Release Details

CHAMPAIGN, Ill., July 27, 2021 (GLOBE NEWSWIRE) -- First Busey Corporation (Nasdaq: BUSE)

Message from our Chairman & CEO

Second Quarter 2021 Highlights:

• Second quarter 2021 net income of $29.8 million and diluted EPS of $0.53, compared to $25.8 million and $0.47, respectively, in the second quarter of 2020
• Second quarter 2021 adjusted net income ¹ of $31.9 million and adjusted diluted EPS ¹ of $0.57, compared to $26.2 million and $0.48, respectively in the second quarter of 2020
• Finalized our acquisition of Cummins-American Corp. (“CAC”), the holding company for Glenview State Bank (“GSB”)
• Core organic loan growth (excluding GSB loans acquired and PPP loans) of $142.0 million, or 2.3%, in the second quarter
• Wealth management assets under care of $12.30 billion at June 30, 2021, up from $10.69 billion at March 31, 2021, and $9.02 billion at June 30, 2020.
• Non-interest income (excluding security gains) accounted for 33.2% of total revenue
• Tangible book value per common share ¹ of $17.11 at June 30, 2021, compared to $16.65 at March 31, 2021, and $15.92 at June 30, 2020, an increase of 7.5% year-over-year
• For additional information, please refer to the 2Q21 Quarterly Earnings Supplement

Second Quarter Financial Results
Net income for First Busey Corporation (“First Busey” or the “Company”) for the second quarter of 2021 was $29.8 million, or $0.53 per diluted common share, as compared to $37.8 million, or $0.69 per diluted common share, for the first quarter of 2021 and $25.8 million, or $0.47 per diluted common share, for the second quarter of 2020. Adjusted net income¹ for the second quarter of 2021 was $31.9 million, or $0.57 per diluted common share, as compared to $38.1 million, or $0.69 per diluted common share, for the first quarter of 2021 and $26.2 million, or $0.48 per diluted common share, for the second quarter of 2020. For the second quarter of 2021, annualized return on average assets and annualized return on average tangible common equity¹ were 1.05% and 12.26%, respectively. Based on adjusted net income¹, annualized return on average assets was 1.12% and annualized return on average tangible common equity¹ was 13.14% for the second quarter of 2021. Second quarter results include GSB’s performance for one month of post-acquisition activity.

Pre-provision net revenue¹ for the second quarter of 2021 was $34.0 million, compared to $40.2 million for the first quarter of 2021 and $45.4 million for the second quarter of 2020. Adjusted pre-provision net revenue¹ for the second quarter of 2021 was $37.5 million, as compared to $42.8 million for the first quarter of 2021 and $46.4 million for the second quarter of 2020. Pre-provision net revenue to average assets¹ for the second quarter of 2021 was 1.20%, as compared to 1.54% for the first quarter of 2021 and 1.76% for the second quarter of 2020. Adjusted pre-provision net revenue to average assets¹ for the second quarter of 2021 was 1.32%, as compared to 1.64% for the first quarter of 2021 and 1.80% for the second quarter of 2020.

Our fee-based businesses continue to add dynamic revenue diversification and growing contributions. In the second quarter of 2021, wealth management fees were $13.0 million, an increase of 27.6% from the second quarter of 2020, while remittance processing revenue was $4.3 million, an increase of 17.0% from the same period last year. Fees for customer services were $8.6 million in the second quarter of 2021, a 22.6% increase from $7.0 million in the second quarter of 2020. Mortgage revenue was $1.7 million in the second quarter of 2021, compared to $2.7 million in the second quarter of 2020. Total non-interest income, excluding net security gains, accounted for 33.2% of our total revenue in the second quarter of 2021, compared to 28.1% in second quarter of 2020.

The continued challenge of low interest rates, coupled with high levels of excess liquidity, resulted in further pressure on our net interest margin during the second quarter. The Company reported net interest income of $64.5 million in the second quarter of 2021, down from $64.9 million in the first quarter of 2021, and $70.8 million in the second quarter of 2020. A $0.5 million decrease in net fee recognition on Paycheck Protection Program (“PPP”) loans contributed to the quarter-over-quarter decline in reported net interest income. Our reported net interest margin was 2.50% in the second quarter of 2021, as compared to 2.72% in the first quarter of 2021. The impact of the GSB acquisition reflected in our results for one month of the quarter accounted for five basis points of the decline in net interest margin.

Second quarter 2021 results reflect a provision release, as compared to a reserve build at the onset of the coronavirus disease 2019 (“COVID-19”) pandemic. Specifically, Busey Bank recorded a $5.5 million negative provision for credit losses and a $0.6 million negative provision for unfunded commitments amid improved US economic outlooks. As a result of the acquisition, GSB recorded a Day 1 allowance of $4.2 million for loans purchased with credit deterioration (“PCD”), provision for credit losses of $3.8 million, and a provision for unfunded commitments of $0.2 million. The total allowance for credit losses was $95.4 million at June 30, 2021, representing 1.33% of total portfolio loans outstanding and 1.40% of portfolio loans excluding PPP loans.

The Company views certain non-operating items, including acquisition-related and other restructuring charges, as adjustments to net income reported under U.S. generally accepted accounting principles (“GAAP”). Non-operating pretax adjustments for the second quarter of 2021 included $2.7 million of expenses related to acquisitions. The Company believes that non-GAAP measures (including adjusted pre-provision net revenue, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted net interest margin, efficiency ratio, adjusted efficiency ratio, tangible common equity, tangible common equity to tangible assets, tangible book value per share, and return on average tangible common equity) facilitate the assessment of its financial results and peer comparability. A reconciliation of these non-GAAP measures is included in tabular form at the end of this release.

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¹ A Non-GAAP financial measure. See “Non-GAAP Financial Information” for reconciliation.

Acquisition of Cummins-American Corp.
Effective May 31, 2021, the Company completed its acquisition of CAC, the holding company for GSB. The partnership will enhance the Company’s existing deposit, commercial banking, and wealth management presence in the Chicago-Naperville-Elgin, IL-IN-WI Metropolitan Statistical Area. First Busey will operate GSB as a separate banking subsidiary until it is merged with Busey Bank, which is expected to occur in the third quarter of 2021. At the time of the bank merger, GSB banking centers will become branches of Busey Bank. It is anticipated that two of GSB’s seven banking centers will be closed and consolidated in the fourth quarter of 2021.

Under the terms of the merger agreement, each share of CAC common stock issued and outstanding as of the effective date was converted into the right to receive 444.4783 shares of First Busey’s common stock and $14,173.96 in cash. As additional consideration provided to CAC’s shareholders in the merger, CAC paid a special dividend to its shareholders in the amount of $60 million, or $12,087.58 per share of CAC common stock, on May 28, 2021.

At the date of the merger, the estimated fair value of CAC’s total assets was $1.48 billion, the fair value of total loans was $434.7 million, and the fair value of total deposits was $1.32 billion, which included $347.8 million of noninterest-bearing deposits. In addition, GSB had $1.26 billion in assets under care at May 31, 2021. Fair values are considered provisional until finalized. Reviews of third-party valuations are still being performed by management; therefore, amounts are subject to change.

Personal Banking Transformation Plan
Based on thoughtful consideration and analysis, in July 2021 the Company approved a plan to close and consolidate 15 Busey Bank banking centers to ensure a balance between the Company’s physical banking center network and its robust digital banking services. An efficient banking center footprint is necessary to keep First Busey competitive, responsive, and independent. The banking centers are expected to close in the fourth quarter of 2021. When fully realized, annualized expense savings net of expected associated revenue impacts are anticipated to be approximately $3.5 million, with the impact of these cost savings beginning to be realized in the fourth quarter of 2021. One-time expenses expected in relation to the banking center closures are estimated to be in the range of $4.3 to $5.0 million and are anticipated to be incurred during the third and fourth quarters of 2021.

COVID-19 Update
The Company continues to navigate the economic environment caused by COVID-19 effectively and prudently and remains resolute in its focus on serving its customers, communities, and associates while protecting its balance sheet. To alleviate some of the financial hardships faced as a result of COVID-19, First Busey offered an internal Financial Relief Program to qualifying customers. As of June 30, 2021, the Company had 49 commercial loans remaining on payment deferrals representing $143.5 million in loans. Importantly, only $10.4 million of these balances remain on full payment deferral with the remaining $133.1 million on interest only deferral. Commercial loans on full payment deferral now represent less than 0.2% of commercial loans outstanding. In addition, as of June 30, 2021, the Company had eight retail loans remaining on payment deferrals representing $0.8 million in loans.

First Busey served as a bridge for the PPP, actively helping existing and new business clients sign up for this important financial resource. The Company originated a total of $749.4 million of first round PPP loans and acquired an additional $15.8 million of GSB first round PPP loans, representing 4,595 new and existing customers. Net fee income accretion recognized on these loans in the second quarter of 2021 was $1.4 million, compared to $3.3 million in the first quarter of 2021.

The Company originated a total of $296.3 million of second round PPP loans and acquired an additional $27.7 million of GSB second round PPP loans, representing 2,740 new and existing customers. Net fee income accretion recognized on these loans in the second quarter of 2021 was $1.6 million, compared to $0.3 million in the first quarter of 2021.

As of June 30, 2021, the Company had received approximately $685.6 million in loan forgiveness from the SBA and had submitted forgiveness applications to the SBA for another $20.9 million, including $4.3 million for GSB loans. At June 30, 2021, First Busey had $399.7 million in total PPP loans outstanding, with an amortized cost of $390.4 million, representing 3,104 customers.

Community Banking
First Busey’s goal of being a strong community bank for the communities it serves begins with outstanding associates. The Company is honored to be named among the 2020 Best Banks to Work For by American Banker, the 2021 Best Places to Work in Illinois by Daily Herald Business Ledger, the 2020 Best Companies to Work For in Florida by Florida Trend magazine, the 2021 Best Place to Work in Indiana by the Indiana Chamber of Commerce, and the 2020 Best Places to Work in Money Management by Pensions and Investments.

Our second quarter results reflect our strategic growth plans and improving economic conditions. As we enter into the second half of 2021, we are working towards a successful integration of GSB and excited about the opportunities for efficiency enhancements and growth as we move ahead as a combined Company. In today’s fluid, ever-evolving landscape, the Company remains steadfast in its commitment to the customers and communities it serves.

/s/ Van A. Dukeman
Chairman, President & Chief Executive Officer
First Busey Corporation

Balance Sheet Growth

The balance sheet remains a source of strength. Total assets were $12.42 billion at June 30, 2021, $10.76 billion at March 31, 2021, and $10.84 billion at June 30, 2020. At June 30, 2021, portfolio loans were $7.19 billion, compared to $6.78 billion as of March 31, 2021, and $7.23 billion as of June 30, 2020. Amortized costs of PPP loans of $390.4 million, $522.1 million, and $729.3 million are included in the June 30, 2021, March 31, 2021, and June 30, 2020, portfolio loan balances, respectively. During the second quarter of 2021, Busey Bank experienced organic loan growth of $142.0 million, consisting of $94.2 million commercial growth and $47.8 million retail real estate and retail other growth. With the inclusion of GSB and organic growth, commercial balances (consisting of commercial, commercial real estate and real estate construction loans), excluding PPP loans, increased $204.2 million from March 31, 2021, and retail real estate and retail other loans increased $333.9 million from March 31, 2021.

Average portfolio loans were $6.89 billion for the second quarter of 2021, compared to $6.74 billion for the first quarter of 2021 and $7.22 billion for the second quarter of 2020. The average balance of PPP loans for the second quarter of 2021 was $496.2 million, compared to $482.5 million for the first quarter of 2021 and $579.5 for the second quarter of 2020. Average interest-earning assets for the second quarter of 2021 were $10.45 billion, compared to $9.75 billion for the first quarter of 2021 and $9.49 billion for the second quarter of 2020.

Total deposits were $10.34 billion at June 30, 2021, compared to $8.87 billion at March 31, 2021, and $8.91 billion at June 30, 2020. GSB deposits accounted for $1.29 billion of the second quarter increase. Recent fluctuations in deposit balances can be attributed to the retention of PPP loan funding in customer deposit accounts, the impacts of economic stimulus, other core deposit growth, and the seasonality of public funds. The Company remains funded substantially through core deposits with significant market share in its primary markets. Core deposits now account for 98.7% of total deposits. Cost of deposits in the second quarter are down to 0.14%.

Net Interest Margin and Net Interest Income

Net interest margin for the second quarter of 2021 was 2.50%, compared to 2.72% for the first quarter of 2021 and 3.03% for the second quarter of 2020. Excluding purchase accretion, core net interest margin was 2.43% for the second quarter of 2021, compared to 2.63% in the first quarter of 2021. Net interest income was $64.5 million in the second quarter of 2021 compared to $64.9 million in the first quarter of 2021 and $70.8 million in the second quarter of 2020.

The Federal Open Market Committee rate cuts during the first quarter of 2020 have contributed to the decline in net interest margin over the past year, as assets, in particular commercial loans, repriced more quickly and to a greater extent than liabilities. The net interest margin has also been negatively impacted by the sizeable balance of lower-yielding PPP loans, significant growth in the Company’s liquidity position, and the issuance of debt. Those impacts were partially offset by the Company’s efforts to lower deposit funding costs as well as the fees recognized related to PPP loans. Factors contributing to the 22 basis point decline in net interest margin during the second quarter of 2021 include:

• Reduced recognition of purchase accounting accretion contributed -2 basis points
• Reduction in PPP fee recognition contributed -3 basis points
• Inclusion of GSB for one month contributed -5 basis points
• Asset rate volume mix contributed -15 basis points
• Funding costs improved +3 basis points, partially offsetting the declines

Asset Quality

Credit quality continues to be exceptionally strong. Loans 30-89 days past due were $3.9 million as of June 30, 2021, compared to $9.9 million as of March 31, 2021, and $5.2 million as of June 30, 2020. Non-performing loans totaled $28.3 million as of June 30, 2021, compared to $22.9 million as of March 31, 2021, and $25.4 million as of June 30, 2020. The increase in non-performing loans in the second quarter of 2021 was primarily the result of $4.4 million of acquired GSB non-performing loans. Continued disciplined credit management resulted in non-performing loans as a percentage of total loans of 0.39% at June 30, 2021, compared to 0.34% at March 31, 2021, and 0.35% at June 30, 2020. Excluding the amortized cost of PPP loans, non-performing loans as a percentage of total loans was 0.42% at June 30, 2021, compared to 0.37% at March 31, 2021, and 0.39% at June 30, 2020.

Net charge-offs totaled $1.0 million for the quarter ended June 30, 2021, compared to $0.3 million and $1.2 million for the quarters ended March 31, 2021, and June 30, 2020, respectively. The annualized ratio of second quarter net charge-offs to average loans was 0.06%. The allowance as a percentage of portfolio loans was 1.33% at June 30, 2021, compared to 1.39% at March 31, 2021, and 1.33% at June 30, 2020. Excluding the amortized cost of PPP loans, the allowance as a percentage of portfolio loans was 1.40% at June 30, 2021. The allowance as a percentage of non-performing loans was 336.96% at June 30, 2021, compared to 411.04% at March 31, 2021, and 378.43% at June 30, 2020.

As a matter of policy and practice, the Company limits the level of concentration exposure in any particular loan segment and maintains a well-diversified loan portfolio.

Non-Interest Income

Total non-interest income increased to $33.0 million for the second quarter of 2021, compared to $31.4 million for the first quarter of 2021 and $28.0 million for the second quarter of 2020. Revenues from wealth management fees and remittance processing activities represented 52.6% of the Company’s non-interest income for the quarter ended June 30, 2021, providing a balance to spread-based revenue from traditional banking activities. On a combined basis, revenue from these two critical operating areas increased to $17.4 million in the second quarter of 2021, as compared to $13.9 million in the second quarter of 2020, a 24.7% increase.

Wealth management fees were $13.0 million for the second quarter of 2021, an increase from $12.6 million for the first quarter of 2021 and $10.2 million for the second quarter of 2020, a 27.6% increase from the comparable period in 2020. Net income from the Wealth Management segment was $4.9 million for the second quarter of 2021, an increase from $4.7 million for the first quarter of 2021 and $3.1 million in the second quarter of 2020, a 58.5% increase from the comparable period in 2020. First Busey’s Wealth Management division ended the second quarter of 2021 with $12.30 billion in assets under care, compared to $10.69 billion at the end of the first quarter of 2021 and $9.02 billion at the end of the second quarter of 2020, a 36.4% increase from the comparable period in 2020. The increase in assets under care compared to the second quarter of 2020 was comprised of $2.00 billion in organic and market related growth with an additional $1.28 billion obtained in the GSB acquisition.

Remittance processing revenue from the Company’s subsidiary, FirsTech, Inc., was $4.3 million for the second quarter of 2021, compared to $4.4 million for the first quarter of 2021 and $3.7 million for the second quarter of 2020, a 17.0% increase from the comparable period in 2020. The Remittance Processing operating segment generated net income of $0.4 million in the second quarter of 2021, consistent with last quarter, and down from $0.5 million in the second quarter of 2020. The Company is currently making strategic investments in FirsTech to further enhance future growth.

Fees for customer services increased to $8.6 million for the second quarter of 2021, compared to $8.0 million in the first quarter of 2021 and $7.0 million in the second quarter of 2020, a 22.6% increase from the comparable period in 2020. Fees for customer services have been impacted over the past year by changing customer behaviors resulting from COVID-19 and related government stimulus programs, and continue to rebound with improving economic conditions and customer activity levels.

Mortgage revenue decreased to $1.7 million in the second quarter of 2021, compared to $2.7 million in both the first quarter of 2021 and the second quarter of 2020, as a result of declines in sold-loan mortgage volume.

Operating Efficiency

Total non-interest expense was $62.6 million in the second quarter of 2021 compared to $54.5 million in the first quarter of 2021 and $53.1 million in the second quarter of 2020. Non-interest expense including amortization of intangibles but excluding non-operating adjustment items¹ was $59.9 million in the second quarter of 2021 compared to $54.2 million in the first quarter of 2021 and $52.6 million in the second quarter of 2020. Second quarter 2021 results include one month of operating expenses for GSB totaling $2.5 million, excluding non-operating items, and the Company expects efficiencies associated with the acquisition to be realized after the banks merge. As a result, the efficiency ratio¹ was 61.68% for the quarter ended June 30, 2021, compared to 54.67% for the quarter ended March 31, 2021, and 50.97% for the quarter ended June 30, 2020. The adjusted efficiency ratio¹ was 58.89% for the quarter ended June 30, 2021, 54.33% for the quarter ended March 31, 2021, and 50.48% for the quarter ended June 30, 2020. The Company remains focused on expense discipline.

Noteworthy components of non-interest expense are as follows:

• Salaries, wages, and employee benefits were $34.9 million in the second quarter of 2021, an increase from $30.4 million in the first quarter of 2021 and $28.6 million from the second quarter of 2020. Total full-time equivalents at June 30, 2021, numbered 1,503 compared to 1,332 at March 31, 2021, and 1,480 at June 30, 2020. The GSB acquisition added 137 full-time equivalents at June 30, 2021. Second quarter 2021 results include $2.4 million of GSB expenses for the one month since acquisition, which included $1.1 million of non-operating salaries, wages, and employee benefits expenses. Further, the deferral of PPP loan origination costs of $1.8 million contributed to the lower salaries, wages, and benefits expense in the first quarter of 2021, compared to only $0.3 million in the second quarter of 2021.
   
• Data processing expense increased to $4.8 million in the second quarter of 2021, compared to $4.3 million in the first quarter of 2021 and $4.1 million in the second quarter of 2020. Second quarter 2021 results include $0.2 million of GSB operating data processing expenses for the one month since acquisition. Further, the Company recorded an additional $0.4 million of non-operating data processing expenses related to the acquisition.
   
• Professional fees increased to $2.3 million in the second quarter of 2021, compared to $1.9 million in the first quarter of 2021 and $2.0 million in the second quarter of 2020. Second quarter 2021 results include $0.9 million of non-operating professional fee expenses related to the acquisition.
   
• Amortization expense increased to $2.7 million in the second quarter of 2021, compared to $2.4 million in the first quarter of 2021 and $2.5 million in the second quarter of 2020. Second quarter 2021 results include $0.3 million of amortization related to GSB.
   
• Other operating expense increased to $10.2 million for the second quarter of 2021, compared to $7.4 million in the first quarter of 2021 and $7.8 million in the second quarter of 2020. The second quarter 2021 increase was across multiple expense categories, including a $0.6 million increase in new market tax credit amortization and $0.9 million increase in business development expenses, which includes $0.2 million of non-operating expenses related to the acquisition. Additionally, second quarter 2021 results included $0.5 million of GSB other operating expenses.

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¹ A Non-GAAP financial measure. See “Non-GAAP Financial Information” for reconciliation.

Capital Strength

The Company's strong capital levels, coupled with its earnings, have allowed First Busey to provide a steady return to its stockholders through dividends. The Company will pay a cash dividend on July 30, 2021, of $0.23 per common share to stockholders of record as of July 23, 2021. The Company has consistently paid dividends to its common stockholders since the bank holding company was organized in 1980.

As of June 30, 2021, the Company continued to exceed the capital adequacy requirements necessary to be considered “well-capitalized” under applicable regulatory guidelines. The Company’s tangible common equity¹ (“TCE”) was $981.9 million at June 30, 2021, compared to $918.6 million at March 31, 2021, and $883.9 million at June 30, 2020. TCE represented 8.15% of tangible assets at June 30, 2021, compared to 8.82% at March 31, 2021, and 8.43% at June 30, 2020.¹

During the second quarter of 2021, the Company purchased 221,000 shares of its common stock at an average price of $25.97 per share for a total of $5.7 million under the Company’s stock repurchase plan.

2Q21 Quarterly Earnings Supplement
For additional information on the Company’s response to COVID-19, financial condition, and operating results, please refer to the 2Q21 Quarterly Earnings Supplement presentation furnished via Form 8-K on July 27, 2021, in connection with this earnings release.

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¹ A Non-GAAP financial measure. See “Non-GAAP Financial Information” for reconciliation.

Corporate Profile

As of June 30, 2021, First Busey Corporation (Nasdaq: BUSE) was a $12.42 billion financial holding company headquartered in Champaign, Illinois.

Busey Bank, a wholly-owned bank subsidiary of First Busey Corporation, had total assets of $10.94 billion as of June 30, 2021, and is headquartered in Champaign, Illinois. Busey Bank currently has 53 banking centers serving Illinois, 10 banking centers serving Missouri, four banking centers serving southwest Florida, and one banking center in Indianapolis, Indiana.  

Busey Bank owns a retail payment processing subsidiary, FirsTech, Inc., which processes approximately 30 million transactions for a total of $9.0 billion on an annual basis. FirsTech, Inc. operates across the United States and Canada, providing payment solutions that include, but are not limited to, electronic payments, mobile payments, phone payments, remittance processing, in person payments, and merchant services. FirsTech, Inc. partners with 5,800+ agents across the U.S. More information about FirsTech, Inc. can be found at firstechpayments.com.

Glenview State Bank, a wholly-owned bank subsidiary of First Busey Corporation acquired in the second quarter of 2021, had total assets of $1.44 billion as of June 30, 2021, and is headquartered in Glenview, Illinois. Glenview State Bank currently has seven banking centers serving the Chicago-Naperville-Elgin, IL-IN-WI Metropolitan Statistical Area.

Through Busey Bank’s and GSB’s Wealth Management divisions, the Company provides asset management, investment, and fiduciary services to individuals, businesses, and foundations. As of June 30, 2021, Busey Bank’s assets under care were $11.02 billion, and GSB’s assets under care were $1.28 billion.

First Busey has been named a Best Place to Work across the company footprint since 2016 by Best Companies Group. We are honored to be consistently recognized by national and local organizations for our engaged culture of integrity and commitment to community development.

For more information about us, visit busey.com.

Category: Financial
Source: First Busey Corporation

Contacts:

Jeffrey D. Jones, Chief Financial Officer
217-365-4130

Non-GAAP Financial Information

This earnings release contains certain financial information determined by methods other than GAAP. These measures include adjusted pre-provision net revenue, adjusted net income, adjusted diluted earnings per share, adjusted return on average assets, adjusted net interest margin, efficiency ratio, adjusted efficiency ratio, tangible common equity, tangible common equity to tangible assets, tangible book value per share, and return on average tangible common equity. Management uses these non-GAAP measures, together with the related GAAP measures, in analysis of the Company’s performance and in making business decisions. Management also uses these measures for peer comparisons.

A reconciliation to what management believes to be the most direct compared GAAP financial measures, specifically total net interest income in the case of adjusted pre-provision net revenue; net income in the case of adjusted net income, adjusted diluted earnings per share, and adjusted return on average assets; total net interest income in the case of adjusted net interest margin; total non-interest income and total non-interest expense in the case of efficiency ratio and adjusted efficiency ratio; and total stockholders’ equity in the case of tangible common equity, tangible common equity to tangible assets, tangible book value per share, and return on average tangible common equity, appears below. The Company believes the adjusted measures are useful for investors and management to understand the effects of certain non-recurring non-interest items and provide additional perspective on the Company’s performance over time as well as comparison to the Company’s peers.

These non-GAAP disclosures have inherent limitations and are not audited. They should not be considered in isolation or as a substitute for the results reported in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Tax effected numbers included in these non-GAAP disclosures are based on estimated statutory rates or effective rates as appropriate.

Special Note Concerning Forward-Looking Statements

Statements made in this document, other than those concerning historical financial information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, plans, objectives, future performance, and business of the Company. Forward-looking statements, which may be based upon beliefs, expectations, and assumptions of the Company’s management, and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should,” or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the Company’s ability to control or predict, could cause actual results to differ materially from those in the Company’s forward-looking statements. These factors include, among others, the following: (i) the strength of the local, state, national, and international economy (including the impact of the current presidential administration); (ii) the economic impact of any future terrorist threats or attacks, widespread disease or pandemics (including the COVID-19 pandemic), or other adverse external events that could cause economic deterioration or instability in credit markets; (iii) changes in state and federal laws, regulations, and governmental policies concerning the Company’s general business; (iv) changes in accounting policies and practices, including FASB’s CECL impairment standards; (v) changes in interest rates and prepayment rates of the Company’s assets (including the impact of The London Inter-bank Offered Rate phase-out); (vi) increased competition in the financial services sector and the inability to attract new customers; (vii) changes in technology and the ability to develop and maintain secure and reliable electronic systems; (viii) the loss of key executives or associates; (ix) changes in consumer spending; (x) unexpected results of current and/or future acquisitions, which may include failure to realize the anticipated benefits of any acquisition and the possibility that transaction costs may be greater than anticipated; (xi) unexpected outcomes of existing or new litigation involving the Company; and (xii) the economic impact of exceptional weather occurrences such as tornadoes, hurricanes, floods, and blizzards. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect its financial results, is included in the Company’s filings with the Securities and Exchange Commission.