EX-99.1 2 d840514dex991.htm EX-99.1

Exhibit 99.1

October 23, 2024

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

EARNINGS FOR THE THIRD QUARTER OF 2024

| • |  | 167 consecutive quarters of profitability

| • |  | Strong commercial loan growth of $35.2 million, or 7.2% annualized, for the third quarter of 2024

| • |  | Overall loan growth of $43.1 million, or 5.3% annualized, for the third quarter of 2024

| • |  | Customer deposit growth of $81.1 million, or 7.7% annualized, for the third quarter of 2024

| • |  | Strong growth in fee-based businesses

| • |  | Wealth management assets under management have grown to $4.0 billion at September 30, 2024

CANFIELD, Ohio (October 23, 2024) – Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $8.5 million, or $0.23 per diluted share, for the quarter ended September 30, 2024, compared to $13.3 million, or $0.36 per diluted share, for the quarter ended September 30, 2023. Net income in the third quarter of 2024 was impacted by a single $12.5 million commercial credit backed by office space which resulted in a $4.4 million charge-off along with the establishment of a specific reserve on the credit in the amount of $1.2 million. The impact of this credit reduced third quarter results by $0.12 per diluted share.

Kevin J. Helmick, President and CEO, stated “Our third quarter performance was solid as we experienced strong loan and deposit growth, reflecting strengthening levels of underlying profitability. We produced outstanding loan growth for a second consecutive quarter along with great results from our fee-based business lines. Overall, we believe we are very well positioned to grow earnings in 2025, while navigating continued macro-level uncertainty.”

Balance Sheet

The Company’s total assets were $5.24 billion at September 30, 2024, an increase from $5.16 billion at June 30, 2024, and $5.08 billion at December 31, 2023. Loans increased $82.4 million from December 31, 2023 to $3.28 billion at September 30, 2024 and increased $43.1 million from June 30, 2024 to September 30, 2024. The 5.3% annualized loan growth from the second quarter of 2024 to the third quarter of 2024 was driven by strong commercial loan growth of $35.2 million. With a second consecutive quarter of positive loan growth, the Company now anticipates total loans to increase by approximately 2.8% - 3.0% for 2024. The Company remains committed to maintaining solid asset quality and prudent pricing standards, which is expected to contribute to higher overall profitability.

Securities available for sale totaled $1.29 billion at September 30, 2024, compared to $1.25 billion at June 30, 2024, and $1.30 billion at December 31, 2023. Gross unrealized losses on the portfolio totaled $189.4 million at September 30, 2024, a decrease from $242.3 million at June 30, 2024, and $217.1 million at December 31, 2023. While interest rates have started to decline, the Company still expects bond market volatility to continue for the remainder of 2024 and into 2025.

Total deposits increased to $4.36 billion at September 30, 2024, compared to $4.21 billion at June 30, 2024, and $4.18 billion at December 31, 2023. The increase since December 31, 2023, was driven by the acquisition of $74.9 in brokered deposits in the third quarter of 2024 and growth in customer deposits (non brokered) of $109.5 million. The increase since June 30, 2024, was driven by the brokered deposits and an increase in customer deposits of $81.1 million. The brokered deposits were used to pay down more expensive wholesale funding.

Total stockholders’ equity increased to $439.7 million at September 30, 2024, compared to $396.7 million at June 30, 2024, and $404.4 million at December 31, 2023. The increase from both prior periods has primarily been driven by a decrease in the unrealized losses on investment securities.

Credit Quality

The Company’s non-performing loans increased to $19.1 million at September 30, 2024, compared to $12.9 million at June 30, 2024, and $15.1 million at December 31, 2023. The increase resulted from the addition of the remaining $8.1 million balance of the single commercial credit discussed previously, offset by large declines in the balance of other non-performing loans. Non-performing loans to total loans were 0.58% at September 30, 2024, compared to 0.40% at June 30, 2024 and 0.47% at December 31, 2023. The Company’s loans which were 30-89 days delinquent were $15.6 million at September 30, 2024, or 0.47% of total loans. This is down significantly from the $18.5 million figure reported at June 30, 2024 and the $16.7 million figure from December 31, 2023.

The provision for credit losses and unfunded commitments totaled $7.0 million for the three months ended September 30, 2024, compared to $243,000 for the three months ended September 30, 2023. The increased provision for credit losses was primarily due to the increased level of net charge-offs and reserving activity resulting from the deterioration in the single credit. Strong loan growth during the quarter also increased provision costs during the quarter. Annualized net charge-offs as a percentage of average loans were 0.58% for the third quarter of 2024, compared to 0.05% for the third quarter of 2023. The allowance for credit losses to total loans was 1.10% at September 30, 2024, compared to 1.05% at June 30 2024, and 1.08% at December 31, 2023.

Net Interest Income

Net interest income for the third quarter of 2024 was $31.9 million compared to $33.8 million in the third quarter of 2023. Average interest earning assets increased to $4.89 billion in the third quarter of 2024 compared to $4.82 billion for the third quarter of 2023. The increase was driven by an increase in average loan balances of $88.3 million and an increase in fed funds sold and other of $51.1 million. These increases were offset by declines in the average balance of investment securities. The net interest margin declined to 2.66% for the third quarter of 2024 from 2.86% for the third quarter of 2023 and 2.71% for the second quarter of 2024. The year-over-year decline in net interest margin was due to higher funding costs outstripping the increase in yields on earning assets. The increase in funding costs has been due to the rapid increase in deposit rates due to intense competition for deposits, the Federal Reserve’s rate hiking cycle, and the runoff of noninterest bearing deposit balances which are being replaced with more costly wholesale funding. The decline in net interest margin compared to the second quarter of 2024 was due to the higher balance of fed funds sold and other along with a decline in the accretion of acquisition marks. The Federal Reserve’s 50 basis point cut in the fed funds rate at the end of September 2024 will have a positive impact on the Company’s net interest margin in the fourth quarter of 2024. Excluding acquisition marks and PPP interest, non-GAAP, the Company’s net interest margin was 2.48% in the third quarter of 2024 compared to 2.61% in the third quarter of 2023.

Noninterest Income

Noninterest income for the third quarter of 2024 was $12.3 million compared to $9.8 million for the third quarter of 2023. This increase was due to solid growth in the Company’s fee-based business lines along with gains from SBIC funds and a $444,000 gain on the purchase of $3.0 million of the Company’s subordinated debt.

Service charges on deposit accounts increased $280,000 to $2.0 million for the third quarter of 2024 compared to $1.7 million for the third quarter in 2023. The Company undertook a review of all service charges in late 2023 and early 2024 and implemented fee increases across deposit product lines in the second quarter of 2024. Trust fees increased by $217,000 to $2.5 million at September 30, 2024, from $2.3 million at September 30, 2023. The increase was due to continued growth in the business unit. Insurance agency commissions grew to $1.4 million in the third quarter of 2024 from $1.1 million in the third quarter of 2023. The increase has been driven by strong growth in fixed annuity sales. Losses on the sale of securities totaled $403,000 in the third quarter of 2024 compared to losses on the sale of securities of $624,000 during the third quarter of 2023. Net gains on the sale of loans increased to $506,000 in the third quarter of 2024 compared to $395,000 in the third quarter of 2023. Greater saleable volume drove this increase. Other mortgage banking fee income was a loss of $168,000 for the third quarter compared to income of $185,000 during the third quarter of 2023. The decline in income was due to an impairment charge on the Company’s higher coupon mortgage servicing right tranches in the third quarter of 2024. Debit card income grew to $2.0 million in the third quarter of 2024 from $1.8 million in the third quarter of 2023 as better volumes were realized in the current period. Other noninterest income increased from $1.1 million in the third quarter of 2023 to $2.6 million in the third quarter of 2024. The Company recorded $854,000 more in SBIC income in the third quarter of 2024 compared to the same period in 2023. In addition, the Company purchased $3.0 million of its subordinated debt during the third quarter of 2024 recording a gain of $444,000. In the third quarter of 2023, the Company had no gains from the purchase of subordinated debt but instead recorded losses of $110,000 on assets held for sale.

Noninterest Expense

Noninterest expense totaled $27.1 million for the quarter ended September 30, 2024 compared to $27.7 million for the quarter ended September 30, 2023. The third quarter of 2023 included $268,000 of merger related charges. There were no merger related expenses during the third quarter of 2024. Salaries and employee benefits were $14.9 million in the third quarter of 2024 compared to $14.2 million in the third quarter of 2023. The increase was primarily driven by higher salaries associated with employee raises along with higher health care expenses. FDIC and state and local taxes decreased by $168,000 to $1.5 million for the third quarter of 2024 compared

to $1.6 million for the third quarter of 2023 due to lower FDIC premiums. Intangible amortization declined to $629,000 in the third quarter of 2024 from $725,000 for the third quarter of 2023. This decrease was driven by amortization from a prior acquisition running off. Other noninterest expense decreased $804,000 in the third quarter of 2024 to $3.4 million from $4.2 million in the third quarter of 2023. The primary reason for the decrease was due to a $785,000 charge incurred in 2023 for the settlement of a lawsuit.

Liquidity

At September 30, 2024, the Company had access to an additional $695.8 million of FHLB borrowing capacity, along with $250.0 million in available for sale securities that are available for additional pledging. The Company’s loan to deposit ratio was 75.2% at September 30, 2024 while the Company’s average deposit balance per account (excluding collateralized deposits) was $24,742 for the same period.

About Farmers National Banc Corp.

Founded in 1887, Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $5.2 billion in banking assets. Farmers National Banc Corp.’s wholly-owned subsidiaries are comprised of The Farmers National Bank of Canfield, a full-service national bank engaged in commercial and retail banking with 62 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 September 30, 2024 are $4.0 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 and efficiency ratio less certain items, 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 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; and the other factors contained in Farmers’ Annual Report on Form 10-K for the year ended December 31, 2023 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 |
|  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |  |  | 2024 |  |  | 2023 |  |  | Change |
Total interest income |  | $ | 57,923 |  |  | $ | 56,846 |  |  | $ | 55,054 |  |  | $ | 55,069 |  |  | $ | 54,229 |  |  | $ | 169,823 |  |  | $ | 158,266 |  |  |  | 7.3 | %
Total interest expense |  |  | 26,047 |  |  |  | 24,780 |  |  |  | 23,367 |  |  |  | 22,239 |  |  |  | 20,461 |  |  |  | 74,194 |  |  |  | 53,310 |  |  |  | 39.2 | %
Net interest income |  |  | 31,876 |  |  |  | 32,066 |  |  |  | 31,687 |  |  |  | 32,830 |  |  |  | 33,768 |  |  |  | 95,629 |  |  |  | 104,956 |  |  |  | -8.9 | %
Provision (credit) for credit losses |  |  | 7,008 |  |  |  | 1,112 |  |  |  | (449 | ) |  |  | 286 |  |  |  | 243 |  |  |  | 7,671 |  |  |  | 8,867 |  |  |  | -13.5 | %
Noninterest income |  |  | 12,340 |  |  |  | 9,606 |  |  |  | 8,357 |  |  |  | 12,156 |  |  |  | 9,831 |  |  |  | 30,302 |  |  |  | 29,705 |  |  |  | 2.0 | %
Acquisition related costs |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 452 |  |  |  | 268 |  |  |  | 0 |  |  |  | 5,022 |  |  |  | -100.0 | %
Other expense |  |  | 27,075 |  |  |  | 26,403 |  |  |  | 27,039 |  |  |  | 26,520 |  |  |  | 27,448 |  |  |  | 80,517 |  |  |  | 79,802 |  |  |  | 0.9 | %
Income before income taxes |  |  | 10,133 |  |  |  | 14,157 |  |  |  | 13,454 |  |  |  | 17,728 |  |  |  | 15,640 |  |  |  | 37,743 |  |  |  | 40,970 |  |  |  | -7.9 | %
Income taxes |  |  | 1,598 |  |  |  | 2,374 |  |  |  | 2,214 |  |  |  | 3,151 |  |  |  | 2,326 |  |  |  | 6,185 |  |  |  | 5,614 |  |  |  | 10.2 | %
Net income |  | $ | 8,535 |  |  | $ | 11,783 |  |  | $ | 11,240 |  |  | $ | 14,577 |  |  | $ | 13,314 |  |  | $ | 31,558 |  |  | $ | 35,356 |  |  |  | -10.7 | %
Average diluted shares outstanding |  |  | 37,567 |  |  |  | 37,487 |  |  |  | 37,479 |  |  |  | 37,426 |  |  |  | 37,379 |  |  |  | 37,495 |  |  |  | 37,533 |  |  |  |  |
Basic earnings per share |  |  | 0.23 |  |  |  | 0.32 |  |  |  | 0.30 |  |  |  | 0.39 |  |  |  | 0.36 |  |  |  | 0.85 |  |  |  | 0.94 |  |  |  |  |
Diluted earnings per share |  |  | 0.23 |  |  |  | 0.31 |  |  |  | 0.30 |  |  |  | 0.39 |  |  |  | 0.36 |  |  |  | 0.84 |  |  |  | 0.94 |  |  |  |  |
Cash dividends per share |  |  | 0.17 |  |  |  | 0.17 |  |  |  | 0.17 |  |  |  | 0.17 |  |  |  | 0.17 |  |  |  | 0.51 |  |  |  | 0.51 |  |  |  |  |
Performance Ratios |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net Interest Margin (Annualized) |  |  | 2.66 | % |  |  | 2.71 | % |  |  | 2.70 | % |  |  | 2.78 | % |  |  | 2.86 | % |  |  | 2.69 | % |  |  | 2.95 | % |  |  |  |
Efficiency Ratio (Tax equivalent basis) |  |  | 58.47 | % |  |  | 60.80 | % |  |  | 61.54 | % |  |  | 57.84 | % |  |  | 60.11 | % |  |  | 60.24 | % |  |  | 59.70 | % |  |  |  |
Return on Average Assets (Annualized) |  |  | 0.66 | % |  |  | 0.93 | % |  |  | 0.90 | % |  |  | 1.17 | % |  |  | 1.06 | % |  |  | 0.83 | % |  |  | 0.93 | % |  |  |  |
Return on Average Equity (Annualized) |  |  | 8.18 | % |  |  | 12.15 | % |  |  | 11.47 | % |  |  | 17.98 | % |  |  | 14.49 | % |  |  | 10.51 | % |  |  | 12.79 | % |  |  |  |
Other Performance Ratios (Non-GAAP) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on Average Tangible Assets |  |  | 0.69 | % |  |  | 0.97 | % |  |  | 0.93 | % |  |  | 1.22 | % |  |  | 1.09 | % |  |  | 0.86 | % |  |  | 0.97 | % |  |  |  |
Return on Average Tangible Equity |  |  | 14.94 | % |  |  | 23.74 | % |  |  | 21.88 | % |  |  | 43.77 | % |  |  | 30.29 | % |  |  | 19.95 | % |  |  | 26.80 | % |  |  |  |

Consolidated Statements of Financial Condition |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Sept. 30, |  |  | June 30, |  |  | March 31, |  |  | Dec. 31, |  |  | Sept. 30, |
|  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 189,136 |  |  | $ | 180,987 |  |  | $ | 148,630 |  |  | $ | 103,658 |  |  | $ | 93,923 |
Debt securities available for sale |  |  | 1,293,350 |  |  |  | 1,246,730 |  |  |  | 1,270,149 |  |  |  | 1,299,701 |  |  |  | 1,210,736 |
Other investments |  |  | 33,617 |  |  |  | 37,594 |  |  |  | 34,619 |  |  |  | 35,311 |  |  |  | 35,342 |
Loans held for sale |  |  | 2,852 |  |  |  | 2,577 |  |  |  | 1,854 |  |  |  | 3,711 |  |  |  | 1,910 |
Loans |  |  | 3,280,517 |  |  |  | 3,237,369 |  |  |  | 3,181,318 |  |  |  | 3,198,127 |  |  |  | 3,168,554 |
Less allowance for credit losses |  |  | 36,186 |  |  |  | 33,991 |  |  |  | 33,159 |  |  |  | 34,440 |  |  |  | 34,753 |
Net Loans |  |  | 3,244,331 |  |  |  | 3,203,378 |  |  |  | 3,148,159 |  |  |  | 3,163,687 |  |  |  | 3,133,801 |
Other assets |  |  | 473,217 |  |  |  | 485,587 |  |  |  | 476,599 |  |  |  | 472,282 |  |  |  | 495,451 |
Total Assets |  | $ | 5,236,503 |  |  | $ | 5,156,853 |  |  | $ | 5,080,010 |  |  | $ | 5,078,350 |  |  | $ | 4,971,163 |
Liabilities and Stockholders’ Equity |  |  |  |
Deposits |  |  |  |
Noninterest-bearing |  | $ | 969,682 |  |  | $ | 968,693 |  |  | $ | 977,475 |  |  | $ | 1,026,630 |  |  | $ | 1,039,524 |
Interest-bearing |  |  | 3,317,223 |  |  |  | 3,237,142 |  |  |  | 3,220,650 |  |  |  | 3,150,756 |  |  |  | 3,217,869 |
Brokered time deposits |  |  | 74,932 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 254,257 |
Total deposits |  |  | 4,361,837 |  |  |  | 4,205,835 |  |  |  | 4,198,125 |  |  |  | 4,177,386 |  |  |  | 4,511,650 |
Other interest-bearing liabilities |  |  | 371,038 |  |  |  | 494,890 |  |  |  | 433,777 |  |  |  | 443,663 |  |  |  | 88,550 |
Other liabilities |  |  | 63,950 |  |  |  | 59,434 |  |  |  | 51,082 |  |  |  | 52,886 |  |  |  | 54,981 |
Total liabilities |  |  | 4,796,825 |  |  |  | 4,760,159 |  |  |  | 4,682,984 |  |  |  | 4,673,935 |  |  |  | 4,655,181 |
Stockholders’ Equity |  |  | 439,678 |  |  |  | 396,694 |  |  |  | 397,026 |  |  |  | 404,415 |  |  |  | 315,982 |
Total Liabilities and Stockholders’ Equity |  | $ | 5,236,503 |  |  | $ | 5,156,853 |  |  | $ | 5,080,010 |  |  | $ | 5,078,350 |  |  | $ | 4,971,163 |
Period-end shares outstanding |  |  | 37,574 |  |  |  | 37,575 |  |  |  | 37,546 |  |  |  | 37,503 |  |  |  | 37,489 |
Book value per share |  | $ | 11.70 |  |  | $ | 10.56 |  |  | $ | 10.57 |  |  | $ | 10.78 |  |  | $ | 8.43 |
Tangible book value per share (Non-GAAP)* |  |  | 6.69 |  |  |  | 5.53 |  |  |  | 5.52 |  |  |  | 5.71 |  |  |  | 3.33 |

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

|  | For the Three Months Ended |  |  | For the Nine Months Ended |
|  | Sept. 30, |  |  | June 30, |  |  | March 31, |  |  | Dec. 31, |  |  | Sept. 30, |  |  | Sept. 30, |  |  | Sept. 30, |
Capital and Liquidity |  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Common Equity Tier 1 Capital Ratio (a) |  |  | 10.96 | % |  |  | 10.94 | % |  |  | 10.88 | % |  |  | 10.61 | % |  |  | 10.37 | % |  |  |  |  |  |  |  |
Total Risk Based Capital Ratio (a) |  |  | 14.35 | % |  |  | 14.42 | % |  |  | 14.38 | % |  |  | 14.06 | % |  |  | 13.83 | % |  |  |  |  |  |  |  |
Tier 1 Risk Based Capital Ratio (a) |  |  | 11.44 | % |  |  | 11.43 | % |  |  | 11.37 | % |  |  | 11.10 | % |  |  | 10.86 | % |  |  |  |  |  |  |  |
Tier 1 Leverage Ratio (a) |  |  | 8.22 | % |  |  | 8.26 | % |  |  | 8.19 | % |  |  | 8.02 | % |  |  | 7.84 | % |  |  |  |  |  |  |  |
Equity to Asset Ratio |  |  | 8.40 | % |  |  | 7.69 | % |  |  | 7.82 | % |  |  | 7.96 | % |  |  | 6.36 | % |  |  |  |  |  |  |  |
Tangible Common Equity Ratio (b) |  |  | 4.98 | % |  |  | 4.18 | % |  |  | 4.24 | % |  |  | 4.38 | % |  |  | 2.61 | % |  |  |  |  |  |  |  |
Net Loans to Assets |  |  | 61.96 | % |  |  | 62.12 | % |  |  | 61.97 | % |  |  | 62.30 | % |  |  | 63.04 | % |  |  |  |  |  |  |  |
Loans to Deposits |  |  | 75.21 | % |  |  | 76.97 | % |  |  | 75.78 | % |  |  | 76.56 | % |  |  | 70.23 | % |  |  |  |  |  |  |  |
Asset Quality |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-performing loans |  | $ | 19,076 |  |  | $ | 12,870 |  |  | $ | 11,951 |  |  | $ | 15,063 |  |  | $ | 18,368 |  |  |  |  |  |  |  |  |
Non-performing assets |  |  | 19,137 |  |  |  | 12,975 |  |  |  | 12,215 |  |  |  | 15,321 |  |  |  | 18,522 |  |  |  |  |  |  |  |  |
Loans 30 - 89 days delinquent |  |  | 15,562 |  |  |  | 18,546 |  |  |  | 14,069 |  |  |  | 16,705 |  |  |  | 13,314 |  |  |  |  |  |  |  |  |
Charged-off loans |  |  | 5,116 |  |  |  | 661 |  |  |  | 1,282 |  |  |  | 972 |  |  |  | 525 |  |  |  | 7,059 |  |  |  | 1,965 |
Recoveries |  |  | 504 |  |  |  | 98 |  |  |  | 271 |  |  |  | 172 |  |  |  | 139 |  |  |  | 873 |  |  |  | 509 |
Net Charge-offs |  |  | 4,612 |  |  |  | 563 |  |  |  | 1,011 |  |  |  | 800 |  |  |  | 386 |  |  |  | 6,186 |  |  |  | 1,456 |
Annualized Net Charge-offs to Average Net Loans |  |  | 0.58 | % |  |  | 0.07 | % |  |  | 0.13 | % |  |  | 0.10 | % |  |  | 0.05 | % |  |  | 0.26 | % |  |  | 0.06 | %
Allowance for Credit Losses to Total Loans |  |  | 1.10 | % |  |  | 1.05 | % |  |  | 1.04 | % |  |  | 1.08 | % |  |  | 1.10 | % |  |  |  |  |  |  |  |
Non-performing Loans to Total Loans |  |  | 0.58 | % |  |  | 0.40 | % |  |  | 0.38 | % |  |  | 0.47 | % |  |  | 0.58 | % |  |  |  |  |  |  |  |
Loans 30 - 89 Days Delinquent to Total Loans |  |  | 0.47 | % |  |  | 0.57 | % |  |  | 0.44 | % |  |  | 0.52 | % |  |  | 0.42 | % |  |  |  |  |  |  |  |
Allowance to Non-performing Loans |  |  | 189.69 | % |  |  | 264.11 | % |  |  | 277.46 | % |  |  | 228.64 | % |  |  | 189.20 | % |  |  |  |  |  |  |  |
Non-performing Assets to Total Assets |  |  | 0.37 | % |  |  | 0.25 | % |  |  | 0.24 | % |  |  | 0.30 | % |  |  | 0.37 | % |  |  |  |  |  |  |  |

(a) | September 30, 2024 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 |  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |
Commercial real estate |  | $ | 1,372,374 |  |  | $ | 1,348,675 |  |  | $ | 1,339,372 |  |  | $ | 1,335,806 |  |  | $ | 1,295,847 |
Commercial |  |  | 358,247 |  |  |  | 343,694 |  |  |  | 335,747 |  |  |  | 346,354 |  |  |  | 357,691 |
Residential real estate |  |  | 852,444 |  |  |  | 849,561 |  |  |  | 836,252 |  |  |  | 843,697 |  |  |  | 842,729 |
HELOC |  |  | 155,967 |  |  |  | 151,511 |  |  |  | 143,696 |  |  |  | 142,441 |  |  |  | 140,772 |
Consumer |  |  | 269,231 |  |  |  | 268,606 |  |  |  | 256,846 |  |  |  | 259,784 |  |  |  | 261,136 |
Agricultural loans |  |  | 261,773 |  |  |  | 265,035 |  |  |  | 260,425 |  |  |  | 261,288 |  |  |  | 261,738 |
Total, excluding net deferred loan costs |  | $ | 3,270,036 |  |  | $ | 3,227,082 |  |  | $ | 3,172,338 |  |  | $ | 3,189,370 |  |  | $ | 3,159,913 |

|  |  |  |  | For the Three Months Ended |  |  |  |
|  | Sept. 30, |  |  | June 30, |  |  | March 31, |  |  | Dec. 31, |  |  | Sept. 30, |
End of Period Customer Deposit Balances |  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |
Noninterest-bearing demand |  | $ | 969,682 |  |  | $ | 968,693 |  |  | $ | 977,474 |  |  | $ | 1,026,630 |  |  | $ | 1,039,524 |
Interest-bearing demand |  |  | 1,453,288 |  |  |  | 1,380,266 |  |  |  | 1,381,383 |  |  |  | 1,362,609 |  |  |  | 1,426,349 |
Money market |  |  | 676,664 |  |  |  | 677,058 |  |  |  | 646,308 |  |  |  | 593,975 |  |  |  | 588,043 |
Savings |  |  | 418,771 |  |  |  | 433,166 |  |  |  | 452,949 |  |  |  | 468,890 |  |  |  | 488,991 |
Certificate of deposit |  |  | 768,500 |  |  |  | 746,652 |  |  |  | 740,011 |  |  |  | 725,282 |  |  |  | 714,486 |
Total customer deposits |  | $ | 4,286,905 |  |  | $ | 4,205,835 |  |  | $ | 4,198,125 |  |  | $ | 4,177,386 |  |  | $ | 4,257,393 |

|  | 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 |  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Service charges on deposit accounts |  | $ | 1,992 |  |  | $ | 1,846 |  |  | $ | 1,583 |  |  | $ | 1,677 |  |  | $ | 1,712 |  |  | $ | 5,421 |  |  | $ | 4,646 |
Bank owned life insurance income, including death benefits |  |  | 688 |  |  |  | 652 |  |  |  | 707 |  |  |  | 617 |  |  |  | 694 |  |  |  | 2,046 |  |  |  | 1,825 |
Trust fees |  |  | 2,544 |  |  |  | 2,345 |  |  |  | 2,510 |  |  |  | 2,382 |  |  |  | 2,327 |  |  |  | 7,398 |  |  |  | 6,665 |
Insurance agency commissions |  |  | 1,416 |  |  |  | 1,255 |  |  |  | 1,528 |  |  |  | 1,540 |  |  |  | 1,116 |  |  |  | 4,199 |  |  |  | 3,904 |
Security gains (losses), including fair value changes for equity securities |  |  | (403 | ) |  |  | (124 | ) |  |  | (2,120 | ) |  |  | 19 |  |  |  | (624 | ) |  |  | (2,647 | ) |  |  | (490 | )
Retirement plan consulting fees |  |  | 677 |  |  |  | 623 |  |  |  | 617 |  |  |  | 631 |  |  |  | 650 |  |  |  | 1,918 |  |  |  | 1,837 |
Investment commissions |  |  | 476 |  |  |  | 478 |  |  |  | 432 |  |  |  | 589 |  |  |  | 520 |  |  |  | 1,386 |  |  |  | 1,389 |
Net gains on sale of loans |  |  | 506 |  |  |  | 417 |  |  |  | 297 |  |  |  | 1,280 |  |  |  | 395 |  |  |  | 1,219 |  |  |  | 1,111 |
Other mortgage banking fee income (loss), net |  |  | (168 | ) |  |  | 192 |  |  |  | 125 |  |  |  | 139 |  |  |  | 185 |  |  |  | 150 |  |  |  | 571 |
Debit card and EFT fees |  |  | 1,993 |  |  |  | 1,760 |  |  |  | 1,567 |  |  |  | 1,697 |  |  |  | 1,763 |  |  |  | 5,320 |  |  |  | 5,362 |
Other noninterest income |  |  | 2,619 |  |  |  | 162 |  |  |  | 1,111 |  |  |  | 1,585 |  |  |  | 1,093 |  |  |  | 3,892 |  |  |  | 2,885 |
Total Noninterest Income |  | $ | 12,340 |  |  | $ | 9,606 |  |  | $ | 8,357 |  |  | $ | 12,156 |  |  | $ | 9,831 |  |  | $ | 30,302 |  |  | $ | 29,705 |

|  | 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 |  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Salaries and employee benefits |  | $ | 14,874 |  |  | $ | 14,558 |  |  | $ | 15,069 |  |  | $ | 14,871 |  |  | $ | 14,233 |  |  | $ | 44,501 |  |  | $ | 42,503 |
Occupancy and equipment |  |  | 3,968 |  |  |  | 3,815 |  |  |  | 3,730 |  |  |  | 3,896 |  |  |  | 3,810 |  |  |  | 11,512 |  |  |  | 11,538 |
FDIC insurance and state and local taxes |  |  | 1,480 |  |  |  | 1,185 |  |  |  | 1,345 |  |  |  | 1,484 |  |  |  | 1,648 |  |  |  | 4,010 |  |  |  | 4,365 |
Professional fees |  |  | 1,084 |  |  |  | 1,194 |  |  |  | 1,254 |  |  |  | 1,004 |  |  |  | 1,043 |  |  |  | 3,532 |  |  |  | 3,347 |
Merger related costs |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 452 |  |  |  | 268 |  |  |  | 0 |  |  |  | 5,022 |
Advertising |  |  | 435 |  |  |  | 445 |  |  |  | 431 |  |  |  | 414 |  |  |  | 492 |  |  |  | 1,312 |  |  |  | 1,379 |
Intangible amortization |  |  | 629 |  |  |  | 630 |  |  |  | 688 |  |  |  | 578 |  |  |  | 725 |  |  |  | 1,947 |  |  |  | 2,856 |
Core processing charges |  |  | 1,186 |  |  |  | 1,099 |  |  |  | 1,135 |  |  |  | 1,057 |  |  |  | 1,274 |  |  |  | 3,420 |  |  |  | 3,582 |
Other noninterest expenses |  |  | 3,419 |  |  |  | 3,477 |  |  |  | 3,387 |  |  |  | 3,216 |  |  |  | 4,223 |  |  |  | 10,283 |  |  |  | 10,232 |
Total Noninterest Expense |  | $ | 27,075 |  |  | $ | 26,403 |  |  | $ | 27,039 |  |  | $ | 26,972 |  |  | $ | 27,716 |  |  | $ | 80,517 |  |  | $ | 84,824 |

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

|  | Three Months Ended |  |  | Three Months Ended |
|  | September 30, 2024 |  |  | September 30, 2023 |
|  | AVERAGE |  |  |  |  |  | YIELD/ |  |  | AVERAGE |  |  |  |  |  | YIELD/ |
|  | BALANCE |  |  | INTEREST (1) |  |  | RATE (1) |  |  | BALANCE |  |  | INTEREST (1) |  |  | RATE (1) |
EARNING ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans (2) |  | $ | 3,241,603 |  |  | $ | 47,060 |  |  |  | 5.81 | % |  | $ | 3,153,309 |  |  | $ | 43,928 |  |  |  | 5.57 | %
Taxable securities |  |  | 1,104,264 |  |  |  | 6,761 |  |  |  | 2.45 |  |  |  | 1,132,959 |  |  |  | 6,492 |  |  |  | 2.29 |
Tax-exempt securities (2) |  |  | 379,551 |  |  |  | 2,992 |  |  |  | 3.15 |  |  |  | 413,117 |  |  |  | 3,251 |  |  |  | 3.15 |
Other investments |  |  | 34,873 |  |  |  | 346 |  |  |  | 3.97 |  |  |  | 42,581 |  |  |  | 487 |  |  |  | 4.57 |
Federal funds sold and other |  |  | 130,053 |  |  |  | 1,371 |  |  |  | 4.22 |  |  |  | 78,922 |  |  |  | 751 |  |  |  | 3.81 |
Total earning assets |  |  | 4,890,344 |  |  |  | 58,530 |  |  |  | 4.79 |  |  |  | 4,820,888 |  |  |  | 54,909 |  |  |  | 4.56 |
Nonearning assets |  |  | 243,718 |  |  |  |  |  |  |  |  |  |  |  | 215,445 |  |  |  |  |  |  |  |  |
Total assets |  | $ | 5,134,062 |  |  |  |  |  |  |  |  |  |  | $ | 5,036,333 |  |  |  |  |  |  |  |  |
INTEREST-BEARING LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Time deposits |  | $ | 753,163 |  |  | $ | 7,584 |  |  |  | 4.03 | % |  | $ | 677,291 |  |  | $ | 5,308 |  |  |  | 3.13 | %
Brokered time deposits |  |  | 26,062 |  |  |  | 286 |  |  |  | 4.39 |  |  |  | 145,839 |  |  |  | 1,882 |  |  |  | 5.16 |
Savings deposits |  |  | 1,103,269 |  |  |  | 4,372 |  |  |  | 1.59 |  |  |  | 1,099,682 |  |  |  | 2,625 |  |  |  | 0.95 |
Demand deposits - interest bearing |  |  | 1,411,520 |  |  |  | 9,305 |  |  |  | 2.64 |  |  |  | 1,412,922 |  |  |  | 7,647 |  |  |  | 2.16 |
Total interest-bearing deposits |  |  | 3,294,014 |  |  |  | 21,547 |  |  |  | 2.62 |  |  |  | 3,335,734 |  |  |  | 17,462 |  |  |  | 2.09 |
Short term borrowings |  |  | 289,652 |  |  |  | 3,477 |  |  |  | 4.80 |  |  |  | 141,717 |  |  |  | 1,961 |  |  |  | 5.53 |
Long term borrowings |  |  | 87,368 |  |  |  | 1,023 |  |  |  | 4.68 |  |  |  | 88,494 |  |  |  | 1,038 |  |  |  | 4.69 |
Total borrowed funds |  |  | 377,020 |  |  |  | 4,500 |  |  |  | 4.77 |  |  |  | 230,211 |  |  |  | 2,999 |  |  |  | 5.21 |
Total interest-bearing liabilities |  |  | 3,671,034 |  |  |  | 26,047 |  |  |  | 2.84 |  |  |  | 3,565,945 |  |  |  | 20,461 |  |  |  | 2.30 |
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |
Demand deposits - noninterest bearing |  |  | 983,274 |  |  |  |  |  |  |  |  |  |  |  | 1,052,062 |  |  |  |  |  |  |  |  |
Other liabilities |  |  | 62,427 |  |  |  |  |  |  |  |  |  |  |  | 50,726 |  |  |  |  |  |  |  |  |
Stockholders’ equity |  |  | 417,327 |  |  |  |  |  |  |  |  |  |  |  | 367,600 |  |  |  |  |  |  |  |  |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |  | $ | 5,134,062 |  |  |  |  |  |  |  |  |  |  | $ | 5,036,333 |  |  |  |  |  |  |  |  |
Net interest income and interest rate spread |  |  |  |  |  | $ | 32,483 |  |  |  | 1.95 | % |  |  |  |  |  | $ | 34,448 |  |  |  | 2.26 | %
Net interest margin |  |  |  |  |  |  |  |  |  |  | 2.66 | % |  |  |  |  |  |  |  |  |  |  | 2.86 | %

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

(2) | For 2024, adjustments of $71 thousand and $536 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $90 thousand and $590 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, 2024 |  |  | September 30, 2023 |
|  | AVERAGE |  |  |  |  |  | YIELD/ |  |  | AVERAGE |  |  |  |  |  | YIELD/ |
|  | BALANCE |  |  | INTEREST (1) |  |  | RATE (1) |  |  | BALANCE |  |  | INTEREST (1) |  |  | RATE (1) |
EARNING ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans (2) |  | $ | 3,212,799 |  |  | $ | 138,746 |  |  |  | 5.76 | % |  | $ | 3,144,817 |  |  | $ | 127,293 |  |  |  | 5.40 | %
Taxable securities |  |  | 1,108,055 |  |  |  | 19,988 |  |  |  | 2.41 |  |  |  | 1,153,804 |  |  |  | 19,697 |  |  |  | 2.28 |
Tax-exempt securities (2) |  |  | 389,094 |  |  |  | 9,174 |  |  |  | 3.14 |  |  |  | 422,151 |  |  |  | 10,048 |  |  |  | 3.17 |
Other investments |  |  | 34,243 |  |  |  | 1,030 |  |  |  | 4.01 |  |  |  | 40,211 |  |  |  | 1,457 |  |  |  | 4.83 |
Federal funds sold and other |  |  | 93,601 |  |  |  | 2,740 |  |  |  | 3.90 |  |  |  | 78,224 |  |  |  | 1,911 |  |  |  | 3.26 |
Total earning assets |  |  | 4,837,792 |  |  |  | 171,678 |  |  |  | 4.73 |  |  |  | 4,839,207 |  |  |  | 160,406 |  |  |  | 4.42 |
Nonearning assets |  |  | 229,966 |  |  |  |  |  |  |  |  |  |  |  | 219,762 |  |  |  |  |  |  |  |  |
Total assets |  | $ | 5,067,758 |  |  |  |  |  |  |  |  |  |  | $ | 5,058,969 |  |  |  |  |  |  |  |  |
INTEREST-BEARING LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Time deposits |  | $ | 741,450 |  |  | $ | 21,865 |  |  |  | 3.93 | % |  | $ | 636,939 |  |  | $ | 13,171 |  |  |  | 2.76 | %
Brokered time deposits |  |  | 8,751 |  |  |  | 286 |  |  |  | 4.36 |  |  |  | 145,115 |  |  |  | 4,889 |  |  |  | 4.49 |
Savings deposits |  |  | 1,096,788 |  |  |  | 12,087 |  |  |  | 1.47 |  |  |  | 1,128,760 |  |  |  | 6,981 |  |  |  | 0.82 |
Demand deposits - interest bearing |  |  | 1,386,390 |  |  |  | 25,857 |  |  |  | 2.49 |  |  |  | 1,421,208 |  |  |  | 19,619 |  |  |  | 1.84 |
Total interest-bearing deposits |  |  | 3,233,379 |  |  |  | 60,095 |  |  |  | 2.48 |  |  |  | 3,332,022 |  |  |  | 44,660 |  |  |  | 1.79 |
Short term borrowings |  |  | 304,607 |  |  |  | 11,000 |  |  |  | 4.81 |  |  |  | 145,509 |  |  |  | 5,608 |  |  |  | 5.14 |
Long term borrowings |  |  | 88,304 |  |  |  | 3,098 |  |  |  | 4.68 |  |  |  | 88,382 |  |  |  | 3,043 |  |  |  | 4.59 |
Total borrowed funds |  |  | 392,911 |  |  |  | 14,098 |  |  |  | 4.78 |  |  |  | 233,891 |  |  |  | 8,651 |  |  |  | 4.93 |
Total interest-bearing liabilities |  |  | 3,626,290 |  |  |  | 74,193 |  |  |  | 2.73 |  |  |  | 3,565,913 |  |  |  | 53,311 |  |  |  | 1.99 |
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand deposits - noninterest bearing |  | $ | 983,576 |  |  |  |  |  |  |  |  |  |  | $ | 1,075,493 |  |  |  |  |  |  |  |  |
Other liabilities |  |  | 57,577 |  |  |  |  |  |  |  |  |  |  |  | 48,936 |  |  |  |  |  |  |  |  |
Stockholders’ equity |  |  | 400,315 |  |  |  |  |  |  |  |  |  |  |  | 368,627 |  |  |  |  |  |  |  |  |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |  | $ | 5,067,758 |  |  |  |  |  |  |  |  |  |  | $ | 5,058,969 |  |  |  |  |  |  |  |  |
Net interest income and interest rate spread |  |  |  |  |  | $ | 97,485 |  |  |  | 2.00 | % |  |  |  |  |  | $ | 107,095 |  |  |  | 2.43 | %
Net interest margin |  |  |  |  |  |  |  |  |  |  | 2.69 | % |  |  |  |  |  |  |  |  |  |  | 2.95 | %

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

(2) | For 2024, adjustments of $227 thousand and $1.6 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $268 thousand and $1.9 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, |
|  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Total Assets |  | $ | 5,236,503 |  |  | $ | 5,156,853 |  |  | $ | 5,080,010 |  |  | $ | 5,078,350 |  |  | $ | 4,971,163 |  |  | $ | 5,236,503 |  |  | $ | 4,971,163 |
Less Goodwill and other intangibles |  |  | 188,340 |  |  |  | 188,970 |  |  |  | 189,599 |  |  |  | 190,288 |  |  |  | 191,326 |  |  |  | 188,340 |  |  |  | 191,326 |
Tangible Assets |  | $ | 5,048,163 |  |  | $ | 4,967,883 |  |  | $ | 4,890,411 |  |  | $ | 4,888,062 |  |  | $ | 4,779,837 |  |  | $ | 5,048,163 |  |  | $ | 4,779,837 |
Average Assets |  |  | 5,134,062 |  |  |  | 5,044,516 |  |  |  | 5,023,966 |  |  |  | 4,980,314 |  |  |  | 5,058,969 |  |  |  | 5,067,758 |  |  |  | 5,058,969 |
Less average Goodwill and other intangibles |  |  | 188,755 |  |  |  | 189,382 |  |  |  | 190,040 |  |  |  | 191,108 |  |  |  | 191,804 |  |  |  | 189,391 |  |  |  | 192,709 |
Average Tangible Assets |  | $ | 4,945,307 |  |  | $ | 4,855,134 |  |  | $ | 4,833,926 |  |  | $ | 4,789,206 |  |  | $ | 4,867,165 |  |  | $ | 4,878,367 |  |  | $ | 4,866,260 |

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, |
|  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Stockholders’ Equity |  | $ | 439,678 |  |  | $ | 396,694 |  |  | $ | 397,026 |  |  | $ | 404,415 |  |  | $ | 315,982 |  |  | $ | 439,678 |  |  | $ | 315,982 |
Less Goodwill and other intangibles |  |  | 188,340 |  |  |  | 188,970 |  |  |  | 189,599 |  |  |  | 190,288 |  |  |  | 191,326 |  |  |  | 188,340 |  |  |  | 191,326 |
Tangible Common Equity |  | $ | 251,338 |  |  | $ | 207,724 |  |  | $ | 207,427 |  |  | $ | 214,127 |  |  | $ | 124,656 |  |  | $ | 251,338 |  |  | $ | 124,656 |
Average Stockholders’ Equity |  |  | 417,327 |  |  |  | 387,881 |  |  |  | 395,549 |  |  |  | 324,332 |  |  |  | 367,600 |  |  |  | 400,315 |  |  |  | 368,627 |
Less average Goodwill and other intangibles |  |  | 188,755 |  |  |  | 189,382 |  |  |  | 190,040 |  |  |  | 191,108 |  |  |  | 191,804 |  |  |  | 189,391 |  |  |  | 192,709 |
Average Tangible Common Equity |  | $ | 228,572 |  |  | $ | 198,499 |  |  | $ | 205,509 |  |  | $ | 133,224 |  |  | $ | 175,796 |  |  | $ | 210,924 |  |  | $ | 175,918 |

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, |
|  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net income |  | $ | 8,535 |  |  | $ | 11,783 |  |  | $ | 11,240 |  |  | $ | 14,577 |  |  | $ | 13,314 |  |  | $ | 31,558 |  |  | $ | 35,356 |
Acquisition related costs - after tax |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 358 |  |  |  | 234 |  |  |  | 0 |  |  |  | 4,037 |
Acquisition related provision - after tax |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 6,077 |
Employee severence - after tax |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 798 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Lawsuit settlement expense - after tax |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 620 |  |  |  | 0 |  |  |  | 620 |
Net (gain) on loan sale - after tax |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (723 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Net loss (gain) on asset/security sales - after tax |  |  | (32 | ) |  |  | 407 |  |  |  | 1,675 |  |  |  | 171 |  |  |  | 604 |  |  |  | 2,050 |  |  |  | 527 |
Net income - Adjusted |  | $ | 8,503 |  |  | $ | 12,190 |  |  | $ | 12,915 |  |  | $ | 15,181 |  |  | $ | 14,772 |  |  | $ | 33,608 |  |  | $ | 46,617 |
Diluted EPS excluding merger and certain items |  | $ | 0.23 |  |  | $ | 0.33 |  |  | $ | 0.34 |  |  | $ | 0.41 |  |  | $ | 0.40 |  |  | $ | 0.90 |  |  | $ | 1.24 |
Return on Average Assets excluding merger and certain items (Annualized) |  |  | 0.66 | % |  |  | 0.97 | % |  |  | 1.03 | % |  |  | 1.22 | % |  |  | 1.17 | % |  |  | 0.88 | % |  |  | 1.23 | %
Return on Average Equity excluding merger and certain items (Annualized) |  |  | 8.15 | % |  |  | 12.57 | % |  |  | 13.06 | % |  |  | 18.72 | % |  |  | 16.07 | % |  |  | 11.19 | % |  |  | 16.86 | %
Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized) |  |  | 14.88 | % |  |  | 24.56 | % |  |  | 25.14 | % |  |  | 45.58 | % |  |  | 33.61 | % |  |  | 21.24 | % |  |  | 35.33 | %

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, |
|  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net interest income, tax equated |  | $ | 32,483 |  |  | $ | 32,661 |  |  | $ | 32,341 |  |  | $ | 33,494 |  |  | $ | 34,448 |  |  | $ | 97,485 |  |  | $ | 107,095 |
Noninterest income |  |  | 12,340 |  |  |  | 9,606 |  |  |  | 8,357 |  |  |  | 12,156 |  |  |  | 9,831 |  |  |  | 30,302 |  |  |  | 29,705 |
Net (gain) on loan sale |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (915 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Net loss (gain) on asset/security sales |  |  | (41 | ) |  |  | 515 |  |  |  | 2,120 |  |  |  | 217 |  |  |  | 764 |  |  |  | 2,594 |  |  |  | 667 |
Net interest income and noninterest income adjusted |  |  | 44,782 |  |  |  | 42,782 |  |  |  | 42,818 |  |  |  | 44,952 |  |  |  | 45,043 |  |  |  | 130,381 |  |  |  | 137,467 |
Noninterest expense less intangible amortization |  |  | 26,446 |  |  |  | 25,773 |  |  |  | 26,351 |  |  |  | 26,394 |  |  |  | 26,991 |  |  |  | 78,570 |  |  |  | 81,968 |
Legal settlement expense |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 785 |  |  |  | 0 |  |  |  | 785 |
Employee severence |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,010 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Acquisition related costs |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 452 |  |  |  | 268 |  |  |  | 0 |  |  |  | 5,022 |
Noninterest expense adjusted |  |  | 26,446 |  |  |  | 25,773 |  |  |  | 26,351 |  |  |  | 24,932 |  |  |  | 25,938 |  |  |  | 78,570 |  |  |  | 76,161 |
Efficiency ratio excluding certain items |  |  | 59.05 | % |  |  | 60.24 | % |  |  | 61.54 | % |  |  | 55.46 | % |  |  | 57.58 | % |  |  | 60.26 | % |  |  | 55.40 | %

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, |
|  | 2024 |  |  | 2024 |  |  | 2024 |  |  | 2023 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net interest income, tax equated |  | $ | 32,483 |  |  | $ | 32,661 |  |  | $ | 32,341 |  |  | $ | 33,494 |  |  | $ | 34,448 |  |  | $ | 97,485 |  |  | $ | 107,095 |
Acquisition marks |  |  | 2,123 |  |  |  | 2,391 |  |  |  | 2,370 |  |  |  | 2,475 |  |  |  | 2,959 |  |  |  | 6,884 |  |  |  | 8,471 |
PPP interest and fees |  |  | 0 |  |  |  | 1 |  |  |  | 1 |  |  |  | 1 |  |  |  | 1 |  |  |  | 2 |  |  |  | 4 |
Adjusted and annualized net interest income |  |  | 121,440 |  |  |  | 121,076 |  |  |  | 119,880 |  |  |  | 124,072 |  |  |  | 125,952 |  |  |  | 120,799 |  |  |  | 131,493 |
Average earning assets |  |  | 4,890,344 |  |  |  | 4,825,532 |  |  |  | 4,796,922 |  |  |  | 4,816,409 |  |  |  | 4,820,888 |  |  |  | 4,837,792 |  |  |  | 4,839,207 |
Less PPP average balances |  |  | 118 |  |  |  | 171 |  |  |  | 213 |  |  |  | 229 |  |  |  | 247 |  |  |  | 167 |  |  |  | 262 |
Adjusted average earning assets |  |  | 4,890,226 |  |  |  | 4,825,361 |  |  |  | 4,796,709 |  |  |  | 4,816,180 |  |  |  | 4,820,641 |  |  |  | 4,837,625 |  |  |  | 4,838,945 |
Net interest margin excluding marks and PPP interest and fees |  |  | 2.48 | % |  |  | 2.51 | % |  |  | 2.50 | % |  |  | 2.58 | % |  |  | 2.61 | % |  |  | 2.50 | % |  |  | 2.72 | %