			569,179		712		0.13
Demand deposits - interest bearing		1,392,058		7,449		0.54			1,240,014		2,336		0.19
Short term borrowings		55,668		1,408		2.53			3,957		7		0.28
Long term borrowings		87,972		3,427		3.90			70,057		1,687		2.40
Total interest-bearing liabilities	$	2,799,768		17,920		0.64		$	2,287,983		8,469		0.37
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS’ EQUITY
Demand deposits - noninterest bearing	$	959,294						$	714,978
Other liabilities		34,180							23,498
Stockholders’ equity		351,466							379,425
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY	$	4,144,708						$	3,405,884
Net interest income and interest rate spread			$	127,530		2.98	%			$	110,835		3.35	%
Net interest margin						3.18	%						3.45	%

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

(2) For 2022, adjustments of $310 thousand and $3.1 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2021, adjustments of $360 thousand and $2.5 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 Twelve Months Ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,		Dec. 31,
	2022		2022		2022		2022		2021		2022		2021
Total Assets	$	4,082,200	$	4,120,022	$	4,114,364	$	4,205,855	$	4,142,749	$	4,082,200	$	4,142,749
Less Goodwill and other intangibles		101,666		102,368		101,767		102,187		102,606		101,666		102,606
Tangible Assets	$	3,980,534	$	4,017,654	$	4,012,597	$	4,103,668	$	4,040,143	$	3,980,534	$	4,040,143
Average Assets		4,144,708		4,164,855		4,155,719		4,178,618		3,879,901		4,144,708		3,405,884
Less average Goodwill and other intangibles		102,126		101,981		102,042		102,462		84,580		102,151		58,111
Average Tangible Assets	$	4,042,582	$	4,062,874	$	4,053,677	$	4,076,156	$	3,795,321	$	4,042,557	$	3,347,773

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity

	For the Three Months Ended										For the Twelve Months Ended
	Dec. 31,		Sept. 30,		June 30,		March 31,		Dec. 31,		Dec. 31,		Dec. 31,
	2022		2022		2022		2022		2021		2022		2021
Stockholders’ Equity	$	292,295	$	265,619	$	321,449	$	393,886	$	472,432	$	292,295	$	472,432
Less Goodwill and other intangibles		101,666		102,368		101,767		102,187		102,606		101,666		102,606
Tangible Common Equity	$	190,629	$	163,251	$	219,682	$	291,699	$	369,826	$	190,629	$	369,826
Average Stockholders’ Equity		264,939		330,300		354,981		456,206		431,709		351,466		379,425
Less average Goodwill and other intangibles		102,126		101,981		102,042		102,462		84,580		102,151		58,111
Average Tangible Common Equity	$	162,813	$	228,319	$	252,939	$	353,744	$	347,129	$	249,315	$	321,314

Reconciliation of Net Income, Less Merger and Certain Items    

	For the Three Months Ended															For the Twelve Months Ended
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2022			2022			2022			2022			2021			2022			2021
Net income	$	13,356		$	15,446		$	15,951		$	15,844		$	5,702		$	60,597		$	51,844
Acquisition related costs - after tax		475			711			564			1,540			5,232			3,290			5,731
Acquisition related provision - after tax		0			0			0			0			3,846			0			3,846
Lawsuit settlement income - after tax		0			0			0			(6,616	)		0			(6,616	)		0
Lawsuit settlement contingent legal expense - after tax		0			0			0			1,639			0			1,639			0
Charitable donation - after tax		0			0			0			4,740			0			4,740			0
FHLB prepayment penalties - after tax		0			0			0			0			1,425			0			1,682
Net loss (gain) on asset/security sales - after tax		268			4			(25	)		97			134			344			(598	)
Gain on sale of credit card portfolio - after tax		0			0			0			0			(189	)		0			(189	)
Net income - Adjusted	$	14,099		$	16,161		$	16,490		$	17,244		$	16,150		$	63,994		$	62,316
Diluted EPS excluding merger and one-time items	$	0.42		$	0.48		$	0.49		$	0.51		$	0.50		$	1.89		$	2.13
Return on Average Assets excluding merger and certain items (Annualized)		1.36	%		1.55	%		1.59	%		1.65	%		1.65	%		1.54	%		1.83	%
Return on Average Equity excluding merger and certain items (Annualized)		21.29	%		19.57	%		18.58	%		15.12	%		14.84	%		18.21	%		16.42	%
Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)		34.64	%		28.31	%		26.08	%		19.50	%		18.46	%		25.67	%		19.39	%

Efficiency ratio excluding certain items    

	For the Three Months Ended															For the Twelve Months Ended
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2022			2022			2022			2022			2021			2022			2021
Net interest income, tax equated	$	30,212		$	32,636		$	32,583		$	32,100		$	30,486		$	127,530		$	110,835
Noninterest income		8,200			8,827			9,477			17,698			9,538			44,202			38,193
Legal settlement income		0			0			0			(8,375	)		0			(8,375	)		0
Net loss (gain) on asset/security sales		338			6			(32	)		123			170			435			(757	)
Gain on sale of credit card portfolio		0			0			0			0			(239	)		0			(239	)
Net interest income and noninterest income adjusted		38,750			41,469			42,028			41,546			39,955			163,792			148,032
Noninterest expense less intangible amortization		20,393			20,967			21,042			30,036			27,247			92,438			77,817
Charitable donation		0			0			0			6,000			0			6,000			0
Contingent legal settlement expense		0			0			0			2,075			0			2,075			0
Acquisition related costs		584			872			674			1,940			6,521			4,070			7,109
FHLB prepayment penalties		0			0			0			0			1,804			0			2,129
Noninterest income adjusted		19,809			20,095			20,368			20,021			18,922			80,293			68,579
Efficiency ratio excluding one-time items		51.12	%		48.46	%		48.46	%		48.19	%		47.36	%		49.02	%		46.33	%

Net interest margin excluding acquisition marks and PPP interest and fees    

	For the Three Months Ended															For the Twelve Months Ended
	Dec. 31,			Sept. 30,			June 30,			March 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2022			2022			2022			2022			2021			2022			2021
Net interest income, tax equated	$	30,212		$	32,636		$	32,583		$	32,100		$	30,486		$	127,530		$	110,835
Acquisition marks		209			246			381			957			496			1,793			932
PPP interest and fees		10			62			634			686			979			1,392			6,621
Adjusted and annualized net interest income		119,972			129,312			126,272			121,828			115,098			124,345			103,283
Average earning assets		4,047,343			4,065,085			4,015,385			3,931,506			3,631,320			4,015,951			3,210,079
Less PPP average balances		485			1,586			16,019			30,003			47,939			11,914			95,226
Adjusted average earning assets		4,046,858			4,063,499			3,999,366			3,901,503			3,583,381			4,004,037			3,114,853
Net interest margin excluding marks and PPP interest and fees		2.96	%		3.18	%		3.16	%		3.12	%		3.21	%		3.11	%		3.32	%