Farmers National Banc(FMNB) - 2025 Q3 - Quarterly Results

Third Quarter 2025 Earnings Overview This section summarizes Farmers National Banc Corp.'s Q3 2025 financial performance and strategic initiatives Financial Performance Highlights Farmers National Banc Corp. reported a significant increase in net income for Q3 2025 compared to Q3 2024, despite incurring pretax losses from asset sales and a charge for core platform transition consulting services. Excluding these items, adjusted net income and diluted EPS showed strong performance | Metric ($ in millions) | Q3 2025 | Q3 2024 | Change (YoY) | | :-------------------------- | :-------- | :-------- | :----------- | | Net Income | $12.5M | $8.5M | +$4.0M | | Diluted EPS | $0.33 | $0.23 | +$0.10 | | Pretax losses (asset sales) | $1.0M | - | | | Core platform charge | $3.1M | - | | | Adjusted Net Income (non-GAAP) | $15.7M | - | | | Adjusted Diluted EPS (non-GAAP) | $0.42 | - | | - The new core platform contract is expected to save the Company approximately $2.0 million per year, or $0.04 in diluted earnings per share, once the conversion is complete in August 2026[2] CEO Commentary & Strategic Initiatives CEO Kevin J. Helmick highlighted the Company's strong financial results and deliberate actions to strengthen its operating platform and financial model. He also announced the merger with Middlefield Banc Corp., expected to close in Q1 2026, which will significantly increase assets and market presence - Farmers continues to deliver strong financial results, demonstrating the value of diversified financial services[3] - The Company has taken deliberate actions in 2025 to strengthen its operating platform and enhance its financial model for sustainable growth and profitability[3] - Merger with Middlefield Banc Corp. announced, expected to close in Q1 2026, increasing assets to over $7.4 billion and expanding market reach in Ohio and Pennsylvania[3] Financial Condition This section analyzes the Company's balance sheet, including assets, securities, deposits, and stockholders' equity, highlighting key trends and changes Balance Sheet Overview Total assets and loans experienced consistent growth, with commercial loans being a primary driver. The Company's balance sheet reflects an improving trend in key metrics | Metric ($ in billions) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :----------- | :----------- | :----------- | :----------- | | Total Assets | $5.24B | $5.18B | $5.12B | | Loans | $3.34B | $3.30B | $3.27B | - Commercial loan balances increased by $30.1 million, representing a 6.0% annualized growth from the prior quarter[4] Securities Available for Sale Securities available for sale increased, and the mark-to-market adjustment improved due to declining interest rates. The Company anticipates continued rate volatility | Metric ($ in billions) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | | Securities available for sale | $1.30B | $1.27B | $1.27B | - Mark-to-market adjustment improved by $27.4 million between June 30 and September 30, 2025, due to declining interest rates[5] Deposits Total deposits showed slight growth quarter-over-quarter and a more substantial increase year-to-date. The Company successfully paid off brokered CDs and experienced strong organic deposit growth excluding public funds and brokered CDs - Total deposits increased slightly from June 30, 2025, and are up $133.7 million since December 31, 2024[6] - Paid off $75.0 million in brokered CDs during Q3 2025[6] - Excluding public funds and brokered CDs, deposit growth was $108.3 million, or 4.2% annualized, since December 31, 2024[6] Stockholders' Equity Total stockholders' equity increased significantly, primarily driven by an improvement in accumulated other comprehensive income and increased retained earnings | Metric ($ in millions) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------- | :----------- | :----------- | :----------- | | Total Stockholders' Equity | $465.9M | $437.7M | $406.0M | - The increase in equity was primarily due to an improvement in accumulated other comprehensive income and increased retained earnings[7] Credit Quality This section evaluates the Company's credit quality through key metrics such as non-performing loans, provision for credit losses, and net charge-offs Key Credit Quality Metrics While non-performing loans increased due to a single large loan relationship, the provision for credit losses decreased significantly year-over-year. Annualized net charge-offs remained stable quarter-over-quarter, and the allowance for credit losses to total loans showed a slight increase | Metric | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | | Non-performing loans ($ in millions) | $35.3M | $27.8M | $22.8M | | Non-performing loans to total loans | 1.06% | 0.84% | 0.70% | | Loans 30-89 days delinquent ($ in millions) | $16.1M | $17.7M | $13.0M | | Provision for credit losses (Q3, $ in millions) | $1.4M | - | $7.0M (Q3 2024) | | Annualized net charge-offs to avg loans | 0.07% | 0.07% | 0.58% (Q3 2024) | | Allowance for credit losses to total loans | 1.18% | 1.17% | 1.10% | - A single loan relationship totaling $7.3 million moved into nonaccrual this quarter, secured by an apartment building in Troy, Michigan[10] - The provision in Q3 2024 was impacted by a single commercial office loan resulting in a $4.4 million charge-off and a $1.2 million specific reserve[11] Income Statement Analysis This section provides a detailed analysis of the Company's net interest income, noninterest income, and noninterest expenses for the reporting period Net Interest Income Net interest income and net interest margin both increased significantly year-over-year and quarter-over-quarter. This improvement was driven by higher yields on earning assets and lower funding costs on interest-bearing liabilities, benefiting from Federal Reserve rate cuts | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :---------------------- | :-------- | :-------- | :-------- | | Net Interest Income ($ in millions) | $36.3M | $34.9M | $31.9M | | Net Interest Margin | 3.00% | 2.91% | 2.66% | | Yield on earning assets | 4.88% | - | 4.79% | | Cost of interest-bearing liabilities | 2.51% | - | 2.84% | - Average interest-earning assets increased to $4.92 billion in Q3 2025, primarily due to a $69.9 million increase in average loan balances[12] - The Company expects its net interest margin to continue expanding into 2026 due to its liability-sensitive position and falling interest rates[12] Noninterest Income Noninterest income declined year-over-year, primarily due to larger losses on the sale of securities and lower SBIC income. However, BOLI income, trust fees, retirement plan consulting fees, and investment commissions all increased, reflecting growth in fee-based businesses and recent acquisitions | Metric | Q3 2025 | Q3 2024 | Change (YoY) | | :-------------------------------- | :-------- | :-------- | :----------- | | Total Noninterest Income ($ in millions) | $11.4M | $12.3M | -$0.9M | | Service charge income on deposit accounts ($ in millions) | $1.9M | $2.0M | -$0.118M | | BOLI income ($ in thousands) | $852K | $688K | +$164K | | Trust fees ($ in millions) | $2.7M | $2.5M | +$0.2M | | Losses on sale of AFS securities ($ in thousands) | $927K | $403K | +$524K (loss) | | Retirement plan consulting fees ($ in millions) | $1.1M | $677K | +$0.423M | | Investment commissions ($ in thousands) | $658K | $476K | +$0.182M | | SBIC income ($ in thousands) | $258K | $1.1M | -$0.842M | - The Company restructured $28.5 million of securities in Q3 2025, reinvesting proceeds into securities yielding approximately 220 basis points more[14] - Growth in retirement plan consulting fees is primarily due to the acquisition of Crest Retirement Advisors LLC in late December 2024[14] Noninterest Expense Noninterest expense increased year-over-year, driven by higher salaries and employee benefits due to annual raises, acquisitions, and increased commission expense. Occupancy and equipment expenses also rose, and a significant charge was incurred for core platform transition consulting services | Metric ($ in millions) | Q3 2025 | Q3 2024 | Change (YoY) | | :-------------------------- | :-------- | :-------- | :----------- | | Total Noninterest Expense | $31.7M | $27.2M | +$4.5M | | Salaries and employee benefits | $16.0M | $14.9M | +$1.1M | | Occupancy and equipment expense | $4.4M | $4.0M | +$0.4M | | FDIC and state/local taxes | $1.2M | $1.5M | -$0.268M | | Core platform consulting charge | $3.1M | - | | | Core processing expense | $1.4M | $1.2M | +$0.2M | - Salaries and employee benefits increased due to annual raises, the acquisition of Crest Retirement in Q4 2024, and higher commission expense[15] Liquidity The Company maintains strong liquidity with substantial FHLB borrowing capacity and available-for-sale securities for pledging. Its loan-to-deposit ratio indicates a healthy funding position | Metric | Sep 30, 2025 | | :-------------------------------- | :----------- | | FHLB borrowing capacity ($ in millions) | $618.1M | | Available for sale securities (for pledging, $ in millions) | $353.2M | | Loan to deposit ratio | 75.9% | | Average deposit balance per account (excl. collateralized, $) | $26,235 | Company Information Farmers National Banc Corp. is a diversified financial services company headquartered in Canfield, Ohio, with $5.2 billion in banking assets. It operates a full-service national bank and a trust company across Ohio and Pennsylvania, with total wealth management assets under care of $4.6 billion - Farmers National Banc Corp. is a diversified financial services company founded in 1887, headquartered in Canfield, Ohio[17] - The Company has $5.2 billion in banking assets and 62 banking locations across Ohio and Pennsylvania[17] - Total wealth management assets under care were $4.6 billion at September 30, 2025[17] Non-GAAP Financial Measures This section clarifies the use of non-GAAP financial measures, such as tangible common equity ratio and adjusted net income, which are provided to offer a more complete understanding of the Company's operational results and trends, supplementing GAAP figures - Non-GAAP financial measures are used to provide a more complete understanding of underlying operational results and trends[18] - These measures are not considered in isolation or as a substitute for GAAP numbers[18] Cautionary Statements Regarding Forward-Looking Statements This section provides a standard cautionary statement regarding forward-looking statements, emphasizing that actual results may differ materially from expectations due to various factors, including economic conditions and regulatory changes. The Company does not undertake to update these statements - Forward-looking statements represent management's current expectations and are subject to inherent uncertainties and factors outside of Farmers' control[19] - Actual results and financial condition may differ materially due to significant changes in economic conditions, monetary policy, and other factors detailed in SEC filings[19] Consolidated Financial Tables This section presents detailed consolidated financial statements and key ratios, including income statements, balance sheets, capital, liquidity, and asset quality metrics Consolidated Statements of Income The consolidated statements of income show a strong increase in net interest income and net income for both the three and nine months ended September 30, 2025, compared to the prior year. Noninterest income also grew for the nine-month period, while the provision for credit losses decreased significantly | Metric ($ in thousands) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | YoY Q3 Change | YoY 9M Change | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | :------------ | :------------ | | Total interest income | $59,366 | $57,923 | $174,374 | $169,823 | | 2.7% | | Total interest expense | $23,059 | $26,047 | $68,949 | $74,194 | | -7.1% | | Net interest income | $36,307 | $31,876 | $105,425 | $95,629 | | 10.2% | | Provision for credit losses | $1,419 | $7,008 | $4,763 | $7,671 | | -37.9% | | Noninterest income | $11,430 | $12,340 | $34,032 | $30,302 | | 12.3% | | Net income | $12,461 | $8,535 | $39,949 | $31,558 | | 26.6% | | Diluted earnings per share | $0.33 | $0.23 | $1.06 | $0.84 | | | Performance Ratios Key performance ratios demonstrate improved profitability and efficiency. Net interest margin, return on average assets, and return on average equity all increased year-over-year for both the quarter and nine-month periods. The efficiency ratio also improved | Metric | Q3 2025 | Q2 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :---------------------------------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net Interest Margin (Annualized) | 3.00% | 2.91% | 2.66% | 2.92% | 2.69% | | Efficiency Ratio (Tax equivalent basis) | 62.66% | 56.66% | 58.47% | 59.68% | 60.24% | | Efficiency Ratio (Tax equivalent basis) excluding core conversion, acquisition costs and other extraordinary items (b) | 56.43% | 55.66% | 59.05% | 57.20% | 60.26% | | Return on Average Assets (Annualized) | 0.96% | 1.08% | 0.66% | 1.04% | 0.83% | | Return on Average Equity (Annualized) | 11.26% | 13.08% | 8.18% | 12.46% | 10.51% | | Return on Average Tangible Assets (Non GAAP) | 1.00% | 1.13% | 0.69% | 1.07% | 0.86% | | Return on Average Tangible Equity (Non GAAP) | 19.46% | 23.37% | 14.94% | 22.18% | 19.95% | Consolidated Statements of Financial Condition The balance sheet shows growth in total assets, loans, and stockholders' equity. Total deposits also increased, with a notable reduction in brokered time deposits | Metric ($ in thousands) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | | Total Assets | $5,235,575 | $5,178,428 | $5,118,924 | | Debt securities available for sale | $1,301,766 | $1,274,899 | $1,266,553 | | Loans | $3,337,780 | $3,303,359 | $3,268,346 | | Net Loans | $3,298,252 | $3,264,796 | $3,232,483 | | Total deposits | $4,400,515 | $4,396,417 | $4,266,779 | | Brokered time deposits | $0 | $74,988 | $74,951 | | Total liabilities | $4,769,626 | $4,740,680 | $4,712,896 | | Stockholders' Equity | $465,949 | $437,748 | $406,028 | | Book value per share | $12.38 | $11.63 | $10.80 | | Tangible book value per share (Non GAAP) | $7.44 | $6.67 | $5.80 | Capital and Liquidity Ratios The Company's capital and liquidity ratios remained strong, with estimated increases across all key capital ratios (Common Equity Tier 1, Total Risk Based, Tier 1 Risk Based, and Tier 1 Leverage) at September 30, 2025, compared to prior periods | Metric | Sep 30, 2025 (Est.) | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------- | :------------------ | :----------- | :----------- | | Common Equity Tier 1 Capital Ratio | 11.74% | 11.56% | 11.14% | | Total Risk Based Capital Ratio | 15.23% | 15.04% | 14.55% | | Tier 1 Risk Based Capital Ratio | 12.22% | 12.05% | 11.62% | | Tier 1 Leverage Ratio | 8.75% | 8.67% | 8.36% | | Equity to Asset Ratio | 8.90% | 8.45% | 7.93% | | Tangible Common Equity Ratio (b) | 5.54% | 5.03% | 4.42% | | Net Loans to Assets | 63.00% | 63.05% | 63.15% | | Loans to Deposits | 75.85% | 75.14% | 76.60% | Asset Quality Ratios Asset quality metrics show an increase in non-performing loans and assets, but the allowance for credit losses to total loans remains stable. Net charge-offs for the quarter were consistent with the previous quarter but significantly lower than the prior year | Metric | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | | Non-performing loans ($ in thousands) | $35,344 | $27,819 | $22,818 | | Non-performing assets ($ in thousands) | $35,519 | $28,052 | $22,903 | | Loans 30 - 89 days delinquent ($ in thousands) | $16,083 | $17,727 | $13,032 | | Net Charge-offs (Qtr, $ in thousands) | $536 | $572 | $635 | | Annualized Net Charge-offs to Average Net Loans | 0.07% | 0.07% | 0.08% | | Allowance for Credit Losses to Total Loans | 1.18% | 1.17% | 1.10% | | Non-performing Loans to Total Loans | 1.06% | 0.84% | 0.70% | | Allowance to Non-performing Loans | 111.84% | 138.62% | 157.17% | End of Period Loan Balances Commercial real estate loans showed strong growth, while residential real estate and HELOCs also increased. Commercial loans experienced a slight decrease, and consumer and agricultural loans remained relatively stable | Loan Type ($ in thousands) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | | Commercial real estate | $1,428,583 | $1,385,162 | $1,382,714 | | Commercial | $351,213 | $363,009 | $349,966 | | Residential real estate | $850,112 | $849,443 | $845,081 | | HELOC | $176,609 | $171,312 | $158,014 | | Consumer | $251,557 | $253,363 | $259,954 | | Agricultural loans | $269,025 | $270,599 | $262,392 | | Total, excluding net deferred loan costs | $3,327,099 | $3,292,888 | $3,258,121 | End of Period Customer Deposit Balances Total customer deposits increased, with growth in interest-bearing demand, money market, and certificate of deposit accounts. Noninterest-bearing demand deposits remained stable | Deposit Type ($ in thousands) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | | Noninterest-bearing demand | $994,604 | $995,866 | $965,507 | | Interest-bearing demand | $1,443,422 | $1,388,596 | $1,366,255 | | Money market | $761,788 | $748,770 | $682,558 | | Savings | $410,165 | $416,795 | $414,796 | | Certificate of deposit | $790,536 | $771,403 | $762,712 | | Total customer deposits | $4,400,515 | $4,321,430 | $4,191,828 | Noninterest Income Details Detailed noninterest income shows varied performance. While security losses increased and service charges on deposits slightly declined, BOLI income, trust fees, retirement plan consulting fees, and investment commissions all saw growth, contributing to the overall increase in noninterest income for the nine-month period | Income Source ($ in thousands) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :------------------------------------------------ | :-------- | :-------- | :-------- | :-------- | | Service charges on deposit accounts | $1,874 | $1,992 | $5,381 | $5,421 | | Bank owned life insurance income, including death benefits | $852 | $688 | $2,494 | $2,046 | | Trust fees | $2,745 | $2,544 | $7,982 | $7,398 | | Insurance agency commissions | $1,395 | $1,416 | $4,964 | $4,199 | | Security gains (losses), including fair value changes for equity securities | ($927) | ($403) | ($2,205) | ($2,647) | | Retirement plan consulting fees | $1,060 | $677 | $2,641 | $1,918 | | Investment commissions | $658 | $476 | $1,908 | $1,386 | | Debit card and EFT fees | $2,068 | $1,993 | $5,951 | $5,320 | | Other noninterest income | $954 | $2,619 | $3,336 | $3,892 | | Total Noninterest Income | $11,430 | $12,340 | $34,032 | $30,302 | Noninterest Expense Details Detailed noninterest expenses show increases in salaries and employee benefits, occupancy and equipment, and core processing charges. A significant system conversion/merger related cost was incurred in Q3 2025, contributing to the overall rise in expenses | Expense Type ($ in thousands) | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :-------------------------------- | :-------- | :-------- | :-------- | :-------- | | Salaries and employee benefits | $15,992 | $14,874 | $46,880 | $44,501 | | Occupancy and equipment | $4,370 | $3,968 | $12,627 | $11,512 | | FDIC insurance and state and local taxes | $1,212 | $1,480 | $3,736 | $4,010 | | Professional fees | $990 | $1,084 | $3,213 | $3,532 | | System conversion / Merger related costs | $3,123 | $0 | $3,123 | $0 | | Advertising | $466 | $435 | $1,376 | $1,312 | | Intangible amortization | $718 | $629 | $2,188 | $1,947 | | Core processing charges | $1,412 | $1,186 | $4,210 | $3,420 | | Other noninterest expenses | $3,396 | $3,419 | $10,028 | $10,283 | | Total Noninterest Expense | $31,679 | $27,075 | $87,381 | $80,517 | Average Balance Sheets and Related Yields and Rates Average earning assets increased, primarily driven by loan growth. The yield on earning assets improved, while the cost of interest-bearing liabilities decreased, leading to an expansion in net interest margin and interest rate spread for both the three and nine months ended September 30, 2025 | Metric | Q3 2025 Average Balance ($ in thousands) | Q3 2025 Yield/Rate | Q3 2024 Average Balance ($ in thousands) | Q3 2024 Yield/Rate | | :-------------------------------- | :---------------------- | :----------------- | :---------------------- | :----------------- | | Loans | $3,311,535 | 5.88% | $3,241,603 | 5.81% | | Total earning assets | $4,922,275 | 4.88% | $4,890,344 | 4.79% | | Total interest-bearing deposits | $3,439,913 | 2.37% | $3,294,014 | 2.62% | | Total interest-bearing liabilities | $3,676,441 | 2.51% | $3,671,034 | 2.84% | | Net interest margin | - | 3.00% | - | 2.66% | | Metric | 9M 2025 Average Balance ($ in thousands) | 9M 2025 Yield/Rate | 9M 2024 Average Balance ($ in thousands) | 9M 2024 Yield/Rate | | :-------------------------------- | :---------------------- | :----------------- | :---------------------- | :----------------- | | Loans | $3,282,794 | 5.80% | $3,212,799 | 5.76% | | Total earning assets | $4,900,563 | 4.80% | $4,837,792 | 4.73% | | Total interest-bearing deposits | $3,414,640 | 2.36% | $3,233,379 | 2.48% | | Total interest-bearing liabilities | $3,669,478 | 2.51% | $3,626,290 | 2.73% | | Net interest margin | - | 2.92% | - | 2.69% | Reconciliation of Tangible Assets This table provides a reconciliation of total assets to tangible assets by deducting goodwill and other intangibles, showing the tangible asset base for various periods | Metric ($ in thousands) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | | Total Assets | $5,235,575 | $5,178,428 | $5,118,924 | | Less Goodwill and other intangibles | $186,013 | $186,731 | $188,200 | | Tangible Assets | $5,049,562 | $4,991,697 | $4,930,724 | | Average Assets | $5,178,998 | $5,132,661 | $5,159,901 | | Less average Goodwill and other intangibles | $186,479 | $187,209 | $188,256 | | Average Tangible Assets | $4,992,519 | $4,945,452 | $4,971,645 | Reconciliation of Common Stockholders' Equity to Tangible Common Equity This reconciliation shows the calculation of tangible common equity by subtracting goodwill and other intangibles from common stockholders' equity, providing a clearer view of the Company's tangible capital | Metric ($ in thousands) | Sep 30, 2025 | Jun 30, 2025 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | :----------- | | Stockholders' Equity | $465,949 | $437,748 | $406,028 | | Less Goodwill and other intangibles | $186,013 | $186,731 | $188,200 | | Tangible Common Equity | $279,936 | $251,017 | $217,828 | | Average Stockholders' Equity | $442,556 | $425,249 | $428,646 | | Less average Goodwill and other intangibles | $186,479 | $187,209 | $188,256 | | Average Tangible Common Equity | $256,077 | $238,040 | $240,390 | Reconciliation of Net Income, Less Merger and Certain Items This reconciliation adjusts net income and related performance ratios by excluding the after-tax impact of system conversion/acquisition costs and net losses/gains on asset/security sales, providing a non-GAAP view of core operational profitability | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :---------------------------------------------------------------- | :-------- | :-------- | :-------- | :-------- | | Net income ($ in thousands) | $12,461 | $8,535 | $39,949 | $31,558 | | System conversion / Acquisition related costs - after tax ($ in thousands) | $2,467 | $0 | $2,467 | $0 | | Net loss (gain) on asset/security sales - after tax ($ in thousands) | $760 | ($32) | $1,680 | $2,050 | | Net income - Adjusted ($ in thousands) | $15,688 | $8,503 | $44,097 | $33,608 | | Diluted EPS excluding merger and certain items | $0.42 | $0.23 | $1.17 | $0.90 | | Return on Average Assets excluding system conversion, merger and certain items (Annualized) | 1.21% | 0.66% | 1.14% | 0.88% | | Return on Average Equity excluding system conversion, merger and certain items (Annualized) | 14.18% | 8.15% | 13.76% | 11.19% | | Return on Average Tangible Equity excluding system conversion, merger costs and certain items (Annualized) | 24.51% | 14.88% | 24.48% | 21.24% | | Efficiency ratio excluding certain items | 56.43% | 59.05% | 57.20% | 60.26% | Net Interest Margin Excluding Acquisition Marks and PPP Interest and Fees This reconciliation provides the net interest margin adjusted to exclude the impact of acquisition marks and PPP interest and fees, offering a normalized view of the Company's core lending profitability | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :------------------------------------------------ | :-------- | :-------- | :-------- | :-------- | | Net interest income, tax equated ($ in thousands) | $36,940 | $32,483 | $107,332 | $97,485 | | Acquisition marks ($ in thousands) | $1,677 | $2,123 | $5,559 | $6,884 | | PPP interest and fees ($ in thousands) | $0 | $1 | $0 | $2 | | Adjusted and annualized net interest income ($ in thousands) | $141,052 | $121,436 | $135,697 | $120,799 | | Average earning assets ($ in thousands) | $4,922,275 | $4,890,344 | $4,900,563 | $4,837,792 | | Less PPP average balances ($ in thousands) | $89 | $112 | $98 | $167 | | Adjusted average earning assets ($ in thousands) | $4,922,186 | $4,890,226 | $4,900,465 | $4,837,625 | | Net interest margin excluding marks and PPP interest and fees | 2.87% | 2.48% | 2.77% | 2.50% |