First Business Bank Reports Strong Second Quarter 2021 Net Income of $8.2 Million

About this update from First Business Financial Services, Inc.

[{"type":"text","content":" \n-- Performance driven by loan growth, strength and diversification of fee income, and provision benefit --\n \n-- Continued asset quality improvement, with non-performing assets down 39% during the quarter --\n \n MADISON, Wis. --(BUSINESS WIRE)--\n First Business Financial Services, Inc. (the “Company”, the “Bank”, or “ First Business Bank”) (Nasdaq:FBIZ) reported net income of $8.2 million , or $0.95 diluted earnings per share, in the second quarter 2021. This compares to record net income of $9.7 million or $1.12 in the first quarter of 2021, and $3.3 million or $0.38 in the second quarter of 2020.\n \n“First Business Bank again delivered strong financial performance in the second quarter, highlighted by continued double-digit annualized loan growth, further improvement in asset quality metrics, and diversified fee income,” President and Chief Executive Officer Corey Chambas said. “Our active management of asset quality led to another significant reduction in non-performing assets as well as a provision benefit that positively impacted the bottom-line. Our NPAs as a percentage of total assets are at the lowest level since 2006 and, based on what we are seeing today, we believe there will be additional reductions in NPAs and release of reserves in the second half of 2021. Therefore, at this time, we believe there will be no meaningful provision for the second half of 2021, even though we expect double-digit organic loan growth to continue.”\n \n Quarterly Highlights \n \n \n Exceptional Loan Growth. Loans, excluding Paycheck Protection Program (“PPP”) loans, grew $55.3 million , or 11.2% annualized, from the first quarter of 2021 and $286.0 million , or 16.5%, from the second quarter of 2020, as we continued to expand specialized lending offerings for commercial clients and focus on business development across products and geographies. This marks the fourth consecutive quarter of 10% or greater annualized loan growth, excluding PPP loans.\n \n \n Positive Asset Quality Trends. Non-performing assets (“NPAs”) declined 39.0% to $11.6 million , marking the third consecutive quarterly reduction of more than 25%. NPAs made up 0.42% of total assets, excluding PPP loans, improving by 39 and 77 basis points from March 31, 2021 and June 30, 2020 , respectively.\n \n \n Diversified Fee Income. Second quarter 2021 non-interest income continued to reflect the strength and diversity of our fee income sources and contributed meaningfully to top-line revenue. Private wealth management generated record revenue of $2.7 million on $2.564 billion in assets under management and administration for the period, while gains on the sale of Small Business Administration (“SBA”) loans grew to $1.2 million .\n \n \n Robust Core Earnings and Top-Line Revenue. Our improved asset quality metrics, net interest margin stability, organic loan growth, and fee income generation produced strong net income of $8.2 million in the second quarter, up $4.9 million , or 147.8%, compared to the same period in 2020. Top-line revenue of $28.0 million was up $2.8 million , or 11.0% from the same period in 2020.\n \n \n PPP Update. Our participation in PPP has been a tremendous benefit to our clients. As of June 30, 2021 , the Company had $123.8 million in gross PPP loans outstanding and deferred processing fees outstanding of $3.1 million to be recognized into income in future quarters. During the quarter, $2.5 million of processing fees were recognized.\n \n \n Quarterly Financial Results \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Six Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\n \n \n \n21,652\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,863\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n18,888\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 \n \n \n35,937\n \n \n \n \n \n \n \n \n \nAdjusted non-interest income (1)\n \n \n \n \n \n \n \n6,292\n \n \n \n \n \n \n \n \n \n \n \n7,195\n \n \n \n \n \n \n \n \n \n \n \n6,319\n \n \n \n \n \n \n \n \n \n \n \n13,487\n \n \n \n \n \n \n \n \n \n \n \n12,737\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n27,944\n \n \n \n \n \n \n \n \n \n \n \n28,058\n \n \n \n \n \n \n \n \n \n \n \n25,207\n \n \n \n \n \n \n \n \n \n \n \n56,002\n \n \n \n \n \n \n \n \n \n \n \n48,674\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n17,932\n \n \n \n \n \n \n \n \n \n \n \n17,449\n \n \n \n \n \n \n \n \n \n \n \n15,431\n \n \n \n \n \n \n \n \n \n \n \n35,383\n \n \n \n \n \n \n \n \n \n \n \n31,327\n \n \n \n \n \n \n \n \n \nPre-tax, pre-provision adjusted earnings (1)\n \n \n \n \n \n \n \n10,012\n \n \n \n \n \n \n \n \n \n \n \n10,609\n \n \n \n \n \n \n \n \n \n \n \n9,776\n \n \n \n \n \n \n \n \n \n \n \n20,619\n \n \n \n \n \n \n \n \n \n \n \n17,347\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(958)\n \n \n \n \n \n \n \n \n \n \n \n(2,068)\n \n \n \n \n \n \n \n \n \n \n \n5,469\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 \n8,651\n \n \n \n \n \n \n \n \n \nNet (gain) loss on foreclosed properties\n \n \n \n \n \n \n \n(1)\n \n \n \n \n \n \n \n \n \n \n \n3\n \n \n \n \n \n \n \n \n \n \n \n348\n \n \n \n \n \n \n \n \n \n \n \n1\n \n \n \n \n \n \n \n \n \n \n \n450\n \n \n \n \n \n \n \n \n \nAmortization of other intangible assets\n \n \n \n \n \n \n \n8\n \n \n \n \n \n \n \n \n \n \n \n8\n \n \n \n \n \n \n \n \n \n \n \n9\n \n \n \n \n \n \n \n \n \n \n \n15\n \n \n \n \n \n \n \n \n \n \n \n18\n \n \n \n \n \n \n \n \n \nSBA recourse provision (benefit)\n \n \n \n \n \n \n \n245\n \n \n \n \n \n \n \n \n \n \n \n(130)\n \n \n \n \n \n \n \n \n \n \n \n(30)\n \n \n \n \n \n \n \n \n \n \n \n115\n \n \n \n \n \n \n \n \n \n \n \n(5)\n \n \n \n \n \n \n \n \n \nImpairment on tax credit investments\n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n1,841\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n1,954\n \n \n \n \n \n \n \n \n \nLoss on early extinguishment of debt\n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n744\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n744\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 (loss) on sale of securities\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 \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \n \n \n(4)\n \n \n \n \n \n \n \n \n \nIncome before income tax expense\n \n \n \n \n \n \n \n10,747\n \n \n \n \n \n \n \n \n \n \n \n12,796\n \n \n \n \n \n \n \n \n \n \n \n1,395\n \n \n \n \n \n \n \n \n \n \n \n23,543\n \n \n \n \n \n \n \n \n \n \n \n5,531\n \n \n \n \n \n \n \n \n \nIncome tax expense (benefit)\n \n \n \n \n \n \n \n2,512\n \n \n \n \n \n \n \n \n \n \n \n3,065\n \n \n \n \n \n \n \n \n \n \n \n(1,928)\n \n \n \n \n \n \n \n \n \n \n \n5,577\n \n \n \n \n \n \n \n \n \n \n \n(1,070)\n \n \n \n \n \n \n \n \n \nNet income\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 \n9,731\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,323\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n17,966\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,601\n \n \n \n \n \n \n \n \n \nEarnings per share, diluted\n \n \n \n \n \n \n \n$\n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.12\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.38\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2.08\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.77\n \n \n \n \n \n \n \n \n \nBook value per share\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 \n24.83\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23.04\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25.70\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23.04\n \n \n \n \n \n \n \n \n \nTangible book value per share (1)\n \n \n \n \n \n \n \n$\n \n \n \n24.28\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23.43\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21.65\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 \n21.65\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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\n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n3.44\n \n \n \n%\n \n \n \n \n \n \n \n3.34\n \n \n \n%\n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \nAdjusted net interest margin (1)\n \n \n \n \n \n \n \n3.20\n \n \n \n%\n \n \n \n \n \n \n \n3.20\n \n \n \n%\n \n \n \n \n \n \n \n3.32\n \n \n \n%\n \n \n \n \n \n \n \n3.20\n \n \n \n%\n \n \n \n \n \n \n \n3.32\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n64.17\n \n \n \n%\n \n \n \n \n \n \n \n62.19\n \n \n \n%\n \n \n \n \n \n \n \n61.22\n \n \n \n%\n \n \n \n \n \n \n \n63.18\n \n \n \n%\n \n \n \n \n \n \n \n64.36\n \n \n \n%\n \n \n \n \n \nReturn on average assets\n \n \n \n \n \n \n \n1.26\n \n \n \n%\n \n \n \n \n \n \n \n1.51\n \n \n \n%\n \n \n \n \n \n \n \n0.55\n \n \n \n%\n \n \n \n \n \n \n \n1.38\n \n \n \n%\n \n \n \n \n \n \n \n0.58\n \n \n \n%\n \n \n \n \n \nPre-tax, pre-provision adjusted return on average assets (1)\n \n \n \n \n \n \n \n1.53\n \n \n \n%\n \n \n \n \n \n \n \n1.65\n \n \n \n%\n \n \n \n \n \n \n \n1.61\n \n \n \n%\n \n \n \n \n \n \n \n1.59\n \n \n \n%\n \n \n \n \n \n \n \n1.53\n \n \n \n%\n \n \n \n \n \nReturn on average equity\n \n \n \n \n \n \n \n15.09\n \n \n \n%\n \n \n \n \n \n \n \n18.48\n \n \n \n%\n \n \n \n \n \n \n \n6.70\n \n \n \n%\n \n \n \n \n \n \n \n16.75\n \n \n \n%\n \n \n \n \n \n \n \n6.92\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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$\n \n \n \n2,143,561\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,235,112\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,056,863\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,143,561\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,056,863\n \n \n \n \n \n \n \n \n \nPeriod-end loans and leases receivable, excluding net PPP loans\n \n \n \n \n \n \n \n$\n \n \n \n2,022,839\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,967,545\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,736,827\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 \n1,736,827\n \n \n \n \n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,223,353\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,182,958\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,983,121\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,203,267\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,858,432\n \n \n \n \n \n \n \n \n \nPeriod-end in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n2,016,215\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,737,226\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,620,616\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 \n1,620,616\n \n \n \n \n \n \n \n \n \nAverage in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,735,393\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,722,107\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,570,552\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,728,787\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,468,348\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n25,675\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n28,982\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27,464\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 \n27,464\n \n \n \n \n \n \n \n \n \nNon-performing assets\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 \n19,023\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,484\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,601\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,484\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 \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n1.29\n \n \n \n%\n \n \n \n \n \n \n \n1.33\n \n \n \n%\n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n1.33\n \n \n \n%\n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases, excluding net PPP loans\n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n1.47\n \n \n \n%\n \n \n \n \n \n \n \n1.57\n \n \n \n%\n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n1.57\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 \n0.40\n \n \n \n%\n \n \n \n \n \n \n \n0.73\n \n \n \n%\n \n \n \n \n \n \n \n1.03\n \n \n \n%\n \n \n \n \n \n \n \n0.40\n \n \n \n%\n \n \n \n \n \n \n \n1.03\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets, excluding net PPP loans\n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n0.81\n \n \n \n%\n \n \n \n \n \n \n \n1.19\n \n \n \n%\n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n1.19\n \n \n \n%\n \n \n \n \n \n (1) \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 Second Quarter 2021 Compared to First Quarter 2021 \n \nNet interest income increased $789,000 , or 3.8%, to $21.7 million .\n \n \nNet interest income reflected increases in average loans and leases, as well as in fees received in lieu of interest. Fees in lieu of interest, which can vary from quarter to quarter based on client-driven activity, totaled $3.5 million , compared to $3.1 million . Excluding fees in lieu of interest, net interest income increased $338,000 , or 1.9%.\n \n \nAverage loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $53.5 million , or 11.0% annualized, to $1.994 billion .\n \n \nThe yield on average interest-earning assets increased 3 basis points to 3.96% from 3.93%. Excluding average net PPP loans, the PPP loan interest income of $566,000 , and the aforementioned fees in lieu of interest, the yield earned on average interest-earning assets decreased 5 basis points to 3.64% from 3.69%. The rate paid for average total bank funding decreased one basis point to 0.39% from 0.40%. Total bank funding is defined as total deposits plus Federal Home Loan Bank (“FHLB”) advances, and Federal Reserve Discount Window advances.\n \n \nNet interest margin increased five basis points to 3.49% from 3.44%. Adjusted net interest margin, excluding fees in lieu of interest and other recurring but volatile components of net interest margin, was 3.20%, unchanged from the linked quarter.\n \n \nThe Company reported a net benefit to provision for loan and lease losses of $1.0 million , compared to a net benefit of $2.1 million in the first quarter.\n \n \nThe decrease in the provision for loan and lease losses was primarily due to a $1.7 million reduction in the general reserve from improving historical loss rates and a $1.5 million decrease in specific reserves. These decreases were partially offset by $2.3 million in net charge-offs and a $498,000 increase in the general reserve due to loan growth. Net charge-offs for the quarter principally consisted of a $2.2 million charge-off of one previously identified and partially reserved for legacy SBA loan.\n \n \nNon-interest income decreased $874,000 , or 12.1%, to $6.3 million .\n \n \nPrivate wealth management fee income increased $337,000 , or 14.0% to $2.7 million . Private wealth and trust assets under management and administration measured a record $2.564 billion at June 30, 2021 , up $177.8 million , or 29.8% annualized, primarily due to growth from new and existing clients and increased equity market values.\n \n \nGains on sale of SBA loans increased $125,000 , or 11.6%, to $1.2 million . Management believes the gain on sale of traditional SBA loans (i.e., SBA loans unrelated to PPP loans), while variable based on timing of closings, will continue to increase annually at a measured pace.\n \n \nDuring the second quarter there was no commercial loan interest rate swap fee income, compared to total swap fees of $684,000 in the first quarter. Swap fee income can vary from period to period based on client demand and the interest rate environment in any given quarter.\n \n \nOther fee income decreased $729,000 to $835,000 , compared to $1.6 million in the first quarter, which reflected higher than typical returns in the first three months of 2021 from the Company’s investments in mezzanine funds.\n \n \nNon-interest expense increased $854,000 , or 4.9%, to $18.2 million . Operating expense increased $483,000 , or 2.8%, to $17.9 million .\n \n \nCompensation expense increased $598,000 , or 4.7%, to $13.3 million , primarily due to a $415,000 true up of the Company’s performance-based incentive compensation accrual to reflect the strong earnings results through the first half of 2021.\n \n \nSBA recourse provision for estimated losses in the outstanding guaranteed portion of SBA loans sold totaled $245,000 , compared to a net benefit of $130,000 in the linked quarter.\n \n \nOther non-interest expense decreased $228,000 to $176,000 . The decrease was principally due to a reduction in the credit valuation adjustment (“CVA”) related to the commercial loan interest rate swap program and a reduction in the loan servicing valuation adjustment related to the Bank’s SBA portfolio.\n \n \nTotal period-end loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $55.3 million , or 11.2% annualized, to $2.023 billion .\n \n \nCommercial and industrial (“C&I”) loans, excluding net PPP loans, increased $58.0 million , or 44.8% annualized, led by First Business Bank’s specialized lending commercial business lines. While we believe this level of above average growth is not sustainable, management believes the timely prior-period investments in producers for specialized lending, such as dealer floorplan financing, small-ticket equipment vendor financing, and accounts receivable financing, have positioned C&I lending to increase throughout the current economic cycle.\n \n \nCommercial real estate (“CRE”) loans were unchanged at $1.392 billion , as growth from non-owner occupied CRE was offset by payoffs and paydowns in the remaining categories.\n \n \nTotal period-end in-market deposits increased $279.0 million to $2.016 billion , or 64.2% annualized, and the average rate paid decreased one basis point to 0.15%.\n \n \nA significant portion of the large increase in deposits was due to the proceeds of a commercial client’s business sale late in the second quarter, the majority of which was moved off the balance sheet in early July. Excluding this temporary deposit, total period-end in-market deposits increased $54.0 million to $1.791 billion , or 12.4% annualized.\n \n \nExcluding the temporary deposit described above, non-interest bearing transaction and money market accounts increased $52.4 million and $53.1 million , respectively, while interest-bearing transaction accounts and certificates of deposits decreased $49.8 million and $1.7 million , respectively.\n \n \nPeriod-end wholesale funding, including FHLB advances, Federal Reserve Discount Window advances, brokered deposit, and deposits gathered through internet deposit listing services, decreased $49.0 million to $532.3 million .\n \n \nWholesale deposits decreased $21.0 million to $144.5 million , due to contractual runoff. The average rate paid on wholesale deposits decreased 2 basis points to 0.74% and the weighted average original maturity of brokered certificates of deposit decreased to 3.5 years from 3.9 years.\n \n \nFHLB advances decreased $28.0 million to $387.8 million . The average rate paid on FHLB advances decreased nine basis points to 1.27% and the weighted average original maturity increased to 6.1 years from 5.7 years.\n \n \nNon-performing assets decreased $7.4 million , or 39.0%, to $11.6 million , or 0.40% of total assets, compared to $19.0 million , or 0.73% of total assets. The reduction in non-performing assets was principally due to loan payoffs and charge-offs. Excluding net PPP loans, non-performing assets were 0.42% of total assets as of June 30, 2021 , compared to 0.81% as of March 31, 2021 .\n \nThe allowance for loan and lease losses decreased $3.3 million , or 11.4%, as an increase in the general reserve from loan growth was more than offset by a decrease in the historical loss rate and reduction in specific reserves.\n \n \nThe allowance for loan and lease losses as a percent of total gross loans and leases was 1.20% compared to 1.29% as of March 31, 2021 .\n \n \nExcluding net PPP loans, the allowance for loan and leases losses as a percent of total gross loans and leases was 1.27%, compared to 1.47% as of March 31, 2021 .\n \n \n Second Quarter 2021 Compared to Second Quarter 2020 \n \nNet interest income increased $2.8 million , or 14.6%, to $21.7 million .\n \n \nThe increase in net interest income reflects an increase in average gross loans and leases and an increase in fees collected in lieu of interest. Fees in lieu of interest, which can vary from quarter to quarter, totaled $3.5 million compared to $2.3 million . Excluding fees in lieu of interest and interest income from PPP loans, net interest income increased $1.5 million , or 9.7%. Excluding net PPP loans, average gross loans and leases increased $263.9 million , or 15.3%.\n \n \nThe yield on average interest-earning assets measured 3.96% compared to 4.03%. Excluding fees collected in lieu of interest, PPP loan interest income and net PPP loans, the yield on average interest-earning assets was 3.64%, compared to 3.96%. The decline in yields was primarily due to the decrease in LIBOR and Prime rates and related impact on variable-rate loans, in addition to the renewal of fixed-rate loans and reinvestment of security cash flows at historically low interest rates. The rate paid for average total bank funding decreased 22 basis points to 0.39% from 0.61%.\n \n \nNet interest margin increased 15 basis points to 3.49% from 3.34%. Adjusted net interest margin decreased 12 basis points to 3.20% from 3.32%.\n \n \nThe Company reported a net benefit to provision for loan and lease losses of $1.0 million , compared to a $5.5 million expense in the second quarter of 2020.\n \nNon-interest income was $6.3 million for both periods.\n \n \nGains on sale of SBA loans increased $629,000 , or 109.6%, to $1.2 million as a result of the Company’s rebuilt SBA business line.\n \n \nPrivate wealth management fee income increased $620,000 , or 29.2%, to $2.7 million . Private wealth and trust assets under management and administration measured a record $2.564 billion at June 30, 2021 , up $691.0 million , or 36.9%.\n \n \nDuring the second quarter there was no commercial loan interest rate swap fee income, compared to total swap fees of $1.7 million for the year-ago quarter.\n \n \nOther fee income increased $149,000 , or 21.7%, to $835,000 compared to $686,000 .\n \n \nNon-interest expense decreased $159,000 , or 0.9%, to $18.2 million . Operating expense increased $2.5 million , or 16.2%, to $17.9 million .\n \n \nCompensation expense increased $2.5 million , or 22.8%, to $13.3 million . The increase reflects new hires and an increase in the Company’s performance-based incentive compensation accrual based on estimated full year 2021 results, compared to a second quarter 2020 reduction to the same accrual due to COVID-19 pandemic uncertainty. Average full-time equivalent employees increased to 312, up 11.0% for the quarter ended June 30, 2021 , compared to 281 for the quarter ended June 30, 2020 .\n \n \nIn the second quarter of 2020, the Company recognized $1.7 million in expense due to the impairment of federal historic tax credit investments, which corresponded with the recognition of a $2.5 million in tax credits during the quarter. No federal historic tax credit investments were recognized in the second quarter of 2021.\n \n \nOther non-interest expense decreased $369,000 , or 67.7%, to $176,000 . The decrease was principally due to a reduction in the credit valuation adjustment (“CVA”) related to the commercial loan interest rate swap program and a decrease in business travel expense.\n \n \nTotal period-end loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $286.0 million , or 16.5%, to $2.023 billion .\n \n \nC&I loans, excluding net PPP loans, increased $113.5 million , or 24.6%.\n \n \nCRE loans increased $169.8 million , or 13.9%, driven by an increase across most CRE categories with the majority in the non-owner occupied and multi-family portfolios.\n \n \nTotal period-end in-market deposits increased $395.6 million , or 24.4%, to $2.016 billion and the average rate paid decreased 18 basis points to 0.15%.\n \n \nExcluding the temporary deposit from a client’s business sale, total period-end in-market deposits increased $170.6 million to $1.791 billion , or 10.5%.\n \n \nExcluding the temporary deposit described above, transaction and money market accounts increased $214.0 million and $28.4 million , respectively, while certificates of deposits decreased $71.8 million .\n \n \nPeriod-end wholesale funding increased $31.5 million to $532.3 million .\n \n \nWholesale deposits increased $54.7 million to $144.5 million mainly due to adding non-maturity brokered deposits at a favorable rate compared to alternative funding sources. Excluding these deposits, wholesale deposits decreased as the existing portfolio runoff was replaced by in-market deposits and lower cost FHLB advances to match-fund long-term fixed rate loans and fund loan growth. The average rate paid on brokered certificates of deposit decreased 168 basis points to 0.74% and the weighted average original maturity decreased to 3.5 years from 4.6 years.\n \n \nFHLB advances decreased $23.2 million to $387.8 million . The average rate paid on FHLB advances increased 2 basis points to 1.27% and the weighted average original maturity increased to 6.1 years from 5.3 years.\n \n \nNon-performing assets decreased to $11.6 million , or 0.40% of total assets, compared to $25.5 million , or 1.03% of total assets. Excluding net PPP loans, non-performing assets were 0.42% of total assets as of June 30, 2021 compared to 1.19% one year prior.\n \nThe allowance for loan and lease losses decreased $1.8 million to $25.7 million compared to $27.5 million .\n \n \nThe allowance for loan and lease losses as a percent of total gross loans and leases was 1.20% compared to 1.33%.\n \n \nExcluding net PPP loans, the allowance for loan and leases losses as a percent of total gross loans and leases was 1.27% as of June 30, 2021 compared to 1.57% one year prior.\n \n \n COVID-19 Update \n \nOn March 11, 2020 , the World Health Organization declared COVID-19, the disease caused by the novel coronavirus, a pandemic as a result of the global spread of the coronavirus illness. In response to the outbreak, federal and state authorities in the U.S. introduced various measures to try to limit or slow the spread of the virus, including travel restrictions, nonessential business closures, stay-at-home orders, and strict social distancing. The Company activated its Pandemic Preparedness Plan to protect the health of employees and clients, which included temporarily limiting lobby hours and transitioning the vast majority of the Company’s workforce to remote work. The Company did not incur any significant disruptions to its business activities during this time of transition and extended remote work.\n \nThe second half of 2020 saw improvements in economic trends, but continued waves of new cases of COVID-19 created continued uncertainty in the economic environment. However, at the end of the fourth quarter of 2020 and into the first quarter of 2021, the rollout of new vaccines and the ratification of two additional stimulus laws resulted in lower infection rates and significant improvement in the outlook of the economy. In the second quarter of 2021, the Company communicated return to office plans to employees. Based on the national and local guidelines, the Company developed a phased-in approach for returning to the office. Under this phased-in approach, offices opened in early June 2021 . The return to office included enhanced safety protocols and processes to provide the best working environment possible for employees.\n \n Paycheck Protection Program \n \nAs of June 30, 2021 , the Company had $123.8 million in gross PPP loans outstanding and deferred processing fees outstanding of $3.1 million . The processing fees are deferred and recognized over the contractual life of the loan, or accelerated at forgiveness, as an adjustment of yield using the interest method. During the three and six months ended June 30, 2021 , the Company recognized $2.5 million and $4.8 million , respectively, of processing fees in loans and leases interest income in the unaudited Consolidated Statements of Income. The SBA provides a guaranty to the lender of 100% of principal and interest, unless the lender violated an obligation under the agreement. Since loan losses are expected to immaterial, if at all due to the government guarantee, management excluded the PPP loans from the allowance for loan and lease losses calculation. These short-term loans were funded primarily through a combination of excess cash held at the Federal Reserve and from an increase in in-market deposits.\n \n Deferral Requests \n \nThe Company provided loan modifications deferring payments for certain borrowers impacted by COVID-19 who were current in their payments at the inception of the Company’s loan modification program. Excluding gross PPP loans, as of June 30, 2021 , the Company had five deferred loans outstanding of $20.5 million , or 1.0% of gross loans and leases, compared to $323.2 million , or 18.6% of gross loans and leases as of June 30, 2020 . Of the $20.5 million of deferred loans outstanding, $19.8 million relates to two hospitality credits that went on deferral during the second quarter of 2021 and are both accruing and current on payments. Management believes there will be no losses associated with these two credits.\n \nThe following tables represent a breakdown of the deferred loan balances by industry segment and collateral type:\n \n \n \n \n \n \n \n \n \n \n \nAs of\n \n \n \n \n \n \n \n \n \n \n \n \n \n June 30, 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCollateral Type\n \n \n \n \n \nIndustries Description\n \n \n \n \n \n \n \nBalance\n \n \n \n \n \n \n \nReal Estate\n \n \n \n \n \n \n \n Non-Real Estate \n \n \n \n \n \n \n \n \n \n \n \n \n \n(In thousands)\n \n \n \n \n \nAccommodation and Food Services\n \n \n \n \n \n \n \n$\n \n \n \n19,811\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,811\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n—\n \n \n \n \n \n \n \n \n \nManufacturing\n \n \n \n \n \n \n \n310\n \n \n \n \n \n \n \n \n \n \n \n310\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nAgriculture, Forestry, Fishing, and Hunting\n \n \n \n \n \n \n \n210\n \n \n \n \n \n \n \n \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 \nEducational Services\n \n \n \n \n \n \n \n195\n \n \n \n \n \n \n \n \n \n \n \n195\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nTotal deferred loan balances\n \n \n \n \n \n \n \n$\n \n \n \n20,526\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,316\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n210\n \n \n \n \n \n \n \n \n Exposure to Stressed Industries \n \nCertain industries have been and are expected to be particularly impacted by social distancing, quarantines, and the economic impact of the COVID-19 pandemic, such as the following:\n \n \n \n \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n \n \n \n \n \n \n \n \n June 30, 2021 \n \n \n \n \n \n \n \n December 31, 2020 \n \n \n \n \n \n Industries: \n \n \n \n \n \n \n \n Balance \n \n \n \n \n \n \n \n % Gross Loans\nand Leases (1) \n \n \n \n \n \n \n \n Balance \n \n \n \n \n \n \n \n % Gross Loans\nand Leases (1) \n \n \n \n \n \n \n \n \n \n \n \n \n \n(Dollars in Thousands)\n \n \n \n \n \nRetail (2) (3)\n \n \n \n \n \n \n \n$\n \n \n \n75,588\n \n \n \n \n \n \n \n \n \n \n \n3.7\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n62,719\n \n \n \n \n \n \n \n \n \n \n \n3.3\n \n \n \n%\n \n \n \n \n \nHospitality\n \n \n \n \n \n \n \n82,818\n \n \n \n \n \n \n \n \n \n \n \n4.1\n \n \n \n%\n \n \n \n \n \n \n \n80,832\n \n \n \n \n \n \n \n \n \n \n \n4.2\n \n \n \n%\n \n \n \n \n \nEntertainment\n \n \n \n \n \n \n \n13,729\n \n \n \n \n \n \n \n \n \n \n \n0.7\n \n \n \n%\n \n \n \n \n \n \n \n14,208\n \n \n \n \n \n \n \n \n \n \n \n0.7\n \n \n \n%\n \n \n \n \n \nRestaurants & food service\n \n \n \n \n \n \n \n23,340\n \n \n \n \n \n \n \n \n \n \n \n1.2\n \n \n \n%\n \n \n \n \n \n \n \n24,854\n \n \n \n \n \n \n \n \n \n \n \n1.3\n \n \n \n%\n \n \n \n \n \nTotal outstanding exposure\n \n \n \n \n \n \n \n$\n \n \n \n195,475\n \n \n \n \n \n \n \n \n \n \n \n9.6\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n182,613\n \n \n \n \n \n \n \n \n \n \n \n9.5\n \n \n \n%\n \n \n \n \n \n (1) \n \nExcluding net PPP loans.\n \n \n \n \n (2) \n \nIncludes $38.6 million and $48.9 million in loans secured by commercial real estate as of June 30, 2021 and December 31, 2020 , respectively.\n \n \n \n \n (3) \n \nIncludes $24.1 million and $7.7 million in fully collateralized asset-based loans as of June 30, 2021 and December 31, 2020 , respectively.\n \n \n \n \nAs of June 30, 2021 , the Company had no meaningful direct exposure to the energy sector, airline industry or retail consumer, and does not participate in Shared National Credits.\n \nBecause of the uncertainties related to the ultimate duration of the COVID-19 pandemic and its effects on our clients and prospects, and on the national and local economies as a whole, there can be no assurances as to how the crisis may ultimately affect the Company’s loan portfolio.\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, the adverse effects of the COVID-19 pandemic on the global, national, and local economy.\n \n \nThe effect of the COVID-19 pandemic on the Company’s credit quality, revenue, and business operations.\n \n \nCompetitive pressures among depository and other financial institutions nationally and in our markets.\n \n \nIncreases in defaults by borrowers and other delinquencies.\n \n \nOur ability to manage growth effectively, including the successful expansion of our client service, administrative infrastructure, and internal management systems.\n \n \nFluctuations in interest rates and market prices.\n \n \nChanges in legislative or regulatory requirements applicable to us and our subsidiaries.\n \n \nChanges in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations.\n \n \nFraud, including client and system failure or breaches of our network security, including our internet banking activities.\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, 2020 and other filings with the Securities and Exchange Commission .\n \n SELECTED FINANCIAL CONDITION DATA \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 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \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 \n389,977\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n58,874\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n56,909\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n51,728\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n42,391\n \n \n \n \n \n \n \n \n \nSecurities available-for-sale, at fair value\n \n \n \n \n \n \n \n171,219\n \n \n \n \n \n \n \n \n \n \n \n173,261\n \n \n \n \n \n \n \n \n \n \n \n183,925\n \n \n \n \n \n \n \n \n \n \n \n179,274\n \n \n \n \n \n \n \n \n \n \n \n171,680\n \n \n \n \n \n \n \n \n \nSecurities held-to-maturity, at amortized cost\n \n \n \n \n \n \n \n22,382\n \n \n \n \n \n \n \n \n \n \n \n24,783\n \n \n \n \n \n \n \n \n \n \n \n26,374\n \n \n \n \n \n \n \n \n \n \n \n28,897\n \n \n \n \n \n \n \n \n \n \n \n29,826\n \n \n \n \n \n \n \n \n \nLoans held for sale\n \n \n \n \n \n \n \n6,059\n \n \n \n \n \n \n \n \n \n \n \n6,576\n \n \n \n \n \n \n \n \n \n \n \n8,695\n \n \n \n \n \n \n \n \n \n \n \n15,049\n \n \n \n \n \n \n \n \n \n \n \n13,672\n \n \n \n \n \n \n \n \n \nLoans and leases receivable\n \n \n \n \n \n \n \n2,143,561\n \n \n \n \n \n \n \n \n \n \n \n2,235,112\n \n \n \n \n \n \n \n \n \n \n \n2,145,970\n \n \n \n \n \n \n \n \n \n \n \n2,170,299\n \n \n \n \n \n \n \n \n \n \n \n2,056,863\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n(25,675)\n \n \n \n \n \n \n \n \n \n \n \n(28,982)\n \n \n \n \n \n \n \n \n \n \n \n(28,521)\n \n \n \n \n \n \n \n \n \n \n \n(30,817)\n \n \n \n \n \n \n \n \n \n \n \n(27,464)\n \n \n \n \n \n \n \n \n \nLoans and leases receivable, net\n \n \n \n \n \n \n \n2,117,886\n \n \n \n \n \n \n \n \n \n \n \n2,206,130\n \n \n \n \n \n \n \n \n \n \n \n2,117,449\n \n \n \n \n \n \n \n \n \n \n \n2,139,482\n \n \n \n \n \n \n \n \n \n \n \n2,029,399\n \n \n \n \n \n \n \n \n \nPremises and equipment, net\n \n \n \n \n \n \n \n1,747\n \n \n \n \n \n \n \n \n \n \n \n1,923\n \n \n \n \n \n \n \n \n \n \n \n1,998\n \n \n \n \n \n \n \n \n \n \n \n2,130\n \n \n \n \n \n \n \n \n \n \n \n2,266\n \n \n \n \n \n \n \n \n \nForeclosed properties\n \n \n \n \n \n \n \n179\n \n \n \n \n \n \n \n \n \n \n \n31\n \n \n \n \n \n \n \n \n \n \n \n34\n \n \n \n \n \n \n \n \n \n \n \n613\n \n \n \n \n \n \n \n \n \n \n \n1,389\n \n \n \n \n \n \n \n \n \nRight-of-use assets\n \n \n \n \n \n \n \n5,472\n \n \n \n \n \n \n \n \n \n \n \n5,486\n \n \n \n \n \n \n \n \n \n \n \n5,814\n \n \n \n \n \n \n \n \n \n \n \n6,141\n \n \n \n \n \n \n \n \n \n \n \n6,272\n \n \n \n \n \n \n \n \n \nBank-owned life insurance\n \n \n \n \n \n \n \n52,887\n \n \n \n \n \n \n \n \n \n \n \n52,537\n \n \n \n \n \n \n \n \n \n \n \n52,188\n \n \n \n \n \n \n \n \n \n \n \n51,798\n \n \n \n \n \n \n \n \n \n \n \n51,433\n \n \n \n \n \n \n \n \n \n Federal Home Loan Bank stock, at cost\n \n \n \n \n \n \n \n13,451\n \n \n \n \n \n \n \n \n \n \n \n14,941\n \n \n \n \n \n \n \n \n \n \n \n13,578\n \n \n \n \n \n \n \n \n \n \n \n15,153\n \n \n \n \n \n \n \n \n \n \n \n13,470\n \n \n \n \n \n \n \n \n \n Goodwill and other intangible assets\n \n \n \n \n \n \n \n12,178\n \n \n \n \n \n \n \n \n \n \n \n12,055\n \n \n \n \n \n \n \n \n \n \n \n12,018\n \n \n \n \n \n \n \n \n \n \n \n12,024\n \n \n \n \n \n \n \n \n \n \n \n11,925\n \n \n \n \n \n \n \n \n \nDerivatives\n \n \n \n \n \n \n \n32,377\n \n \n \n \n \n \n \n \n \n \n \n26,104\n \n \n \n \n \n \n \n \n \n \n \n49,377\n \n \n \n \n \n \n \n \n \n \n \n58,210\n \n \n \n \n \n \n \n \n \n \n \n58,808\n \n \n \n \n \n \n \n \n \nAccrued interest receivable and other assets\n \n \n \n \n \n \n \n39,855\n \n \n \n \n \n \n \n \n \n \n \n38,017\n \n \n \n \n \n \n \n \n \n \n \n39,478\n \n \n \n \n \n \n \n \n \n \n \n41,348\n \n \n \n \n \n \n \n \n \n \n \n36,283\n \n \n \n \n \n \n \n \n \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,865,669\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,620,718\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,567,837\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,601,847\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,468,814\n \n \n \n \n \n \n \n \n \n Liabilities and Stockholders’ Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nIn-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n2,016,215\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,737,226\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,683,008\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,667,245\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,620,616\n \n \n \n \n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n144,492\n \n \n \n \n \n \n \n \n \n \n \n165,492\n \n \n \n \n \n \n \n \n \n \n \n172,508\n \n \n \n \n \n \n \n \n \n \n \n154,130\n \n \n \n \n \n \n \n \n \n \n \n89,759\n \n \n \n \n \n \n \n \n \nTotal deposits\n \n \n \n \n \n \n \n2,160,707\n \n \n \n \n \n \n \n \n \n \n \n1,902,718\n \n \n \n \n \n \n \n \n \n \n \n1,855,516\n \n \n \n \n \n \n \n \n \n \n \n1,821,375\n \n \n \n \n \n \n \n \n \n \n \n1,710,375\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 \n420,113\n \n \n \n \n \n \n \n \n \n \n \n448,417\n \n \n \n \n \n \n \n \n \n \n \n419,167\n \n \n \n \n \n \n \n \n \n \n \n483,517\n \n \n \n \n \n \n \n \n \n \n \n465,007\n \n \n \n \n \n \n \n \n \nJunior subordinated notes\n \n \n \n \n \n \n \n10,069\n \n \n \n \n \n \n \n \n \n \n \n10,065\n \n \n \n \n \n \n \n \n \n \n \n10,062\n \n \n \n \n \n \n \n \n \n \n \n10,058\n \n \n \n \n \n \n \n \n \n \n \n10,054\n \n \n \n \n \n \n \n \n \nLease liabilities\n \n \n \n \n \n \n \n6,005\n \n \n \n \n \n \n \n \n \n \n \n6,040\n \n \n \n \n \n \n \n \n \n \n \n6,386\n \n \n \n \n \n \n \n \n \n \n \n6,728\n \n \n \n \n \n \n \n \n \n \n \n6,877\n \n \n \n \n \n \n \n \n \nDerivatives\n \n \n \n \n \n \n \n36,109\n \n \n \n \n \n \n \n \n \n \n \n29,565\n \n \n \n \n \n \n \n \n \n \n \n54,927\n \n \n \n \n \n \n \n \n \n \n \n64,403\n \n \n \n \n \n \n \n \n \n \n \n65,390\n \n \n \n \n \n \n \n \n \nAccrued interest payable and other liabilities\n \n \n \n \n \n \n \n11,214\n \n \n \n \n \n \n \n \n \n \n \n9,422\n \n \n \n \n \n \n \n \n \n \n \n15,617\n \n \n \n \n \n \n \n \n \n \n \n14,981\n \n \n \n \n \n \n \n \n \n \n \n13,549\n \n \n \n \n \n \n \n \n \nTotal liabilities\n \n \n \n \n \n \n \n2,644,217\n \n \n \n \n \n \n \n \n \n \n \n2,406,227\n \n \n \n \n \n \n \n \n \n \n \n2,361,675\n \n \n \n \n \n \n \n \n \n \n \n2,401,062\n \n \n \n \n \n \n \n \n \n \n \n2,271,252\n \n \n \n \n \n \n \n \n \nTotal stockholders’ equity\n \n \n \n \n \n \n \n221,452\n \n \n \n \n \n \n \n \n \n \n \n214,491\n \n \n \n \n \n \n \n \n \n \n \n206,162\n \n \n \n \n \n \n \n \n \n \n \n200,785\n \n \n \n \n \n \n \n \n \n \n \n197,562\n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,865,669\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,620,718\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,567,837\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,601,847\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,468,814\n \n \n \n \n \n \n \n \n STATEMENTS OF INCOME \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Six Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \nTotal interest income\n \n \n \n \n \n \n \n$\n \n \n \n24,599\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,806\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,770\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n22,276\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n22,761\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n48,406\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n46,132\n \n \n \n \n \n \n \n \n \nTotal interest expense\n \n \n \n \n \n \n \n2,947\n \n \n \n \n \n \n \n \n \n \n \n2,943\n \n \n \n \n \n \n \n \n \n \n \n3,258\n \n \n \n \n \n \n \n \n \n \n \n3,655\n \n \n \n \n \n \n \n \n \n \n \n3,873\n \n \n \n \n \n \n \n \n \n \n \n5,891\n \n \n \n \n \n \n \n \n \n \n \n10,195\n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n21,652\n \n \n \n \n \n \n \n \n \n \n \n20,863\n \n \n \n \n \n \n \n \n \n \n \n22,512\n \n \n \n \n \n \n \n \n \n \n \n18,621\n \n \n \n \n \n \n \n \n \n \n \n18,888\n \n \n \n \n \n \n \n \n \n \n \n42,515\n \n \n \n \n \n \n \n \n \n \n \n35,937\n \n \n \n \n \n \n \n \n \nProvision for loan and lease losses\n \n \n \n \n \n \n \n(958)\n \n \n \n \n \n \n \n \n \n \n \n(2,068)\n \n \n \n \n \n \n \n \n \n \n \n4,322\n \n \n \n \n \n \n \n \n \n \n \n3,835\n \n \n \n \n \n \n \n \n \n \n \n5,469\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 \n8,651\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 \n22,610\n \n \n \n \n \n \n \n \n \n \n \n22,931\n \n \n \n \n \n \n \n \n \n \n \n18,190\n \n \n \n \n \n \n \n \n \n \n \n14,786\n \n \n \n \n \n \n \n \n \n \n \n13,419\n \n \n \n \n \n \n \n \n \n \n \n45,541\n \n \n \n \n \n \n \n \n \n \n \n27,286\n \n \n \n \n \n \n \n \n \nPrivate wealth management service fees\n \n \n \n \n \n \n \n2,744\n \n \n \n \n \n \n \n \n \n \n \n2,407\n \n \n \n \n \n \n \n \n \n \n \n2,208\n \n \n \n \n \n \n \n \n \n \n \n2,167\n \n \n \n \n \n \n \n \n \n \n \n2,124\n \n \n \n \n \n \n \n \n \n \n \n5,151\n \n \n \n \n \n \n \n \n \n \n \n4,235\n \n \n \n \n \n \n \n \n \nGain on sale of SBA loans\n \n \n \n \n \n \n \n1,203\n \n \n \n \n \n \n \n \n \n \n \n1,078\n \n \n \n \n \n \n \n \n \n \n \n1,300\n \n \n \n \n \n \n \n \n \n \n \n760\n \n \n \n \n \n \n \n \n \n \n \n574\n \n \n \n \n \n \n \n \n \n \n \n2,281\n \n \n \n \n \n \n \n \n \n \n \n839\n \n \n \n \n \n \n \n \n \nService charges on deposits\n \n \n \n \n \n \n \n941\n \n \n \n \n \n \n \n \n \n \n \n917\n \n \n \n \n \n \n \n \n \n \n \n887\n \n \n \n \n \n \n \n \n \n \n \n881\n \n \n \n \n \n \n \n \n \n \n \n829\n \n \n \n \n \n \n \n \n \n \n \n1,859\n \n \n \n \n \n \n \n \n \n \n \n1,647\n \n \n \n \n \n \n \n \n \nLoan fees\n \n \n \n \n \n \n \n569\n \n \n \n \n \n \n \n \n \n \n \n545\n \n \n \n \n \n \n \n \n \n \n \n412\n \n \n \n \n \n \n \n \n \n \n \n478\n \n \n \n \n \n \n \n \n \n \n \n451\n \n \n \n \n \n \n \n \n \n \n \n1,114\n \n \n \n \n \n \n \n \n \n \n \n936\n \n \n \n \n \n \n \n \n \nNet gain on sale of securities\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 \n \n \n \n \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(4)\n \n \n \n \n \n \n \n \n \nSwap fees\n \n \n \n \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 \n1,078\n \n \n \n \n \n \n \n \n \n \n \n2,446\n \n \n \n \n \n \n \n \n \n \n \n1,655\n \n \n \n \n \n \n \n \n \n \n \n684\n \n \n \n \n \n \n \n \n \n \n \n3,336\n \n \n \n \n \n \n \n \n \nOther non-interest income\n \n \n \n \n \n \n \n835\n \n \n \n \n \n \n \n \n \n \n \n1,564\n \n \n \n \n \n \n \n \n \n \n \n914\n \n \n \n \n \n \n \n \n \n \n \n676\n \n \n \n \n \n \n \n \n \n \n \n686\n \n \n \n \n \n \n \n \n \n \n \n2,398\n \n \n \n \n \n \n \n \n \n \n \n1,744\n \n \n \n \n \n \n \n \n \nTotal non-interest income\n \n \n \n \n \n \n \n6,321\n \n \n \n \n \n \n \n \n \n \n \n7,195\n \n \n \n \n \n \n \n \n \n \n \n6,799\n \n \n \n \n \n \n \n \n \n \n \n7,408\n \n \n \n \n \n \n \n \n \n \n \n6,319\n \n \n \n \n \n \n \n \n \n \n \n13,516\n \n \n \n \n \n \n \n \n \n \n \n12,733\n \n \n \n \n \n \n \n \n \nCompensation\n \n \n \n \n \n \n \n13,255\n \n \n \n \n \n \n \n \n \n \n \n12,657\n \n \n \n \n \n \n \n \n \n \n \n12,145\n \n \n \n \n \n \n \n \n \n \n \n11,857\n \n \n \n \n \n \n \n \n \n \n \n10,796\n \n \n \n \n \n \n \n \n \n \n \n25,912\n \n \n \n \n \n \n \n \n \n \n \n21,848\n \n \n \n \n \n \n \n \n \nOccupancy\n \n \n \n \n \n \n \n533\n \n \n \n \n \n \n \n \n \n \n \n552\n \n \n \n \n \n \n \n \n \n \n \n556\n \n \n \n \n \n \n \n \n \n \n \n570\n \n \n \n \n \n \n \n \n \n \n \n554\n \n \n \n \n \n \n \n \n \n \n \n1,085\n \n \n \n \n \n \n \n \n \n \n \n1,126\n \n \n \n \n \n \n \n \n \nProfessional fees\n \n \n \n \n \n \n \n913\n \n \n \n \n \n \n \n \n \n \n \n866\n \n \n \n \n \n \n \n \n \n \n \n909\n \n \n \n \n \n \n \n \n \n \n \n943\n \n \n \n \n \n \n \n \n \n \n \n859\n \n \n \n \n \n \n \n \n \n \n \n1,778\n \n \n \n \n \n \n \n \n \n \n \n1,678\n \n \n \n \n \n \n \n \n \nData processing\n \n \n \n \n \n \n \n798\n \n \n \n \n \n \n \n \n \n \n \n770\n \n \n \n \n \n \n \n \n \n \n \n668\n \n \n \n \n \n \n \n \n \n \n \n679\n \n \n \n \n \n \n \n \n \n \n \n710\n \n \n \n \n \n \n \n \n \n \n \n1,569\n \n \n \n \n \n \n \n \n \n \n \n1,386\n \n \n \n \n \n \n \n \n \nMarketing\n \n \n \n \n \n \n \n511\n \n \n \n \n \n \n \n \n \n \n \n391\n \n \n \n \n \n \n \n \n \n \n \n411\n \n \n \n \n \n \n \n \n \n \n \n356\n \n \n \n \n \n \n \n \n \n \n \n352\n \n \n \n \n \n \n \n \n \n \n \n902\n \n \n \n \n \n \n \n \n \n \n \n813\n \n \n \n \n \n \n \n \n \nEquipment\n \n \n \n \n \n \n \n261\n \n \n \n \n \n \n \n \n \n \n \n246\n \n \n \n \n \n \n \n \n \n \n \n294\n \n \n \n \n \n \n \n \n \n \n \n310\n \n \n \n \n \n \n \n \n \n \n \n304\n \n \n \n \n \n \n \n \n \n \n \n506\n \n \n \n \n \n \n \n \n \n \n \n595\n \n \n \n \n \n \n \n \n \nComputer software\n \n \n \n \n \n \n \n1,129\n \n \n \n \n \n \n \n \n \n \n \n1,115\n \n \n \n \n \n \n \n \n \n \n \n1,028\n \n \n \n \n \n \n \n \n \n \n \n1,017\n \n \n \n \n \n \n \n \n \n \n \n966\n \n \n \n \n \n \n \n \n \n \n \n2,244\n \n \n \n \n \n \n \n \n \n \n \n1,856\n \n \n \n \n \n \n \n \n \n FDIC insurance\n \n \n \n \n \n \n \n280\n \n \n \n \n \n \n \n \n \n \n \n362\n \n \n \n \n \n \n \n \n \n \n \n479\n \n \n \n \n \n \n \n \n \n \n \n312\n \n \n \n \n \n \n \n \n \n \n \n239\n \n \n \n \n \n \n \n \n \n \n \n642\n \n \n \n \n \n \n \n \n \n \n \n448\n \n \n \n \n \n \n \n \n \nCollateral liquidation cost\n \n \n \n \n \n \n \n84\n \n \n \n \n \n \n \n \n \n \n \n94\n \n \n \n \n \n \n \n \n \n \n \n47\n \n \n \n \n \n \n \n \n \n \n \n45\n \n \n \n \n \n \n \n \n \n \n \n115\n \n \n \n \n \n \n \n \n \n \n \n178\n \n \n \n \n \n \n \n \n \n \n \n236\n \n \n \n \n \n \n \n \n \nNet (gain) loss on foreclosed properties\n \n \n \n \n \n \n \n(1)\n \n \n \n \n \n \n \n \n \n \n \n3\n \n \n \n \n \n \n \n \n \n \n \n54\n \n \n \n \n \n \n \n \n \n \n \n(121)\n \n \n \n \n \n \n \n \n \n \n \n348\n \n \n \n \n \n \n \n \n \n \n \n1\n \n \n \n \n \n \n \n \n \n \n \n450\n \n \n \n \n \n \n \n \n \nTax credit investment impairment\n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n328\n \n \n \n \n \n \n \n \n \n \n \n113\n \n \n \n \n \n \n \n \n \n \n \n1,841\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n1,954\n \n \n \n \n \n \n \n \n \nSBA recourse provision (benefit)\n \n \n \n \n \n \n \n245\n \n \n \n \n \n \n \n \n \n \n \n(130)\n \n \n \n \n \n \n \n \n \n \n \n(330)\n \n \n \n \n \n \n \n \n \n \n \n57\n \n \n \n \n \n \n \n \n \n \n \n(30)\n \n \n \n \n \n \n \n \n \n \n \n115\n \n \n \n \n \n \n \n \n \n \n \n(5)\n \n \n \n \n \n \n \n \n \nLoss on early extinguishment of debt\n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n744\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n744\n \n \n \n \n \n \n \n \n \nOther non-interest expense\n \n \n \n \n \n \n \n176\n \n \n \n \n \n \n \n \n \n \n \n404\n \n \n \n \n \n \n \n \n \n \n \n1,062\n \n \n \n \n \n \n \n \n \n \n \n620\n \n \n \n \n \n \n \n \n \n \n \n545\n \n \n \n \n \n \n \n \n \n \n \n582\n \n \n \n \n \n \n \n \n \n \n \n1,359\n \n \n \n \n \n \n \n \n \nTotal non-interest expense\n \n \n \n \n \n \n \n18,184\n \n \n \n \n \n \n \n \n \n \n \n17,330\n \n \n \n \n \n \n \n \n \n \n \n17,651\n \n \n \n \n \n \n \n \n \n \n \n16,758\n \n \n \n \n \n \n \n \n \n \n \n18,343\n \n \n \n \n \n \n \n \n \n \n \n35,514\n \n \n \n \n \n \n \n \n \n \n \n34,488\n \n \n \n \n \n \n \n \n \nIncome before income tax expense (benefit)\n \n \n \n \n \n \n \n10,747\n \n \n \n \n \n \n \n \n \n \n \n12,796\n \n \n \n \n \n \n \n \n \n \n \n7,338\n \n \n \n \n \n \n \n \n \n \n \n5,436\n \n \n \n \n \n \n \n \n \n \n \n1,395\n \n \n \n \n \n \n \n \n \n \n \n23,543\n \n \n \n \n \n \n \n \n \n \n \n5,531\n \n \n \n \n \n \n \n \n \nIncome tax expense (benefit)\n \n \n \n \n \n \n \n2,512\n \n \n \n \n \n \n \n \n \n \n \n3,065\n \n \n \n \n \n \n \n \n \n \n \n1,254\n \n \n \n \n \n \n \n \n \n \n \n1,143\n \n \n \n \n \n \n \n \n \n \n \n(1,928)\n \n \n \n \n \n \n \n \n \n \n \n5,577\n \n \n \n \n \n \n \n \n \n \n \n(1,070)\n \n \n \n \n \n \n \n \n \nNet income\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 \n9,731\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,084\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4,293\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,323\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n17,966\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,601\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPer common share:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nBasic earnings\n \n \n \n \n \n \n \n$\n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.12\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.71\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.50\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.38\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2.08\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.77\n \n \n \n \n \n \n \n \n \nDiluted earnings\n \n \n \n \n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n1.12\n \n \n \n \n \n \n \n \n \n \n \n0.71\n \n \n \n \n \n \n \n \n \n \n \n0.50\n \n \n \n \n \n \n \n \n \n \n \n0.38\n \n \n \n \n \n \n \n \n \n \n \n2.08\n \n \n \n \n \n \n \n \n \n \n \n0.77\n \n \n \n \n \n \n \n \n \nDividends declared\n \n \n \n \n \n \n \n0.18\n \n \n \n \n \n \n \n \n \n \n \n0.18\n \n \n \n \n \n \n \n \n \n \n \n0.165\n \n \n \n \n \n \n \n \n \n \n \n0.165\n \n \n \n \n \n \n \n \n \n \n \n0.165\n \n \n \n \n \n \n \n \n \n \n \n0.36\n \n \n \n \n \n \n \n \n \n \n \n0.33\n \n \n \n \n \n \n \n \n \nBook value\n \n \n \n \n \n \n \n25.70\n \n \n \n \n \n \n \n \n \n \n \n24.83\n \n \n \n \n \n \n \n \n \n \n \n24.06\n \n \n \n \n \n \n \n \n \n \n \n23.45\n \n \n \n \n \n \n \n \n \n \n \n23.04\n \n \n \n \n \n \n \n \n \n \n \n25.70\n \n \n \n \n \n \n \n \n \n \n \n23.04\n \n \n \n \n \n \n \n \n \nTangible book value\n \n \n \n \n \n \n \n24.28\n \n \n \n \n \n \n \n \n \n \n \n23.43\n \n \n \n \n \n \n \n \n \n \n \n22.66\n \n \n \n \n \n \n \n \n \n \n \n22.05\n \n \n \n \n \n \n \n \n \n \n \n21.65\n \n \n \n \n \n \n \n \n \n \n \n24.28\n \n \n \n \n \n \n \n \n \n \n \n21.65\n \n \n \n \n \n \n \n \n \nWeighted-average common shares outstanding(1)\n \n \n \n \n \n \n \n8,385,069\n \n \n \n \n \n \n \n \n \n \n \n8,429,149\n \n \n \n \n \n \n \n \n \n \n \n8,417,216\n \n \n \n \n \n \n \n \n \n \n \n8,404,084\n \n \n \n \n \n \n \n \n \n \n \n8,392,197\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 \n8,379,696\n \n \n \n \n \n \n \n \n \nWeighted-average diluted common shares outstanding(1)\n \n \n \n \n \n \n \n8,385,069\n \n \n \n \n \n \n \n \n \n \n \n8,429,149\n \n \n \n \n \n \n \n \n \n \n \n8,417,216\n \n \n \n \n \n \n \n \n \n \n \n8,404,084\n \n \n \n \n \n \n \n \n \n \n \n8,392,197\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 \n8,379,696\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(1) Excluding participating securities.\n \n \n \n \n NET INTEREST INCOME ANALYSIS \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, 2021 \n \n \n \n \n \n \n \n March 31, 2021 \n \n \n \n \n \n \n \n June 30, 2020 \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$\n \n \n \n1,386,187\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n13,087\n \n \n \n \n \n \n \n \n \n \n \n3.78\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,357,141\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n12,528\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$\n \n \n \n1,192,530\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n12,450\n \n \n \n \n \n \n \n \n \n \n \n4.18\n \n \n \n%\n \n \n \n \n \nCommercial and industrial loans(1)\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 \n \n \n \n \n5.11\n \n \n \n%\n \n \n \n \n \n \n \n757,898\n \n \n \n \n \n \n \n \n \n \n \n9,625\n \n \n \n \n \n \n \n \n \n \n \n5.08\n \n \n \n%\n \n \n \n \n \n \n \n726,862\n \n \n \n \n \n \n \n \n \n \n \n8,347\n \n \n \n \n \n \n \n \n \n \n \n4.59\n \n \n \n%\n \n \n \n \n \nDirect financing leases(1)\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 \n \n \n \n \n4.47\n \n \n \n%\n \n \n \n \n \n \n \n22,271\n \n \n \n \n \n \n \n \n \n \n \n244\n \n \n \n \n \n \n \n \n \n \n \n4.38\n \n \n \n%\n \n \n \n \n \n \n \n27,115\n \n \n \n \n \n \n \n \n \n \n \n395\n \n \n \n \n \n \n \n \n \n \n \n5.83\n \n \n \n%\n \n \n \n \n \nConsumer and other loans(1)\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 \n \n \n \n \n3.62\n \n \n \n%\n \n \n \n \n \n \n \n45,648\n \n \n \n \n \n \n \n \n \n \n \n398\n \n \n \n \n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n36,614\n \n \n \n \n \n \n \n \n \n \n \n356\n \n \n \n \n \n \n \n \n \n \n \n3.89\n \n \n \n%\n \n \n \n \n \nTotal loans and leases receivable(1)\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 \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \n \n \n2,182,958\n \n \n \n \n \n \n \n \n \n \n \n22,795\n \n \n \n \n \n \n \n \n \n \n \n4.18\n \n \n \n%\n \n \n \n \n \n \n \n1,983,121\n \n \n \n \n \n \n \n \n \n \n \n21,548\n \n \n \n \n \n \n \n \n \n \n \n4.35\n \n \n \n%\n \n \n \n \n \nMortgage-related securities(2)\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 \n \n \n \n \n1.69\n \n \n \n%\n \n \n \n \n \n \n \n163,324\n \n \n \n \n \n \n \n \n \n \n \n666\n \n \n \n \n \n \n \n \n \n \n \n1.63\n \n \n \n%\n \n \n \n \n \n \n \n174,113\n \n \n \n \n \n \n \n \n \n \n \n912\n \n \n \n \n \n \n \n \n \n \n \n2.10\n \n \n \n%\n \n \n \n \n \nOther investment securities(3)\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 \n \n \n \n \n1.78\n \n \n \n%\n \n \n \n \n \n \n \n42,177\n \n \n \n \n \n \n \n \n \n \n \n187\n \n \n \n \n \n \n \n \n \n \n \n1.77\n \n \n \n%\n \n \n \n \n \n \n \n30,194\n \n \n \n \n \n \n \n \n \n \n \n158\n \n \n \n \n \n \n \n \n \n \n \n2.09\n \n \n \n%\n \n \n \n \n \nFHLB stock\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 \n \n \n \n \n4.97\n \n \n \n%\n \n \n \n \n \n \n \n12,465\n \n \n \n \n \n \n \n \n \n \n \n152\n \n \n \n \n \n \n \n \n \n \n \n4.88\n \n \n \n%\n \n \n \n \n \n \n \n10,301\n \n \n \n \n \n \n \n \n \n \n \n127\n \n \n \n \n \n \n \n \n \n \n \n4.93\n \n \n \n%\n \n \n \n \n \nShort-term investments\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 \n \n \n \n \n0.12\n \n \n \n%\n \n \n \n \n \n \n \n24,575\n \n \n \n \n \n \n \n \n \n \n \n6\n \n \n \n \n \n \n \n \n \n \n \n0.10\n \n \n \n%\n \n \n \n \n \n \n \n61,030\n \n \n \n \n \n \n \n \n \n \n \n16\n \n \n \n \n \n \n \n \n \n \n \n0.10\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets\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 \n \n \n \n \n3.96\n \n \n \n%\n \n \n \n \n \n \n \n2,425,499\n \n \n \n \n \n \n \n \n \n \n \n23,806\n \n \n \n \n \n \n \n \n \n \n \n3.93\n \n \n \n%\n \n \n \n \n \n \n \n2,258,759\n \n \n \n \n \n \n \n \n \n \n \n22,761\n \n \n \n \n \n \n \n \n \n \n \n4.03\n \n \n \n%\n \n \n \n \n \nNon-interest-earning assets\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 \n \n \n \n \n \n \n151,665\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n167,008\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,621,340\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,577,164\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,425,767\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest-bearing liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTransaction accounts\n \n \n \n \n \n \n \n$\n \n \n \n499,040\n \n \n \n \n \n \n \n \n \n \n \n248\n \n \n \n \n \n \n \n \n \n \n \n0.20\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n521,130\n \n \n \n \n \n \n \n \n \n \n \n250\n \n \n \n \n \n \n \n \n \n \n \n0.19\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n368,844\n \n \n \n \n \n \n \n \n \n \n \n291\n \n \n \n \n \n \n \n \n \n \n \n0.32\n \n \n \n%\n \n \n \n \n \nMoney market\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 \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n657,690\n \n \n \n \n \n \n \n \n \n \n \n274\n \n \n \n \n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n637,714\n \n \n \n \n \n \n \n \n \n \n \n368\n \n \n \n \n \n \n \n \n \n \n \n0.23\n \n \n \n%\n \n \n \n \n \nCertificates of deposit\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 \n \n \n \n \n0.97\n \n \n \n%\n \n \n \n \n \n \n \n57,424\n \n \n \n \n \n \n \n \n \n \n \n177\n \n \n \n \n \n \n \n \n \n \n \n1.23\n \n \n \n%\n \n \n \n \n \n \n \n123,581\n \n \n \n \n \n \n \n \n \n \n \n627\n \n \n \n \n \n \n \n \n \n \n \n2.03\n \n \n \n%\n \n \n \n \n \nWholesale deposits\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 \n \n \n \n \n0.74\n \n \n \n%\n \n \n \n \n \n \n \n166,752\n \n \n \n \n \n \n \n \n \n \n \n318\n \n \n \n \n \n \n \n \n \n \n \n0.76\n \n \n \n%\n \n \n \n \n \n \n \n105,597\n \n \n \n \n \n \n \n \n \n \n \n638\n \n \n \n \n \n \n \n \n \n \n \n2.42\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing deposits\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 \n \n \n \n \n0.28\n \n \n \n%\n \n \n \n \n \n \n \n1,402,996\n \n \n \n \n \n \n \n \n \n \n \n1,019\n \n \n \n \n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n1,235,736\n \n \n \n \n \n \n \n \n \n \n \n1,924\n \n \n \n \n \n \n \n \n \n \n \n0.62\n \n \n \n%\n \n \n \n \n \nFHLB advances\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 \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n366,670\n \n \n \n \n \n \n \n \n \n \n \n1,249\n \n \n \n \n \n \n \n \n \n \n \n1.36\n \n \n \n%\n \n \n \n \n \n \n \n409,281\n \n \n \n \n \n \n \n \n \n \n \n1,283\n \n \n \n \n \n \n \n \n \n \n \n1.25\n \n \n \n%\n \n \n \n \n \nFederal Reserve PPPLF\n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n%\n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n%\n \n \n \n \n \n \n \n20,821\n \n \n \n \n \n \n \n \n \n \n \n18\n \n \n \n \n \n \n \n \n \n \n \n0.35\n \n \n \n%\n \n \n \n \n \nOther borrowings\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 \n \n \n \n \n5.46\n \n \n \n%\n \n \n \n \n \n \n \n27,296\n \n \n \n \n \n \n \n \n \n \n \n401\n \n \n \n \n \n \n \n \n \n \n \n5.88\n \n \n \n%\n \n \n \n \n \n \n \n24,681\n \n \n \n \n \n \n \n \n \n \n \n371\n \n \n \n \n \n \n \n \n \n \n \n6.01\n \n \n \n%\n \n \n \n \n \nJunior subordinated notes\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 \n \n \n \n \n11.01\n \n \n \n%\n \n \n \n \n \n \n \n10,063\n \n \n \n \n \n \n \n \n \n \n \n274\n \n \n \n \n \n \n \n \n \n \n \n10.89\n \n \n \n%\n \n \n \n \n \n \n \n10,052\n \n \n \n \n \n \n \n \n \n \n \n277\n \n \n \n \n \n \n \n \n \n \n \n11.02\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\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 \n \n \n \n \n0.65\n \n \n \n%\n \n \n \n \n \n \n \n1,807,025\n \n \n \n \n \n \n \n \n \n \n \n2,943\n \n \n \n \n \n \n \n \n \n \n \n0.65\n \n \n \n%\n \n \n \n \n \n \n \n1,700,571\n \n \n \n \n \n \n \n \n \n \n \n3,873\n \n \n \n \n \n \n \n \n \n \n \n0.91\n \n \n \n%\n \n \n \n \n \nNon-interest-bearing demand deposit accounts\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 \n \n \n \n \n \n \n485,863\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n440,413\n \n \n \n \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 \n56,691\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n73,695\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n86,504\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities\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 \n \n \n \n \n \n \n2,366,583\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,227,488\n \n \n \n \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 \n218,308\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n210,581\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n198,279\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,621,340\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,577,164\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,425,767\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,863\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n18,888\n \n \n \n \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 \n3.31\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.12\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n664,547\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n618,474\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n558,188\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.44\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.34\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \nThe average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.\n \n \n \n \n \n(2)\n \n \n \nIncludes amortized cost basis of assets available for sale and held to maturity.\n \n \n \n \n \n(3)\n \n \n \nYields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.\n \n \n \n \n \n(4)\n \n \n \nRepresents annualized yields/rates.\n \n \n \n \n NET INTEREST INCOME ANALYSIS \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Six Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n June 30, 2021 \n \n \n \n \n \n \n \n June 30, 2020 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate(4) \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate(4) \n \n \n \n \n \n Interest-earning assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommercial real estate and other mortgage loans(1)\n \n \n \n \n \n \n \n$\n \n \n \n1,371,744\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,615\n \n \n \n \n \n \n \n \n \n \n \n3.73\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,173,251\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,973\n \n \n \n \n \n \n \n \n \n \n \n4.43\n \n \n \n%\n \n \n \n \n \nCommercial and industrial loans(1)\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 \n \n \n \n \n5.10\n \n \n \n%\n \n \n \n \n \n \n \n621,399\n \n \n \n \n \n \n \n \n \n \n \n16,204\n \n \n \n \n \n \n \n \n \n \n \n5.22\n \n \n \n%\n \n \n \n \n \nDirect financing leases(1)\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 \n \n \n \n \n4.42\n \n \n \n%\n \n \n \n \n \n \n \n27,538\n \n \n \n \n \n \n \n \n \n \n \n503\n \n \n \n \n \n \n \n \n \n \n \n3.65\n \n \n \n%\n \n \n \n \n \nConsumer and other loans(1)\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 \n \n \n \n \n3.55\n \n \n \n%\n \n \n \n \n \n \n \n36,244\n \n \n \n \n \n \n \n \n \n \n \n717\n \n \n \n \n \n \n \n \n \n \n \n3.96\n \n \n \n%\n \n \n \n \n \nTotal loans and leases receivable(1)\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 \n \n \n \n \n4.21\n \n \n \n%\n \n \n \n \n \n \n \n1,858,432\n \n \n \n \n \n \n \n \n \n \n \n43,397\n \n \n \n \n \n \n \n \n \n \n \n4.67\n \n \n \n%\n \n \n \n \n \nMortgage-related securities(2)\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 \n \n \n \n \n1.66\n \n \n \n%\n \n \n \n \n \n \n \n177,352\n \n \n \n \n \n \n \n \n \n \n \n1,973\n \n \n \n \n \n \n \n \n \n \n \n2.22\n \n \n \n%\n \n \n \n \n \nOther investment securities(3)\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 \n \n \n \n \n1.78\n \n \n \n%\n \n \n \n \n \n \n \n26,737\n \n \n \n \n \n \n \n \n \n \n \n285\n \n \n \n \n \n \n \n \n \n \n \n2.13\n \n \n \n%\n \n \n \n \n \nFHLB stock\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 \n \n \n \n \n4.94\n \n \n \n%\n \n \n \n \n \n \n \n9,407\n \n \n \n \n \n \n \n \n \n \n \n331\n \n \n \n \n \n \n \n \n \n \n \n7.04\n \n \n \n%\n \n \n \n \n \nShort-term investments\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 \n \n \n \n \n0.11\n \n \n \n%\n \n \n \n \n \n \n \n48,396\n \n \n \n \n \n \n \n \n \n \n \n146\n \n \n \n \n \n \n \n \n \n \n \n0.60\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets\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 \n \n \n \n \n3.94\n \n \n \n%\n \n \n \n \n \n \n \n2,120,324\n \n \n \n \n \n \n \n \n \n \n \n46,132\n \n \n \n \n \n \n \n \n \n \n \n4.35\n \n \n \n%\n \n \n \n \n \nNon-interest-earning assets\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 \n \n \n \n \n \n \n144,991\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal assets\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 \n \n \n \n \n \n$\n \n \n \n2,265,315\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest-bearing liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTransaction accounts\n \n \n \n \n \n \n \n$\n \n \n \n510,024\n \n \n \n \n \n \n \n \n \n \n \n498\n \n \n \n \n \n \n \n \n \n \n \n0.20\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n320,188\n \n \n \n \n \n \n \n \n \n \n \n938\n \n \n \n \n \n \n \n \n \n \n \n0.59\n \n \n \n%\n \n \n \n \n \nMoney market\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 \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n653,598\n \n \n \n \n \n \n \n \n \n \n \n2,237\n \n \n \n \n \n \n \n \n \n \n \n0.68\n \n \n \n%\n \n \n \n \n \nCertificates of deposit\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 \n \n \n \n \n1.11\n \n \n \n%\n \n \n \n \n \n \n \n128,791\n \n \n \n \n \n \n \n \n \n \n \n1,377\n \n \n \n \n \n \n \n \n \n \n \n2.14\n \n \n \n%\n \n \n \n \n \nWholesale deposits\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 \n \n \n \n \n0.75\n \n \n \n%\n \n \n \n \n \n \n \n119,032\n \n \n \n \n \n \n \n \n \n \n \n1,488\n \n \n \n \n \n \n \n \n \n \n \n2.50\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing deposits\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 \n \n \n \n \n0.28\n \n \n \n%\n \n \n \n \n \n \n \n1,221,609\n \n \n \n \n \n \n \n \n \n \n \n6,040\n \n \n \n \n \n \n \n \n \n \n \n0.99\n \n \n \n%\n \n \n \n \n \nFHLB advances\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 \n \n \n \n \n1.31\n \n \n \n%\n \n \n \n \n \n \n \n367,604\n \n \n \n \n \n \n \n \n \n \n \n2,842\n \n \n \n \n \n \n \n \n \n \n \n1.55\n \n \n \n%\n \n \n \n \n \nFederal Reserve PPPLF\n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n%\n \n \n \n \n \n \n \n10,410\n \n \n \n \n \n \n \n \n \n \n \n18\n \n \n \n \n \n \n \n \n \n \n \n0.35\n \n \n \n%\n \n \n \n \n \nOther borrowings\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 \n \n \n \n \n5.65\n \n \n \n%\n \n \n \n \n \n \n \n24,533\n \n \n \n \n \n \n \n \n \n \n \n740\n \n \n \n \n \n \n \n \n \n \n \n6.03\n \n \n \n%\n \n \n \n \n \nJunior subordinated notes\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 \n \n \n \n \n10.97\n \n \n \n%\n \n \n \n \n \n \n \n10,050\n \n \n \n \n \n \n \n \n \n \n \n555\n \n \n \n \n \n \n \n \n \n \n \n11.04\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\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 \n \n \n \n \n0.65\n \n \n \n%\n \n \n \n \n \n \n \n1,634,206\n \n \n \n \n \n \n \n \n \n \n \n10,195\n \n \n \n \n \n \n \n \n \n \n \n1.25\n \n \n \n%\n \n \n \n \n \nNon-interest-bearing demand deposit accounts\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 \n \n \n \n \n \n \n365,771\n \n \n \n \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 \n65,146\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n74,436\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities\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 \n \n \n \n \n \n \n2,074,413\n \n \n \n \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 \n214,465\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n190,902\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\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 \n \n \n \n \n \n$\n \n \n \n2,265,315\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n42,515\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n35,937\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.10\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\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 \n \n \n \n \n \n \n$\n \n \n \n486,118\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \nThe average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.\n \n \n \n \n \n(2)\n \n \n \nIncludes amortized cost basis of assets available for sale and held to maturity.\n \n \n \n \n \n(3)\n \n \n \nYields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.\n \n \n \n \n \n(4)\n \n \n \nRepresents annualized yields/rates.\n \n \n \n \n PROVISION FOR LOAN AND LEASE LOSS COMPOSITION \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n \n \n For the Six Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \nChange in general reserve due to subjective factor changes\n \n \n \n \n \n \n \n$\n \n \n \n(652)\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 \n1,008\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(766)\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,388\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n430\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n5,224\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(1,687)\n \n \n \n \n \n \n \n \n \n \n \n(984)\n \n \n \n \n \n \n \n \n \n \n \n1,274\n \n \n \n \n \n \n \n \n \n \n \n(16)\n \n \n \n \n \n \n \n \n \n \n \n(54)\n \n \n \n \n \n \n \n \n \n \n \n(2,671)\n \n \n \n \n \n \n \n \n \n \n \n(334)\n \n \n \n \n \n \n \n \n \nCharge-offs\n \n \n \n \n \n \n \n2,894\n \n \n \n \n \n \n \n \n \n \n \n144\n \n \n \n \n \n \n \n \n \n \n \n6,685\n \n \n \n \n \n \n \n \n \n \n \n505\n \n \n \n \n \n \n \n \n \n \n \n817\n \n \n \n \n \n \n \n \n \n \n \n3,038\n \n \n \n \n \n \n \n \n \n \n \n948\n \n \n \n \n \n \n \n \n \nRecoveries\n \n \n \n \n \n \n \n(545)\n \n \n \n \n \n \n \n \n \n \n \n(2,673)\n \n \n \n \n \n \n \n \n \n \n \n(68)\n \n \n \n \n \n \n \n \n \n \n \n(23)\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(3,218)\n \n \n \n \n \n \n \n \n \n \n \n(241)\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(1,466)\n \n \n \n \n \n \n \n \n \n \n \n(194)\n \n \n \n \n \n \n \n \n \n \n \n(5,216)\n \n \n \n \n \n \n \n \n \n \n \n2,974\n \n \n \n \n \n \n \n \n \n \n \n2,122\n \n \n \n \n \n \n \n \n \n \n \n(1,660)\n \n \n \n \n \n \n \n \n \n \n \n2,559\n \n \n \n \n \n \n \n \n \nChange due to loan growth, net\n \n \n \n \n \n \n \n498\n \n \n \n \n \n \n \n \n \n \n \n557\n \n \n \n \n \n \n \n \n \n \n \n639\n \n \n \n \n \n \n \n \n \n \n \n1,161\n \n \n \n \n \n \n \n \n \n \n \n260\n \n \n \n \n \n \n \n \n \n \n \n1,055\n \n \n \n \n \n \n \n \n \n \n \n495\n \n \n \n \n \n \n \n \n \nTotal provision for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n(958)\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(2,068)\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4,322\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,835\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n5,469\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(3,026)\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,651\n \n \n \n \n \n \n \n \n PERFORMANCE RATIOS \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 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \nReturn on average assets (annualized)\n \n \n \n \n \n \n \n1.26\n \n \n \n%\n \n \n \n \n \n \n \n1.51\n \n \n \n%\n \n \n \n \n \n \n \n0.93\n \n \n \n%\n \n \n \n \n \n \n \n0.68\n \n \n \n%\n \n \n \n \n \n \n \n0.55\n \n \n \n%\n \n \n \n \n \n \n \n1.38\n \n \n \n%\n \n \n \n \n \n \n \n0.58\n \n \n \n%\n \n \n \n \n \nReturn on average equity (annualized)\n \n \n \n \n \n \n \n15.09\n \n \n \n%\n \n \n \n \n \n \n \n18.48\n \n \n \n%\n \n \n \n \n \n \n \n11.92\n \n \n \n%\n \n \n \n \n \n \n \n8.58\n \n \n \n%\n \n \n \n \n \n \n \n6.70\n \n \n \n%\n \n \n \n \n \n \n \n16.75\n \n \n \n%\n \n \n \n \n \n \n \n6.92\n \n \n \n%\n \n \n \n \n \nEfficiency ratio\n \n \n \n \n \n \n \n64.17\n \n \n \n%\n \n \n \n \n \n \n \n62.19\n \n \n \n%\n \n \n \n \n \n \n \n60.02\n \n \n \n%\n \n \n \n \n \n \n \n64.16\n \n \n \n%\n \n \n \n \n \n \n \n61.22\n \n \n \n%\n \n \n \n \n \n \n \n63.18\n \n \n \n%\n \n \n \n \n \n \n \n64.36\n \n \n \n%\n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n3.31\n \n \n \n%\n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \n \n \n3.51\n \n \n \n%\n \n \n \n \n \n \n \n2.94\n \n \n \n%\n \n \n \n \n \n \n \n3.12\n \n \n \n%\n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \n \n \n3.10\n \n \n \n%\n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n3.44\n \n \n \n%\n \n \n \n \n \n \n \n3.69\n \n \n \n%\n \n \n \n \n \n \n \n3.14\n \n \n \n%\n \n \n \n \n \n \n \n3.34\n \n \n \n%\n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \n \n \n3.39\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 \n136.54\n \n \n \n%\n \n \n \n \n \n \n \n134.23\n \n \n \n%\n \n \n \n \n \n \n \n132.88\n \n \n \n%\n \n \n \n \n \n \n \n131.68\n \n \n \n%\n \n \n \n \n \n \n \n132.82\n \n \n \n%\n \n \n \n \n \n \n \n135.39\n \n \n \n%\n \n \n \n \n \n \n \n129.75\n \n \n \n%\n \n \n \n \n ASSET QUALITY RATIOS \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 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \nNon-accrual loans and leases\n \n \n \n \n \n \n \n$\n \n \n \n11,422\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n18,992\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26,617\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n36,050\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,095\n \n \n \n \n \n \n \n \n \nForeclosed properties\n \n \n \n \n \n \n \n179\n \n \n \n \n \n \n \n \n \n \n \n31\n \n \n \n \n \n \n \n \n \n \n \n34\n \n \n \n \n \n \n \n \n \n \n \n613\n \n \n \n \n \n \n \n \n \n \n \n1,389\n \n \n \n \n \n \n \n \n \nTotal non-performing assets\n \n \n \n \n \n \n \n11,601\n \n \n \n \n \n \n \n \n \n \n \n19,023\n \n \n \n \n \n \n \n \n \n \n \n26,651\n \n \n \n \n \n \n \n \n \n \n \n36,663\n \n \n \n \n \n \n \n \n \n \n \n25,484\n \n \n \n \n \n \n \n \n \nPerforming troubled debt restructurings\n \n \n \n \n \n \n \n56\n \n \n \n \n \n \n \n \n \n \n \n59\n \n \n \n \n \n \n \n \n \n \n \n46\n \n \n \n \n \n \n \n \n \n \n \n47\n \n \n \n \n \n \n \n \n \n \n \n49\n \n \n \n \n \n \n \n \n \nTotal impaired assets\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 \n19,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26,697\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n36,710\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25,533\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n0.53\n \n \n \n%\n \n \n \n \n \n \n \n0.85\n \n \n \n%\n \n \n \n \n \n \n \n1.24\n \n \n \n%\n \n \n \n \n \n \n \n1.66\n \n \n \n%\n \n \n \n \n \n \n \n1.17\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 \n0.54\n \n \n \n%\n \n \n \n \n \n \n \n0.85\n \n \n \n%\n \n \n \n \n \n \n \n1.24\n \n \n \n%\n \n \n \n \n \n \n \n1.68\n \n \n \n%\n \n \n \n \n \n \n \n1.23\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 \n0.40\n \n \n \n%\n \n \n \n \n \n \n \n0.73\n \n \n \n%\n \n \n \n \n \n \n \n1.04\n \n \n \n%\n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n1.03\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 \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n1.29\n \n \n \n%\n \n \n \n \n \n \n \n1.33\n \n \n \n%\n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n1.33\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 \n224.79\n \n \n \n%\n \n \n \n \n \n \n \n152.60\n \n \n \n%\n \n \n \n \n \n \n \n107.15\n \n \n \n%\n \n \n \n \n \n \n \n85.48\n \n \n \n%\n \n \n \n \n \n \n \n113.98\n \n \n \n%\n \n \n \n \n ASSET QUALITY RATIOS - EXCLUDING NET PPP LOANS \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 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \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 \n0.56\n \n \n \n%\n \n \n \n \n \n \n \n0.96\n \n \n \n%\n \n \n \n \n \n \n \n1.38\n \n \n \n%\n \n \n \n \n \n \n \n1.95\n \n \n \n%\n \n \n \n \n \n \n \n1.38\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 \n0.57\n \n \n \n%\n \n \n \n \n \n \n \n0.96\n \n \n \n%\n \n \n \n \n \n \n \n1.38\n \n \n \n%\n \n \n \n \n \n \n \n1.98\n \n \n \n%\n \n \n \n \n \n \n \n1.46\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 \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n0.81\n \n \n \n%\n \n \n \n \n \n \n \n1.14\n \n \n \n%\n \n \n \n \n \n \n \n1.61\n \n \n \n%\n \n \n \n \n \n \n \n1.19\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 \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n1.47\n \n \n \n%\n \n \n \n \n \n \n \n1.48\n \n \n \n%\n \n \n \n \n \n \n \n1.67\n \n \n \n%\n \n \n \n \n \n \n \n1.57\n \n \n \n%\n \n \n \n \n \nPPP loans outstanding, net\n \n \n \n \n \n \n \n$\n \n \n \n120,723\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n267,567\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n225,323\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n325,481\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n320,036\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n NET CHARGE-OFFS (RECOVERIES) \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 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \nCharge-offs\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 \n144\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,685\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n505\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n817\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,038\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n948\n \n \n \n \n \n \n \n \n \nRecoveries\n \n \n \n \n \n \n \n(545)\n \n \n \n \n \n \n \n \n \n \n \n(2,673)\n \n \n \n \n \n \n \n \n \n \n \n(68)\n \n \n \n \n \n \n \n \n \n \n \n(23)\n \n \n \n \n \n \n \n \n \n \n \n(64)\n \n \n \n \n \n \n \n \n \n \n \n(3,218)\n \n \n \n \n \n \n \n \n \n \n \n(241)\n \n \n \n \n \n \n \n \n \nNet charge-offs (recoveries)\n \n \n \n \n \n \n \n$\n \n \n \n2,349\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(2,529)\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,617\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n482\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n753\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(180)\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n707\n \n \n \n \n \n \n \n \n \nNet charge-offs (recoveries) as a percent of average gross loans and leases (annualized)\n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n(0.46)\n \n \n \n%\n \n \n \n \n \n \n \n1.21\n \n \n \n%\n \n \n \n \n \n \n \n0.09\n \n \n \n%\n \n \n \n \n \n \n \n0.15\n \n \n \n%\n \n \n \n \n \n \n \n(0.02)\n \n \n \n%\n \n \n \n \n \n \n \n0.08\n \n \n \n%\n \n \n \n \n \nAnnualized charge-offs (recoveries) as a percent of average gross loans and leases, excluding average net PPP loans\n \n \n \n \n \n \n \n0.47\n \n \n \n%\n \n \n \n \n \n \n \n(0.52)\n \n \n \n%\n \n \n \n \n \n \n \n1.39\n \n \n \n%\n \n \n \n \n \n \n \n0.11\n \n \n \n%\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n(0.02)\n \n \n \n%\n \n \n \n \n \n \n \n0.08\n \n \n \n%\n \n \n \n \n \nAverage PPP loans outstanding, net\n \n \n \n \n \n \n \n$\n \n \n \n229,165\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n242,242\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n282,259\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n323,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n252,834\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n235,668\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n126,417\n \n \n \n \n \n \n \n \n CAPITAL RATIOS \n \n \n \n \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \nTotal capital to risk-weighted assets\n \n \n \n \n \n \n \n11.22\n \n \n \n%\n \n \n \n \n \n \n \n11.52\n \n \n \n%\n \n \n \n \n \n \n \n11.25\n \n \n \n%\n \n \n \n \n \n \n \n11.42\n \n \n \n%\n \n \n \n \n \n \n \n11.97\n \n \n \n%\n \n \n \n \n \nTier I capital to risk-weighted assets\n \n \n \n \n \n \n \n9.14\n \n \n \n%\n \n \n \n \n \n \n \n9.24\n \n \n \n%\n \n \n \n \n \n \n \n8.96\n \n \n \n%\n \n \n \n \n \n \n \n9.09\n \n \n \n%\n \n \n \n \n \n \n \n9.57\n \n \n \n%\n \n \n \n \n \nCommon equity tier I capital to risk-weighted assets\n \n \n \n \n \n \n \n8.72\n \n \n \n%\n \n \n \n \n \n \n \n8.81\n \n \n \n%\n \n \n \n \n \n \n \n8.53\n \n \n \n%\n \n \n \n \n \n \n \n8.64\n \n \n \n%\n \n \n \n \n \n \n \n9.08\n \n \n \n%\n \n \n \n \n \nTier I capital to adjusted assets\n \n \n \n \n \n \n \n8.48\n \n \n \n%\n \n \n \n \n \n \n \n8.37\n \n \n \n%\n \n \n \n \n \n \n \n7.99\n \n \n \n%\n \n \n \n \n \n \n \n8.04\n \n \n \n%\n \n \n \n \n \n \n \n8.29\n \n \n \n%\n \n \n \n \n \nTangible common equity to tangible assets\n \n \n \n \n \n \n \n7.33\n \n \n \n%\n \n \n \n \n \n \n \n7.76\n \n \n \n%\n \n \n \n \n \n \n \n7.60\n \n \n \n%\n \n \n \n \n \n \n \n7.29\n \n \n \n%\n \n \n \n \n \n \n \n7.56\n \n \n \n%\n \n \n \n \n \nTangible common equity to tangible assets, excluding net PPP loans\n \n \n \n \n \n \n \n7.66\n \n \n \n%\n \n \n \n \n \n \n \n8.65\n \n \n \n%\n \n \n \n \n \n \n \n8.33\n \n \n \n%\n \n \n \n \n \n \n \n8.34\n \n \n \n%\n \n \n \n \n \n \n \n8.69\n \n \n \n%\n \n \n \n \n LOAN AND LEASE RECEIVABLE COMPOSITION \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 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n June 30 ,\n 2020 \n \n \n \n \n \nCommercial real estate:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 - owner occupied\n \n \n \n \n \n \n \n$\n \n \n \n253,600\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n256,812\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n253,882\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n240,706\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n229,994\n \n \n \n \n \n \n \n \n \nCommercial real estate - non-owner occupied\n \n \n \n \n \n \n \n614,289\n \n \n \n \n \n \n \n \n \n \n \n592,090\n \n \n \n \n \n \n \n \n \n \n \n564,532\n \n \n \n \n \n \n \n \n \n \n \n565,781\n \n \n \n \n \n \n \n \n \n \n \n533,211\n \n \n \n \n \n \n \n \n \nLand development\n \n \n \n \n \n \n \n45,056\n \n \n \n \n \n \n \n \n \n \n \n46,544\n \n \n \n \n \n \n \n \n \n \n \n49,839\n \n \n \n \n \n \n \n \n \n \n \n50,864\n \n \n \n \n \n \n \n \n \n \n \n44,299\n \n \n \n \n \n \n \n \n \nConstruction\n \n \n \n \n \n \n \n139,943\n \n \n \n \n \n \n \n \n \n \n \n151,345\n \n \n \n \n \n \n \n \n \n \n \n141,043\n \n \n \n \n \n \n \n \n \n \n \n142,726\n \n \n \n \n \n \n \n \n \n \n \n133,375\n \n \n \n \n \n \n...

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