First Business Bank Reports Third Quarter 2022 Net Income of $10.6 Million

About this update from First Business Financial Services, Inc.

[{"type":"text","content":" \n-- Net interest margin expansion and balance sheet growth drive record top line revenue and tangible book value growth --\n \n MADISON, Wis. --(BUSINESS WIRE)--\n First Business Financial Services, Inc. (the “Company”, the “Bank”, or “First Business Bank”) (Nasdaq:FBIZ) reported quarterly net income available to common shareholders of $10.6 million , or $1.25 diluted earnings per share. This compares to net income available to common shareholders of $11.0 million , or $1.29 per share, in the second quarter of 2022 and $9.2 million , or $1.07 per share, in the third quarter of 2021.\n \n“In the third quarter, loan and deposit growth and net interest margin expansion helped generate a 12% increase in top line revenue compared to the second quarter of 2022. In addition, the Bank’s exceptional asset quality continued, as we reported our lowest percentage of non-performing assets to total assets in nearly 20 years at just 0.13%,” President and Chief Executive Officer Corey Chambas said. “We were also very pleased to see significant deposit growth during the quarter, increasing 16% annualized, more than fully funding our 8% annualized loan growth,” Chambas added. “Our capital base remains strong and, unlike many of our peers, we have continued to increase tangible book value and maintain tangible common equity in excess of 8%.”\n \n Quarterly Highlights \n \n \n Strong Profitability Metrics. Pre-tax, pre-provision adjusted (“PTPP”) earnings, excluding Paycheck Protection Program (“PPP”) interest and fee income, grew to a record $14.1 million , increasing $3.5 million , or 32.6%, from the linked quarter and $6.3 million , or 80.4%, from the prior year quarter. Continued improvement in profitability was driven by an increase in top line revenue, which rose $3.7 million , or 12.2%, from the linked quarter and $7.7 million , or 29.1%, from the prior year quarter. With continued positive operating leverage, the Company increased PTPP return on average assets to 2.05% in the third quarter of 2022, compared to 1.57% in linked quarter and 1.24% in the prior year quarter.\n \n \n \n Record Top Line Revenue and Net Interest Margin Expansion. Net interest income grew to a record $25.9 million , increasing $2.2 million , or 9.4%, from the linked quarter and $4.7 million , or 22.0%, from the prior year quarter. This increase was primarily due to a 30 and 56 basis point expansion in net interest margin compared to the linked and prior year quarters, respectively. The net interest margin expansion resulted from rising rates on variable-rate loans and lower deposit betas on in-market deposits during the third quarter of 2022. Average loans and leases receivable increased $43.7 million , or 7.7% annualized, and $185.5 , or 8.71%, compared to the linked and prior year quarters, respectively.\n \n \n \n Deposit Growth. Enhanced focus on relationship-based deposit generation and the return of cyclical deposits following second quarter client utilization led to in-market deposit growth of $72.2 million , or 15.6% annualized, from the second quarter of 2022.\n \n \n \n Exceptional Asset Quality. Continued positive asset quality trends resulted in the decline of non-performing assets to $3.8 million , or 0.13% of total assets, improving from 0.29% of total assets on September 30, 2021 . The Company recorded a loan loss provision of $12,000 , compared to a provision benefit of $3.7 million in the second quarter of 2022 and $2.3 million in the third quarter of 2021.\n \n \n \n Tangible Book Value Growth. The Company’s strong earnings continued to offset the interest-rate-driven market value decline in the investment portfolio, producing a 7.5% annualized increase in tangible book value compared to the linked quarter and 8.0% compared to the prior year quarter.\n \n \n \n \n Quarterly Financial Results \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Nine Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\n \n \n \n25,884\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,660\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,223\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n70,971\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n63,738\n \n \n \n \n \n \n \n \n \nAdjusted non-interest income (1)\n \n \n \n \n \n \n \n \n \n \n \n8,197\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,872\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,015\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,455\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n20,502\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n \n \n \n \n34,081\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n30,532\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,238\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n93,426\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n84,240\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n \n \n \n \n19,925\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n19,685\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,546\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n58,497\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53,928\n \n \n \n \n \n \n \n \n \nPre-tax, pre-provision adjusted earnings (1)\n \n \n \n \n \n \n \n \n \n \n \n14,156\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,847\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n9,692\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n34,929\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n30,312\n \n \n \n \n \n \n \n \n \nLess:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nProvision for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n12\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(3,727\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(2,269\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,569\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 \nNet loss on foreclosed properties\n \n \n \n \n \n \n \n \n \n \n \n7\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7\n \n \n \n \n \n \n \n \n \nAmortization of other intangible assets\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23\n \n \n \n \n \n \n \n \n \nSBA recourse provision (benefit)\n \n \n \n \n \n \n \n \n \n \n \n96\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n114\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(69\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n134\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n45\n \n \n \n \n \n \n \n \n \nTax credit investment impairment recovery\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(351\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(351\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nAdd:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet gain on sale of securities\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \nIncome before income tax expense\n \n \n \n \n \n \n \n \n \n \n \n14,041\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n14,803\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,017\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39,688\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n35,561\n \n \n \n \n \n \n \n \n \nIncome tax expense\n \n \n \n \n \n \n \n \n \n \n \n3,215\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,599\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,819\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,986\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,396\n \n \n \n \n \n \n \n \n \nNet income\n \n \n \n \n \n \n \n$\n \n \n \n10,826\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,204\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,198\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n30,702\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27,165\n \n \n \n \n \n \n \n \n \nPreferred stock dividends\n \n \n \n \n \n \n \n \n \n \n \n218\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n246\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n464\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nNet income available to common shareholders\n \n \n \n \n \n \n \n$\n \n \n \n10,608\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n10,958\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,198\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n30,238\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27,165\n \n \n \n \n \n \n \n \n \nEarnings per share, diluted\n \n \n \n \n \n \n \n$\n \n \n \n1.25\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.29\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.07\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3.57\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3.15\n \n \n \n \n \n \n \n \n \nBook value per share\n \n \n \n \n \n \n \n$\n \n \n \n28.58\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n28.08\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.56\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n28.58\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.56\n \n \n \n \n \n \n \n \n \nTangible book value per share (1)\n \n \n \n \n \n \n \n$\n \n \n \n27.13\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.63\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 \n27.13\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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin (2)\n \n \n \n \n \n \n \n \n \n \n \n4.01\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.71\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.45\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.71\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \nAdjusted net interest margin (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n3.89\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 \n3.22\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \nFee income ratio (non-interest income / total revenue)\n \n \n \n \n \n \n \n \n \n \n \n24.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n22.51\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.84\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.36\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n58.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n64.47\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n65.68\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n62.61\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n64.02\n \n \n \n%\n \n \n \n \n \nReturn on average assets (2)\n \n \n \n \n \n \n \n \n \n \n \n1.57\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.65\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.49\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.39\n \n \n \n%\n \n \n \n \n \nPre-tax, pre-provision adjusted return on average assets (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n2.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.60\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.49\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.72\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.55\n \n \n \n%\n \n \n \n \n \nReturn on average common equity (2)\n \n \n \n \n \n \n \n \n \n \n \n16.97\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n18.27\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n16.39\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n16.59\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n16.63\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n2,330,700\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,290,100\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,123,306\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,330,700\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,123,306\n \n \n \n \n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,316,621\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,272,946\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,131,099\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,278,333\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,178,947\n \n \n \n \n \n \n \n \n \nPeriod-end in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,929,224\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,857,010\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,829,644\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,929,224\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,829,644\n \n \n \n \n \n \n \n \n \nAverage in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,930,995\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,900,842\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,810,948\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,921,465\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,756,475\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n24,143\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,104\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,676\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,143\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,676\n \n \n \n \n \n \n \n \n \nNon-performing assets\n \n \n \n \n \n \n \n$\n \n \n \n3,796\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n5,709\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 \n3,796\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n7,605\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n1.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.16\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.16\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \nThis is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.\n \n \n \n \n \n(2)\n \n \n \n \nCalculation is annualized.\n \n \n \n \n \n \n Quarterly Financial Results - Excluding PPP Loans, Interest Income, and Fees \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Nine Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\n \n \n \n25,812\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,435\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,336\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n70,373\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n55,928\n \n \n \n \n \n \n \n \n \nAdjusted non-interest income (1)\n \n \n \n \n \n \n \n \n \n \n \n8,197\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,872\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,015\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,455\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n20,502\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n \n \n \n \n34,009\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n30,307\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26,351\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n92,828\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n76,430\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n \n \n \n \n19,925\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n19,685\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,546\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n58,497\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53,928\n \n \n \n \n \n \n \n \n \nPre-tax, pre-provision adjusted earnings (1)\n \n \n \n \n \n \n \n$\n \n \n \n14,084\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n10,622\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n7,805\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n34,331\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n22,502\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin (2)\n \n \n \n \n \n \n \n \n \n \n \n4.00\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.69\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.26\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.69\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.28\n \n \n \n%\n \n \n \n \n \nFee income ratio (non-interest income / total revenue)\n \n \n \n \n \n \n \n \n \n \n \n24.10\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n22.67\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n26.62\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24.19\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n26.85\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n58.59\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n64.95\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n70.38\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n63.02\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n70.56\n \n \n \n%\n \n \n \n \n \nPre-tax, pre-provision adjusted return on average assets (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n2.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.57\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.69\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPeriod-end loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,328,376\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,281,928\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,058,852\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,328,376\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,058,852\n \n \n \n \n \n \n \n \n \nSpecialized lending as a percent of total loans and leases\n \n \n \n \n \n \n \n \n \n \n \n22.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n20.76\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n18.33\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n22.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n18.33\n \n \n \n%\n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,312,116\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,261,296\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,043,582\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,266,030\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,993,206\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n1.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.06\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.30\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.30\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 2022 Compared to Second Quarter 2022 \n \nNet interest income increased $2.2 million , or 9.4%, to $25.9 million .\n \n \nNet interest income growth was driven by an increase in average loans and leases and net interest margin expansion, partially offset by a decrease in fees in lieu of interest. Average loans and leases receivable increased $43.7 million , or 7.7% annualized, to $2.3 billion . Fees in lieu of interest, which can vary from quarter to quarter based on client-driven activity, totaled $807,000 , compared to $1.9 million , as the prior quarter included a significant non-accrual interest recovery. Excluding fees in lieu of interest and interest income from PPP loans, net interest income increased $3.3 million , or 15.2%.\n \n \nThe yield on average interest-earning assets increased 68 basis points to 4.92% from 4.24%. Excluding average net PPP loans, PPP loan interest income, and fees in lieu of interest, the yield earned on average interest-earning assets increased 84 basis points to 4.80% from 3.96%.\n \n \nThe rate paid for average interest-bearing, in-market deposits increased 59 basis points to 0.88% from 0.29%. The rate paid for average total bank funding increased 43 basis points to 0.89% from 0.46%. Total bank funding is defined as total deposits plus Federal Home Loan Bank (“FHLB”) advances. The daily average effective federal funds rate increased 141 basis points compared to the linked quarter, which equates to an in-market, interest-bearing deposit beta of 41.9% for the three months ended September 30, 2022 .\n \n \nNet interest margin was 4.01%, up 30 basis points compared to 3.71% in the linked quarter. Adjusted net interest margin1 was 3.89%, up 44 basis points compared to 3.45% in the linked quarter. Net interest margin expansion resulted from rising rates on variable-rate loans and lower deposit betas on in-market deposits, as the federal funds target rate reached its highest point since the Great Recession.\n \n \nThe Bank continues to maintain an asset-sensitive balance sheet and ended the quarter positioned for net interest income to continue to benefit from rising rates. However, the Bank anticipates deposit betas will rise at a greater rate with further increases expected in the federal funds rate during the fourth quarter, which will slow the pace of net interest margin expansion.\n \n \n \n ____________________ \n \n \n \n1 Adjusted net interest margin is a non-GAAP measure representing net interest income excluding fees in lieu of interest and other recurring, but volatile, components of net interest margin divided by average interest-earning assets less average net PPP loans and other recurring, but volatile, components of average interest-earning assets.\n \n \n \n \nThe Company reported provision expense of $12,000 , compared to a $3.7 million benefit in the second quarter of 2022 due to a large loan recovery.\n \n \nThe provision expense in the third quarter of 2022 was primarily due to an increase in the general reserve of $400,000 related to loan growth and a $132,000 increase due to qualitative factor changes, as well as a $447,000 net increase in specific reserves, partially offset by a $940,000 reduction in general reserve from change in loss factors derived from historical look-back period.\n \n \nNon-interest income increased $1.3 million , or 19.3%, to $8.2 million .\n \n \nOther fee income increased $1.8 million to $2.7 million , compared to $860,000 in the second quarter. The increase was primarily due to strong returns on the Company’s investments in mezzanine funds and gains recognized on end-of-term buyout agreements related to the Company’s equipment financing business line.\n \n \nLoan fees increased $117,000 , or 16.8% to $814,000 from the increase in loans as well as an increase in commercial and industrial activity (“C&I”) generating additional service fee income.\n \n \nPrivate Wealth management fee income decreased $234,000 , or 8.2% to $2.6 million . Private Wealth and trust assets under management and administration measured $2.493 billion at September 30, 2022 , down $61.1 million from the second quarter. The decrease in fee income and assets under management and administration was due to a decrease in market valuations.\n \n \nGains on sale of Small Business Administration (“SBA”) loans decreased $219,000 , or 23.0%, to $732,000 . Premiums on the sale and notional value of SBA loans sold decreased compared to prior quarter.\n \n \nCommercial loan swap fee income decreased $130,000 , or 27.6%, to $341,000 . Swap fee income can vary from period to period based on loan activity and the interest rate environment.\n \n \nNon-interest expense increased $572,000 , or 2.9%, to $20.0 million , while operating expense increased $240,000 , or 1.2%, to $19.9 million .\n \n \nCompensation expense was $14.8 million , reflecting an increase of $797,000 , or 5.7%, from the linked quarter due to a $441,000 one-time increase to the annual cash incentive bonus program accrual, as well as expanded hiring to support the Bank’s growth plans. Management believes there will be upward pressure on compensation throughout the remainder of the year as the Bank continues to opportunistically invest in new talent and retain existing talent in the competitive market. Average FTEs for the third quarter of 2022 were 333, up twelve from 321 in the linked quarter.\n \n \nProfessional fees decreased $95,000 , or 7.3%, to $1.2 million from the linked quarter primarily due to a decrease in recruiting expense.\n \n \nMarketing expense decreased $127,000 , or 19.0%, to $543,000 from the linked quarter primarily due to seasonally higher spending in the second quarter related to sponsorships.\n \n \nData processing expense decreased $173,000 , or 19.4%, to $719,000 from the linked quarter primarily due to the decrease in recurring annual expense related to tax processing on behalf of the Bank’s Private Wealth management clients in the second quarter.\n \n \nIncome tax expense decreased $384,000 , or 10.7%, to $3.2 million . The effective tax rate was 22.9% for the three months ended September 30, 2022 , compared to 23.5% for the same period in 2021. The three months ended September 30, 2022 included a $155,000 net benefit from a low income housing tax credit investment; no tax credits were recognized in the second quarter of 2022. For 2022, the Company expects to report an effective tax rate less than 22.5% as management continues to actively pursue tax credit opportunities.\n \nTotal period-end loans and leases receivable increased $40.6 million , or 7.1% annualized, to $2.331 billion . Excluding net PPP loans, total period-end loans and leases receivable increased $46.4 million , or 8.1% annualized, to $2.328 billion .\n \n \nC&I loans increased $47.6 million , or 25.6% annualized, to $789.0 million , compared to $741.4 million . Excluding PPP loans, C&I loans increased $53.5 million , or 29.2% annualized, due to an increase in Equipment Finance and Asset-Based Lending.\n \n \nCommercial real estate (“CRE”) loans decreased by $3.5 million , or 1.0% annualized, to $1.485 billion , compared to $1.488 billion . A decrease in construction loans reflected migration to other CRE categories.\n \n \nTotal period-end in-market deposits increased $72.2 million , or 15.6% annualized, to $1.929 billion , compared to $1.857 billion . The average rate paid was 0.61%, up 41 basis points from 0.20% in the second quarter.\n \nPeriod-end wholesale funding, including FHLB advances, brokered deposits, and deposits gathered through internet deposit listing services, decreased $30.3 million to $536.1 million .\n \n \nWholesale deposits increased $146.0 million to $158.3 million , compared to $12.3 million as the Bank replaced FHLB advances with wholesale deposits. This shift in wholesale funding is consistent with our funding philosophy to manage interest rate risk by utilizing the most efficient and cost-effective source of wholesale funds to match-fund our fixed-rate loan portfolio. The average rate paid on wholesale deposits decreased 52 basis points to 2.46% and the weighted average original maturity decreased to 0.3 years from 4.8 years.\n \n \nFHLB advances decreased $176.3 million to $377.8 million . The average rate paid on FHLB advances increased 53 basis points to 2.01% and the weighted average original maturity increased to 4.8 years from 3.2 years.\n \n \nNon-performing assets decreased to $3.8 million , or 0.13% of total assets, compared to $5.7 million , or 0.21% of total assets, primarily due to the payoff of a non-accrual loan.\n \nThe allowance for loan and lease losses increased $39,000 , or 0.2%, as increases in the general reserve from loan growth, changes in qualitative factors, and an increase in specific reserves were partially offset by a decrease in the general reserve due to a change in loss factors derived from the historical look-back period.\n \nThe allowance for loan and lease losses as a percent of total gross loans and leases was 1.04% compared to 1.05%.\n \n Third Quarter 2022 Compared to Third Quarter 2021 \n \nNet interest income increased $4.7 million , or 22.0%, to $25.9 million .\n \n \nThe increase in net interest income primarily reflects an increase in average gross loans and leases and net interest margin expansion, partially offset by lower fees in lieu of interest. Fees in lieu of interest decreased from $2.8 million to $807,000 , primarily due to a $1.6 million reduction in PPP loan fee amortization. Excluding fees in lieu of interest and interest income from PPP loans, net interest income increased $6.9 million , or 38.0%. Excluding net PPP loans, average gross loans and leases increased $268.5 million , or 13.1%.\n \n \nNet interest margin increased 56 basis points to 4.01% from 3.45%. Adjusted net interest margin increased 67 basis points to 3.89% from 3.22%.\n \n \nThe yield on average interest-earning assets measured 4.92% compared to 3.90%. Excluding fees in lieu of interest, PPP loan interest income, and net PPP loans, the yield on average interest-earning assets measured 4.80%, compared to 3.53%. This increase in yield was primarily due to the increase in short-term market rates and the reinvestment of cash flows from the securities and fixed rate loan portfolios in a rising rate environment.\n \n \nThe rate paid for average interest-bearing in-market deposits increased 68 basis points to 0.88% from 0.20%. The rate paid for average total bank funding increased 53 basis points to 0.89% from 0.36%.\n \n \nThe Company reported provision expense of $12,000 , compared to a provision benefit of $2.3 million in the third quarter of 2021 due to large loan recoveries in the prior year.\n \nNon-interest income of $8.2 million increased by $1.2 million , or 16.8%, from $7.0 million in the prior year period.\n \n \nOther fee income increased $806,000 , or 53.4%, to $2.3 million , due to above-average returns on the Company’s investments in mezzanine funds and gains recognized on end-of-term buyout agreements related to the Company’s equipment financing business line.\n \n \nCommercial loan swap fee income was $341,000 . There was no swap fee activity in the prior year quarter. Swap fee income varies from period to period based on loan activity and the interest rate environment.\n \n \nLoan fees of $814,000 increased by $101,000 , or 14.2%, primarily due to an increase in C&I lending activity.\n \n \nService charges on deposits increased $62,000 , or 6.5%, to $1.0 million , due to an increase in existing and new deposit client relationships.\n \n \nPrivate Wealth management fee income decreased $141,000 , or 5.1%, to $2.6 million , due to a decline in market values. Private Wealth and trust assets under management and administration measured $2.493 billion at September 30, 2022 , down $255.1 million , or 9.3%.\n \n \nNon-interest expense increased $1.5 million , or 8.3%, to $20.0 million . Operating expense increased $1.4 million , or 7.4%, to $19.9 million .\n \n \nCompensation expense increased $1.5 million , or 11.0%, to $14.8 million . Average FTEs were 333 in the third quarter of 2022, compared to 311 in the third quarter of 2021. The increase in compensation expense is consistent with the explanations discussed above in the linked quarter analysis.\n \n \nProfessional fees increased $179,000 , or 17.5%, to $1.2 million , primarily due to an increase in recruiting expense, audit expenses, and a general increase in other professional consulting services for various projects.\n \n \nComputer software expense increased $129,000 , or 12.9%, to $1.1 million , primarily due to an increase in technology costs driven by higher headcount.\n \n \nOther non-interest expense decreased $134,000 , or 19.1%, to $569,000 mainly due to higher deferred loan origination costs driven by loan volume increases in our Equipment Finance business line.\n \n \nTotal period-end loans and leases receivable increased $207.4 million , or 9.8%, to $2.331 billion . Excluding net PPP loans, total period-end loans and leases receivable increased $269.5 million , or 13.1%, to $2.328 billion .\n \n \nC&I loans increased $107.9 million , or 15.8% to $789.0 million . Excluding PPP loans, C&I loans increased $171.4 million , or 27.9%, to $786.6 million due to expansion of existing markets and products.\n \n \nCRE loans increased $97.2 million , or 7.0%, due to increases in all CRE categories.\n \n \nTotal period-end in-market deposits increased $99.6 million , or 5.4%, to $1.929 billion and the average rate paid increased 47 basis points to 0.61%. This increase in deposits was principally due to a $103.1 million increase in certificates of deposit, partially offset by a $17.3 million decrease in transaction accounts.\n \nPeriod-end wholesale funding increased $103.7 million to $536.1 million .\n \n \nWholesale deposits increased $83.7 million , or 112.1%, to $158.3 million , as the Bank utilized more wholesale deposits in lieu of short-term FHLB advances. The average rate paid on brokered certificates of deposit increased 154 basis points to 2.46% and the weighted average original maturity decreased to 0.3 years from 3.5 years.\n \n \nFHLB advances increased $20.0 million to $377.8 million . The average rate paid on FHLB advances increased 72 basis points to 2.01% and the weighted average original maturity decreased to 4.8 years from 6.1 years.\n \n \nNon-performing assets decreased to $3.8 million , or 0.13% of total assets, compared to $7.6 million , or 0.29% of total assets.\n \nThe allowance for loan and lease losses decreased $533,000 to $24.1 million , compared to $24.7 million .\n \n \nThe allowance for loan and lease losses as a percent of total gross loans and leases was 1.04% compared to 1.16%.\n \n \n Paycheck Protection Program \n \nAs of September 30, 2022 , the Company had $2.4 million in gross PPP loans outstanding and deferred processing fees outstanding of $52,000 . The processing fees are deferred and recognized over the contractual life of the loan, or accelerated at forgiveness, as an adjustment of yield using the interest method. During the three months ended September 30, 2022 , the Company recognized $61,000 of PPP processing fees in interest income. The SBA provides a guaranty to the lender of 100% of principal and interest unless the lender violated an obligation under the agreement.\n \n Share Repurchase Program Update \n \nAs previously announced, effective March 4, 2022 , the Company’s Board of Directors authorized the repurchase by the Company of shares of its common stock with a maximum aggregate purchase price of $5.0 million , effective March 4, 2022 through March 4, 2023 . As of October 25, 2022 , the Company had repurchased a total of 88,735 shares for approximately $2.9 million at an average cost of $33.17 per share.\n \nAbout First Business Financial Services, Inc. \n \n First Business Financial Services, Inc. , (Nasdaq: FBIZ) is the parent company of First Business Bank . First Business Bank specializes in business banking, including commercial banking and specialized lending, private wealth, and bank consulting services, and through its refined focus, delivers unmatched expertise, accessibility, and responsiveness. Specialized lending solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC . For additional information, visit firstbusiness.bank .\n \nThis release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect First Business Bank’s current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs, and projections expressed in such statements. Such statements are subject to risks and uncertainties, including among other things:\n \n \nAdverse changes in the economy or business conditions, either nationally or in our markets including, without limitation, inflation, supply chain issues, labor shortages, and the adverse effects of the COVID-19 pandemic on the global, national, and local economy.\n \n \nCompetitive pressures among depository and other financial institutions nationally and in the Company’s markets.\n \n \nIncreases in defaults by borrowers and other delinquencies.\n \n \nManagement’s ability to manage growth effectively, including the successful expansion of our client service, administrative infrastructure, and internal management systems.\n \n \nFluctuations in interest rates and market prices.\n \n \nChanges in legislative or regulatory requirements applicable to the Company and its 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 the Company’s 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, 2021 and other filings with the Securities and Exchange Commission .\n \n \n \n SELECTED FINANCIAL CONDITION DATA \n \n \n \n \n \n \n \n \n (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 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCash and cash equivalents\n \n \n \n \n \n \n \n$\n \n \n \n110,965\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n95,484\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n95,603\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n57,110\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n110,624\n \n \n \n \n \n \n \n \n \nSecurities available-for-sale, at fair value\n \n \n \n \n \n \n \n \n \n \n \n196,566\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n208,643\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n223,631\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n205,702\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n194,056\n \n \n \n \n \n \n \n \n \nSecurities held-to-maturity, at amortized cost\n \n \n \n \n \n \n \n \n \n \n \n13,531\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,968\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,267\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n19,746\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,196\n \n \n \n \n \n \n \n \n \nLoans held for sale\n \n \n \n \n \n \n \n \n \n \n \n773\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,256\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,418\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,570\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,603\n \n \n \n \n \n \n \n \n \nLoans and leases receivable\n \n \n \n \n \n \n \n \n \n \n \n2,330,700\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,290,100\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,251,249\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,239,408\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,123,306\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n(24,143\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(24,104\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(23,669\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(24,336\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(24,676\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 \n2,306,557\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,265,996\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,227,580\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,215,072\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,098,630\n \n \n \n \n \n \n \n \n \nPremises and equipment, net\n \n \n \n \n \n \n \n \n \n \n \n3,143\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,899\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,621\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,694\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,700\n \n \n \n \n \n \n \n \n \nForeclosed properties\n \n \n \n \n \n \n \n \n \n \n \n151\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n124\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n117\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n164\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n172\n \n \n \n \n \n \n \n \n \nRight-of-use assets\n \n \n \n \n \n \n \n \n \n \n \n5,424\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,772\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,118\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,910\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,263\n \n \n \n \n \n \n \n \n \nBank-owned life insurance\n \n \n \n \n \n \n \n \n \n \n \n54,683\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n54,324\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53,974\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53,600\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53,244\n \n \n \n \n \n \n \n \n \n Federal Home Loan Bank stock, at cost\n \n \n \n \n \n \n \n \n \n \n \n15,701\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,959\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,863\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,336\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,351\n \n \n \n \n \n \n \n \n \n Goodwill and other intangible assets\n \n \n \n \n \n \n \n \n \n \n \n12,218\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,262\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,184\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,268\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,229\n \n \n \n \n \n \n \n \n \nDerivatives\n \n \n \n \n \n \n \n \n \n \n \n73,718\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n44,461\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26,890\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26,343\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,678\n \n \n \n \n \n \n \n \n \nAccrued interest receivable and other assets\n \n \n \n \n \n \n \n \n \n \n \n57,372\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n48,868\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n43,816\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39,390\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n40,664\n \n \n \n \n \n \n \n \n \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,850,802\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,777,016\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,724,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,652,905\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,584,410\n \n \n \n \n \n \n \n \n \n Liabilities and Stockholders’ Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nIn-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,929,224\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,857,010\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,011,373\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,928,285\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,829,644\n \n \n \n \n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n158,321\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,321\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,321\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29,638\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n74,638\n \n \n \n \n \n \n \n \n \nTotal deposits\n \n \n \n \n \n \n \n \n \n \n \n2,087,545\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,869,331\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,023,694\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,957,923\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,904,282\n \n \n \n \n \n \n \n \n \n Federal Home Loan Bank advances and other borrowings\n \n \n \n \n \n \n \n \n \n \n \n420,297\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n596,642\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n414,487\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n403,451\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n394,090\n \n \n \n \n \n \n \n \n \nJunior subordinated notes\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,076\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,072\n \n \n \n \n \n \n \n \n \nLease liabilities\n \n \n \n \n \n \n \n \n \n \n \n6,827\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,207\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,580\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,406\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,780\n \n \n \n \n \n \n \n \n \nDerivatives\n \n \n \n \n \n \n \n \n \n \n \n66,162\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n40,357\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24,961\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,283\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n31,890\n \n \n \n \n \n \n \n \n \nAccrued interest payable and other liabilities\n \n \n \n \n \n \n \n \n \n \n \n16,967\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,556\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,309\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n15,344\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,016\n \n \n \n \n \n \n \n \n \nTotal liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,597,798\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,527,093\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,479,031\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,420,483\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,359,130\n \n \n \n \n \n \n \n \n \nTotal stockholders’ equity\n \n \n \n \n \n \n \n \n \n \n \n253,004\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n249,923\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n245,051\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n232,422\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n225,280\n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,850,802\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,777,016\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,724,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,652,905\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,584,410\n \n \n \n \n \n \n \n \n \n \n STATEMENTS OF INCOME \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Nine Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \nTotal interest income\n \n \n \n \n \n \n \n$\n \n \n \n31,786\n \n \n \n \n \n \n \n$\n \n \n \n27,031\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,576\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,014\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n83,053\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n72,420\n \n \n \n \n \n \n \n \n \nTotal interest expense\n \n \n \n \n \n \n \n \n \n \n \n5,902\n \n \n \n \n \n \n \n \n \n \n \n3,371\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,809\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,791\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,082\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,682\n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n25,884\n \n \n \n \n \n \n \n \n \n \n \n23,660\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,426\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n20,924\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,223\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n70,971\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 \nProvision for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n12\n \n \n \n \n \n \n \n \n \n \n \n(3,727\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(855\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(508\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(2,269\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,569\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 \nNet interest income after provision for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n25,872\n \n \n \n \n \n \n \n \n \n \n \n27,387\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,281\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,432\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23,492\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n75,540\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n69,033\n \n \n \n \n \n \n \n \n \nPrivate wealth management service fees\n \n \n \n \n \n \n \n \n \n \n \n2,618\n \n \n \n \n \n \n \n \n \n \n \n2,852\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,841\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,874\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,759\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,311\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,910\n \n \n \n \n \n \n \n \n \nGain on sale of SBA loans\n \n \n \n \n \n \n \n \n \n \n \n732\n \n \n \n \n \n \n \n \n \n \n \n951\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n585\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n721\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,269\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,002\n \n \n \n \n \n \n \n \n \nService charges on deposits\n \n \n \n \n \n \n \n \n \n \n \n1,018\n \n \n \n \n \n \n \n \n \n \n \n1,041\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n999\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,023\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n956\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,058\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,814\n \n \n \n \n \n \n \n \n \nLoan fees\n \n \n \n \n \n \n \n \n \n \n \n814\n \n \n \n \n \n \n \n \n \n \n \n697\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n679\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n713\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,163\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,828\n \n \n \n \n \n \n \n \n \nNet gain on sale of securities\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \nSwap fees\n \n \n \n \n \n \n \n \n \n \n \n341\n \n \n \n \n \n \n \n \n \n \n \n471\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n225\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n684\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,038\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n684\n \n \n \n \n \n \n \n \n \nOther non-interest income\n \n \n \n \n \n \n \n \n \n \n \n2,674\n \n \n \n \n \n \n \n \n \n \n \n860\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,084\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,267\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,866\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,616\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,264\n \n \n \n \n \n \n \n \n \nTotal non-interest income\n \n \n \n \n \n \n \n \n \n \n \n8,197\n \n \n \n \n \n \n \n \n \n \n \n6,872\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,386\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,569\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,015\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,455\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n20,531\n \n \n \n \n \n \n \n \n \nCompensation\n \n \n \n \n \n \n \n \n \n \n \n14,817\n \n \n \n \n \n \n \n \n \n \n \n14,020\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,638\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,447\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,351\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n42,475\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39,263\n \n \n \n \n \n \n \n \n \nOccupancy\n \n \n \n \n \n \n \n \n \n \n \n566\n \n \n \n \n \n \n \n \n \n \n \n568\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n555\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n551\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n544\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,689\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,628\n \n \n \n \n \n \n \n \n \nProfessional fees\n \n \n \n \n \n \n \n \n \n \n \n1,203\n \n \n \n \n \n \n \n \n \n \n \n1,298\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,170\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n933\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,024\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,671\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,803\n \n \n \n \n \n \n \n \n \nData processing\n \n \n \n \n \n \n \n \n \n \n \n719\n \n \n \n \n \n \n \n \n \n \n \n892\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n780\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n773\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n746\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,391\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,315\n \n \n \n \n \n \n \n \n \nMarketing\n \n \n \n \n \n \n \n \n \n \n \n543\n \n \n \n \n \n \n \n \n \n \n \n670\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n500\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n548\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n572\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,713\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,474\n \n \n \n \n \n \n \n \n \nEquipment\n \n \n \n \n \n \n \n \n \n \n \n253\n \n \n \n \n \n \n \n \n \n \n \n235\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n244\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n223\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n260\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n732\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n767\n \n \n \n \n \n \n \n \n \nComputer software\n \n \n \n \n \n \n \n \n \n \n \n1,128\n \n \n \n \n \n \n \n \n \n \n \n1,117\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,082\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,017\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n999\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,327\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,244\n \n \n \n \n \n \n \n \n \n FDIC insurance\n \n \n \n \n \n \n \n \n \n \n \n230\n \n \n \n \n \n \n \n \n \n \n \n296\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n313\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n210\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n291\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n840\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n933\n \n \n \n \n \n \n \n \n \nOther non-interest expense\n \n \n \n \n \n \n \n \n \n \n \n569\n \n \n \n \n \n \n \n \n \n \n \n360\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n541\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n829\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n703\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,469\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,576\n \n \n \n \n \n \n \n \n \nTotal non-interest expense\n \n \n \n \n \n \n \n \n \n \n \n20,028\n \n \n \n \n \n \n \n \n \n \n \n19,456\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,823\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,531\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,490\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n58,307\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n54,003\n \n \n \n \n \n \n \n \n \nIncome before income tax expense\n \n \n \n \n \n \n \n \n \n \n \n14,041\n \n \n \n \n \n \n \n \n \n \n \n14,803\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,844\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,470\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,017\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39,688\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n35,561\n \n \n \n \n \n \n \n \n \nIncome tax expense\n \n \n \n \n \n \n \n \n \n \n \n3,215\n \n \n \n \n \n \n \n \n \n \n \n3,599\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,172\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,879\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,819\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,986\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,396\n \n \n \n \n \n \n \n \n \nNet income\n \n \n \n \n \n \n \n$\n \n \n \n10,826\n \n \n \n \n \n \n \n$\n \n \n \n11,204\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,672\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,198\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n30,702\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27,165\n \n \n \n \n \n \n \n \n \nPreferred stock dividends\n \n \n \n \n \n \n \n \n \n \n \n218\n \n \n \n \n \n \n \n \n \n \n \n246\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n464\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nNet income available to common shareholders\n \n \n \n \n \n \n \n$\n \n \n \n10,608\n \n \n \n \n \n \n \n$\n \n \n \n10,958\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,672\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,198\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n30,238\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27,165\n \n \n \n \n \n \n \n \n \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$\n \n \n \n1.25\n \n \n \n \n \n \n \n$\n \n \n \n1.29\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.02\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.01\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.07\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3.57\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 \nDiluted earnings\n \n \n \n \n \n \n \n \n \n \n \n1.25\n \n \n \n \n \n \n \n \n \n \n \n1.29\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.02\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.01\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.07\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.57\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 \nDividends declared\n \n \n \n \n \n \n \n \n \n \n \n0.1975\n \n \n \n \n \n \n \n \n \n \n \n0.1975\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.1975\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.18\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.18\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.5925\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.54\n \n \n \n \n \n \n \n \n \nBook value\n \n \n \n \n \n \n \n \n \n \n \n28.58\n \n \n \n \n \n \n \n \n \n \n \n28.08\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27.46\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27.48\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.56\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28.58\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.56\n \n \n \n \n \n \n \n \n \nTangible book value\n \n \n \n \n \n \n \n \n \n \n \n27.13\n \n \n \n \n \n \n \n \n \n \n \n26.63\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.02\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.03\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25.11\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27.13\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25.11\n \n \n \n \n \n \n \n \n \nWeighted-average common shares outstanding(1)\n \n \n \n \n \n \n \n \n \n \n \n8,230,902\n \n \n \n \n \n \n \n \n \n \n \n8,225,838\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,232,142\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,228,311\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,340,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,237,879\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,380,591\n \n \n \n \n \n \n \n \n \nWeighted-average diluted common shares outstanding(1)\n \n \n \n \n \n \n \n \n \n \n \n8,230,902\n \n \n \n \n \n \n \n \n \n \n \n8,225,838\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,232,142\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,228,311\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,340,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,237,879\n \n \n \n \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(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 (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, 2022 \n \n \n \n \n \n \n \n June 30, 2022 \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 Average\n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average\n Yield/\nRate(4) \n \n \n \n \n \n \n \n Average\n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average\n Yield/\nRate(4) \n \n \n \n \n \n \n \n Average\n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average\n Yield/\nRate(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 \n1,486,530\n \n \n \n \n \n \n \n$\n \n \n \n17,280\n \n \n \n \n \n \n \n4.65\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,472,075\n \n \n \n \n \n \n \n$\n \n \n \n15,343\n \n \n \n \n \n \n \n4.17\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,388,236\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 \nCommercial and industrial loans(1)\n \n \n \n \n \n \n \n \n \n \n \n765,440\n \n \n \n \n \n \n \n \n \n \n \n12,266\n \n \n \n \n \n \n \n6.41\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n734,299\n \n \n \n \n \n \n \n \n \n \n \n9,710\n \n \n \n \n \n \n \n5.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n680,563\n \n \n \n \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 \nDirect financing leases(1)\n \n \n \n \n \n \n \n \n \n \n \n15,093\n \n \n \n \n \n \n \n \n \n \n \n160\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n15,527\n \n \n \n \n \n \n \n \n \n \n \n176\n \n \n \n \n \n \n \n4.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n18,611\n \n \n \n \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 \nConsumer and other loans(1)\n \n \n \n \n \n \n \n \n \n \n \n49,558\n \n \n \n \n \n \n \n \n \n \n \n468\n \n \n \n \n \n \n \n3.78\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n51,045\n \n \n \n \n \n \n \n \n \n \n \n458\n \n \n \n \n \n \n \n3.59\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n43,689\n \n \n \n \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 \nTotal loans and leases receivable(1)\n \n \n \n \n \n \n \n \n \n \n \n2,316,621\n \n \n \n \n \n \n \n \n \n \n \n30,174\n \n \n \n \n \n \n \n5.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,272,946\n \n \n \n \n \n \n \n \n \n \n \n25,687\n \n \n \n \n \n \n \n4.52\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,131,099\n \n \n \n \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 \nMortgage-related securities(2)\n \n \n \n \n \n \n \n \n \n \n \n168,433\n \n \n \n \n \n \n \n \n \n \n \n915\n \n \n \n \n \n \n \n2.17\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n176,747\n \n \n \n \n \n \n \n \n \n \n \n804\n \n \n \n \n \n \n \n1.82\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n154,372\n \n \n \n \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 \nOther investment securities(3)\n \n \n \n \n \n \n \n \n \n \n \n51,812\n \n \n \n \n \n \n \n \n \n \n \n250\n \n \n \n \n \n \n \n1.93\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n54,591\n \n \n \n \n \n \n \n \n \n \n \n260\n \n \n \n \n \n \n \n1.91\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n45,196\n \n \n \n \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 \nFHLB stock\n \n \n \n \n \n \n \n \n \n \n \n18,167\n \n \n \n \n \n \n \n \n \n \n \n289\n \n \n \n \n \n \n \n6.36\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n17,355\n \n \n \n \n \n \n \n \n \n \n \n226\n \n \n \n \n \n \n \n5.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n13,279\n \n \n \n \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 \nShort-term investments\n \n \n \n \n \n \n \n \n \n \n \n27,912\n \n \n \n \n \n \n \n \n \n \n \n158\n \n \n \n \n \n \n \n2.26\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n29,541\n \n \n \n \n \n \n \n \n \n \n \n54\n \n \n \n \n \n \n \n0.73\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n116,621\n \n \n \n \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 \nTotal interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n2,582,945\n \n \n \n \n \n \n \n \n \n \n \n31,786\n \n \n \n \n \n \n \n4.92\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,551,180\n \n \n \n \n \n \n \n \n \n \n \n27,031\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,460,567\n \n \n \n \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 \nNon-interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n176,016\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n165,527\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n147,631\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 \n2,758,961\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,716,707\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,608,198\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$\n \n \n \n486,704\n \n \n \n \n \n \n \n \n \n \n \n1,005\n \n \n \n \n \n \n \n0.83\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n502,763\n \n \n \n \n \n \n \n \n \n \n \n343\n \n \n \n \n \n \n \n0.27\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n509,089\n \n \n \n \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 \nMoney market\n \n \n \n \n \n \n \n \n \n \n \n746,227\n \n \n \n \n \n \n \n \n \n \n \n1,610\n \n \n \n \n \n \n \n0.86\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n767,433\n \n \n \n \n \n \n \n \n \n \n \n509\n \n \n \n \n \n \n \n0.27\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n703,460\n \n \n \n \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 \nCertificates of deposit\n \n \n \n \n \n \n \n \n \n \n \n113,529\n \n \n \n \n \n \n \n \n \n \n \n340\n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n73,560\n \n \n \n \n \n \n \n \n \n \n \n114\n \n \n \n \n \n \n \n0.62\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n42,370\n \n \n \n \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 \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n36,702\n \n \n \n \n \n \n \n \n \n \n \n226\n \n \n \n \n \n \n \n2.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n12,350\n \n \n \n \n \n \n \n \n \n \n \n92\n \n \n \n \n \n \n \n2.98\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n89,135\n \n \n \n \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 \nTotal interest-bearing deposits\n \n \n \n \n \n \n \n \n \n \n \n1,383,162\n \n \n \n \n \n \n \n \n \n \n \n3,181\n \n \n \n \n \n \n \n0.92\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,356,106\n \n \n \n \n \n \n \n \n \n \n \n1,058\n \n \n \n \n \n \n \n0.31\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,344,054\n \n \n \n \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 \nFHLB advances\n \n \n \n \n \n \n \n \n \n \n \n432,528\n \n \n \n \n \n \n \n \n \n \n \n2,173\n \n \n \n \n \n \n \n2.01\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n449,599\n \n \n \n \n \n \n \n \n \n \n \n1,666\n \n \n \n \n \n \n \n1.48\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n381,061\n \n \n \n \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 \nOther borrowings\n \n \n \n \n \n \n \n \n \n \n \n42,800\n \n \n \n \n \n \n \n \n \n \n \n548\n \n \n \n \n \n \n \n5.12\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n51,018\n \n \n \n \n \n \n \n \n \n \n \n647\n \n \n \n \n \n \n \n5.07\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n32,630\n \n \n \n \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 \nJunior subordinated notes\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n—\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n—\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n10,070\n \n \n \n \n \n \n \n \n \n \n \n280\n \n \n \n \n \n \n \n11.12\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n1,858,490\n \n \n \n \n \n \n \n \n \n \n \n5,902\n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,856,723\n \n \n \n \n \n \n \n \n \n \n \n3,371\n \n \n \n \n \n \n \n0.73\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,767,815\n \n \n \n \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 \nNon-interest-bearing demand deposit accounts\n \n \n \n \n \n \n \n \n \n \n \n584,535\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n557,086\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n556,029\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nOther non-interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n60,705\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n57,615\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n59,865\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,503,730\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,471,424\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,383,709\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nStockholders’ equity\n \n \n \n \n \n \n \n \n \n \n \n255,231\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n245,283\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n224,489\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 \n2,758,961\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,716,707\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,608,198\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$\n \n \n \n25,884\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,660\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,223\n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.65\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.51\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n724,455\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n694,457\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n692,752\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4.01\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.71\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.45\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 (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, 2022 \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 Average\n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average\n Yield/\nRate(4) \n \n \n \n \n \n \n \n Average\n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average\n Yield/\nRate(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$\n \n \n \n1,472,930\n \n \n \n \n \n \n \n$\n \n \n \n45,969\n \n \n \n \n \n \n \n4.16\n \n \n \n%\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 \nCommercial and industrial loans(1)\n \n \n \n \n \n \n \n \n \n \n \n739,540\n \n \n \n \n \n \n \n \n \n \n \n31,077\n \n \n \n \n \n \n \n5.60\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n736,623\n \n \n \n \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 \nDirect financing leases(1)\n \n \n \n \n \n \n \n \n \n \n \n15,714\n \n \n \n \n \n \n \n \n \n \n \n526\n \n \n \n \n \n \n \n4.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n20,242\n \n \n \n \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 \nConsumer and other loans(1)\n \n \n \n \n \n \n \n \n \n \n \n50,149\n \n \n \n \n \n \n \n \n \n \n \n1,362\n \n \n \n \n \n \n \n3.62\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n44,780\n \n \n \n \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 \nTotal loans and leases receivable(1)\n \n \n \n \n \n \n \n \n \n \n \n2,278,333\n \n \n \n \n \n \n \n \n \n \n \n78,934\n \n \n \n \n \n \n \n4.62\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 \n69,333\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \nMortgage-related securities(2)\n \n \n \n \n \n \n \n \n \n \n \n176,654\n \n \n \n \n \n \n \n \n \n \n \n2,479\n \n \n \n \n \n \n \n1.87\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n155,617\n \n \n \n \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 \nOther investment securities(3)\n \n \n \n \n \n \n \n \n \n \n \n52,324\n \n \n \n \n \n \n \n \n \n \n \n725\n \n \n \n \n \n \n \n1.85\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n42,992\n \n \n \n \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 \nFHLB stock\n \n \n \n \n \n \n \n \n \n \n \n16,523\n \n \n \n \n \n \n \n \n \n \n \n688\n \n \n \n \n \n \n \n5.55\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n13,308\n \n \n \n \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 \nShort-term investments\n \n \n \n \n \n \n \n \n \n \n \n29,509\n \n \n \n \n \n \n \n \n \n \n \n227\n \n \n \n \n \n \n \n1.03\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n65,769\n \n \n \n \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 \nTotal interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n2,553,343\n \n \n \n \n \n \n \n \n \n \n \n83,053\n \n \n \n \n \n \n \n4.34\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,456,633\n \n \n \n \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 \nNon-interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n160,966\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,714,309\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,602,347\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$\n \n \n \n507,402\n \n \n \n \n \n \n \n \n \n \n \n1,602\n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n509,709\n \n \n \n \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 \nMoney market\n \n \n \n \n \n \n \n \n \n \n \n765,839\n \n \n \n \n \n \n \n \n \n \n \n2,458\n \n \n \n \n \n \n \n0.43\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n674,858\n \n \n \n \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 \nCertificates of deposit\n \n \n \n \n \n \n \n \n \n \n \n80,093\n \n \n \n \n \n \n \n \n \n \n \n509\n \n \n \n \n \n \n \n0.85\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n48,540\n \n \n \n \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 \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n21,838\n \n \n \n \n \n \n \n \n \n \n \n436\n \n \n \n \n \n \n \n2.66\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n139,205\n \n \n \n \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 \nTotal interest-bearing deposits\n \n \n \n \n \n \n \n \n \n \n \n1,375,172\n \n \n \n \n \n \n \n \n \n \n \n5,005\n \n \n \n \n \n \n \n0.49\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,372,312\n \n \n \n \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 \nFHLB advances\n \n \n \n \n \n \n \n \n \n \n \n422,576\n \n \n \n \n \n \n \n \n \n \n \n4,875\n \n \n \n \n \n \n \n1.54\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n384,581\n \n \n \n \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 \nOther borrowings\n \n \n \n \n \n \n \n \n \n \n \n44,719\n \n \n \n \n \n \n \n \n \n \n \n1,698\n \n \n \n \n \n \n \n5.06\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n30,811\n \n \n \n \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 \nJunior subordinated notes(5)\n \n \n \n \n \n \n \n \n \n \n \n3,247\n \n \n \n \n \n \n \n \n \n \n \n504\n \n \n \n \n \n \n \n20.69\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n10,066\n \n \n \n \n \n \n \n \n \n \n \n832\n \n \n \n \n \n \n \n11.02\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n1,845,714\n \n \n \n \n \n \n \n \n \n \n \n12,082\n \n \n \n \n \n \n \n0.87\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,797,770\n \n \n \n \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 \nNon-interest-bearing demand deposit accounts\n \n \n \n \n \n \n \n \n \n \n \n568,131\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n523,368\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nOther non-interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n53,685\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \nTotal liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,467,530\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,384,504\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nStockholders’ equity\n \n \n \n \n \n \n \n \n \n \n \n246,779\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,714,309\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,602,347\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$\n \n \n \n70,971\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n63,738\n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n3.46\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 \n3.29\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n707,629\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\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 \nNet interest margin\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.71\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.46\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(5)\n \n \n \n \nThe calculation for the nine months ended September 30, 2022 includes $236,000 in accelerated amortization of debt issuance costs.\n \n \n \n \n \n \n ASSET AND LIABILITY BETA ANALYSIS \n \n \n \n \n \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n For the Nine Months Ended \n \n \n \n \n \n (Unaudited) \n \n \n \n September 30 ,\n2022 \n \n \n \n \n \n \n \n June 30 ,\n2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 ,\n2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 ,\n2022 \n \n \n \n \n \n \n \n September 30 ,\n2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average\nYield/\nRate (3) \n \n \n \n \n \n \n \n Average\nYield/\nRate (3) \n \n \n \n \n \n \n \n Increase\n(Decrease) \n \n \n \n \n \n \n \n Average\nYield/\nRate (3) \n \n \n \n \n \n \n \n Increase\n(Decrease) \n \n \n \n \n \n \n \n Average\nYield/\nRate (3) \n \n \n \n \n \n \n \n Average\nYield/\nRate (3) \n \n \n \n \n \n \n \n Increase\n(Decrease) \n \n \n \n \n \nTotal loans and leases receivable (a)\n \n \n \n5.21\n \n \n \n%\n \n \n \n \n \n \n \n4.52\n \n \n \n%\n \n \n \n \n \n \n \n0.69\n \n \n \n%\n \n \n \n \n \n \n \n4.31\n \n \n \n%\n \n \n \n \n \n \n \n0.90\n \n \n \n%\n \n \n \n \n \n \n \n4.62\n \n \n \n%\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \n \n \n0.38\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets(b)\n \n \n \n4.92\n \n \n \n%\n \n \n \n \n \n \n \n4.24\n \n \n \n%\n \n \n \n \n \n \n \n0.68\n \n \n \n%\n \n \n \n \n \n \n \n3.90\n \n \n \n%\n \n \n \n \n \n \n \n1.02\n \n \n \n%\n \n \n \n \n \n \n \n4.34\n \n \n \n%\n \n \n \n \n \n \n \n3.93\n \n \n \n%\n \n \n \n \n \n \n \n0.41\n \n \n \n%\n \n \n \n \n \nAdjusted total loans and leases receivable (1)(c)\n \n \n \n5.08\n \n \n \n%\n \n \n \n \n \n \n \n4.21\n \n \n \n%\n \n \n \n \n \n \n \n0.87\n \n \n \n%\n \n \n \n \n \n \n \n3.89\n \n \n \n%\n \n \n \n \n \n \n \n1.19\n \n \n \n%\n \n \n \n \n \n \n \n4.40\n \n \n \n%\n \n \n \n \n \n \n \n3.91\n \n \n \n%\n \n \n \n \n \n \n \n0.49\n \n \n \n%\n \n \n \n \n \nAdjusted total interest-earning assets (1)(d)\n \n \n \n4.80\n \n \n \n%\n \n \n \n \n \n \n \n3.96\n \n \n \n%\n \n \n \n \n \n \n \n0.84\n \n \n \n%\n \n \n \n \n \n \n \n3.53\n \n \n \n%\n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n4.14\n \n \n \n%\n \n \n \n \n \n \n \n3.61\n \n \n \n%\n \n \n \n \n \n \n \n0.53\n \n \n \n%\n \n \n \n \n \nInterest-bearing in-market deposits(e)\n \n \n \n0.88\n \n \n \n%\n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n0.59\n \n \n \n%\n \n \n \n \n \n \n \n0.20\n \n \n \n%\n \n \n \n \n \n \n \n0.68\n \n \n \n%\n \n \n \n \n \n \n \n0.45\n \n \n \n%\n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n0.24\n \n \n \n%\n \n \n \n \n \nInterest-bearing deposits(f)\n \n \n \n0.92\n \n \n \n%\n \n \n \n \n \n \n \n0.31\n \n \n \n%\n \n \n \n \n \n \n \n0.61\n \n \n \n%\n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n0.67\n \n \n \n%\n \n \n \n \n \n \n \n0.49\n \n \n \n%\n \n \n \n \n \n \n \n0.27\n \n \n \n%\n \n \n \n \n \n \n \n0.22\n \n \n \n%\n \n \n \n \n \nInterest-bearing liabilities(g)\n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n0.73\n \n \n \n%\n \n \n \n \n \n \n \n0.54\n \n \n \n%\n \n \n \n \n \n \n \n0.63\n \n \n \n%\n \n \n \n \n \n \n \n0.64\n \n \n \n%\n \n \n \n \n \n \n \n0.87\n \n \n \n%\n \n \n \n \n \n \n \n0.64\n \n \n \n%\n \n \n \n \n \n \n \n0.23\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nEffective fed funds rate (2)(h)\n \n \n \n2.18\n \n \n \n%\n \n \n \n \n \n \n \n0.77\n \n \n \n%\n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n0.09\n \n \n \n%\n \n \n \n \n \n \n \n2.09\n \n \n \n%\n \n \n \n \n \n \n \n1.03\n \n \n \n%\n \n \n \n \n \n \n \n0.08\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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Beta Calculations: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal loans and leases receivable(a)/(h)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n48.90\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n43.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39.66\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets(b)/(h)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n48.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n48.74\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n42.77\n \n \n \n%\n \n \n \n \n \nAdjusted total loans and leases receivable (1)(c)/(h)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n61.70\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56.75\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n51.96\n \n \n \n%\n \n \n \n \n \nAdjusted total interest-earning assets (1)(d)/(h)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n59.92\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n60.87\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n55.80\n \n \n \n%\n \n \n \n \n \nInterest-bearing in-market deposits(e)/(h)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n41.87\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n32.43\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24.94\n \n \n \n%\n \n \n \n \n \nInterest-bearing deposits(f)/(h)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n43.11\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n32.14\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22.48\n \n \n \n%\n \n \n \n \n \nInterest-bearing liabilities(g)/(h)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n38.59\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n30.56\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24.09\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \nExcluding average net PPP loans, PPP loan interest income, and fees in lieu of interest.\n \n \n \n \n \n(2)\n \n \n \n \n Board of Governors of the Federal Reserve System (US), Effective Federal Funds Rate [DFF]. Retrieved from FRED, Federal Reserve Bank of St. Louis . Represents average daily rate.\n \n \n \n \n \n(3)\n \n \n \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 (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 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \nChange in general reserve due to qualitative factor changes\n \n \n \n \n \n \n \n$\n \n \n \n132\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(185\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(416\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(805\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(51\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(469\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n379\n \n \n \n \n \n \n \n \n \nChange in general reserve due to historical loss factor changes\n \n \n \n \n \n \n \n \n \n \n \n(940\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n64\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(206\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(862\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(923\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(1,082\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(3,594\n \n \n \n)\n \n \n \n \n \nCharge-offs\n \n \n \n \n \n \n \n \n \n \n \n54\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n85\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n106\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n364\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n161\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 \nRecoveries\n \n \n \n \n \n \n \n \n \n \n \n(81\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,247\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(210\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(274\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(1,634\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,537\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,852\n \n \n \n)\n \n \n \n \n \nChange in specific reserves on impaired loans, net\n \n \n \n \n \n \n \n \n \n \n \n447\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(280\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(64\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(451\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n196\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(2,111\n \n \n \n)\n \n \n \n \n \nChange due to loan growth, net\n \n \n \n \n \n \n \n \n \n \n \n400\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n527\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n235\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,391\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n426\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,162\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,481\n \n \n \n \n \n \n \n \n \nTotal provision for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n12\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(3,727\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(855\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(508\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(2,269\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(4,569\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 PERFORMANCE RATIOS \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n \n \n For the Nine Months Ended \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n June 30 ,\n 2022 \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2022 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \nReturn on average assets (annualized)\n \n \n \n \n \n \n \n1.57\n \n \n \n%\n \n \n \n \n \n \n \n1.65\n \n \n \n%\n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \n \n \n1.32\n \n \n \n%\n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n1.49\n \n \n \n%\n \n \n \n \n \n \n \n1.39\n \n \n \n%\n \n \n \n \n \nReturn on average equity (annualized)\n \n \n \n \n \n \n \n16.97\n \n \n \n%\n \n \n \n \n \n \n \n18.27\n \n \n \n%\n \n \n \n \n \n \n \n14.47\n \n \n \n%\n \n \n \n \n \n \n \n15.04\n \n \n \n%\n \n \n \n \n \n \n \n16.39\n \n \n \n%\n \n \n \n \n \n \n \n16.59\n \n \n \n%\n \n \n \n \n \n \n \n16.63\n \n \n \n%\n \n \n \n \n \nReturn on average tangible common equity (annualized)\n \n \n \n \n \n \n \n17.88\n \n \n \n%\n \n \n \n \n \n \n \n19.27\n \n \n \n%\n \n \n \n \n \n \n \n15.05\n \n \n \n%\n \n \n \n \n \n \n \n15.44\n \n \n \n%\n \n \n \n \n \n \n \n16.85\n \n \n \n%\n \n \n \n \n \n \n \n17.40\n \n \n \n%\n \n \n \n \n \n \n \n17.12\n \n \n \n%\n \n \n \n \n \nEfficiency ratio\n \n \n \n \n \n \n \n58.46\n \n \n \n%\n \n \n \n \n \n \n \n64.47\n \n \n \n%\n \n \n \n \n \n \n \n65.55\n \n \n \n%\n \n \n \n \n \n \n \n61.92\n \n \n \n%\n \n \n \n \n \n \n \n65.68\n \n \n \n%\n \n \n \n \n \n \n \n62.61\n \n \n \n%\n \n \n \n \n \n \n \n64.02\n \n \n \n%\n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n3.65\n \n \n \n%\n \n \n \n \n \n \n \n3.51\n \n \n \n%\n \n \n \n \n \n \n \n3.22\n \n \n \n%\n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n4.01\n \n \n \n%\n \n \n \n \n \n \n \n3.71\n \n \n \n%\n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n3.45\n \n \n \n%\n \n \n \n \n \n \n \n3.71\n \n \n \n%\n \n \n \n \n \n \n \n3.46\n \n \n \n%\n \n \n \n \n \nAverage interest-earning assets to average interest-bearing liabilities\n \n \n \n \n \n \n \n138.98\n \n \n \n%\n \n \n \n \n \n \n \n137.40\n \n \n \n%\n \n \n \n \n \n \n \n138.64\n \n \n \n%\n \n \n \n \n \n \n \n141.19\n \n \n \n%\n \n \n \n \n \n \n \n139.19\n \n \n \n%\n \n \n \n \n \n \n \n138.34\n \n \n \n%\n \n \n \n \n \n \n \n136.65\n \n \n \n%\n \n \n \n \n \n \n ASSET QUALITY RATIOS \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 2022 \n \n \n \n \n \n \...

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