Reports NIM of 3.75%, Completes Merger with
Rockhold Bancorp, Adding to Missouri Franchise
Equity Bancshares, Inc. (NYSE: EQBK), (“Equity”, “the Company”,
“we,” “us,” “our”), the Wichita-based holding company of Equity
Bank, reported net income of $14.1 million or $0.90 earnings per
diluted share for the quarter ended March 31, 2024.
“Our Company entered the year positioned to take advantage of
opportunities which we expect will drive our operating growth in
the future,” said Brad S. Elliott, Chairman and CEO of Equity.
“With our team’s proven, strategic skillset and cultivated
relationships within our banking community, we were able to
complete our merger with the Bank of Kirksville on February 9,
2024, just 67 days after announcement of the formal agreement. We
are excited about our Company’s capacity to continue to leverage
our skills and position to grow our franchise.”
"In addition, our retail and commercial teams throughout our
footprint continued to build customer relationships and provide
value to business and consumer customers in the quarter," Mr.
Elliott said. "Our classified asset ratio continues to be
historically low, while both capital and on balance sheet reserves
remain high, positioning Equity to continue to pursue strategic
growth opportunities, both organically and through mergers.”
Notable Items:
- The Company realized earnings per diluted share of $0.90,
adjusted to exclude merger expenses of $1.6 million and opening
balance sheet provisioning of $1.0 million, earnings per share were
$1.03.
- The Company completed its all-cash acquisition (“the
acquisition”) of Rockhold Bancorp, the parent company of the Bank
of Kirksville adding eight locations, $118.7 million in loans, and
$349.6 million in deposits. A gain on acquisition of $1.2 million
was recorded with the closing of the transaction.
- The Company realized linked quarter gross loans
held-for-investment expansion of $149.3 million. Excluding the
impact of the acquisition, loans grew by $30.6 million, or 3.70%
annualized
- The Company realized expansion in net interest income and net
interest margin, as the benefits of previously announced strategic
transactions were realized. Total net interest income for the
quarter was $44.2 million, an all-time high for the Company.
- The Company was active in its share repurchase plan during the
quarter, purchasing 209,591 shares at a weighted average cost of
$32.24. Under the repurchase plan announced in the fourth quarter
of 2023, 790,409 shares remain available for purchase.
- Classified assets as a percentage of total risk based capital
at Equity Bank closed the period at 6.65% while non-performing
assets remained historically low. The allowance for credit losses
closed the quarter at 1.28% of total loans.
Financial Results for the Quarter Ended
March 31, 2024
Net income allocable to common stockholders was $14.1 million,
or $0.90 per diluted share, for the three months ended March 31,
2024. Excluding merger expenses and the required provisioning for
performing loans acquired in the acquisition, net income was $16.1
million, or $1.03 per diluted share. Excluding the impact of the
merger expenses and the loss on sale of securities taken by the
Company during the previous quarter, operating net income was $12.1
million. The drivers of the periodic change are discussed in detail
in the following sections.
Net Interest Income
Net interest income was $44.2 million for the three months ended
March 31, 2024, as compared to $39.5 million for the three months
ended December 31, 2024, the increase was driven by increasing
average assets as well as positive trend in margin. Net interest
margin increased to 3.75% from 3.49% as the yield on
interest-earning assets increased 40 basis points to 6.09% and the
cost of interest-bearing deposits increased 19 basis points to
2.77%. The earning asset improvement was driven by the Bank’s bond
portfolio re-positioning as well as purchase accounting accretion
associated with the marks on the acquisition. Additionally, loan
coupons continued to improve partially offsetting pressures in
funding costs. Further, the addition of non-interest bearing
deposits positively impacted total deposit costs during the
quarter, limiting expansion to 18 basis points and comparatively
improving net interest income.
Provision for Credit Losses
During the three months ended March 31, 2024, there was a
provision of $1.0 million compared to a provision of $711 thousand
in the previous quarter. The provision for the quarter is entirely
attributable to the establishment of reserve on loan acquired in
the acquisition. The Company continues to estimate the allowance
for credit loss with assumptions that anticipate slower prepayment
rates and continued market disruption caused by elevated inflation,
supply chain issues and the impact of monetary policy on consumers
and businesses. For the three months ended March 31, 2024, we had
net charge-offs of $668 thousand as compared to $1.4 million for
the three months ended December 31, 2023.
Non-Interest Income
Total non-interest income was $11.7 million for the three months
ended March 31, 2024, as compared to $(43.4) million for the three
months ended December 31, 2023. Adjusted for the loss realized on
re-positioning our bond portfolio of $50.7 million, non-interest
income for the previous period ended was $7.3 million. The
comparative increase for the current quarter ended is driven by
positive outcomes on resolution of specific loan assets adding $3.0
million as well as the gain recognized on the acquisition of $1.2
million. In addition to these non-recurring benefits, the Bank saw
expansion in service fee revenue line items, including service
charges, treasury, mortgage banking and wealth management during
the period.
The gain on acquisition is primarily attributable to the
improvement in the fair value position of the Bank of Kirksville’s
bond portfolio between announcement of the transaction and
close.
Non-Interest Expense
Total non-interest expense for the quarter ended March 31, 2024,
was $37.1 million as compared to $35.0 million for the quarter
ended December 31, 2023, an increase of $2.1 million. Adjusting for
merger expenses in both periods, the increase quarter over quarter
was $1.0 million due to the addition of Bank of Kirksville
expenses, annual compensation rate adjustments and early year
payroll tax dynamics. The conversion of systems related to the
acquisition will not be completed until the middle of the second
quarter 2024. Following conversion, cost saves are expected to be
fully realized.
Income Tax Expense
At March 31, 2024, the effective tax rate for the quarter was
20.8% as compared to a normalized rate of 7.5% for the quarter
ended December 31, 2023. The prior quarter's tax rate was
normalized to exclude pre-tax losses recognized in the quarter
related to the sale of investment securities. The increase in rate
from December 31, 2023, to the quarter ending March 31, 2024, was
the result of a reduction in the tax benefit related to investments
in tax credit structures offset by the tax benefit recognized in
the current quarter related to the bargain purchase gain recorded
on the acquisition completed during the quarter. At the end of the
quarter, the Company has additional capacity for investments in tax
credit structures which would positively impact the Company's tax
rate. As these investments have not been made as of the end of the
quarter, they are not considered in establishing the quarterly tax
expense reserve.
Loans, Total Assets and Funding
Loans held for investment were $3.48 billion at March 31, 2024,
increasing $149.3 million compared to the previous quarter.
Included in this growth figure is $118.7 million in total loans
added through the acquisition. Total assets were $5.20 billion as
of March 31, 2024, increasing $204.4 million or 4.1% during the
quarter.
Total deposits were $4.4 billion at March 31, 2024, increasing
$225.6 million from the previous quarter end. Included in the
growth figure is $349.6 million added through the acquisition. Of
the total deposit balance, non-interest-bearing accounts comprise
approximately 22.5%. During the quarter, the Company’s $140.0
million Federal Reserve Bank borrowing matured and was replaced
with borrowing from the Federal Home Loan Bank. Total Federal Home
Loan Bank borrowings were $219.9 million as of the end of the
quarter, up $119.9 million as compared to December 31, 2023.
Asset Quality
As of March 31, 2024, Equity’s allowance for credit losses to
total loans remained materially consistent at 1.3% as compared to
December 31, 2023. Nonperforming assets were $25.3 million as of
March 31, 2024, or 0.5% of total assets, compared to $26.5 million
at December 31, 2023, or 0.5% of total assets. Non-accrual loans
were $24.2 million at March 31, 2024, as compared to $25.0 million
at December 31, 2023. Total classified assets, including loans
rated special mention or worse, other real estate owned, excluding
previous branch locations, and other repossessed assets were $38.1
million, or 6.65% of regulatory capital, down from $40.5 million,
or 7.1% of regulatory capital as of December 31, 2023.
Capital
Quarter over quarter, book capital increased $3.9 million to
$456.8 million and tangible capital decreased $6.7 million to
$384.8 million. The increase in book capital is primarily due to
earnings, partially offset by treasury share purchases of $6.7
million, increase in unrealized loss on bonds and cash flow hedges
of $2.9 million and dividends declared of $1.9 million. The
comparative reduction in tangible capital is due to the addition of
$11.5 million in core deposit intangible associated with the
acquisition.
The Company’s ratio of common equity tier 1 capital to
risk-weighted assets was 11.1%, the total capital to risk-weighted
assets was 14.7% and the total leverage ratio was 9.1% at March 31,
2024. At December 31, 2023, the Company’s common equity tier 1
capital to risk-weighted assets ratio was 11.7%, the total capital
to risk-weighted assets ratio was 15.5% and the total leverage
ratio was 9.5%.
Equity Bank's ratio of common equity tier 1 capital to
risk-weighted assets was 13.2%, total capital to risk-weighted
assets was 14.3% and the total leverage ratio was 10.2% at March
31, 2024. At December 31, 2023, Equity Bank’s ratio of common
equity tier 1 capital to risk-weighted assets was 13.9%, the ratio
of total capital to risk-weighted assets was 15.1% and the total
leverage ratio was 10.6%.
Non-GAAP Financial
Measures
In addition to evaluating the Company’s results of operations in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”), management periodically
supplements this evaluation with an analysis of certain non-GAAP
financial measures that are intended to provide the reader with
additional perspectives on operating results, financial condition
and performance trends, while facilitating comparisons with the
performance of other financial institutions. Non-GAAP financial
measures are not a substitute for GAAP measures, rather, they
should be read and used in conjunction with the Company’s GAAP
financial information.
The efficiency ratio is a common comparable metric used by banks
to understand the expense structure relative to total revenue. In
other words, for every dollar of total revenue recognized, how much
of that dollar is expended. To improve the comparability of the
ratio to our peers, non-core items are excluded. To improve
transparency and acknowledging that banks are not consistent in
their definition of the efficiency ratio, we include our
calculation of this non-GAAP measure.
Return on average assets before income tax provision and
provision for loan losses is a measure that the Company uses to
understand fundamental operating performance before these expenses.
Used as a ratio relative to average assets, we believe it
demonstrates “core” performance and can be viewed as an alternative
measure of how efficiently the Company services its asset base.
Used as a ratio relative to average equity, it can function as an
alternative measure of the Company’s earnings performance in
relationship to its equity.
Tangible common equity and related measures are non-GAAP
financial measures that exclude the impact of intangible assets,
net of deferred taxes, and their related amortization. These
financial measures are useful for evaluating the performance of a
business consistently, whether acquired or developed internally.
Return on average tangible common equity is used by management and
readers of our financial statements to understand how efficiently
the Company is deploying its common equity. Companies that are able
to demonstrate more efficient use of common equity are more likely
to be viewed favorably by current and prospective investors.
The Company believes that disclosing these non-GAAP financial
measures is both useful internally and is expected by our investors
and analysts in order to understand the overall performance of the
Company. Other companies may calculate and define their non-GAAP
financial measures and supplemental data differently. A
reconciliation of GAAP financial measures to non-GAAP measures and
other performance ratios, as adjusted, are included in Table 6 in
the following press release tables.
Conference Call and
Webcast
Equity’s Chairman and Chief Executive Officer, Brad Elliott, and
Chief Financial Officer, Chris Navratil, will hold a conference
call and webcast to discuss first quarter results on Wednesday,
April 17, 2024, at 10 a.m. eastern time or 9 a.m. central time.
A live webcast of the call will be available on the Company’s
website at investor.equitybank.com. To access the call by phone,
please go to this registration link, and you will be provided with
dial in details. Investors, news media, and other participants are
encouraged to dial into the conference call ten minutes ahead of
the scheduled start time.
A replay of the call and webcast will be available two hours
following the close of the call until May 1, 2024, accessible 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 NYSE
National, Inc. 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,”
“positioned,” “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 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 7, 2024, 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, except as required by law. New
risks and uncertainties arise from time to time 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.
Unaudited Financial
Tables
- Table 1. Quarterly Consolidated Statements of
Income
- Table 2. Consolidated Balance Sheets
- Table 3. Selected Financial Highlights
- Table 4. Quarter-To-Date Net Interest Income
Analysis
- Table 5. Quarter-Over-Quarter Net Interest Income
Analysis
- Table 6. Non-GAAP Financial Measures
TABLE 1. QUARTERLY CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share
data)
As of and for the three months
ended
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
Interest and dividend income
Loans, including fees
$
58,829
$
54,932
$
55,152
$
52,748
$
48,381
Securities, taxable
9,877
6,417
5,696
5,813
5,947
Securities, nontaxable
391
354
369
568
669
Federal funds sold and other
2,670
2,591
3,822
2,127
1,126
Total interest and dividend income
71,767
64,294
65,039
61,256
56,123
Interest expense
Deposits
22,855
20,074
19,374
17,204
13,821
Federal funds purchased and retail
repurchase agreements
326
298
246
192
195
Federal Home Loan Bank advances
1,144
1,005
968
953
1,018
Federal Reserve Bank borrowings
1,361
1,546
1,546
1,528
135
Subordinated debt
1,899
1,904
1,893
1,950
1,844
Total interest expense
27,585
24,827
24,027
21,827
17,013
Net interest income
44,182
39,467
41,012
39,429
39,110
Provision (reversal) for credit losses
1,000
711
1,230
298
(366
)
Net interest income after provision
(reversal) for credit losses
43,182
38,756
39,782
39,131
39,476
Non-interest income
Service charges and fees
2,569
2,299
2,690
2,653
2,545
Debit card income
2,447
2,524
2,591
2,653
2,554
Mortgage banking
188
125
226
213
88
Increase in value of bank-owned life
insurance
828
925
794
757
1,583
Net gain on acquisition and branch
sales
1,240
—
—
—
—
Net gains (losses) from securities
transactions
43
(50,618
)
(1
)
(1,322
)
32
Other
4,416
1,331
2,435
1,996
1,798
Total non-interest income
11,731
(43,414
)
8,735
6,950
8,600
Non-interest expense
Salaries and employee benefits
18,097
16,598
15,857
15,237
16,692
Net occupancy and equipment
3,535
3,244
3,262
2,940
2,879
Data processing
4,828
4,471
4,553
4,493
3,916
Professional fees
1,392
1,413
1,312
1,645
1,384
Advertising and business development
1,238
1,598
1,419
1,249
1,159
Telecommunications
655
460
502
516
485
FDIC insurance
571
660
660
515
360
Courier and postage
606
577
548
463
458
Free nationwide ATM cost
494
508
516
524
525
Amortization of core deposit
intangibles
899
739
799
918
918
Loan expense
109
155
132
136
117
Other real estate owned
(84
)
224
128
71
119
Merger expenses
1,556
292
—
—
—
Other
3,256
4,059
4,556
4,423
4,217
Total non-interest expense
37,152
34,998
34,244
33,130
33,229
Income (loss) before income tax
17,761
(39,656
)
14,273
12,951
14,847
Provision for income taxes (benefit)
3,693
(11,357
)
1,932
1,495
2,524
Net income (loss) and net income (loss)
allocable to common stockholders
$
14,068
$
(28,299
)
$
12,341
$
11,456
$
12,323
Basic earnings (loss) per share
$
0.91
$
(1.84
)
$
0.80
$
0.74
$
0.78
Diluted earnings (loss) per share
$
0.90
$
(1.84
)
$
0.80
$
0.74
$
0.77
Weighted average common shares
15,425,709
15,417,200
15,404,992
15,468,378
15,858,808
Weighted average diluted common shares
15,569,225
15,417,200
15,507,172
15,554,255
16,028,051
TABLE 2. CONSOLIDATED BALANCE
SHEETS (Unaudited)
(Dollars in thousands)
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
ASSETS
Cash and due from banks
$
217,611
$
363,289
$
183,404
$
262,604
$
249,982
Federal funds sold
17,407
15,810
15,613
15,495
384
Cash and cash equivalents
235,018
379,099
199,017
278,099
250,366
Available-for-sale securities
1,091,717
919,648
1,057,009
1,094,748
1,183,247
Held-to-maturity securities
2,205
2,209
2,212
2,216
1,944
Loans held for sale
1,311
476
627
2,456
648
Loans, net of allowance for credit
losses(1)
3,437,714
3,289,381
3,237,932
3,278,126
3,285,515
Other real estate owned, net
1,465
1,833
3,369
4,362
4,171
Premises and equipment, net
116,792
112,632
110,271
106,186
104,789
Bank-owned life insurance
125,693
124,865
124,245
123,451
122,971
Federal Reserve Bank and Federal Home Loan
Bank stock
27,009
20,608
20,780
21,129
33,359
Interest receivable
27,082
25,497
23,621
21,360
20,461
Goodwill
53,101
53,101
53,101
53,101
53,101
Core deposit intangibles, net
17,854
7,222
7,961
8,760
9,678
Other
102,075
98,021
105,122
100,889
86,466
Total assets
$
5,239,036
$
5,034,592
$
4,945,267
$
5,094,883
$
5,156,716
LIABILITIES AND STOCKHOLDERS’
EQUITY
Deposits
Demand
$
981,623
$
898,129
$
936,217
$
978,968
$
1,012,671
Total non-interest-bearing deposits
981,623
898,129
936,217
978,968
1,012,671
Demand, savings and money market
2,574,871
2,483,807
2,397,003
2,397,524
2,334,463
Time
814,532
763,519
748,950
854,458
939,799
Total interest-bearing deposits
3,389,403
3,247,326
3,145,953
3,251,982
3,274,262
Total deposits
4,371,026
4,145,455
4,082,170
4,230,950
4,286,933
Federal funds purchased and retail
repurchase agreements
43,811
43,582
39,701
44,770
45,098
Federal Home Loan Bank advances and
Federal Reserve Bank borrowings
219,931
240,000
240,000
240,000
251,222
Subordinated debt
97,058
96,921
96,787
96,653
96,522
Contractual obligations
18,493
19,315
29,019
29,608
19,372
Interest payable and other liabilities
31,941
36,459
39,460
34,467
32,446
Total liabilities
4,782,260
4,581,732
4,527,137
4,676,448
4,731,593
Commitments and contingent liabilities
Stockholders’ equity
Common stock
208
207
207
207
206
Additional paid-in capital
490,533
489,187
488,137
487,225
486,658
Retained earnings
153,201
141,006
171,188
160,715
150,810
Accumulated other comprehensive income
(loss), net of tax
(60,788
)
(57,920
)
(122,047
)
(110,225
)
(101,238
)
Treasury stock
(126,378
)
(119,620
)
(119,355
)
(119,487
)
(111,313
)
Total stockholders’ equity
456,776
452,860
418,130
418,435
425,123
Total liabilities and stockholders’
equity
$
5,239,036
$
5,034,592
$
4,945,267
$
5,094,883
$
5,156,716
(1) Allowance for credit losses
$
44,449
$
43,520
$
44,186
$
44,544
$
45,103
TABLE 3. SELECTED FINANCIAL
HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share
data)
As of and for the three months
ended
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
Loans Held For Investment by
Type
Commercial real estate
$
1,797,192
$
1,759,855
$
1,721,761
$
1,764,460
$
1,746,834
Commercial and industrial
649,035
598,327
585,129
583,664
605,576
Residential real estate
581,988
556,328
558,188
560,389
563,791
Agricultural real estate
198,291
196,114
205,865
202,317
202,274
Agricultural
149,312
118,587
103,352
104,510
106,169
Consumer
106,345
103,690
107,823
107,330
105,974
Total loans held-for-investment
3,482,163
3,332,901
3,282,118
3,322,670
3,330,618
Allowance for credit losses
(44,449
)
(43,520
)
(44,186
)
(44,544
)
(45,103
)
Net loans held for investment
$
3,437,714
$
3,289,381
$
3,237,932
$
3,278,126
$
3,285,515
Asset Quality Ratios
Allowance for credit losses on loans to
total loans
1.28
%
1.31
%
1.35
%
1.34
%
1.35
%
Past due or nonaccrual loans to total
loans
1.09
%
1.10
%
1.03
%
0.78
%
0.66
%
Nonperforming assets to total assets
0.48
%
0.53
%
0.42
%
0.31
%
0.33
%
Nonperforming assets to total loans plus
other real estate owned
0.73
%
0.79
%
0.63
%
0.47
%
0.51
%
Classified assets to bank total regulatory
capital
6.65
%
7.09
%
6.27
%
7.94
%
10.09
%
Selected Average Balance Sheet Data
(QTD Average)
Investment securities
$
1,074,101
$
985,591
$
1,085,905
$
1,155,971
$
1,185,482
Total gross loans receivable
3,452,553
3,293,755
3,281,483
3,337,497
3,305,681
Interest-earning assets
4,742,200
4,480,279
4,635,384
4,678,744
4,611,019
Total assets
5,152,915
4,892,712
5,046,179
5,064,912
4,994,417
Interest-bearing deposits
3,319,907
3,092,637
3,206,300
3,226,965
3,235,557
Borrowings
390,166
391,691
385,125
385,504
247,932
Total interest-bearing liabilities
3,710,073
3,484,328
3,591,425
3,612,469
3,483,489
Total deposits
4,254,883
4,019,362
4,177,332
4,204,334
4,279,451
Total liabilities
4,692,670
4,469,504
4,619,919
4,640,050
4,573,917
Total stockholders' equity
460,244
423,207
426,260
424,862
420,500
Tangible common equity*
398,041
361,451
363,625
361,409
356,053
Performance ratios
Return on average assets (ROAA)
annualized
1.10
%
(2.29
)%
0.97
%
0.91
%
1.00
%
Return on average assets before income tax
and provision for loan losses*
1.46
%
(3.16
)%
1.22
%
1.05
%
1.18
%
Return on average equity (ROAE)
annualized
12.29
%
(26.53
)%
11.49
%
10.82
%
11.89
%
Return on average equity before income tax
and provision for loan losses*
16.39
%
(36.51
)%
14.43
%
12.51
%
13.97
%
Return on average tangible common equity
(ROATCE) annualized*
14.96
%
(30.39
)%
14.18
%
13.55
%
14.89
%
Yield on loans annualized
6.85
%
6.62
%
6.67
%
6.34
%
5.94
%
Cost of interest-bearing deposits
annualized
2.77
%
2.58
%
2.40
%
2.14
%
1.73
%
Cost of total deposits annualized
2.16
%
1.98
%
1.84
%
1.64
%
1.31
%
Net interest margin annualized
3.75
%
3.49
%
3.51
%
3.38
%
3.44
%
Efficiency ratio*
65.16
%
74.35
%
68.83
%
69.44
%
70.00
%
Non-interest income / average assets
0.92
%
(3.52
)%
0.69
%
0.55
%
0.74
%
Non-interest expense / average assets
2.90
%
2.84
%
2.69
%
2.62
%
2.74
%
Capital Ratios
Tier 1 Leverage Ratio
9.10
%
9.46
%
9.77
%
9.54
%
9.60
%
Common Equity Tier 1 Capital Ratio
11.14
%
11.74
%
12.65
%
12.23
%
12.21
%
Tier 1 Risk Based Capital Ratio
11.73
%
12.36
%
13.28
%
12.84
%
12.83
%
Total Risk Based Capital Ratio
14.71
%
15.48
%
16.42
%
15.96
%
15.98
%
Total stockholders' equity to total
assets
8.72
%
8.99
%
8.46
%
8.21
%
8.24
%
Tangible common equity to tangible
assets*
7.45
%
7.87
%
7.29
%
7.06
%
7.09
%
Dividend payout ratio
13.31
%
(6.65
)%
15.13
%
13.53
%
10.49
%
Book value per common share
$
29.80
$
29.35
$
27.13
$
27.18
$
27.03
Tangible book value per common share*
$
25.10
$
25.37
$
23.09
$
23.08
$
22.96
Tangible book value per diluted common
share*
$
24.87
$
25.05
$
22.96
$
22.98
$
22.83
* 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.
TABLE 4. QUARTER-TO-DATE NET INTEREST
INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For the three months
ended
For the three months
ended
March 31, 2024
March 31, 2023
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)
Commercial and industrial
$
634,637
$
12,412
7.87
%
$
577,452
$
9,634
6.77
%
Commercial real estate
1,449,177
24,601
6.83
%
1,344,727
20,112
6.07
%
Real estate construction
354,801
7,775
8.81
%
404,016
6,695
6.72
%
Residential real estate
580,426
6,461
4.48
%
570,139
5,802
4.13
%
Agricultural real estate
197,023
3,468
7.08
%
202,901
3,114
6.22
%
Agricultural
131,035
2,391
7.34
%
100,251
1,478
5.98
%
Consumer
105,454
1,721
6.56
%
106,195
1,546
5.91
%
Total loans
3,452,553
58,829
6.85
%
3,305,681
48,381
5.94
%
Securities
Taxable securities
1,011,466
9,877
3.93
%
1,083,645
5,947
2.23
%
Nontaxable securities
62,635
391
2.51
%
101,837
669
2.67
%
Total securities
1,074,101
10,268
3.84
%
1,185,482
6,616
2.26
%
Federal funds sold and other
215,546
2,670
4.98
%
119,856
1,126
3.81
%
Total interest-earning assets
$
4,742,200
71,767
6.09
%
$
4,611,019
56,123
4.94
%
Interest-bearing liabilities
Demand, savings and money market
deposits
$
2,520,521
15,660
2.50
%
$
2,350,042
8,453
1.46
%
Time deposits
799,386
7,195
3.62
%
885,515
5,368
2.46
%
Total interest-bearing deposits
3,319,907
22,855
2.77
%
3,235,557
13,821
1.73
%
FHLB advances
113,348
1,144
4.06
%
89,078
1,018
4.64
%
Other borrowings
276,818
3,586
5.21
%
158,854
2,174
5.55
%
Total interest-bearing liabilities
$
3,710,073
27,585
2.99
%
$
3,483,489
17,013
1.98
%
Net interest income
$
44,182
$
39,110
Interest rate spread
3.10
%
2.96
%
Net interest margin (2)
3.75
%
3.44
%
(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.
TABLE 5. QUARTER-OVER-QUARTER NET
INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For the three months
ended
For the three months
ended
March 31, 2024
December 31, 2023
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)
Commercial and industrial
$
634,637
$
12,412
7.87%
$
580,726
$
11,397
7.79%
Commercial real estate
1,449,177
24,601
6.83%
1,309,588
21,630
6.55%
Real estate construction
354,801
7,775
8.81%
439,708
9,000
8.12%
Residential real estate
580,426
6,461
4.48%
561,382
5,866
4.15%
Agricultural real estate
197,023
3,468
7.08%
196,468
3,421
6.91%
Agricultural
131,035
2,391
7.34%
100,226
1,928
7.63%
Consumer
105,454
1,721
6.56%
105,657
1,690
6.35%
Total loans
3,452,553
58,829
6.85%
3,293,755
54,932
6.62%
Securities
Taxable securities
1,011,466
9,877
3.93%
932,376
6,417
2.73%
Nontaxable securities
62,635
391
2.51%
53,215
354
2.64%
Total securities
1,074,101
10,268
3.84%
985,591
6,771
2.73%
Federal funds sold and other
215,546
2,670
4.98%
200,933
2,591
5.12%
Total interest-earning assets
$
4,742,200
71,767
6.09%
$
4,480,279
64,294
5.69%
Interest-bearing liabilities
Demand savings and money market
deposits
$
2,520,521
15,660
2.50%
$
2,351,663
13,918
2.35%
Time deposits
799,386
7,195
3.62%
740,974
6,156
3.30%
Total interest-bearing deposits
3,319,907
22,855
2.77%
3,092,637
20,074
2.58%
FHLB advances
113,348
1,144
4.06%
102,432
1,005
3.89%
Other borrowings
276,818
3,586
5.21%
289,259
3,748
5.14%
Total interest-bearing liabilities
$
3,710,073
27,585
2.99%
$
3,484,328
24,827
2.83%
Net interest income
$
44,182
$
39,467
Interest rate spread
3.10%
2.86%
Net interest margin (2)
3.75%
3.49%
(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.
TABLE 6. NON-GAAP FINANCIAL
MEASURES (Unaudited)
(Dollars in thousands, except per share
data)
As of and for the three months
ended
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
Total stockholders' equity
$
456,776
$
452,860
$
418,130
$
418,435
$
425,123
Less: goodwill
53,101
53,101
53,101
53,101
53,101
Less: core deposit intangibles, net
17,854
7,222
7,961
8,760
9,678
Less: mortgage servicing rights, net
50
75
100
126
151
Less: naming rights, net
989
1,000
1,011
1,022
1,033
Tangible common equity
$
384,782
$
391,462
$
355,957
$
355,426
$
361,160
Common shares outstanding at period
end
15,327,799
15,428,251
15,413,064
15,396,739
15,730,257
Diluted common shares outstanding at
period end
15,469,531
15,629,185
15,500,749
15,468,319
15,822,536
Book value per common share
$
29.80
$
29.35
$
27.13
$
27.18
$
27.03
Tangible book value per common
share
$
25.10
$
25.37
$
23.09
$
23.08
$
22.96
Tangible book value per diluted common
share
$
24.87
$
25.05
$
22.96
$
22.98
$
22.83
Total assets
$
5,239,036
$
5,034,592
$
4,945,267
$
5,094,883
$
5,156,716
Less: goodwill
53,101
53,101
53,101
53,101
53,101
Less: core deposit intangibles, net
17,854
7,222
7,961
8,760
9,678
Less: mortgage servicing rights, net
50
75
100
126
151
Less: naming rights, net
989
1,000
1,011
1,022
1,033
Tangible assets
$
5,167,042
$
4,973,194
$
4,883,094
$
5,031,874
$
5,092,753
Total stockholders' equity to total
assets
8.72
%
8.99
%
8.46
%
8.21
%
8.24
%
Tangible common equity to tangible
assets
7.45
%
7.87
%
7.29
%
7.06
%
7.09
%
Total average stockholders' equity
$
460,244
$
423,207
$
426,260
$
424,862
$
420,500
Less: average intangible assets
62,203
61,756
62,635
63,453
64,447
Average tangible common equity
$
398,041
$
361,451
$
363,625
$
361,409
$
356,053
Net income (loss) allocable to common
stockholders
$
14,068
$
(28,299
)
$
12,341
$
11,456
$
12,323
Add: amortization of intangible assets
935
775
835
954
954
Less: tax effect of intangible assets
amortization
196
163
175
200
200
Adjusted net income (loss) allocable to
common stockholders
$
14,807
$
(27,687
)
$
13,001
$
12,210
$
13,077
Return on total average stockholders'
equity (ROAE) annualized
12.29
%
(26.53
)%
11.49
%
10.82
%
11.89
%
Return on average tangible common
equity (ROATCE) annualized
14.96
%
(30.39
)%
14.18
%
13.55
%
14.89
%
Non-interest expense
$
37,152
$
34,998
$
34,244
$
33,130
$
33,229
Less: merger expense
1,556
297
—
—
—
Adjusted non-interest expense
$
35,596
$
34,701
$
34,244
$
33,130
$
33,229
Net interest income
$
44,182
$
39,467
$
41,012
$
39,429
$
39,110
Non-interest income
11,731
(43,414
)
8,735
6,950
8,600
Less: net gain on acquisition and branch
sales
1,240
—
—
—
—
Less: net gains (losses) from securities
transactions
43
(50,618
)
(1
)
(1,322
)
32
Adjusted non-interest income
$
10,448
$
7,204
$
8,736
$
8,272
$
8,568
Net interest income plus adjusted
non-interest income
$
54,630
$
46,671
$
49,748
$
47,701
$
47,678
Non-interest expense to net interest
income plus non-interest income
66.45
%
-886.70
%
68.84
%
71.43
%
69.65
%
Efficiency ratio
65.16
%
74.35
%
68.83
%
69.45
%
69.69
%
Net income (loss) allocable to common
stockholders
$
14,068
$
(28,299
)
$
12,341
$
11,456
$
12,323
Add: income tax provision
3,693
(11,357
)
1,932
1,495
2,524
Add: provision (reversal) of credit
losses
1,000
711
1,230
298
(366
)
Pre-tax, pre-provision income
$
18,761
$
(38,945
)
$
15,503
$
13,249
$
14,481
Total average assets
$
5,152,915
$
4,892,712
$
5,046,179
$
5,064,912
$
4,994,417
Total average stockholders' equity
$
460,244
$
423,207
$
426,620
$
424,862
$
420,500
Return on average assets (ROAA)
annualized
1.10
%
(2.29
)%
0.97
%
0.91
%
1.00
%
Adjusted return on average
assets
1.46
%
(3.16
)%
1.22
%
1.05
%
1.18
%
Adjusted return on average
equity
16.39
%
(36.51
)%
14.43
%
12.51
%
13.97
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240416937060/en/
Investor Contact: Brian J.
Katzfey VP, Director of Corporate Development and Investor
Relations Equity Bank (316) 858-3128 bkatzfey@equitybank.com
Media Contact:
John J. Hanley Chief Marketing Officer Equity Bancshares, Inc.
(913) 583-8004 jhanley@equitybank.com
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