EX-99.2 3 a992investorpresentation.htm EX-99.2 a992investorpresentation
Fixed Income Investor Presentation September 2019[Month] [Day], 2019Third Quarter 2021 Investor Presentation cshares, Inc. Exhibit 99.2


 
2 “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements within the meaning of the securities laws that are derived utilizing assumptions, present expectations, estimates and projections about Allegiance. These statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “continues”, “anticipates,” “intends,” “projects,” “estimates,” “potential”, “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts, although not all forward looking statements include the foregoing. Forward-looking statements include information concerning Allegiance’s expected future financial performance, business and growth strategy, projected plans and objectives, as well as projections of macroeconomic and industry trends, which are inherently unreliable due to the multiple factors that impact economic trends, and any such variations may be material. Such forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of Allegiance’s control, which may cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties include but are not limited to whether Allegiance can: continue to develop and maintain new and existing customer and community relationships; successfully implement its growth strategy, including identifying suitable acquisition targets and integrating the businesses of acquired companies and banks; sustain its current internal growth rate; provide quality and competitive products and services that appeal to its customers; continue to have access to debt and equity capital markets; and achieve its performance objectives. Additionally, the impact of the COVID-19 pandemic continues to evolve and its future effects on Allegiance are difficult to predict. These and various other factors are discussed in Allegiance's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and in other reports and statements Allegiance has filed with the Securities and Exchange Commission. Copies of such filings are available for download free of charge from the Investor Relations section of Allegiance's website at www.allegiancebank.com, under Financial Information, SEC Filings. Any forward-looking statement made by Allegiance in this presentation speaks only as of the date on which it is made. Factors or events that could cause Allegiance’s actual results to differ may emerge from time to time, and it is not possible for Allegiance to predict all of them. Because of these uncertainties, readers should not place undue reliance on any forward-looking statement. Allegiance disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. GAAP Reconciliation of Non-GAAP Financial Measures We use certain non-GAAP financial measures to evaluate our performance. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, we review return on average tangible common equity, the ratio of tangible equity to tangible assets and adjusted net interest margin on a tax equivalent basis for internal planning and forecasting purposes. We have included in this presentation information relating to these non-GAAP financial measures for the applicable periods presented. These non-GAAP measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate these non-GAAP financial measures may differ from that of other companies reporting measures with similar names. A reconciliation of the non-GAAP financial measures is in the appendix. Safe Harbor Statement and Non-GAAP Financial Measures


 
3 Allegiance Bancshares, Inc. Overview Franchise Footprint Holding Company for Allegiance Bank; Headquartered in Houston, Texas Company Overview Providing full-service banking services for small- to medium-sized businesses Operational History  27 full-service banking locations (at September 30, 2021) • 26 in the Houston-The Woodlands-Sugar Land MSA • 1 in the Beaumont-Port Arthur MSA, just outside of Houston  Since opening in 2007, we have completed three whole bank acquisitions and one branch transaction: • 2019: LoweryBank branch acquisition with $45.0 million in loans and $16.0 million in deposits • 2018: Post Oak Bank, N.A. (Post Oak Bancshares, Inc.) with $1.5 billion in total assets • 2015: Enterprise Bank (F&M Bancshares, Inc.) with $569.7 million in total assets • 2013: Independence Bank, N.A. with $222.1 million in total assets Financial Highlights ABTX Branch Locations (27) Galveston Houston Houston-The Woodlands-Sugar Land MSA Beaumont-Port Arthur MSA 10 10 45 45 Beaumont _____________________ (1) Please refer to the non-GAAP reconciliation in the appendix (2) Annualized ($ in millions) 9/30/2021 12/31/2020 12/31/2019 12/31/2018 12/31/2017 Total Assets 6,759.8$ 6,050.1$ 4,992.7$ 4,655.2$ 2,860.2$ Total Loans 4,289.5 4,491.8 3,915.3 3,708.3 2,270.9 Total Deposits 5,666.9 4,988.5 4,068.1 3,662.5 2,214.0 Total Equity 798.6 758.7 709.9 703.0 306.9 Loans/Deposits 75.69% 90.04% 96.24% 101.25% 102.57% NPAs/Assets 0.44% 0.63% 0.74% 0.72% 0.49% TCE/TA(1) 8.58% 8.90% 9.78% 10.29% 9.38% NIM (tax equivalent)(2 3.90% 4.08% 4.22% 4.27% 4.34% ROAA(2) 1.14% 0.81% 1.10% 1.11% 0.65% ROATCE(2) 13.49% 9.33% 11.50% 11.20% 6.93% Ba lan ce S he et Ca pi ta l, C re di t & P ro fit ab ilit y


 
4 Financial Highlights – Third Quarter 2021  Assets of $6.76 billion, loans of $4.29 billion, deposits of $5.67 billion and shareholder's equity of $798.6 million at September 30, 2021 • Deposit growth of $749.5 million, or 15.2%, from the third quarter 2020 • Asset growth of $792.0 million, or 13.3%, from the third quarter 2020 • Funded over $1.08 billion in PPP loans in 2020 and 2021 Balance Sheet Growth  Strong net income of $19.1 million for the third quarter 2021 compared to $16.2 million for the third quarter 2020 and $22.9 million for the second quarter 2021  Third quarter 2021 earnings were impacted by: • Net interest income growth of $6.3 million, or 12.1%, from the third quarter 2020 and $1.6 million, or 2.8% from the second quarter 2021 • $2.3 million provision for credit losses compared to $1.3 million in the third quarter 2020 and a $2.7 million recapture of credit losses in the second quarter 2021  Diluted EPS of $0.93 translated into an annualized return on average assets and average tangible equity(1) of 1.14% and 13.49%, respectively Profitability Net Interest Income and Margin  Net interest income increased to $58.2 million for third quarter 2021 compared to $51.9 million for the third quarter 2020 and $56.6 million for the second quarter 2021 • PPP fees of $7.4 million recognized in the third quarter 2021 compared to $2.0 million in the third quarter 2020 and $6.4 million in the second quarter 2021 • Net interest margin on a tax equivalent basis decreased to 3.90% for the third quarter 2021 from 3.95% for the third quarter 2020 and 4.02% for the second quarter 2021 Recognitions and Awards  Recognized as a Winner of Distinction at the Houston 2021 BBB Awards of Excellence _____________________ (1) Please refer to the non-GAAP reconciliation in the appendix.


 
5 Number of Branches Total Deposits In Market ($000) Total Market Share (%) % of Company Deposits Total Deposits In Market ($000) Total Market Share (%) Size Profile Houston-The Woodlands-Sugar Land, TX JPMorgan Chase & Co. (NY) 1 1 176 155,894,884$ 47.11 7.75 144,957,958$ 48.45 >$1T Wells Fargo & Co. (CA) 2 2 164 34,160,426 10.32 2.30 27,057,129 9.04 >$1T Bank of America Corporation (NC) 3 3 112 26,436,694 7.99 1.41 23,787,159 7.95 >$1T The PNC Finl Svcs Grp (PA) 4 4 86 14,991,787 4.53 3.33 16,073,270 5.37 >$500B Zions Bancorp. NA (UT) 5 5 59 13,834,338 4.18 18.18 11,527,801 3.85 >$80B Cullen/Frost Bankers Inc. (TX) 6 6 53 8,033,612 2.43 20.49 6,022,935 2.01 >$40B Prosperity Bancshares Inc. (TX) 7 8 58 6,444,413 1.95 22.07 5,635,177 1.88 >$30B Woodforest Financial Grp Inc. (TX) 8 10 105 6,280,274 1.90 72.01 5,349,523 1.79 >$9B Capital One Financial Corp. (VA) 9 9 22 6,243,102 1.89 2.03 5,463,024 1.83 >$400B Cadence Bancorp. (TX) 10 7 11 5,540,508 1.67 34.44 5,747,768 1.92 >$15B Allegiance Bancshares Inc. (TX) 11 11 26 5,215,366 1.58 95.53 4,568,351 1.53 ~$6.5B Comerica Inc. (TX) 12 12 49 3,554,038 1.07 4.65 3,457,262 1.16 >$80B Texas Capital Bancshares Inc. (TX) 13 13 2 3,543,956 1.07 12.10 3,037,992 1.02 >$30B Truist Financial Corp. (NC) 14 15 21 2,197,317 0.66 0.53 1,870,728 0.63 >$500B BOK Financial Corp. (OK) 15 16 11 2,127,591 0.64 5.65 1,802,005 0.60 >$40B CBTX Inc. (TX) 16 14 17 1,917,457 0.58 55.61 1,923,017 0.64 >$40B Regions Financial Corp. (AL) 17 18 52 1,830,098 0.55 1.38 1,692,428 0.57 >$100B Veritex Holdings Inc. (TX) 18 17 11 1,801,212 0.54 25.39 1,694,437 0.57 >$9B Independent Bk Group Inc. (TX) 19 19 13 1,791,921 0.54 11.89 1,585,009 0.53 >$15B First Horizon Corp. (TN) 20 20 7 1,700,009 0.51 2.29 1,533,609 0.51 >$80B Total For Institutions In Market 1,404 330,888,412$ 299,201,648$ 2020 Institution (ST) 2021 Rank 2020 Rank 2021 Deposit Market Share - Houston-The Woodlands-Sugar Land MSA _____________________ Source: S&P Global Intelligence as of June 30, 2021. (1) As of June 30 of the year shown, on a pro forma basis reflecting any announced acquisition. (1) (1) (1)


 
6 Historical Balance Sheet Growth Total LoansTotal Assets Total EquityTotal Deposits _____________________ Note: Dollars in millions. (1) Includes $1.50 billion in assets acquired on October 1, 2018. (2) Includes $1.16 billion of acquired loans at fair value on October 1, 2018. (3) Includes $1.29 billion of acquired deposits on October 1, 2018. (4) Includes $45.0 million of loans acquired on February 1, 2019. (5) Includes $16.0 million of deposits acquired on February 1, 2019. $2,451 $2,860 $4,655 $4,993 $6,050 $6,760 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 2016 2017 2018 2019 2020 2021 Q3 Assets Acquired Assets (1) (4) $1,892 $2,271 $3,708 $3,915 $4,492 $4,289 $0 $1,000 $2,000 $3,000 $4,000 $5,000 2016 2017 2018 2019 2020 2021 Q3 Loans Acquired Loans (2) (4) $1,870 $2,214 $3,663 $4,068 $4,988 $5,667 $0 $1,000 $2,000 $3,000 $4,000 $5,000 2016 2017 2018 2019 2020 2021 Q3 Deposits Acquired Deposits (3) (5) $280 $307 $703 $710 $759 $799 $0 $200 $400 $600 $800 2016 2017 2018 2019 2020 2021 Q3


 
7 $80.2 $89.9 $103.7 $128.6 $179.5 $202.7 $51.9 $58.2 4.68% 4.37% 4.34% 4.27% 4.22% 4.08% 3.95% 3.90% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 $180.0 $200.0 $220.0 2015 2016 2017 2018 2019 2020 2020 Q3 2021 Q3 Ne t I nt er es t M ar gi n (T ax E qu iv al en t) Ne t I nt er es t I nc om e Net Interest Income Net Interest Margin (TE) Earnings Performance Net Interest Income and Net Interest MarginNet Income and Earnings per Share _____________________ Note: Dollars in millions, except per share numbers. (1) Includes a one-time gain from sale of branches of $1.3 million (after-tax). (2) Includes $1.8 million and $1.7 million of core system conversion and acquisition and merger-related expenses, respectively, and $3.1 million of acquisition accounting adjustments. (3) Includes $9.6 million of acquisition accounting adjustments, $1.4 million of pre-tax severance expense and a $1.1 million FDIC Small Bank Assessment Credit. (1) (2) (3) (4) Includes $3.1 million of acquisition accounting adjustments; Adjusted net interest margin (tax equivalent) adjusted for acquisition accounting adjustments was 4.17%. Please refer to the non-GAAP reconciliation in the appendix. (5) Includes $9.6 million of acquisition accounting adjustments; Adjusted net interest margin (tax equivalent) adjusted for acquisition accounting adjustments was 4.00%. Please refer to the non-GAAP reconciliation in the appendix. (6) Annualized for the quarter ending September 30 for each respective year. (4) (5) (6) (6) $15.8 $22.9 $17.6 $37.3 $53.0 $45.5 $16.2 $19.1 $1.43 $1.75 $1.31 $2.37 $2.47 $2.22 $0.79 $0.93 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 2015 2016 2017 2018 2019 2020 2020 Q3 2021 Q3 Ea rn in gs p er S ha re ($ ) Ne t I nc om e Net Income Earnings per Share (Diluted)


 
8 6.30% 7.38% 9.22% 8.70% 9.52% 9.96% 6.93% 11.20% 11.50% 9.33% 12.72% 13.49% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Q3 2021 Q3 3.26% 2.99% 2.82% 2.80% 2.83% 2.53% 2.59% 2.58% 2.50% 2.26% 2.19% 2.05% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Q3 2021 Q3 74.4% 69.0% 69.2% 67.8% 65.3% 62.3% 63.9% 63.7% 63.0% 60.6% 60.6% 56.9% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Q3 2021 Q3 0.60% 0.65% 0.78% 0.75% 0.81% 0.98% 0.65% 1.11% 1.10% 0.81% 1.09% 1.14% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Q3 2021 Q3 Return on Average Tangible Common Equity(1)Return on Average Assets Noninterest Expense to Average AssetsEfficiency Ratio(7) _____________________ (1) Please refer to the non-GAAP reconciliation in the appendix. (2) Annualized for the quarter ending September 30 for each respective year. (3) Includes a one-time gain from sale of branches of $1.3 million (after-tax). (4) Includes $1.8 million and $1.7 million of core system conversion and merger-related expenses, respectively. (5) Includes $3.1 million of acquisition accounting adjustments. (1) Includes $9.6 million of acquisition accounting adjustments, $1.3 million of acquisition and merger related expenses, $1.4 million of pre-tax severance expense, $1.1 million FDIC Small Bank Assessment Credit, $1.5 million of gain on sales of securities offset by $572 thousand of prepayment penalties and $376 thousand of SBIC income (2) Includes $9.6 million of acquisition accounting adjustments, $1.3 million of acquisition and merger related expenses, $1.4 million of pre-tax severance expense, $1.1 million FDIC Small Bank Assessment Credit, $1.5 million of gain on sales of securities offset by $572 thousand of prepayment penalties and $376 thousand of SBIC income (3) Includes $9.6 million of acquisition accounting adjustments, $1.3 million of acquisition and merger related expenses, $1.4 million of pre-tax severance expense, $1.1 million FDIC Small Bank Assessment Credit, $1.5 million of gain on sales of securities offset by $572 thousand of prepayment penalties and $376 thousand of SBIC income (4) Includes $9.6 million of acquisition accounting adjustments, $1.3 million of acquisition and merger related expenses, $1.4 million of pre-tax severance expense, $1.1 million FDIC Small Bank Assessment Credit, $1.5 million of gain on sales of securities offset by $572 thousand of prepayment penalties and $376 thousand of SBIC income (5) Includes $9.6 million of acquisition accounting adjustments, $1.3 million of acquisition and merger related expenses, $1.4 million of pre-tax severance expense, $1.1 million FDIC Small Bank Assessment Credit, $1.5 million of gain on sales of securities offset by $572 thousand of prepayment penalties and $376 thousand of SBIC income (6) Includes $9.6 million of acquisition accounting adjustments, $1.3 million of acquisition and merger related expenses, $1.4 million of pre-tax severance expense, $1.1 million FDIC Small Bank Assessment Credit, $1.5 million of gain on sales of securities offset by $572 thousand of prepayment penalties and $376 thousand of SBIC income (7) Represents total noninterest expense divided by the sum of net interest income plus noninterest income, excluding net gains and losses on the sale of loans, securities and assets. Additionally, taxes and provision for loan losses are not part of this calculation. (3) (4)(5) (6) (6) (6) (4)(5) (4) (3) Earnings Performance, continued (2) (2) (2) (2) (2)(2)


 
9 4.89% 5.09% 5.15% 5.09% 5.32% 5.25% 5.11% 5.06% 5.07% 5.00% 0.57% 0.49% 0.41% 0.32% 0.28% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% Co st of D ep os its Yi eld o n Lo an s Yield on Loans Yield on Loans (excl. PPP) Cost of Deposits 3.95% 4.14% 4.19% 4.02% 3.90% 3.91% 4.12% 4.17% 4.01% 3.89% 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 3.50% 3.70% 3.90% 4.10% 4.30% 4.50% 4.70% Net Interest Margin (TE) Adjusted Net Interest Margin (TE) Yields and Cost Analysis Net Interest Margin(2)Loan Portfolio Reported Yields and Total Deposit Costs _____________________ (1) Adjusted net interest margin excludes acquisition accounting adjustments. Please refer to the non-GAAP reconciliation in the appendix. (2) Annualized for each respective quarter (1)(2) (2)


 
10 Common Equity Tier 1 RatioTangible Equity / Tangible Assets(1) Total Risk-Based RatioTier 1 Risk-Based Ratio Capital Position _____________________ (1) Please refer to the non-GAAP reconciliation in the appendix. 9.82% 9.38% 10.29% 9.78% 8.90% 8.58% 2016 2017 2018 2019 2020 2021 Q3 11.30% 10.54% 11.76% 11.42% 11.80% 12.37% 2016 2017 2018 2019 2020 2021 Q3 11.73% 10.92% 12.01% 11.66% 12.04% 12.60% 2016 2017 2018 2019 2020 2021 Q3 12.57% 13.43% 13.70% 14.83% 15.71% 16.13% 2016 2017 2018 2019 2020 2021 Q3


 
11 Deposit Composition and Growth Deposit Growth TrendDeposit Composition _____________________ Note: Dollars in millions. As of the quarter ended September 30, 2021. Certificates and Other T ime 24.4% Noninterest-bearing 36.8% Interest- bearing Demand 10.5% Money Market and Savings 28.3% Deposit Category ($) (%) Noninterest-bearing $ 2,086.7 36.8% Interest-bearing Demand 595.0 10.5% Money Market and Savings 1,604.2 28.3% Certificates and Other Time 1,381.0 24.4% Total $ 5,666.9 100.0% $1,870 $2,214 $3,663 $4,068 $4,988 $5,666 31.7% 30.9% 33.0% 30.8% 34.2% 36.8% 0.0% 10.0% 20.0% 30.0% 40.0% $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 2016 2017 2018 2019 2020 2021 Q3 No ni nt er es t-b ea rin g D ep os its to To ta l D ep os its De po sit s Deposits Noninterest-bearing (%)


 
12 C&I 17.0% Paycheck Protection Program (PPP) 6.8% CRE (incl. multifamily) 48.3% CRE C&D 8.9% Residential Construction 2.5% 1-4 family residential 15.9% Consumer & Other 0.6% Total Loan Portfolio Composition 54.1% of CRE is Owner-Occupied CRE (incl. multi-family) by Property Type CRE Construction by Property Type _____________________ Note: Dollars in millions, unless otherwise noted. As of the quarter ended September 30, 2021. (1) Includes classifications less than 2.0% of total composition. Loan Portfolio Composition Loan Category ($) (%) C&I 728.9$ 17.0% Paycheck Protection Program (PPP) 290.0 6.8% CRE (incl. multifamily) 2,073.5 48.3% CRE C&D 382.6 8.9% 1-4 family residential 683.9 15.9% Residential construction 104.7 2.5% Consumer & Other 25.9 0.6% Total 4,289.5$ 100.0% Retail 17.6% Office 15.7% Industrial Warehouse 14.6% C-Store 13.4% Hotel / Motel 5.4% Restaurant / Bar 3.9% Multi-Family 3.8% Church Facility 3.7% Day Care 3.0% Service Center 3.0% Healthcare 2.2% Rental / Investment 2.2% Mini Storage 2.2% Recreational 2.0% Other 7.3% Vacant Land-Near Term 29.7% Vacant Land- Future Construction 14.4% Resi. Vacant Land- Future Constr. 11.2% C-Store 6.5% Retail / Wholesale 6.5% Office 5.8% Industrial / Warehouse 3.3% Mobile Home / RV Park 3.1% Church Facility 2.7% Multi- Family 2.7% Serv ice Center 2.5% Other 11.7% Property Type ($) (%) Vacant Land-Near Term 113.6$ 29.7% Vacant Land-Future Construction 55.0 14.4% Resi. Vacant Land-Future Constr. 42.8 11.2% C-Store 25.0 6.5% Retail / Wholesale 25.0 6.5% Office 22.1 5.8% Industrial / Warehouse 12.5 3.3% Mobile Home / RV Park 11.8 3.1% Church Facility 10.5 2.7% Multi-Family 10.4 2.7% Service Center 9.7 2.5% Other(1) 44.2 11.7% Total 382.6$ 100.0% Property Type ($) (%) Retail 364.7$ 17.6% Office 325.6 15.7% Industrial Warehouse 302.3 14.6% C-Store 277.4 13.4% Hotel / Motel 111.6 5.4% Restaurant / Bar 80.1 3.9% Multi-Family 79.2 3.8% Church Facility 76.9 3.7% Day Care 62.6 3.0% Service Center 61.4 3.0% Healthcare 46.2 2.2% Rental / Investment 46.0 2.2% Mini Storage 45.5 2.2% Recreational 41.8 2.0% Other(1) 152.2 7.3% Total 2,073.5$ 100.0%


 
13 Total PPP Loan Composition _____________________ (1) Includes classifications less than 2.0% of total composition. PPP Loan Success – Over $1.08 Billion Funded  Tremendous support to our customers and non-customers  SBA Preferred Lender, Ranked #3 in PPP lending in Houston Region  Supported over 123,000 jobs  Approximately 4,000 new customers from the PPP effort  Customer retention program to retain our “new to bank” customers and expand “existing customer” relationships  Net fees from PPP programs amortized over the life of the loan  Net fees recognized in the nine months ended 2021 of $20.7 million  Net fees recognized in the nine months ended 2020 of $5.1 million  Unamortized net fees of $10.8 million as of September 30, 2021 Serv ices 23.7% Commercial Construction 17.6% Manufacturing 13.2% Retail / Wholesale 9.5% Restaurants / Bars 9.8% Health Care / Social Assistance 7.6% Real Estate, Rental, Leasing 4.2% Oil and Gas 3.6% Transportation 3.1% Finance / Insurance 2.2% Other(1) 5.5% PPP Program Number of Loans Funded Amount of Loans Funded (in thousands) Average Funded Loan Size (in thousands) Weighted Average Fee Amount of Funded Loans under $150,000 (in thousands) Balance of Funded Loans (in thousands) 2020 6,334 710,234$ 112.1$ 3.32% 340,314$ 26,309$ 2021 3,708 374,594 101.0$ 4.95% 120,510 263,719 Total 10,042 1,084,828$ 460,824$ 290,028$ As of September 30, 2021


 
14 Loan Deferral Composition as of September 30, 2021 _____________________ Note: Dollars in thousands. Loan Category Outstanding Loan Balance Loan Balance Percent Loan Balance Percent Loan Balance Percent Commercial and industrial 728,897$ 979$ 2.6% 78,871$ 10.1% 79,850$ 9.7% Paycheck Protection Program (PPP) 290,028 - 0.0% - 0.0% - 0.0% Real estate: Commercial real estate (including multi-family resident 2,073,521 32,780 87.6% 587,195 75.1% 619,975 75.7% Commercial real estate construction and land developm 382,610 1,987 5.3% 40,294 5.2% 42,281 5.2% 1-4 family residential (including home equity) 683,919 1,688 4.5% 73,530 9.4% 75,218 9.2% Residential construction 104,638 - 0.0% 1,321 0.2% 1,321 0.2% Consumer and other 25,856 - 0.0% 522 0.1% 522 0.1% Total loans 4,289,469$ 37,434$ 100.0% 781,733$ 100.0% 819,167$ 100.0% Inside of Deferral Period Outside of Deferral Period Total Loans That Have Had a Deferral


 
15 Allowance / Total LoansAllowance / Nonperforming Loans Net Charge-offs / Average Loans(1)Nonperforming Loans / Total Loans Strong Asset Quality (1) Annualized for the quarter ending September 30, 2021. 211.3% 300.0% 121.0% 258.8% 259.0% 252.7% 107.3% 177.4% 79.9% 103.8% 184.0% 178.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3 1.25% 1.20% 1.13% 0.80% 0.82% 0.78% 0.95% 1.04% 0.71% 0.75% 1.18% 1.18% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3 0.59% 0.02% 0.94% 0.31% 0.32% 0.31% 0.88% 0.59% 0.89% 0.72% 0.64% 0.66% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3 0.29% 0.25% 0.25% 0.02% 0.06% 0.06% 0.04% 0.36% 0.06% 0.07% 0.12% 0.04% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3


 
16 Our management uses certain non-GAAP financial measures in its analysis of our performance:  “Tangible Shareholders’ Equity” is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Tangible shareholders’ equity is defined as total shareholders’ equity reduced by goodwill and core deposit intangibles, net of accumulated amortization. This measure is important to investors interested in changes from period to period in shareholders’ equity, exclusive of changes in intangible assets. For tangible shareholders’ equity, the most directly comparable financial measure calculated in accordance with GAAP is total shareholders’ equity. Goodwill and other intangible assets have the effect of increasing total shareholders’ equity while not increasing our tangible shareholders’ equity.  “Tangible Equity to Tangible Assets” is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Tangible equity to tangible assets is defined as total shareholders’ equity reduced by goodwill and core deposit intangibles, net of accumulated amortization, divided by tangible assets, which are total assets reduced by goodwill and core deposit intangibles, net of accumulated amortization. This measure is important to investors interested in changes from period to period in equity and total assets, each exclusive of changes in intangible assets. For tangible equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total shareholders’ equity to total assets. Goodwill and other intangible assets have the effect of increasing both total shareholders’ equity and assets while not increasing our tangible common equity or tangible assets. Appendix: Non-GAAP Reconciliation _____________________ Note: Dollars in thousands. (1) Annualized for each respective quarter. For the Years Ended December 31, For the Quarters Ended September 30, 2016 2017 2018 2019 2020 2020(1) 2021(1) Total Shareholders' Equity 279,817$ 306,865$ 702,984$ 709,865$ 758,669$ 753,053$ 798,592$ Less: Goodwill and Core Deposit Intangibles, net 43,444 42,663 249,712 245,518 241,596 242,549 239,124 Tangible Shareholders' Equity 236,373$ 264,202$ 453,272$ 464,347$ 517,073$ 510,504$ 559,468$ Total Assets 2,450,948$ 2,860,231$ 4,655,249$ 4,992,654$ 6,050,128$ 5,967,751$ 6,759,761$ Less: Goodwill and Core Deposit Intangibles, net 43,444 42,663 249,712 245,518 241,596 242,549 239,124 Tangible Assets 2,407,504$ 2,817,568$ 4,405,537$ 4,747,136$ 5,808,532$ 5,725,202$ 6,520,637$ Tangible Equity to Tangible Assets 9.82% 9.38% 10.29% 9.78% 8.90% 8.92% 8.58% For the Quarters Ended September 30, 2016 2017 2018 2019 2020 2020(1) 2021(1) Net Income Attributable to Shareholders 22,851$ 17,632$ 37,309$ 52,959$ 45,534$ 16,170$ 19,060$ Average Shareholders' Equity 273,211 297,627 413,441 708,269 731,688 748,647 800,146 Less: Average Goodwill and Core Deposit Intangibles, net 43,880 43,050 80,384 247,854 243,513 243,015 239,497 Average Tangible Common Shareholders’ Equity 229,331$ 254,577$ 333,057$ 460,415$ 488,175$ 505,632$ 560,649$ Return on Average Tangible Common Equity 9.96% 6.93% 11.20% 11.50% 9.33% 12.72% 13.49% For the Year Ended December 31,


 
17 Non-GAAP Reconciliation, continued  “Adjusted Net Interest Margin (TE)” is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. Adjusted net interest margin is defined as net interest income, net of related acquisition accounting adjustments, divided average earnings assets. This measure is important to investors interested in changes from period to period in net interest income, exclusive of the impact from related acquisition accounting adjustments. For adjusted net interest margin, the most directly comparable financial measure calculated in accordance with GAAP is net interest margin. _____________________ Note: Dollars in thousands. (1) Annualized for each respective quarter. For the Three Months Ended, 9/30/2020 12/31/2020 3/31/2021 6/30/2021 9/30/2021 Interest Income 60,811$ 63,047$ 62,828$ 62,832$ 63,893$ Interest Expense 8,902 8,145 7,130 6,236 5,727 Tax Equivalent Adjustment 537 574 619 691 707 Net Interest Income (TE) 52,446 55,476 56,317 57,287 58,873 Less: Acquisition Accounting Adjustments (598) (342) (155) (206) (146) Adjusted Net Interest Income (TE) 51,848$ 55,134$ 56,162$ 57,081$ 58,727$ Average Earning Assets 5,281,517$ 5,329,107$ 5,456,445$ 5,713,429$ 5,996,153$ Net Interest Margin (TE) (1) 3.95% 4.14% 4.19% 4.02% 3.90% Adjusted Net Interest Margin (TE) (1) 3.91% 4.12% 4.17% 4.01% 3.89%