First Business Bank Reports Strong Third Quarter 2021 Net Income of $9.2 Million

About this update from First Business Financial Services, Inc.

[{"type":"text","content":" \n-- Continuation of positive trends including top line revenue growth, organic loan growth, and superior asset quality --\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 $9.2 million , or $1.07 diluted earnings per share, in the third quarter 2021. Third quarter net income grew by 11.7% from $8.2 million , or $0.95 per share, in the second quarter of 2021 and more than doubled from $4.3 million , or $0.50 , in the third quarter of 2020.\n \n“First Business Bank’s excellent third quarter results include profitable top line revenue growth illustrating the strength and diversification of our fee generating businesses, net interest margin stability, and our team’s ability to organically grow commercial loans,” President and Chief Executive Officer Corey Chambas said. “Excluding PPP loans, we achieved another quarter of solid loan growth and our record pipelines continue to support our expectation for double-digit organic loan growth for full-year 2021 and 2022. As expected, our discipline around credit resulted in further improvement to our asset quality metrics, with nonperforming assets declining to just 0.29% of total assets, the lowest level since 2006. Our results were further supported by a loan loss provision benefit in the third quarter and, based on current economic trends, we continue to expect no meaningful provision in the fourth quarter and anticipate continued opportunities to release reserves in 2022.”\n \n Quarterly Highlights \n \n \n Continued Loan Growth. Loans, excluding Paycheck Protection Program (“PPP”) loans, grew $36.0 million , or 7.1% annualized, from the second quarter of 2021 and $214.0 million , or 11.6%, from the third quarter of 2020, as the Company continued to expand specialized lending offerings for commercial clients and focus on growing our businesses across all products and geographies.\n \n \n Sustained Strong Revenue Growth. Driven by net interest margin stability and fee income growth, top line revenue, the sum of net interest income and non-interest income, grew to $28.2 million , up 8.5% from the third quarter of 2020. Third quarter 2021 non-interest income continued to reflect the strength and diversity of our fee income sources, including record revenue from private wealth management of $2.8 million on $2.7 billion in assets under management and administration for the period.\n \n \n Positive Asset Quality Trends. Non-performing assets (“NPAs”) declined 34.4% to $7.6 million , or 0.29% of total assets, marking the fourth consecutive quarterly reduction of more than 25%. NPAs made up 0.30% of total assets, excluding net PPP loans, improving by 12 and 131 basis points from June 30, 2021 and September 30, 2020 , respectively.\n \n \n Compounding Tangible Book Value . Tangible Book Value (“TBV”) per share grew by 14% annualized in the quarter to $25.11 , which is nearly double the long-term growth rate of 8%.\n \n \n \n \n Quarterly Financial Results \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Nine Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\n \n \n \n21,223\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,652\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n18,621\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n63,738\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n54,558\n \n \n \n \n \n \n \n \n \nAdjusted non-interest income (1)\n \n \n \n \n \n \n \n7,015\n \n \n \n \n \n \n \n \n \n \n \n6,292\n \n \n \n \n \n \n \n \n \n \n \n7,408\n \n \n \n \n \n \n \n \n \n \n \n20,502\n \n \n \n \n \n \n \n \n \n \n \n20,145\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n28,238\n \n \n \n \n \n \n \n \n \n \n \n27,944\n \n \n \n \n \n \n \n \n \n \n \n26,029\n \n \n \n \n \n \n \n \n \n \n \n84,240\n \n \n \n \n \n \n \n \n \n \n \n74,703\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n18,546\n \n \n \n \n \n \n \n \n \n \n \n17,932\n \n \n \n \n \n \n \n \n \n \n \n16,700\n \n \n \n \n \n \n \n \n \n \n \n53,928\n \n \n \n \n \n \n \n \n \n \n \n48,026\n \n \n \n \n \n \n \n \n \nPre-tax, pre-provision adjusted earnings (1)\n \n \n \n \n \n \n \n9,692\n \n \n \n \n \n \n \n \n \n \n \n10,012\n \n \n \n \n \n \n \n \n \n \n \n9,329\n \n \n \n \n \n \n \n \n \n \n \n30,312\n \n \n \n \n \n \n \n \n \n \n \n26,677\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(2,269\n \n \n \n)\n \n \n \n \n \n \n \n(958\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(5,295\n \n \n \n)\n \n \n \n \n \n \n \n12,487\n \n \n \n \n \n \n \n \n \nNet loss (gain) on foreclosed properties\n \n \n \n \n \n \n \n6\n \n \n \n \n \n \n \n \n \n \n \n(1\n \n \n \n)\n \n \n \n \n \n \n \n(121\n \n \n \n)\n \n \n \n \n \n \n \n7\n \n \n \n \n \n \n \n \n \n \n \n329\n \n \n \n \n \n \n \n \n \nAmortization of other intangible assets\n \n \n \n \n \n \n \n7\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 \n23\n \n \n \n \n \n \n \n \n \n \n \n27\n \n \n \n \n \n \n \n \n \nSBA recourse (benefit) provision\n \n \n \n \n \n \n \n(69\n \n \n \n)\n \n \n \n \n \n \n \n245\n \n \n \n \n \n \n \n \n \n \n \n57\n \n \n \n \n \n \n \n \n \n \n \n45\n \n \n \n \n \n \n \n \n \n \n \n53\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 \n113\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n2,066\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 \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 \n—\n \n \n \n \n \n \n \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \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 \n12,017\n \n \n \n \n \n \n \n \n \n \n \n10,747\n \n \n \n \n \n \n \n \n \n \n \n5,436\n \n \n \n \n \n \n \n \n \n \n \n35,561\n \n \n \n \n \n \n \n \n \n \n \n10,967\n \n \n \n \n \n \n \n \n \nIncome tax expense\n \n \n \n \n \n \n \n2,819\n \n \n \n \n \n \n \n \n \n \n \n2,512\n \n \n \n \n \n \n \n \n \n \n \n1,143\n \n \n \n \n \n \n \n \n \n \n \n8,396\n \n \n \n \n \n \n \n \n \n \n \n73\n \n \n \n \n \n \n \n \n \nNet income\n \n \n \n \n \n \n \n$\n \n \n \n9,198\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4,293\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27,165\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n10,894\n \n \n \n \n \n \n \n \n \nEarnings per share, diluted\n \n \n \n \n \n \n \n$\n \n \n \n1.07\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.50\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3.15\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.27\n \n \n \n \n \n \n \n \n \nBook value per share\n \n \n \n \n \n \n \n$\n \n \n \n26.56\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25.70\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23.45\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.56\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23.45\n \n \n \n \n \n \n \n \n \nTangible book value per share (1)\n \n \n \n \n \n \n \n$\n \n \n \n25.11\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24.28\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n22.05\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25.11\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n22.05\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin (2)\n \n \n \n \n \n \n \n3.45\n \n \n \n%\n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n3.14\n \n \n \n%\n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \n \n \n3.30\n \n \n \n%\n \n \n \n \n \nAdjusted net interest margin (1)(2)\n \n \n \n \n \n \n \n3.22\n \n \n \n%\n \n \n \n \n \n \n \n3.20\n \n \n \n%\n \n \n \n \n \n \n \n3.24\n \n \n \n%\n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n65.68\n \n \n \n%\n \n \n \n \n \n \n \n64.17\n \n \n \n%\n \n \n \n \n \n \n \n64.16\n \n \n \n%\n \n \n \n \n \n \n \n64.02\n \n \n \n%\n \n \n \n \n \n \n \n64.29\n \n \n \n%\n \n \n \n \n \nReturn on average assets (2)\n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n1.26\n \n \n \n%\n \n \n \n \n \n \n \n0.68\n \n \n \n%\n \n \n \n \n \n \n \n1.39\n \n \n \n%\n \n \n \n \n \n \n \n0.62\n \n \n \n%\n \n \n \n \n \nPre-tax, pre-provision adjusted return on average assets (1)(2)\n \n \n \n \n \n \n \n1.49\n \n \n \n%\n \n \n \n \n \n \n \n1.53\n \n \n \n%\n \n \n \n \n \n \n \n1.47\n \n \n \n%\n \n \n \n \n \n \n \n1.55\n \n \n \n%\n \n \n \n \n \n \n \n1.51\n \n \n \n%\n \n \n \n \n \nReturn on average equity (2)\n \n \n \n \n \n \n \n16.39\n \n \n \n%\n \n \n \n \n \n \n \n15.09\n \n \n \n%\n \n \n \n \n \n \n \n8.58\n \n \n \n%\n \n \n \n \n \n \n \n16.63\n \n \n \n%\n \n \n \n \n \n \n \n7.49\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 \n \n \n \n \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$\n \n \n \n2,123,306\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,143,561\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,170,299\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,123,306\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,170,299\n \n \n \n \n \n \n \n \n \nPeriod-end loans and leases receivable, excluding net PPP loans\n \n \n \n \n \n \n \n$\n \n \n \n2,058,852\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 \n1,844,818\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,058,852\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,844,818\n \n \n \n \n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,131,099\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,223,353\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,139,439\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,178,947\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,952,785\n \n \n \n \n \n \n \n \n \nPeriod-end in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,829,644\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,016,215\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,667,245\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,829,644\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,667,245\n \n \n \n \n \n \n \n \n \nAverage in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,810,948\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,735,393\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,644,704\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,756,475\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,527,561\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n24,676\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 \n30,817\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,676\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n30,817\n \n \n \n \n \n \n \n \n \nNon-performing assets\n \n \n \n \n \n \n \n$\n \n \n \n7,605\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,601\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n36,663\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n7,605\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n36,663\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 \n1.16\n \n \n \n%\n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n1.16\n \n \n \n%\n \n \n \n \n \n \n \n1.41\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 \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n1.67\n \n \n \n%\n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n1.67\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 \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n0.40\n \n \n \n%\n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n1.41\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 \n0.30\n \n \n \n%\n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n1.61\n \n \n \n%\n \n \n \n \n \n \n \n0.30\n \n \n \n%\n \n \n \n \n \n \n \n1.61\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \nThis is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.\n \n \n \n \n \n(2)\n \n \n \n \nCalculation is annualized.\n \n \n \n \n Third Quarter 2021 Compared to Second Quarter 2021 \n \nNet interest income decreased $429,000 , or 2.0%, to $21.2 million .\n \n \nNet interest income decreased primarily due to a reduction in fees in lieu of interest. Fees in lieu of interest, which can vary from quarter to quarter based on client-driven activity, totaled $2.8 million , compared to $3.5 million . Excluding fees in lieu of interest, net interest income increased $268,000 , or 1.5%.\n \n \nAverage loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $49.4 million , or 9.9% annualized, to $2.044 billion .\n \n \nThe yield on average interest-earning assets decreased six basis points to 3.90% from 3.96%. Excluding average net PPP loans, the PPP loan interest income of $221,000 , and the aforementioned fees in lieu of interest, the yield earned on average interest-earning assets decreased 11 basis points to 3.53% from 3.64%. The rate paid for average total bank funding decreased three basis point to 0.36% from 0.39%. 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 decreased four basis points to 3.45% from 3.49%. Adjusted net interest margin was 3.22%, compared to 3.20% in the linked quarter. Adjusted net interest margin is a non-GAAP measure representing net interest income excluding the fees in lieu of interest and other recurring but volatile components of net interest margin divided by average interest-earning assets less average net PPP loans, if any, and other recurring but volatile components of average interest-earning assets such as excess liquidity and non-accrual loans.\n \n \nThe Company reported a net benefit to provision for loan and lease losses of $2.3 million , compared to a net benefit of $1.0 million in the second quarter.\n \n \nThe decrease in the provision for loan and lease losses was primarily due to a $923,000 reduction in the general reserve from improving historical loss rates, $1.3 million in net recoveries, and a $451,000 decrease in specific reserves. These decreases were partially offset by a $426,000 increase in the general reserve due to loan growth.\n \n \nNon-interest income increased $694,000 , or 11.0%, to $7.0 million .\n \n \nPrivate wealth management fee income increased $15,000 , or 0.5% to $2.8 million . Private wealth and trust assets under management and administration measured a record $2.694 billion at September 30, 2021 , up $129.8 million , or 20.2% annualized, primarily due to growth from new and existing clients.\n \n \nGains on sale of SBA loans decreased $482,000 to $721,000 . Management expects this revenue stream to return to levels consistent with the first half of the year in the coming quarters and continues to believe gains 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 third and second quarters of 2021 there was no commercial loan interest rate swap fee income. Swap fee income can vary from period to period based on client demand and the interest rate environment in any given quarter. Subsequent to September 30, 2021 , the Company completed two commercial loan interest rate swap transactions which generated swap fees totaling $684,000 .\n \n \nOther fee income increased $1.0 million to $1.9 million , compared to $835,000 in the second quarter, reflecting higher than typical returns from the Company’s investments in mezzanine funds.\n \n \nNon-interest expense increased $306,000 , or 1.7%, to $18.5 million . Operating expense increased $614,000 , or 3.4%, to $18.5 million .\n \n \nCompensation expense, the largest component of the Company’s non-interest expense, increased $96,000 , or 0.7%, to $13.4 million , primarily for performance-based incentive compensation accruals reflecting strong company performance relative to bonus criteria.\n \n \nOther non-interest expense increased $543,000 to $719,000 . Other non-interest expense for the second quarter of 2021 included a $206,000 and $78,000 benefit in the Company’s swap credit valuation and loan servicing impairment valuation, respectively. The remaining variance was generally attributable to higher travel costs.\n \n \nTotal period-end loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $36.0 million , or 7.1% annualized, to $2.059 billion .\n \n \nCommercial and industrial (“C&I”) loans, excluding net PPP loans, increased $41.9 million , or 29.2% annualized, led by First Business Bank’s specialized lending commercial business lines. Management believes the timely prior-period investments in our specialized lending business lines, 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 decreased by $4.3 million to $1.388 billion , compared to $1.392 billion , as new production was offset by payoffs and paydowns.\n \n \nTotal period-end in-market deposits decreased $186.6 million to $1.830 billion , compared to $2.016 billion , and the average rate paid decreased one basis point to 0.14%.\n \n \nAs previously disclosed, in-market deposits on June 30, 2021 included a temporary balance associated with 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 by $38.4 million , or 8.6% annualized.\n \n \nExcluding the temporary deposit, money market accounts, interest-bearing transaction accounts, and certificates of deposit increased $43.6 million , $5.6 million , and $12.5 million , respectively, while non-interest bearing transaction accounts decreased $23.2 million .\n \n \nPeriod-end wholesale funding, including FHLB advances, Federal Reserve Discount Window advances, brokered deposits, and deposits gathered through internet deposit listing services, decreased $99.9 million to $432.4 million .\n \n \nWholesale deposits decreased $69.9 million to $74.6 million . The average rate paid on wholesale deposits increased 18 basis points to 0.92% and the weighted average original maturity of brokered certificates of deposit increased to 3.7 years from 3.5 years.\n \n \nFHLB advances decreased $30.0 million to $357.8 million . The average rate paid on FHLB advances increased two basis points to 1.29% and the weighted average original maturity increased to 6.2 years from 6.1 years.\n \n \nNon-performing assets decreased $4.0 million , or 34.4%, to $7.6 million , or 0.29% of total assets, compared to $11.6 million , or 0.40% of total assets. The reduction in non-performing assets was due to loan payoffs. Excluding net PPP loans, non-performing assets were 0.30% of total assets as of September 30, 2021 , compared to 0.42% as of June 30, 2021 .\n \nThe allowance for loan and lease losses decreased $1.0 million , or 3.9%, 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 1.16% compared to 1.20% as of June 30, 2021 .\n \n \nExcluding net PPP loans, the allowance for loan and leases losses as a percent of total gross loans and leases was 1.20%, compared to 1.27% as of June 30, 2021 .\n \n \n Third Quarter 2021 Compared to Third Quarter 2020 \n \nNet interest income increased $2.6 million , or 14.0%, to $21.2 million .\n \n \nThe increase in net interest income reflects expanded yields on average gross loans and leases, which were relatively consistent between periods, and lower deposit costs. Excluding fees collected in lieu of interest and interest income from PPP loans, net interest income increased $1.9 million , or 11.4%. Excluding net PPP loans, average gross loans and leases increased $227.2 million , or 12.5%.\n \n \nThe yield on average interest-earning assets measured 3.90% compared to 3.75%. Excluding fees collected in lieu of interest, PPP loan interest income and net PPP loans, the yield on average interest-earning assets measured 3.53%, compared to 3.89%. This decrease in yield 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 cash flows from the securities portfolio at historically low interest rates. The rate paid for average total bank funding decreased 18 basis points to 0.36% from 0.54%.\n \n \nNet interest margin increased 31 basis points to 3.45% from 3.14%. Adjusted net interest margin decreased 2 basis points to 3.22% from 3.24%.\n \n \nThe Company reported a net benefit to provision for loan and lease losses of $2.3 million , compared to a $3.8 million expense in the third quarter of 2020.\n \nNon-interest income of $7.0 million compares to $7.4 million in the prior year period.\n \n \nPrivate wealth management fee income increased $592,000 , or 27.3%, to $2.8 million . Private wealth and trust assets under management and administration measured a record $2.694 billion at September 30, 2021 , up $676.6 million , or 33.5%.\n \n \nLoan fees of $713,000 increased by $235,000 , or 49.2%, primarily due to an increase in floorplan financing curtailment fees and miscellaneous asset-based lending fees.\n \n \nGains on sale of SBA loans decreased $39,000 to $721,000 . Management expects this revenue stream to return to levels consistent with the first half of the year in the coming quarters and continues to believe gains 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 third quarter of 2021, there was no commercial loan interest rate swap fee income activity, compared to $2.4 million in the year-ago period. 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 increased $1.2 million , or 176.0%, to $1.9 million compared to $676,000 , reflecting higher than typical returns from the Company’s investments in mezzanine funds in the third quarter of 2021.\n \n \nNon-interest expense increased $1.7 million , or 10.3%, to $18.5 million . Operating expense increased $1.8 million , or 11.1%, to $18.5 million .\n \n \nCompensation expense increased $1.5 million , or 12.6%, to $13.4 million . The increase resulted from new hires and an increase in performance-based incentive compensation accruals reflecting strong company performance relative to bonus criteria.. Average full-time equivalent employees increased to 311, up 5.4% for the quarter ended September 30, 2021 , compared to 295 for the quarter ended September 30, 2020 .\n \n \nTotal period-end loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $214.0 million , or 11.6%, to $2.059 billion .\n \n \nC&I loans, excluding net PPP loans, increased $151.7 million , or 32.6%.\n \n \nCRE loans increased $61.2 million , or 4.6%, as increases in the non-owner occupied and multi-family portfolios were partially offset by reductions in the land development and 1-4 family portfolios.\n \n \nTotal period-end in-market deposits increased $162.4 million , or 9.7%, to $1.830 billion and the average rate paid decreased 13 basis points to 0.14%.\n \n \nTransaction and money market accounts increased $106.3 million and $91.9 million , respectively, while certificates of deposits decreased $35.7 million .\n \n \nPeriod-end wholesale funding decreased $180.8 million to $432.4 million .\n \n \nWholesale deposits decreased $79.5 million to $74.6 million , compared to $154.1 million , as the existing portfolio runoff was replaced by in-market deposits. The average rate paid on brokered certificates of deposit decreased 41 basis points to 0.92% and the weighted average original maturity decreased to 3.7 years from 4.3 years.\n \n \nFHLB advances decreased $71.7 million to $357.8 million . The average rate paid on FHLB advances increased 14 basis points to 1.29% and the weighted average original maturity increased to 6.2 years from 5.1 years.\n \n \nNon-performing assets decreased to $7.6 million , or 0.29% of total assets, compared to $36.7 million , or 1.41% of total assets. Excluding net PPP loans, non-performing assets were 0.30% of total assets as of September 30, 2021 compared to 1.61% one year prior.\n \nThe allowance for loan and lease losses decreased $6.1 million to $24.7 million , compared to $30.8 million .\n \n \nThe allowance for loan and lease losses as a percent of total gross loans and leases was 1.16% compared to 1.41%.\n \n \nExcluding net PPP loans, the allowance for loan and leases losses as a percent of total gross loans and leases was 1.20% as of September 30, 2021 compared to 1.67% one year prior.\n \n \n COVID-19 Update \n \nIn 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, more employees returned to the office in early June 2021 . The return to office included enhanced safety protocols and processes to provide the best working environment possible for employees. In addition, the Company has adopted workplace flexibility strategies in response to ever-changing circumstances and expectations. Remote, hybrid and hoteling options are available for most positions. These options cultivate a more flexible work environment that is very attractive to our employees.\n \n Paycheck Protection Program \n \nAs of September 30, 2021 , the Company had $65.9 million in gross PPP loans outstanding and deferred processing fees outstanding of $1.4 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 nine months ended September 30, 2021 , the Company recognized $1.7 million and $6.4 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 be 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 September 30, 2021 , the Company had five deferred loans outstanding in an aggregate amount of $24.1 million , or 1.2% of gross loans and leases, compared to $131.5 million , or 7.2% of gross loans and leases as of September 30, 2020 . Of the $24.1 million of deferred loans outstanding, $23.5 million is related to three hospitality credits which received principal deferrals and are accruing and current on interest payments. Management believes there will be no losses associated with these credits.\n \nThe following tables represent a breakdown of the deferred loan balances by industry segment and collateral type:\n \n \n \n \n \n \n \n \n \n \n \nAs of\n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCollateral Type\n \n \n \n \n \nIndustries Description\n \n \n \n \n \n \n \nBalance\n \n \n \n \n \n \n \nReal Estate\n \n \n \n \n \n \n \n Non-Real Estate \n \n \n \n \n \n \n \n \n \n \n \n \n \n(In thousands)\n \n \n \n \n \nAccommodation and Food Services\n \n \n \n \n \n \n \n$\n \n \n \n23,521\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,521\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n—\n \n \n \n \n \n \n \n \n \nManufacturing\n \n \n \n \n \n \n \n428\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n428\n \n \n \n \n \n \n \n \n \nRetail Trade\n \n \n \n \n \n \n \n115\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n115\n \n \n \n \n \n \n \n \n \nTotal deferred loan balances\n \n \n \n \n \n \n \n$\n \n \n \n24,064\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,521\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n543\n \n \n \n \n \n \n \n \n Exposure to Stressed Industries \n \nCertain industries have been and are expected to be particularly impacted by social distancing, quarantines, and the economic impact of the COVID-19 pandemic, such as the following:\n \n \n \n \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n \n \n \n December 31, 2020 \n \n \n \n \n \n Industries: \n \n \n \n \n \n \n \n Balance \n \n \n \n \n \n \n \n % Gross Loans and Leases (1) \n \n \n \n \n \n \n \n Balance \n \n \n \n \n \n \n \n % Gross Loans and Leases (1) \n \n \n \n \n \n \n \n \n \n \n \n \n \n(Dollars in Thousands)\n \n \n \n \n \nRetail (2) (3)\n \n \n \n \n \n \n \n$\n \n \n \n76,635\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$\n \n \n \n62,719\n \n \n \n \n \n \n \n \n \n \n \n3.3\n \n \n \n%\n \n \n \n \n \nHospitality\n \n \n \n \n \n \n \n77,286\n \n \n \n \n \n \n \n \n \n \n \n3.7\n \n \n \n%\n \n \n \n \n \n \n \n80,832\n \n \n \n \n \n \n \n \n \n \n \n4.2\n \n \n \n%\n \n \n \n \n \nEntertainment\n \n \n \n \n \n \n \n13,533\n \n \n \n \n \n \n \n \n \n \n \n0.7\n \n \n \n%\n \n \n \n \n \n \n \n14,208\n \n \n \n \n \n \n \n \n \n \n \n0.7\n \n \n \n%\n \n \n \n \n \nRestaurants & food service\n \n \n \n \n \n \n \n22,393\n \n \n \n \n \n \n \n \n \n \n \n1.1\n \n \n \n%\n \n \n \n \n \n \n \n24,854\n \n \n \n \n \n \n \n \n \n \n \n1.3\n \n \n \n%\n \n \n \n \n \nTotal outstanding exposure\n \n \n \n \n \n \n \n$\n \n \n \n189,847\n \n \n \n \n \n \n \n \n \n \n \n9.2\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 \n(1)\n \n \n \n \nExcluding net PPP loans.\n \n \n \n \n \n(2)\n \n \n \n \nIncludes $39.6 million and $48.9 million in loans secured by commercial real estate as of September 30, 2021 and December 31, 2020 , respectively.\n \n \n \n \n \n(3)\n \n \n \n \nIncludes $23.2 million and $7.7 million in fully collateralized asset-based loans as of September 30, 2021 and December 31, 2020 , respectively.\n \n \n \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 the future effect of the ongoing pandemic on the Company’s loan portfolio.\n \n Share Repurchase Program Update \n \nDuring the third quarter the Company repurchased a total of 129,600 shares for approximately $3.5 million at an average cost of $27.40 per share. The Company had $717,000 of repurchase authority as of September 30, 2021 remaining in its previously disclosed share repurchase program.\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 \n \n SELECTED FINANCIAL CONDITION DATA \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (in thousands) \n \n \n \n \n \n \n \n September 30 ,\n 2021 \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 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 \n110,624\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n389,977\n \n \n \n \n \n \n \n \n \n \n \n$\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 \nSecurities available-for-sale, at fair value\n \n \n \n \n \n \n \n194,056\n \n \n \n \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 \nSecurities held-to-maturity, at amortized cost\n \n \n \n \n \n \n \n21,196\n \n \n \n \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 \nLoans held for sale\n \n \n \n \n \n \n \n5,603\n \n \n \n \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 \nLoans and leases receivable\n \n \n \n \n \n \n \n2,123,306\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 \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 \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n(24,676\n \n \n \n)\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 \nLoans and leases receivable, net\n \n \n \n \n \n \n \n2,098,630\n \n \n \n \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 \nPremises and equipment, net\n \n \n \n \n \n \n \n1,700\n \n \n \n \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 \nForeclosed properties\n \n \n \n \n \n \n \n172\n \n \n \n \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 \nRight-of-use assets\n \n \n \n \n \n \n \n5,263\n \n \n \n \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 \nBank-owned life insurance\n \n \n \n \n \n \n \n53,244\n \n \n \n \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 Federal Home Loan Bank stock, at cost\n \n \n \n \n \n \n \n12,351\n \n \n \n \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 Goodwill and other intangible assets\n \n \n \n \n \n \n \n12,229\n \n \n \n \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 \nDerivatives\n \n \n \n \n \n \n \n28,678\n \n \n \n \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 \nAccrued interest receivable and other assets\n \n \n \n \n \n \n \n40,664\n \n \n \n \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 \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,584,410\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,865,669\n \n \n \n \n \n \n \n \n \n \n \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$\n \n \n \n2,601,847\n \n \n \n \n \n \n \n \n \n Liabilities and Stockholders’ Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nIn-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,829,644\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,016,215\n \n \n \n \n \n \n \n \n \n \n \n$\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 \nWholesale deposits\n \n \n \n \n \n \n \n74,638\n \n \n \n \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 \nTotal deposits\n \n \n \n \n \n \n \n1,904,282\n \n \n \n \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 Federal Home Loan Bank advances and other borrowings\n \n \n \n \n \n \n \n394,090\n \n \n \n \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 \nJunior subordinated notes\n \n \n \n \n \n \n \n10,072\n \n \n \n \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 \nLease liabilities\n \n \n \n \n \n \n \n5,780\n \n \n \n \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 \nDerivatives\n \n \n \n \n \n \n \n31,890\n \n \n \n \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 \nAccrued interest payable and other liabilities\n \n \n \n \n \n \n \n13,016\n \n \n \n \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 \nTotal liabilities\n \n \n \n \n \n \n \n2,359,130\n \n \n \n \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 \nTotal stockholders’ equity\n \n \n \n \n \n \n \n225,280\n \n \n \n \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 \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,584,410\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,865,669\n \n \n \n \n \n \n \n \n \n \n \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$\n \n \n \n2,601,847\n \n \n \n \n \n \n \n \n \n \n STATEMENTS OF INCOME \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Nine Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \nTotal interest income\n \n \n \n \n \n \n \n$\n \n \n \n24,014\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,599\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \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$\n \n \n \n72,420\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n68,408\n \n \n \n \n \n \n \n \n \nTotal interest expense\n \n \n \n \n \n \n \n2,791\n \n \n \n \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 \n8,682\n \n \n \n \n \n \n \n \n \n \n \n13,850\n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n21,223\n \n \n \n \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 \n63,738\n \n \n \n \n \n \n \n \n \n \n \n54,558\n \n \n \n \n \n \n \n \n \nProvision for loan and lease losses\n \n \n \n \n \n \n \n(2,269\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(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 \n(5,295\n \n \n \n)\n \n \n \n \n \n \n \n12,487\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 \n23,492\n \n \n \n \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 \n69,033\n \n \n \n \n \n \n \n \n \n \n \n42,071\n \n \n \n \n \n \n \n \n \nPrivate wealth management service fees\n \n \n \n \n \n \n \n2,759\n \n \n \n \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 \n7,910\n \n \n \n \n \n \n \n \n \n \n \n6,402\n \n \n \n \n \n \n \n \n \nGain on sale of SBA loans\n \n \n \n \n \n \n \n721\n \n \n \n \n \n \n \n \n \n \n \n1,203\n \n \n \n \n \n \n \n \n \n \n \n1,078\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 \n3,002\n \n \n \n \n \n \n \n \n \n \n \n1,598\n \n \n \n \n \n \n \n \n \nService charges on deposits\n \n \n \n \n \n \n \n956\n \n \n \n \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 \n2,814\n \n \n \n \n \n \n \n \n \n \n \n2,527\n \n \n \n \n \n \n \n \n \nLoan fees\n \n \n \n \n \n \n \n713\n \n \n \n \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 \n1,828\n \n \n \n \n \n \n \n \n \n \n \n1,414\n \n \n \n \n \n \n \n \n \nNet gain (loss) on sale of securities\n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \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 \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 \n684\n \n \n \n \n \n \n \n \n \n \n \n5,782\n \n \n \n \n \n \n \n \n \nOther non-interest income\n \n \n \n \n \n \n \n1,866\n \n \n \n \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 \n4,264\n \n \n \n \n \n \n \n \n \n \n \n2,422\n \n \n \n \n \n \n \n \n \nTotal non-interest income\n \n \n \n \n \n \n \n7,015\n \n \n \n \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 \n20,531\n \n \n \n \n \n \n \n \n \n \n \n20,141\n \n \n \n \n \n \n \n \n \nCompensation\n \n \n \n \n \n \n \n13,351\n \n \n \n \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 \n39,263\n \n \n \n \n \n \n \n \n \n \n \n33,705\n \n \n \n \n \n \n \n \n \nOccupancy\n \n \n \n \n \n \n \n544\n \n \n \n \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 \n1,628\n \n \n \n \n \n \n \n \n \n \n \n1,696\n \n \n \n \n \n \n \n \n \nProfessional fees\n \n \n \n \n \n \n \n1,024\n \n \n \n \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 \n2,803\n \n \n \n \n \n \n \n \n \n \n \n2,621\n \n \n \n \n \n \n \n \n \nData processing\n \n \n \n \n \n \n \n746\n \n \n \n \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 \n2,315\n \n \n \n \n \n \n \n \n \n \n \n2,066\n \n \n \n \n \n \n \n \n \nMarketing\n \n \n \n \n \n \n \n572\n \n \n \n \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 \n1,474\n \n \n \n \n \n \n \n \n \n \n \n1,169\n \n \n \n \n \n \n \n \n \nEquipment\n \n \n \n \n \n \n \n260\n \n \n \n \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 \n767\n \n \n \n \n \n \n \n \n \n \n \n905\n \n \n \n \n \n \n \n \n \nComputer software\n \n \n \n \n \n \n \n999\n \n \n \n \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 \n3,244\n \n \n \n \n \n \n \n \n \n \n \n2,873\n \n \n \n \n \n \n \n \n \n FDIC insurance\n \n \n \n \n \n \n \n291\n \n \n \n \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 \n933\n \n \n \n \n \n \n \n \n \n \n \n760\n \n \n \n \n \n \n \n \n \nCollateral liquidation cost\n \n \n \n \n \n \n \n47\n \n \n \n \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 \n224\n \n \n \n \n \n \n \n \n \n \n \n281\n \n \n \n \n \n \n \n \n \nNet loss (gain) on foreclosed properties\n \n \n \n \n \n \n \n6\n \n \n \n \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 \n7\n \n \n \n \n \n \n \n \n \n \n \n329\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 \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 \n—\n \n \n \n \n \n \n \n \n \n \n \n2,066\n \n \n \n \n \n \n \n \n \nSBA recourse (benefit) provision\n \n \n \n \n \n \n \n(69\n \n \n \n)\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 \n45\n \n \n \n \n \n \n \n \n \n \n \n53\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 \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 \nOther non-interest expense\n \n \n \n \n \n \n \n719\n \n \n \n \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 \n1,300\n \n \n \n \n \n \n \n \n \n \n \n1,977\n \n \n \n \n \n \n \n \n \nTotal non-interest expense\n \n \n \n \n \n \n \n18,490\n \n \n \n \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 \n54,003\n \n \n \n \n \n \n \n \n \n \n \n51,245\n \n \n \n \n \n \n \n \n \nIncome before income tax expense\n \n \n \n \n \n \n \n12,017\n \n \n \n \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 \n35,561\n \n \n \n \n \n \n \n \n \n \n \n10,967\n \n \n \n \n \n \n \n \n \nIncome tax expense\n \n \n \n \n \n \n \n2,819\n \n \n \n \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 \n8,396\n \n \n \n \n \n \n \n \n \n \n \n73\n \n \n \n \n \n \n \n \n \nNet income\n \n \n \n \n \n \n \n$\n \n \n \n9,198\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,731\n \n \n \n \n \n \n \n \n \n \n \n$\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 \n27,165\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n10,894\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPer common share:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nBasic earnings\n \n \n \n \n \n \n \n$\n \n \n \n1.07\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \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$\n \n \n \n3.15\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.27\n \n \n \n \n \n \n \n \n \nDiluted earnings\n \n \n \n \n \n \n \n1.07\n \n \n \n \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 \n3.15\n \n \n \n \n \n \n \n \n \n \n \n1.27\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 \n0.18\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 \n0.54\n \n \n \n \n \n \n \n \n \n \n \n0.495\n \n \n \n \n \n \n \n \n \nBook value\n \n \n \n \n \n \n \n26.56\n \n \n \n \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 \n26.56\n \n \n \n \n \n \n \n \n \n \n \n23.45\n \n \n \n \n \n \n \n \n \nTangible book value\n \n \n \n \n \n \n \n25.11\n \n \n \n \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 \n25.11\n \n \n \n \n \n \n \n \n \n \n \n22.05\n \n \n \n \n \n \n \n \n \nWeighted-average common shares outstanding(1)\n \n \n \n \n \n \n \n8,340,042\n \n \n \n \n \n \n \n \n \n \n \n8,385,069\n \n \n \n \n \n \n \n \n \n \n \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 \n8,380,591\n \n \n \n \n \n \n \n \n \n \n \n8,380,676\n \n \n \n \n \n \n \n \n \nWeighted-average diluted common shares outstanding(1)\n \n \n \n \n \n \n \n8,340,042\n \n \n \n \n \n \n \n \n \n \n \n8,385,069\n \n \n \n \n \n \n \n \n \n \n \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 \n8,380,591\n \n \n \n \n \n \n \n \n \n \n \n8,380,676\n \n \n \n \n \n \n \n \n \n \n(1)\n \n \n \n \nExcluding participating securities.\n \n \n \n \n \n \n NET INTEREST INCOME ANALYSIS \n \n \n \n \n \n \n \n \n \n \n (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 September 30, 2021 \n \n \n \n \n \n \n \n June 30, 2021 \n \n \n \n \n \n \n \n September 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$\n \n \n \n1,388,236\n \n \n \n \n \n \n \n$\n \n \n \n13,090\n \n \n \n \n \n \n \n3.77\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,386,187\n \n \n \n \n \n \n \n$\n \n \n \n13,087\n \n \n \n \n \n \n \n3.78\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,282,132\n \n \n \n \n \n \n \n$\n \n \n \n12,340\n \n \n \n \n \n \n \n3.85\n \n \n \n%\n \n \n \n \n \nCommercial and industrial loans(1)\n \n \n \n \n \n \n \n680,563\n \n \n \n \n \n \n \n9,259\n \n \n \n \n \n \n \n5.44\n \n \n \n%\n \n \n \n \n \n \n \n772,257\n \n \n \n \n \n \n \n9,875\n \n \n \n \n \n \n \n5.11\n \n \n \n%\n \n \n \n \n \n \n \n791,909\n \n \n \n \n \n \n \n8,133\n \n \n \n \n \n \n \n4.11\n \n \n \n%\n \n \n \n \n \nDirect financing leases(1)\n \n \n \n \n \n \n \n18,611\n \n \n \n \n \n \n \n207\n \n \n \n \n \n \n \n4.45\n \n \n \n%\n \n \n \n \n \n \n \n19,883\n \n \n \n \n \n \n \n222\n \n \n \n \n \n \n \n4.47\n \n \n \n%\n \n \n \n \n \n \n \n26,129\n \n \n \n \n \n \n \n258\n \n \n \n \n \n \n \n3.95\n \n \n \n%\n \n \n \n \n \nConsumer and other loans(1)\n \n \n \n \n \n \n \n43,689\n \n \n \n \n \n \n \n391\n \n \n \n \n \n \n \n3.58\n \n \n \n%\n \n \n \n \n \n \n \n45,026\n \n \n \n \n \n \n \n407\n \n \n \n \n \n \n \n3.62\n \n \n \n%\n \n \n \n \n \n \n \n39,269\n \n \n \n \n \n \n \n374\n \n \n \n \n \n \n \n3.81\n \n \n \n%\n \n \n \n \n \nTotal loans and leases receivable(1)\n \n \n \n \n \n \n \n2,131,099\n \n \n \n \n \n \n \n22,947\n \n \n \n \n \n \n \n4.31\n \n \n \n%\n \n \n \n \n \n \n \n2,223,353\n \n \n \n \n \n \n \n23,591\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \n \n \n2,139,439\n \n \n \n \n \n \n \n21,105\n \n \n \n \n \n \n \n3.95\n \n \n \n%\n \n \n \n \n \nMortgage-related securities(2)\n \n \n \n \n \n \n \n154,372\n \n \n \n \n \n \n \n659\n \n \n \n \n \n \n \n1.71\n \n \n \n%\n \n \n \n \n \n \n \n149,253\n \n \n \n \n \n \n \n631\n \n \n \n \n \n \n \n1.69\n \n \n \n%\n \n \n \n \n \n \n \n167,326\n \n \n \n \n \n \n \n833\n \n \n \n \n \n \n \n1.99\n \n \n \n%\n \n \n \n \n \nOther investment securities(3)\n \n \n \n \n \n \n \n45,196\n \n \n \n \n \n \n \n196\n \n \n \n \n \n \n \n1.73\n \n \n \n%\n \n \n \n \n \n \n \n41,569\n \n \n \n \n \n \n \n185\n \n \n \n \n \n \n \n1.78\n \n \n \n%\n \n \n \n \n \n \n \n34,004\n \n \n \n \n \n \n \n171\n \n \n \n \n \n \n \n2.01\n \n \n \n%\n \n \n \n \n \nFHLB stock\n \n \n \n \n \n \n \n13,279\n \n \n \n \n \n \n \n167\n \n \n \n \n \n \n \n5.03\n \n \n \n%\n \n \n \n \n \n \n \n14,172\n \n \n \n \n \n \n \n176\n \n \n \n \n \n \n \n4.97\n \n \n \n%\n \n \n \n \n \n \n \n12,835\n \n \n \n \n \n \n \n161\n \n \n \n \n \n \n \n5.02\n \n \n \n%\n \n \n \n \n \nShort-term investments\n \n \n \n \n \n \n \n116,621\n \n \n \n \n \n \n \n45\n \n \n \n \n \n \n \n0.15\n \n \n \n%\n \n \n \n \n \n \n \n55,100\n \n \n \n \n \n \n \n16\n \n \n \n \n \n \n \n0.12\n \n \n \n%\n \n \n \n \n \n \n \n21,287\n \n \n \n \n \n \n \n6\n \n \n \n \n \n \n \n0.11\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets\n \n \n \n \n \n \n \n2,460,567\n \n \n \n \n \n \n \n24,014\n \n \n \n \n \n \n \n3.90\n \n \n \n%\n \n \n \n \n \n \n \n2,483,447\n \n \n \n \n \n \n \n24,599\n \n \n \n \n \n \n \n3.96\n \n \n \n%\n \n \n \n \n \n \n \n2,374,891\n \n \n \n \n \n \n \n22,276\n \n \n \n \n \n \n \n3.75\n \n \n \n%\n \n \n \n \n \nNon-interest-earning assets\n \n \n \n \n \n \n \n147,631\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n137,893\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n165,844\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$\n \n \n \n2,608,198\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,621,340\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,540,735\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest-bearing liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTransaction accounts\n \n \n \n \n \n \n \n$\n \n \n \n509,089\n \n \n \n \n \n \n \n251\n \n \n \n \n \n \n \n0.20\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n499,040\n \n \n \n \n \n \n \n248\n \n \n \n \n \n \n \n0.20\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n445,687\n \n \n \n \n \n \n \n259\n \n \n \n \n \n \n \n0.23\n \n \n \n%\n \n \n \n \n \nMoney market\n \n \n \n \n \n \n \n703,460\n \n \n \n \n \n \n \n306\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n662,919\n \n \n \n \n \n \n \n282\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n642,881\n \n \n \n \n \n \n \n318\n \n \n \n \n \n \n \n0.20\n \n \n \n%\n \n \n \n \n \nCertificates of deposit\n \n \n \n \n \n \n \n42,370\n \n \n \n \n \n \n \n71\n \n \n \n \n \n \n \n0.67\n \n \n \n%\n \n \n \n \n \n \n \n45,993\n \n \n \n \n \n \n \n112\n \n \n \n \n \n \n \n0.97\n \n \n \n%\n \n \n \n \n \n \n \n110,891\n \n \n \n \n \n \n \n513\n \n \n \n \n \n \n \n1.85\n \n \n \n%\n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n89,135\n \n \n \n \n \n \n \n206\n \n \n \n \n \n \n \n0.92\n \n \n \n%\n \n \n \n \n \n \n \n162,580\n \n \n \n \n \n \n \n301\n \n \n \n \n \n \n \n0.74\n \n \n \n%\n \n \n \n \n \n \n \n160,067\n \n \n \n \n \n \n \n533\n \n \n \n \n \n \n \n1.33\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing deposits\n \n \n \n \n \n \n \n1,344,054\n \n \n \n \n \n \n \n834\n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n1,370,532\n \n \n \n \n \n \n \n943\n \n \n \n \n \n \n \n0.28\n \n \n \n%\n \n \n \n \n \n \n \n1,359,526\n \n \n \n \n \n \n \n1,623\n \n \n \n \n \n \n \n0.48\n \n \n \n%\n \n \n \n \n \nFHLB advances\n \n \n \n \n \n \n \n381,061\n \n \n \n \n \n \n \n1,228\n \n \n \n \n \n \n \n1.29\n \n \n \n%\n \n \n \n \n \n \n \n405,855\n \n \n \n \n \n \n \n1,284\n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n379,915\n \n \n \n \n \n \n \n1,356\n \n \n \n \n \n \n \n1.43\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 \n29,605\n \n \n \n \n \n \n \n26\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 \n32,630\n \n \n \n \n \n \n \n449\n \n \n \n \n \n \n \n5.50\n \n \n \n%\n \n \n \n \n \n \n \n32,447\n \n \n \n \n \n \n \n443\n \n \n \n \n \n \n \n5.46\n \n \n \n%\n \n \n \n \n \n \n \n24,403\n \n \n \n \n \n \n \n370\n \n \n \n \n \n \n \n6.06\n \n \n \n%\n \n \n \n \n \nJunior subordinated notes\n \n \n \n \n \n \n \n10,070\n \n \n \n \n \n \n \n280\n \n \n \n \n \n \n \n11.12\n \n \n \n%\n \n \n \n \n \n \n \n10,066\n \n \n \n \n \n \n \n277\n \n \n \n \n \n \n \n11.01\n \n \n \n%\n \n \n \n \n \n \n \n10,056\n \n \n \n \n \n \n \n280\n \n \n \n \n \n \n \n11.14\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\n \n \n \n \n \n \n \n1,767,815\n \n \n \n \n \n \n \n2,791\n \n \n \n \n \n \n \n0.63\n \n \n \n%\n \n \n \n \n \n \n \n1,818,900\n \n \n \n \n \n \n \n2,947\n \n \n \n \n \n \n \n0.65\n \n \n \n%\n \n \n \n \n \n \n \n1,803,505\n \n \n \n \n \n \n \n3,655\n \n \n \n \n \n \n \n0.81\n \n \n \n%\n \n \n \n \n \nNon-interest-bearing demand deposit accounts\n \n \n \n \n \n \n \n556,029\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n527,441\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n445,245\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 \n59,865\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56,691\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n91,810\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 \n2,383,709\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,403,032\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,340,560\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 \n224,489\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n218,308\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n200,175\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$\n \n \n \n2,608,198\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,621,340\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,540,735\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,223\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n18,621\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 \n3.27\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 \n3.31\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 \n2.94\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n692,752\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n664,547\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n571,386\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.45\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.14\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \nThe average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.\n \n \n \n \n \n(2)\n \n \n \n \nIncludes amortized cost basis of assets available for sale and held to maturity.\n \n \n \n \n \n(3)\n \n \n \n \nYields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.\n \n \n \n \n \n(4)\n \n \n \n \nRepresents annualized yields/rates.\n \n \n \n \n \n \n NET INTEREST INCOME ANALYSIS \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Nine Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n \n \n \n September 30, 2020 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate(4) \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/Rate(4) \n \n \n \n \n \n Interest-earning assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommercial real estate and other mortgage loans(1)\n \n \n \n \n \n \n \n$\n \n \n \n1,377,302\n \n \n \n \n \n \n \n$\n \n \n \n38,704\n \n \n \n \n \n \n \n3.75\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,209,810\n \n \n \n \n \n \n \n$\n \n \n \n38,312\n \n \n \n \n \n \n \n4.22\n \n \n \n%\n \n \n \n \n \nCommercial and industrial loans(1)\n \n \n \n \n \n \n \n736,623\n \n \n \n \n \n \n \n28,759\n \n \n \n \n \n \n \n5.21\n \n \n \n%\n \n \n \n \n \n \n \n678,650\n \n \n \n \n \n \n \n24,338\n \n \n \n \n \n \n \n4.78\n \n \n \n%\n \n \n \n \n \nDirect financing leases(1)\n \n \n \n \n \n \n \n20,242\n \n \n \n \n \n \n \n673\n \n \n \n \n \n \n \n4.43\n \n \n \n%\n \n \n \n \n \n \n \n27,065\n \n \n \n \n \n \n \n761\n \n \n \n \n \n \n \n3.75\n \n \n \n%\n \n \n \n \n \nConsumer and other loans(1)\n \n \n \n \n \n \n \n44,780\n \n \n \n \n \n \n \n1,197\n \n \n \n \n \n \n \n3.56\n \n \n \n%\n \n \n \n \n \n \n \n37,260\n \n \n \n \n \n \n \n1,091\n \n \n \n \n \n \n \n3.90\n \n \n \n%\n \n \n \n \n \nTotal loans and leases receivable(1)\n \n \n \n \n \n \n \n2,178,947\n \n \n \n \n \n \n \n69,333\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \n \n \n1,952,785\n \n \n \n \n \n \n \n64,502\n \n \n \n \n \n \n \n4.40\n \n \n \n%\n \n \n \n \n \nMortgage-related securities(2)\n \n \n \n \n \n \n \n155,617\n \n \n \n \n \n \n \n1,955\n \n \n \n \n \n \n \n1.67\n \n \n \n%\n \n \n \n \n \n \n \n173,985\n \n \n \n \n \n \n \n2,806\n \n \n \n \n \n \n \n2.15\n \n \n \n%\n \n \n \n \n \nOther investment securities(3)\n \n \n \n \n \n \n \n42,992\n \n \n \n \n \n \n \n569\n \n \n \n \n \n \n \n1.76\n \n \n \n%\n \n \n \n \n \n \n \n29,177\n \n \n \n \n \n \n \n456\n \n \n \n \n \n \n \n2.08\n \n \n \n%\n \n \n \n \n \nFHLB stock\n \n \n \n \n \n \n \n13,308\n \n \n \n \n \n \n \n496\n \n \n \n \n \n \n \n4.97\n \n \n \n%\n \n \n \n \n \n \n \n10,558\n \n \n \n \n \n \n \n491\n \n \n \n \n \n \n \n6.20\n \n \n \n%\n \n \n \n \n \nShort-term investments\n \n \n \n \n \n \n \n65,769\n \n \n \n \n \n \n \n67\n \n \n \n \n \n \n \n0.14\n \n \n \n%\n \n \n \n \n \n \n \n39,293\n \n \n \n \n \n \n \n153\n \n \n \n \n \n \n \n0.52\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets\n \n \n \n \n \n \n \n2,456,633\n \n \n \n \n \n \n \n72,420\n \n \n \n \n \n \n \n3.93\n \n \n \n%\n \n \n \n \n \n \n \n2,205,798\n \n \n \n \n \n \n \n68,408\n \n \n \n \n \n \n \n4.13\n \n \n \n%\n \n \n \n \n \nNon-interest-earning assets\n \n \n \n \n \n \n \n145,714\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n151,994\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 \n2,602,347\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,357,792\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest-bearing liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTransaction accounts\n \n \n \n \n \n \n \n$\n \n \n \n509,709\n \n \n \n \n \n \n \n749\n \n \n \n \n \n \n \n0.20\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n362,326\n \n \n \n \n \n \n \n1,197\n \n \n \n \n \n \n \n0.44\n \n \n \n%\n \n \n \n \n \nMoney market\n \n \n \n \n \n \n \n674,858\n \n \n \n \n \n \n \n862\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n649,999\n \n \n \n \n \n \n \n2,555\n \n \n \n \n \n \n \n0.52\n \n \n \n%\n \n \n \n \n \nCertificates of deposit\n \n \n \n \n \n \n \n48,540\n \n \n \n \n \n \n \n360\n \n \n \n \n \n \n \n0.99\n \n \n \n%\n \n \n \n \n \n \n \n122,781\n \n \n \n \n \n \n \n1,890\n \n \n \n \n \n \n \n2.05\n \n \n \n%\n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n139,205\n \n \n \n \n \n \n \n825\n \n \n \n \n \n \n \n0.79\n \n \n \n%\n \n \n \n \n \n \n \n132,811\n \n \n \n \n \n \n \n2,021\n \n \n \n \n \n \n \n2.03\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing deposits\n \n \n \n \n \n \n \n1,372,312\n \n \n \n \n \n \n \n2,796\n \n \n \n \n \n \n \n0.27\n \n \n \n%\n \n \n \n \n \n \n \n1,267,917\n \n \n \n \n \n \n \n7,663\n \n \n \n \n \n \n \n0.81\n \n \n \n%\n \n \n \n \n \nFHLB advances\n \n \n \n \n \n \n \n384,581\n \n \n \n \n \n \n \n3,761\n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \n \n \n371,738\n \n \n \n \n \n \n \n4,198\n \n \n \n \n \n \n \n1.51\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 \n16,855\n \n \n \n \n \n \n \n44\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 \n30,811\n \n \n \n \n \n \n \n1,293\n \n \n \n \n \n \n \n5.60\n \n \n \n%\n \n \n \n \n \n \n \n24,490\n \n \n \n \n \n \n \n1,110\n \n \n \n \n \n \n \n6.04\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 \n832\n \n \n \n \n \n \n \n11.02\n \n \n \n%\n \n \n \n \n \n \n \n10,052\n \n \n \n \n \n \n \n835\n \n \n \n \n \n \n \n11.07\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\n \n \n \n \n \n \n \n1,797,770\n \n \n \n \n \n \n \n8,682\n \n \n \n \n \n \n \n0.64\n \n \n \n%\n \n \n \n \n \n \n \n1,691,052\n \n \n \n \n \n \n \n13,850\n \n \n \n \n \n \n \n1.09\n \n \n \n%\n \n \n \n \n \nNon-interest-bearing demand deposit accounts\n \n \n \n \n \n \n \n523,368\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n392,455\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 \n63,366\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n80,270\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 \n2,384,504\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,163,777\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 \n217,843\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n194,015\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 \n2,602,347\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,357,792\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n63,738\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n54,558\n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.04\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n658,863\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n514,746\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.30\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \nThe average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.\n \n \n \n \n \n(2)\n \n \n \n \nIncludes amortized cost basis of assets available for sale and held to maturity.\n \n \n \n \n \n(3)\n \n \n \n \nYields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.\n \n \n \n \n \n(4)\n \n \n \n \nRepresents annualized yields/rates.\n \n \n \n \n \n \n PROVISION FOR LOAN AND LEASE LOSS COMPOSITION \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n \n \n For the Nine Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \nChange in general reserve due to subjective factor changes\n \n \n \n \n \n \n \n$\n \n \n \n(51\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(652\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \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$\n \n \n \n379\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4,697\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(923\n \n \n \n)\n \n \n \n \n \n \n \n(1,687\n \n \n \n)\n \n \n \n \n \n \n \n(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(3,594\n \n \n \n)\n \n \n \n \n \n \n \n(380\n \n \n \n)\n \n \n \n \n \nCharge-offs\n \n \n \n \n \n \n \n364\n \n \n \n \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 \n3,402\n \n \n \n \n \n \n \n \n \n \n \n1,454\n \n \n \n \n \n \n \n \n \nRecoveries\n \n \n \n \n \n \n \n(1,634\n \n \n \n)\n \n \n \n \n \n \n \n(545\n \n \n \n)\n \n \n \n \n \n \n \n(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(4,852\n \n \n \n)\n \n \n \n \n \n \n \n(264\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(451\n \n \n \n)\n \n \n \n \n \n \n \n(1,466\n \n \n \n)\n \n \n \n \n \n \n \n(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 \n(2,111\n \n \n \n)\n \n \n \n \n \n \n \n5,533\n \n \n \n \n \n \n \n \n \nChange due to loan growth, net\n \n \n \n \n \n \n \n426\n \n \n \n \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 \n1,481\n \n \n \n \n \n \n \n \n \n \n \n1,447\n \n \n \n \n \n \n \n \n \nTotal provision for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n(2,269\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(958\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(2,068\n \n \n \n)\n \n \n \n \n \n \n \n$\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 \n(5,295\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n12,487\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 Nine Months Ended \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n 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 September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \nReturn on average assets (annualized)\n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n1.26\n \n \n \n%\n \n \n \n \n \n \n \n1.51\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 \n1.39\n \n \n \n%\n \n \n \n \n \n \n \n0.62\n \n \n \n%\n \n \n \n \n \nReturn on average equity (annualized)\n \n \n \n \n \n \n \n16.39\n \n \n \n%\n \n \n \n \n \n \n \n15.09\n \n \n \n%\n \n \n \n \n \n \n \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 \n16.63\n \n \n \n%\n \n \n \n \n \n \n \n7.49\n \n \n \n%\n \n \n \n \n \nEfficiency ratio\n \n \n \n \n \n \n \n65.68\n \n \n \n%\n \n \n \n \n \n \n \n64.17\n \n \n \n%\n \n \n \n \n \n \n \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 \n64.02\n \n \n \n%\n \n \n \n \n \n \n \n64.29\n \n \n \n%\n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \n \n \n3.31\n \n \n \n%\n \n \n \n \n \n \n \n3.27\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 \n3.29\n \n \n \n%\n \n \n \n \n \n \n \n3.04\n \n \n \n%\n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n3.45\n \n \n \n%\n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n3.44\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 \n3.46\n \n \n \n%\n \n \n \n \n \n \n \n3.30\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 \n139.19\n \n \n \n%\n \n \n \n \n \n \n \n136.54\n \n \n \n%\n \n \n \n \n \n \n \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 \n136.65\n \n \n \n%\n \n \n \n \n \n \n \n130.44\n \n \n \n%\n \n \n \n \n \n \n ASSET QUALITY RATIOS \n \n \n \n \n \n \n \n \n \n \n (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 September 30 ,\n 2021 \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 \nNon-accrual loans and leases\n \n \n \n \n \n \n \n$\n \n \n \n7,433\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,422\n \n \n \n \n \n \n \n \n \n \n \n$\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 \nForeclosed properties\n \n \n \n \n \n \n \n172\n \n \n \n \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 \nTotal non-performing assets\n \n \n \n \n \n \n \n7,605\n \n \n \n \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 \nPerforming troubled debt restructurings\n \n \n \n \n \n \n \n53\n \n \n \n \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 \nTotal impaired assets\n \n \n \n \n \n \n \n$\n \n \n \n7,658\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,657\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,082\n \n \n \n \n \n \n \n \n \n \n \n$\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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n0.35\n \n \n \n%\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 \nNon-performing assets as a percent of total gross loans and leases plus foreclosed properties\n \n \n \n \n \n \n \n0.36\n \n \n \n%\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 \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n0.29\n \n \n \n%\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 \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n1.16\n \n \n \n%\n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n1.29\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 \nAllowance for loan and lease losses as a percent of non-accrual loans and leases\n \n \n \n \n \n \n \n331.98\n \n \n \n%\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 ASSET QUALITY RATIOS - EXCLUDING NET PPP LOANS \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n September 30 ,\n 2021 \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 \nNon-accrual loans and leases as a percent of total gross loans and leases\n \n \n \n \n \n \n \n0.36\n \n \n \n%\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 \nNon-performing assets as a percent of total gross loans and leases plus foreclosed properties\n \n \n \n \n \n \n \n0.37\n \n \n \n%\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 \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n0.30\n \n \n \n%\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 \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 \n1.27\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 \nPPP loans outstanding, net\n \n \n \n \n \n \n \n$\n \n \n \n64,454\n \n \n \n \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 \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 \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n \n \n For the Nine Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n 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 September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \nCharge-offs\n \n \n \n \n \n \n \n$\n \n \n \n364\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,894\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n144\n \n \n \n \n \n \n \n \n \n \n \n$\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 \n3,402\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,454\n \n \n \n \n \n \n \n \n \nRecoveries\n \n \n \n \n \n \n \n(1,634\n \n \n \n)\n \n \n \n \n \n \n \n(545\n \n \n \n)\n \n \n \n \n \n \n \n(2,673\n \n \n \n)\n \n \n \n \n \n \n \n(68\n \n \n \n)\n \n \n \n \n \n \n \n(23\n \n \n \n)\n \n \n \n \n \n \n \n(4,852\n \n \n \n)\n \n \n \n \n \n \n \n(264\n \n \n \n)\n \n \n \n \n \nNet (recoveries) charge-offs\n \n \n \n \n \n \n \n$\n \n \n \n(1,270\n \n \n \n)\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$\n \n \n \n(1,450\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n1,190\n \n \n \n \n \n \n \n \n \nNet (recoveries) charge-offs as a percent of average gross loans and leases (annualized)\n \n \n \n \n \n \n \n(0.24\n \n \n \n)%\n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n(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 \n(0.09\n \n \n \n)%\n \n \n \n \n \n \n \n0.08\n \n \n \n%\n \n \n \n \n \nAnnualized (recoveries) charge-offs as a percent of average gross loans and leases, excluding average net PPP loans\n \n \n \n \n \n \n \n(0.25\n \n \n \n)%\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 \n(0.10\n \n \n \n)%\n \n \n \n \n \n \n \n0.09\n \n \n \n%\n \n \n \n \n \nAverage PPP loans outstanding, net\n \n \n \n \n \n \n \n$\n \n \n \n87,517\n \n \n \n \n \n \n \n \n \n \n \n$\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 \n185,742\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n192,451\n \n \n \n \n \n \n \n \n \n \n CAPITAL RATIOS \n \n \n \n \n \n \n \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 September 30 ,\n 2021 \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 \nTotal capital to risk-weighted assets\n \n \n \n \n \n \n \n11.14\n \n \n \n%\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 \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 \n9.14\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 \nCommon equity tier I capital to risk-weighted assets\n \n \n \n \n \n \n \n8.73\n \n \n \n%\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 \nTier I capital to adjusted assets\n \n \n \n \n \n \n \n8.69\n \n \n \n%\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 \nTangible common equity to tangible assets\n \n \n \n \n \n \n \n8.28\n \n \n \n%\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 \nTangible common equity to tangible assets, excluding net PPP loans\n \n \n \n \n \n \n \n8.50\n \n \n \n%\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 LOAN AND LEASE RECEIVABLE COMPOSITION \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (in thousands) \n \n \n \n \n \n \n \n September 30 ,\n 2021 \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 \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 \n241,977\n \n \n \n \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 \nCommercial real estate - non-owner occupied\n \n \n \n \n \n \n \n639,423\n \n \n \n \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 \nLand development\n \n \n \n \n \n \n \n39,119\n \n \n \n \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 \nConstruction\n \n \n \n \n \n \n \n139,933\n \n \n \n \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 \nMulti-family\n \n \n \n \n \n \n \n313,787\n \n \n \n \n \n \n \n \n \n \n \n319,351\n \n \n \n \n \n \n \n \n \n \n \n322,384\n \n \n \n \n \n \n \n \n \n \n \n311,556\n \n \n \n \n \n \n \n \n \n \n \n287,583\n \n \n \n \n \n \n \n \n \n1-4 family\n \n \n \n \n \n \n \n13,487\n \n \n \n \n \n \n \n \n \n \n \n19,769\n \n \n \n \n \n \n \n \n \n \n \n23,319\n \n \n \n \n \n \n \n \n \n \n \n38,284\n \n \n \n \n \n \n \n \n \n \n \n38,857\n \n \n \n \n \n \n \n \n \nTotal commercial real estate\n \n \n \n \n \n \n \n1,387,726\n \n \n \n \n \n \n \n \n \n \n \n1,392,008\n \n \n \n \n \n \n \n \n \n \n \n1,392,494\n \n \n \n \n \n \n \n \n \n \n \n1,359,136\n \n \n \n \n \n \n \n \n \n \n \n1,326,517\n \n \n \n \n \n \n \n \n \nCommercial and industrial\n \n \n \n \n \n \n \n681,065\n \n \n \n \n \n \n \n \n \n \n \n695,442\n \n \n \n \n \n \n \n \n \n \n \n784,305\n \n \n \n \n \n \n \n \n \n \n \n732,318\n \n \n \n \n \n \n \n \n \n \n \n790,349\n \n \n \n \n \n \n \n \n \nDirect financing leases, net\n \n \n \n \n \n \n \n16,810\n \n \n \n \n \n \n \n \n \n \n \n18,142\n \n \n \n \n \n \n \n \n \n \n \n19,616\n \n \n \n \n \n \n \n \n \n \n \n22,331\n \n \n \n \n \n \n \n \n \n \n \n24,743\n \n \n \n \n \n \n \n \n \nConsumer and other:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nHome equity and second mortgages\n \n \n \n \n \n \n \n4,576\n \n \n \n \n \n \n \n \n \n \n \n5,740\n \n \n \n \n \n \n \n \n \n \n \n6,719\n \n \n \n \n \n \n \n \n \n \n \n7,833\n \n \n \n \n \n \n \n \n \n \n \n7,106\n \n \n \n \n \n \n \n \n \nOther\n \n \n \n \n \n \n \n35,645\n \n \n \n \n \n \n \n \n \n \n \n36,567\n \n \n \n \n \n \n \n \n \n \n \n38,266\n \n \n \n \n \n \n \n \n \n \n \n28,897\n \n \n \n \n \n \n \n \n \n \n \n29,341\n \n \n \n \n \n \n \n \n \nTotal consumer and other\n \n \n \n \n \n \n \n40,221\n \n \n \n \n \n \n \n \n \n \n \n42,307\n \n \n \n \n \n \n \n \n \n \n \n44,985\n \n \n \n \n \n \n \n \n \n \n \n36,730\n \n \n \n \n \n \n \n \n \n \n \n36,447\n \n \n \n \n \n \n \n \n \nTotal gross loans and leases receivable\n \n \n \n \n \n \n \n2,125,822\n \n \n \n \n \n \n \n \n \n \n \n2,147,899\n \n \n \n \n \n \n \n \n \n \n \n2,241,400\n \n \n \n \n \n \n \n \n \n \n \n2,150,515\n \n \n \n \n \n \n \n \n \n \n \n2,178,056\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 \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n24,676\n \n \n \n \n \n \n \n \n \n \n \n25,675\n \n \n \n \n \n \n \n \n \n \n \n28,982\n \n \n \n \n \n \n \n \n \n \n \n28,521\n \n \n \n \n \n \n \n \n \n \n \n30,817\n \n \n \n \n \n \n \n \n \nDeferred loan fees\n \n \n \n \n \n \n \n2,516\n \n \n \n \n \n \n \n \n \n \n \n4,338\n \n \n \n \n \n \n \n \n \n \n \n6,288\n \n \n \n \n \n \n \n \n \n \n \n4,545\n \n \n \n \n \n \n \n \n \n \n \n7,757\n \n \n \n \n \n \n \n \n \nLoans and leases receivable, net\n \n \n \n \n \n \n \n$\n \n \n \n2,098,630\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,117,886\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,206,130\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,117,449\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,139,482\n \n \n \n \n \n \n \n \n \n \n LEGACY SBA 7(a) AND EXPRESS LOAN COMPOSITION (1) \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (in thousands) \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \n \n \n December 31 ,\n 2020 \n \n \n \n \n \n \n \n September 30 ,\n 2020 \n \n \n \n \n \nPerforming loans:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nOff-balance sheet loans\n \n \n \n \n \n \n \n$\n \n \n \n13,340\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n14,161\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n17,523\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,354\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26,017\n \n \n \n \n \n \n \n \n \nOn-balance sheet loan...

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