First Business Bank Reports Record Second Quarter 2022 Net Income of $11.0 Million

About this update from First Business Financial Services, Inc.

[{"type":"text","content":" \n-- Strong top line revenue and provision benefit drive 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 $11.0 million , or $1.29 diluted earnings per share. This compares to net income of $8.7 million , or $1.02 per share, in the first quarter of 2022 and $8.2 million , or $0.95 per share, in the second quarter of 2021.\n \n“Our record quarterly net income was driven by a notable increase in net interest income and exceptional commitment to asset quality resulting in a significant loan loss provision benefit,” President and Chief Executive Officer Corey Chambas said. “Despite above-average loan payoffs this year, we remain confident in our ability to produce 10% net loan growth. We believe this sustained loan growth and expanding net interest margin will continue to generate double-digit annual revenue growth.” Chambas added, “With an enhanced capital base, focus on diversified revenue streams, and relentless attention to credit quality, we believe we are well positioned to extend our track record of performance over the long term.”\n \n Quarterly Highlights \n \n \n Robust Profitability Metrics. Pre-tax, pre-provision adjusted (“PTPP”) earnings, excluding Paycheck Protection Program (“PPP”) interest and fee income, increased $998,000 , or 10.4%, from the linked quarter and $3.7 million , or 53.8%, from the prior year quarter. The improvement in profitability was driven by an increase in top line revenue, which rose $1.8 million , or 6.3%, from the linked quarter and $5.4 million , or 21.9%, from the prior year quarter. With revenue growth outpacing operating expense growth, the Company increased PTPP return on average assets to 1.57% in the second quarter of 2022, compared to 1.46% in linked quarter and 1.15% in the prior year quarter.\n \n \n \n Strong Asset Quality. The Bank continued its strong asset quality trend, highlighted by the team’s ability to proactively work through challenging loans to achieve positive outcomes for the Bank and its shareholders. Non-performing assets declined to $5.7 million , or 0.21% of total assets, improving from 0.40% of total assets on June 30, 2021 . The Company recorded a provision benefit of $3.7 million , compared to a benefit of $855,000 in the first quarter of 2022 and $1.0 million in the second quarter of 2021. The provision benefit in the second quarter of 2022 was primarily due to a $4.1 million principal recovery on a legacy SBA relationship originated in May 2016 and fully charged-off in December 2020 .\n \n \n \n Record Net Interest Income Reflecting Loan Growth and Net Interest Margin Expansion. Net interest income grew to a record $23.7 million , increasing $2.2 million , or 10.4%, from the linked quarter and $2.0 million , or 9.3%, from the prior year quarter. This increase was primarily due to a 32 and 22 basis point expansion in net interest margin compared to the linked and prior year quarters, respectively. This net interest expansion resulted from rising rates on variable-rate loans and low deposit betas on in-market deposits following the Federal Open Market Committee’s (“FOMC”) decision to raise the target Fed Funds rate 150 basis points during the first half of 2022.\n \n \n \n Increased Organic Loan Production. Loans, excluding net PPP loans, grew $48.9 million , or 8.8% annualized, from the first quarter of 2022 and $259.1 million , or 12.8%, from the second quarter of 2021, as the Company’s previous investments in both conventional and specialized lending continue to generate positive results.\n \n \n \n Compounding Tangible Book Value Growth. The Company’s demonstrated earnings power and diligent credit management more than offset the interest-rate-driven market value decline in the investment portfolio, providing a 9.4% annualized increase in tangible book value compared to the linked quarter and 9.7% compared to the prior year quarter.\n \n \n \n \n Quarterly Financial Results \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the \n \n \n Three Months Ended \n \n \n \n \n \n \n \n As of and for the \n \n \n Six Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\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 \n21,652\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n45,087\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n42,515\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 \n6,872\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 \n6,292\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n14,258\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,487\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n \n \n \n \n30,532\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,812\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27,944\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n59,345\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56,002\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n \n \n \n \n19,685\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,887\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,932\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n38,573\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n35,383\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 \n10,847\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n9,925\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,012\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n20,772\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n20,619\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 \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(958\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,582\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(3,026\n \n \n \n)\n \n \n \n \n \nNet loss (gain) on foreclosed properties\n \n \n \n \n \n \n \n \n \n \n \n8\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(1\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n20\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1\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 \n8\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\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 \nSBA recourse provision (benefit)\n \n \n \n \n \n \n \n \n \n \n \n114\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 \n \n \n \n \n \n \n245\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n38\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n115\n \n \n \n \n \n \n \n \n \nImpairment (benefit) on tax credit investments\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 \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 \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 \n29\n \n \n \n \n \n \n \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 \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 \n10,747\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25,647\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23,543\n \n \n \n \n \n \n \n \n \nIncome tax expense\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 \n2,512\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,771\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,577\n \n \n \n \n \n \n \n \n \nNet income\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$\n \n \n \n8,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,876\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n17,966\n \n \n \n \n \n \n \n \n \nPreferred stock dividends\n \n \n \n \n \n \n \n \n \n \n \n246\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n246\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nNet income available to common shareholders\n \n \n \n \n \n \n \n$\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 \n8,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,630\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n17,966\n \n \n \n \n \n \n \n \n \nEarnings per share, diluted\n \n \n \n \n \n \n \n$\n \n \n \n1.29\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.02\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2.31\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2.08\n \n \n \n \n \n \n \n \n \nBook value per share\n \n \n \n \n \n \n \n$\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 \n25.70\n \n \n \n \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 \n25.70\n \n \n \n \n \n \n \n \n \nTangible book value per share (1)\n \n \n \n \n \n \n \n$\n \n \n \n26.63\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.02\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24.28\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.63\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24.28\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n3.71\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 \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.55\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.46\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 \n3.45\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.35\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.20\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 \n22.51\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n25.64\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n22.60\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.03\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.12\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n64.47\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n65.55\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n64.17\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n65.00\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n63.18\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 \n1.61\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.26\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 \n1.38\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 \n1.60\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.49\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 \n1.54\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.59\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 \n18.79\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n14.47\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n15.09\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n16.74\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n16.75\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n2,290,100\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 \n2,143,561\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 \n2,143,561\n \n \n \n \n \n \n \n \n \nSpecialized lending as a percent of total loans and leases\n \n \n \n \n \n \n \n \n \n \n \n20.68\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n19.22\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n17.59\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n20.68\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n17.59\n \n \n \n%\n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,272,946\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,244,642\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,223,353\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,258,872\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,203,267\n \n \n \n \n \n \n \n \n \nPeriod-end in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,857,010\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 \n2,016,215\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 \n2,016,215\n \n \n \n \n \n \n \n \n \nAverage in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,900,842\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,932,576\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,735,393\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,916,622\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,728,787\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n24,104\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,669\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,675\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,104\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,675\n \n \n \n \n \n \n \n \n \nNon-performing assets\n \n \n \n \n \n \n \n$\n \n \n \n5,709\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n5,734\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,601\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n5,709\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,601\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n1.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.40\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.40\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \n \n \n \nThis is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.\n \n \n \n \n \n(2)\n \n \n \n \n \n \n \nCalculation is annualized.\n \n \n \n \n \n \n Quarterly Financial Results - Excluding PPP Loans, Interest Income, and Fees \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the \n \n \n Three Months Ended \n \n \n \n \n \n \n \n As of and for the \n \n \n Six Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\n \n \n \n23,435\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,125\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n18,545\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n44,561\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n36,592\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 \n6,872\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 \n6,292\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n14,258\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,487\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n \n \n \n \n30,307\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,511\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24,837\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n58,819\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n50,079\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n \n \n \n \n19,685\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,887\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,932\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n38,573\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n35,383\n \n \n \n \n \n \n \n \n \nPre-tax, pre-provision adjusted earnings (1)\n \n \n \n \n \n \n \n$\n \n \n \n10,622\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,624\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,905\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,246\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n14,696\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin (2)\n \n \n \n \n \n \n \n \n \n \n \n3.69\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.37\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.30\n \n \n \n%\n \n \n \n \n \nFee income ratio (non-interest income / total revenue)\n \n \n \n \n \n \n \n \n \n \n \n22.67\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n25.91\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n25.42\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n26.97\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n64.95\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n66.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n72.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n65.58\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n70.65\n \n \n \n%\n \n \n \n \n \nPre-tax, pre-provision adjusted return on average assets (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n1.57\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.15\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.51\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPeriod-end loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,281,928\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,233,043\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,022,839\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,281,928\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,022,839\n \n \n \n \n \n \n \n \n \nSpecialized lending as a percent of total loans and leases\n \n \n \n \n \n \n \n \n \n \n \n20.76\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n19.38\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n18.67\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n20.76\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n18.67\n \n \n \n%\n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,261,296\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,223,707\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,994,188\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,242,606\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,967,599\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 \n1.06\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.06\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.06\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.27\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 \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \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 \n \n \n \n \nCalculation is annualized.\n \n \n \n \n Second Quarter 2022 Compared to First Quarter 2022 \n \nNet interest income increased $2.2 million , or 10.4%, to $23.7 million .\n \n \nNet interest income growth was driven by an increase in average loans and leases, net interest margin expansion, and an increase in fees in lieu of interest, which included the recovery of $709,000 in interest from a previously charged-off legacy SBA loan relationship. Average loans and leases receivable increased $37.6 million , or 6.8% annualized, to $2.261 billion . Fees in lieu of interest, which can vary from quarter to quarter based on client-driven activity, totaled $1.9 million , compared to $1.3 million , and included $196,000 and $249,000 in PPP fees, respectively. Excluding fees in lieu of interest and interest income from PPP loans, net interest income increased $1.7 million , or 8.4%.\n \n \n \nNet interest margin was 3.71%, up 32 basis points compared to 3.39% in the linked quarter. Adjusted net interest margin was 3.45%, up 21 basis points compared to 3.24% in the linked quarter. The primary driver of improved net interest margin was a low deposit beta and higher earning asset yields in the current rising rate environment. The change in the yield of the respective interest-earning asset or the rate paid on interest-bearing liability compared to the change in short-term market rates is commonly referred to as a beta. Management defines short-term market rates as the daily average effective federal funds rate for purposes of estimating interest-earning asset and interest-bearing liability betas. 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 \n \nThe yield on average interest-earning assets increased 40 basis points to 4.24% from 3.84%. Excluding average net PPP loans, PPP loan interest income, and fees in lieu of interest, the yield earned on average interest-earning assets increased 30 basis points to 3.96% from 3.66%.\n \n \n \nThe rate paid for average interest-bearing, in-market deposits increased 10 basis points to 0.29% from 0.19%. The rate paid for average total bank funding increased 15 basis points to 0.46% from 0.31%. Total bank funding is defined as total deposits plus Federal Home Loan Bank (“FHLB”) advances. The daily average effective federal funds rate increased 65 basis points compared to the linked quarter, which equates to an in-market, interest-bearing deposit beta of 15% for the three months ended June 30, 2022 .\n \n \n \nThe Bank continues to maintain an asset-sensitive balance sheet and ended the quarter appropriately positioned for net interest income to continue to benefit; however, the Bank anticipates deposit betas will rise at a greater rate with further increases in the federal funds rate during the second half of the year, slowing the pace of net interest margin expansion.\n \n \nThe Company reported a net benefit to provision for loan and lease losses of $3.7 million , compared to a $855,000 benefit in the first quarter of 2022.\n \n \nThe provision benefit in the second quarter of 2022 was primarily due to net recoveries of $4.2 million , partially offset by a $527,000 increase in the general reserve due to loan growth.\n \n \nNon-interest income decreased $514,000 , or 7.0%, to $6.9 million .\n \n \nOther fee income decreased $1.2 million to $860,000 , compared to $2.1 million in the first quarter. The decrease is primarily due to above-average returns on the Company’s investments in mezzanine funds in the first quarter, which returned to historical levels in the second quarter.\n \n \n \nPrivate Wealth management fee income increased $11,000 , or 0.4% to $2.9 million , despite lower market values during the second quarter. Private Wealth and trust assets under management and administration measured $2.554 billion at June 30, 2022 , down $280.3 million , primarily due to a decrease in market valuations, which was partially offset by new business development.\n \n \n \nGains on sale of SBA loans increased $366,000 to $951,000 .\n \n \n \nCommercial loan swap fee income increased $246,000 to $471,000 . Swap fee income can vary from period to period based on loan activity and the interest rate environment.\n \n \nNon-interest expense increased $633,000 , or 3.4%, to $19.5 million , while operating expense increased $798,000 , or 4.2%, to $19.7 million .\n \n \nCompensation expense was $14.0 million , reflecting an increase of $382,000 , or 2.8%, from the linked quarter due to a $474,000 one-time increase to the annual cash incentive bonus program accrual, as well as expanded hiring to support the Bank’s growth plans. Management believes there will be upward pressure on compensation throughout the remainder of the year as the Bank continues to opportunistically invest in new talent and retain existing talent in the competitive market. Average FTEs for the second quarter of 2022 were 321, up eleven from 310 in the linked quarter as management continued to focus on talent acquisition to support the Bank’s growth initiatives.\n \n \n \nMarketing expense increased $170,000 , or 34.0%, to $670,000 primarily due to the increase in client entertainment and sponsorships as business development activities continue to increase towards pre-pandemic levels.\n \n \n \nProfessional fees increased $128,000 , or 10.9%, to $1.3 million from the linked quarter primarily due to an increase in recruiting expense.\n \n \n \nData processing expense increased $112,000 , or 14.4%, to $892,000 primarily due to the recurring annual expense related to tax processing on behalf of the Bank’s Private Wealth clients.\n \n \nIncome tax expense increased $1.4 million , or 65.7%, to $3.6 million . The effective tax rate was 23.7% for the six months ended June 30, 2022 , compared to 23.6% for the same period in 2021. For 2022, the Company expects to report an effective tax rate of approximately 23% as management intends to continue actively pursuing tax credit opportunities.\n \nTotal period-end loans and leases receivable increased $38.9 million , or 6.9% annualized, to $2.290 billion . Excluding net PPP loans, total period-end loans and leases receivable increased $48.9 million , or 8.8% annualized, to $2.282 billion .\n \n \nCommercial and industrial (“C&I”) loans increased $20.7 million , or 11.6% annualized, to $741.4 million , compared to $720.7 million . Excluding PPP loans, C&I loans increased $30.9 million , or 17.6% annualized, due to an increase in specialized lending.\n \n \n \nCommercial real estate (“CRE”) loans increased by $18.8 million , or 5.1% annualized, to $1.488 billion , compared to $1.470 billion . Increases in construction financing, owner-occupied CRE, multi-family, and land development were offset by a decrease in non-owner occupied CRE loans.\n \n \nTotal period-end in-market deposits decreased $154.4 million , or 30.7% annualized, to $1.857 billion , compared to $2.011 billion . The average rate paid was 0.20%, up seven basis points from 0.13% in the first quarter. The decline in balances was due to movement of client deposits to investment alternatives, seasonality within the Bank’s municipality clients, tax payments, and normal course of business for continuing client relationships.\n \n”On the deposit front, the second quarter is typically seasonally weaker, due to tax payments and other business cycle reasons – just as the first quarter was seasonally strong,” said Corey Chambas . “What was unusual this quarter was several clients moved large amounts of deposits into investments and there were some large client distributions to investors, as well. Importantly, we have not lost any meaningful client relationships associated with these decreases in deposits. We believe a better measure of our deposit picture is that average deposits are up 10% from a year ago, and due to our Treasury Management sales success, service charge fee income is up 11% from a year ago.”\n \nPeriod-end wholesale funding, including FHLB advances, brokered deposits, and deposits gathered through internet deposit listing services, increased $192.7 million to $566.4 million .\n \n \nWholesale deposits were $12.3 million in both periods. The average rate paid on wholesale deposits increased seven basis points to 2.98% and the weighted average original maturity was 4.8 years.\n \n \n \nFHLB advances increased $192.7 million to $554.1 million . The average rate paid on FHLB advances increased 40 basis points to 1.48% and the weighted average original maturity decreased to 3.2 years from 6.0 years.\n \n \nNon-performing assets were $5.7 million , or 0.21% of total assets, in both periods of comparison.\n \nThe allowance for loan and lease losses increased $435,000 , or 1.8%, as an increase in the general reserve from loan growth was partially offset by a decrease in general reserve driven by a change in qualitative risk factors.\n \n \nThe allowance for loan and lease losses as a percent of total gross loans and leases was 1.05% in both periods of comparison (1.06% excluding net PPP loans).\n \n \n Second Quarter 2022 Compared to Second Quarter 2021 \n \nNet interest income increased $2.0 million , or 9.3%, to $23.7 million .\n \n \nThe increase in net interest income primarily reflects an increase in average gross loans and leases, partially offset by lower fees in lieu of interest. Fees in lieu of interest decreased from $3.5 million to $1.9 million , primarily due to a $2.3 million reduction in PPP loan fee amortization. Excluding fees in lieu of interest and interest income from PPP loans, net interest income increased $4.2 million , or 24.0%. Excluding net PPP loans, average gross loans and leases increased $267.1 million , or 13.4%.\n \n \n \nNet interest margin increased 22 basis points to 3.71% from 3.49%. Adjusted net interest margin increased 25 basis points to 3.45% from 3.20%.\n \n \n \nThe yield on average interest-earning assets measured 4.24% compared to 3.96%. Excluding fees in lieu of interest, PPP loan interest income, and net PPP loans, the yield on average interest-earning assets measured 3.96%, compared to 3.64%. 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 eight basis points to 0.29% from 0.21%. The rate paid for average total bank funding increased seven basis points to 0.46% from 0.39%.\n \n \nThe Company reported a net benefit to provision for loan and lease losses of $3.7 million , compared to provision benefit of $958,000 in the second quarter of 2021. The reasons for the provision benefit are consistent with the explanations discussed above in the linked quarter comparison.\n \nNon-interest income of $6.9 million increased by $551,000 , or 8.7%, from $6.3 million in the prior year period.\n \n \nPrivate Wealth management fee income increased $108,000 , or 3.9%, to $2.9 million , despite a decline in market values, due to the addition of new money from existing clients. Private Wealth and trust assets under management and administration measured $2.554 billion at June 30, 2022 , down $10.6 million , or 0.4%.\n \n \n \nGains on sale of SBA loans decreased $252,000 to $951,000 .\n \n \n \nLoan fees of $697,000 increased by $128,000 , or 22.5%, primarily due to an increase in conventional, SBA, and Floorplan Financing activity generating additional service fee income.\n \n \n \nCommercial loan swap fee income was $471,000 . There was no swap fee activity in the prior year quarter. Swap fee income varies from period to period based on loan activity and the interest rate environment in any given quarter.\n \n \n \nService charges on deposits increased $100,000 , or 10.6%, to $1.0 million compared to $941,000 , due to an increase in existing and new deposit client relationships.\n \n \nNon-interest expense increased $1.3 million , or 7.0%, to $19.5 million . Operating expense increased $1.8 million , or 9.8%, to $19.7 million .\n \n \nCompensation expense increased $765,000 , or 5.8%, to $14.0 million . Average FTEs were 321 in the second quarter of 2022, compared to 312 in the second quarter of 2021. The reasons for the increase in compensation expense are consistent with the explanations discussed above in the linked quarter analysis.\n \n \n \nProfessional fees increased $385,000 , or 42.2%, to $1.3 million , primarily due to an increase in recruiting expense, audit expenses, and a general increase in other professional consulting services for various projects.\n \n \n \nMarketing expense increased $159,000 , or 31.1%, to $670,000 mainly due to an increase in business development activities as the Company continues to return to pre-pandemic spending levels.\n \n \nTotal period-end loans and leases receivable increased $146.5 million , or 6.8%, to $2.290 billion . Excluding net PPP loans, total period-end loans and leases receivable increased $259.1 million , or 12.8%, to $2.282 billion .\n \n \nC&I loans increased $45.9 million , or 6.6% to $741.4 million . Excluding PPP loans, C&I loans increased $161.5 million , or 28.2%, to $733.1 million due to an increase in conventional and specialized Commercial Lending. Management believes this growth rate will moderate to lower double-digits as the Company’s specialized lending products scale over time.\n \n \n \nCRE loans increased $96.5 million , or 6.9%, primarily due to an increase in non-owner-occupied real estate and construction financing.\n \n \nTotal period-end in-market deposits decreased $159.2 million , or 7.9%, to $1.857 billion and the average rate paid increased five basis points to 0.20%. This decrease in deposits was principally due to a $274.7 million decrease in transaction accounts, partially offset by a $68.9 million and $46.6 million increase in certificates of deposit and money market accounts, respectively. The reasons for the decrease in deposits are consistent with the explanations discussed above in the linked quarter comparison.\n \nPeriod-end wholesale funding increased $34.1 million to $566.4 million .\n \n \nWholesale deposits decreased $132.2 million to $12.3 million , compared to $144.5 million , as the existing portfolio runoff was replaced by FHLB advances. The average rate paid on brokered certificates of deposit increased 224 basis points to 2.98% and the weighted average original maturity increased to 4.8 years from 3.5 years.\n \n \n \nFHLB advances increased $166.3 million to $554.1 million . The average rate paid on FHLB advances increased 21 basis points to 1.48% and the weighted average original maturity decreased to 3.2 years from 6.1 years.\n \n \nNon-performing assets decreased to $5.7 million , or 0.21% of total assets, compared to $11.6 million , or 0.40% of total assets. Excluding net PPP loans, non-performing assets decreased to 0.21% of total assets compared to 0.42%.\n \nThe allowance for loan and lease losses decreased $1.6 million to $24.1 million , compared to $25.7 million .\n \n \nThe allowance for loan and lease losses as a percent of total gross loans and leases was 1.05% compared to 1.20%.\n \n \n \nExcluding net PPP loans, the allowance for loan and leases losses as a percent of total gross loans and leases was 1.06% compared to 1.27%.\n \n \n Paycheck Protection Program \n \nAs of June 30, 2022 , the Company had $8.3 million in gross PPP loans outstanding and deferred processing fees outstanding of $113,000 . 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 months ended June 30, 2022 , the Company recognized $196,000 of PPP processing fees in interest income. 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 . For the six months ended June 30, 2022 , the Company repurchased a total of 30,600 shares for approximately $1.0 million at an average cost of $33.28 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 www.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 \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 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 September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\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 \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 \n \n \n$\n \n \n \n110,624\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n389,977\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 \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 \n \n \n \n \n \n \n194,056\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n171,219\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 \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 \n \n \n \n \n \n \n21,196\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,382\n \n \n \n \n \n \n \n \n \nLoans held for sale\n \n \n \n \n \n \n \n \n \n \n \n2,256\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 \n \n \n \n \n \n \n5,603\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,059\n \n \n \n \n \n \n \n \n \nLoans and leases receivable\n \n \n \n \n \n \n \n \n \n \n \n2,290,100\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 \n \n \n \n \n \n \n2,123,306\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,143,561\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(24,104\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 \n \n \n \n \n \n \n(24,676\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(25,675\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 \n2,265,996\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 \n \n \n \n \n \n \n2,098,630\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,117,886\n \n \n \n \n \n \n \n \n \nPremises and equipment, net\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 \n \n \n \n \n \n \n1,700\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,747\n \n \n \n \n \n \n \n \n \nForeclosed properties\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 \n \n \n \n \n \n \n172\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n179\n \n \n \n \n \n \n \n \n \nRight-of-use assets\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 \n \n \n \n \n \n \n5,263\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,472\n \n \n \n \n \n \n \n \n \nBank-owned life insurance\n \n \n \n \n \n \n \n \n \n \n \n54,324\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 \n \n \n \n \n \n53,244\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n52,887\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 \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 \n \n \n \n \n \n12,351\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,451\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 \n12,262\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 \n \n \n \n \n \n \n12,229\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,178\n \n \n \n \n \n \n \n \n \nDerivatives\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 \n \n \n \n \n \n \n28,678\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n32,377\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 \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 \n \n \n \n \n \n \n40,664\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39,855\n \n \n \n \n \n \n \n \n \nTotal assets\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$\n \n \n \n2,652,905\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,584,410\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,865,669\n \n \n \n \n \n \n \n \n \n Liabilities and Stockholders’ Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nIn-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,857,010\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 \n \n \n$\n \n \n \n1,829,644\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,016,215\n \n \n \n \n \n \n \n \n \nWholesale deposits\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 \n \n \n \n \n \n \n74,638\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n144,492\n \n \n \n \n \n \n \n \n \nTotal deposits\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 \n \n \n \n \n \n1,904,282\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,160,707\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 \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 \n \n \n \n \n \n \n394,090\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n420,113\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 \n10,076\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,072\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,069\n \n \n \n \n \n \n \n \n \nLease liabilities\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 \n \n \n \n \n \n \n5,780\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,005\n \n \n \n \n \n \n \n \n \nDerivatives\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 \n \n \n \n \n \n \n31,890\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n36,109\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 \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 \n \n \n \n \n \n \n13,016\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,214\n \n \n \n \n \n \n \n \n \nTotal liabilities\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 \n \n \n \n \n \n \n2,359,130\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,644,217\n \n \n \n \n \n \n \n \n \nTotal stockholders’ equity\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 \n \n \n \n \n \n \n225,280\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n221,452\n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,777,016\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,724,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,652,905\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,584,410\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,865,669\n \n \n \n \n \n \n \n \n \n \n STATEMENTS OF INCOME \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the \n \n \n Year Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \nTotal interest income\n \n \n \n \n \n \n \n$\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$\n \n \n \n24,014\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,599\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n51,266\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n48,406\n \n \n \n \n \n \n \n \n \nTotal interest expense\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 \n2,791\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,947\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,179\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,891\n \n \n \n \n \n \n \n \n \nNet interest income\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 \n21,223\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n45,087\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n42,515\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 \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(2,269\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(958\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,582\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(3,026\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 \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 \n23,492\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,610\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n49,669\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n45,541\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 \n2,852\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 \n2,759\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,744\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,693\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,151\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 \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 \n721\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,203\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,537\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,281\n \n \n \n \n \n \n \n \n \nService charges on deposits\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 \n956\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n941\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,040\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,859\n \n \n \n \n \n \n \n \n \nLoan fees\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 \n713\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n569\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,349\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,114\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 \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 \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 \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \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 \n684\n \n \n \n \n \n \n \n \n \nOther non-interest income\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 \n1,866\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n835\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,942\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,398\n \n \n \n \n \n \n \n \n \nTotal non-interest income\n \n \n \n \n \n \n \n \n \n \n \n6,872\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 \n7,015\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,321\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n14,258\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,516\n \n \n \n \n \n \n \n \n \nCompensation\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 \n13,351\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,255\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27,658\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25,912\n \n \n \n \n \n \n \n \n \nOccupancy\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 \n544\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n533\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,123\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,085\n \n \n \n \n \n \n \n \n \nProfessional fees\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 \n1,024\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n913\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,468\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,778\n \n \n \n \n \n \n \n \n \nData processing\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 \n746\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n798\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,673\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,569\n \n \n \n \n \n \n \n \n \nMarketing\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 \n572\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n511\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 \n902\n \n \n \n \n \n \n \n \n \nEquipment\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 \n260\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n261\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n479\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n506\n \n \n \n \n \n \n \n \n \nComputer software\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 \n999\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,129\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,199\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,244\n \n \n \n \n \n \n \n \n \n FDIC insurance\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 \n291\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n280\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n610\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n642\n \n \n \n \n \n \n \n \n \nOther non-interest expense\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 \n703\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n504\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n900\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n876\n \n \n \n \n \n \n \n \n \nTotal non-interest expense\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 \n18,490\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,184\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n38,280\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n35,514\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 \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 \n12,017\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,747\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25,647\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23,543\n \n \n \n \n \n \n \n \n \nIncome tax expense\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 \n2,819\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,512\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,771\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,577\n \n \n \n \n \n \n \n \n \nNet income\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 \n9,198\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,876\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n17,966\n \n \n \n \n \n \n \n \n \nPreferred stock dividends\n \n \n \n \n \n \n \n \n \n \n \n246\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n246\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nNet income available to common shareholders\n \n \n \n \n \n \n \n$\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$\n \n \n \n9,198\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,630\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n17,966\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$\n \n \n \n1.29\n \n \n \n \n \n \n \n \n \n \n \n$\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 \n1.07\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2.31\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2.08\n \n \n \n \n \n \n \n \n \nDiluted earnings\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 \n1.07\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2.31\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2.08\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 \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 \n0.18\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 \n0.395\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.36\n \n \n \n \n \n \n \n \n \nBook value\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 \n26.56\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25.70\n \n \n \n \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 \n25.70\n \n \n \n \n \n \n \n \n \nTangible book value\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 \n25.11\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24.28\n \n \n \n \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 \n24.28\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 \n8,225,838\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 \n8,340,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,385,069\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,245,317\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,381,868\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 \n8,225,838\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 \n8,340,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,385,069\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,245,317\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,381,868\n \n \n \n \n \n \n \n \n \n \n(1)\n \n \n \n \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 \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 June 30, 2022 \n \n \n \n \n \n \n \n March 31, 2022 \n \n \n \n \n \n \n \n June 30, 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 \n1,472,075\n \n \n \n \n \n \n \n$\n \n \n \n15,343\n \n \n \n \n \n \n \n4.17\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,459,891\n \n \n \n \n \n \n \n$\n \n \n \n13,346\n \n \n \n \n \n \n \n3.66\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,386,187\n \n \n \n \n \n \n \n$\n \n \n \n13,087\n \n \n \n \n \n \n \n3.78\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 \n734,299\n \n \n \n \n \n \n \n \n \n \n \n9,710\n \n \n \n \n \n \n \n5.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n718,364\n \n \n \n \n \n \n \n \n \n \n \n9,101\n \n \n \n \n \n \n \n5.07\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n772,257\n \n \n \n \n \n \n \n \n \n \n \n9,875\n \n \n \n \n \n \n \n5.11\n \n \n \n%\n \n \n \n \n \nDirect financing leases(1)\n \n \n \n \n \n \n \n \n \n \n \n15,527\n \n \n \n \n \n \n \n \n \n \n \n176\n \n \n \n \n \n \n \n4.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n16,540\n \n \n \n \n \n \n \n \n \n \n \n189\n \n \n \n \n \n \n \n4.57\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n19,883\n \n \n \n \n \n \n \n \n \n \n \n222\n \n \n \n \n \n \n \n4.47\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 \n51,045\n \n \n \n \n \n \n \n \n \n \n \n458\n \n \n \n \n \n \n \n3.59\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n49,847\n \n \n \n \n \n \n \n \n \n \n \n436\n \n \n \n \n \n \n \n3.50\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n45,026\n \n \n \n \n \n \n \n \n \n \n \n407\n \n \n \n \n \n \n \n3.62\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 \n2,272,946\n \n \n \n \n \n \n \n \n \n \n \n25,687\n \n \n \n \n \n \n \n4.52\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,244,642\n \n \n \n \n \n \n \n \n \n \n \n23,072\n \n \n \n \n \n \n \n4.11\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,223,353\n \n \n \n \n \n \n \n \n \n \n \n23,591\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \nMortgage-related securities(2)\n \n \n \n \n \n \n \n \n \n \n \n176,747\n \n \n \n \n \n \n \n \n \n \n \n804\n \n \n \n \n \n \n \n1.82\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n184,962\n \n \n \n \n \n \n \n \n \n \n \n760\n \n \n \n \n \n \n \n1.64\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n149,253\n \n \n \n \n \n \n \n \n \n \n \n631\n \n \n \n \n \n \n \n1.69\n \n \n \n%\n \n \n \n \n \nOther investment securities(3)\n \n \n \n \n \n \n \n \n \n \n \n54,591\n \n \n \n \n \n \n \n \n \n \n \n260\n \n \n \n \n \n \n \n1.91\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n50,555\n \n \n \n \n \n \n \n \n \n \n \n215\n \n \n \n \n \n \n \n1.70\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n41,569\n \n \n \n \n \n \n \n \n \n \n \n185\n \n \n \n \n \n \n \n1.78\n \n \n \n%\n \n \n \n \n \nFHLB stock\n \n \n \n \n \n \n \n \n \n \n \n17,355\n \n \n \n \n \n \n \n \n \n \n \n226\n \n \n \n \n \n \n \n5.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n14,002\n \n \n \n \n \n \n \n \n \n \n \n172\n \n \n \n \n \n \n \n4.91\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n14,172\n \n \n \n \n \n \n \n \n \n \n \n176\n \n \n \n \n \n \n \n4.97\n \n \n \n%\n \n \n \n \n \nShort-term investments\n \n \n \n \n \n \n \n \n \n \n \n29,541\n \n \n \n \n \n \n \n \n \n \n \n54\n \n \n \n \n \n \n \n0.73\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n31,111\n \n \n \n \n \n \n \n \n \n \n \n16\n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n55,100\n \n \n \n \n \n \n \n \n \n \n \n16\n \n \n \n \n \n \n \n0.12\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n2,551,180\n \n \n \n \n \n \n \n \n \n \n \n27,031\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,525,272\n \n \n \n \n \n \n \n \n \n \n \n24,235\n \n \n \n \n \n \n \n3.84\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,483,447\n \n \n \n \n \n \n \n \n \n \n \n24,599\n \n \n \n \n \n \n \n3.96\n \n \n \n%\n \n \n \n \n \nNon-interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n165,527\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n140,969\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n137,893\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 \n2,716,707\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,666,241\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,621,340\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$\n \n \n \n502,763\n \n \n \n \n \n \n \n \n \n \n \n343\n \n \n \n \n \n \n \n0.27\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n533,251\n \n \n \n \n \n \n \n \n \n \n \n255\n \n \n \n \n \n \n \n0.19\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n499,040\n \n \n \n \n \n \n \n \n \n \n \n248\n \n \n \n \n \n \n \n0.20\n \n \n \n%\n \n \n \n \n \nMoney market\n \n \n \n \n \n \n \n \n \n \n \n767,433\n \n \n \n \n \n \n \n \n \n \n \n509\n \n \n \n \n \n \n \n0.27\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n784,276\n \n \n \n \n \n \n \n \n \n \n \n338\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n662,919\n \n \n \n \n \n \n \n \n \n \n \n282\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 \n73,560\n \n \n \n \n \n \n \n \n \n \n \n114\n \n \n \n \n \n \n \n0.62\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n52,519\n \n \n \n \n \n \n \n \n \n \n \n55\n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n45,993\n \n \n \n \n \n \n \n \n \n \n \n112\n \n \n \n \n \n \n \n0.97\n \n \n \n%\n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n12,350\n \n \n \n \n \n \n \n \n \n \n \n92\n \n \n \n \n \n \n \n2.98\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n16,236\n \n \n \n \n \n \n \n \n \n \n \n118\n \n \n \n \n \n \n \n2.91\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n162,580\n \n \n \n \n \n \n \n \n \n \n \n301\n \n \n \n \n \n \n \n0.74\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing deposits\n \n \n \n \n \n \n \n \n \n \n \n1,356,106\n \n \n \n \n \n \n \n \n \n \n \n1,058\n \n \n \n \n \n \n \n0.31\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,386,282\n \n \n \n \n \n \n \n \n \n \n \n766\n \n \n \n \n \n \n \n0.22\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,370,532\n \n \n \n \n \n \n \n \n \n \n \n943\n \n \n \n \n \n \n \n0.28\n \n \n \n%\n \n \n \n \n \nFHLB advances\n \n \n \n \n \n \n \n \n \n \n \n449,599\n \n \n \n \n \n \n \n \n \n \n \n1,666\n \n \n \n \n \n \n \n1.48\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n385,080\n \n \n \n \n \n \n \n \n \n \n \n1,036\n \n \n \n \n \n \n \n1.08\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n405,855\n \n \n \n \n \n \n \n \n \n \n \n1,284\n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \nOther borrowings\n \n \n \n \n \n \n \n \n \n \n \n51,018\n \n \n \n \n \n \n \n \n \n \n \n647\n \n \n \n \n \n \n \n5.07\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n40,311\n \n \n \n \n \n \n \n \n \n \n \n503\n \n \n \n \n \n \n \n4.99\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n32,447\n \n \n \n \n \n \n \n \n \n \n \n443\n \n \n \n \n \n \n \n5.46\n \n \n \n%\n \n \n \n \n \nJunior subordinated notes(5)\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n—\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n9,850\n \n \n \n \n \n \n \n \n \n \n \n504\n \n \n \n \n \n \n \n20.47\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n10,066\n \n \n \n \n \n \n \n \n \n \n \n277\n \n \n \n \n \n \n \n11.01\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n1,856,723\n \n \n \n \n \n \n \n \n \n \n \n3,371\n \n \n \n \n \n \n \n0.73\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,821,523\n \n \n \n \n \n \n \n \n \n \n \n2,809\n \n \n \n \n \n \n \n0.62\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,818,900\n \n \n \n \n \n \n \n \n \n \n \n2,947\n \n \n \n \n \n \n \n0.65\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 \n557,086\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n562,530\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n527,441\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 \n57,615\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n42,537\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56,691\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 \n2,471,424\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 \n2,426,590\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,403,032\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 \n245,283\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n239,651\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n218,308\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 \n2,716,707\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,666,241\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,621,340\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$\n \n \n \n23,660\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,426\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,652\n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.51\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.22\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.31\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n694,457\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n703,749\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n664,547\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 \n3.71\n \n \n \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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \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 \n \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 \n \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 \n \n \n \n \nRepresents annualized yields/rates.\n \n \n \n \n \n(5)\n \n \n \n \n \n \n \nThe calculation for the three months ended June 30, 2022 and March 31, 2022 includes $12,000 and $236,000 , respectively, in accelerated amortization of debt issuance costs.\n \n \n \n \n \n \n NET INTEREST INCOME ANALYSIS \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Six Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n June 30, 2022 \n \n \n \n \n \n \n \n June 30, 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate(4) \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate(4) \n \n \n \n \n \n Interest-earning assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommercial real estate and other mortgage loans(1)\n \n \n \n \n \n \n \n$\n \n \n \n1,466,017\n \n \n \n \n \n \n \n$\n \n \n \n28,689\n \n \n \n \n \n \n \n3.91\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,371,744\n \n \n \n \n \n \n \n$\n \n \n \n25,615\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 \n726,376\n \n \n \n \n \n \n \n \n \n \n \n18,811\n \n \n \n \n \n \n \n5.18\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n765,117\n \n \n \n \n \n \n \n \n \n \n \n19,500\n \n \n \n \n \n \n \n5.10\n \n \n \n%\n \n \n \n \n \nDirect financing leases(1)\n \n \n \n \n \n \n \n \n \n \n \n16,030\n \n \n \n \n \n \n \n \n \n \n \n365\n \n \n \n \n \n \n \n4.55\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n21,071\n \n \n \n \n \n \n \n \n \n \n \n466\n \n \n \n \n \n \n \n4.42\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 \n50,449\n \n \n \n \n \n \n \n \n \n \n \n894\n \n \n \n \n \n \n \n3.54\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n45,335\n \n \n \n \n \n \n \n \n \n \n \n805\n \n \n \n \n \n \n \n3.55\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 \n2,258,872\n \n \n \n \n \n \n \n \n \n \n \n48,759\n \n \n \n \n \n \n \n4.32\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,203,267\n \n \n \n \n \n \n \n \n \n \n \n46,386\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 \n180,832\n \n \n \n \n \n \n \n \n \n \n \n1,564\n \n \n \n \n \n \n \n1.73\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n156,249\n \n \n \n \n \n \n \n \n \n \n \n1,297\n \n \n \n \n \n \n \n1.66\n \n \n \n%\n \n \n \n \n \nOther investment securities(3)\n \n \n \n \n \n \n \n \n \n \n \n52,584\n \n \n \n \n \n \n \n \n \n \n \n475\n \n \n \n \n \n \n \n1.81\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n41,871\n \n \n \n \n \n \n \n \n \n \n \n372\n \n \n \n \n \n \n \n1.78\n \n \n \n%\n \n \n \n \n \nFHLB stock\n \n \n \n \n \n \n \n \n \n \n \n15,688\n \n \n \n \n \n \n \n \n \n \n \n398\n \n \n \n \n \n \n \n5.07\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n13,323\n \n \n \n \n \n \n \n \n \n \n \n329\n \n \n \n \n \n \n \n4.94\n \n \n \n%\n \n \n \n \n \nShort-term investments\n \n \n \n \n \n \n \n \n \n \n \n30,321\n \n \n \n \n \n \n \n \n \n \n \n70\n \n \n \n \n \n \n \n0.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n39,922\n \n \n \n \n \n \n \n \n \n \n \n22\n \n \n \n \n \n \n \n0.11\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n2,538,297\n \n \n \n \n \n \n \n \n \n \n \n51,266\n \n \n \n \n \n \n \n4.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,454,632\n \n \n \n \n \n \n \n \n \n \n \n48,406\n \n \n \n \n \n \n \n3.94\n \n \n \n%\n \n \n \n \n \nNon-interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n153,316\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n144,741\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 \n2,691,613\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,599,373\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest-bearing liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTransaction accounts\n \n \n \n \n \n \n \n$\n \n \n \n517,923\n \n \n \n \n \n \n \n \n \n \n \n597\n \n \n \n \n \n \n \n0.23\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n510,024\n \n \n \n \n \n \n \n \n \n \n \n498\n \n \n \n \n \n \n \n0.20\n \n \n \n%\n \n \n \n \n \nMoney market\n \n \n \n \n \n \n \n \n \n \n \n775,808\n \n \n \n \n \n \n \n \n \n \n \n848\n \n \n \n \n \n \n \n0.22\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n660,319\n \n \n \n \n \n \n \n \n \n \n \n557\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 \n63,098\n \n \n \n \n \n \n \n \n \n \n \n169\n \n \n \n \n \n \n \n0.54\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n51,677\n \n \n \n \n \n \n \n \n \n \n \n288\n \n \n \n \n \n \n \n1.11\n \n \n \n%\n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n14,282\n \n \n \n \n \n \n \n \n \n \n \n210\n \n \n \n \n \n \n \n2.94\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n164,654\n \n \n \n \n \n \n \n \n \n \n \n619\n \n \n \n \n \n \n \n0.75\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing deposits\n \n \n \n \n \n \n \n \n \n \n \n1,371,111\n \n \n \n \n \n \n \n \n \n \n \n1,824\n \n \n \n \n \n \n \n0.27\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,386,674\n \n \n \n \n \n \n \n \n \n \n \n1,962\n \n \n \n \n \n \n \n0.28\n \n \n \n%\n \n \n \n \n \nFHLB advances\n \n \n \n \n \n \n \n \n \n \n \n417,518\n \n \n \n \n \n \n \n \n \n \n \n2,702\n \n \n \n \n \n \n \n1.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n386,371\n \n \n \n \n \n \n \n \n \n \n \n2,533\n \n \n \n \n \n \n \n1.31\n \n \n \n%\n \n \n \n \n \nOther borrowings\n \n \n \n \n \n \n \n \n \n \n \n45,694\n \n \n \n \n \n \n \n \n \n \n \n1,149\n \n \n \n \n \n \n \n5.03\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n29,886\n \n \n \n \n \n \n \n \n \n \n \n844\n \n \n \n \n \n \n \n5.65\n \n \n \n%\n \n \n \n \n \nJunior subordinated notes(5)\n \n \n \n \n \n \n \n \n \n \n \n4,898\n \n \n \n \n \n \n \n \n \n \n \n504\n \n \n \n \n \n \n \n20.58\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n10,064\n \n \n \n \n \n \n \n \n \n \n \n552\n \n \n \n \n \n \n \n10.97\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n1,839,221\n \n \n \n \n \n \n \n \n \n \n \n6,179\n \n \n \n \n \n \n \n0.67\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,812,995\n \n \n \n \n \n \n \n \n \n \n \n5,891\n \n \n \n \n \n \n \n0.65\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 \n559,793\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n506,767\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 \n50,117\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n65,146\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 \n2,449,131\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,384,908\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 \n242,482\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n214,465\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 \n2,691,613\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,599,373\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n45,087\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n42,515\n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.37\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n699,076\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n641,637\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 \n3.55\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \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 \n \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 \n \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 \n \n \n \n \nRepresents annualized yields/rates.\n \n \n \n \n \n(5)\n \n \n \n \n \n \n \nThe calculation for the six months ended June 30, 2022 , 2022 includes $248,000 in accelerated amortization of debt issuance costs.\n \n \n \n \n \n \n PROVISION FOR LOAN AND LEASE LOSS COMPOSITION \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n \n \n For the Six Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \nChange in general reserve due to subjective factor changes\n \n \n \n \n \n \n \n$\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$\n \n \n \n(51\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(652\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(601\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n430\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 \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(923\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(1,687\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(142\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(2,671\n \n \n \n)\n \n \n \n \n \nCharge-offs\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 \n364\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,894\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n107\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,038\n \n \n \n \n \n \n \n \n \nRecoveries\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(1,634\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(545\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,457\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(3,218\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 \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 \n(451\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(1,466\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(251\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(1,660\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 \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 \n426\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n498\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n762\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,055\n \n \n \n \n \n \n \n \n \nTotal provision for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n(3,727\n \n \n \n)\n \n \n \n \n \n \n \n$\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(2,269\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(958\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(4,582\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(3,026\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 For the Three Months Ended \n \n \n \n \n \n \n \n For the Six Months Ended \n \n \n \n \n \n (Unaudited) \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 September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \nReturn on average assets (annualized)\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 \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n1.26\n \n \n \n%\n \n \n \n \n \n \n \n1.46\n \n \n \n%\n \n \n \n \n \n \n \n1.38\n \n \n \n%\n \n \n \n \n \nReturn on average common equity (annualized)\n \n \n \n \n \n \n \n18.79\n \n \n \n%\n \n \n \n \n \n \n \n14.47\n \n \n \n%\n \n \n \n \n \n \n \n15.04\n \n \n \n%\n \n \n \n \n \n \n \n16.39\n \n \n \n%\n \n \n \n \n \n \n \n15.09\n \n \n \n%\n \n \n \n \n \n \n \n16.74\n \n \n \n%\n \n \n \n \n \n \n \n16.75\n \n \n \n%\n \n \n \n \n \nEfficiency ratio\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 \n65.68\n \n \n \n%\n \n \n \n \n \n \n \n64.17\n \n \n \n%\n \n \n \n \n \n \n \n65.00\n \n \n \n%\n \n \n \n \n \n \n \n63.18\n \n \n \n%\n \n \n \n \n \nInterest rate spread\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 \n3.27\n \n \n \n%\n \n \n \n \n \n \n \n3.31\n \n \n \n%\n \n \n \n \n \n \n \n3.37\n \n \n \n%\n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \nNet interest margin\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 \n%\n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n3.45\n \n \n \n%\n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n3.55\n \n \n \n%\n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \nAverage interest-earning assets to average interest-bearing liabilities\n \n \n \n \n \n \n \n137.40\n \n \n \n%\n \n \n \n \n \n \n \n138.64\n \n \n \n%\n \n \n \n \n \n \n \n141.19\n \n \n \n%\n \n \n \n \n \n \n \n139.19\n \n \n \n%\n \n \n \n \n \n \n \n136.54\n \n \n \n%\n \n \n \n \n \n \n \n138.01\n \n \n \n%\n \n \n \n \n \n \n \n135.39\n \n \n \n%\n \n \n \n \n \n \n ASSET QUALITY RATIOS \n \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 (Dollars in thousands) \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 September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \nNon-accrual loans and leases\n \n \n \n \n \n \n \n$\n \n \n \n5,585\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n5,617\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,358\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n7,433\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,422\n \n \n \n \n \n \n \n \n \nForeclosed properties\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 \n \n \n \n \n \n \n172\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n179\n \n \n \n \n \n \n \n \n \nTotal non-performing assets\n \n \n \n \n \n \n \n \n \n \n \n5,709\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,734\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 \n7,605\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,601\n \n \n \n \n \n \n \n \n \nPerforming troubled debt restructurings\n \n \n \n \n \n \n \n \n \n \n \n188\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n203\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n217\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56\n \n \n \n \n \n \n \n \n \nTotal impaired assets\n \n \n \n \n \n \n \n$\n \n \n \n5,897\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n5,937\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,739\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n7,658\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,657\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNon-accrual loans and leases as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n0.24\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 \n0.28\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.35\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.53\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total gross loans and leases plus foreclosed properties\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 \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.36\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.54\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 \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.21\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 \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.40\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 \n1.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.05\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 \n1.16\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \nAllowance for loan and lease losses as a percent of non-accrual loans and leases\n \n \n \n \n \n \n \n \n \n \n \n431.58\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n421.38\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n382.76\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n331.98\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n224.79\n \n \n \n%\n \n \n \n \n \n \n ASSET QUALITY RATIOS - EXCLUDING NET PPP LOANS \n \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 (Dollars in thousands) \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 September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \nNon-accrual loans and leases as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n0.24\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 \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.36\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.56\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total gross loans and leases plus foreclosed properties\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 \n0.26\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.37\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.57\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 \n0.21\n \n \n \n%\n \n \n \n \n \n \n ...

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