First Business Bank Reports Fourth Quarter 2022 Net Income of $9.9 Million

About this update from First Business Financial Services, Inc.

[{"type":"text","content":" \n-- Loan growth, net interest margin expansion, and strong asset quality support continued tangible book value growth --\n \n MADISON, Wis. --(BUSINESS WIRE)--\n First Business Financial Services, Inc. (the “Company”, the “Bank”, or “First Business Bank”) (Nasdaq:FBIZ) reported quarterly net income available to common shareholders of $9.9 million , or $1.18 diluted earnings per share. This compares to net income available to common shareholders of $10.6 million , or $1.25 per share, in the third quarter of 2022 and $8.6 million , or $1.01 per share, in the fourth quarter of 2021. For the full year 2022, the Company reported net income available to common shareholders of $40.2 million , or $4.75 per share, compared to $35.8 million , or $4.17 per share, in 2021.\n \n“Excellent execution across our commercial lending businesses continued through the fourth quarter, highlighted by 20% annualized loan growth,” Chief Executive Officer Corey Chambas said. “The impact of rising rates and strong balance sheet management, contributed to record net interest margin of 4.15%. We believe our core net interest margin will remain relatively stable in the near-term given the current interest rate environment. We bolstered our funding position with solid in-market deposit expansion, along with the use of wholesale deposits as part of our long-held strategy to match-fund our fixed rate loans.” Chambas added, “This important component of our interest rate risk management strategy resulted in favorable margin expansion compared to peer banks. Outstanding execution led to growth in tangible book value per share of 9% for the year, which compares very favorably to the industry. We enter 2023 with expectations for double-digit loan, deposit, and revenue growth, driving strong earnings performance.”\n \n Quarterly Highlights \n \n \n Robust Loan Growth. Loans, excluding net Paycheck Protection Program (“PPP”) loans, grew $114.2 million , or 19.6% annualized, from the third quarter of 2022 and $230.4 million , or 10.4%, from the fourth quarter of 2021, reflecting balanced growth across the Company’s commercial and industrial (“C&I”) and commercial real estate (“CRE”) portfolios.\n \n \n \n Strong Deposit Growth. Total deposits grew to $2.168 billion , increasing 15.5% annualized from the linked quarter and 10.7% from the fourth quarter of 2021. In-market deposits grew to $1.966 billion , up $36.7 million , or 7.6% annualized, from the linked quarter.\n \n \n \n Record Net Interest Income. Net interest income grew to a record $27.5 million , increasing $1.6 million , or 6.1%, from the linked quarter and $6.5 million , or 31.2%, from the prior year quarter. This was driven by a combination of 11.6% annualized increase in average loans and leases as well as a record net interest margin of 4.15%.\n \n \n \n Exceptional Asset Quality. Continued positive asset quality trends resulted in non-performing assets of $3.8 million , measuring a historically low of 0.13% of total assets and improving from 0.25% of total assets on December 31, 2021 .\n \n \n \n Tangible Book Value Growth. The Company’s strong earnings generation produced a 17.0% annualized increase in tangible book value per share compared to the linked quarter and 8.6% compared to the prior year quarter.\n \n \n \n \n Quarterly Financial Results \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Year Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\n \n \n \n27,452\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,884\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,924\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n98,422\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n84,662\n \n \n \n \n \n \n \n \n \nAdjusted non-interest income (1)\n \n \n \n \n \n \n \n \n \n \n \n6,164\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,197\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,569\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,619\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,071\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n \n \n \n \n33,616\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n34,081\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,493\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n127,041\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n112,733\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n \n \n \n \n20,658\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n19,925\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,644\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n79,155\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n71,571\n \n \n \n \n \n \n \n \n \nPre-tax, pre-provision adjusted earnings (1)\n \n \n \n \n \n \n \n \n \n \n \n12,958\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n14,156\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,849\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n47,886\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n41,162\n \n \n \n \n \n \n \n \n \nLess:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nProvision for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n702\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(508\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(3,868\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(5,803\n \n \n \n)\n \n \n \n \n \nNet loss on foreclosed properties\n \n \n \n \n \n \n \n \n \n \n \n22\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n49\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n15\n \n \n \n \n \n \n \n \n \nAmortization of other intangible assets\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25\n \n \n \n \n \n \n \n \n \nContribution to First Business Charitable Foundation \n \n \n \n \n \n \n \n \n \n \n \n809\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n809\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nSBA recourse (benefit) provision\n \n \n \n \n \n \n \n \n \n \n \n(322\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n96\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(122\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(188\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(76\n \n \n \n)\n \n \n \n \n \nTax credit investment impairment recovery\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(351\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nAdd:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nBank-owned life insurance claim\n \n \n \n \n \n \n \n \n \n \n \n809\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n809\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nNet gain on sale of securities\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \nIncome before income tax expense\n \n \n \n \n \n \n \n \n \n \n \n12,556\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n14,041\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,470\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n52,244\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n47,030\n \n \n \n \n \n \n \n \n \nIncome tax expense\n \n \n \n \n \n \n \n \n \n \n \n2,400\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,215\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,879\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,386\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,275\n \n \n \n \n \n \n \n \n \nNet income\n \n \n \n \n \n \n \n$\n \n \n \n10,156\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n10,826\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n40,858\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n35,755\n \n \n \n \n \n \n \n \n \nPreferred stock dividends\n \n \n \n \n \n \n \n \n \n \n \n219\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n218\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n683\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nNet income available to common shareholders\n \n \n \n \n \n \n \n$\n \n \n \n9,937\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n10,608\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n40,175\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n35,755\n \n \n \n \n \n \n \n \n \nEarnings per share, diluted\n \n \n \n \n \n \n \n$\n \n \n \n1.18\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.25\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.01\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4.75\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4.17\n \n \n \n \n \n \n \n \n \nBook value per share\n \n \n \n \n \n \n \n$\n \n \n \n29.74\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n28.58\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27.48\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n29.74\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27.48\n \n \n \n \n \n \n \n \n \nTangible book value per share (1)\n \n \n \n \n \n \n \n$\n \n \n \n28.28\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27.13\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.03\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n28.28\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.03\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin (2)\n \n \n \n \n \n \n \n \n \n \n \n4.15\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n4.01\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.82\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.44\n \n \n \n%\n \n \n \n \n \nAdjusted net interest margin (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n3.94\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.89\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.23\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.64\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \nFee income ratio (non-interest income / total revenue)\n \n \n \n \n \n \n \n \n \n \n \n20.26\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n26.56\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n23.02\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.92\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n61.45\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n58.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n61.92\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n62.31\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n63.49\n \n \n \n%\n \n \n \n \n \nReturn on average assets (2)\n \n \n \n \n \n \n \n \n \n \n \n1.39\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.54\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.32\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.37\n \n \n \n%\n \n \n \n \n \nPre-tax, pre-provision adjusted return on average assets (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n1.81\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.66\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.74\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.58\n \n \n \n%\n \n \n \n \n \nReturn on average common equity (2)\n \n \n \n \n \n \n \n \n \n \n \n16.26\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n17.44\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n15.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n16.79\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n16.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPeriod-end loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,443,066\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,330,700\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,239,408\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,443,066\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,239,408\n \n \n \n \n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,384,091\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,316,621\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,179,769\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,304,990\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,179,154\n \n \n \n \n \n \n \n \n \nPeriod-end in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,965,970\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,929,224\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,928,285\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,965,970\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,928,285\n \n \n \n \n \n \n \n \n \nAverage in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,950,625\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,930,995\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,866,875\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,928,815\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,784,302\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n24,230\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,143\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,336\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,230\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,336\n \n \n \n \n \n \n \n \n \nNon-performing assets\n \n \n \n \n \n \n \n$\n \n \n \n3,754\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,796\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,522\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,754\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,522\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n0.99\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.09\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.99\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.09\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \nThis is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.\n \n \n \n \n \n(2)\n \n \n \nCalculation is annualized.\n \n \n \n \n \n \n Quarterly Financial Results - Excluding PPP Loans, Interest Income, and Fees \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Year Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\n \n \n \n27,444\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,812\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,898\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n97,816\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n75,826\n \n \n \n \n \n \n \n \n \nAdjusted non-interest income (1)\n \n \n \n \n \n \n \n \n \n \n \n6,164\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,197\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,569\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,619\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,071\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n \n \n \n \n33,608\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n34,009\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27,467\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n126,435\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n103,897\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n \n \n \n \n20,658\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n19,925\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,644\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n79,155\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n71,571\n \n \n \n \n \n \n \n \n \nPre-tax, pre-provision adjusted earnings (1)\n \n \n \n \n \n \n \n$\n \n \n \n12,950\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n14,084\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,823\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n47,280\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n32,326\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin (2)\n \n \n \n \n \n \n \n \n \n \n \n4.15\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n4.00\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.81\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \nFee income ratio (non-interest income / total revenue)\n \n \n \n \n \n \n \n \n \n \n \n20.26\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.10\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n27.56\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n23.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n27.04\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n61.47\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n58.59\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n64.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n62.61\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n68.89\n \n \n \n%\n \n \n \n \n \nPre-tax, pre-provision adjusted return on average assets (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n1.81\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.72\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.32\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPeriod-end loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,442,560\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,328,376\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,212,111\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,442,560\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,212,111\n \n \n \n \n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,381,958\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,312,116\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,126,846\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,295,250\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,026,890\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n0.99\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.10\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.99\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.10\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \nThis is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.\n \n \n \n \n \n(2)\n \n \n \nCalculation is annualized.\n \n \n \n \n Fourth Quarter 2022 Compared to Third Quarter 2022 \n \nNet interest income increased $1.6 million , or 6.1%, to $27.5 million .\n \n \nNet interest income growth was driven by an increase in both average loans and leases and in fees in lieu of interest combined with net interest margin expansion. Average loans and leases receivable increased $67.5 million , or 11.6% annualized, to $2.384 billion . Fees in lieu of interest, which can vary from quarter to quarter based on client-driven activity, totaled $1.3 million , compared to $807,000 in the prior quarter. Excluding fees in lieu of interest and interest income from PPP loans, net interest income increased $1.1 million , or 17.0% annualized.\n \n \n \nThe yield on average interest-earning assets increased 87 basis points to 5.79% from 4.92%. Excluding average net PPP loans, PPP loan interest income, and fees in lieu of interest, the yield earned on average interest-earning assets increased 79 basis points to 5.59% from 4.80%.\n \n \n \nThe rate paid for average interest-bearing, in-market deposits increased 113 basis points to 2.01% from 0.88%. The rate paid for average total bank funding increased 78 basis points to 1.67% from 0.89%. Total bank funding is defined as total deposits plus Federal Home Loan Bank (“FHLB”) advances. The daily average effective federal funds rate increased 147 basis points compared to the linked quarter, which equates to a total bank funding beta of 53.1% for the three months ended December 31, 2022 .\n \n \n \nNet interest margin was 4.15%, up 14 basis points compared to 4.01% in the linked quarter. Adjusted net interest margin1 was 3.94%, up 5 basis points compared to 3.89% in the linked quarter. Net interest margin expansion was due to an increase in fees of lieu of interest and the beta on interest earning assets exceeding the total bank funding beta.\n \n \n \nThe Bank maintains an asset-sensitive balance sheet and ended the quarter positioned for net interest income to continue to benefit from rising rates. However, the Bank anticipates deposit betas will continue to rise at a greater rate, and adjusted net interest margin may begin to decline at a gradual pace in coming quarters.\n \n \nThe Bank reported a provision expense of $702,000 , compared to $12,000 in the third quarter of 2022.\n \n \nThe provision for loan and lease losses expense in the fourth quarter of 2022 was primarily due to net charge offs of $615,000 and an increase of $982,000 in the general reserve due to loan growth, partially offset by a $930,000 decrease in the general reserve due to a decrease in the historical loss factor as elevated losses during the Great Recession fall outside the model look-back period.\n \n \n \nThe Bank adopted ASU No. 2016-13, “Financial Instruments- Credit Losses (Topic 326)\", which is often referred to as CECL, on January 1, 2023 .\n \n \nNon-interest income decreased $1.2 million , or 14.9%, to $7.0 million .\n \n \nPrivate Wealth and Retirement assets (“Private Wealth”) fee income decreased $48,000 , or 1.8% to $2.6 million . Private Wealth assets under management and administration measured $2.660 billion at December 31, 2022 , up $167.4 million from the third quarter, with a majority of the growth occurring late in the fourth quarter.\n \n \n \nGains on sale of Small Business Administration (“SBA”) loans decreased $463,000 , or 63.3%, to $269,000 . Premiums on the sale of SBA loans sold decreased compared to prior quarter and the Company elected to hold a higher proportion of SBA loans on its balance sheet in the current interest rate environment.\n \n \n \nCommercial loan swap fee income increased $415,000 , or 121.7%, to $756,000 . Swap fee income can vary from period to period based on loan activity and the interest rate environment.\n \n \n \nService charges on deposits decreased $227,000 , or 22.3%, to $791,000 , driven by an increase in the earnings credit rate commensurate with the rising rate environment.\n \n \n \nOther fee income decreased $934,000 to $1.7 million , compared to $2.7 million in the third quarter. The decrease was primarily due to lower returns on the Company’s investments in mezzanine funds and lower income in the equipment financing business line. The fourth quarter decrease was partially offset by the recognition of a $809,000 bank-owned life insurance claim. Income on mezzanine funds can vary from period to period based on changes in the value of underlying investments.\n \n \nNon-interest expense increased $1.1 million , or 5.7%, to $21.2 million , while operating expense increased $733,000 , or 3.7%, to $20.7 million .\n \n____________________\n1 Adjusted net interest margin is a non-GAAP measure representing net interest income excluding fees in lieu of interest and other recurring, but volatile, components of net interest margin divided by average interest-earning assets less average net PPP loans and other recurring, but volatile, components of average interest-earning assets.\n \n \nCompensation expense was $15.3 million , reflecting an increase of $450,000 , or 3.0%, from the linked quarter due to a $347,000 adjustment to the annual cash incentive bonus program accrual driven by above-target current year performance, as well as expanded hiring to support the Bank’s growth plans. The Bank’s compensation philosophy is to provide base salaries competitive with the market. To stay competitive in the tight labor market, the Company increased its base salaries consistent with 2021. Average full-time equivalents (FTEs) for the fourth quarter of 2022 were 336, up three from 333 in the linked quarter.\n \n \n \nEquipment expense increased $106,000 , or 41.9%, to $359,000 from the linked quarter primarily due to one-time costs associated with an office relocation.\n \n \n \nOccupancy expense increased $103,000 , or 18.2%, to $669,000 from the linked quarter primarily due to an office relocation and one-time costs associated with building repairs.\n \n \n \nOther non-interest expense increased $354,000 , or 62.2%, to $923,000 from the linked quarter primarily due to a non-recurring contribution to the First Business Charitable Foundation totaling $809,000 during the fourth quarter partially offset by a recourse release of $322,000 and a swap credit valuation benefit of $153,000 .\n \n \nIncome tax expense decreased $815,000 , or 25.3%, to $2.4 million . The effective tax rate was 19.1% for the three months ended December 31, 2022 , compared to 22.9% for the linked quarter. The three months ended December 31, 2022 benefited from low income housing tax credits and a state return amendment. The Company expects to report an effective tax rate of 21-22% for 2023.\n \nTotal period-end loans and leases receivable increased $112.4 million , or 19.3% annualized, to $2.443 billion . Excluding net PPP loans, total period-end loans and leases receivable increased $114.2 million , or 19.6% annualized.\n \n \nCommercial real estate loans increased by $57.0 million , or 15.4% annualized, to $1.542 billion , compared to $1.485 billion . Growth spanned all commercial real estate categories, led by increases in non-owner occupied and multi-family loans.\n \n \n \nC&I loans increased $52.2 million , or 26.4% annualized, to $841.2 million , compared to $789.0 million . Excluding PPP loans, C&I loans increased $54.0 million , or 27.6% annualized, due to growth across products and geographies.\n \n \nTotal period-end in-market deposits increased $36.7 million , or 7.6% annualized, to $1.966 billion , compared to $1.929 billion . The average rate paid was 1.43%, up 82 basis points from 0.61% in the third quarter.\n \nPeriod-end wholesale funding, including FHLB advances, brokered deposits, and deposits gathered through internet deposit listing services, increased $82.5 million to $618.6 million .\n \n \nWholesale deposits increased $43.9 million to $202.2 million , compared to $158.3 million as the Bank continued to replace FHLB advances with wholesale deposits. The increase in wholesale funding is consistent with the Company’s long-held philosophy to manage interest rate risk by utilizing the most efficient and cost-effective source of wholesale funds to match-fund our fixed-rate loan portfolio. The average rate paid on wholesale deposits increased 120 basis points to 3.66% and the weighted average original maturity increased to 2.1 years from 0.3 years.\n \n \n \nFHLB advances increased $38.6 million to $416.4 million . The average rate paid on FHLB advances increased 20 basis points to 2.21% and the weighted average original maturity decreased to 3.7 years from 4.8 years.\n \n \nNon-performing assets were $3.8 million , or 0.13% of total assets in both periods of comparison.\n \nThe allowance for loan and lease losses increased $87,000 , or 0.4%, as increases in the general reserve from loan growth and net charge-offs were partially offset by a decrease in the general reserve due to a change in loss factors derived from the historical look-back period. The allowance for loan and lease losses as a percent of total gross loans and leases was 0.99% compared to 1.04% in the third quarter.\n \n Fourth Quarter 2022 Compared to Fourth Quarter 2021 \n \nNet interest income increased $6.5 million , or 31.2%, to $27.5 million .\n \n \nThe increase in net interest income primarily reflects an increase in average gross loans and leases and net interest margin expansion, partially offset by lower fees in lieu of interest. Fees in lieu of interest decreased from $1.7 million to $1.3 million , primarily due to a $889,000 reduction in PPP loan fee amortization. Excluding fees in lieu of interest and interest income from PPP loans, net interest income increased $7.0 million , or 36.9%. Excluding net PPP loans, average gross loans and leases increased $255.1 million , or 12.0%.\n \n \n \nNet interest margin increased 76 basis points to 4.15% from 3.39%. Adjusted net interest margin increased 71 basis points to 3.94% from 3.23%.\n \n \n \nThe yield on average interest-earning assets measured 5.79% compared to 3.81%. Excluding fees in lieu of interest, PPP loan interest income, and net PPP loans, the yield on average interest-earning assets measured 5.59%, compared to 3.60%. This increase in yield was primarily due to the increase in short-term market rates and the reinvestment of cash flows from the securities and fixed rate loan portfolios in a rising rate environment.\n \n \n \nThe rate paid for average interest-bearing in-market deposits increased 183 basis points to 2.01% from 0.18%. The rate paid for average total bank funding increased 124 basis points to 1.67% from 0.33%.\n \n \nThe Company reported a provision expense of $702,000 , compared to a provision benefit of $508,000 in the fourth quarter of 2021 primarily due to an increase in net charge-offs in the current quarter and improvement in subjective factors in the prior year quarter.\n \nNon-interest income of $7.0 million decreased by $596,000 , or 7.9%, from $7.6 million in the prior year period.\n \n \nPrivate Wealth fee income decreased $304,000 , or 10.6%, to $2.6 million , due to a decline in market values. Private Wealth assets under management and administration measured $2.660 billion at December 31, 2022 , down $260.7 million , or 8.9%.\n \n \n \nGain on sale of SBA loans decreased $773,000 , or 74.2%, to $269,000 . Premiums on the sale and notional value of SBA loans sold decreased compared to prior year quarter, as the Company elected to hold a higher proportion of SBA loans on its balance sheet in the current interest rate environment.\n \n \n \nService charges on deposits decreased $232,000 , or 22.7%, to $791,000 . The reasons for the decrease are consistent with the explanations discussed above in the linked quarter analysis.\n \n \n \nLoan fees of $847,000 increased by $168,000 , or 24.7%, primarily due to an increase in C&I lending activity.\n \n \n \nOther fee income increased $473,000 , or 37.4%, to $1.7 million , due to the recognition of a $809,000 bank owned life insurance death benefit, partially offset by lower returns on the Company’s investments in mezzanine funds. Income on mezzanine funds can vary from period to period based on changes in the value of underlying investments.\n \n \nNon-interest expense increased $3.6 million , or 20.7%, to $21.2 million . Operating expense increased $3.0 million , or 17.1%, to $20.7 million .\n \n \nCompensation expense increased $2.8 million , or 22.7%, to $15.3 million . Average FTEs increased 12% to 336 in the fourth quarter of 2022, compared to 301 in the fourth quarter of 2021. The increase in compensation expense was mainly due to an increase in average FTEs, annual merit increases and promotions, and an increase in incentive compensation due to outstanding company performance.\n \n \n \nFull year 2022 compensation included a $6.7 million annual incentive compensation accrual, which exceeded the Company’s target payout by $2.5 million .\n \n \n \nProfessional fees increased $277,000 , or 29.7%, to $1.2 million , primarily due to a general increase in other professional consulting services associated with various projects and an increase in audit expenses.\n \n \n \nEquipment expense increased $136,000 , or 61.0%, to $359,000 . The reasons for the increase in equipment expense are consistent with the explanations discussed above in the linked quarter analysis.\n \n \n \nOccupancy expense increased $118,000 , or 21.4%, to $669,000 . The reasons for the increase in occupancy expense are consistent with the explanations discussed above in the linked quarter analysis.\n \n \n \nOther non-interest expense increased $94,000 , or 11.3%, to $923,000 primarily due to a non-recurring charitable contribution totaling $809,000 during the fourth quarter partially offset by a reduction in expenses related to swap credit valuations and recourse provision.\n \n \nTotal period-end loans and leases receivable increased $203.7 million , or 9.1%, to $2.443 billion . Excluding net PPP loans, total period-end loans and leases receivable increased $230.4 million , or 10.4%, to $2.443 billion .\n \n \nC&I loans increased $110.4 million , or 15.1% to $841.2 million . Excluding PPP loans, C&I loans increased $137.7 million , or 19.6%, to $840.6 million due to growth across categories and geographies.\n \n \n \nCRE loans increased $87.3 million , or 6.0%, to $1.542 billion , due to increases in most CRE categories.\n \n \nTotal period-end in-market deposits increased $37.7 million , or 2.0%, to $1.966 billion , and the average rate paid increased 130 basis points to 1.43%. The increase in in-market deposits was principally due to a $99.7 million increase in certificates of deposit, partially offset by a $55.9 million decline in money market accounts.\n \nPeriod-end wholesale funding increased $220.2 million to $618.6 million .\n \n \nWholesale deposits increased $172.6 million to $202.2 million , as the Bank utilized more wholesale deposits in lieu of short-term FHLB advances. The average rate paid on brokered certificates of deposit increased 263 basis points to 3.66% and the weighted average original maturity decreased to 2.1 years from 3.8 years.\n \n \n \nFHLB advances increased $47.6 million to $416.4 million . The average rate paid on FHLB advances increased 91 basis points to 2.21% and the weighted average original maturity decreased to 3.7 years from 5.9 years.\n \n \nNon-performing assets decreased to $3.8 million , or 0.13% of total assets, compared to $6.5 million , or 0.25% of total assets.\n \nThe allowance for loan and lease losses decreased $106,000 to $24.2 million , compared to $24.3 million . The allowance for loan and lease losses as a percent of total gross loans and leases was 0.99%, compared to 1.09%.\n \n Paycheck Protection Program \n \nAs of December 31, 2022 , the Company had $554,000 in gross PPP loans outstanding and deferred processing fees outstanding of $48,000 . The processing fees are deferred and recognized over the contractual life of the loan, or accelerated at forgiveness, as an adjustment of yield using the interest method. During the three and twelve months ended December 31, 2022 , the Company recognized $3,000 and $509,000 of PPP processing fees in interest income, respectively, compared to $892,000 and $7.3 million for the three and twelve months ended December 31, 2021 . The SBA provides a guaranty to the lender of 100% of principal and interest unless the lender violated an obligation under the agreement.\n \n Share Repurchase Program Update \n \nAs previously announced, effective March 4, 2022 , the Company’s Board of Directors authorized the repurchase by the Company of shares of its common stock with a maximum aggregate purchase price of $5.0 million , effective March 4, 2022 through March 4, 2023 . As of December 16, 2022 , the Company had completed the share repurchase program, purchasing a total of 142,074 shares for approximately $5.0 million at an average cost of $35.14 per share.\n \nAbout First Business Financial Services, Inc. \n \n First Business Financial Services, Inc. , (Nasdaq: FBIZ) is the parent company of First Business Bank . First Business Bank specializes in business banking, including commercial banking and specialized lending, private wealth, and bank consulting services, and through its refined focus, delivers unmatched expertise, accessibility, and responsiveness. Specialized lending solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC . For additional information, visit firstbusiness.bank .\n \nThis release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect First Business Bank’s current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs, and projections expressed in such statements. Such statements are subject to risks and uncertainties, including among other things:\n \n \nAdverse changes in the economy or business conditions, either nationally or in our markets including, without limitation, inflation, supply chain issues, labor shortages, and the adverse effects of the COVID-19 pandemic on the global, national, and local economy.\n \n \n \nCompetitive pressures among depository and other financial institutions nationally and in the Company’s markets.\n \n \n \nIncreases in defaults by borrowers and other delinquencies.\n \n \n \nManagement’s ability to manage growth effectively, including the successful expansion of our client service, administrative infrastructure, and internal management systems.\n \n \n \nFluctuations in interest rates and market prices.\n \n \n \nChanges in legislative or regulatory requirements applicable to the Company and its subsidiaries.\n \n \n \nChanges in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations.\n \n \n \nFraud, including client and system failure or breaches of our network security, including the Company’s internet banking activities.\n \n \n \nFailure to comply with the applicable SBA regulations in order to maintain the eligibility of the guaranteed portion of SBA loans.\n \n \nFor further information about the factors that could affect the Company’s future results, please see the Company’s annual report on Form 10-K for the year ended December 31, 2021 and other filings with the Securities and Exchange Commission .\n \n \n \n SELECTED FINANCIAL CONDITION DATA \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (in thousands) \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCash and cash equivalents\n \n \n \n \n \n \n \n$\n \n \n \n102,682\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n110,965\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n95,484\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n95,603\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n57,110\n \n \n \n \n \n \n \n \n \nSecurities available-for-sale, at fair value\n \n \n \n \n \n \n \n \n \n \n \n212,024\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n196,566\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n208,643\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n223,631\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n205,702\n \n \n \n \n \n \n \n \n \nSecurities held-to-maturity, at amortized cost\n \n \n \n \n \n \n \n \n \n \n \n12,635\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,531\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,968\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,267\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n19,746\n \n \n \n \n \n \n \n \n \nLoans held for sale\n \n \n \n \n \n \n \n \n \n \n \n2,632\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n773\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,256\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,418\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,570\n \n \n \n \n \n \n \n \n \nLoans and leases receivable\n \n \n \n \n \n \n \n \n \n \n \n2,443,066\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,330,700\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,290,100\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,251,249\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,239,408\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n(24,230\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(24,143\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(24,104\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(23,669\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(24,336\n \n \n \n)\n \n \n \n \n \nLoans and leases receivable, net\n \n \n \n \n \n \n \n \n \n \n \n2,418,836\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,306,557\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,265,996\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,227,580\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,215,072\n \n \n \n \n \n \n \n \n \nPremises and equipment, net\n \n \n \n \n \n \n \n \n \n \n \n4,340\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,143\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,899\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,621\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,694\n \n \n \n \n \n \n \n \n \nForeclosed properties\n \n \n \n \n \n \n \n \n \n \n \n95\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n151\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n124\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n117\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n164\n \n \n \n \n \n \n \n \n \nRight-of-use assets\n \n \n \n \n \n \n \n \n \n \n \n7,690\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,424\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,772\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,118\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,910\n \n \n \n \n \n \n \n \n \nBank-owned life insurance\n \n \n \n \n \n \n \n \n \n \n \n54,018\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n54,683\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n54,324\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53,974\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53,600\n \n \n \n \n \n \n \n \n \n Federal Home Loan Bank stock, at cost\n \n \n \n \n \n \n \n \n \n \n \n17,812\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n15,701\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,959\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,863\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,336\n \n \n \n \n \n \n \n \n \n Goodwill and other intangible assets\n \n \n \n \n \n \n \n \n \n \n \n12,159\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,218\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,262\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,184\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,268\n \n \n \n \n \n \n \n \n \nDerivatives\n \n \n \n \n \n \n \n \n \n \n \n68,581\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n73,718\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n44,461\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26,890\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26,343\n \n \n \n \n \n \n \n \n \nAccrued interest receivable and other assets\n \n \n \n \n \n \n \n \n \n \n \n63,107\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n57,372\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n48,868\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n43,816\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39,390\n \n \n \n \n \n \n \n \n \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,976,611\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,850,802\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,777,016\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,724,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,652,905\n \n \n \n \n \n \n \n \n \n Liabilities and Stockholders’ Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nIn-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,965,970\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,929,224\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,857,010\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,011,373\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,928,285\n \n \n \n \n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n202,236\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n158,321\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,321\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,321\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29,638\n \n \n \n \n \n \n \n \n \nTotal deposits\n \n \n \n \n \n \n \n \n \n \n \n2,168,206\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,087,545\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,869,331\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,023,694\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,957,923\n \n \n \n \n \n \n \n \n \n Federal Home Loan Bank advances and other borrowings\n \n \n \n \n \n \n \n \n \n \n \n456,808\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n420,297\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n596,642\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n414,487\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n403,451\n \n \n \n \n \n \n \n \n \nJunior subordinated notes\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,076\n \n \n \n \n \n \n \n \n \nLease liabilities\n \n \n \n \n \n \n \n \n \n \n \n10,175\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,827\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,207\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,580\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,406\n \n \n \n \n \n \n \n \n \nDerivatives\n \n \n \n \n \n \n \n \n \n \n \n61,419\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n66,162\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n40,357\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24,961\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,283\n \n \n \n \n \n \n \n \n \nAccrued interest payable and other liabilities\n \n \n \n \n \n \n \n \n \n \n \n19,363\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n16,967\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,556\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,309\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n15,344\n \n \n \n \n \n \n \n \n \nTotal liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,715,971\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,597,798\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,527,093\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,479,031\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,420,483\n \n \n \n \n \n \n \n \n \nTotal stockholders’ equity\n \n \n \n \n \n \n \n \n \n \n \n260,640\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n253,004\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n249,923\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n245,051\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n232,422\n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,976,611\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,850,802\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,777,016\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,724,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,652,905\n \n \n \n \n \n \n \n \n \n \n STATEMENTS OF INCOME \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Year Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \nTotal interest income\n \n \n \n \n \n \n \n$\n \n \n \n38,319\n \n \n \n \n \n \n \n$\n \n \n \n31,786\n \n \n \n \n \n \n \n$\n \n \n \n27,031\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,576\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n121,371\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n95,995\n \n \n \n \n \n \n \n \n \nTotal interest expense\n \n \n \n \n \n \n \n \n \n \n \n10,867\n \n \n \n \n \n \n \n \n \n \n \n5,902\n \n \n \n \n \n \n \n \n \n \n \n3,371\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,809\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,949\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,333\n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n27,452\n \n \n \n \n \n \n \n \n \n \n \n25,884\n \n \n \n \n \n \n \n \n \n \n \n23,660\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,426\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n20,924\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n98,422\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n84,662\n \n \n \n \n \n \n \n \n \nProvision for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n702\n \n \n \n \n \n \n \n \n \n \n \n12\n \n \n \n \n \n \n \n \n \n \n \n(3,727\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(855\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(508\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(3,868\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(5,803\n \n \n \n)\n \n \n \n \n \nNet interest income after provision for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n26,750\n \n \n \n \n \n \n \n \n \n \n \n25,872\n \n \n \n \n \n \n \n \n \n \n \n27,387\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,281\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,432\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n102,290\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n90,465\n \n \n \n \n \n \n \n \n \nPrivate wealth management service fees\n \n \n \n \n \n \n \n \n \n \n \n2,570\n \n \n \n \n \n \n \n \n \n \n \n2,618\n \n \n \n \n \n \n \n \n \n \n \n2,852\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,841\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,874\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,881\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,784\n \n \n \n \n \n \n \n \n \nGain on sale of SBA loans\n \n \n \n \n \n \n \n \n \n \n \n269\n \n \n \n \n \n \n \n \n \n \n \n732\n \n \n \n \n \n \n \n \n \n \n \n951\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n585\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,537\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,044\n \n \n \n \n \n \n \n \n \nService charges on deposits\n \n \n \n \n \n \n \n \n \n \n \n791\n \n \n \n \n \n \n \n \n \n \n \n1,018\n \n \n \n \n \n \n \n \n \n \n \n1,041\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n999\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,023\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,849\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,837\n \n \n \n \n \n \n \n \n \nLoan fees\n \n \n \n \n \n \n \n \n \n \n \n847\n \n \n \n \n \n \n \n \n \n \n \n814\n \n \n \n \n \n \n \n \n \n \n \n697\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n679\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,010\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,506\n \n \n \n \n \n \n \n \n \nNet gain on sale of securities\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \nSwap fees\n \n \n \n \n \n \n \n \n \n \n \n756\n \n \n \n \n \n \n \n \n \n \n \n341\n \n \n \n \n \n \n \n \n \n \n \n471\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n225\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n684\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,793\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,368\n \n \n \n \n \n \n \n \n \nOther non-interest income\n \n \n \n \n \n \n \n \n \n \n \n1,740\n \n \n \n \n \n \n \n \n \n \n \n2,674\n \n \n \n \n \n \n \n \n \n \n \n860\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,084\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,267\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,358\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,532\n \n \n \n \n \n \n \n \n \nTotal non-interest income\n \n \n \n \n \n \n \n \n \n \n \n6,973\n \n \n \n \n \n \n \n \n \n \n \n8,197\n \n \n \n \n \n \n \n \n \n \n \n6,872\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,386\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,569\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29,428\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,100\n \n \n \n \n \n \n \n \n \nCompensation\n \n \n \n \n \n \n \n \n \n \n \n15,267\n \n \n \n \n \n \n \n \n \n \n \n14,817\n \n \n \n \n \n \n \n \n \n \n \n14,020\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,638\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,447\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n57,742\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n51,710\n \n \n \n \n \n \n \n \n \nOccupancy\n \n \n \n \n \n \n \n \n \n \n \n669\n \n \n \n \n \n \n \n \n \n \n \n566\n \n \n \n \n \n \n \n \n \n \n \n568\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n555\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n551\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,358\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,180\n \n \n \n \n \n \n \n \n \nProfessional fees\n \n \n \n \n \n \n \n \n \n \n \n1,210\n \n \n \n \n \n \n \n \n \n \n \n1,203\n \n \n \n \n \n \n \n \n \n \n \n1,298\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,170\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n933\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,881\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,736\n \n \n \n \n \n \n \n \n \nData processing\n \n \n \n \n \n \n \n \n \n \n \n806\n \n \n \n \n \n \n \n \n \n \n \n719\n \n \n \n \n \n \n \n \n \n \n \n892\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n780\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n773\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,197\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,087\n \n \n \n \n \n \n \n \n \nMarketing\n \n \n \n \n \n \n \n \n \n \n \n641\n \n \n \n \n \n \n \n \n \n \n \n543\n \n \n \n \n \n \n \n \n \n \n \n670\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n500\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n548\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,354\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,022\n \n \n \n \n \n \n \n \n \nEquipment\n \n \n \n \n \n \n \n \n \n \n \n359\n \n \n \n \n \n \n \n \n \n \n \n253\n \n \n \n \n \n \n \n \n \n \n \n235\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n244\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n223\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,091\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n990\n \n \n \n \n \n \n \n \n \nComputer software\n \n \n \n \n \n \n \n \n \n \n \n1,089\n \n \n \n \n \n \n \n \n \n \n \n1,128\n \n \n \n \n \n \n \n \n \n \n \n1,117\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,082\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,017\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,416\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,260\n \n \n \n \n \n \n \n \n \n FDIC insurance\n \n \n \n \n \n \n \n \n \n \n \n203\n \n \n \n \n \n \n \n \n \n \n \n230\n \n \n \n \n \n \n \n \n \n \n \n296\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n313\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n210\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,143\n \n \n \n \n \n \n \n \n \nOther non-interest expense\n \n \n \n \n \n \n \n \n \n \n \n923\n \n \n \n \n \n \n \n \n \n \n \n569\n \n \n \n \n \n \n \n \n \n \n \n360\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n541\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n829\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,393\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,407\n \n \n \n \n \n \n \n \n \nTotal non-interest expense\n \n \n \n \n \n \n \n \n \n \n \n21,167\n \n \n \n \n \n \n \n \n \n \n \n20,028\n \n \n \n \n \n \n \n \n \n \n \n19,456\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,823\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,531\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n79,474\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n71,535\n \n \n \n \n \n \n \n \n \nIncome before income tax expense\n \n \n \n \n \n \n \n \n \n \n \n12,556\n \n \n \n \n \n \n \n \n \n \n \n14,041\n \n \n \n \n \n \n \n \n \n \n \n14,803\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,844\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,470\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n52,244\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n47,030\n \n \n \n \n \n \n \n \n \nIncome tax expense\n \n \n \n \n \n \n \n \n \n \n \n2,400\n \n \n \n \n \n \n \n \n \n \n \n3,215\n \n \n \n \n \n \n \n \n \n \n \n3,599\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,172\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,879\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,386\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,275\n \n \n \n \n \n \n \n \n \nNet income\n \n \n \n \n \n \n \n$\n \n \n \n10,156\n \n \n \n \n \n \n \n$\n \n \n \n10,826\n \n \n \n \n \n \n \n$\n \n \n \n11,204\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,672\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n40,858\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n35,755\n \n \n \n \n \n \n \n \n \nPreferred stock dividends\n \n \n \n \n \n \n \n \n \n \n \n219\n \n \n \n \n \n \n \n \n \n \n \n218\n \n \n \n \n \n \n \n \n \n \n \n246\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n683\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nNet income available to common shareholders\n \n \n \n \n \n \n \n$\n \n \n \n9,937\n \n \n \n \n \n \n \n$\n \n \n \n10,608\n \n \n \n \n \n \n \n$\n \n \n \n10,958\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,672\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n40,175\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n35,755\n \n \n \n \n \n \n \n \n \nPer common share:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nBasic earnings\n \n \n \n \n \n \n \n$\n \n \n \n1.18\n \n \n \n \n \n \n \n$\n \n \n \n1.25\n \n \n \n \n \n \n \n$\n \n \n \n1.29\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.02\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.01\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4.75\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4.17\n \n \n \n \n \n \n \n \n \nDiluted earnings\n \n \n \n \n \n \n \n \n \n \n \n1.18\n \n \n \n \n \n \n \n \n \n \n \n1.25\n \n \n \n \n \n \n \n \n \n \n \n1.29\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.02\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.01\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4.75\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4.17\n \n \n \n \n \n \n \n \n \nDividends declared\n \n \n \n \n \n \n \n \n \n \n \n0.1975\n \n \n \n \n \n \n \n \n \n \n \n0.1975\n \n \n \n \n \n \n \n \n \n \n \n0.1975\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.1975\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.18\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.79\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.72\n \n \n \n \n \n \n \n \n \nBook value\n \n \n \n \n \n \n \n \n \n \n \n29.74\n \n \n \n \n \n \n \n \n \n \n \n28.58\n \n \n \n \n \n \n \n \n \n \n \n28.08\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27.46\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27.48\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29.74\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27.48\n \n \n \n \n \n \n \n \n \nTangible book value\n \n \n \n \n \n \n \n \n \n \n \n28.28\n \n \n \n \n \n \n \n \n \n \n \n27.13\n \n \n \n \n \n \n \n \n \n \n \n26.63\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.02\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.03\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28.28\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.03\n \n \n \n \n \n \n \n \n \nWeighted-average common shares outstanding(1)\n \n \n \n \n \n \n \n \n \n \n \n8,180,531\n \n \n \n \n \n \n \n \n \n \n \n8,230,902\n \n \n \n \n \n \n \n \n \n \n \n8,225,838\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,232,142\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,228,311\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,226,943\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,314,921\n \n \n \n \n \n \n \n \n \nWeighted-average diluted common shares outstanding(1)\n \n \n \n \n \n \n \n \n \n \n \n8,180,531\n \n \n \n \n \n \n \n \n \n \n \n8,230,902\n \n \n \n \n \n \n \n \n \n \n \n8,225,838\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,232,142\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,228,311\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,226,943\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,314,921\n \n \n \n \n \n \n \n \n \n \n(1)\n \n \n \nExcluding participating securities.\n \n \n \n \n \n \n NET INTEREST INCOME ANALYSIS \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n December 31, 2022 \n \n \n \n \n \n \n \n September 30, 2022 \n \n \n \n \n \n \n \n December 31, 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate(4) \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate(4) \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate(4) \n \n \n \n \n \n Interest-earning assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommercial real estate and other mortgage loans(1)\n \n \n \n \n \n \n \n$\n \n \n \n1,515,975\n \n \n \n \n \n \n \n$\n \n \n \n20,948\n \n \n \n \n \n \n \n5.53\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,486,530\n \n \n \n \n \n \n \n$\n \n \n \n17,280\n \n \n \n \n \n \n \n4.65\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,417,498\n \n \n \n \n \n \n \n$\n \n \n \n13,225\n \n \n \n \n \n \n \n3.73\n \n \n \n%\n \n \n \n \n \nCommercial and industrial loans(1)\n \n \n \n \n \n \n \n \n \n \n \n806,019\n \n \n \n \n \n \n \n \n \n \n \n14,816\n \n \n \n \n \n \n \n7.35\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n765,440\n \n \n \n \n \n \n \n \n \n \n \n12,266\n \n \n \n \n \n \n \n6.41\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n702,108\n \n \n \n \n \n \n \n \n \n \n \n8,711\n \n \n \n \n \n \n \n4.96\n \n \n \n%\n \n \n \n \n \nDirect financing leases(1)\n \n \n \n \n \n \n \n \n \n \n \n13,747\n \n \n \n \n \n \n \n \n \n \n \n156\n \n \n \n \n \n \n \n4.54\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n15,093\n \n \n \n \n \n \n \n \n \n \n \n160\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n17,662\n \n \n \n \n \n \n \n \n \n \n \n200\n \n \n \n \n \n \n \n4.53\n \n \n \n%\n \n \n \n \n \nConsumer and other loans(1)\n \n \n \n \n \n \n \n \n \n \n \n48,350\n \n \n \n \n \n \n \n \n \n \n \n514\n \n \n \n \n \n \n \n4.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n49,558\n \n \n \n \n \n \n \n \n \n \n \n468\n \n \n \n \n \n \n \n3.78\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n42,501\n \n \n \n \n \n \n \n \n \n \n \n376\n \n \n \n \n \n \n \n3.54\n \n \n \n%\n \n \n \n \n \nTotal loans and leases receivable(1)\n \n \n \n \n \n \n \n \n \n \n \n2,384,091\n \n \n \n \n \n \n \n \n \n \n \n36,434\n \n \n \n \n \n \n \n6.11\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,316,621\n \n \n \n \n \n \n \n \n \n \n \n30,174\n \n \n \n \n \n \n \n5.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,179,769\n \n \n \n \n \n \n \n \n \n \n \n22,512\n \n \n \n \n \n \n \n4.13\n \n \n \n%\n \n \n \n \n \nMortgage-related securities(2)\n \n \n \n \n \n \n \n \n \n \n \n164,120\n \n \n \n \n \n \n \n \n \n \n \n1,008\n \n \n \n \n \n \n \n2.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n168,433\n \n \n \n \n \n \n \n \n \n \n \n915\n \n \n \n \n \n \n \n2.17\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n170,002\n \n \n \n \n \n \n \n \n \n \n \n677\n \n \n \n \n \n \n \n1.59\n \n \n \n%\n \n \n \n \n \nOther investment securities(3)\n \n \n \n \n \n \n \n \n \n \n \n49,850\n \n \n \n \n \n \n \n \n \n \n \n261\n \n \n \n \n \n \n \n2.09\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n51,812\n \n \n \n \n \n \n \n \n \n \n \n250\n \n \n \n \n \n \n \n1.93\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n49,927\n \n \n \n \n \n \n \n \n \n \n \n209\n \n \n \n \n \n \n \n1.67\n \n \n \n%\n \n \n \n \n \nFHLB stock\n \n \n \n \n \n \n \n \n \n \n \n16,281\n \n \n \n \n \n \n \n \n \n \n \n301\n \n \n \n \n \n \n \n7.40\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n18,167\n \n \n \n \n \n \n \n \n \n \n \n289\n \n \n \n \n \n \n \n6.36\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n12,345\n \n \n \n \n \n \n \n \n \n \n \n155\n \n \n \n \n \n \n \n5.02\n \n \n \n%\n \n \n \n \n \nShort-term investments\n \n \n \n \n \n \n \n \n \n \n \n34,807\n \n \n \n \n \n \n \n \n \n \n \n315\n \n \n \n \n \n \n \n3.62\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n27,912\n \n \n \n \n \n \n \n \n \n \n \n158\n \n \n \n \n \n \n \n2.26\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n59,970\n \n \n \n \n \n \n \n \n \n \n \n23\n \n \n \n \n \n \n \n0.15\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n2,649,149\n \n \n \n \n \n \n \n \n \n \n \n38,319\n \n \n \n \n \n \n \n5.79\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,582,945\n \n \n \n \n \n \n \n \n \n \n \n31,786\n \n \n \n \n \n \n \n4.92\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,472,013\n \n \n \n \n \n \n \n \n \n \n \n23,576\n \n \n \n \n \n \n \n3.81\n \n \n \n%\n \n \n \n \n \nNon-interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n218,326\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n176,016\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n140,892\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,867,475\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,758,961\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,612,905\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest-bearing liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTransaction accounts\n \n \n \n \n \n \n \n$\n \n \n \n492,586\n \n \n \n \n \n \n \n \n \n \n \n2,360\n \n \n \n \n \n \n \n1.92\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n486,704\n \n \n \n \n \n \n \n \n \n \n \n1,005\n \n \n \n \n \n \n \n0.83\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n497,743\n \n \n \n \n \n \n \n \n \n \n \n239\n \n \n \n \n \n \n \n0.19\n \n \n \n%\n \n \n \n \n \nMoney market\n \n \n \n \n \n \n \n \n \n \n \n748,502\n \n \n \n \n \n \n \n \n \n \n \n3,784\n \n \n \n \n \n \n \n2.02\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n746,227\n \n \n \n \n \n \n \n \n \n \n \n1,610\n \n \n \n \n \n \n \n0.86\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n749,247\n \n \n \n \n \n \n \n \n \n \n \n321\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \nCertificates of deposit\n \n \n \n \n \n \n \n \n \n \n \n148,949\n \n \n \n \n \n \n \n \n \n \n \n849\n \n \n \n \n \n \n \n2.28\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n113,529\n \n \n \n \n \n \n \n \n \n \n \n340\n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n42,507\n \n \n \n \n \n \n \n \n \n \n \n36\n \n \n \n \n \n \n \n0.34\n \n \n \n%\n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n128,908\n \n \n \n \n \n \n \n \n \n \n \n1,180\n \n \n \n \n \n \n \n3.66\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n36,702\n \n \n \n \n \n \n \n \n \n \n \n226\n \n \n \n \n \n \n \n2.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n62,342\n \n \n \n \n \n \n \n \n \n \n \n161\n \n \n \n \n \n \n \n1.03\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing deposits\n \n \n \n \n \n \n \n \n \n \n \n1,518,945\n \n \n \n \n \n \n \n \n \n \n \n8,173\n \n \n \n \n \n \n \n2.15\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,383,162\n \n \n \n \n \n \n \n \n \n \n \n3,181\n \n \n \n \n \n \n \n0.92\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,351,839\n \n \n \n \n \n \n \n \n \n \n \n757\n \n \n \n \n \n \n \n0.22\n \n \n \n%\n \n \n \n \n \nFHLB advances\n \n \n \n \n \n \n \n \n \n \n \n389,310\n \n \n \n \n \n \n \n \n \n \n \n2,149\n \n \n \n \n \n \n \n2.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n432,528\n \n \n \n \n \n \n \n \n \n \n \n2,173\n \n \n \n \n \n \n \n2.01\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n353,637\n \n \n \n \n \n \n \n \n \n \n \n1,149\n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \nOther borrowings\n \n \n \n \n \n \n \n \n \n \n \n41,143\n \n \n \n \n \n \n \n \n \n \n \n545\n \n \n \n \n \n \n \n5.30\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n42,800\n \n \n \n \n \n \n \n \n \n \n \n548\n \n \n \n \n \n \n \n5.12\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n35,270\n \n \n \n \n \n \n \n \n \n \n \n466\n \n \n \n \n \n \n \n5.28\n \n \n \n%\n \n \n \n \n \nJunior subordinated notes\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n—\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n—\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n10,073\n \n \n \n \n \n \n \n \n \n \n \n280\n \n \n \n \n \n \n \n11.12\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n1,949,398\n \n \n \n \n \n \n \n \n \n \n \n10,867\n \n \n \n \n \n \n \n2.23\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,858,490\n \n \n \n \n \n \n \n \n \n \n \n5,902\n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,750,819\n \n \n \n \n \n \n \n \n \n \n \n2,652\n \n \n \n \n \n \n \n0.61\n \n \n \n%\n \n \n \n \n \nNon-interest-bearing demand deposit accounts\n \n \n \n \n \n \n \n \n \n \n \n560,588\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n584,535\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n577,378\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nOther non-interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n100,998\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n60,705\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56,280\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,610,984\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,503,730\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,384,477\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nStockholders’ equity\n \n \n \n \n \n \n \n \n \n \n \n256,491\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n255,231\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n228,428\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,867,475\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,758,961\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,612,905\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27,452\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,884\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,924\n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.56\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.65\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n699,751\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n724,455\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n721,194\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4.15\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4.01\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \nThe average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.\n \n \n \n \n \n(2)\n \n \n \nIncludes amortized cost basis of assets available for sale and held to maturity.\n \n \n \n \n \n(3)\n \n \n \nYields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.\n \n \n \n \n \n(4)\n \n \n \nRepresents annualized yields/rates.\n \n \n \n \n \n \n NET INTEREST INCOME ANALYSIS \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Year Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n December 31, 2022 \n \n \n \n \n \n \n \n December 31, 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate \n \n \n \n \n \n Interest-earning assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommercial real estate and other mortgage loans(1)\n \n \n \n \n \n \n \n$\n \n \n \n1,484,239\n \n \n \n \n \n \n \n$\n \n \n \n66,917\n \n \n \n \n \n \n \n4.51\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,387,434\n \n \n \n \n \n \n \n$\n \n \n \n51,930\n \n \n \n \n \n \n \n3.74\n \n \n \n%\n \n \n \n \n \nCommercial and industrial loans(1)\n \n \n \n \n \n \n \n \n \n \n \n755,837\n \n \n \n \n \n \n \n \n \n \n \n45,893\n \n \n \n \n \n \n \n6.07\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n727,923\n \n \n \n \n \n \n \n \n \n \n \n37,470\n \n \n \n \n \n \n \n5.15\n \n \n \n%\n \n \n \n \n \nDirect financing leases(1)\n \n \n \n \n \n \n \n \n \n \n \n15,219\n \n \n \n \n \n \n \n \n \n \n \n682\n \n \n \n \n \n \n \n4.48\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n19,591\n \n \n \n \n \n \n \n \n \n \n \n872\n \n \n \n \n \n \n \n4.45\n \n \n \n%\n \n \n \n \n \nConsumer and other loans(1)\n \n \n \n \n \n \n \n \n \n \n \n49,695\n \n \n \n \n \n \n \n \n \n \n \n1,876\n \n \n \n \n \n \n \n3.78\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n44,206\n \n \n \n \n \n \n \n \n \n \n \n1,572\n \n \n \n \n \n \n \n3.56\n \n \n \n%\n \n \n \n \n \nTotal loans and leases receivable(1)\n \n \n \n \n \n \n \n \n \n \n \n2,304,990\n \n \n \n \n \n \n \n \n \n \n \n115,368\n \n \n \n \n \n \n \n5.01\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,179,154\n \n \n \n \n \n \n \n \n \n \n \n91,844\n \n \n \n \n \n \n \n4.21\n \n \n \n%\n \n \n \n \n \nMortgage-related securities(2)\n \n \n \n \n \n \n \n \n \n \n \n173,495\n \n \n \n \n \n \n \n \n \n \n \n3,486\n \n \n \n \n \n \n \n2.01\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n159,242\n \n \n \n \n \n \n \n \n \n \n \n2,633\n \n \n \n \n \n \n \n1.65\n \n \n \n%\n \n \n \n \n \nOther investment securities(3)\n \n \n \n \n \n \n \n \n \n \n \n51,700\n \n \n \n \n \n \n \n \n \n \n \n986\n \n \n \n \n \n \n \n1.91\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n44,739\n \n \n \n \n \n \n \n \n \n \n \n777\n \n \n \n \n \n \n \n1.74\n \n \n \n%\n \n \n \n \n \nFHLB stock\n \n \n \n \n \n \n \n \n \n \n \n16,462\n \n \n \n \n \n \n \n \n \n \n \n989\n \n \n \n \n \n \n \n6.01\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n13,066\n \n \n \n \n \n \n \n \n \n \n \n651\n \n \n \n \n \n \n \n4.98\n \n \n \n%\n \n \n \n \n \nShort-term investments\n \n \n \n \n \n \n \n \n \n \n \n30,845\n \n \n \n \n \n \n \n \n \n \n \n542\n \n \n \n \n \n \n \n1.76\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n64,308\n \n \n \n \n \n \n \n \n \n \n \n90\n \n \n \n \n \n \n \n0.14\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n2,577,492\n \n \n \n \n \n \n \n \n \n \n \n121,371\n \n \n \n \n \n \n \n4.71\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,460,509\n \n \n \n \n \n \n \n \n \n \n \n95,995\n \n \n \n \n \n \n \n3.90\n \n \n \n%\n \n \n \n \n \nNon-interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n175,424\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n144,499\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,752,916\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,605,008\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest-bearing liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTransaction accounts\n \n \n \n \n \n \n \n$\n \n \n \n503,668\n \n \n \n \n \n \n \n \n \n \n \n3,963\n \n \n \n \n \n \n \n0.79\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n506,693\n \n \n \n \n \n \n \n \n \n \n \n988\n \n \n \n \n \n \n \n0.19\n \n \n \n%\n \n \n \n \n \nMoney market\n \n \n \n \n \n \n \n \n \n \n \n761,469\n \n \n \n \n \n \n \n \n \n \n \n6,241\n \n \n \n \n \n \n \n0.82\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n693,608\n \n \n \n \n \n \n \n \n \n \n \n1,183\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \nCertificates of deposit\n \n \n \n \n \n \n \n \n \n \n \n97,448\n \n \n \n \n \n \n \n \n \n \n \n1,358\n \n \n \n \n \n \n \n1.39\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n47,020\n \n \n \n \n \n \n \n \n \n \n \n396\n \n \n \n \n \n \n \n0.84\n \n \n \n%\n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n48,825\n \n \n \n \n \n \n \n \n \n \n \n1,616\n \n \n \n \n \n \n \n3.31\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n119,831\n \n \n \n \n \n \n \n \n \n \n \n986\n \n \n \n \n \n \n \n0.82\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing deposits\n \n \n \n \n \n \n \n \n \n \n \n1,411,410\n \n \n \n \n \n \n \n \n \n \n \n13,178\n \n \n \n \n \n \n \n0.93\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,367,152\n \n \n \n \n \n \n \n \n \n \n \n3,553\n \n \n \n \n \n \n \n0.26\n \n \n \n%\n \n \n \n \n \nFHLB advances\n \n \n \n \n \n \n \n \n \n \n \n414,191\n \n \n \n \n \n \n \n \n \n \n \n7,024\n \n \n \n \n \n \n \n1.70\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n376,781\n \n \n \n \n \n \n \n \n \n \n \n4,908\n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \nOther borrowings\n \n \n \n \n \n \n \n \n \n \n \n43,818\n \n \n \n \n \n \n \n \n \n \n \n2,243\n \n \n \n \n \n \n \n5.12\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n31,935\n \n \n \n \n \n \n \n \n \n \n \n1,759\n \n \n \n \n \n \n \n5.51\n \n \n \n%\n \n \n \n \n \nJunior subordinated notes(4)\n \n \n \n \n \n \n \n \n \n \n \n2,429\n \n \n \n \n \n \n \n \n \n \n \n504\n \n \n \n \n \n \n \n20.75\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n10,068\n \n \n \n \n \n \n \n \n \n \n \n1,113\n \n \n \n \n \n \n \n11.05\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n1,871,848\n \n \n \n \n \n \n \n \n \n \n \n22,949\n \n \n \n \n \n \n \n1.23\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,785,936\n \n \n \n \n \n \n \n \n \n \n \n11,333\n \n \n \n \n \n \n \n0.63\n \n \n \n%\n \n \n \n \n \nNon-interest-bearing demand deposit accounts\n \n \n \n \n \n \n \n \n \n \n \n566,230\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n536,981\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nOther non-interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n65,611\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n61,580\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,503,689\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,384,497\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nStockholders’ equity\n \n \n \n \n \n \n \n \n \n \n \n249,227\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n220,511\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,752,916\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,605,008\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n98,422\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n84,662\n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.48\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n705,644\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n674,573\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.82\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.44\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \nThe average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.\n \n \n \n \n \n(2)\n \n \n \nIncludes amortized cost basis of assets available for sale and held to maturity.\n \n \n \n \n \n(3)\n \n \n \nYields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.\n \n \n \n \n \n(4)\n \n \n \nThe calculation for the year ended December 31, 2022 includes $236,000 in accelerated amortization of debt issuance costs.\n \n \n \n \n \n \n ASSET AND LIABILITY BETA ANALYSIS \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n For the Year Ended \n \n \n \n \n \n (Unaudited) \n \n \n \n December 31, 2022 \n \n \n \n \n \n \n \n September 30, 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n December 31, 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n December 31, 2022 \n \n \n \n \n \n \n \n December 31, 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average Yield/Rate (3) \n \n \n \n \n \n \n \n Average Yield/Rate (3) \n \n \n \n \n \n \n \n Increase (Decrease) \n \n \n \n \n \n \n \n Average Yield/Rate (3) \n \n \n \n \n \n \n \n Increase (Decrease) \n \n \n \n \n \n \n \n Average Yield/Rate \n \n \n \n \n \n \n \n Average Yield/Rate \n \n \n \n \n \n \n \n Increase (Decrease) \n \n \n \n \n \nTotal loans and leases receivable (a)\n \n \n \n6.11\n \n \n \n%\n \n \n \n \n \n \n \n5.21\n \n \n \n%\n \n \n \n \n \n \n \n0.90\n \n \n \n%\n \n \n \n \n \n \n \n4.13\n \n \n \n%\n \n \n \n \n \n \n \n1.98\n \n \n \n%\n \n \n \n \n \n \n \n5.01\n \n \n \n%\n \n \n \n \n \n \n \n4.21\n \n \n \n%\n \n \n \n \n \n \n \n0.80\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets(b)\n \n \n \n5.79\n \n \n \n%\n \n \n \n \n \n \n \n4.92\n \n \n \n%\n \n \n \n \n \n \n \n0.87\n \n \n \n%\n \n \n \n \n \n \n \n3.81\n \n \n \n%\n \n \n \n \n \n \n \n1.98\n \n \n \n%\n \n \n \n \n \n \n \n4.71\n \n \n \n%\n \n \n \n \n \n \n \n3.90\n \n \n \n%\n \n \n \n \n \n \n \n0.81\n \n \n \n%\n \n \n \n \n \nAdjusted total loans and leases receivable (1)(c)\n \n \n \n5.90\n \n \n \n%\n \n \n \n \n \n \n \n5.08\n \n \n \n%\n \n \n \n \n \n \n \n0.82\n \n \n \n%\n \n \n \n \n \n \n \n3.89\n \n \n \n%\n \n \n \n \n \n \n \n2.01\n \n \n \n%\n \n \n \n \n \n \n \n4.79\n \n \n \n%\n \n \n \n \n \n \n \n3.91\n \n \n \n%\n \n \n \n \n \n \n \n0.88\n \n \n \n%\n \n \n \n \n \nAdjusted total interest-earning assets (1)(d)\n \n \n \n5.59\n \n \n \n%\n \n \n \n \n \n \n \n4.80\n \n \n \n%\n \n \n \n \n \n \n \n0.79\n \n \n \n%\n \n \n \n \n \n \n \n3.60\n \n \n \n%\n \n \n \n \n \n \n \n1.99\n \n \n \n%\n \n \n \n \n \n \n \n4.52\n \n \n \n%\n \n \n \n \n \n \n \n3.61\n \n \n \n%\n \n \n \n \n \n \n \n0.91\n \n \n \n%\n \n \n \n \n \nTotal in-market deposits(e)\n \n \n \n1.43\n \n \n \n%\n \n \n \n \n \n \n \n0.61\n \n \n \n%\n \n \n \n \n \n \n \n0.82\n \n \n \n%\n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \n \n \n0.60\n \n \n \n%\n \n \n \n \n \n \n \n0.14\n \n \n \n%\n \n \n \n \n \n \n \n0.46\n \n \n \n%\n \n \n \n \n \nTotal bank funding(f)\n \n \n \n1.67\n \n \n \n%\n \n \n \n \n \n \n \n0.89\n \n \n \n%\n \n \n \n \n \n \n \n0.78\n \n \n \n%\n \n \n \n \n \n \n \n0.33\n \n \n \n%\n \n \n \n \n \n \n \n1.34\n \n \n \n%\n \n \n \n \n \n \n \n0.84\n \n \n \n%\n \n \n \n \n \n \n \n0.37\n \n \n \n%\n \n \n \n \n \n \n \n0.47\n \n \n \n%\n \n \n \n \n \nNet interest margin(g)\n \n \n \n4.15\n \n \n \n%\n \n \n \n \n \n \n \n4.01\n \n \n \n%\n \n \n \n \n \n \n \n0.14\n \n \n \n%\n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n0.76\n \n \n \n%\n \n \n \n \n \n \n \n3.82\n \n \n \n%\n \n \n \n \n \n \n \n3.44\n \n \n \n%\n \n \n \n \n \n \n \n0.38\n \n \n \n%\n \n \n \n \n \nAdjusted net interest margin(h)\n \n \n \n3.94\n \n \n \n%\n \n \n \n \n \n \n \n3.89\n \n \n \n%\n \n \n \n \n \n \n \n0.05\n \n \n \n%\n \n \n \n \n \n \n \n3.23\n \n \n \n%\n \n \n \n \n \n \n \n0.71\n \n \n \n%\n \n \n \n \n \n \n \n3.64\n \n \n \n%\n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \n \n \n0.43\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nEffective fed funds rate (2)(i)\n \n \n \n3.65\n \n \n \n%\n \n \n \n \n \n \n \n2.18\n \n \n \n%\n \n \n \n \n \n \n \n1.47\n \n \n \n%\n \n \n \n \n \n \n \n0.09\n \n \n \n%\n \n \n \n \n \n \n \n3.56\n \n \n \n%\n \n \n \n \n \n \n \n1.69\n \n \n \n%\n \n \n \n \n \n \n \n0.08\n \n \n \n%\n \n \n \n \n \n \n \n1.61\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Beta Calculations: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal loans and leases receivable(a)/(i)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n61.42\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n55.67\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n49.69\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets(b)/(i)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n58.74\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n55.36\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n50.15\n \n \n \n%\n \n \n \n \n \nAdjusted total loans and leases receivable (1)(c)/(i)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n55.61\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56.38\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n54.66\n \n \n \n%\n \n \n \n \n \nAdjusted total interest-earning assets (1)(d)/(i)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53.50\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56.39\n \n \n \n%\n \n \n \n \n \nTotal in-market deposits(e/i)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n55.78\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n36.52\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28.57\n \n \n \n%\n \n \n \n \n \nTotal bank funding(f)/(i)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53.06\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n37.64\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29.19\n \n \n \n%\n \n \n \n \n \nNet interest margin(g/i)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n9.52\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21.35\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23.60\n \n \n \n%\n \n \n \n \n \nAdjusted Net interest margin(h/i)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.40\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n19.94\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.71\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \nExcluding average net PPP loans, PPP loan interest income, and fees in lieu of interest.\n \n \n \n \n \n(2)\n \n \n \n Board of Governors of the Federal Reserve System (US), Effective Federal Funds Rate [DFF]. Retrieved from FRED, Federal Reserve Bank of St. Louis . Represents average daily rate.\n \n \n \n \n \n(3)\n \n \n \nRepresents annualized yields/rates.\n \n \n \n \n \n \n PROVISION FOR LOAN AND LEASE LOSS COMPOSITION \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n \n \n For the Year Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \nChange in general reserve due to qualitative factor changes\n \n \n \n \n \n \n \n$\n \n \n \n85\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n132\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(185\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(416\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(805\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(384\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(426\n \n \n \n)\n \n \n \n \n \nChange in general reserve due to historical loss factor changes\n \n \n \n \n \n \n \n \n \n \n \n(930\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(940\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n64\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(206\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(862\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(2,012\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,456\n \n \n \n)\n \n \n \n \n \nCharge-offs\n \n \n \n \n \n \n \n \n \n \n \n818\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n54\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n85\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n106\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n979\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,508\n \n \n \n \n \n \n \n \n \nRecoveries\n \n \n \n \n \n \n \n \n \n \n \n(203\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(81\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,247\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(210\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(274\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,741\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(5,126\n \n \n \n)\n \n \n \n \n \nChange in specific reserves on impaired loans, net\n \n \n \n \n \n \n \n \n \n \n \n(50\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n447\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(280\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(64\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n146\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(2,175\n \n \n \n)\n \n \n \n \n \nChange due to loan growth, net\n \n \n \n \n \n \n \n \n \n \n \n982\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n400\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n527\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n235\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,391\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,144\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,872\n \n \n \n \n \n \n \n \n \nTotal provision for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n702\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n12\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(3,727\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(855\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(508\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(3,868\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(5,803\n \n \n \n)\n \n \n \n \n \n \n PERFORMANCE RATIOS \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n \n \n For the Year Ended \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \nReturn on average assets (annualized)\n \n \n \n \n \n \n \n1.39\n \n \n \n%\n \n \n \n \n \n \n \n1.54\n \n \n \n%\n \n \n \n \n \n \n \n1.61\n \n \n \n%\n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \n \n \n1.32\n \n \n \n%\n \n \n \n \n \n \n \n1.46\n \n \n \n%\n \n \n \n \n \n \n \n1.37\n \n \n \n%\n \n \n \n \n \nReturn on average common equity (annualized)\n \n \n \n \n \n \n \n16.26\n \n \n \n%\n \n \n \n \n \n \n \n17.44\n \n \n \n%\n \n \n \n \n \n \n \n18.79\n \n \n \n%\n \n \n \n \n \n \n \n14.70\n \n \n \n%\n \n \n \n \n \n \n \n15.04\n \n \n \n%\n \n \n \n \n \n \n \n16.79\n \n \n \n%\n \n \n \n \n \n \n \n16.21\n \n \n \n%\n \n \n \n \n \nEfficiency ratio\n \n \n \n \n \n \n \n61.45\n \n \n \n%\n \n \n \n \n \n \n \n58.46\n \n \n \n%\n \n \n \n \n \n \n \n64.47\n \n \n \n%\n \n \n \n \n \n \n \n65.55\n \n \n \n%\n \n \n \n \n \n \n \n61.92\n \n \n \n%\n \n \n \n \n \n \n \n62.31\n \n \n \n%\n \n \n \n \n \n \n \n63.49\n \n \n \n%\n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n3.56\n \n \n \n%\n \n \n \n \n \n \n \n3.65\n \n \n \n%\n \n \n \n \n \n \n \n3.51\n \n \n \n%\n \n \n \n \n \n \n \n3.22\n \n \n \n%\n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \n \n \n3.48\n \n \n \n%\n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n4.15\n \n \n \n%\n \n \n \n \n \n \n \n4.01\n \n \n \n%\n \n \n \n \n \n \n \n3.71\n \n \n \n%\n \n \n \n \n \n \n \n3.39\n \n \n...

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