FMBH First Mid Bancshares Inc

First Mid Bancshares, Inc. (NASDAQ: FMBH) (the “Company”) today announced its financial results for the quarter and year ended December 31, 2023.

Highlights

• Net income of $18.1 million, or $0.76 diluted EPS
• Adjusted net income (non-GAAP) of $22.4 million, or $0.94 diluted EPS
• Completed the merger and integration of Blackhawk Bank (“Blackhawk”)
• Sold additional bonds to reposition balance sheet helping drive a strong net interest margin of 3.33%
• Strong asset quality performance continued with minimal net charge offs for the quarter
• Board of Directors declares regular quarterly dividend of $0.23 per share

“We capped off 2023 with a strong quarter of financial results,” said Joe Dively, Chairman and Chief Executive Officer. “This was the first full quarter inclusive of Blackhawk and the value of the transaction is evident in our results. We completed another step in the Blackhawk related balance sheet repositioning by selling additional bonds with proceeds of $79.7 million used to reduce brokered CDs and wholesale borrowings, improving our net interest margin.”

“During the quarter, we completed the merger of Blackhawk into First Mid Bank & Trust and the related core system conversion. Our employees worked extremely hard to make the transition as seamless as possible for our customers in what was our largest, most complex integration. I am proud of the efforts of our team and their support of our customers,” Dively concluded.

Net Interest Income Net interest income for the fourth quarter of 2023 increased by $7.0 million, or 13.9% compared to the third quarter of 2023. Interest income and interest expense increased in the quarter by $9.5 million and $2.5 million, respectively. The increase in interest income was primarily driven by the addition of Blackhawk, loan growth, and the repricing of loans with higher interest rates. Accretion income for the quarter was $4.6 million, an increase compared to $2.6 million in the prior quarter. The increase in interest expense was primarily driven by the addition of Blackhawk and higher interest rates. During the quarter, the Company sold $79.7 million of bonds and used the proceeds to payoff maturing brokered CDs and wholesale borrowings.            

In comparison to the fourth quarter of 2022, net interest income increased $11.8 million, or 25.8%. The increase was primarily driven by the addition of Blackhawk. For the same period, interest income increased by $29.2 million, while interest expense increased $17.4 million.                     

Net Interest MarginNet interest margin, on a tax equivalent basis (non-GAAP), was 3.33% for the fourth quarter of 2023, which was 27 basis points higher compared to the prior quarter. Earning asset yields increased by 29 basis points and the average cost of funds increased 2 basis points.        

In comparison to the fourth quarter of last year, the net interest margin increased 26 basis points, with an average earning asset increase of 111 basis points versus the average cost of funds increase of 85 basis points.

Loan Portfolio Total loans ended the quarter at $5.58 billion, representing an increase of $40.5 million. The growth was spread among several categories with the largest increase in Ag operating loans. Overall, loan demand slightly improved and we saw an increase in line draws during the period. Most of the new originations and renewed loans in the period were at rates in the 8.00% to 8.50% range. 

Asset Quality The fourth quarter was another strong period with respect to the Company’s asset quality metrics. The allowance for credit losses (“ACL”) increased by $0.4 million to $68.7 million with an ending ACL to total loans ratio of 1.23%. In addition to the ACL, an unearned discount of $49.9 million remains at quarter end. Provision expense was recorded in the amount of $0.6 million with net charge offs of $0.1 million in the quarter. Also, at the end of the fourth quarter, the ratio of non-performing loans to total loans was 0.36%, and the ACL to non-performing loans was 341.19%.   The ratio of nonperforming assets to total assets was 0.28% and nonperforming loans were $20.1 million at quarter end. For the quarter, special mention loans were $74.1 million and substandard loans were $28.9 million.        

DepositsTotal deposits ended the quarter at $6.12 billion, which represented a decrease of $222.7 million from the prior quarter. Of the decline, $73.2 million came from time deposits, including brokered, where the Company used proceeds from its bond sales to pay these off at maturity. The remaining portion of the decline in balances was driven primarily by seasonal cash flow operating needs of commercial customers. Noninterest bearing deposits increased by $9.2 million in the quarter. The Company’s average rate on cost of funds increased to 1.85% compared to 1.83% in the prior quarter and 1.00% in the fourth quarter of 2022.                

Noninterest IncomeNoninterest income represented 31% of our total net revenues for the year.

Noninterest income for the fourth quarter of 2023 was $21.8 million compared to $23.1 million in the third quarter of 2023.   Excluding securities gains for both periods, noninterest income increased $2.1 million in the current quarter. The increase was primarily driven by the full quarter benefit of Blackhawk, along with higher insurance revenues.     

In comparison to the fourth quarter of 2022, noninterest income increased $3.6 million, or 19.6%, due to a combination of organic growth and the addition of Blackhawk’s operating costs for the period.                  

Noninterest Expenses      Noninterest expense for the fourth quarter of 2023 totaled $57.0 million compared to $47.1 million in the prior quarter. The increase was primarily driven by the full quarter of Blackhawk and approximately $5.6 million in nonrecurring acquisition related costs.

In comparison to the fourth quarter of 2022, noninterest expenses increased $17.7 million. In addition to $5.6 million in nonrecurring integration related costs during the period, the increase was primarily driven by the addition of Blackhawk.

The Company’s efficiency ratio, as adjusted in the non-GAAP reconciliation table herein, for the fourth quarter 2023 was 58.9% compared to 58.6% in the prior quarter and 58.1% for the same period last year.

Capital Levels, Dividend and TaxesThe Company’s capital levels remained strong and above the “well capitalized” levels. Capital levels ended the period as follows:

Total capital to risk-weighted assets	14.84%
Tier 1 capital to risk-weighted assets	12.02%
Common equity tier 1 capital to risk-weighted assets	11.62%
Leverage ratio	9.33%

Tangible book value per share increased in the period to $22.20 on a combination of both earnings growth and improvement in the unrealized loss position in the bond portfolio impacting accumulated other comprehensive income (“AOCI”).

The Company’s Board of Directors approved a regular quarterly dividend of $0.23 payable on March 1, 2024 for shareholders of record on February 16, 2024.

The Company’s effective tax rate for the fourth quarter was 16.6% and 22.0% for the year. The lower rate in the current period was primarily due to $0.8 million of refunds for amendments filed on Wisconsin state taxes.

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 $7.6 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, Texas, and Wisconsin 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 159 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; and the impact of the global COVID-19 pandemic on First Mid’s businesses. 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 HoltVP, Shareholder Relations217-258-0463 aholt@firstmid.com

Matt SmithChief Financial Officer217-258-1528msmith@firstmid.com

– Tables Follow –

		FIRST MID BANCSHARES, INC.
		Condensed Consolidated Balance Sheets
		(In thousands, unaudited)
		As of
		December 31,				September 30,				December 31,
			2023				2023				2022
Assets
Cash and cash equivalents		$	143,064			$	383,237			$	152,433
Investment securities			1,179,402				1,226,746				1,223,720
Loans (including loans held for sale)			5,580,565				5,540,065				4,826,212
Less allowance for credit losses			(68,675	)			(68,241	)			(59,093	)
Net loans			5,511,890				5,471,824				4,767,119
Premises and equipment, net			101,396				102,004				90,473
Goodwill and intangibles, net			264,231				267,793				169,897
Bank owned life insurance			166,125				165,022				151,756
Other assets			220,686				238,668				188,817
Total assets		$	7,586,794			$	7,855,294			$	6,744,215
Liabilities and Stockholders' Equity
Deposits:
Non-interest bearing		$	1,398,234			$	1,389,022			$	1,256,514
Interest bearing			4,725,425				4,957,302				4,000,487
Total deposits			6,123,659				6,346,324				5,257,001
Repurchase agreement with customers			213,721				214,978				221,414
Other borrowings			263,787				364,953				465,071
Junior subordinated debentures			24,058				24,003				19,364
Subordinated debt			106,755				106,648				94,553
Other liabilities			61,610				60,440				53,657
Total liabilities			6,793,590				7,117,346				6,111,060
Total stockholders' equity			793,204				737,948				633,155
Total liabilities and stockholders' equity		$	7,586,794			$	7,855,294			$	6,744,215

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,
			2023			2022				2023			2022
Interest income:
Interest and fees on loans		$	78,676		$	53,128			$	262,423		$	185,869
Interest on investment securities			8,515			7,285				32,119			29,380
Interest on federal funds sold & other deposits			2,736			296				5,624			642
Total interest income			89,927			60,709				300,166			215,891
Interest expense:
Interest on deposits			25,900			9,227				77,294			18,813
Interest on securities sold under agreements to repurchase			1,754			1,163				6,565			1,795
Interest on other borrowings			3,073			3,345				16,789			6,193
Interest on jr. subordinated debentures			545			315				1,859			868
Interest on subordinated debt			1,193			987				4,196			3,945
Total interest expense			32,465			15,037				106,703			31,614
Net interest income			57,462			45,672				193,463			184,277
Provision for credit losses			552			805				6,104			4,806
Net interest income after provision for loan			56,910			44,867				187,359			179,471
Non-interest income:
Wealth management revenues			4,998			6,201				20,793			22,492
Insurance commissions			5,398			4,719				24,814			21,622
Service charges			3,298			2,375				10,881			9,112
Net securities gains/(losses)			46			(48	)			3,383			33
Mortgage banking revenues			954			65				2,282			1,190
ATM/debit card revenue			4,233			3,209				14,347			12,422
Other			2,841			1,686				10,286			7,811
Total non-interest income			21,768			18,207				86,786			74,682
Non-interest expense:
Salaries and employee benefits			29,925			23,610				104,962			98,594
Net occupancy and equipment expense			7,977			6,126				26,946			24,257
Net other real estate owned (income) expense			800			87				1,862			330
FDIC insurance			1,015			464				3,339			1,805
Amortization of intangible assets			3,560			1,537				9,127			6,290
Stationary and supplies			404			298				1,346			1,295
Legal and professional expense			2,065			1,607				7,379			6,996
ATM/debit card expense			1,332			1,309				5,322			4,300
Marketing and donations			679			681				3,005			2,999
Other			9,268			3,653				22,452			15,995
Total non-interest expense			57,025			39,372				185,740			162,861
Income before income taxes			21,653			23,702				88,405			91,292
Income taxes			3,582			3,063				19,470			18,340
Net income		$	18,071		$	20,639			$	68,935		$	72,952
Per Share Information
Basic earnings per common share		$	0.76		$	1.01			$	3.17		$	3.62
Diluted earnings per common share			0.76			1.01				3.15			3.60
Weighted average shares outstanding			23,837,853			20,461,046				21,780,217			20,169,077
Diluted weighted average shares outstanding			23,921,758			20,535,220				21,868,788			20,243,635

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,
		2023			2023			2023				2023				2022
Interest income:
Interest and fees on loans		$	78,676		$	69,143		$	58,368			$	56,236			$	53,128
Interest on investment securities			8,515			9,284			7,193				7,127				7,285
Interest on federal funds sold & other deposits			2,736			2,011			569				308				296
Total interest income			89,927			80,438			66,130				63,671				60,709
Interest expense:
Interest on deposits			25,900			22,047			16,580				12,767				9,227
Interest on securities sold under agreements to repurchase			1,754			1,625			1,723				1,463				1,163
Interest on other borrowings			3,073			4,749			4,084				4,883				3,345
Interest on jr. subordinated debentures			545			545			390				379				315
Interest on subordinated debt			1,193			1,029			986				988				987
Total interest expense			32,465			29,995			23,763				20,480				15,037
Net interest income			57,462			50,443			42,367				43,191				45,672
Provision for credit losses			552			5,911			458				(817	)			805
Net interest income after provision for loan			56,910			44,532			41,909				44,008				44,867
Non-interest income:
Wealth management revenues			4,998			4,940			5,341				5,514				6,201
Insurance commissions			5,398			5,199			5,737				8,480				4,719
Service charges			3,298			2,994			2,386				2,203				2,375
Securities gains, net			46			3,389			(6	)			(46	)			(48	)
Mortgage banking revenues			954			846			332				150				65
ATM/debit card revenue			4,233			3,766			3,265				3,083				3,209
Other			2,841			1,919			2,431				3,095				1,686
Total non-interest income			21,768			23,053			19,486				22,479				18,207
Non-interest expense:
Salaries and employee benefits			29,925			25,422			23,544				26,071				23,610
Net occupancy and equipment expense			7,977			6,929			6,035				6,005				6,126
Net other real estate owned (income) expense			800			902			27				133				87
FDIC insurance			1,015			785			1,076				463				464
Amortization of intangible assets			3,560			2,568			1,477				1,522				1,537
Stationary and supplies			404			335			315				292				298
Legal and professional expense			2,065			1,844			1,780				1,690				1,607
ATM/debit card expense			1,332			1,751			1,016				1,223				1,309
Marketing and donations			679			764			908				654				681
Other			9,268			5,796			3,864				3,524				3,653
Total non-interest expense			57,025			47,096			40,042				41,577				39,372
Income before income taxes			21,653			20,489			21,353				24,910				23,702
Income taxes			3,582			5,372			4,786				5,730				3,063
Net income		$	18,071		$	15,117		$	16,567			$	19,180			$	20,639
Per Share Information
Basic earnings per common share		$	0.76		$	0.68		$	0.81			$	0.94			$	1.01
Diluted earnings per common share			0.76			0.68			0.80				0.93				1.01
Weighted average shares outstanding			23,837,853			22,220,438			20,528,717				20,492,254				20,461,046
Diluted weighted average shares outstanding			23,921,758			22,319,334			20,628,239				20,563,972				20,535,220

		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,
		2023				2023				2023				2023				2022
Loan Portfolio
Construction and land development		$	205,077			$	189,206			$	151,574			$	159,157			$	144,264
Farm real estate loans			391,132				399,834				392,220				401,957				410,327
1-4 Family residential properties			542,469				531,699				418,932				424,545				440,180
Multifamily residential properties			319,129				327,067				303,482				301,808				294,346
Commercial real estate			2,384,704				2,392,834				2,056,529				2,003,647				2,030,011
Loans secured by real estate			3,842,511				3,840,640				3,322,737				3,291,114				3,319,128
Agricultural operating loans			196,272				179,447				148,318				146,847				166,838
Commercial and industrial loans			1,266,159				1,242,653				1,094,522				1,078,021				1,082,960
Consumer loans			91,014				99,542				80,241				88,430				97,775
All other loans			184,609				177,783				167,598				156,219				159,511
Total loans			5,580,565				5,540,065				4,813,416				4,760,631				4,826,212
Deposit Portfolio
Non-interest bearing demand deposits		$	1,398,234			$	1,389,022			$	1,171,047			$	1,262,181			$	1,256,514
Interest bearing demand deposits			1,837,296				1,940,162				1,477,765				1,419,791				1,389,283
Savings deposits			710,586				734,377				602,523				639,691				636,699
Money Market			1,129,950				1,161,957				923,259				878,452				1,267,726
Time deposits			1,047,593				1,120,806				1,044,991				830,663				706,779
Total deposits			6,123,659				6,346,324				5,219,585				5,030,778				5,257,001
Asset Quality
Non-performing loans		$	20,128			$	21,269			$	18,637			$	15,163			$	19,170
Non-performing assets			21,292				23,565				22,615				19,225				23,539
Net charge-offs (recoveries)			118				181				(38	)			53				489
Allowance for credit losses to non-performing loans			341.19	%			320.85	%			315.07	%			383.98	%			308.26	%
Allowance for credit losses to total loans outstanding			1.23	%			1.23	%			1.22	%			1.22	%			1.22	%
Nonperforming loans to total loans			0.36	%			0.38	%			0.39	%			0.32	%			0.40	%
Nonperforming assets to total assets			0.28	%			0.30	%			0.34	%			0.29	%			0.35	%
Special Mention loans			74,050				73,732				40,687				47,022				39,853
Substandard and Doubtful loans			28,945				30,575				28,255				29,931				34,352
Common Share Data
Common shares outstanding			23,827,137				23,830,038				20,528,192				20,519,717				20,452,376
Book value per common share		$	33.29			$	30.97			$	32.18			$	32.26			$	30.96
Tangible book value per common share (1)			22.20				19.73				23.48				24.05				22.65
Tangible book value per common share excluding other comprehensive income at period end (1)			27.93				27.24				30.87				30.77				30.06
Market price of stock			34.66				26.56				24.14				27.22				32.08
Key Performance Ratios and Metrics
End of period earning assets		$	6,780,160			$	7,007,282			$	6,023,553			$	5,995,674			$	6,063,953
Average earning assets			6,948,309				6,593,781				6,049,626				6,052,264				6,000,106
Average rate on average earning assets (tax equivalent)			5.18	%			4.89	%			4.43	%			4.32	%			4.07	%
Average rate on cost of funds			1.85	%			1.83	%			1.59	%			1.38	%			1.00	%
Net interest margin (tax equivalent) (1)			3.33	%			3.06	%			2.84	%			2.94	%			3.07	%
Return on average assets			0.93	%			0.90	%			0.99	%			1.15	%			1.24	%
Adjusted return on average assets (1)			1.16	%			0.94	%			1.03	%			1.18	%			1.25	%
Return on average common equity			9.76	%			8.70	%			10.07	%			12.11	%			13.51	%
Adjusted return on average common equity (1)			12.11	%			9.82	%			10.42	%			11.92	%			13.60	%
Efficiency ratio (tax equivalent) (1)			58.91	%			58.60	%			60.37	%			59.01	%			58.07	%
Full-time equivalent employees			1,187				1,224				995				988				1,043
1 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, 2023
		QTD Average							Average
		Balance				Interest			Rate
INTEREST EARNING ASSETS
Interest bearing deposits		$	186,849			$	2,560		5.44	%
Federal funds sold			8,842				122		5.47	%
Certificates of deposits investments			1,630				54		13.14	%
Investment Securities:
Taxable (total less municipals)			946,620				6,522		2.76	%
Tax-exempt (Municipals)			259,662				2,524		3.89	%
Loans (net of unearned income)			5,544,706				78,938		5.65	%
Total interest earning assets			6,948,309				90,720		5.18	%
NONEARNING ASSETS
Cash and due from banks			137,282
Premises and equipment			101,641
Other nonearning assets			618,063
Allowance for loan losses			(68,584	)
Total assets		$	7,736,711
INTEREST BEARING LIABILITIES
Demand deposits		$	2,999,731			$	16,077		2.13	%
Savings deposits			724,347				190		0.10	%
Time deposits			1,074,569				9,633		3.56	%
Total interest bearing deposits			4,798,647				25,900		2.14	%
Repurchase agreements			230,977				1,754		3.01	%
FHLB advances			336,939				3,060		3.60	%
Federal funds purchased			-				1		0.00	%
Subordinated debt			106,684				1,193		4.44	%
Jr. subordinated debentures			24,029				545		9.00	%
Other debt			-				12		0.00	%
Total borrowings			698,629				6,565		3.73	%
Total interest bearing liabilities			5,497,276				32,465		2.34	%
NONINTEREST BEARING LIABILITIES
Demand deposits			1,463,572			Average cost of funds			1.85	%
Other liabilities			35,248
Stockholders' equity			740,615
Total liabilities & stockholders' equity		$	7,736,711
Net Interest Earnings / Spread						$	58,255		2.84	%
Impact of Non-Interest Bearing Funds									0.49	%
Tax effected yield on interest earning assets									3.33	%

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,
		2023				2023				2023				2023				2022
Net interest income as reported		$	57,462			$	50,443			$	42,367			$	43,191			$	45,672
Net interest income, (tax equivalent)			58,255				51,212				43,109				43,947				46,464
Average earning assets			6,948,309				6,593,781				6,049,626				6,052,264				6,000,106
Net interest margin (tax equivalent)			3.33	%			3.06	%			2.84	%			2.94	%			3.07	%
Common stockholder's equity		$	793,204			$	737,948			$	660,687			$	661,865			$	633,155
Goodwill and intangibles, net			264,231				267,793				178,615				168,373				169,897
Common shares outstanding			23,827				23,830				20,528				20,520				20,452
Tangible Book Value per common share		$	22.20			$	19.73			$	23.48			$	24.05			$	22.65
Accumulated other comprehensive loss (AOCI)			(136,427	)			(178,903	)			(151,566	)			(137,901	)			(151,507	)
Adjusted tangible book value per common share		$	27.93			$	27.24			$	30.87			$	30.77			$	30.06

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,
			2023				2023				2023				2023				2022
Adjusted earnings Reconciliation
Net Income - GAAP		$	18,071			$	15,117			$	16,567			$	19,180			$	20,639
Adjustments (post-tax): (1)
Acquisition ACL on non-PCD assets in provision expense			-				2,985				-				-				-
Nonrecurring severance expense			-				-				-				416				-
Net (gain)/loss on securities sales			(36	)			(2,677	)			-				-				-
Integration and acquisition expenses			4,385				1,653				589				135				131
Total non-recurring adjustments (non-GAAP)		$	4,348			$	1,962			$	589			$	551			$	131
Adjusted earnings - non-GAAP		$	22,419			$	17,079			$	17,156			$	19,731			$	20,770
Adjusted diluted earnings per share (non-GAAP)		$	0.94			$	0.77			$	0.83			$	0.96			$	1.01
Adjusted return on average assets - non-GAAP			1.16	%			0.94	%			1.03	%			1.18	%			1.25	%
Adjusted return on average common equity - non-GAAP			12.11	%			9.82	%			10.42	%			11.92	%			13.60	%
Efficiency Ratio Reconciliation
Noninterest expense - GAAP		$	57,025			$	47,096			$	40,042			$	41,577			$	39,372
Other real estate owned property income (expense)			(800	)			(902	)			(27	)			(133	)			(87	)
Amortization of intangibles			(3,560	)			(2,568	)			(1,477	)			(1,522	)			(1,537	)
Nonrecurring severance expense			-				-				-				(527	)			-
Integration and acquisition expenses			(5,550	)			(2,093	)			(745	)			(171	)			(166	)
Adjusted noninterest expense (non-GAAP)		$	47,115			$	41,533			$	37,793			$	39,224			$	37,582
Net interest income -GAAP		$	57,462			$	50,443			$	42,367			$	43,192			$	45,672
Effect of tax-exempt income (1)			793				769				742				755				792
Adjusted net interest income (non-GAAP)		$	58,255			$	51,212			$	43,109			$	43,947			$	46,464
Noninterest income - GAAP		$	21,768			$	23,053			$	19,486			$	22,479			$	18,207
Net (gain)/loss on securities sales			(46	)			(3,389	)			6				46				48
Adjusted noninterest income (non-GAAP)		$	21,722			$	19,664			$	19,492			$	22,525			$	18,255
Adjusted total revenue (non-GAAP)		$	79,977			$	70,876			$	62,601			$	66,472			$	64,719
Efficiency ratio (non-GAAP)			58.91	%			58.60	%			60.37	%			59.01	%			58.07	%
(1) Nonrecurring items (post-tax) and tax-exempt income are calculated using an estimated effective tax rate of 21%.