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Stellar Bancorp, Inc. Reports Third Quarter 2022 Results

October 28, 2022 at 7:01 AM EDT

HOUSTON, Oct. 28, 2022 (GLOBE NEWSWIRE) -- (NASDAQ: STEL) The merger of equals between CBTX, Inc. (CBTX) and Allegiance Bancshares, Inc. (Allegiance) became effective as of October 1, 2022, with the combined company renamed Stellar Bancorp, Inc. This press release includes the pre-merger financial results of stand-alone CBTX and stand-alone Allegiance for the periods presented. As such, these financial results do not include the impact of purchase accounting adjustments related to the merger.

Stellar Bancorp, Inc. (Stellar), formerly known as CBTX, reported net income of $12.7 million and diluted earnings per share of $0.52 for the third quarter 2022 compared to net income of $14.4 million and diluted earnings per share of $0.59 for the third quarter 2021. Net income for the nine months ended September 30, 2022 was $35.0 million, or $1.43 per diluted share, compared to $36.1 million, or $1.47 per diluted share, for the nine months ended September 30, 2021.

Allegiance reported net income of $14.3 million and diluted earnings per share of $0.71 for the third quarter 2022 compared to net income of $19.1 million and diluted earnings per share of $0.93 for the third quarter 2021. Net income for the nine months ended September 30, 2022 was $49.4 million, or $2.42 per diluted share, compared to $60.0 million, or $2.95 per diluted share, for the nine months ended September 30, 2021.

Third Quarter 2022 Financial Highlights

  • CBTX highlights
    • Loans held for investment grew 12.3% (annualized), or $93.5 million, during the third quarter 2022 to $3.13 billion
    • Net interest income increased 23.3%, or $8.1 million, compared to the second quarter of 2022
    • Tax equivalent net interest margin increased 76 basis points to 4.25% compared to the second quarter of 2022
  • Allegiance highlights
    • Loans held for investment grew 22.4% (annualized), or $243.1 million, during the third quarter 2022 to $4.59 billion
    • Net interest income increased 5.6%, or $3.2 million, compared to the second quarter of 2022
    • Tax equivalent net interest margin increased 32 basis points to 3.85% compared to the second quarter of 2022
 CBTX, Inc. Allegiance Bancshares, Inc.
3Q 2022 2Q 2022 3Q 2022 2Q 2022
 (Dollars in thousands, except per share data)
Net income$12,747  $11,707  $14,286  $16,437 
Pre-tax, pre-provision income(A)$17,140  $14,660  $19,654  $22,282 
Earnings per share, diluted$0.52  $0.48  $0.71  $0.80 
Efficiency ratio(B) 63.11%  61.84%  69.18%  62.96%
Acquisition and merger-related expenses$5,897  $1,100  $10,551  $1,667 
Adjusted pre-tax, pre-provision income(A)(C)$23,037  $15,760  $30,205  $23,949 
Adjusted efficiency ratio(A)(C) 50.42%  58.98%  52.61%  60.19%
                

(A)     Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on pages 11 and 18 of this Earnings Release.
(B)     Refer to the calculation of the efficiency ratio on pages 5 and 12 for CBTX and Allegiance, respectively.
(C)     Adjusted results exclude the impact of acquisition and merger-related expenses.

“We are proud to have closed the merger between CBTX and Allegiance to become Stellar,” said Stellar’s Chief Executive Officer Robert R. Franklin, Jr. “Both of our organizations entered this merger from tremendous positions of strength and with great momentum, providing Stellar a solid foundation upon which to build.”

“Our teams have worked diligently to ensure a successful integration of these two organizations. Together we are stronger and committed to providing value for our shareholders as we drive purposeful growth, deliver continued personalized service and invest in the communities that we serve,” concluded Franklin.

CBTX, Inc. Third Quarter 2022 Results

CBTX’s net interest income in the third quarter 2022 increased $11.8 million, or 37.6%, to $43.0 million from $31.2 million for the third quarter 2021 and increased $8.1 million, or 23.3%, from $34.9 million for the second quarter 2022. These increases were primarily due to increased interest income on loans and interest-bearing deposits at other financial institutions as a result of changes in market interest rates and increases in average loans and securities. The net interest margin on a tax equivalent basis increased 103 basis points to 4.25% for the third quarter 2022 from 3.22% for the third quarter 2021 and increased 76 basis points from 3.49% for the second quarter 2022.

Noninterest income for the third quarter 2022 was $3.4 million, a decrease of $2.1 million, or 38.0%, compared to $5.6 million for the third quarter 2021 and a decrease of $97 thousand, or 2.7%, compared to $3.5 million for the second quarter 2022. The decrease in noninterest income of $2.1 million during the three months ended September 30, 2022 compared to the three months ended September 30, 2021, was primarily due to the impact of earnings on bank-owned life insurance and related gains of $1.9 million during the third quarter of 2021.

Noninterest expense for the third quarter 2022 increased $4.9 million, or 20.3%, to $29.3 million from $24.4 million for the third quarter 2021 and increased $5.6 million, or 23.4%, compared to the second quarter of 2022. The increase in noninterest expense for the third quarter of 2022 compared to the third quarter of 2021, was primarily due to acquisition and merger-related expenses associated with the merger with Allegiance, partially offset by a decrease in professional and director fees, primarily related to BSA/AML compliance matters and legal fees incurred during the third quarter of 2021. The increase in noninterest expense for the third quarter of 2022 compared to the second quarter of 2022 was primarily due to greater acquisition and merger-related expenses.

CBTX’s efficiency ratio decreased to 63.11% for the third quarter 2022 compared to 66.21% for the third quarter 2021 and increased from 61.84% for the second quarter 2022. Third quarter 2022 annualized returns on average assets, average equity and average tangible equity were 1.16%, 9.40% and 11.15%, respectively, compared to 1.37%, 10.15% and 11.95% for the third quarter 2021. Annualized returns on average assets, average equity and average tangible equity for the second quarter 2022 were 1.08%, 8.75% and 10.38%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 11.

Financial Condition

CBTX’s total assets at September 30, 2022 increased $62.7 million, or 1.5%, to $4.27 billion compared to $4.21 billion at September 30, 2021 and decreased $50.5 million, or 4.6% (annualized), compared to $4.32 billion at June 30, 2022.

Total gross loans at September 30, 2022 increased $517.7 million, or 19.8%, to $3.13 billion compared to $2.61 billion at September 30, 2021, primarily due to organic loan growth, and increased $93.5 million, or 12.3% (annualized) compared to $3.03 billion at June 30, 2022 due to the increase in organic loans.

Deposits at September 30, 2022 increased $192.1 million, or 5.4%, to $3.72 billion compared to $3.53 billion at September 30, 2021 and decreased $32.9 million, or 3.5% (annualized), compared to $3.76 billion at June 30, 2022.

Asset Quality

CBTX’s nonperforming assets totaled $22.4 million, or 0.52% of total assets, at September 30, 2022 compared to $20.6 million, or 0.49% of total assets, at September 30, 2021 and $28.3 million, or 0.65% of total assets at June 30, 2022. The allowance for credit losses on loans as a percentage of total loans, excluding loans held for sale, was 1.04% at September 30, 2022, 1.23% at September 30, 2021 and 1.06% at June 30, 2022.

The provision for credit losses for the third quarter 2022 was $1.0 million compared to the recapture of provision for credit losses of $4.9 million for the third quarter 2021 and the provision for credit losses of $126 thousand for the second quarter 2022.

Third quarter 2022 net charge-offs were $33 thousand, or 0.00% (annualized) of average loans, compared to net recoveries of $82 thousand, or 0.01% (annualized) of average loans, for the third quarter 2021 and net recoveries of $166 thousand, or 0.02% (annualized) of average loans, for the second quarter 2022.

Allegiance Bancshares, Inc. Third Quarter 2022 Results

Allegiance’s net interest income in the third quarter 2022 increased $2.5 million, or 4.3%, to $60.7 million from $58.2 million for the third quarter 2021 and increased $3.2 million, or 5.6%, from $57.5 million for the second quarter 2022. These increases were primarily due to increased interest income on securities and loans as a result of changes in market interest rates. The net interest margin on a tax equivalent basis decreased 5 basis points to 3.85% for the third quarter 2022 from 3.90% for the third quarter 2021 and increased 32 basis points from 3.53% for the second quarter 2022. The decrease in the margin over the prior year was primarily due to the increase in funding costs. The increase in the margin over the prior quarter was primarily due to changes in market interest rates and the composition of earning assets.

Noninterest income for the third quarter 2022 was $3.0 million, an increase of $896 thousand, or 42.7%, compared to $2.1 million for the third quarter 2021 and an increase of $291 thousand, or 10.8%, compared to $2.7 million for the second quarter 2022. Third quarter 2022 other noninterest income included increased income from Small Business Investment Company investments.

Noninterest expense for the third quarter 2022 increased $9.7 million, or 28.4%, to $44.0 million from $34.3 million for the third quarter 2021 and increased $6.1 million, or 16.2%, compared to the second quarter of 2022. These increases in noninterest expense over the prior periods were primarily due to greater acquisition and merger-related expenses associated with the merger with CBTX.

Allegiance’s efficiency ratio increased to 69.18% for the third quarter 2022 compared to 56.91% for the third quarter 2021 and 62.96% for the second quarter 2022. Third quarter 2022 annualized returns on average assets, average equity and average tangible equity were 0.84%, 7.90% and 11.78%, respectively, compared to 1.14%, 9.45% and 13.49% for the third quarter 2021. Annualized returns on average assets, average equity and average tangible equity for the second quarter 2022 were 0.94%, 8.86% and 13.00%, respectively. Return on average tangible equity is a non-GAAP measure. Please refer to the non-GAAP reconciliation on page 18.  

        Financial Condition

Allegiance’s total assets at September 30, 2022 decreased $29.4 million, or 0.4%, to $6.73 billion compared to $6.76 billion at September 30, 2021 and decreased $1.4 million, or 0.1% (annualized), compared to $6.73 billion at June 30, 2022.

Total gross loans at September 30, 2022 increased $302.4 million, or 7.1%, to $4.59 billion compared to $4.29 billion at September 30, 2021, primarily due to organic loan growth, and increased $243.1 million, or 22.4% (annualized) compared to $4.35 billion at June 30, 2022, primarily due to the increase in organic loans. Core loans, which exclude Paycheck Protection Program (PPP) loans, increased $574.6 million, or 14.4%, to $4.57 billion at September 30, 2022 from $4.00 billion at September 30, 2021 and increased $257.1 million, or 23.8% (annualized), from $4.32 billion at June 30, 2022.

Deposits at September 30, 2022 decreased $6.2 million, or 0.1%, to $5.66 billion compared to $5.67 billion at September 30, 2021 and decreased $219.9 million, or 15.0% (annualized), compared to $5.88 billion at June 30, 2022.

        Asset Quality

Allegiance’s nonperforming assets totaled $21.6 million, or 0.32% of total assets, at September 30, 2022 compared to $29.8 million, or 0.44% of total assets, at September 30, 2021 and $28.2 million, or 0.42% of total assets at June 30, 2022. The allowance for credit losses on loans as a percentage of total loans was 1.14% at September 30, 2022, 1.18% at September 30, 2021 and 1.16% at June 30, 2022.

The provision for credit losses for the third quarter 2022 was $2.0 million compared to the provision for credit losses of $2.3 million for the third quarter 2021 and the provision for credit losses of $2.1 million for the second quarter 2022.

Third quarter 2022 net recoveries were $245 thousand, or 0.02% (annualized) of average loans, compared to net charge-offs of $450 thousand, or 0.04% (annualized) of average loans, for the third quarter 2021 and net charge-offs of $571 thousand, or 0.05% (annualized) of average loans, for the second quarter 2022.

Share Repurchase Authorization

On September 22, 2022, the Board of Directors of CBTX authorized the repurchase of up to $40 million of outstanding CBTX (now Stellar) common stock through September 30, 2023. Repurchases under this program may be made from time to time through open market purchases, privately negotiated transactions or such other manners as will comply with applicable laws and regulations. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The repurchase program does not obligate Stellar to purchase any particular number of shares and there is no guarantee as to the exact dollar amount or number of shares that will be repurchased by Stellar. Stellar may suspend, modify or terminate the program at any time and for any reason, without prior notice.

GAAP Reconciliation of Non-GAAP Financial Measures

Stellar’s management uses certain non-GAAP financial measures to evaluate its performance. Please refer to the GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures on pages 11 and 18 of this earnings release for a reconciliation of these non-GAAP financial measures.

Conference Call

As previously announced, Stellar’s management team will host a conference call and webcast on Friday, October 28, 2022 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time) to discuss third quarter 2022 results of stand-alone CBTX and stand-alone Allegiance. Individuals and investment professionals may register for the conference call at https://register.vevent.com/register/BId5b581acd6f143fdb46c9666597c0d84 to receive the dial-in numbers and unique PIN to access the call. If you need assistance in obtaining a dial-in number, please contact IR@stellarbancorpinc.com. A simultaneous audio-only webcast may be accessed via the Investor Relations section of Stellar’s website at https://IR.stellarbancorpinc.com/events-and-presentations. If you are unable to participate during the live webcast, the webcast will be accessible via the Investor Relations section of Stellar’s website at IR.stellarbancorpinc.com.

About Stellar Bancorp, Inc.

Stellar Bancorp, Inc. is a bank holding company headquartered in Houston, Texas. Stellar’s principal banking subsidiary, created by the merger of Allegiance Bank and CommunityBank of Texas, N.A. and to be renamed Stellar Bank upon system conversion, provides a diversified range of commercial banking services primarily to small- to medium-sized businesses and individual customers across the Houston, Dallas, Beaumont and surrounding communities in Texas.

Investor relations:
IR@stellarbancorpinc.com  

Forward-Looking Statements

Certain statements in this press release which are not historical in nature are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements about the benefits of the merger of CBTX, Inc. (now Stellar Bancorp, Inc.)(the "Company") and Allegiance Bancshares, Inc. ("Allegiance"), including future financial performance and operating results, the combined company’s plans, business and growth strategies, objectives, expectations and intentions, and other statements that are not historical facts, including 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. Forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “could,” “scheduled,” “plans,” “intends,” “projects,” “anticipates,” “expects,” “believes,” “estimates,” “potential,” “would,” or “continue” or negatives of such terms or other comparable terminology.

All forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Stellar to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others: (1) the risk that the cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized; (2) disruption to our business as a result of the merger; (3) the risk that the integration of our operations will be materially delayed or will be more costly or difficult than we expected or that we are otherwise unable to successfully integrate our legacy businesses; (4) the amount of the costs, fees, expenses and charges related to the merger; (5) reputational risk and the reaction of our customers, suppliers, employees or other business partners to the merger; (6) the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (7) the dilution caused by Stellar’s issuance of additional shares of its common stock in the merger; (8) general competitive, economic, political and market conditions; and (9) other factors that may affect future results of Stellar including changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; the impact, extent and timing of technological changes; capital management activities; and other actions of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation and Texas Department of Banking and legislative and regulatory actions and reforms.

Additional factors which could affect the Company’s future results can be found in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and the Joint Proxy Statement/Prospectus regarding the merger that CBTX filed with the SEC on April 7, 2022 pursuant to Rule 424(b)(3) and Allegiance’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, in each case filed with the SEC and available on the SEC’s website at https:// www.sec.gov. We disclaim any obligation and do not intend to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

CBTX, Inc.
Financial Highlights
(Unaudited)

 Three Months Ended Nine Months Ended
  2022   2021   2022   2021 
  September 30   June 30   March 31   December 31   September 30   September 30   September 30
 (Dollars and share amounts in thousands, except per share data)
Net income (loss)$12,747  $11,707  $10,595  $(545) $14,421  $35,049  $36,143 
              
Earnings (loss) per share, basic$0.52  $0.48  $0.43  $(0.02) $0.59  $1.43  $1.48 
Earnings (loss) per share, diluted$0.52  $0.48  $0.43  $(0.02) $0.59  $1.43  $1.47 
Dividends per share$0.13  $0.13  $0.13  $0.13  $0.13  $0.39  $0.39 
              
Return on average assets(A) 1.16%  1.08%  0.97%  (0.05%)  1.37%  1.07%  1.19%
Return on average equity(A) 9.40%  8.75%  7.67%  (0.38%)  10.15%  8.60%  8.70%
Return on average tangible
equity(A)(B)
 11.15%  10.38%  9.03%  (0.45%)  11.95%  10.18%  10.27%
Net interest margin
(tax equivalent)(A)(C)
 4.25%  3.49%  3.22%  3.07%  3.22%  3.65%  3.40%
Efficiency ratio(D) 63.11%  61.84%  64.94%  99.78%  66.21%  63.28%  67.76%
              
Capital Ratios             
CBTX, Inc.(Consolidated)             
Equity to assets 11.74%  12.19%  12.14%  12.53%  13.41%  11.74%  13.41%
Tangible equity to tangible
assets(B)
 9.96%  10.44%  10.44%  10.85%  11.64%  9.96%  11.64%
Estimated common equity
tier 1 capital
 14.05%  14.49%  14.97%  15.31%  16.87%  14.05%  16.87%
Estimated tier 1 risk-based
capital
 14.05%  14.49%  14.97%  15.31%  16.87%  14.05%  16.87%
Estimated total risk-based
capital
 15.09%  15.53%  16.06%  16.42%  18.12%  15.09%  18.12%
Estimated tier 1 leverage
capital
 11.42%  11.48%  11.08%  11.22%  11.69%  11.42%  11.69%
CommunityBank of Texas             
Estimated common equity
tier 1 capital
 13.81%  13.77%  14.13%  14.43%  15.88%  13.81%  15.88%
Estimated tier 1 risk-based
capital
 13.81%  13.77%  14.13%  14.43%  15.88%  13.81%  15.88%
Estimated total risk-based
capital
 14.85%  14.82%  15.22%  15.54%  17.13%  14.85%  17.13%
Estimated tier 1 leverage
capital
 11.22%  10.91%  10.47%  10.58%  11.01%  11.22%  11.01%
              
Other Data             
Weighted average shares:             
Basic 24,345   24,493   24,497   24,437   24,432   24,445   24,462 
Diluted 24,464   24,593   24,605   24,575   24,544   24,552   24,572 
Period end shares
outstanding
 24,015   24,425   24,502   24,488   24,420   24,015   24,420 
Book value per share$20.88  $21.56  $22.03  $22.96  $23.12  $20.88  $23.12 
Tangible book value per share(B)$17.38  $18.11  $18.58  $19.50  $19.65  $17.38  $19.65 
Employees - full-time equivalents 487   491   503   506   520   487   520 
                            

(A)     Interim periods annualized.
(B)     Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 11 of this Earnings Release.
(C)     Net interest margin represents net interest income divided by average interest-earning assets.
(D)     Represents total noninterest expense divided by the sum of net interest income plus noninterest income.

CBTX, Inc.
Financial Highlights
(Unaudited)

  2022   2021 
  September 30  June 30 March 31 December 31 September 30
  (Dollars in thousands)
ASSETS         
Cash and due from banks$41,219  $41,951  $47,718  $27,689  $50,642 
Interest-bearing deposits at other financial
institutions
 329,229   442,015   723,273   922,457   948,143 
Total cash and cash equivalents 370,448   483,966   770,991   950,146   998,785 
Available for sale securities, at fair value 511,282   550,083   547,979   425,046   359,539 
Equity investments 17,835   18,073   17,101   17,727   17,349 
Loans held for sale       748   164   327 
Loans held for investment 3,126,421   3,032,914   2,879,880   2,867,524   2,608,402 
Less: allowance for credit losses on loans (32,577)  (32,087)  (31,442)  (31,345)  (32,208)
Loans, net 3,093,844   3,000,827   2,848,438   2,836,179   2,576,194 
Premises and equipment, net 55,594   56,010   56,665   58,417   59,235 
Goodwill 80,950   80,950   80,950   80,950   80,950 
Other intangible assets, net 3,188   3,353   3,540   3,658   3,702 
Bank owned life insurance 74,274   73,898   73,527   73,156   72,771 
Operating lease right-to-use assets 10,992   11,324   10,850   11,191   11,527 
Deferred tax assets, net 29,581   22,699   16,724   9,973   9,760 
Other assets 23,843   21,120   18,464   19,394   18,980 
Total assets$4,271,831  $4,322,303  $4,445,977  $4,486,001  $4,209,119 
LIABILITIES AND SHAREHOLDERS’
EQUITY
         
LIABILITIES:         
Deposits:         
Noninterest-bearing$1,780,473  $1,810,275  $1,801,323  $1,784,981  $1,628,144 
Interest-bearing         
 Demand 415,970   445,149   444,571   468,361   386,196 
 Money market and savings 1,273,855   1,239,978   1,348,300   1,336,690   1,257,961 
 Certificates and other time 253,476   261,232   227,031   241,252   259,334 
 Total interest-bearing deposits 1,943,301   1,946,359   2,019,902   2,046,303   1,903,491 
 Total deposits 3,723,774   3,756,634   3,821,225   3,831,284   3,531,635 
Operating lease liabilities 13,748   14,169   13,752   14,142   14,556 
Federal Home Loan Bank advances       50,000   50,000   50,000 
Other liabilities 32,884   24,821   21,277   28,450   48,335 
 Total liabilities 3,770,406   3,795,624   3,906,254   3,923,876   3,644,526 
SHAREHOLDERS’ EQUITY:         
Common stock 240   253   253   253   253 
Capital surplus 308,197   334,104   336,214   335,846   335,226 
Retained earnings 262,804   253,180   244,672   237,165   241,012 
Treasury stock    (14,046)  (14,196)  (14,196)  (14,334)
Accumulated other comprehensive (loss) income (69,816)  (46,812)  (27,220)  3,057   2,436 
 Total shareholders’ equity 501,425   526,679   539,723   562,125   564,593 
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY
$4,271,831  $4,322,303  $4,445,977  $4,486,001  $4,209,119 
                     


CBTX, Inc.

Financial Highlights
(Unaudited)

 Three Months Ended Nine Months Ended
  2022  2021   2022  2021 
  September 30   June 30   March 31   December 31   September 30   September 30   September 30
 (Dollars in thousands, except per share data)
INTEREST INCOME:             
Interest and fees on loans$39,058 $31,768  $31,221 $29,882  $30,765  $102,047 $94,723 
Securities 3,046  2,937   2,292  1,796   1,435   8,275  3,940 
Interest-bearing deposits at other financial institutions 2,408  1,238   348  383   340   3,994  740 
Equity investments 161  158   154  168   157   473  461 
Total interest income 44,673  36,101   34,015  32,229   32,697   114,789  99,864 
              
INTEREST EXPENSE:             
Deposits 1,661  1,178   1,164  1,180   1,227   4,003  3,844 
Federal Home Loan Bank advances   51   221  222   221   272  663 
Other interest-bearing liabilities        17         
Total interest expense 1,661  1,229   1,385  1,419   1,448   4,275  4,507 
NET INTEREST INCOME 43,012  34,872   32,630  30,810   31,249   110,514  95,357 
Provision (recapture) for credit losses for loans 523  479   20  (901)  (5,057)  1,022  (8,961)
Provision (recapture) for credit losses for unfunded commitments 489  (353)  415  (306)  162   551  (605)
Total provision (recapture) for credit losses 1,012  126   435  (1,207)  (4,895)  1,573  (9,566)
Net interest income after provision (recapture) for credit losses 42,000  34,746   32,195  32,017   36,144   108,941  104,923 
              
NONINTEREST INCOME:             
Deposit account service charges 1,320  1,386   1,370  1,370   1,352   4,076  3,712 
Card interchange fees 1,056  1,135   1,037  1,081   1,048   3,228  3,119 
Earnings on bank-owned life insurance 376  371   371  385   2,323   1,118  3,103 
Net gain on sales of assets 85  58   530  910   360   673  918 
Other 612  596   2,021  354   479   3,229  1,312 
Total noninterest income 3,449  3,546   5,329  4,100   5,562   12,324  12,164 
              
NONINTEREST EXPENSE:             
Salaries and employee benefits 14,706  14,698   15,254  16,609   15,000   44,658  43,922 
Occupancy expense 2,595  2,386   2,371  2,606   2,660   7,352  7,778 
Professional and director fees 836  1,140   879  756   1,167   2,855  5,271 
Data processing and software 1,502  1,210   1,763  1,716   1,629   4,475  4,866 
Regulatory fees 599  803   614  8,366   478   2,016  1,535 
Advertising, marketing and business development 350  366   249  263   493   965  1,288 
Telephone and communications 348  349   454  471   516   1,151  1,529 
Security and protection expense 386  170   324  439   425   880  1,352 
Amortization of intangibles 165  172   181  179   182   518  559 
Acquisition and merger-related
expenses
 5,897  1,100   784  1,293   400   7,781  1,689 
Other expenses 1,937  1,364   1,779  2,134   1,422   5,080  3,065 
Total noninterest expense 29,321  23,758   24,652  34,832   24,372   77,731  72,854 
INCOME BEFORE INCOME TAXES 16,128  14,534   12,872  1,285   17,334   43,534  44,233 
Provision for income taxes 3,381  2,827   2,277  1,830   2,913   8,485  8,090 
NET INCOME (LOSS)$12,747 $11,707  $10,595 $(545) $14,421  $35,049 $36,143 
              
EARNINGS PER SHARE             
Basic$0.52 $0.48  $0.43 $(0.02) $0.59  $1.43 $1.48 
Diluted$0.52 $0.48  $0.43 $(0.02) $0.59  $1.43 $1.47 
                         


CBTX, Inc.

Financial Highlights
(Unaudited)

 Three Months Ended
 September 30, 2022 June 30, 2022 September 30, 2021
 Average Outstanding Balance Interest Earned/
Interest
Paid
 Average
Yield/
Rate
(A)
 Average Outstanding Balance Interest Earned/
Interest
Paid
 Average
Yield/
Rate
(A)
 Average Outstanding Balance Interest Earned/
Interest
Paid
 Average
Yield/
Rate
(A)
 (Dollars in thousands)
Assets                 
Interest-Earning Assets:                 
Total loans(B)$3,074,655  $39,058 5.04% $2,897,335  $31,768 4.40% $2,702,248  $30,765 4.52%
Securities 552,901   3,046 2.19%  562,518   2,937 2.09%  327,968   1,435 1.74%
Interest-bearing deposits at other financial institutions 428,196   2,408 2.23%  593,255   1,238 0.84%  854,406   340 0.16%
Equity investments 13,393   161 4.77%  13,386   158 4.73%  13,367   157 4.66%
Total interest-earning assets 4,069,145  $44,673 4.36%  4,066,494  $36,101 3.56%  3,897,989  $32,697 3.33%
Allowance for credit losses on loans (32,106)      (31,081)      (36,945)    
Noninterest-earning assets 318,761       315,133       313,901     
Total assets$4,355,800      $4,350,546      $4,174,945     
Liabilities and
Shareholders' Equity
                 
Interest-Bearing Liabilities:                 
Interest-bearing deposits$1,954,854  $1,661 0.34% $1,939,990  $1,178 0.24% $1,895,617  $1,227 0.26%
Federal Home Loan Bank advances     0.00%  5,495   51 3.72%  50,000   221 1.75%
Total interest-bearing
liabilities
 1,954,854  $1,661 0.34%  1,945,485  $1,229 0.25%  1,945,617  $1,448 0.30%
Noninterest-Bearing Liabilities:                 
Noninterest-bearing demand deposits 1,822,323       1,825,400       1,612,985     
Other liabilities 40,684       42,861       52,712     
Total noninterest-bearing liabilities 1,863,007       1,868,261       1,665,697     
Shareholders' equity 537,939       536,800       563,631     
Total liabilities and
shareholders' equity
$4,355,800      $4,350,546      $4,174,945     
Net interest income  $43,012     $34,872     $31,249  
Net interest spread(C)    4.02%     3.31%     3.03%
Net interest margin(D)    4.19%     3.44%     3.18%
Net interest margin - tax equivalent(E)    4.25%     3.49%     3.22%
                     

(A)     Annualized.
(B)     Includes average outstanding balances related to loans held for sale.
(C)     Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
(D)     Net interest margin is equal to net interest income divided by average interest-earning assets.
(E)     Tax equivalent adjustments of $578 thousand, $478 thousand and $369 thousand for the three months ended September 30, 2022, June 30, 2022 and September 30, 2021, respectively, were computed using a federal income tax rate of 21%.


CBTX, Inc.

Financial Highlights
(Unaudited)

 Nine Months Ended September 30,
  2022   2021 
 Average Outstanding Balance Interest Earned/
Interest Paid
 Average Yield/ Rate(A) Average Outstanding Balance Interest Earned/
Interest Paid
 Average Yield/ Rate(A)
 (Dollars in thousands)
Assets           
Interest-Earning Assets:           
Total loans(B)$2,953,607  $102,047 4.62% $2,812,449  $94,723 4.50%
Securities 537,889   8,275 2.06%  296,958   3,940 1.77%
Interest-bearing deposits at other financial institutions 595,458   3,994 0.90%  668,119   740 0.15%
Equity investments 13,386   473 4.72%  14,679   461 4.20%
Total interest-earning assets 4,100,340  $114,789 3.74%  3,792,205  $99,864 3.52%
Allowance for credit losses on loans (31,599)      (39,594)    
Noninterest-earning assets 313,938       318,009     
Total assets$4,382,679      $4,070,620     
Liabilities and Shareholders' Equity           
Interest-Bearing Liabilities:           
Interest-bearing deposits$1,971,247  $4,003 0.27% $1,846,211  $3,844 0.28%
Federal Home Loan Bank advances 18,315   272 1.99%  50,000   663 1.77%
Total interest-bearing
liabilities
 1,989,562  $4,275 0.29%  1,896,211   4,507 0.32%
Noninterest-Bearing Liabilities:           
Noninterest-bearing demand deposits 1,803,702       1,568,071     
Other liabilities 44,479       50,966     
Total noninterest-bearing liabilities 1,848,181       1,619,037     
Shareholders' equity 544,936       555,372     
Total liabilities and shareholders' equity$4,382,679      $4,070,620     
Net interest income  $110,514     $95,357  
Net interest spread(C)    3.45%     3.20%
Net interest margin(D)    3.60%     3.36%
Net interest margin - tax equivalent(E)    3.65%     3.40%
              

(A)     Annualized.
(B)     Includes average outstanding balances related to loans held for sale.
(C)     Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.
(D)     Net interest margin is equal to net interest income divided by average interest-earning assets.
(E)     Tax equivalent adjustments of $1.5 million and $989 thousand for the nine months ended September 30, 2022 and 2021, respectively, were computed using a federal income tax rate of 21%.


CBTX, Inc.

Financial Highlights
(Unaudited)

 Three Months Ended
  2022   2021 
  September 30   June 30   March 31   December 31   September 30
 (Dollars in thousands)
Loan Portfolio:         
Commercial and industrial$568,071  $581,443  $600,990  $634,384  $596,251 
Real estate:         
Commercial real estate 1,242,118   1,181,620   1,142,646   1,091,969   1,029,137 
Construction and development 507,570   560,903   473,326   460,719   393,541 
1-4 family residential 288,456   264,428   263,213   277,273   204,151 
Multi-family residential 370,391   300,582   279,099   286,396   285,852 
Consumer 24,509   26,810   28,230   28,090   27,930 
Agriculture 11,185   8,036   6,287   7,941   8,780 
Other 123,591   118,153   95,187   89,655   71,915 
Gross loans 3,135,891   3,041,975   2,888,978   2,876,427   2,617,557 
Less allowance for credit losses (32,577)  (32,087)  (31,442)  (31,345)  (32,208)
Less deferred fees and unearned discount (9,470)  (9,061)  (8,350)  (8,739)  (8,828)
Less loans held for sale       (748)  (164)  (327)
Loans, net$3,093,844  $3,000,827  $2,848,438  $2,836,179  $2,576,194 
          
Deposits:         
Interest-bearing demand accounts$415,970  $445,149  $444,571  $468,361  $386,196 
Money market accounts 1,144,969   1,109,265   1,218,082   1,209,659   1,139,167 
Savings accounts 128,886   130,713   130,218   127,031   118,794 
Certificates and other time deposits, $100,000 or greater 161,975   169,616   127,798   134,775   140,740 
Certificates and other time deposits, less than $100,000 91,501   91,616   99,233   106,477   118,594 
Total interest-bearing deposits 1,943,301   1,946,359   2,019,902   2,046,303   1,903,491 
Noninterest-bearing deposits 1,780,473   1,810,275   1,801,323   1,784,981   1,628,144 
Total deposits$3,723,774  $3,756,634  $3,821,225  $3,831,284  $3,531,635 
          
Asset Quality:         
Nonaccrual loans$22,410  $28,273  $22,083  $22,568  $20,585 
Accruing loans 90 or more days past due              
Total nonperforming loans 22,410   28,273   22,083   22,568   20,585 
Other real estate              
Total nonperforming assets$22,410  $28,273  $22,083  $22,568  $20,585 
          
Net charge-offs (recoveries)$33  $(166) $(77) $(38) $(82)
          
Nonaccrual loans:         
Commercial and industrial$7,985  $8,312  $8,765  $9,090  $9,773 
Real estate:         
Commercial real estate 11,076   16,481   11,363   11,512   10,419 
Construction and development 139   143   140   142    
1-4 family residential 3,176   3,302   1,777   1,784   351 
Multi-family residential              
Consumer              
Agriculture              
Other 34   35   38   40   42 
Total nonaccrual loans$22,410  $28,273  $22,083  $22,568  $20,585 
          
Asset Quality Ratios:         
Nonperforming assets to total assets 0.52%  0.65%  0.50%  0.50%  0.49%
Nonperforming loans to loans excluding loans held for sale 0.72%  0.93%  0.77%  0.79%  0.79%
Allowance for credit losses on loans to
nonperforming loans
 145.37%  113.49%  142.38%  138.89%  156.46%
Allowance for credit losses on loans to loans excluding loans held for sale 1.04%  1.06%  1.09%  1.09%  1.23%
Net charge-offs (recoveries) to average loans (annualized) 0.00%  (0.02%)  (0.01%)  (0.01%)  (0.01%)
                    


CBTX, Inc.

GAAP Reconciliation and Management’s Explanation of Non-GAAP Financial Measures
(Unaudited)

CBTX’s management uses certain non-GAAP (generally accepted accounting principles) financial measures to evaluate its performance. CBTX believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and that management and investors benefit from referring to these non-GAAP financial measures in assessing CBTX’s performance and when planning, forecasting, analyzing and comparing past, present and future periods. Specifically, CBTX reviews pre-tax, pre-provision income, adjusted pre-tax, pre-provision income, adjusted efficiency ratio, tangible book value per share, return on average tangible equity and the ratio of tangible equity to tangible assets for internal planning and forecasting purposes. CBTX has included in this earnings release 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 CBTX calculates the non-GAAP financial measures may differ from that of other companies reporting measures with similar names.

 Three Months Ended Nine Months Ended
  2022   2021   2022   2021 
  September 30   June 30   March 31   December 31   September 30   September 30   September 30
 (Dollars and share amounts in thousands, except per share data)
Net income$12,747  $11,707  $10,595  $(545) $14,421  $35,049  $36,143 
Add: Provision for credit losses 1,012   126   435   (1,207)  (4,895)  1,573   (9,566)
Add: Provision for income taxes 3,381   2,827   2,277   1,830   2,913   8,485   8,090 
Pre-tax, pre-provision income$17,140  $14,660  $13,307  $78  $12,439  $45,107  $34,667 
              
Pre-tax, pre-provision income$17,140  $14,660  $13,307  $78  $12,439  $45,107  $34,667 
Add: Acquisition and merger-related expenses 5,897   1,100   784   1,293   400   7,781   1,689 
Adjusted pre-tax, pre-provision income$23,037  $15,760  $14,091  $1,371  $12,839  $52,888  $36,356 
              
Total noninterest expense$29,321  $23,758  $24,652  $34,832  $24,372  $77,731  $72,854 
Acquisition and merger-related expenses 5,897   1,100   784   1,293   400   7,781   1,689 
Net interest income 43,012   34,872   32,630   30,810   31,249   110,514   95,357 
Total noninterest income 3,449   3,546   5,329   4,100   5,562   12,324   12,164 
Adjusted efficiency ratio(A) 50.42%  58.98%  62.88%  96.07%  65.12%  56.94%  66.19%
              
Total shareholders' equity$501,425  $526,679  $539,723  $562,125  $564,593  $501,425  $564,593 
Less:  Goodwill and other intangible assets, net 84,138   84,303   84,490   84,608   84,652   84,138   84,652 
Tangible shareholders’ equity$417,287  $442,376  $455,233  $477,517  $479,941  $417,287  $479,941 
              
Shares outstanding at end of period 24,015   24,425   24,502   24,488   24,420   24,015   24,420 
              
Tangible book value per share$17.38  $18.11  $18.58  $19.50  $19.65  $17.38  $19.65 
              
Net income$12,747  $11,707  $10,595  $(545) $14,421  $35,049  $36,143 
              
Average shareholders' equity$537,939  $536,800  $560,315  $568,167  $563,631  $544,936  $555,372 
Less:  Average goodwill and other intangible assets, net 84,242   84,413   84,584   84,643   84,753   84,413   84,901 
Average tangible shareholders’ equity$453,697  $452,387  $475,731  $483,524  $478,878  $460,523  $470,471 
              
Return on average tangible equity(B) 11.15%  10.38%  9.03%  (0.45%)  11.95%  10.18%  10.27%
              
Total assets$4,271,831  $4,322,303  $4,445,977  $4,486,001  $4,209,119  $4,271,831  $4,209,119 
Less:  Goodwill and other intangible assets, net 84,138   84,303   84,490   84,608   84,652   84,138   84,652 
Tangible assets$4,187,693  $4,238,000  $4,361,487  $4,401,393  $4,124,467  $4,187,693  $4,124,467 
              
Tangible equity to tangible assets 9.96%  10.44%  10.44%  10.85%  11.64%  9.96%  11.64%
                            

(A)     Represents total noninterest expense, excluding acquisition and merger-related expenses, divided by the sum of net interest income plus noninterest income. Additionally, taxes and provision for credit losses are not part of this calculation.
(B)     Interim periods annualized.


Allegiance Bancshares, Inc.

Financial Highlights
(Unaudited)

 Three Months Ended Nine Months Ended
  2022   2021   2022   2021 
  September 30   June 30   March 31   December 31   September 30   September 30   September 30
 (Dollars and share amounts in thousands, except per share data)
Net income$14,286  $16,437  $18,657  $21,558  $19,060  $49,380  $59,995 
              
Earnings per share, basic$0.72  $0.81  $0.92  $1.06  $0.94  $2.44  $2.97 
Earnings per share, diluted$0.71  $0.80  $0.91  $1.06  $0.93  $2.42  $2.95 
Dividends per share$0.14  $0.14  $0.14  $0.12  $0.12  $0.42  $0.36 
              
Return on average assets(A) 0.84%  0.94%  1.04%  1.23%  1.14%  0.94%  1.25%
Return on average equity(A) 7.90%  8.86%  9.40%  10.60%  9.45%  8.74%  10.30%
Return on average tangible
equity(A)(B)
 11.78%  13.00%  13.35%  15.05%  13.49%  12.75%  14.89%
Net interest margin
(tax equivalent)(A)(C)
 3.85%  3.53%  3.30%  3.57%  3.90%  3.55%  4.03%
Efficiency ratio(D) 69.18%  62.96%  58.32%  60.68%  56.91%  63.62%  58.24%
              
Capital Ratios             
Allegiance Bancshares, Inc.(Consolidated)             
Equity to assets 9.75%  10.48%  10.52%  11.49%  11.81%  9.75%  11.81%
Tangible equity to tangible
assets(B)
 6.47%  7.21%  7.44%  8.42%  8.58%  6.47%  8.58%
Estimated common equity
tier 1 capital
 11.39%  12.06%  12.28%  12.47%  12.37%  11.39%  12.37%
Estimated tier 1 risk-based
capital
 11.58%  12.26%  12.49%  12.69%  12.60%  11.58%  12.60%
Estimated total risk-based
capital
 14.66%  15.47%  15.76%  16.08%  16.13%  14.66%  16.13%
Estimated tier 1 leverage
capital
 9.00%  8.65%  8.37%  8.53%  8.76%  9.00%  8.76%
Allegiance Bank             
Estimated common equity
tier 1 capital
 12.20%  12.51%  12.48%  12.63%  12.81%  12.20%  12.81%
Estimated tier 1 risk-based
capital
 12.20%  12.51%  12.48%  12.63%  12.81%  12.20%  12.81%
Estimated total risk-based
capital
 14.12%  14.50%  14.50%  14.71%  14.98%  14.12%  14.98%
Estimated tier 1 leverage
capital
 9.49%  8.83%  8.37%  8.49%  8.91%  9.49%  8.91%
              
Other Data             
Weighted average shares:             
Basic 19,942   20,357   20,363   20,260   20,221   20,219   20,188 
Diluted 20,114   20,530   20,526   20,423   20,411   20,376   20,369 
Period end shares outstanding 19,837   20,154   20,378   20,337   20,218   19,837   20,218 
Book value per share$33.08  $35.00  $36.90  $40.15  $39.50  $33.08  $39.50 
Tangible book value per share(B)$21.19  $23.25  $25.24  $28.43  $27.67  $21.19  $27.67 
Employees - full-time equivalents 562   578   586   594   603   562   603 
                            

(A)     Interim periods annualized.
(B)     Refer to the calculation of these non-GAAP financial measures and a reconciliation to their most directly comparable GAAP financial measures on page 18 of this Earnings Release.
(C)     Net interest margin represents net interest income divided by average interest-earning assets.
(D)     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 credit losses are not part of this calculation.


Allegiance Bancshares, Inc.

Financial Highlights
(Unaudited)

   2022   2021 
   September 30  June 30 March 31 December 31 September 30
   (Dollars in thousands)
ASSETS         
Cash and due from banks$16,449  $17,547  $26,629  $23,961  $23,903 
Interest-bearing deposits at other financial
institutions
 102,118   275,290   672,755   733,548   879,858 
Total cash and cash equivalents 118,567   292,837   699,384   757,509   903,761 
Available for sale securities, at fair value 1,618,995   1,709,321   1,790,707   1,773,765   1,211,476 
Loans held for investment 4,591,912   4,348,833   4,283,514   4,220,486   4,289,469 
Less: allowance for credit losses on loans (52,147)  (50,242)  (49,215)  (47,940)  (50,491)
Loans, net 4,539,765   4,298,591   4,234,299   4,172,546   4,238,978 
Accrued interest receivable 29,697   29,882   31,505   33,392   33,523 
Premises and equipment, net 57,837   58,482   62,168   63,708   65,140 
Other real estate owned             1,397 
Federal Home Loan Bank stock 16,843   4,078   9,376   9,358   8,326 
Bank owned life insurance 28,305   28,170   28,374   28,240   28,101 
Goodwill 223,642   223,642   223,642   223,642   223,642 
Core deposit intangibles, net 12,406   13,156   13,907   14,658   15,482 
Other assets 84,285   73,605   56,001   28,136   29,935 
Total assets$6,730,342  $6,731,764  $7,149,363  $7,104,954  $6,759,761 
LIABILITIES AND SHAREHOLDERS’
EQUITY
         
LIABILITIES:         
Deposits:         
Noninterest-bearing$2,465,839  $2,394,719  $2,353,604  $2,243,085  $2,086,683 
Interest-bearing         
 Demand 956,920   1,016,381   1,070,855   869,984   594,959 
 Money market and savings 1,471,690   1,510,008   1,552,853   1,643,745   1,604,222 
 Certificates and other time 766,270   959,524   1,185,015   1,290,825   1,381,014 
 Total interest-bearing deposits 3,194,880   3,485,913   3,808,723   3,804,554   3,580,195 
 Total deposits 5,660,719   5,880,632   6,162,327   6,047,639   5,666,878 
Accrued interest payable 2,673   1,500   3,086   1,753   3,296 
Borrowed funds 257,000      89,959   89,956   139,954 
Subordinated debt 109,241   109,109   108,978   108,847   108,715 
Other liabilities 44,407   35,194   33,073   40,291   42,326 
Total liabilities 6,074,040   6,026,435   6,397,423   6,288,486   5,961,169 
SHAREHOLDERS’ EQUITY:         
Common stock 19,837   20,154   20,378   20,337   20,218 
Capital surplus 491,878   504,165   512,284   510,797   507,948 
Retained earnings 307,975   296,477   282,896   267,092   247,966 
Accumulated other comprehensive (loss) income (163,388)  (115,467)  (63,618)  18,242   22,460 
Total shareholders’ equity 656,302   705,329   751,940   816,468   798,592 
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY
$6,730,342  $6,731,764  $7,149,363  $7,104,954  $6,759,761 
                     


Allegiance Bancshares, Inc.

Financial Highlights
(Unaudited)

  Three Months Ended Nine Months Ended
  2022 2021 2022 2021 
   September 30   June 30   March 31   December 31   September 30   September 30   September 30
  (Dollars in thousands, except per share data)
INTEREST INCOME:             
Loans, including fees$58,025 $53,835  $52,370 $56,855  $58,176 $164,230 $173,858 
Securities:             
 Taxable 6,655  5,571   5,068  3,933   2,998  17,294  7,956 
 Tax-exempt 2,594  2,557   2,525  2,526   2,498  7,676  7,383 
Deposits in other financial
institutions
 608  877   340  317   221  1,825  356 
 Total interest income 67,882  62,840   60,303  63,631   63,893  191,025  189,553 
               
INTEREST EXPENSE:             
Demand, money market and
savings deposits
 3,527  1,859   1,347  1,277   1,267  6,733  4,088 
Certificates and other time
deposits
 1,664  1,922   2,156  2,391   2,583  5,742  9,237 
Borrowed funds 499  114   186  434   436  799  1,444 
Subordinated debt 1,502  1,463   1,442  1,425   1,441  4,407  4,324 
 Total interest expense 7,192  5,358   5,131  5,527   5,727  17,681  19,093 
NET INTEREST INCOME 60,690  57,482   55,172  58,104   58,166  173,344  170,460 
Provision for credit losses 1,962  2,143   1,814  (2,577)  2,295  5,919  255 
Net interest income after provision
for credit losses
 58,728  55,339   53,358  60,681   55,871  167,425  170,205 
               
NONINTEREST INCOME:             
Nonsufficient funds fees 145  126   116  156   131  387  308 
Service charges on deposit
accounts
 527  560   527  476   425  1,614  1,195 
Gain (loss) on sale of securities 42  (17)         25  49 
Loss on sale of other real
estate and repossessed assets
        (89)      (176)
Bank owned life insurance 135  342   133  139   125  610  415 
Debit card and ATM card income 869  880   819  834   771  2,568  2,162 
Other 1,277  813   2,423  938   647  4,513  2,155 
 Total noninterest income 2,995  2,704   4,018  2,454   2,099  9,717  6,108 
               

NONINTEREST EXPENSE:
             
Salaries and employee benefits 22,013  21,864   22,728  22,918   22,335  66,605  67,259 
Net occupancy and equipment 2,129  2,220   2,205  2,194   2,335  6,554  6,950 
Depreciation 1,003  1,012   1,033  1,103   1,060  3,048  3,151 
Data processing and software
amortization
 2,541  2,522   2,498  2,264   2,222  7,561  6,598 
Professional fees 485  662   138  1,008   620  1,285  2,017 
Regulatory assessments and
FDIC insurance
 1,134  1,256   1,261  949   883  3,651  2,458 
Core deposit intangibles
amortization