First Mid Bancshares, Inc. Announces Fourth Quarter 2022 Results

MATTOON, Ill., Jan. 26, 2023 (GLOBE NEWSWIRE) -- First Mid Bancshares, Inc. (NASDAQ:FMBH) (the "Company") today announced its financial results for the quarter and year ended December 31, 2022.

Highlights

• Net income of $20.6 million, or $1.01 diluted EPS
• Adjusted net income (non-GAAP) of $20.8 million, or $1.01 diluted EPS
• Strong loan growth of 2.2% for the quarter and 10.3% for the year (excluding acquired loans)
• Tangible book value per share increased 7.8% for the quarter
• Improved on already strong asset quality ratios reflecting strength if economic downturn transpires
• Board of Directors declares regular quarterly dividend of $0.23 per share

"Our fourth quarter results capped off a strong, but challenging year," said Joe Dively, Chairman and Chief Executive Officer. "For 2022, we delivered exceptional loan growth and excellent credit quality. Our noninterest income grew by over 7% for the year, driven by double digit growth in our wealth management and insurance businesses that more than offset lower mortgage banking revenues. We successfully integrated Jefferson Bank and Trust ("Jefferson") and met all of our acquisition related financial targets. While funding costs have increased at a faster pace than we anticipated placing pressure on margin, we have offset this challenge with stringent expense management and our relationship driven strategy to provide our expanded services to customers."         

Net Interest Income

Net interest income for the fourth quarter of 2022 decreased by $2.6 million, or 5.4% compared to the third quarter of 2022. Interest income increased by $4.0 million primarily driven by loan growth and higher interest rates. Interest expense increased by $6.5 million on increased rates and aggressive competition. Accretion income declined by $0.3 million for the quarter to $0.6 million.         

In comparison to the fourth quarter of 2021, net interest income increased $2.9 million, or 6.9%. The increase was primarily the result of organic loan growth, higher interest rates, and the acquisition of Jefferson.            

Net Interest Margin

Net interest margin, on a tax equivalent basis, was 3.07% for the fourth quarter of 2022, which was a decrease of 14 basis points compared to the prior quarter. Lower accretion income represented 2 basis points of the decline for the quarter. Earning asset yields increased by 30 basis points, while the average cost of funds increased 44 basis points.   

In comparison to the fourth quarter of last year, the net interest margin decreased 4 basis points. The primary reason for the decrease was due to PPP fee income being lower by $1.7 million compared to the fourth quarter of 2021. Earning asset yields increased 70 basis points, while the average cost of funds increased 74 basis points.

Loan Portfolio

Total loans ended the quarter at $4.83 billion, representing an increase of $105.9 million, or 2.2%, compared to the prior quarter. The growth in the quarter was primarily in farm real estate, CRE and C&I. While the pipeline remains solid, we do anticipate it softening based on the macroeconomic conditions. As we have experienced in the past, we expect seasonal line paydowns in agricultural operating lines during the first quarter of 2023.       

Asset Quality

First Mid's asset quality continues to be very strong and well positioned if an economic downturn occurs. Nonperforming loans decreased by $1.6 million in the period and the ratio of nonperforming loans to total loans decreased to 0.40%. The allowance for credit losses ("ACL") to nonperforming loans increased to 308.3%. As of December 31, 2022, the ACL increased by $0.3 million to $59.1 million with an ending ACL to total loans ratio of 1.22%. In addition, the Company has $7.0 million, or 15 basis points, of discount remaining on purchased loans. Provision expense was recorded in the amount of $0.8 million and net charge offs totaled $0.5 million. Special mention loans increased by $14.6 million, while substandard loans decreased by $3.0 million.

Deposits

Total deposits ended the quarter at $5.26 billion, which represented a decrease of $226.2 million, or 4.1%, from the prior quarter. The decrease was primarily in money market and noninterest bearing deposits. The Company has experienced increased competition from brokerage firms and community banks. In some cases, we are successful in maintaining the customer's funds within the Company, but off balance sheet by providing our own wealth management solutions. The Company's average rate on cost of funds was 1.00% compared to 0.56% in the prior quarter, and 0.26% versus the fourth quarter of 2021.                  

Noninterest Income

Noninterest income for the fourth quarter of 2022 was $18.2 million compared to $16.8 million in the third quarter of 2022. The increase was primarily driven by the seasonality in insurance and wealth management revenues from farmland sales. Wealth management and insurance revenue increased $1.4 million and $0.6 million, respectively, from the prior quarter. Mortgage banking represented the largest decline in the period.    

In comparison to the fourth quarter of 2021, noninterest income increased $0.1 million, or 0.5%. The increase was primarily driven by a $0.6 million increase in insurance and a $0.3 million increase in service charges, offsetting a $0.8 million decline in mortgage banking.      

Noninterest Expenses     

Noninterest expense for the fourth quarter of 2022 totaled $39.4 million, which was a decrease of $2.2 million compared to the prior quarter. The current quarter included $0.2 million of nonrecurring integration expenses for the Jefferson acquisition compared to $0.7 million in the third quarter. The Company has increased its emphasis in its ongoing effort to identify and implement cost savings initiatives to drive a more efficient operations.

In comparison to the fourth quarter of 2021, noninterest expenses increased $3.0 million. The increase was primarily driven by the additional expense related to the Jefferson acquisition and inflationary cost increases.   

The Company's efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the fourth quarter 2022 was 58.1% compared to 59.6% in the prior quarter and 55.8% for the same period last year.

Capital Levels, Dividend and Taxes

The Company's capital levels remained strong and comfortably above the "well capitalized" levels. Capital levels ended the period as follows:

Total capital to risk-weighted assets	15.20%
Tier 1 capital to risk-weighted assets	12.40%
Common equity tier 1 capital to risk-weighted assets	12.03%
Leverage ratio	9.62%

The Company's Board of Directors approved a regular quarterly dividend of $0.23 payable on March 1, 2023 for shareholders of record on February 15, 2023.

The Company's effective tax rate for the fourth quarter was 12.9% compared to 23.2% in the prior quarter. The primary reason for the lower tax rate was a $2.5 million credit in the current quarter. The credit was due to the removal of a deferred tax liability that was no longer applicable.

About First Mid: First Mid Bancshares, Inc. ("First Mid") is the parent company of First Mid Bank & Trust, N.A., First Mid Insurance Group, Inc., and First Mid Wealth Management Co. First Mid is a $6.7 billion community-focused organization that provides a full-suite of financial services including banking, wealth management, brokerage, Ag services, and insurance through a sizeable network of locations throughout Illinois, Missouri, and Texas, and a loan production office in the greater Indianapolis area. Together, our First Mid team takes great pride in providing solutions and services to the customers and communities and has done so over the last 157 years. More information about the Company is available on our website at www.firstmid.com.

Non-GAAP Measures: In addition to reports presented in accordance with generally accepted accounting principles ("GAAP"), this release contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures provide investors with information useful in understanding the Company's financial performance. Readers of this release, however, are urged to review these non-GAAP financial measures in conjunction with the GAAP results as reported. These non-GAAP financial measures are detailed as supplemental tables and include "Adjusted Net Income," "Adjusted Diluted EPS," "Efficiency Ratio," "Net Interest Margin, tax equivalent," and "Tangible Book Value per Common Share". While the Company believes these non-GAAP financial measures provide investors with a broader understanding of the capital adequacy, funding profile and financial trends of the Company, this information should be considered as supplemental in nature and not as a substitute to the related financial information prepared in accordance with GAAP. These non-GAAP financial measures may also differ from the similar measures presented by other companies.

Forward Looking Statements

This document may contain certain forward-looking statements about First Mid, such as discussions of First Mid's pricing and fee trends, credit quality and outlook, liquidity, new business results, expansion plans, anticipated expenses, and planned schedules. First Mid intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of First Mid, are identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. Actual results could differ materially from the results indicated by these statements because the realization of those results is subject to many risks and uncertainties, including, among other things, changes in interest rates; general economic conditions and those in the market areas of First Mid; legislative and/or regulatory changes; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of First Mid's loan or investment portfolios and the valuation of those investment portfolios; demand for loan products; deposit flows; competition, demand for financial services in the market areas of First Mid; accounting principles, policies and guidelines; the severity, magnitude and duration of the COVID-19 pandemic, the direct and indirect impact of such pandemic, including responses to the pandemic by the U.S., state and local governments, customers' businesses, the disruption of global, national, state and local economies associated with the COVID-19 pandemic, which could affect First Mid's liquidity and capital positions, impair the ability of First Mid's borrowers to repay outstanding loans, impair collateral values, and further increase the allowance for credit losses, and the impact of the COVID-19 pandemic on First Mid's financial results, including possible lost revenue and increased expenses (including cost of capital), as well as possible goodwill impairment charges. Additional information concerning First Mid, including additional factors and risks that could materially affect First Mid's financial results, are included in First Mid's filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. Except as required under the federal securities laws or the rules and regulations of the SEC, we do not undertake any obligation to update or review any forward-looking information, whether as a result of new information, future events or otherwise.

Investor Contact:

Aaron Holt

VP, Shareholder Relations

217-258-0463

[email protected]

Matt Smith

Chief Financial Officer

217-258-1528

[email protected]

 – Tables Follow –

FIRST MID BANCSHARES, INC.
Condensed Consolidated Balance Sheets
(In thousands, unaudited)
	As of
	December 31,				September 30,				December 31,
		2022				2022				2021
Assets
Cash and cash equivalents	$	152,433			$	160,954			$	168,602
Investment securities		1,223,720				1,235,505				1,431,299
Loans (including loans held for sale)		4,826,212				4,720,290				3,995,523
Less allowance for credit losses		(59,093	)			(58,777	)			(54,655	)
Net loans		4,767,119				4,661,513				3,940,868
Premises and equipment, net		90,473				90,659				81,484
Goodwill and intangibles, net		169,897				170,897				141,376
Bank owned life insurance		151,756				150,831				132,375
Other assets		188,817				181,024				90,578
Total assets	$	6,744,215			$	6,651,383			$	5,986,582
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing	$	1,256,514			$	1,334,686			$	1,246,673
Interest bearing		4,000,487				4,148,512				3,709,813
Total deposits		5,257,001				5,483,198				4,956,486
Repurchase agreement with customers		221,414				220,707				146,268
Other borrowings		465,071				181,232				86,446
Junior subordinated debentures		19,364				19,322				19,195
Subordinated debt		94,553				94,515				94,400
Other liabilities		53,657				51,694				49,893
Total liabilities		6,111,060				6,050,668				5,352,688
Total stockholders' equity		633,155				600,715				633,894
Total liabilities and stockholders' equity	$	6,744,215			$	6,651,383			$	5,986,582

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
	Three Months Ended							Twelve Months Ended
	December 31,							December 31,
		2022				2021			2022			2021
Interest income:
Interest and fees on loans	$	53,128			$	39,711		$	185,869		$	159,684
Interest on investment securities		7,285				6,500			29,380			22,916
Interest on federal funds sold & other deposits		296				88			642			413
Total interest income		60,709				46,299			215,891			183,013
Interest expense:
Interest on deposits		9,227				2,057			18,813			9,037
Interest on securities sold under agreements to repurchase		1,163				52			1,795			231
Interest on other borrowings		3,345				336			6,193			1,514
Interest on jr. subordinated debentures		315				125			868			541
Interest on subordinated debt		987				985			3,945			3,939
Total interest expense		15,037				3,555			31,614			15,262
Net interest income		45,672				42,744			184,277			167,751
Provision for loan losses		805				2,472			4,806			15,151
Net interest income after provision for loan		44,867				40,272			179,471			152,600
Non-interest income:
Wealth management revenues		6,201				6,261			22,492			20,407
Insurance commissions		4,719				4,150			21,622			18,927
Service charges		2,375				2,067			9,112			6,808
Securities gains, net		(48	)			36			33			124
Mortgage banking revenues		65				890			1,190			4,718
ATM/debit card revenue		3,209				3,074			12,422			11,974
Other		1,686				1,646			7,811			6,809
Total non-interest income		18,207				18,124			74,682			69,767
Non-interest expense:
Salaries and employee benefits		23,610				20,424			98,594			89,660
Net occupancy and equipment expense		6,126				5,712			24,257			21,546
Net other real estate owned (income) expense		87				315			330			3,866
FDIC insurance		464				406			1,805			1,604
Amortization of intangible assets		1,537				1,462			6,290			5,391
Stationary and supplies		298				311			1,295			1,161
Legal and professional expense		1,607				1,811			6,996			6,730
ATM/debit card expense		1,309				586			4,300			3,116
Marketing and donations		681				1,915			2,999			3,603
Other		3,653				3,452			15,995			18,902
Total non-interest expense		39,372				36,394			162,861			155,579
Income before income taxes		23,702				22,002			91,292			66,788
Income taxes		3,063				5,168			18,340			15,298
Net income	$	20,639			$	16,834		$	72,952		$	51,490
Per Share Information
Basic earnings per common share	$	1.01			$	0.93		$	3.62		$	2.88
Diluted earnings per common share		1.01				0.93			3.60			2.87
Weighted average shares outstanding		20,461,046				18,086,949			20,169,077			17,886,998
Diluted weighted average shares outstanding		20,535,220				18,135,380			20,243,635			17,939,007

FIRST MID BANCSHARES, INC.
Condensed Consolidated Statements of Income
(In thousands, except per share data, unaudited)
	For the Quarter Ended
	December 31,				September 30,			June 30,			March 31,				December 31,
		2022			2022			2022				2022			2021
Interest income:
Interest and fees on loans	$	53,128			$	49,278		$	43,555		$	39,908			$	39,711
Interest on investment securities		7,285				7,302			7,623			7,170				6,500
Interest on federal funds sold & other deposits		296				174			105			67				88
Total interest income		60,709				56,754			51,283			47,145				46,299
Interest expense:
Interest on deposits		9,227				4,915			2,523			2,148				2,057
Interest on securities sold under agreements to repurchase		1,163				428			137			67				52
Interest on other borrowings		3,345				1,927			645			276				336
Interest on jr. subordinated debentures		315				241			166			146				125
Interest on subordinated debt		987				986			986			986				985
Total interest expense		15,037				8,497			4,457			3,623				3,555
Net interest income		45,672				48,257			46,826			43,522				42,744
Provision for loan losses		805				142			907			2,952				2,472
Net interest income after provision for loan		44,867				48,115			45,919			40,570				40,272
Non-interest income:
Wealth management revenues		6,201				4,843			5,473			5,975				6,261
Insurance commissions		4,719				4,158			5,641			7,104				4,150
Service charges		2,375				2,445			2,236			2,056				2,067
Securities gains, net		(48	)			79			2			-				36
Mortgage banking revenues		65				355			289			444				890
ATM/debit card revenue		3,209				3,101			3,214			2,898				3,074
Other		1,686				1,810			1,704			2,611				1,646
Total non-interest income		18,207				16,791			18,559			21,088				18,124
Non-interest expense:
Salaries and employee benefits		23,610				24,877			25,768			24,302				20,424
Net occupancy and equipment expense		6,126				5,903			6,073			6,155				5,712
Net other real estate owned (income) expense		87				58			218			(33	)			315
FDIC insurance		464				479			436			426				406
Amortization of intangible assets		1,537				1,598			1,633			1,522				1,462
Stationary and supplies		298				361			325			311				311
Legal and professional expense		1,607				1,770			1,885			1,734				1,811
ATM/debit card expense		1,309				1,243			670			1,078				586
Marketing and donations		681				739			706			873				1,915
Other		3,653				4,521			3,801			4,020				3,452
Total non-interest expense		39,372				41,549			41,515			40,388				36,394
Income before income taxes		23,702				23,357			22,963			21,270				22,002
Income taxes		3,063				5,418			5,205			4,654				5,168
Net income	$	20,639			$	17,939		$	17,758		$	16,616			$	16,834
Per Share Information
Basic earnings per common share	$	1.01			$	0.88		$	0.87		$	0.86			$	0.93
Diluted earnings per common share		1.01				0.88			0.86			0.86				0.93
Weighted average shares outstanding		20,461,046				20,454,669			20,448,799			19,295,860				18,086,949
Diluted weighted average shares outstanding		20,535,220				20,535,215			20,529,523			19,358,457				18,135,380

FIRST MID BANCSHARES, INC.
Consolidated Financial Highlights and Ratios
(Dollars in thousands, except per share data)
(Unaudited)
		As of and for the Quarter Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
			2022				2022				2022				2022				2021
Loan Portfolio
Construction and land development		$	144,264			$	142,801			$	141,072			$	131,504			$	145,118
Farm real estate loans			410,327				360,424				350,159				280,993				279,272
1-4 Family residential properties			440,180				436,625				424,230				417,232				400,313
Multifamily residential properties			294,346				298,321				330,600				369,926				298,942
Commercial real estate			2,030,011				1,996,338				1,976,654				1,965,321				1,666,198
Loans secured by real estate			3,319,128				3,234,509				3,222,715				3,164,976				2,789,843
Agricultural operating loans			166,838				160,511				142,406				121,708				151,484
Commercial and industrial loans			1,082,960				1,064,033				1,036,987				935,454				832,008
Consumer loans			97,775				100,783				94,828				89,685				78,442
All other loans			159,511				160,454				151,727				142,738				143,746
Total loans			4,826,212				4,720,290				4,648,663				4,454,561				3,995,523
Deposit Portfolio
Non-interest bearing demand deposits		$	1,256,514			$	1,334,686			$	1,369,756			$	1,373,881			$	1,246,673
Interest bearing demand deposits			1,389,283				1,364,306				1,453,932				1,482,556				1,452,765
Savings deposits			636,699				657,592				683,944				685,228				626,523
Money Market			1,267,726				1,443,060				1,158,724				1,280,129				1,068,473
Time deposits			706,779				683,554				652,622				665,511				562,052
Total deposits			5,257,001				5,483,198				5,318,978				5,487,305				4,956,486
Asset Quality
Non-performing loans		$	19,170			$	20,812			$	19,981			$	22,465			$	22,036
Non-performing assets			23,539				25,143				24,190				27,269				27,055
Net charge-offs (recoveries)			489				440				307				(5	)			1,800
Allowance for credit losses to non-performing loans			308.26	%			282.42	%			295.66	%			260.29	%			248.03	%
Allowance for credit losses to total loans outstanding			1.22	%			1.25	%			1.27	%			1.31	%		1.37%1
Nonperforming loans to total loans			0.40	%			0.44	%			0.43	%			0.50	%			0.55	%
Nonperforming assets to total assets			0.35	%			0.38	%			0.36	%			0.41	%			0.45	%
Special Mention loans			39,853				25,298				35,849				64,160				66,235
Substandard and Doubtful loans			34,352				37,378				38,155				38,801				46,862
Common Share Data
Common shares outstanding			20,452,376				20,454,636				20,448,799				20,437,183				18,080,303
Book value per common share		$	30.96			$	29.37			$	30.63			$	32.61			$	35.06
Tangible book value per common share (2)			22.65				21.01				22.17				24.07				27.24
Market price of stock			32.08				31.97				35.67				38.49				42.79
Key Performance Ratios and Metrics
End of period earning assets		$	6,063,953			$	5,975,619			$	6,024,815			$	6,038,542			$	5,504,517
Average earning assets			6,000,106				6,063,061				5,975,821				5,817,752				5,539,819
Average rate on average earning assets (tax equivalent)			4.07	%			3.77	%			3.50	%			3.33	%			3.37	%
Average rate on cost of funds			1.00	%			0.56	%			0.30	%			0.26	%			0.26	%
Net interest margin (tax equivalent) (2)			3.07	%			3.21	%			3.20	%			3.07	%			3.11	%
Return on average assets			1.24	%			1.07	%			1.08	%			1.05	%			1.12	%
Return on average common equity			13.51	%			11.18	%			11.02	%			9.95	%			10.74	%
Efficiency ratio (tax equivalent) (2)			58.07	%			59.64	%			58.45	%			58.59	%			55.75	%
Full-time equivalent employees			1,043				1,051				1,025				1,050				965
1 Excludes Paycheck Protection Loans
2 Non-GAAP financial measure. Refer to reconciliation to the comparable GAAP measure.

FIRST MID BANCSHARES, INC.
Net Interest Margin
(In thousands, unaudited)
	For the Quarter Ended December 31, 2022
	QTD Average							Average
	Balance				Interest			Rate
INTEREST EARNING ASSETS
Interest bearing deposits	$	18,419			$	220		4.74%
Federal funds sold		7,507				68		3.59%
Certificates of deposits investments		1,470				8		2.16%
Investment Securities:
Taxable (total less municipals)		958,380				5,238		2.19%
Tax-exempt (Municipals)		278,128				2,592		3.73%
Loans (net of unearned income)		4,736,202				53,374		4.47%
Total interest earning assets		6,000,106				61,500		4.07%
NONEARNING ASSETS
Cash and due from banks		141,696
Premises and equipment		90,679
Other nonearning assets		486,896
Allowance for loan losses		(58,967	)
Total assets	$	6,660,410
INTEREST BEARING LIABILITIES
Demand deposits	$	2,582,114			$	7,014		1.08%
Savings deposits		648,084				178		0.11%
Time deposits		686,100				2,034		1.18%
Total interest bearing deposits		3,916,298				9,226		0.93%
Repurchase agreements		248,886				1,163		1.85%
FHLB advances		399,574				3,342		3.32%
Federal funds purchased		266				3		4.47%
Subordinated debt		94,528				987		4.14%
Jr. subordinated debentures		19,343				315		6.46%
Other debt		-				-		0.00%
Total borrowings		762,597				5,810		3.02%
Total interest bearing liabilities		4,678,895				15,036		1.27%
NONINTEREST BEARING LIABILITIES
Demand deposits		1,315,996			Average cost of funds			1.00%
Other liabilities		54,647
Stockholders' equity		610,872
Total liabilities & stockholders' equity	$	6,660,410
Net Interest Earnings / Spread					$	46,464		2.80%
Impact of Non-Interest Bearing Funds								0.27%
Tax effected yield on interest earning assets								3.07%

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, unaudited)
		As of and for the Quarter Ended
		December 31,				September 30,				June 30,				March 31,				December 31,
		2022				2022				2022				2022				2021
Net interest income as reported		$	45,672			$	48,257			$	46,826			$	43,522			$	42,744
Net interest income, (tax equivalent)			46,464				49,060				47,625				44,292				43,492
Average earning assets			6,000,106				6,063,061				5,975,821				5,817,752				5,539,819
Net interest margin (tax equivalent)			3.07	%			3.21	%			3.20	%			3.07	%			3.11	%
Common stockholder's equity		$	633,155			$	600,715			$	626,268			$	666,385			$	633,894
Goodwill and intangibles, net			169,897				170,897				172,871				174,499				141,376
Common shares outstanding			20,452				20,455				20,449				20,437				18,080
Tangible Book Value per common share		$	22.65			$	21.01			$	22.17			$	24.07			$	27.24

FIRST MID BANCSHARES, INC.
Reconciliation of Non-GAAP Financial Measures
(In thousands, except per share data, unaudited)
	As of and for the Quarter Ended
	December 31,				September 30,				June 30,				March 31,				December 31,
	2022				2022					2022				2022				2021
Adjusted earnings Reconciliation
Net Income - GAAP	$	20,639			$	17,939			$	17,758			$	16,616			$	16,834
Adjustments (post-tax): (1)
Acquisition ACL on non-PCD assets in provision expense		-				-				-				1,580				-
Integration and acquisition expenses		131				524				777				469				225
Total non-recurring adjustments (non-GAAP)	$	131			$	524			$	777			$	2,049			$	225
Adjusted earnings - non-GAAP	$	20,770			$	18,463			$	18,535			$	18,665			$	17,059
Adjusted diluted earnings per share (non-GAAP)	$	1.01			$	0.90			$	0.90			$	0.96			$	0.94
Efficiency Ratio Reconciliation
Noninterest expense - GAAP	$	39,372			$	41,549			$	41,515			$	40,388			$	36,394
Other real estate owned property income (expense)		(87	)			(58	)			(218	)			33				(315	)
Amortization of intangibles		(1,537	)			(1,598	)			(1,633	)			(1,522	)			(1,462	)
Branch optimization costs		-				-				-				-				-
integration and acquisition expenses		(166	)			(663	)			(983	)			(594	)			(285	)
Adjusted noninterest expense (non-GAAP)	$	37,582			$	39,230			$	38,681			$	38,305			$	34,332
Net interest income -GAAP	$	45,672			$	48,257			$	46,826			$	43,522			$	42,744
Effect of tax-exempt income (1)		792				803				799				770				748
Adjusted net interest income (non-GAAP)	$	46,464			$	49,060			$	47,625			$	44,292			$	43,492
Noninterest income - GAAP	$	18,207			$	16,791			$	18,559			$	21,088			$	18,124
Loss/(Gain) on sales of investment securities, net		48				(79	)			(2	)			-				(36	)
Adjusted noninterest income (non-GAAP)	$	18,255			$	16,712			$	18,557			$	21,088			$	18,088
Adjusted total revenue (non-GAAP)	$	64,719			$	65,772			$	66,182			$	65,380			$	61,580
Efficiency ratio (non-GAAP)		58.07	%			59.64	%			58.45	%			58.59	%			55.75	%
(1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%.