Exhibit 99.1

July 24, 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: [email protected]

FARMERS NATIONAL BANC CORP. REPORTS

EARNINGS FOR SECOND QUARTER OF 2024

 

•

Earnings per diluted share of $0.31 ($0.33 excluding certain items, non-GAAP) for the second quarter of 2024

 

•

166 consecutive quarters of profitability

 

•

Sequential net interest margin stabilization and expansion

 

•

Loan growth of $56.1 million, or 7.0% annualized, for the second quarter of 2024

 

•

Strong asset quality as non-performing loans to total loans were 0.40% at June 30, 2024

CANFIELD, Ohio (July 24, 2024) – Farmers National Banc Corp. (“Farmers” or the “Company”) (NASDAQ: FMNB) today announced net income of $11.8 million, or $0.31 per diluted share, for the three months ended June 30, 2024, compared to $15.0 million, or $0.40 per diluted share, for the three months ended June 30, 2023. Net income for the second quarter of 2024 included pretax items of $515,000 for the loss on the sale of investment securities and write downs on certain other assets held for sale. Excluding these items (non-GAAP), net income for the second quarter of 2024 was $12.2 million, or $0.33 per diluted share.

Kevin J. Helmick, President and CEO, stated “Our second quarter financial results are encouraging as we experienced strong loan growth along with sequential improvement in net interest income. We are pleased that asset quality also continues to be a source of strength. Over the near term, we remain focused on supporting the financial needs of our communities, while ensuring the Company is well positioned to create long-term value for our shareholders.”

Balance Sheet

Total assets were $5.16 billion at June 30, 2024, up from $5.08 billion at March 31, 2024, and $5.08 billion at December 31, 2023. Loans increased to $3.24 billion at June 30, 2024 compared to $3.18 billion at March 31, 2024 and $3.20 billion at December 31, 2023. While loan growth accelerated sharply in the second quarter of 2024, the Company still anticipates total loan growth of approximately 1.5% - 2% in 2024, reflecting the challenging economic and interest rate environment, as well as the Company’s focus on maintaining excellent asset quality.

The Company had securities available for sale of $1.25 billion at June 30, 2024, compared to $1.27 billion at March 31, 2024, and $1.30 billion at December 31, 2023. Gross unrealized losses on the portfolio totaled $242.3 million at June 30, 2024, an increase from $234.2 million at March 31, 2024, and $217.1 million at December 31, 2023. The Company expects bond market volatility to continue in 2024 and anticipates that it will continue to reduce the size of the securities portfolio via runoff to optimize profitability and enhance liquidity.

Total deposits increased to $4.21 billion at June 30, 2024, up slightly from $4.20 billion at March 31, 2024, and $4.18 billion at December 31, 2023. Noninterest bearing deposits declined to $968.7 million at June 30, 2024, from $977.5 million at March 31, 2024, and $1.03 billion at December 31, 2023 even as growth in interest bearing deposits offset this decline. Customers continue to seek higher rates on their deposit balances but the pace of activity continues to slow.

Total stockholders’ equity was $396.7 million at June 30, 2024, compared to $397.0 million at March 31, 2024, and $404.4 million at December 31, 2023. The decline since December has been driven by an increase in the unrealized losses on investment securities offset by earnings net of dividend payments to shareholders.

Credit Quality

The Company’s non-performing loans increased slightly to $12.9 million at June 30, 20024, compared to $12.0 million at March 31, 2024, but were down from $15.1 million at December 31, 2023. Non-performing loans to total loans were 0.40% at June 30, 2024, 0.38% at March 31, 2024, and 0.47% at December 31, 2023. Non-performing assets to total assets were 0.25% at June 30, 2024, 0.24% at March 31, 2024, and 0.30% at December 31, 2023. The Company’s loans which were 30-89 days delinquent were $18.5 million at June 30, 2024, or 0.57% of total loans, compared to $16.7 million, or 0.52% of total loans, at December 31, 2023.

The provision for credit losses and unfunded commitments totaled $1.1 million for the three months ended June 30, 2024, compared to $25,000 for the three months ended June 30, 2023. The increased provision for credit losses was primarily due to loan growth of $56.1 million in the second quarter of 2024 compared to loan shrinkage of $2.9 million in the second quarter of 2023. Annualized net charge-offs as a percentage of average loans were 0.07% for the second quarter of 2024, compared to 0.10% for the second quarter of 2023. The allowance for credit losses to total loans was 1.05% at June 30, 2024, compared to 1.04% at March 31, 2024 and 1.08% at December 31, 2023.

Net Interest Income

Net interest income for the second quarter of 2024 was $32.1 million compared to $34.6 million in the second quarter of 2023. Average interest earning assets are down $5.4 million when comparing the second quarter of 2024 to the second quarter of 2023. The net interest margin has declined from 2.92% for the second quarter of 2023 to 2.71% for the second quarter of 2024. This decline in net interest margin was due to increased 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 runoff of deposit balances which are being replaced with more costly wholesale funding. Excluding acquisition marks and PPP interest, non-GAAP, the Company’s net interest margin was 2.51% in the second quarter of 2024 compared to 2.68% in the second quarter of 2023.

Noninterest Income

The Company recorded noninterest income of $9.6 million for the second quarter of 2024 compared to $9.4 million for the second quarter of 2023. This increase is due to increases in several categories of noninterest income offset by declines in other noninterest income and losses on the sale of securities.

Service charges on deposit accounts were $1.8 million for the second quarter of 2024 compared to $1.5 million for the same period 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. Bank owned life insurance income increased from $584,000 in the second quarter of 2023 to $652,000 in the second quarter of 2024 as crediting rates on the insurance policies continue to increase. Trust fees increased to $2.6 million in the second quarter of 2024 from $2.2 million in the second quarter of 2023 due to continued strong growth in this line of business. Losses on the sale of securities totaled $124,000 in the second quarter of 2024 compared to gains on the sale of securities of $13,000 during the second quarter of 2023. Other noninterest income declined from $463,000 in the second quarter of 2023 to $162,000 in the second quarter of 2024. The Company recorded write downs totaling $391,000 on other assets held for sale during the second quarter of 2024. No write downs occurred in the second quarter of 2023.

Noninterest Expense

The Company’s noninterest expense totaled $26.4 million for the three months ended June 30, 2024 compared to $26.4 million for the three months ended June 30, 2023. The second quarter of 2023 included $442,000 of merger related charges. There were no merger related expenses during the second quarter of 2024. Salaries and employee benefits were $14.6 million in the second quarter of 2024 compared to $13.6 million in the second 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 $309,000 to $1.2 million for the first three months of 2024 compared to $1.5 million for the first three months of 2023 due to lower FDIC premiums. Intangible amortization declined to $630,000 in the second quarter of 2024 from $1.2 million for the second quarter of 2023. This decrease was driven by accelerated amortization that occurred in the second quarter of 2023 that did not reoccur in 2024 and amortization from a prior acquisition running off. Other noninterest expense increased $545,000 in the second quarter of 2024 compared to the second quarter of 2023. Timing surrounding postage expense and ATM/debit card charges drove much of this increase.

Liquidity

The Company’s loan to deposit ratio was 77.0% at June 30, 2024 while the Company’s average deposit balance per account (excluding collateralized deposits) was $22,375 for the same period. At June 30, 2024, the Company had access to an additional $679.7 million of FHLB borrowing capacity, along with $238.1 million in available for sale securities that are not pledged.

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 June 30, 2024 are $3.7 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 Six Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,				Percent
		2024				2024				2023				2023				2023				2024				2023				Change
Total interest income		$	56,846			$	55,054			$	55,069			$	54,229			$	52,804			$	111,900			$	104,037				7.6	%
Total interest expense			24,780				23,367				22,239				20,461				18,226				48,147				32,849				46.6	%
Net interest income			32,066				31,687				32,830				33,768				34,578				63,753				71,188				-10.4	%
Provision (credit) for credit losses			1,112				(449	)			286				243				25				663				8,624				-92.3	%
Noninterest income			9,606				8,357				12,156				9,831				9,449				17,963				19,874				-9.6	%
Acquisition related costs			0				0				452				268				442				0				4,755				-100.0	%
Other expense			26,403				27,039				26,520				27,448				25,944				53,442				52,353				2.1	%
Income before income taxes			14,157				13,454				17,728				15,640				17,616				27,611				25,330				9.0	%
Income taxes			2,374				2,214				3,151				2,326				2,650				4,588				3,289				39.5	%
Net income		$	11,783			$	11,240			$	14,577			$	13,314			$	14,966			$	23,023			$	22,041				4.5	%
Average diluted shares outstanding			37,487				37,479				37,426				37,379				37,320				37,480				37,624
Basic earnings per share			0.32				0.30				0.39				0.36				0.40				0.62				0.59
Diluted earnings per share			0.31				0.30				0.39				0.36				0.40				0.61				0.59
Cash dividends per share			0.17				0.17				0.17				0.17				0.17				0.34				0.34
Performance Ratios
Net Interest Margin (Annualized)			2.71	%			2.70	%			2.78	%			2.86	%			2.92	%			2.70	%			3.00	%
Efficiency Ratio (Tax equivalent basis)			60.80	%			61.54	%			57.84	%			60.11	%			56.28	%			61.17	%			59.50	%
Return on Average Assets (Annualized)			0.93	%			0.90	%			1.17	%			1.06	%			1.18	%			0.91	%			0.87	%
Return on Average Equity (Annualized)			12.15	%			11.47	%			17.98	%			14.49	%			16.12	%			11.76	%			11.94	%
Dividends to Net Income			54.04	%			56.65	%			43.68	%			47.82	%			42.54	%			55.61	%			58.09	%
Other Performance Ratios (Non-GAAP)
Return on Average Tangible Assets			0.97	%			0.93	%			1.22	%			1.09	%			1.23	%			0.95	%			0.90	%
Return on Average Tangible Equity			23.74	%			21.88	%			43.77	%			30.29	%			33.55	%			22.79	%			25.05	%

Consolidated Statements of Financial Condition

 

		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,
		2024				2024				2023				2023				2023
Assets
Cash and cash equivalents		$	180,987			$	148,630			$	103,658			$	93,923			$	116,063
Debt securities available for sale			1,246,730				1,270,149				1,299,701				1,210,736				1,316,878
Other investments			37,594				34,619				35,311				35,342				44,975
Loans held for sale			2,577				1,854				3,711				1,910				2,197
Loans			3,237,369				3,181,318				3,198,127				3,168,554				3,155,200
Less allowance for credit losses			33,991				33,159				34,440				34,753				34,957
Net Loans			3,203,378				3,148,159				3,163,687				3,133,801				3,120,243
Other assets			485,587				476,599				472,282				495,451				473,098
Total Assets		$	5,156,853			$	5,080,010			$	5,078,350			$	4,971,163			$	5,073,454
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing		$	968,693			$	977,475			$	1,026,630			$	1,039,524			$	1,084,232
Interest-bearing			3,237,142				3,220,650				3,150,756				3,217,869				3,165,381
Brokered time deposits			0				0				0				254,257				21,135
Total deposits			4,205,835				4,198,125				4,177,386				4,511,650				4,270,748
Other interest-bearing liabilities			494,890				433,777				443,663				88,550				388,437
Other liabilities			59,434				51,082				52,886				54,981				47,278
Total liabilities			4,760,159				4,682,984				4,673,935				4,655,181				4,706,463
Stockholders’ Equity			396,694				397,026				404,415				315,982				366,991
Total Liabilities and Stockholders’ Equity		$	5,156,853			$	5,080,010			$	5,078,350			$	4,971,163			$	5,073,454
Period-end shares outstanding			37,575				37,546				37,503				37,489				37,457
Book value per share		$	10.56			$	10.57			$	10.78			$	8.43			$	9.80
Tangible book value per share (Non-GAAP)*			5.53				5.52				5.71				3.33				4.67

 

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

		For the Three Months Ended																				For the Six Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
Capital and Liquidity		2024				2024				2023				2023				2023				2024				2023
Common Equity Tier 1 Capital Ratio (a)			10.95	%			10.88	%			10.61	%			10.37	%			10.25	%
Total Risk Based Capital Ratio (a)			14.39	%			14.38	%			14.06	%			13.83	%			13.76	%
Tier 1 Risk Based Capital Ratio (a)			11.44	%			11.37	%			11.10	%			10.86	%			10.74	%
Tier 1 Leverage Ratio (a)			8.26	%			8.19	%			8.02	%			7.84	%			7.68	%
Equity to Asset Ratio			7.69	%			7.82	%			7.96	%			6.36	%			7.23	%
Tangible Common Equity Ratio (b)			4.18	%			4.24	%			4.38	%			2.61	%			3.58	%
Net Loans to Assets			62.12	%			61.97	%			62.30	%			63.04	%			61.50	%
Loans to Deposits			76.97	%			75.78	%			76.56	%			70.23	%			73.88	%
Asset Quality
Non-performing loans		$	12,870			$	11,951			$	15,063			$	18,368			$	17,956
Non-performing assets			12,975				12,215				15,321				18,522				18,167
Loans 30 - 89 days delinquent			18,546				14,069				16,705				13,314				12,321
Charged-off loans			661				1,282				972				525				971				1,943				1,440
Recoveries			98				271				172				139				172				369				370
Net Charge-offs			563				1,011				800				386				799				1,574				1,070
Annualized Net Charge-offs to Average Net Loans			0.07	%			0.13	%			0.10	%			0.05	%			0.10	%			0.10	%			0.07	%
Allowance for Credit Losses to Total Loans			1.05	%			1.04	%			1.08	%			1.10	%			1.11	%
Non-performing Loans to Total Loans			0.40	%			0.38	%			0.47	%			0.58	%			0.57	%
Loans 30 - 89 Days Delinquent to Total Loans			0.57	%			0.44	%			0.52	%			0.42	%			0.39	%
Allowance to Non-performing Loans			264.11	%			277.46	%			228.64	%			189.20	%			194.68	%
Non-performing Assets to Total Assets			0.25	%			0.24	%			0.30	%			0.37	%			0.36	%

 

(a)	June 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
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,
End of Period Loan Balances		2024				2024				2023				2023				2023
Commercial real estate		$	1,348,675			$	1,339,372			$	1,335,806			$	1,295,847			$	1,284,974
Commercial			343,694				335,747				346,354				357,691				362,664
Residential real estate			849,561				836,252				843,697				842,729				849,533
HELOC			151,511				143,696				142,441				140,772				138,535
Consumer			268,606				256,846				259,784				261,136				260,326
Agricultural loans			265,035				260,425				261,288				261,738				250,807
Total, excluding net deferred loan costs		$	3,227,082			$	3,172,338			$	3,189,370			$	3,159,913			$	3,146,839
		For the Three Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,
End of Period Customer Deposit Balances		2024				2024				2023				2023				2023
Noninterest-bearing demand		$	968,693			$	977,474			$	1,026,630			$	1,039,524			$	1,084,232
Interest-bearing demand			1,380,266				1,381,383				1,362,609				1,426,349				1,383,326
Money market			677,058				646,308				593,975				588,043				610,051
Savings			433,166				452,949				468,890				488,991				511,642
Certificate of deposit			746,652				740,011				725,282				714,486				660,362
Total customer deposits		$	4,205,835			$	4,198,125			$	4,177,386			$	4,257,393			$	4,249,613

 

		For the Three Months Ended																				For the Six Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
Noninterest Income		2024				2024				2023				2023				2023				2024				2023
Service charges on deposit accounts		$	1,846			$	1,583			$	1,677			$	1,712			$	1,501			$	3,429			$	2,933
Bank owned life insurance income, including death benefits			652				707				617				694				584				1,359				1,131
Trust fees			2,638				2,793				2,656				2,617				2,248				5,431				4,835
Insurance agency commissions			1,255				1,528				1,540				1,116				1,332				2,783				2,788
Security gains (losses), including fair value changes for equity securities			(124	)			(2,120	)			19				(624	)			13				(2,244	)			134
Retirement plan consulting fees			330				334				357				360				382				664				689
Investment commissions			478				432				589				520				476				910				869
Net gains on sale of loans			417				297				1,280				395				406				714				716
Other mortgage banking fee income (loss), net			192				125				139				185				234				317				387
Debit card and EFT fees			1,760				1,567				1,697				1,763				1,810				3,327				3,599
Other noninterest income			162				1,111				1,585				1,093				463				1,273				1,793
Total Noninterest Income		$	9,606			$	8,357			$	12,156			$	9,831			$	9,449			$	17,963			$	19,874

		For the Three Months Ended																				For the Six Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
Noninterest Expense		2024				2024				2023				2023				2023				2024				2023
Salaries and employee benefits		$	14,558			$	15,069			$	14,871			$	14,233			$	13,625			$	29,627			$	28,270
Occupancy and equipment			3,815				3,730				3,896				3,810				3,859				7,545				7,728
FDIC insurance and state and local taxes			1,185				1,345				1,484				1,648				1,494				2,530				2,716
Professional fees			1,194				1,254				1,004				1,043				1,190				2,448				2,304
Merger related costs			0				0				452				268				442				0				4,755
Advertising			445				431				414				492				478				876				887
Intangible amortization			630				688				578				725				1,222				1,318				2,131
Core processing charges			1,099				1,135				1,057				1,274				1,144				2,234				2,308
Other noninterest expenses			3,477				3,387				3,216				4,223				2,932				6,864				6,009
Total Noninterest Expense		$	26,403			$	27,039			$	26,972			$	27,716			$	26,386			$	53,442			$	57,108

Average Balance Sheets and Related Yields and Rates

(Dollar Amounts in Thousands)

 

		Three Months Ended												Three Months Ended
		June 30, 2024												June 30, 2023
		AVERAGE								YIELD/				AVERAGE								YIELD/
		BALANCE				INTEREST (1)				RATE (1)				BALANCE				INTEREST (1)				RATE (1)
EARNING ASSETS
Loans (2)		$	3,215,141			$	46,590				5.80	%		$	3,144,461			$	42,422				5.40	%
Taxable securities			1,118,598				6,813				2.44				1,157,284				6,654				2.30
Tax-exempt securities (2)			379,761				2,973				3.13				415,003				3,278				3.16
Other investments			33,441				322				3.85				41,361				594				5.74
Federal funds sold and other			78,591				743				3.78				72,801				551				3.03
Total earning assets			4,825,532				57,441				4.76				4,830,910				53,499				4.43
Nonearning assets			218,984												225,131
Total assets		$	5,044,516											$	5,056,041
INTEREST-BEARING LIABILITIES
Time deposits		$	744,422			$	7,233				3.89	%		$	646,782			$	4,525				2.80	%
Brokered time deposits			0				0				0.00				59,402				686				4.62
Savings deposits			1,102,443				4,117				1.49				1,133,371				2,402				0.85
Demand deposits - interest bearing			1,391,767				8,810				2.53				1,428,409				6,878				1.93
Total interest-bearing deposits			3,238,632				20,160				2.49				3,267,964				14,491				1.77
Short term borrowings			299,543				3,585				4.79				213,549				2,727				5.11
Long term borrowings			88,834				1,035				4.66				88,382				1,008				4.56
Total borrowed funds			388,377				4,620				4.76				301,931				3,735				4.95
Total interest-bearing liabilities			3,627,009				24,780				2.73				3,569,895				18,226				2.04
NONINTEREST-BEARING LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand deposits - noninterest bearing			972,290												1,067,605
Other liabilities			57,336												47,120
Stockholders’ equity			387,881												371,421
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	5,044,516											$	5,056,041
Net interest income and interest rate spread						$	32,661				2.03	%						$	35,273				2.39	%
Net interest margin											2.71	%											2.92	%

 

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

(2)

For 2024, adjustments of $77 thousand and $518 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $91 thousand and $604 thousand, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.

		Six Months Ended												Six Months Ended
		June 30, 2024												June 30, 2023
		AVERAGE								YIELD/				AVERAGE								YIELD/
		BALANCE				INTEREST (1)				RATE (1)				BALANCE				INTEREST (1)				RATE (1)
EARNING ASSETS
Loans (2)		$	3,198,239			$	91,686				5.73	%		$	3,140,500			$	83,365				5.31	%
Taxable securities			1,109,972				13,227				2.38				1,164,400				13,204				2.27
Tax-exempt securities (2)			393,918				6,182				3.14				426,743				6,797				3.19
Other investments			33,924				684				4.03				38,976				970				4.98
Federal funds sold and other			75,174				1,369				3.64				77,870				1,161				2.98
Total earning assets			4,811,227				113,148				4.70				4,848,489				105,497				4.35
Nonearning assets			223,014												221,955
Total assets		$	5,034,241											$	5,070,444
INTEREST-BEARING LIABILITIES
Time deposits		$	738,159			$	14,281				3.87	%		$	618,637			$	7,864				2.54	%
Brokered time deposits			0				0				0.00				144,747				3,007				4.15
Savings deposits			1,093,511				7,716				1.41				1,143,539				4,356				0.76
Demand deposits - interest bearing			1,371,058				16,553				2.41				1,423,211				11,971				1.68
Total interest-bearing deposits			3,202,728				38,550				2.41				3,330,134				27,198				1.63
Short term borrowings			312,167				7,524				4.82				147,436				3,648				4.95
Long term borrowings			88,778				2,073				4.67				88,326				2,003				4.54
Total borrowed funds			400,945				9,597				4.79				235,762				5,651				4.79
Total interest-bearing liabilities			3,603,673				48,147				2.67				3,565,896				32,849				1.84
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS’ EQUITY
Demand deposits - noninterest bearing		$	983,728											$	1,087,403
Other liabilities			55,125												47,996
Stockholders’ equity			391,715												369,149
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	5,034,241											$	5,070,444
Net interest income and interest rate spread						$	65,001				2.03	%						$	72,648				2.51	%
Net interest margin											2.70	%											3.00	%

 

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

(2)

For 2024, adjustments of $156 thousand and $1.1 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. For 2023, adjustments of $178 thousand and $1.3 million, respectively, were made to tax equate income on tax exempt loans and tax exempt securities. These adjustments were based on a marginal federal income tax rate of 21%, less disallowances.

Reconciliation of Total Assets to Tangible Assets

 

		For the Three Months Ended																				For the Six Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
		2024				2024				2023				2023				2023				2024				2023
Total Assets		$	5,156,853			$	5,080,010			$	5,078,350			$	4,971,163			$	5,073,454			$	5,156,853			$	5,073,454
Less Goodwill and other intangibles			188,970				189,599				190,288				191,326				192,052				188,970				192,052
Tangible Assets		$	4,967,883			$	4,890,411			$	4,888,062			$	4,779,837			$	4,881,402			$	4,967,883			$	4,881,402
Average Assets			5,044,516				5,023,966				4,980,314				5,058,969				5,070,444				5,034,241				5,070,444
Less average Goodwill and other intangibles			189,382				190,040				191,108				191,804				192,972				189,712				193,169
Average Tangible Assets		$	4,855,134			$	4,833,926			$	4,789,206			$	4,867,165			$	4,877,472			$	4,844,529			$	4,877,275

Reconciliation of Common Stockholders’ Equity to Tangible Common Equity

 

		For the Three Months Ended																				For the Six Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
		2024				2024				2023				2023				2023				2024				2023
Stockholders’ Equity		$	396,694			$	397,026			$	404,415			$	315,982			$	366,991			$	396,694			$	366,991
Less Goodwill and other intangibles			188,970				189,599				190,288				191,326				192,052				188,970				192,052
Tangible Common Equity		$	207,724			$	207,427			$	214,127			$	124,656			$	174,939			$	207,724			$	174,939
Average Stockholders’ Equity			387,881				395,549				324,332				367,600				371,421				391,715				369,149
Less average Goodwill and other intangibles			189,382				190,040				191,108				191,804				192,972				189,712				193,169
Average Tangible Common Equity		$	198,499			$	205,509			$	133,224			$	175,796			$	178,449			$	202,003			$	175,980

Reconciliation of Net Income, Less Merger and Certain Items

 

		For the Three Months Ended																				For the Six Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
		2024				2024				2023				2023				2023				2024				2023
Net income		$	11,783			$	11,240			$	14,577			$	13,314			$	14,966			$	23,023			$	22,041
Acquisition related costs - after tax			0				0				358				234				354				0				3,803
Acquisition related provision - after tax			0				0				0				0				0				0				6,077
Employee severence - after tax			0				0				798				0				0				0				0
Lawsuit settlement expense - after tax			0				0				0				620				0				0				0
Net (gain) on loan sale - after tax			0				0				(723	)			0				0				0				0
Net loss (gain) on asset/security sales - after tax			407				1,675				171				604				(5	)			2,082				(77	)
Net income - Adjusted		$	12,190			$	12,915			$	15,181			$	14,772			$	15,315			$	25,105			$	31,844
Diluted EPS excluding merger and certain items		$	0.33			$	0.34			$	0.41			$	0.40			$	0.41			$	0.67			$	0.85
Return on Average Assets excluding merger and certain items (Annualized)			0.97	%			1.03	%			1.22	%			1.17	%			1.21	%			1.00	%			1.26	%
Return on Average Equity excluding merger and certain items (Annualized)			12.57	%			13.06	%			18.72	%			16.07	%			16.49	%			12.82	%			17.25	%
Return on Average Tangible Equity excluding acquisition costs and certain items (Annualized)			24.56	%			25.14	%			45.58	%			33.61	%			34.33	%			24.86	%			36.19	%

Efficiency ratio excluding certain items

 

		For the Three Months Ended																				For the Six Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
		2024				2024				2023				2023				2023				2024				2023
Net interest income, tax equated		$	32,661			$	32,341			$	33,494			$	34,448			$	35,273			$	65,001			$	72,648
Noninterest income			9,606				8,357				12,156				9,831				9,449				17,963				19,874
Net (gain) on loan sale			0				0				(915	)			0				0				0				0
Net loss (gain) on asset/security sales			515				2,120				217				764				(6	)			2,635				(97	)
Net interest income and noninterest income adjusted			42,782				42,818				44,952				45,043				44,716				85,599				92,425
Noninterest expense less intangible amortization			25,773				26,351				26,394				26,991				25,163				52,124				54,976
Legal settlement expense			0				0				0				785				0				0				0
Employee severence			0				0				1,010				0				0				0				0
Acquisition related costs			0				0				452				268				442				0				4,755
Noninterest expense adjusted			25,773				26,351				24,932				25,938				24,721				52,124				50,221
Efficiency ratio excluding certain items			60.24	%			61.54	%			55.46	%			57.58	%			55.28	%			60.89	%			54.34	%

Net interest margin excluding acquisition marks and PPP interest and fees

 

		For the Three Months Ended																				For the Six Months Ended
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
		2024				2024				2023				2023				2023				2024				2023
Net interest income, tax equated		$	32,661			$	32,341			$	33,494			$	34,448			$	35,273			$	65,001			$	72,648
Acquisition marks			2,391				2,370				2,475				2,959				2,884				4,761				5,512
PPP interest and fees			1				1				1				1				2				2				3
Adjusted and annualized net interest income			121,076				119,880				124,072				125,952				129,548				120,476				134,266
Average earning assets			4,825,532				4,796,922				4,816,409				4,820,888				4,830,910				4,811,227				4,848,489
Less PPP average balances			171				213				229				247				277				192				271
Adjusted average earning assets			4,825,361				4,796,709				4,816,180				4,820,641				4,830,633				4,811,035				4,848,218
Net interest margin excluding marks and PPP interest and fees			2.51	%			2.50	%			2.58	%			2.61	%			2.68	%			2.50	%			2.77	%