eqbk-8k_20200721.htm
false 0001227500 0001227500 2020-07-21 2020-07-21

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  July 21, 2020

 

EQUITY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Kansas

001-37624

72-1532188

(State or other jurisdiction of

incorporation or organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

 

 

7701 East Kellogg Drive, Suite 300

Wichita, KS

 

 

67207

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 316.612.6000

 

Former name or former address, if changed since last report: Not Applicable

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Class A, Common Stock, par value $0.01 per share

Trading Symbol

EQBK

Name of each exchange on which registered

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 


1


Item 2.02Results of Operations and Financial Condition.

 

On July 21, 2020, Equity Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2020.  A copy of the press release is furnished as Exhibit 99.1 and is incorporated by reference herein.

 

The information in this Item 2.02, including Exhibit 99.1, is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.

 

Item 7.01Regulation FD Disclosure.

 

The Company intends to hold an investor call and webcast to discuss its financial results for the second quarter ended June 30, 2020 on Wednesday, July 22, 2020, at 9:00 a.m. Central Time.  The Company’s presentation to analysts and investors contains additional information about the Company’s financial results for the second quarter ended June 30, 2020 and is furnished as Exhibit 99.2 and is incorporated by reference herein.

 

The information in this Item 7.01, including Exhibit 99.2, is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.

 

Item 9.01Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.

 

Description

99.1

 

Earnings Press Release, dated July 21, 2020

99.2

 

Equity Bancshares, Inc. Investor Presentation

104

 

Cover Page Interactive Data File

 

2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Equity Bancshares, Inc.

 

 

Date:  July 21, 2020

By: /s/ Gregory H. Kossover

 

Gregory H. Kossover

 

Executive Vice President and Chief Operating Officer

(Principal Accounting Officer)


3

eqbk-ex991_6.htm

 

Exhibit 99.1

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

Equity Bancshares, Inc. Announces Second Quarter Results, Reports Earnings

of $0.11 per Diluted Common Share and Net Income of $1.7 Million

Company strengthens local businesses, customers and communities during COVID-19 era,

positions capital and balance sheet for future growth

 

WICHITA, Kansas, July 21, 2020 (GLOBE NEWSWIRE) – Equity Bancshares, Inc. (NASDAQ: EQBK), (“Equity”, “we”, “us”, “our”), the Wichita-based holding company of Equity Bank, reported its unaudited results for the second quarter ended June 30, 2020, including net income allocable to common stockholders of $1.7 million, or $0.11 per diluted share.  Year-to-date 2020 net income allocable to common stockholders was $2.9 million, or $0.19 per diluted share.

 

“During the second quarter we continued to support our communities and customers, including small businesses,” said Brad Elliott, Chairman and CEO of Equity.  “We’ve been able to add new customers and clients through lending programs such as the Paycheck Protection Program and Main Street Lending Program, but notably, our Equity Bank teams have continued to work one-on-one with local businesses to evaluate credit needs and strategic planning in both the near-term and long-term future.  In addition, we’ve been able to strengthen our capital and build value for our stockholder base, all while prioritizing continued, uninterrupted service to our customers.”

 

As of June 30, 2020, Equity has completed 3,198 Small Business Administration (“SBA”) loan applications through the Paycheck Protection Program (“PPP”) as part of the U.S. Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) signed into law on March 27, 2020.  

 

The relief from Equity Bank-administered loans helped more than 90,000 employees working in small businesses throughout Equity’s regions in Kansas, Missouri, Oklahoma and Arkansas.  Equity also is participating in the Main Street Lending Program, designed to keep credit flowing to small and mid-sized businesses in good financial standing during the COVID-19 crisis.

 

On June 29, 2020, Equity issued $42 million aggregate principal amount of fixed-to-floating rate subordinated notes due 2030 to certain institutional accredited investors and qualified institutional buyers in a private placement transaction.  Equity will use the net proceeds from the offering for general corporate purposes, including repayment of Equity’s senior debt, which occurred on June 30, 2020, and for opportunistic growth.  On June 30, 2020, Equity also renewed its senior credit facility with ServisFirst Bank.

 

As of May 2020, all of Equity’s bank locations were open to customers with social distancing measures in place, allowing full access for customer use.  During March and April, Equity adopted a “Branch Light, Drive Through First” model throughout its markets, optimizing customer service delivery by appointment, calling ahead, knocking or using drive through.  Equity continues to serve customers curbside and drive through but offers full lobby access during normal hours.  Equity’s digital products, including online banking and mobile deposit, have increased in active digital users by 10 percent during the six-month period ended June 30, 2020.

 

“We remain focused on our strategy to deliver sophisticated banking products and services to customers who value the dedication and support of a community bank and I’m proud of our Equity teams throughout our footprint for collaborating and supporting our communities,” said Mr. Elliott. “We did not close a single bank location in March, April or May, but simply modified service and solutions.  A strong community bank should step up and work directly with customers and we’ve been able to do just that.  Our business will continue to be rewarded, as a leader in our industry and region.  We have seen new business from both retail and commercial customers attracted to a bank that is innovative and open for business as usual.”

 

Notable Items:

 

 

Net income before taxes for the second quarter of 2020 was $2.2 million, or $0.14 per diluted share, compared to net income before taxes of $11.7 million, or $0.74 per diluted share, for the same time period in 2019.  Net income before taxes for the first six months of 2020 was $3.9 million, or $0.25 per diluted share.  There were no


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

 

merger expenses in the first six months of 2020.  Net income before taxes, adjusted to exclude merger expense was $7.4 million, or $0.46 per diluted share, for the first six months of 2019.

 

Stated income per diluted share in the second quarter of 2020 was $0.11, as compared to $0.58 in the second quarter of 2019.  Income before taxes and provision for loan losses during the quarters ending June 30, 2020 and 2019, was $14.7 million, or $0.96 per diluted share, and $12.7 million, or $0.80 per diluted share.

 

At June 30, 2020 there were $649.3 million of loans under deferment in connection with addressing customers’ credit needs during the COVID-19 crisis.  At the end of the deferral periods, the Company will review a customer’s year-end 2019 and interim financial statements, operating projections for the remainder of 2020 and the business environment to determine if our customers’ businesses are still being impacted by COVID-19 before granting an additional 90-day deferment.

 

The CARES Act provided temporary relief for the implementation of Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments and the Company has elected to calculate the required allowance for loan losses and the resulting provision for loan losses using the prior probable-incurred-loss method.  In keeping with interagency guidance, the Company executed a payment deferral program for commercial lending clients adversely affected by the pandemic, which are not considered troubled debt restructurings.

 

Equity’s Balance Sheet Highlights:

 

 

Total loans held for investment of $2.81 billion at June 30, 2020, as compared to total loans held for investment of $2.56 billion at December 31, 2019.

 

Total deposits were $3.25 billion at June 30, 2020, as compared to $3.06 billion at December 31, 2019.  Signature deposits, including core deposits comprised of checking, savings and money market accounts, were $2.56 billion at June 30, 2020, as compared to $2.23 billion at December 31, 2019.

 

Total assets were $4.21 billion at June 30, 2020, as compared to $3.95 billion at December 31, 2019.

 

Book value per common share was $31.53 at June 30, 2020, as compared to $30.95 at December 31, 2019. Tangible book value per common share was $21.29 at June 30, 2020, as compared to $20.75 at December 31, 2019.

 

Financial Results for the Six Months Ended June 30, 2020

 

Net income allocable to common stockholders was $2.9 million for the six months ended June 30, 2020, as compared to $5.2 million for the six months ended June 30, 2019, a decrease of $2.2 million.

 

Diluted earnings per share were $0.19 for the six-month period ended June 30, 2020, as compared to $0.32 for the comparable period in 2019.  Weighted average fully diluted shares were 15,449,517 and 15,992,265 for the six months ended June 30, 2020, and 2019.

 

Net interest income was $65.0 million for the six months ended June 30, 2020, as compared to $61.9 million for the six months ended June 30, 2019, a $3.1 million, or 4.9% increase.  The increase in net interest income was primarily driven by growth in loan balances, a reduction in interest-bearing time deposit balances and a decrease in the cost of interest-bearing liabilities, partially offset by a decrease in rates on interest-earning assets.

 

Our net interest margin was 3.58% for the six months ended June 30, 2020, as compared to 3.46% for the six months ended June 30, 2019.  The increase in net interest margin was primarily due to a decrease in overall cost of funds in excess of the reduction of asset yields.

 

The provision for loan losses was $22.4 million for the six-month period ended June 30, 2020, as compared to $16.6 million for the six-month period ended June 30, 2019.  The provision for the six months ended June 30, 2020, is primarily related to the impact of COVID-19 on overall credit.  Included in the first quarter of 2019 was a $14.5 million provision against one credit relationship that we believe was an isolated incident that was unique within our portfolio.  Net charge-offs for the six months ended June 30, 2020, were $594 thousand, as compared to net charge-offs, adjusted for charge-offs related to the previously mentioned credit relationship, of $506 thousand for the comparable period in 2019.

 


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

Total non-interest income was $11.0 million for the six months ended June 30, 2020, as compared to $11.8 million for the six months ended June 30, 2019.  The decrease is largely attributable to reductions in service charges and fees, and other income, mainly from derivative mark-to-market adjustments, partially offset by increases in mortgage banking and debit card income.

 

Total non-interest expense was $49.7 million for the six months ended June 30, 2020, as compared to $50.6 million for the six months ended June 30, 2019.  The decrease in non-interest expense was largely due to reductions in salaries and employee benefits, merger expenses, advertising and business development and telecommunications, partially offset by increases in data processing, other non-interest expense, amortization of core deposit intangibles, net occupancy and equipment and other real estate owned expense.  The overall decrease in salaries and employee benefits was due to the deferral of loan origination cost associated with originating the PPP loans during the six months ended June 30, 2020.

 

Equity’s effective tax rate for the six months ended June 30, 2020, was 24.2%, as compared to 20.8% for the first six months of 2019.  For both of the comparable periods, the estimated annual effective tax rate at which income tax expense has been provided reflect, in addition to statutory tax rates, the estimated tax-exempt interest income, non-taxable life insurance income, non-deductible facilitative merger expense and other non-deductible expense in proportion to anticipated annual income before income taxes, as well as federal income tax credits anticipated to be available in each annual period.  Income tax expense for the six-month period ended June 30, 2020, includes $67 thousand of additional tax expense attributable to the settlement in stock of restricted stock units and the exercise of stock options.  The exercise of stock options and the settlement of restricted stock units in the first six months of 2019 resulted in tax benefits of $18 thousand.

 

Financial Results for the Quarter Ended June 30, 2020

 

Net income allocable to common stockholders was $1.7 million for the three months ended June 30, 2020, as compared to $9.2 million for the three months ended June 30, 2019, a decrease of $7.5 million.

 

Diluted earnings per share were $0.11 for the three months ended June 30, 2020, as compared to $0.58 for the comparable period in 2019.  Weighted average fully diluted shares were 15,304,009 and 15,918,274 for the three months ended June 30, 2020, and 2019.

 

Net interest income was $32.9 million for the three months ended June 30, 2020, as compared to $31.3 million for the three months ended June 30, 2019, a $1.6 million, or 5.1% increase.  The increase in net interest income was primarily driven by average rates of interest-bearing liabilities repricing at a faster rate than average rates of interest-earning assets.

 

The net interest margin was 3.49% for the three months ended June 30, 2020, as compared to 3.42% for the three months ended June 30, 2019.  The increase in net interest margin was primarily due to a declining-rate environment where the average rate of interest-bearing liabilities fell faster than the average rate of interest-earning assets.  Higher cost deposits and our Federal Home Loan Bank advances were repriced down as market interest rates dropped.

 

The provision for loan losses was $12.5 million for the three months ended June 30, 2020, as compared to $974 thousand for the three months ended June 30, 2019.  For the three months ended June 30, 2020, we had net charge-offs of $337 thousand as compared to net charge-offs, adjusted for one previously mentioned credit relationship, of $299 thousand for the same period in 2019.  The provision for the three months ended June 30, 2020, is primarily related to the impact of COVID-19 on to overall credit.

 

Total non-interest income for the quarter ended June 30, 2020, was $5.7 million, as compared to $6.5 million for the quarter ended June 30, 2019.  Decreases in service charges and fees were partially offset by an increase in mortgage banking income.

 

Total non-interest expense was $23.9 million for the quarter ended June 30, 2020, as compared to $25.0 million for the quarter ended June 30, 2019.  The decrease in non-interest expense is due largely to reductions in salaries and employee benefits, advertising and business development, FDIC insurance, professional fees, and merger expense, partially offset by increases in data processing, amortization of core deposit intangibles and loan expense.  The overall decrease in salaries


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

and employee benefits was due to the deferral of loan origination cost associated with originating the PPP loans during the three months ended June 30, 2020.

 

Equity’s effective tax rate for the quarter ended June 30, 2020, was 22.7%, as compared to 21.4% for the quarter ended June 30, 2019.

 

Loans, Deposits and Total Assets

 

Loans held for investment were $2.81 billion at June 30, 2020, as compared to $2.56 billion at December 31, 2019, an increase of $249.7 million.  The increase in loans is primarily the result of increases in commercial and industrial and commercial real estate loans, which were partially offset by reductions in real estate construction loans and residential real estate loans.  Included in the commercial and industrial loan increase is $373.0 million of PPP loans to existing and new customers that carry a 1.00% rate but provide the ability to support our markets in a period of need.

 

As of June 30, 2020, Equity’s allowance for loan losses to total loans was 1.21%, as compared to 0.48% at December 31, 2019.  Total reserves, including purchase discounts, to total loans were approximately 1.57% as of June 30, 2020, as compared to 0.85% at December 31, 2019.  Nonperforming assets were $57.8 million as of June 30, 2020, or 1.37% of total assets.  Nonperforming assets were $46.9 million at December 31, 2019, or 1.19% of total assets.

 

Total deposits were $3.25 billion at June 30, 2020, as compared to $3.06 billion at December 31, 2019, an increase of $183.8 million.  This increase included $275.3 million of demand and $51.1 million of savings, NOW and money market deposits, partially offset by a decrease of $142.6 million in time deposits.  The changes in demand, savings, NOW and money market deposits are primarily from increases in existing customer balances, a portion of which are related to PPP funding, in both the private and public sector.  Signature deposits were $2.56 billion at June 30, 2020, as compared to $2.23 billion at December 31, 2019.

 

At June 30, 2020, Equity had consolidated total assets of $4.21 billion, as compared to $3.95 billion at December 31, 2019, an increase of $255.7 million.

 

Borrowings and Capital

 

At June 30, 2020, borrowings totaled $452.0 million, as compared to $383.6 million at December 31, 2019.  The increase in borrowings was principally due to a $41.0 million increase in subordinated debentures, a $20.5 million increase in Federal Home Loan Bank advances and a $15.8 million increase in retail repurchase agreements, offset by a decrease of $9.0 million in the bank stock loan balance, which was paid in full June 30, 2020.

 

At June 30, 2020, common stockholders’ equity totaled $479.8 million, or $31.53 per common share, as compared to $478.1 million, or $30.95 per common share, at December 31, 2019.  Tangible common equity was $324.0 million and tangible book value per common share was $21.29 at June 30, 2020.  Tangible common equity was $320.5 million and tangible book value per common share was $20.75 at December 31, 2019.  The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.02%, the total capital to risk-weighted assets was 15.33% and the total leverage ratio was 8.52% at June 30, 2020.  The Company’s subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 13.11%, a ratio of total capital to risk-weighted assets of 14.37% and a total leverage ratio of 8.88% at June 30, 2020.

 

Non-GAAP Financial Measures

 

This press release includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of this press release.

 

Conference Call and Webcast

 


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

Equity Chairman and Chief Executive Officer, Brad Elliott, and Executive Vice President and Chief Operating Officer (Principal Accounting Officer), Greg Kossover, will hold a conference call and webcast to discuss second quarter 2020 results on Wednesday, July 22, 2020, at 10 a.m. eastern time, 9:00 a.m. central time.

 

Investors, news media and other participants should register for the call or audio webcast at investor.equitybank.com. On Wednesday, July 22, 2020, participants may also dial into the call toll-free at (844) 534-7311 from anywhere in the U.S. or (574) 990-1419 internationally, using conference ID no. 8360966.

 

Participants are encouraged to dial into the call or access the webcast approximately 10 minutes prior to the start time.  Presentation slides to pair with the call or webcast will be posted one hour prior to the call at investor.equitybank.com.

 

A replay of the call and webcast will be available two hours following the close of the call until July 29, 2020, accessible at (855) 859-2056 with conference ID no. 8360966 at investor.equitybank.com.

About Equity Bancshares, Inc.

Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions, including commercial loans, consumer banking, mortgage loans, trust and wealth management services and treasury management services, while delivering the high-quality, relationship-based customer service of a community bank. Equity’s common stock is traded on the NASDAQ Global Select Market under the symbol “EQBK.” Learn more at www.equitybank.com.

 

Special Note Concerning Forward-Looking Statements

 

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements reflect the current views of Equity’s management with respect to, among other things, future events and Equity’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature.  These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity’s control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.  Factors that could cause actual results to differ materially from Equity’s expectations include COVID-19 related impacts; competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses; and similar variables. The foregoing list of factors is not exhaustive.

 

For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Equity’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2020, and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity’s business or the extent to which any factor, or combination of factors, may cause actual results


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity’s behalf may issue.

 

Investor Contact:

 

Chris Navratil

SVP, Finance

Equity Bancshares, Inc.

(316) 612-6014

cnavratil@equitybank.com

 

Media Contact:

 

John J. Hanley

SVP, Senior Director of Marketing

Equity Bancshares, Inc.

(816) 505-4063

jhanley@equitybank.com

 

 

Unaudited Financial Tables

 

Table 1. Selected Financial Highlights

 

Table 2. Year-to-Date Analysis of Changes in Net Interest Income

 

Table 3.  Quarterly Analysis of Changes in Net Interest Income

 

Table 4. Consolidated Balance Sheets

 

Table 5. Consolidated Statements of Operations

 

Table 6. Non-GAAP Financial Measures



 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

TABLE 1. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)

(Dollars in thousands, except per share data)

 

 

As of and for the three months ended

 

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 

2019

 

Statement of Income Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

32,891

 

 

$

32,095

 

 

$

32,405

 

 

$

31,526

 

 

$

31,288

 

Provision for loan losses

 

 

12,500

 

 

 

9,940

 

 

 

1,055

 

 

 

679

 

 

 

974

 

Net gains (losses) from securities transactions

 

 

4

 

 

 

8

 

 

 

(3

)

 

 

4

 

 

 

7

 

Other non-interest income

 

 

5,728

 

 

 

5,298

 

 

 

6,644

 

 

 

6,568

 

 

 

6,444

 

Total non-interest income

 

 

5,732

 

 

 

5,306

 

 

 

6,641

 

 

 

6,572

 

 

 

6,451

 

Merger expense

 

 

 

 

 

 

 

 

 

 

 

 

 

276

 

Other non-interest expense

 

 

23,937

 

 

 

25,758

 

 

 

24,846

 

 

 

24,223

 

 

 

24,747

 

Total non-interest expense

 

 

23,937

 

 

 

25,758

 

 

 

24,846

 

 

 

24,223

 

 

 

25,023

 

Income before income taxes

 

 

2,186

 

 

 

1,703

 

 

 

13,145

 

 

 

13,196

 

 

 

11,742

 

Provision for income taxes

 

 

497

 

 

 

445

 

 

 

3,131

 

 

 

2,790

 

 

 

2,510

 

Net income allocable to common stockholders

 

 

1,689

 

 

 

1,258

 

 

 

10,014

 

 

 

10,406

 

 

 

9,232

 

Basic earnings per share

 

 

0.11

 

 

 

0.08

 

 

 

0.65

 

 

 

0.67

 

 

 

0.59

 

Diluted earnings per share

 

 

0.11

 

 

 

0.08

 

 

 

0.64

 

 

 

0.66

 

 

 

0.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Data (at period end)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities

 

$

177,228

 

 

$

187,812

 

 

$

142,067

 

 

$

152,680

 

 

$

161,082

 

Held-to-maturity securities

 

 

662,522

 

 

 

721,992

 

 

 

769,059

 

 

 

764,163

 

 

 

766,950

 

Gross loans held for investment

 

 

2,806,334

 

 

 

2,507,123

 

 

 

2,556,652

 

 

 

2,600,924

 

 

 

2,679,985

 

Allowance for loan losses

 

 

34,078

 

 

 

21,915

 

 

 

12,232

 

 

 

17,875

 

 

 

17,777

 

Intangible assets, net

 

 

155,717

 

 

 

156,704

 

 

 

157,518

 

 

 

158,350

 

 

 

159,147

 

Total assets

 

 

4,205,269

 

 

 

3,943,832

 

 

 

3,949,578

 

 

 

4,074,663

 

 

 

4,180,074

 

Total deposits

 

 

3,247,267

 

 

 

2,960,397

 

 

 

3,063,516

 

 

 

3,106,929

 

 

 

3,185,893

 

Non-time deposits

 

 

2,556,745

 

 

 

2,176,586

 

 

 

2,230,346

 

 

 

2,177,820

 

 

 

2,192,534

 

Borrowings

 

 

452,032

 

 

 

481,371

 

 

 

383,632

 

 

 

480,000

 

 

 

515,582

 

Total liabilities

 

 

3,725,503

 

 

 

3,466,481

 

 

 

3,471,518

 

 

 

3,607,613

 

 

 

3,721,668

 

Total stockholders’ equity

 

 

479,766

 

 

 

477,351

 

 

 

478,060

 

 

 

467,050

 

 

 

458,406

 

Tangible common equity*

 

 

324,049

 

 

 

320,647

 

 

 

320,542

 

 

 

308,700

 

 

 

299,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Average Balance Sheet Data (quarterly average)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

$

877,308

 

 

$

907,910

 

 

$

911,923

 

 

$

926,839

 

 

$

924,914

 

Total gross loans receivable

 

 

2,806,865

 

 

 

2,525,344

 

 

 

2,568,301

 

 

 

2,646,454

 

 

 

2,655,256

 

Interest-earning assets

 

 

3,786,629

 

 

 

3,519,267

 

 

 

3,563,642

 

 

 

3,657,970

 

 

 

3,665,618

 

Total assets

 

 

4,159,336

 

 

 

3,888,205

 

 

 

3,932,909

 

 

 

4,030,606

 

 

 

4,025,764

 

Interest-bearing deposits

 

 

2,487,187

 

 

 

2,531,508

 

 

 

2,563,519

 

 

 

2,673,007

 

 

 

2,726,443

 

Borrowings

 

 

384,727

 

 

 

355,303

 

 

 

377,561

 

 

 

390,562

 

 

 

347,103

 

Total interest-bearing liabilities

 

 

2,871,914

 

 

 

2,886,811

 

 

 

2,941,080

 

 

 

3,063,569

 

 

 

3,073,546

 

Total deposits

 

 

3,257,631

 

 

 

3,021,181

 

 

 

3,055,275

 

 

 

3,152,785

 

 

 

3,200,624

 

Total liabilities

 

 

3,675,731

 

 

 

3,405,638

 

 

 

3,459,347

 

 

 

3,567,354

 

 

 

3,568,661

 

Total stockholders' equity

 

 

483,605

 

 

 

482,567

 

 

 

473,562

 

 

 

463,252

 

 

 

457,103

 

Tangible common equity*

 

 

327,411

 

 

 

325,470

 

 

 

315,569

 

 

 

304,492

 

 

 

297,541

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA) annualized

 

 

0.16

%

 

 

0.13

%

 

 

1.01

%

 

 

1.02

%

 

 

0.92

%

Return on average equity (ROAE) annualized

 

 

1.40

%

 

 

1.05

%

 

 

8.39

%

 

 

8.91

%

 

 

8.10

%

Return on average tangible common equity (ROATCE) annualized*

 

 

3.03

%

 

 

2.35

%

 

 

13.42

%

 

 

14.38

%

 

 

13.29

%

Yield on loans annualized

 

 

4.68

%

 

 

5.47

%

 

 

5.67

%

 

 

5.70

%

 

 

5.74

%

Cost of interest-bearing deposits annualized

 

 

0.63

%

 

 

1.09

%

 

 

1.32

%

 

 

1.56

%

 

 

1.64

%

Cost of total deposits annualized

 

 

0.48

%

 

 

0.91

%

 

 

1.11

%

 

 

1.32

%

 

 

1.40

%

Net interest margin annualized

 

 

3.49

%

 

 

3.67

%

 

 

3.61

%

 

 

3.42

%

 

 

3.42

%

Efficiency ratio*

 

 

61.98

%

 

 

68.88

%

 

 

63.63

%

 

 

63.59

%

 

 

65.59

%

Non-interest income / average assets

 

 

0.55

%

 

 

0.55

%

 

 

0.67

%

 

 

0.65

%

 

 

0.64

%

Non-interest expense / average assets

 

 

2.31

%

 

 

2.66

%

 

 

2.51

%

 

 

2.38

%

 

 

2.49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

Tier 1 Leverage Ratio

 

 

8.52

%

 

 

9.02

%

 

 

9.02

%

 

 

8.49

%

 

 

8.26

%

Common Equity Tier 1 Capital Ratio

 

 

12.02

%

 

 

11.67

%

 

 

11.63

%

 

 

11.08

%

 

 

10.46

%

Tier 1 Risk Based Capital Ratio

 

 

12.57

%

 

 

12.20

%

 

 

12.15

%

 

 

11.59

%

 

 

10.95

%

Total Risk Based Capital Ratio

 

 

15.33

%

 

 

13.00

%

 

 

12.59

%

 

 

12.21

%

 

 

11.56

%

Total stockholders' equity to total assets

 

 

11.41

%

 

 

12.10

%

 

 

12.10

%

 

 

11.46

%

 

 

10.97

%

Tangible common equity to tangible assets*

 

 

8.00

%

 

 

8.47

%

 

 

8.45

%

 

 

7.88

%

 

 

7.44

%

Book value per common share

 

$

31.53

 

 

$

31.41

 

 

$

30.95

 

 

$

30.25

 

 

$

29.45

 

Tangible book value per common share*

 

$

21.29

 

 

$

21.10

 

 

$

20.75

 

 

$

19.99

 

 

$

19.23

 

Tangible book value per diluted common share*

 

$

21.13

 

 

$

20.96

 

 

$

20.39

 

 

$

19.73

 

 

$

18.99

 

 

* The value noted is considered a Non-GAAP financial measure.  For a reconciliation of Non-GAAP financial measures, see Table 6. Non-GAAP Financial Measures


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

TABLE 2. YEAR-TO-DATE ANALYSIS OF CHANGES IN NET INTEREST INCOME (Unaudited)

(Dollars in thousands)

 

 

For the six months ended

 

 

For the six months ended

 

 

June 30, 2020

 

 

June 30, 2019

 

 

Average Outstanding Balance

 

 

Interest Income/ Expense

 

 

Average

Yield/Rate(3)(4)

 

 

Average Outstanding Balance

 

 

Interest Income/ Expense

 

 

Average

Yield/Rate(3)(4)

 

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

$

2,666,104

 

 

$

67,003

 

 

 

5.05

%

 

$

2,607,906

 

 

$

74,560

 

 

 

5.77

%

Total securities

 

892,608

 

 

 

10,483

 

 

 

2.36

%

 

 

921,876

 

 

 

12,149

 

 

 

2.66

%

Federal funds sold and other

 

94,234

 

 

 

1,004

 

 

 

2.14

%

 

 

83,723

 

 

 

1,257

 

 

 

3.03

%

Total interest-earning assets

 

3,652,946

 

 

 

78,490

 

 

 

4.32

%

 

 

3,613,505

 

 

 

87,966

 

 

 

4.91

%

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing demand and savings

 

1,739,527

 

 

 

4,048

 

 

 

0.47

%

 

 

1,704,672

 

 

 

11,525

 

 

 

1.36

%

Certificates of deposit

 

769,820

 

 

 

6,715

 

 

 

1.75

%

 

 

1,013,394

 

 

 

10,349

 

 

 

2.06

%

Total interest-bearing deposits

 

2,509,347

 

 

 

10,763

 

 

 

0.86

%

 

 

2,718,066

 

 

 

21,874

 

 

 

1.62

%

FHLB advances & LOC

 

283,231

 

 

 

1,727

 

 

 

1.23

%

 

 

238,462

 

 

 

3,146

 

 

 

2.66

%

Other borrowings

 

86,784

 

 

 

1,014

 

 

 

2.35

%

 

 

70,049

 

 

 

1,019

 

 

 

2.94

%

Total interest-bearing liabilities

 

2,879,362

 

 

 

13,504

 

 

 

0.94

%

 

 

3,026,577

 

 

 

26,039

 

 

 

1.74

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

64,986

 

 

 

 

 

 

 

 

 

 

$

61,927

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

 

 

3.38

%

 

 

 

 

 

 

 

 

 

 

3.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (2)

 

 

 

 

 

 

 

 

 

3.58

%

 

 

 

 

 

 

 

 

 

 

3.46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Average loan balances include nonaccrual loans.

 

(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.

 

(3) Tax exempt income is not included in the above table on a tax-equivalent basis.

 

(4) Actual unrounded values are used to calculate the reported yield or rate disclosed.  Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts.

 

 

 

 

For the six months ended

 

 

June 30, 2020 vs. 2019

 

 

Total Increase/(Decrease)

 

 

Volume

Variance(1)

 

 

Yield/Rate

Variance(1)

 

 

Total

Variance

 

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

Loans

$

1,633

 

 

$

(9,190

)

 

$

(7,557

)

Total securities

 

(395

)

 

 

(1,271

)

 

 

(1,666

)

Federal funds sold and other

 

144

 

 

 

(397

)

 

 

(253

)

Total interest-earning assets

 

1,382

 

 

 

(10,858

)

 

 

(9,476

)

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing demand and savings

 

221

 

 

 

(7,698

)

 

 

(7,477

)

Certificates of deposit

 

(2,261

)

 

 

(1,373

)

 

 

(3,634

)

Total interest-bearing deposits

 

(2,040

)

 

 

(9,071

)

 

 

(11,111

)

FHLB advances & LOC

 

508

 

 

 

(1,927

)

 

 

(1,419

)

Other borrowings

 

280

 

 

 

(285

)

 

 

(5

)

Total interest-bearing liabilities

 

(1,252

)

 

 

(11,283

)

 

 

(12,535

)

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

2,634

 

 

$

425

 

 

$

3,059

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The effect of changes in volume is determined by multiplying the change in volume by the previous year's average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the prior year's volume. The changes attributable to both volume and rate, which cannot be segregated, have been allocated to the volume variance and the rate variance in proportion to the relationship of the absolute dollar amount of the change in each.

 


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

TABLE 3. QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME (Unaudited)

(Dollars in thousands)

 

 

For the three months ended

 

 

For the three months ended

 

 

June 30, 2020

 

 

June 30, 2019

 

 

Average Outstanding Balance

 

 

Interest Income/ Expense

 

 

Average

Yield/Rate(3)(4)

 

 

Average Outstanding Balance

 

 

Interest Income/ Expense

 

 

Average

Yield/Rate(3)(4)

 

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1)

$

2,806,865

 

 

$

32,627

 

 

 

4.68

%

 

$

2,655,256

 

 

$

38,027

 

 

 

5.74

%

Total securities

 

877,308

 

 

 

4,897

 

 

 

2.25

%

 

 

924,914

 

 

 

6,114

 

 

 

2.65

%

Federal funds sold and other

 

102,456

 

 

 

409

 

 

 

1.61

%

 

 

85,448

 

 

 

623

 

 

 

2.92

%

Total interest-earning assets

 

3,786,629

 

 

 

37,933

 

 

 

4.03

%

 

 

3,665,618

 

 

 

44,764

 

 

 

4.90

%

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing demand and savings

 

1,754,280

 

 

 

923

 

 

 

0.21

%

 

 

1,715,991

 

 

 

5,857

 

 

 

1.37

%

Certificates of deposit

 

732,907

 

 

 

2,976

 

 

 

1.63

%

 

 

1,010,452

 

 

 

5,287

 

 

 

2.10

%

     Total interest-bearing deposits

 

2,487,187

 

 

 

3,899

 

 

 

0.63

%

 

 

2,726,443

 

 

 

11,144

 

 

 

1.64

%

FHLB advances & LOC

 

270,785

 

 

 

552

 

 

 

0.82

%

 

 

278,864

 

 

 

1,841

 

 

 

2.65

%

Other borrowings

 

113,942

 

 

 

591

 

 

 

2.09

%

 

 

68,239

 

 

 

491

 

 

 

2.89

%

Total interest-bearing liabilities

 

2,871,914

 

 

 

5,042

 

 

 

0.71

%

 

 

3,073,546

 

 

 

13,476

 

 

 

1.76

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

32,891

 

 

 

 

 

 

 

 

 

 

$

31,288

 

 

 

 

 

Interest rate spread

 

 

 

 

 

 

 

 

 

3.32

%

 

 

 

 

 

 

 

 

 

 

3.14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (2)

 

 

 

 

 

 

 

 

 

3.49

%

 

 

 

 

 

 

 

 

 

 

3.42

%

(1) Average loan balances include nonaccrual loans.

 

(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.

 

(3) Tax exempt income is not included in the above table on a tax-equivalent basis.

 

(4) Actual unrounded values are used to calculate the reported yield or rate disclosed.  Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts.

 

 

 

 

For the three months ended

 

 

June 30, 2020 vs. 2019

 

 

Total Increase/(Decrease)

 

 

Volume

Variance(1)

 

 

Yield/Rate

Variance (1)

 

 

Total

Variance

 

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

Loans

$

2,076

 

 

$

(7,476

)

 

$

(5,400

)

Total securities

 

(320

)

 

 

(897

)

 

 

(1,217

)

Federal funds sold and other

 

107

 

 

 

(321

)

 

 

(214

)

Total interest-earning assets

 

1,863

 

 

 

(8,694

)

 

 

(6,831

)

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing demand and savings

 

115

 

 

 

(5,049

)

 

 

(4,934

)

Certificates of deposit

 

(1,273

)

 

 

(1,038

)

 

 

(2,311

)

     Total interest-bearing deposits

 

(1,158

)

 

 

(6,087

)

 

 

(7,245

)

FHLB advances & LOC

 

(52

)

 

 

(1,237

)

 

 

(1,289

)

Other borrowings

 

274

 

 

 

(174

)

 

 

100

 

Total interest-bearing liabilities

 

(936

)

 

 

(7,498

)

 

 

(8,434

)

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

$

2,799

 

 

$

(1,196

)

 

$

1,603

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The effect of changes in volume is determined by multiplying the change in volume by the previous year's average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the prior year's volume. The changes attributable to both volume and rate, which cannot be segregated, have been allocated to the volume variance and the rate variance in proportion to the relationship of the absolute dollar amount of the change in each.

 


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

TABLE 4. CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands)

  

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

178,045

 

 

$

88,973

 

Federal funds sold

 

 

245

 

 

 

318

 

Cash and cash equivalents

 

 

178,290

 

 

 

89,291

 

Interest-bearing time deposits in other banks

 

 

2,248

 

 

 

2,498

 

Available-for-sale securities

 

 

177,228

 

 

 

142,067

 

Held-to-maturity securities, fair value of $689,206 and $783,911

 

 

662,522

 

 

 

769,059

 

Loans held for sale

 

 

4,802

 

 

 

5,933

 

Loans, net of allowance for loan losses of $34,078 and $12,232

 

 

2,772,256

 

 

 

2,544,420

 

Other real estate owned, net

 

 

7,374

 

 

 

8,293

 

Premises and equipment, net

 

 

87,055

 

 

 

84,478

 

Bank-owned life insurance

 

 

76,066

 

 

 

75,103

 

Federal Reserve Bank and Federal Home Loan Bank stock

 

 

31,832

 

 

 

31,137

 

Interest receivable

 

 

19,598

 

 

 

15,738

 

Goodwill

 

 

136,432

 

 

 

136,432

 

Core deposit intangibles, net

 

 

18,131

 

 

 

19,907

 

Other

 

 

31,435

 

 

 

25,222

 

Total assets

 

$

4,205,269

 

 

$

3,949,578

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

Demand

 

$

756,613

 

 

$

481,298

 

Total non-interest-bearing deposits

 

 

756,613

 

 

 

481,298

 

Savings, NOW and money market

 

 

1,800,132

 

 

 

1,749,048

 

Time

 

 

690,522

 

 

 

833,170

 

Total interest-bearing deposits

 

 

2,490,654

 

 

 

2,582,218

 

Total deposits

 

 

3,247,267

 

 

 

3,063,516

 

Federal funds purchased and retail repurchase agreements

 

 

51,557

 

 

 

35,708

 

Federal Home Loan Bank advances

 

 

344,900

 

 

 

324,373

 

Bank stock loan

 

 

 

 

 

8,990

 

Subordinated debentures

 

 

55,575

 

 

 

14,561

 

Contractual obligations

 

 

5,571

 

 

 

5,836

 

Interest payable and other liabilities

 

 

20,633

 

 

 

18,534

 

Total liabilities

 

 

3,725,503

 

 

 

3,471,518

 

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Common stock

 

 

174

 

 

 

174

 

Additional paid-in capital

 

 

384,955

 

 

 

382,731

 

Retained earnings

 

 

128,704

 

 

 

125,757

 

Accumulated other comprehensive income (loss)

 

 

3,390

 

 

 

(3

)

Employee stock loans

 

 

(43

)

 

 

(77

)

Treasury stock

 

 

(37,414

)

 

 

(30,522

)

Total stockholders’ equity

 

 

479,766

 

 

 

478,060

 

Total liabilities and stockholders’ equity

 

$

4,205,269

 

 

$

3,949,578

 

 

 

 

 

 

 

 


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

TABLE 5. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Dollars in thousands, except per share data)

 

 

Three months ended

June 30,

 

 

Six months ended

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

32,627

 

 

$

38,027

 

 

$

67,003

 

 

$

74,560

 

Securities, taxable

 

 

4,017

 

 

 

4,969

 

 

 

8,637

 

 

 

10,051

 

Securities, nontaxable

 

 

880

 

 

 

1,145

 

 

 

1,846

 

 

 

2,098

 

Federal funds sold and other

 

 

409

 

 

 

623

 

 

 

1,004

 

 

 

1,257

 

Total interest and dividend income

 

 

37,933

 

 

 

44,764

 

 

 

78,490

 

 

 

87,966

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

3,899

 

 

 

11,144

 

 

 

10,763

 

 

 

21,874

 

Federal funds purchased and retail repurchase agreements

 

 

24

 

 

 

34

 

 

 

55

 

 

 

66

 

Federal Home Loan Bank advances

 

 

552

 

 

 

1,841

 

 

 

1,727

 

 

 

3,146

 

Federal Reserve Bank discount window

 

 

6

 

 

 

 

 

 

6

 

 

 

 

Bank stock loan

 

 

306

 

 

 

147

 

 

 

415

 

 

 

309

 

Subordinated debentures

 

 

255

 

 

 

310

 

 

 

538

 

 

 

644

 

Total interest expense

 

 

5,042

 

 

 

13,476

 

 

 

13,504

 

 

 

26,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

32,891

 

 

 

31,288

 

 

 

64,986

 

 

 

61,927

 

Provision for loan losses

 

 

12,500

 

 

 

974

 

 

 

22,440

 

 

 

16,620

 

Net interest income after provision for loan losses

 

 

20,391

 

 

 

30,314

 

 

 

42,546

 

 

 

45,307

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and fees

 

 

1,365

 

 

 

2,240

 

 

 

3,391

 

 

 

4,163

 

Debit card income

 

 

2,201

 

 

 

2,186

 

 

 

4,244

 

 

 

3,924

 

Mortgage banking

 

 

831

 

 

 

562

 

 

 

1,421

 

 

 

879

 

Increase in value of bank-owned life insurance

 

 

481

 

 

 

499

 

 

 

963

 

 

 

987

 

Net gains from securities transactions

 

 

4

 

 

 

7

 

 

 

12

 

 

 

13

 

Other

 

 

850

 

 

 

957

 

 

 

1,007

 

 

 

1,809

 

Total non-interest income

 

 

5,732

 

 

 

6,451

 

 

 

11,038

 

 

 

11,775

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

12,695

 

 

 

13,067

 

 

 

26,199

 

 

 

27,165

 

Net occupancy and equipment

 

 

2,119

 

 

 

2,188

 

 

 

4,354

 

 

 

4,155

 

Data processing

 

 

2,763

 

 

 

2,358

 

 

 

5,426

 

 

 

4,763

 

Professional fees

 

 

943

 

 

 

1,228

 

 

 

2,310

 

 

 

2,384

 

Advertising and business development

 

 

403

 

 

 

722

 

 

 

1,099

 

 

 

1,368

 

Telecommunications

 

 

390

 

 

 

485

 

 

 

877

 

 

 

1,070

 

FDIC insurance

 

 

414

 

 

 

730

 

 

 

931

 

 

 

1,008

 

Courier and postage

 

 

353

 

 

 

341

 

 

 

737

 

 

 

668

 

Free nationwide ATM cost

 

 

327

 

 

 

420

 

 

 

747

 

 

 

781

 

Amortization of core deposit intangibles

 

 

974

 

 

 

785

 

 

 

1,776

 

 

 

1,564

 

Loan expense

 

 

287

 

 

 

175

 

 

 

521

 

 

 

443

 

Other real estate owned

 

 

269

 

 

 

302

 

 

 

577

 

 

 

414

 

Merger expenses

 

 

 

 

 

276

 

 

 

 

 

 

915

 

Other

 

 

2,000

 

 

 

1,946

 

 

 

4,141

 

 

 

3,868

 

Total non-interest expense

 

 

23,937

 

 

 

25,023

 

 

 

49,695

 

 

 

50,566

 

Income before income tax

 

 

2,186

 

 

 

11,742

 

 

 

3,889

 

 

 

6,516

 

Provision for income taxes

 

 

497

 

 

 

2,510

 

 

 

942

 

 

 

1,357

 

Net income and net income allocable to common stockholders

 

$

1,689

 

 

$

9,232

 

 

$

2,947

 

 

$

5,159

 

Basic earnings per share

 

$

0.11

 

 

$

0.59

 

 

$

0.19

 

 

$

0.33

 

Diluted earnings per share

 

$

0.11

 

 

$

0.58

 

 

$

0.19

 

 

$

0.32

 


 

Equity Bancshares, Inc.

PRESS RELEASE - 07/21/2020

TABLE 6. NON-GAAP FINANCIAL MEASURES (Unaudited)

(Dollars in thousands, except per share data)

  

 

As of and for the three months ended

 

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 

2019

 

Total stockholders' equity

 

$

479,766

 

 

$

477,351

 

 

$

478,060

 

 

$

467,050

 

 

$

458,406

 

Less: goodwill

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

Less: core deposit intangibles, net

 

 

18,131

 

 

 

19,105

 

 

 

19,907

 

 

 

20,727

 

 

 

21,512

 

Less: mortgage servicing asset, net

 

 

2

 

 

 

4

 

 

 

5

 

 

 

7

 

 

 

8

 

Less: naming rights, net

 

 

1,152

 

 

 

1,163

 

 

 

1,174

 

 

 

1,184

 

 

 

1,195

 

Tangible common equity

 

$

324,049

 

 

$

320,647

 

 

$

320,542

 

 

$

308,700

 

 

$

299,259

 

Common shares issued at period end

 

 

15,218,301

 

 

 

15,198,986

 

 

 

15,444,434

 

 

 

15,440,334

 

 

 

15,563,873

 

RSU shares vested

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding at period end

 

 

15,218,301

 

 

 

15,198,986

 

 

 

15,444,434

 

 

 

15,440,334

 

 

 

15,563,873

 

Diluted common shares outstanding at period end

 

 

15,333,977

 

 

 

15,297,319

 

 

 

15,719,810

 

 

 

15,647,456

 

 

 

15,758,747

 

Book value per common share

 

$

31.53

 

 

$

31.41

 

 

$

30.95

 

 

$

30.25

 

 

$

29.45

 

Tangible book value per common share

 

$

21.29

 

 

$

21.10

 

 

$

20.75

 

 

$

19.99

 

 

$

19.23

 

Tangible book value per diluted common share

 

$

21.13

 

 

$

20.96

 

 

$

20.39

 

 

$

19.73

 

 

$

18.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

4,205,269

 

 

$

3,943,832

 

 

$

3,949,578

 

 

$

4,074,663

 

 

$

4,180,074

 

Less: goodwill

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

 

 

136,432

 

Less: core deposit intangibles, net

 

 

18,131

 

 

 

19,105

 

 

 

19,907

 

 

 

20,727

 

 

 

21,512

 

Less: mortgage servicing asset, net

 

 

2

 

 

 

4

 

 

 

5

 

 

 

7

 

 

 

8

 

Less: naming rights, net

 

 

1,152

 

 

 

1,163

 

 

 

1,174

 

 

 

1,184

 

 

 

1,195

 

Tangible assets

 

$

4,049,552

 

 

$

3,787,128

 

 

$

3,792,060

 

 

$

3,916,313

 

 

$

4,020,927

 

Total stockholders' equity to total assets

 

 

11.41

%

 

 

12.10

%

 

 

12.10

%

 

 

11.46

%

 

 

10.97

%

Tangible common equity to tangible assets

 

 

8.00

%

 

 

8.47

%

 

 

8.45

%

 

 

7.88

%

 

 

7.44

%

Total average stockholders' equity

 

$

483,605

 

 

$

482,567

 

 

$

473,562

 

 

$

463,252

 

 

$

457,103

 

Less: average intangible assets

 

 

156,194

 

 

 

157,097

 

 

 

157,993

 

 

 

158,760

 

 

 

159,562

 

Average tangible common equity

 

$

327,411

 

 

$

325,470

 

 

$

315,569

 

 

$

304,492

 

 

$

297,541

 

Net income allocable to common stockholders

 

$

1,689

 

 

$

1,258

 

 

$

10,014

 

 

$

10,406

 

 

$

9,232

 

Amortization of intangible assets

 

 

986

 

 

 

814

 

 

 

833

 

 

 

797

 

 

 

797

 

Less: tax effect of intangible assets amortization

 

 

207

 

 

 

171

 

 

 

175

 

 

 

167

 

 

 

167

 

Adjusted net income allocable to common stockholders

 

$

2,468

 

 

$

1,901

 

 

$

10,672

 

 

$

11,036

 

 

$

9,862

 

Return on total average stockholders' equity (ROAE) annualized

 

 

1.40

%

 

 

1.05

%

 

 

8.39

%

 

 

8.91

%

 

 

8.10

%

Return on average tangible common equity (ROATCE) annualized

 

 

3.03

%

 

 

2.35

%

 

 

13.42

%

 

 

14.38

%

 

 

13.29

%

Non-interest expense

 

$

23,937

 

 

$

25,758

 

 

$

24,846

 

 

$

24,223

 

 

$

25,023

 

Less: merger expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

276

 

Non-interest expense, excluding merger expenses

 

$

23,937

 

 

$

25,758

 

 

$

24,846

 

 

$

24,223

 

 

$

24,747

 

Net interest income

 

$

32,891

 

 

$

32,095

 

 

$

32,405

 

 

$

31,526

 

 

$

31,288

 

Non-interest income

 

 

5,732

 

 

 

5,306

 

 

 

6,641

 

 

 

6,572

 

 

 

6,451

 

Less: net gains (losses) from securities transactions

 

 

4

 

 

 

8

 

 

 

(3

)

 

 

4

 

 

 

7

 

Non-interest income, excluding gains (losses) from securities transactions

 

$

5,728

 

 

$

5,298

 

 

$

6,644

 

 

$

6,568

 

 

$

6,444

 

Net interest income plus non-interest income, excluding net gains (losses) from securities transactions

 

$

38,619

 

 

$

37,393

 

 

$

39,049

 

 

$

38,094

 

 

$

37,732

 

Non-interest expense to net interest income plus non-interest income

 

 

61.98

%

 

 

68.87

%

 

 

63.63

%

 

 

63.58

%

 

 

66.31

%

Efficiency ratio

 

 

61.98

%

 

 

68.88

%

 

 

63.63

%

 

 

63.59

%

 

 

65.59

%

 

eqbk-ex992_529.pptx.htm

Slide 0

Second Quarter 2020 Results Presentation July 21, 2020 Exhibit 99.2

Slide 1

Disclaimers Special Note Concerning Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of Equity’s management with respect to, among other things, future events and Equity’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity’s control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from Equity’s expectations include COVID-19 related impacts; competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses; and similar variables. The foregoing list of factors is not exhaustive.   For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Equity’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10, 2020, and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity’s behalf may issue. NON-GAAP FINANCIAL MEASURES This presentation contains certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of this presentation. Numbers in the presentation may not sum due to rounding.

Slide 2

Equity Bank: We Are Here For You - COVID Outreach 2020 PPP CONTINUING TO ACCEPT APPLICATIONS TO FACILITATE PHASE 2 90,000(1) Employees Assisted through SBA PPP loans 3,198 Completed Loans Digital Banking DocuSign implementation across products Online & Mobile traffic +10% +13% New Account Applications YEAR-OVER-YEAR custom, in-house CRM project workflow Phase 1 (1) Estimate based on data provided on applications processed.

Slide 3

Diluted earnings per share of $0.11 for 2Q 2020 Net income to common stockholders was $1.7 million Pre-tax, pre-provision income was $14.7 million EQBK Capital Ratios as of 6/30/2020: Leverage Ratio of 8.52%, or 9.41% adjusted to exclude PPP loans Total Risk-Based Capital Ratio of 15.33% Tangible Common Equity to Tangible Assets of 8.00%(1), or 8.81% adjusted to exclude PPP loans Tangible common book value per share of $21.29(1) Provision for loan losses was driven higher by continued economic uncertainty due to the COVID-19 pandemic Realized NIM, adjusted for PPP loan impact, expansion Y/Y to 3.65% for Q2 Completed a subordinated debt offering in the amount of $42M to bolster capital without diluting current shareholders 2020 Second Quarter Highlights Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Proactive response to the COVID-19 pandemic for the benefit of our customers, personnel, communities, and shareholders. Raised protective and productive capital in a challenging environment without diluting current shareholders. Continued to enhance enterprise value, through developing strong relationships with current and future customers as we all work to determine and address the impacts of the current environment.

Slide 4

Operating Performance Trends – Year-over-Year Diluted EPS and Net Income to Common Stockholders Return on Average Tangible Common Equity(1,2) Efficiency Ratio(1,2) & Non-Interest Expense / Average Assets Income(2) and Net Interest Margin Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Does not include gains on sales and settlement of securities or bargain purchase gains associated with acquisitions. Periods prior to 2019 adjusted to exclude merger expenses. 2019 results adjusted for merger expenses, first quarter identified specific impairment charge, and FDIC premium credit received in the third quarter. First and second quarter 2020 results adjusted to exclude additional provisioning as a response to COVID-19 economic uncertainty ($9.94M and $11.60M, respectively). Second quarter 2020 also adjusted to exclude fee and interest income associated with PPP loans. (3) (3)

Slide 5

Operating Performance Trends – Quarter-over-Quarter Diluted EPS and Net Income to Common Stockholders Return on Average Tangible Common Equity(1,2) Efficiency Ratio(1,2) & Non-Interest Expense / Average Assets Income(2) and Net Interest Margin (3) (3) Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Does not include gains on sales and settlement of securities or bargain purchase gains associated with acquisitions. 2019 results adjusted for merger expenses and FDIC premium credit received in the third quarter. First and second quarter 2020 results adjusted to exclude additional provisioning as a response to COVID-19 economic uncertainty ($9.94M and $11.60M, respectively). Second quarter 2020 also adjusted to exclude fee and interest income associated with PPP loans.

Slide 6

Interest Income & Net Interest Margin Performance Notes: Exclusive of PPP loan impact margin was down 2 bps Q/Q driven by reduced loan volume and reduced accretion. Y/Y adjusted NIM is up 23 bps. Downward movement in stated NIM of 3.49% was primarily driven by material levels of PPP loan balances and associated low yield. (2) Second quarter 2020 excludes the impact of the PPP loans, including these assets interest earning asset yield would be 4.03% and NIM would be 3.49%. Includes Non-interest bearing deposits. (1) (1)

Slide 7

Margin Dynamic – Adjusted to Exclude PPP Loans EQBK begins raising deposit rates, with a focus on locking in time deposits at fixed rates to get ahead of the curve. 6/30 – 12/31/18 – EQBK reduced exposure to FHLB advances by $275M from $600M to $325M as market rates continued to rise. (1) (1) Second quarter 2020 results are adjusted to exclude the impact of PPP loans, including these assets NIM would be 3.49%.

Slide 8

Successfully Managing Profitability Does not include gains on sales and settlement of securities. Does not include merger expenses. Q/Q and Y/Y reductions in service charge levels driven by reduced transaction activity stemming from COVID pandemic control efforts by federal and state authorities throughout our footprint. Mortgage banking activity is up Y/Y and Q/Q as Bank personnel took advantage of opportunity presented by the marketplace. Non-Interest Income(1) ($000s) Non-Interest Expense(2) ($000s) Specific expense categories are flat to declining Q/Q as well as Y/Y. The Q/Q reduction was driven by the capitalization of costs associated with PPP loan origination as deferred costs on the associated credits. The Q/Q reduction in Professional services was driven by reduced costs to consultants and accountants as well as attorneys associated with the workout of credits.

Slide 9

Loan Portfolio - Concentration(1) (1) Excludes PPP loans.

Slide 10

Deferral Program – COVID Relief (1) With the onset of the pandemic associated with COVID-19, as a service to our customers, management implemented a payment deferral program. The Bank offered 3-6 month deferrals of P&I payments as well as 6 month deferrals of principal only. These deferrals were not automatic, each was reviewed by Bank personnel to ensure the borrower was at risk of reduced performance specifically due to the potential implications of the pandemic. Following the expiration of the first 3 month deferral period, based on conversations with customers, management estimates 35% of these borrowers will not need additional deferrals due to improvement in economic circumstances. (1) Excludes PPP loans.

Slide 11

Hotel Portfolio Total exposure of $273M as of the end of the second quarter 2020. Total deferrals within the portfolio for the first round were $195M, or 71%. During the quarter, the Bank did not experience any significant changes in the composition of this portfolio. It continues to be predominantly comprised of seasoned, sophisticated hoteliers with the expected ability to weather challenging economic times. Operational results have improved through the latter portion of the quarter as efficiency efforts have begun to take hold and portions of the country have begun a metered re-opening. The below chart is indicative of results for a sample of the operators comprising our portfolio from the beginning of the pandemic through the end of the quarter. As indicated, these borrowers implemented significant cost saving efforts to substantially reduce their break-even within the first four weeks of the pandemic. Following the trough in early April, operations have steadily climbed through the end of the quarter and are expected to continue to climb over the coming months as metered re-opening continues around the country. Note: Dollars in Thousands, except as otherwise indicated.

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Restaurant / Retail Portfolios Restaurants: Total exposure of $108M as of the end of the second quarter 2020. Total deferrals within the portfolio for the first round were $81M, or 75%. Within the QSR portfolio, results through the second quarter were generally very positive as the segment did not see the significant drag on earnings felt by the broader restaurant market. With the positive performance evidenced by these borrowers during the quarter, management’s expectation is they will no longer need nor qualify for an additional deferral following the expiration of the first 3-month deferment. Predominantly QSRs in national concepts with Wichita roots, including Freddy’s, Papa John’s, and Pizza Hut (60%). Top tier quick service restaurant brands with national scale and the resources to innovate and command market share. Retail: Total exposure of $206M as of the end of the second quarter 2020. Total deferrals within the portfolio for the first round were $139M, or 67%. Performance amongst our portfolio companies has not seen the significant decline in profitability which was anticipated when deferrals were granted. Upon expiration of the first 3-month deferral period, management expects the majority of these accounts will no longer need nor qualify for an additional deferral. Note: Dollars in Thousands, except as otherwise indicated.

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C&I Manufacturing Portfolio Total exposure of $135M as of the end of the second quarter 2020. Total deferrals within the portfolio for the first round were $46M, or 34%. Aerospace deferrals were $18M, or 28% of the $63M portfolio. The aerospace industry has been adversely impacted by both the Boeing 737 Max grounding and the coronavirus pandemic. Our customer base is comprised of experienced management teams who, we believe, have proactively addressed each of their issues through balance sheet and liquidity management. Ownership teams are also believed to have access to additional capital if, and when, the need arises. The non-aerospace portfolio is well diversified with an average balance per loan of $377K. Note: Dollars in Thousands, except as otherwise indicated.

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Tangible Book Value Tangible Book Value per Share(1) and Total Assets TBV CAGR 2016 - 2Q 2020: 7.29% Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation.

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Capital Position Over Time IPO * Paid off Series C preferred stock in January 2016 Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. (1)

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Total Loans by Purpose(1, 2) Gross Total Loans ($000s) $2,575,408 $2,556,652 $1,383,605 $2,117,270 Year-to-Date Loan Yield 4.98% 5.43% 5.74% 5.73% For financial statement reporting, management considers other factors in addition to purpose when assessing risk and identifying reporting classes. As such, the above is not intended to reconcile to the company’s loan disclosures within the applicable financial statement. June 30, 2020 composition percentages exclude the impact of PPP loans. For the Year-to-Date period ended June 30, 2020 yield has been adjusted to exclude PPP loans, including these loans yield would be 5.05%. $2,806,334 5.25%(2)

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Allowance for Loan Losses As provided for in the CARES Act, the Company elected to defer CECL implementation in favor of the historic probable, incurred methodology. The Company was prepared to implement the standard prior to the emergence of this pandemic. The primary driver of the decision was comparability of results and familiarity with the current process allowing the Company to focus on best serving our customers, community, people, and stockholders. The Company also took into consideration the level of uncertainty related to the economic forecast period, the lack of usable forecasting data available for a similar event on a worldwide scale, the level of variability in the possible outcomes tied to duration of the economic event and how effective the governmental response to the economic event would be, in reaching our decision to utilize the historic, proven methodology. During the second quarter of 2020, the Company recorded a $12.5M provision for loan loss to account for the additional uncertainty and risk associated with the current economic environment through adjustment of our qualitative factors within the probable, incurred methodology.

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Asset Quality – Year-over-Year Nonperforming Assets 1.43% NPAs / Assets 1.52% Net Charge-Offs (NCO)/ Average Loans $1.19 $0.89 NCO ($ in millions) Nonaccrual Detail Classified Assets to Total Regulatory Capital $1.01 0.98% 1.37% $0.59 68.5% 75.9% Purchased impaired loans classified as non-accrual that are current 37.3% 1.19% $17.58 Adjusted to exclude impact of credit specifically identified in March 31, 2019 Form 10-Q. Impact of credit specifically identified in March 31, 2019 Form 10-Q. Includes loans 90+ days past due and other repossessed assets which are not highlighted in the table. $2.40(1) (3) 45.3%

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Asset Quality – Quarter-over-Quarter Nonperforming Assets NPAs / Assets 1.61% Net Charge-Offs (NCO)/ Average Loans $6.70 NCO in $ ($ in millions) Nonaccrual Detail Classified Assets to Total Bank Regulatory Capital $9.54 1.40% 1.22% $0.26 62.5% 37.3% Purchased impaired loans classified as non-accrual that are current 45.3% 1.19% $0.58 Adjusted to exclude impact of credit specifically identified in March 31, 2019 Form 10-Q. No impact on 2020 periods. Includes loans 90+ days past due and other repossessed assets which are not highlighted in the table. $0.30(1) 45.7% 54.6% $1.70 (1) (2) $0.19(1) 1.37% $0.34

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Total Deposits Total ($000s) $3,123,447 $3,063,516 $2,382,013 Year-to-Date Cost of Deposits* 0.68% 0.96% 1.30% * Includes interest and non-interest bearing deposits. $2,960,397 0.91% $3,247,267 0.69%

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Appendix

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Selected Income Statement Data Selected Income Statement Data ($000s) YTD 06/30/20 12/31/19 12/31/18 12/31/17 12/31/16 12/31/14 2013 Interest income $78,490 $,175,499 $,161,556 $,102,693 $61,799 $46,794 $46,845 Interest expense 13504 49641 36758 16691 9202 5433 5610 Net interest income 64986 125858 124798 86002 52597 41361 41235 Provision for loan losses 22440 18354 3961 2953 2119 1200 2583 Net interest income after provision 42546 107504 120837 83049 50478 40161 38652 Other income 11038 24988 19725 15440 10466 8674 7892 Other expense 49695 99635 94387 67463 47075 35645 35137 Income (loss) before income taxes 3889 32857 46175 31026 13869 13190 11407 Income taxes 942 7278 10350 10377 4495 4203 3534 Net income (loss) 2947 25579 35825 20649 9374 8987 7873 Less: dividends and discount accretion on preferred stock 0 0 0 0 1 708 978 Net income (loss) allocable to common stockholders $2,947 $25,579 $35,825 $20,649 $9,373 $8,279 $6,895

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Selected Balance Sheet Data Demonstrating balance sheet strength Includes interest-bearing deposits in other banks. Includes Federal Reserve Bank and Federal Home Loan Bank stock. Includes loans held-for-sale. Selected Balance Sheet Data ($000s) ASSETS 12/31/14 06/30/20 12/31/19 12/31/18 12/31/17 12/31/16 Cash and cash equivalents (1) $37,702 $,180,538 $91,789 $,197,809 $55,691 $38,845 Investment securities (2) 318314 839750 942263 946445 722107 578093 Net loans(3) 720810 2777058 2550353 2566926 2111125 1382003 Other assets 97689 407923 365173 350536 281586 193251 Total assets $1,174,515 $4,205,269 $3,949,578 $4,061,716 $3,170,509 $2,192,192 LIABILITIES & STOCKHOLDERS' EQUITY Deposits $,981,177 $3,247,267 $3,063,516 $3,123,447 $2,382,013 $1,630,451 Borrowings 70370 452032 383632 464676 401652 293909 Other liabilities 5239 26204 24370 17652 12700 9868 Total liabilities 1056786 3725503 3471518 3605775 2796365 1934228 Stockholders' Equity 117729 479766 478060 455941 374144 257964 Total liabilities and stockholders' equity $1,174,515 $4,205,269 $3,949,578 $4,061,716 $3,170,509 $2,192,192

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Capitalization (1) Total common equity less goodwill and intangibles divided by shares outstanding as of period end. Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Maintaining a strong regulatory capital position Ratio 12/31/14 06/31/20 12/31/19 12/31/18 12/31/17 12/31/16 Leverage Ratio 9.6199999999999994E-2 8.5199999999999998E-2 9.0200000000000002E-2 8.5999999999999993E-2 0.1033 0.1181 Tier 1 Risk-Based Capital Ratio 0.13159999999999999 0.12570000000000001 0.1215 0.1145 0.12139999999999999 0.14280000000000001 Total Risk-Based Capital Ratio 0.1386 0.15329999999999999 0.12590000000000001 0.1186 0.12509999999999999 0.14710000000000001 Common Equity Tier 1 Capital to Risk Weighted Assets NA 0.1202 0.1163 0.1095 0.1153 0.1338 Tangible Book Value per Common Share(1) $13.54 $21.29 $20.75 $19.079999999999998 $17.61 $16.64

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The subsequent tables present non-GAAP reconciliations of the following calculations: Tangible Common Equity (TCE) to Tangible Assets (TA) Ratio Tangible Book Value per Common Share Return on Average Tangible Common Equity (ROATCE) Efficiency Ratio

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TCE to TA and Tangible Book Value per Share As of and for the years ended Non-GAAP Financial Measures (Unaudited) (Dollars in thousands, except per share data) YTD June 30, 2020 December 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016 December 31,2012 Total stockholders’ equity $,479,766 $,478,060 $,455,941 $,374,144 $,257,964 $,138,169 Less: goodwill ,136,432 ,136,432 ,131,712 ,104,907 58,874 18,130 Less: core deposit intangibles, net 18,131 19,907 21,725 10,738 4,715 1,957 Less: mortgage servicing asset, net 2 5 11 17 23 Less: naming rights, net 1,152 1,174 1,217 1,260 0 0 Tangible common equity $,324,049 $,320,542 $,301,276 $,257,222 $,194,352 $86,198 Common shares outstanding at period end (1) 15,218,301 15,444,434 15,793,095 14,605,607 11,680,308 7,431,513 Book value per common share (1) $31.525595399906994 $30.953546112470033 $28.869642080922077 $25.61646359511111 $22.085376515756259 $14.301932863469389 Tangible book value per common share (1) $21.293375653432008 $20.75453202105043 $19.076438152243114 $17.611181787925695 $16.639287251671785 $11.598983948490705 Total assets $4,205,269 $3,949,578 $4,061,716 $3,170,509 $2,192,192 $1,188,850 Less: goodwill ,136,432 ,136,432 ,131,712 ,104,907 58,874 18,130 Less: core deposit intangibles, net 18,131 19,907 21,725 10,738 4,715 1,957 Less: mortgage servicing asset, net 2 5 11 17 23 Less: naming rights, net 1,152 1,174 1,217 1,260 0 0 Tangible assets $4,049,552 $3,792,060 $3,907,051 $3,053,587 $2,128,580 $1,168,763 Tangible common equity to tangible assets 8.0020950465631749E-2 8.4529780646930688E-2 7.7110843958781192E-2 8.4236014890029326E-2 9.1305941049901806E-2 7.3751479127932701E-2 (1) Share and per share data includes Class A and Class B common stock issued and outstanding and vested, but unissued RSU shares. Non-GAAP Financial Measures, continued (Unaudited) As of and for the three months ended As of and for the three months ended As of and for the three months ended As of and for the three months ended (Dollars in thousands, except per share data) March 31, 2017 March 31, 2017 March 31, 2017 March 31, 2016 December 31,2012 Total average stockholders' equity $,264,736 $,264,736 $,264,736 $,153,929 $,102,032 Less: average intangible assets and preferred stock 65,185 65,185 65,185 20,616 33,653 Average tangible common equity (1) (3) $,199,551 $,199,551 $,199,551 $,133,313 $68,379 Net income allocable to common stockholders (1) 4,864 4,864 4,864 3,439 3,814 Amortization of core deposit intangible 218 218 218 87 192 Less: tax effect of amortization of core deposit intangible (2) -76 -76 -76 -30 -65 Adjusted net income allocable to common stockholders $5,006 $5,006 $5,006 $3,496 $3,941 Return on average tangible common equity (ROATCE) 0.10173895951967722 0.10173895951967722 0.10173895951967722 0.10547234826937482 5.7634653914213428E-2 Non-interest expense $15,226 $15,226 $15,226 $9,689 $22,900 Less: merger expenses 926 926 926 0 1,519 Less: loss on debt extinguishment 0 0 0 58 0 Non-interest expense, excluding merger expenses and loss on debt extinguishment $14,300 $14,300 $14,300 $9,631 $21,381 Net interest income $19,893 $19,893 $19,893 $12,758 $25,570 Non-interest income $3,339 $3,339 $3,339 $2,697 $4,826 Less: net gains on sales and settlement of securities 13 13 13 420 3 Less: net gain on acquisition 0 0 0 0 0 Non-interest income, excluding net gains on sales and settlement of securities and net gain on acquisition $3,326 $3,326 $3,326 $2,277 $4,823 Efficiency ratio 0.61587493001421245 0.61587493001421245 0.61587493001421245 0.64057199866977055 0.70348435495015305 ____________________ (1) Share and per share data includes Class A and Class B common stock issued and outstanding (2) Tax rates used in this calculation were 35% for 2015 and 2014 and 34% for 2013, 2012, and 2011 (3) All periods disclosed were calculated using a simple average of tangible common equity

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ROATCE and Efficiency Ratio Non-GAAP Financial Measures (Unaudited) Years Ended December 31, (Dollars in thousands, except per share data) Mar. 2018 Mar. 2018 2017 2016 Total stockholders’ equity $,381,487 $,381,487 $,374,144 $,257,964 Less: preferred stock 0 0 0 0 Less: goodwill ,103,412 ,103,412 ,104,907 58,874 Less: core deposit intangibles, net 10,355 10,355 10,738 4,715 Less: mortgage servicing asset, net 16 16 17 23 Less: naming rights, net 1,249 1,249 1,260 0 Tangible common equity $,266,455 $,266,455 $,257,222 $,194,352 Common shares outstanding at period end (1) 14,621,258 14,621,258 14,605,607 11,680,308 Book value per common share $26.091256990335577 $26.091256990335577 $25.61646359511111 $22.085376515756259 Tangible book value per common share $18.223808101874681 $18.223808101874681 $17.611181787925695 $16.639287251671785 Total assets $3,176,062 $3,176,062 $3,170,509 $2,192,192 Less: goodwill ,103,412 ,103,412 ,104,907 58,874 Less: core deposit intangibles, net 10,355 10,355 10,738 4,715 Less: mortgage servicing asset, net 16 16 17 23 Less: naming rights, net 1,249 1,249 1,260 0 Tangible assets $3,061,030 $3,061,030 $3,053,587 $2,128,580 Tangible common equity to tangible assets 8.7047497084314751E-2 8.7047497084314751E-2 8.4236014890029326E-2 9.1305941049901806E-2 (1) Share and per share data includes Class A and Class B common stock issued and outsanding (2) Tax rates used in this calculation were 35% (3) All periods disclosed, except 2018, 2017 and 2016, were calculated using a simple average of tangible common equity Non-GAAP Financial Measures, continued (Unaudited) As of and for the years ended (Dollars in thousands, except per share data) YTD June 30, 2020 December 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016 Total average stockholders' equity $,483,605 $,463,445 $,420,453 $,293,798 $,168,822 Less: average intangible assets and preferred stock ,156,194 ,158,410 ,139,131 76,320 25,883 Average tangible common equity $,327,411 $,305,035 $,281,322 $,217,478 $,142,939 Net income allocable to common stockholders $1,689 $25,579 $35,825 $20,649 $9,373 Amortization of intangibles 986 3,218 2,492 1,070 419 Less: tax effect of amortization of intangibles (1) 207 676 523 375 147 Adjusted net income allocable to common stockholders $2,468 $28,121 $37,794 $21,344 $9,645 Return on average tangible common equity (ROATCE) (2) 3.0317374059642951E-2 9.2189420886127818E-2 0.13434427453238637 9.8143260467725466E-2 6.7476336059437939E-2 Non-interest expense $23,937 $99,635 $94,387 $67,463 $47,075 Less: merger expenses 0 915 7,462 5,352 5,294 Less: loss on debt extinguishment 0 0 0 0 58 Non-interest expense, excluding merger expenses and loss on debt extinguishment $23,937 $98,720 $86,925 $62,111 $41,723 Net interest income $32,891 $,125,858 $,124,798 $86,002 $52,597 Non-interest income $5,732 $24,988 $19,725 $15,440 $10,466 Less: net gains (losses) from securities transactions 4 14 -9 271 479 Non-interest income, excluding net gains (losses) from securities transactions and net gain on acquisition $5,728 $24,974 $19,734 $15,169 $9,987 Efficiency ratio 0.6198244387477666 0.65450302323114462 0.60142390612459529 0.61392098526257521 0.66667199284162082 ____________________ (1) Tax rates used in this calculation were 21% for 2020, 2019 and 2018. Tax rates used were 35% for previous years. (2) Annualized

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investor.equitybank.com

v3.20.2
Document and Entity Information
Jul. 21, 2020
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Jul. 21, 2020
Entity Registrant Name EQUITY BANCSHARES, INC.
Entity Central Index Key 0001227500
Entity Emerging Growth Company true
Entity Ex Transition Period true
Entity File Number 001-37624
Entity Incorporation, State or Country Code KS
Entity Tax Identification Number 72-1532188
Entity Address, Address Line One 7701 East Kellogg Drive
Entity Address, Address Line Two Suite 300
Entity Address, City or Town Wichita
Entity Address, State or Province KS
Entity Address, Postal Zip Code 67207
City Area Code 316
Local Phone Number 612.6000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Security 12b Title Class A, Common Stock, par value $0.01 per share
Trading Symbol EQBK
Security Exchange Name NASDAQ