Reports 10.4% Tangible Book Value Growth,
Closes Merger with KansasLand, Adding to Kansas Franchise
Equity Bancshares, Inc. (NYSE: EQBK), (“Equity”, “the Company,”
“we,” “us,” “our”), the Wichita-based holding company of Equity
Bank, reported net income of $19.8 million or $1.28 earnings per
diluted share for the quarter ended September 30, 2024.
“Our Company realized another exceptional earnings quarter,
which included the favorable resolution of a significant problem
loan," said Brad S. Elliott, Chairman and CEO of Equity. "Our team
is committed to serving our communities and, through prudent
underwriting, mitigating risk. When challenges arise, we will
pursue all avenues available to us for successful resolution on
behalf of our shareholders."
"Also during this quarter, our team continued to execute on our
mission as we grew customer relationships and loan balances while
also expanding our footprint via the KansasLand Bancshares, Inc.
("KansasLand") acquisition," Mr. Elliott said. "We are well
positioned to facilitate both organic growth and strategic M&A.
We have the teams, the processes and the experience to be the
premier community bank in our geography."
Notable Items:
- The Company realized earnings per diluted share of $1.28, or
$1.31 adjusted to exclude pre-tax merger expense of $618 thousand
and gain on security transactions of $206 thousand.
- The Company closed its merger with and completed its
integration of KansasLand. Adding $28.3 million in loan balances
and $42.4 million in deposit balances.
- During the quarter, the Company grew loan balances, excluding
those acquired from KansasLand, by $117.8 million or 13.6% on an
annualized basis.
- The Company resolved a significant problem asset, recognizing
an $8.5 million pre-tax benefit during the quarter.
- The Company ended the quarter with deposit balances of $4.4
billion and a loan-to-deposit ratio of 82.5%.
- The Company increased its quarterly dividend by 25% to $0.15
per share, its third consecutive annual increase. The Company also
announced the approval of a share repurchase plan allowing for the
purchase of up to 1,000,000 shares from October 1, 2024 through
September 30, 2025.
- The Company realized an increase in book and tangible book
value of $42.6 million and $43.2 million, respectively. Linked
quarter tangible book value per share improved 10.4% to $28.38 per
share.
- Classified assets as a percentage of total risk-based capital
at Equity Bank closed the period at 8.3% while non-performing
assets remained historically low. The allowance for credit losses
closed the quarter at 1.2% of total loans.
Financial Results for the Quarter Ended
September 30, 2024
Net income allocable to common stockholders was $19.8 million,
or $1.28 per diluted share. Adjusting to exclude $618 thousand in
pre-tax costs associated with mergers and gain on security
transactions of $206 thousand, net income was $20.2 million or
$1.31 per diluted share.
Excluding merger expenses and the costs associated with
repositioning a portion of our BOLI portfolio in the prior quarter,
net income was $15.3 million, or $0.99 per diluted share. The
drivers of the periodic change are discussed in detail in the
following sections.
Net Interest Income
Net interest income was $46.0 million for the period ended
September 30, 2024, as compared to $46.5 million for the three
months ended June 30, 2024, the decline was driven by minor
declines in average earning assets and margin, partially offset by
an additional day in the current period. Net interest margin was
3.87% for the quarter compared to 3.94% as the yield on
interest-earning assets declined 7 basis points to 6.30%.
The decline in earning asset yield was driven by declining
trends in both non-accrual loan impacts and purchase accounting
accretion. The comparative change in these components of interest
income resulted in an 8 basis point decline in margin.
Provision for Credit Losses
During the quarter ended September 30, 2024, there was a
provision of $1.2 million compared to a provision of $265 thousand
in the previous quarter. The provision was primarily attributable
to growth in loan balances during the period. 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. During the quarter, we
realized net charge-offs of $1.6 million as compared to $1.2
million for the previous quarter.
Non-Interest Income
Total non-interest income was $9.3 million for the quarter ended
September 30, 2024, as compared to $9.0 million linked quarter.
Included in current quarter results was gain realized on the
acquisition of KansasLand of $831 thousand. Service fee revenue
including deposit services, treasury, debit card, credit card,
insurance and wealth management increased at an annualized rate of
2% during the quarter.
Non-Interest Expense
Total non-interest expense for the quarter was $30.3 million as
compared to $38.9 million for the previous quarter. Adjusting for
merger expenses in both periods, the decrease quarter over quarter
was $6.9 million driven by the $8.5 million gain from a borrower's
repurchase of our preferred equity interest in the borrower's
company, partially offset by a $742 thousand write-down of a
previous bank location now carried in Other Real Estate Owned and a
$900 thousand increase in incentive accruals.
Income Tax Expense
The effective tax rate for the quarter was 16.7% as compared to
28.1% for the quarter ended June 30, 2024. The decrease in rate
during the quarter was the result of the reversal of the
non-recurring recognition of tax expense related to the liquidation
of bank owned life insurance in the second quarter in addition to
the reversal of deferred tax asset valuation allowance for the
expected utilization of net operating loss carryforwards in the
current tax year. Year-to-date effective tax rate is 21.2%.
Loans, Total Assets and Funding
Loans held for investment were $3.6 billion at September 30,
2024, increasing $146.5 million, or 16.9% on an annualized basis,
during the quarter. Total assets were $5.4 billion as of the end of
the period, increasing $109.7 million during the quarter.
Total deposits were $4.4 billion at September 30, 2024,
increasing $21.5 million, or 2.0% on an annualized basis, from the
previous quarter end. Of the total deposit balance,
non-interest-bearing accounts comprise approximately 22.2%. Total
Federal Home Loan Bank borrowings were $296.0 million as of the end
of the quarter, up $45.7 million as compared to June 30, 2024.
Asset Quality
As of September 30, 2024, Equity’s allowance for credit losses
to total loans was 1.2% down 5 basis points as compared to June 30,
2024. The decline was driven by realized charge-offs during the
period. Nonperforming assets were $32.3 million as of September 30,
2024, or 0.6% of total assets, compared to $27.2 million at June
30, 2024, or 0.5% of total assets. Non-accrual loans were $31.2
million at September 30, 2024, as compared to $26.6 million at June
30, 2024. Total classified assets, including loans rated special
mention or worse, other real estate owned, excluding previous
branch locations, and other repossessed assets were $49.1 million,
or 8.32% of regulatory capital, up from $48.4 million, or 8.5% of
regulatory capital as of June 30, 2024.
Capital
Quarter over quarter, book capital increased $42.6 million to
$504.0 million and tangible capital increased $43.2 million to
$433.9 million. Tangible book value per share closed the quarter at
$28.4, increasing 10.4% compared to prior quarter. The increase in
capital is primarily due to earnings and improvement in unrealized
losses on bonds and cash flow hedges of $22.0 million, partially
offset by dividends of $2.3 million. Tangible capital was also
positively affected by the amortization of core deposit intangibles
during the quarter.
The Company’s ratio of common equity tier 1 capital to
risk-weighted assets was 11.4%, the total capital to risk-weighted
assets was 14.8% and the total leverage ratio was 9.6% at September
30, 2024. At June 30, 2024, the Company’s common equity tier 1
capital to risk-weighted assets ratio was 11.1%, the total capital
to risk-weighted assets ratio was 14.6% and the total leverage
ratio was 9.1%.
Equity Bank's ratio of common equity tier 1 capital to
risk-weighted assets was 13.0%, total capital to risk-weighted
assets was 14.1% and the total leverage ratio was 10.4% at
September 30, 2024. At June 30, 2024, Equity Bank’s ratio of common
equity tier 1 capital to risk-weighted assets was 12.9%, the ratio
of total capital to risk-weighted assets was 14.0% and the total
leverage ratio was 10.1%.
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 third quarter results on Wednesday,
October 16, 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 following the
close of the call 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. Consolidated Statements of Income
- Table 2. Quarterly Consolidated Statements of
Income
- Table 3. Consolidated Balance Sheets
- Table 4. Selected Financial Highlights
- Table 5. Year-To-Date Net Interest Income Analysis
- Table 6. Quarter-To-Date Net Interest Income
Analysis
- Table 7. Quarter-Over-Quarter Net Interest Income
Analysis
- Table 8. Non-GAAP Financial Measures
TABLE 1. CONSOLIDATED STATEMENTS OF
INCOME (Unaudited)
(Dollars in thousands)
Three months ended September
30,
Nine months ended September
30,
2024
2023
2024
2023
Interest and dividend income
Loans, including fees
$
62,089
$
55,152
$
182,436
$
156,281
Securities, taxable
9,809
5,696
29,862
17,456
Securities, nontaxable
400
369
1,192
1,606
Federal funds sold and other
2,667
3,822
8,374
7,075
Total interest and dividend income
74,965
65,039
221,864
182,418
Interest expense
Deposits
23,679
19,374
69,196
50,399
Federal funds purchased and retail
repurchase agreements
261
246
893
633
Federal Home Loan Bank advances
3,089
968
8,022
2,939
Federal Reserve Bank borrowings
—
1,546
1,361
3,209
Subordinated debt
1,905
1,893
5,703
5,687
Total interest expense
28,934
24,027
85,175
62,867
Net interest income
46,031
41,012
136,689
119,551
Provision (reversal) for credit losses
1,183
1,230
2,448
1,162
Net interest income after provision
(reversal) for credit losses
44,848
39,782
134,241
118,389
Non-interest income
Service charges and fees
2,424
2,690
7,534
7,888
Debit card income
2,665
2,591
7,733
7,798
Mortgage banking
287
226
720
527
Increase in value of bank-owned life
insurance
1,344
794
3,083
3,134
Net gain on acquisition and branch
sales
831
—
2,131
—
Net gains (losses) from securities
transactions
206
(1
)
222
(1,291
)
Other
1,560
2,435
8,583
6,229
Total non-interest income
9,317
8,735
30,006
24,285
Non-interest expense
Salaries and employee benefits
18,494
15,857
54,418
47,786
Net occupancy and equipment
3,478
3,262
10,800
9,081
Data processing
5,152
4,553
15,016
12,962
Professional fees
1,487
1,312
4,657
4,341
Advertising and business development
1,368
1,419
3,897
3,827
Telecommunications
660
502
1,887
1,503
FDIC insurance
660
660
1,821
1,535
Courier and postage
686
548
1,912
1,469
Free nationwide ATM cost
544
516
1,569
1,565
Amortization of core deposit
intangibles
1,112
799
3,229
2,635
Loan expense
143
132
447
385
Other real estate owned
(7,719
)
128
(7,786
)
318
Merger expenses
618
—
4,461
—
Other
3,645
4,556
10,023
13,196
Total non-interest expense
30,328
34,244
106,351
100,603
Income (loss) before income tax
23,837
14,273
57,896
42,071
Provision for income taxes
3,986
1,932
12,261
5,951
Net income (loss) and net income (loss)
allocable to common stockholders
$
19,851
$
12,341
$
45,635
$
36,120
Basic earnings (loss) per share
$
1.30
$
0.80
$
2.98
$
2.32
Diluted earnings (loss) per share
$
1.28
$
0.80
$
2.95
$
2.30
Weighted average common shares
15,258,822
15,404,992
15,310,888
15,575,731
Weighted average diluted common shares
15,451,545
15,507,172
15,467,930
15,692,305
TABLE 2. QUARTERLY CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share
data)
As of and for the three months
ended
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
Interest and dividend income
Loans, including fees
$
62,089
$
61,518
$
58,829
$
54,932
$
55,152
Securities, taxable
9,809
10,176
9,877
6,417
5,696
Securities, nontaxable
400
401
391
354
369
Federal funds sold and other
2,667
3,037
2,670
2,591
3,822
Total interest and dividend income
74,965
75,132
71,767
64,294
65,039
Interest expense
Deposits
23,679
22,662
22,855
20,074
19,374
Federal funds purchased and retail
repurchase agreements
261
306
326
298
246
Federal Home Loan Bank advances
3,089
3,789
1,144
1,005
968
Federal Reserve Bank borrowings
—
—
1,361
1,546
1,546
Subordinated debt
1,905
1,899
1,899
1,904
1,893
Total interest expense
28,934
28,656
27,585
24,827
24,027
Net interest income
46,031
46,476
44,182
39,467
41,012
Provision (reversal) for credit losses
1,183
265
1,000
711
1,230
Net interest income after provision
(reversal) for credit losses
44,848
46,211
43,182
38,756
39,782
Non-interest income
Service charges and fees
2,424
2,541
2,569
2,299
2,690
Debit card income
2,665
2,621
2,447
2,524
2,591
Mortgage banking
287
245
188
125
226
Increase in value of bank-owned life
insurance
1,344
911
828
925
794
Net gain on acquisition and branch
sales
831
60
1,240
—
—
Net gains (losses) from securities
transactions
206
(27
)
43
(50,618
)
(1
)
Other
1,560
2,607
4,416
1,331
2,435
Total non-interest income
9,317
8,958
11,731
(43,414
)
8,735
Non-interest expense
Salaries and employee benefits
18,494
17,827
18,097
16,598
15,857
Net occupancy and equipment
3,478
3,787
3,535
3,244
3,262
Data processing
5,152
5,036
4,828
4,471
4,553
Professional fees
1,487
1,778
1,392
1,413
1,312
Advertising and business development
1,368
1,291
1,238
1,598
1,419
Telecommunications
660
572
655
460
502
FDIC insurance
660
590
571
660
660
Courier and postage
686
620
606
577
548
Free nationwide ATM cost
544
531
494
508
516
Amortization of core deposit
intangibles
1,112
1,218
899
739
799
Loan expense
143
195
109
155
132
Other real estate owned
(7,719
)
17
(84
)
224
128
Merger expenses
618
2,287
1,556
297
—
Other
3,645
3,122
3,256
4,054
4,556
Total non-interest expense
30,328
38,871
37,152
34,998
34,244
Income (loss) before income tax
23,837
16,298
17,761
(39,656
)
14,273
Provision for income taxes (benefit)
3,986
4,582
3,693
(11,357
)
1,932
Net income (loss) and net income (loss)
allocable to common stockholders
$
19,851
$
11,716
$
14,068
$
(28,299
)
$
12,341
Basic earnings (loss) per share
$
1.30
$
0.77
$
0.91
$
(1.84
)
$
0.80
Diluted earnings (loss) per share
$
1.28
$
0.76
$
0.90
$
(1.84
)
$
0.80
Weighted average common shares
15,258,822
15,248,703
15,425,709
15,417,200
15,404,992
Weighted average diluted common shares
15,451,545
15,377,980
15,569,225
15,417,200
15,507,172
TABLE 3. CONSOLIDATED BALANCE
SHEETS (Unaudited)
(Dollars in thousands)
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
ASSETS
Cash and due from banks
$
217,681
$
244,321
$
217,611
$
363,289
$
183,404
Federal funds sold
17,802
15,945
17,407
15,810
15,613
Cash and cash equivalents
235,483
260,266
235,018
379,099
199,017
Available-for-sale securities
1,041,000
1,042,176
1,091,717
919,648
1,057,009
Held-to-maturity securities
5,408
5,226
2,205
2,209
2,212
Loans held for sale
901
1,959
1,311
476
627
Loans, net of allowance for credit
losses(1)
3,557,435
3,410,920
3,437,714
3,289,381
3,237,932
Other real estate owned, net
2,786
2,989
1,465
1,833
3,369
Premises and equipment, net
117,013
114,264
116,792
112,632
110,271
Bank-owned life insurance
131,670
130,326
125,693
124,865
124,245
Federal Reserve Bank and Federal Home Loan
Bank stock
34,429
33,171
27,009
20,608
20,780
Interest receivable
28,398
27,381
27,082
25,497
23,621
Goodwill
53,101
53,101
53,101
53,101
53,101
Core deposit intangibles, net
16,029
16,636
17,854
7,222
7,961
Other
131,580
147,102
102,075
98,021
105,122
Total assets
$
5,355,233
$
5,245,517
$
5,239,036
$
5,034,592
$
4,945,267
LIABILITIES AND STOCKHOLDERS’
EQUITY
Deposits
Demand
$
967,858
$
984,872
$
981,623
$
898,129
$
936,217
Total non-interest-bearing deposits
967,858
984,872
981,623
898,129
936,217
Demand, savings and money market
2,468,956
2,560,091
2,574,871
2,483,807
2,397,003
Time
926,130
796,474
814,532
763,519
748,950
Total interest-bearing deposits
3,395,086
3,356,565
3,389,403
3,247,326
3,145,953
Total deposits
4,362,944
4,341,437
4,371,026
4,145,455
4,082,170
Federal funds purchased and retail
repurchase agreements
38,196
38,031
43,811
43,582
39,701
Federal Home Loan Bank advances and
Federal Reserve Bank borrowings
295,997
250,306
219,931
240,000
240,000
Subordinated debt
97,336
97,196
97,058
96,921
96,787
Contractual obligations
19,683
23,770
18,493
19,315
29,019
Interest payable and other liabilities
37,039
33,342
31,941
36,459
39,460
Total liabilities
4,851,195
4,784,082
4,782,260
4,581,732
4,527,137
Commitments and contingent liabilities
Stockholders’ equity
Common stock
209
208
208
207
207
Additional paid-in capital
494,763
491,709
490,533
489,187
488,137
Retained earnings
180,588
163,068
153,201
141,006
171,188
Accumulated other comprehensive income
(loss), net of tax
(40,012
)
(62,005
)
(60,788
)
(57,920
)
(122,047
)
Treasury stock
(131,510
)
(131,545
)
(126,378
)
(119,620
)
(119,355
)
Total stockholders’ equity
504,038
461,435
456,776
452,860
418,130
Total liabilities and stockholders’
equity
$
5,355,233
$
5,245,517
$
5,239,036
$
5,034,592
$
4,945,267
(1) Allowance for credit losses
$
43,490
$
43,487
$
44,449
$
43,520
$
44,186
TABLE 4. SELECTED FINANCIAL
HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share
data)
As of and for the three months
ended
September 30,
June 30,
March 31,
December 31,
September 30,
2024
2024
2024
2023
2023
Loans Held For Investment by
Type
Commercial real estate
$
1,916,863
$
1,793,544
$
1,797,192
$
1,759,855
$
1,721,761
Commercial and industrial
670,665
663,718
649,035
598,327
585,129
Residential real estate
567,063
572,523
581,988
556,328
558,188
Agricultural real estate
259,587
219,226
198,291
196,114
205,865
Agricultural
89,529
104,342
149,312
118,587
103,352
Consumer
97,218
101,054
106,345
103,690
107,823
Total loans held-for-investment
3,600,925
3,454,407
3,482,163
3,332,901
3,282,118
Allowance for credit losses
(43,490
)
(43,487
)
(44,449
)
(43,520
)
(44,186
)
Net loans held for investment
$
3,557,435
$
3,410,920
$
3,437,714
$
3,289,381
$
3,237,932
Asset Quality Ratios
Allowance for credit losses on loans to
total loans
1.21
%
1.26
%
1.28
%
1.31
%
1.35
%
Past due or nonaccrual loans to total
loans
1.17
%
1.15
%
1.10
%
1.10
%
1.03
%
Nonperforming assets to total assets
0.60
%
0.52
%
0.49
%
0.53
%
0.42
%
Nonperforming assets to total loans plus
other real estate owned
0.90
%
0.79
%
0.73
%
0.79
%
0.63
%
Classified assets to bank total regulatory
capital
8.32
%
8.47
%
6.85
%
7.09
%
6.27
%
Selected Average Balance Sheet Data
(QTD Average)
Investment securities
$
1,055,833
$
1,065,979
$
1,074,101
$
985,591
$
1,085,905
Total gross loans receivable
3,475,885
3,459,476
3,452,553
3,293,755
3,281,483
Interest-earning assets
4,731,927
4,745,713
4,742,200
4,480,279
4,635,384
Total assets
5,205,017
5,196,259
5,152,915
4,892,712
5,046,179
Interest-bearing deposits
3,309,202
3,275,765
3,319,907
3,092,637
3,206,300
Borrowings
395,190
450,178
390,166
391,691
385,125
Total interest-bearing liabilities
3,704,392
3,725,943
3,710,073
3,484,328
3,591,425
Total deposits
4,275,424
4,250,843
4,254,883
4,019,362
4,177,332
Total liabilities
4,719,549
4,740,937
4,692,671
4,469,505
4,619,919
Total stockholders' equity
485,468
455,322
460,244
423,207
426,260
Tangible common equity*
414,644
383,899
398,041
361,451
363,625
Performance ratios
Return on average assets (ROAA)
annualized
1.52
%
0.91
%
1.10
%
(2.29
)%
0.97
%
Return on average assets before income tax
and provision for loan losses*
1.91
%
1.28
%
1.46
%
(3.16
)%
1.22
%
Return on average equity (ROAE)
annualized
16.27
%
10.35
%
12.29
%
(26.53
)%
11.49
%
Return on average equity before income tax
and provision for loan losses*
20.50
%
14.63
%
16.39
%
(36.51
)%
14.43
%
Return on average tangible common equity
(ROATCE) annualized*
19.92
%
13.31
%
14.96
%
(30.39
)%
14.18
%
Yield on loans annualized
7.11
%
7.15
%
6.85
%
6.62
%
6.67
%
Cost of interest-bearing deposits
annualized
2.85
%
2.78
%
2.77
%
2.58
%
2.40
%
Cost of total deposits annualized
2.20
%
2.14
%
2.16
%
1.98
%
1.84
%
Net interest margin annualized
3.87
%
3.94
%
3.75
%
3.49
%
3.51
%
Efficiency ratio*
54.70
%
66.03
%
65.16
%
74.35
%
68.83
%
Non-interest income / average assets
0.71
%
0.69
%
0.92
%
(3.52
)%
0.69
%
Non-interest expense / average assets
2.32
%
3.01
%
2.90
%
2.84
%
2.69
%
Capital Ratios
Tier 1 Leverage Ratio
9.55
%
9.14
%
9.10
%
9.46
%
9.77
%
Common Equity Tier 1 Capital Ratio
11.37
%
11.12
%
11.14
%
11.74
%
12.65
%
Tier 1 Risk Based Capital Ratio
11.94
%
11.70
%
11.73
%
12.36
%
13.27
%
Total Risk Based Capital Ratio
14.78
%
14.61
%
14.71
%
15.48
%
16.42
%
Total stockholders' equity to total
assets
9.41
%
8.80
%
8.72
%
8.99
%
8.46
%
Tangible common equity to tangible
assets*
8.21
%
7.55
%
7.45
%
7.87
%
7.29
%
Dividend payout ratio
11.74
%
15.79
%
13.31
%
(6.65
)%
15.13
%
Book value per common share
$
32.97
$
30.36
$
29.80
$
29.35
$
27.13
Tangible book value per common share*
$
28.38
$
25.70
$
25.10
$
25.37
$
23.09
Tangible book value per diluted common
share*
$
28.00
$
25.44
$
24.87
$
25.05
$
22.96
* The value noted is considered a Non-GAAP
financial measure. For a reconciliation of Non-GAAP financial
measures, see Table 8. Non-GAAP Financial Measures.
TABLE 5. YEAR-TO-DATE NET INTEREST
INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For nine months ended
For nine months ended
September 30, 2024
September 30, 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
$
643,213
$
38,408
7.98
%
$
580,359
$
31,503
7.26
%
Commercial real estate
1,400,385
73,339
7.00
%
1,300,202
61,811
6.36
%
Real estate construction
400,317
26,350
8.79
%
450,147
24,764
7.36
%
Residential real estate
579,818
19,935
4.59
%
567,169
17,933
4.23
%
Agricultural real estate
218,334
11,777
7.21
%
202,963
10,399
6.85
%
Agricultural
116,520
7,398
8.48
%
100,450
5,039
6.71
%
Consumer
104,098
5,229
6.71
%
106,841
4,832
6.05
%
Total loans
3,462,685
182,436
7.04
%
3,308,131
156,281
6.32
%
Securities
Taxable securities
1,004,367
29,862
3.97
%
1,059,858
17,456
2.20
%
Nontaxable securities
60,903
1,192
2.62
%
82,230
1,606
2.61
%
Total securities
1,065,270
31,054
3.89
%
1,142,088
19,062
2.23
%
Federal funds sold and other
211,961
8,374
5.28
%
191,585
7,075
4.94
%
Total interest-earning assets
$
4,739,916
221,864
6.25
%
$
4,641,804
182,418
5.25
%
Interest-bearing liabilities
Demand, savings and money market
deposits
$
2,535,852
48,090
2.53
%
$
2,365,972
32,288
1.82
%
Time deposits
765,800
21,106
3.68
%
856,862
18,111
2.83
%
Total interest-bearing deposits
3,301,652
69,196
2.80
%
3,222,834
50,399
2.09
%
FHLB advances
223,132
8,022
4.80
%
97,014
2,939
4.05
%
Other borrowings
188,652
7,957
5.63
%
243,007
9,529
5.24
%
Total interest-bearing liabilities
$
3,713,436
85,175
3.06
%
$
3,562,855
62,867
2.36
%
Net interest income
$
136,689
$
119,551
Interest rate spread
3.19
%
2.89
%
Net interest margin (2)
3.85
%
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 6. QUARTER-TO-DATE NET INTEREST
INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For the three months
ended
For the three months
ended
September 30, 2024
September 30, 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
$
659,697
$
13,213
7.97
%
$
573,039
$
10,984
7.60
%
Commercial real estate
1,351,407
24,196
7.12
%
1,253,362
20,824
6.59
%
Real estate construction
442,857
9,732
8.74
%
480,355
9,838
8.13
%
Residential real estate
578,702
6,912
4.75
%
564,138
6,085
4.28
%
Agricultural real estate
251,595
4,365
6.90
%
203,399
3,898
7.60
%
Agricultural
91,500
1,906
8.29
%
99,773
1,856
7.38
%
Consumer
100,127
1,765
7.01
%
107,417
1,667
6.16
%
Total loans
3,475,885
62,089
7.11
%
3,281,483
55,152
6.67
%
Securities
Taxable securities
995,713
9,809
3.92
%
1,027,889
5,696
2.20
%
Nontaxable securities
60,120
400
2.65
%
58,016
369
2.52
%
Total securities
1,055,833
10,209
3.85
%
1,085,905
6,065
2.22
%
Federal funds sold and other
200,209
2,667
5.30
%
267,996
3,822
5.66
%
Total interest-earning assets
$
4,731,927
74,965
6.30
%
$
4,635,384
65,039
5.57
%
Interest-bearing liabilities
Demand, savings and money market
deposits
$
2,555,916
16,484
2.57
%
$
2,423,380
13,331
2.18
%
Time deposits
753,286
7,195
3.80
%
782,920
6,043
3.06
%
Total interest-bearing deposits
3,309,202
23,679
2.85
%
3,206,300
19,374
2.40
%
FHLB advances
252,751
3,089
4.86
%
100,000
968
3.84
%
Other borrowings
142,439
2,166
6.05
%
285,125
3,685
5.13
%
Total interest-bearing liabilities
$
3,704,392
28,934
3.11
%
$
3,591,425
24,027
2.65
%
Net interest income
$
46,031
$
41,012
Interest rate spread
3.19
%
2.92
%
Net interest margin (2)
3.87
%
3.51
%
(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 7. QUARTER-OVER-QUARTER NET
INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For the three months
ended
For the three months
ended
September 30, 2024
June 30, 2024
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
$
659,697
$
13,213
7.97
%
$
635,123
$
12,782
8.09
%
Commercial real estate
1,351,407
24,196
7.12
%
1,401,109
24,541
7.04
%
Real estate construction
442,857
9,732
8.74
%
402,831
8,843
8.83
%
Residential real estate
578,702
6,912
4.75
%
580,338
6,563
4.55
%
Agricultural real estate
251,595
4,365
6.90
%
206,018
3,944
7.70
%
Agricultural
91,500
1,906
8.29
%
127,298
3,102
9.80
%
Consumer
100,127
1,765
7.01
%
106,759
1,743
6.57
%
Total loans
3,475,885
62,089
7.11
%
3,459,476
61,518
7.15
%
Securities
Taxable securities
995,713
9,809
3.92
%
1,006,018
10,176
4.07
%
Nontaxable securities
60,120
400
2.65
%
59,961
401
2.70
%
Total securities
1,055,833
10,209
3.85
%
1,065,979
10,577
3.99
%
Federal funds sold and other
200,209
2,667
5.30
%
220,258
3,037
5.54
%
Total interest-earning assets
$
4,731,927
74,965
6.30
%
$
4,745,713
75,132
6.37
%
Interest-bearing liabilities
Demand savings and money market
deposits
$
2,555,916
16,484
2.57
%
$
2,530,899
15,946
2.53
%
Time deposits
753,286
7,195
3.80
%
744,866
6,716
3.63
%
Total interest-bearing deposits
3,309,202
23,679
2.85
%
3,275,765
22,662
2.78
%
FHLB advances
252,751
3,089
4.86
%
302,972
3,789
5.03
%
Other borrowings
142,439
2,166
6.05
%
147,206
2,205
6.03
%
Total interest-bearing liabilities
$
3,704,392
28,934
3.11
%
$
3,725,943
28,656
3.09
%
Net interest income
$
46,031
$
46,476
Interest rate spread
3.19
%
3.28
%
Net interest margin (2)
3.87
%
3.94
%
(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 8. NON-GAAP FINANCIAL
MEASURES (Unaudited)
(Dollars in thousands, except per share
data)
As of and for the three months
ended
September 30,
June 30,
March 31,
December 31,
September 30,
2024
2024
2024
2023
2023
Total stockholders' equity
$
504,038
$
461,435
$
456,776
$
452,860
$
418,130
Less: goodwill
53,101
53,101
53,101
53,101
53,101
Less: core deposit intangibles, net
16,029
16,636
17,854
7,222
7,961
Less: mortgage servicing rights, net
—
25
50
75
100
Less: naming rights, net
968
979
989
1,000
1,011
Tangible common equity
$
433,940
$
390,694
$
384,782
$
391,462
$
355,957
Common shares outstanding at period
end
15,288,309
15,200,194
15,327,799
15,428,251
15,413,064
Diluted common shares outstanding at
period end
15,497,466
15,358,396
15,469,531
15,629,185
15,500,749
Book value per common share
$
32.97
$
30.36
$
29.80
$
29.35
$
27.13
Tangible book value per common
share
$
28.38
$
25.70
$
25.10
$
25.37
$
23.09
Tangible book value per diluted common
share
$
28.00
$
25.44
$
24.87
$
25.05
$
22.96
Total assets
$
5,355,233
$
5,245,517
$
5,239,036
$
5,034,592
$
4,945,267
Less: goodwill
53,101
53,101
53,101
53,101
53,101
Less: core deposit intangibles, net
16,029
16,636
17,854
7,222
7,961
Less: mortgage servicing rights, net
—
25
50
75
100
Less: naming rights, net
968
979
989
1,000
1,011
Tangible assets
$
5,285,135
$
5,174,776
$
5,167,042
$
4,973,194
$
4,883,094
Total stockholders' equity to total
assets
9.41
%
8.80
%
8.72
%
8.99
%
8.46
%
Tangible common equity to tangible
assets
8.21
%
7.55
%
7.45
%
7.87
%
7.29
%
Total average stockholders' equity
$
485,468
$
455,322
$
460,244
$
423,207
$
426,260
Less: average intangible assets
70,824
71,423
62,203
61,756
62,635
Average tangible common equity
$
414,644
$
383,899
$
398,041
$
361,451
$
363,625
Net income (loss) allocable to common
stockholders
$
19,851
$
11,716
$
14,068
$
(28,299
)
$
12,341
Add: amortization of intangible assets
1,148
1,254
935
775
835
Less: tax effect of intangible assets
amortization
241
263
196
163
175
Adjusted net income (loss) allocable to
common stockholders
$
20,758
$
12,707
$
14,807
$
(27,687
)
$
13,001
Return on total average stockholders'
equity (ROAE) annualized
16.27
%
10.35
%
12.29
%
(26.53
)%
11.49
%
Return on average tangible common
equity (ROATCE) annualized
19.92
%
13.31
%
14.96
%
(30.39
)%
14.18
%
Non-interest expense
$
30,328
$
38,871
$
37,152
$
34,998
$
34,244
Less: merger expense
618
2,287
1,556
297
—
Adjusted non-interest expense
$
29,710
$
36,584
$
35,596
$
34,701
$
34,244
Net interest income
$
46,031
$
46,476
$
44,182
$
39,467
$
41,012
Non-interest income
9,317
8,958
11,731
(43,414
)
8,735
Less: net gain on acquisition and branch
sales
831
60
1,240
—
—
Less: net gains (losses) from securities
transactions
206
(27
)
43
(50,618
)
(1
)
Adjusted non-interest income
$
8,280
$
8,925
$
10,448
$
7,204
$
8,736
Net interest income plus adjusted
non-interest income
$
54,311
$
55,401
$
54,630
$
46,671
$
49,748
Non-interest expense to net interest
income plus non-interest income
54.80
%
70.12
%
66.45
%
(886.70
)%
68.84
%
Efficiency ratio
54.70
%
66.03
%
65.16
%
74.35
%
68.83
%
Net income (loss) allocable to common
stockholders
$
19,851
$
11,716
$
14,068
$
(28,299
)
$
12,341
Add: income tax provision
3,986
4,582
3,693
(11,357
)
1,932
Add: provision (reversal) of credit
losses
1,183
265
1,000
711
1,230
Pre-tax, pre-provision income
$
25,020
$
16,563
$
18,761
$
(38,945
)
$
15,503
Total average assets
$
5,205,017
$
5,196,259
$
5,152,915
$
4,892,712
$
5,046,179
Total average stockholders' equity
$
485,468
$
455,322
$
460,244
$
423,207
$
426,620
Return on average assets (ROAA)
annualized
1.52
%
0.91
%
1.10
%
(2.29
)%
0.97
%
Adjusted return on average
assets
1.91
%
1.28
%
1.46
%
(3.16
)%
1.22
%
Adjusted return on average
equity
20.50
%
14.63
%
16.39
%
(36.51
)%
14.43
%
Net income (loss) allocable to common
stockholders
$
19,851
$
11,716
$
14,068
$
(28,299
)
$
12,341
Add: Day 1 -Provision
—
—
1,000
—
—
Less: Gain (loss) from securities
transactions
206
(27
)
43
(50,618
)
(1
)
Add: Merger expense
618
2,287
1,556
297
—
Adjusted non-core items
412
2,314
2,513
50,915
1
Tax effected non-core items
325
1,828
1,985
40,223
1
BOLI tax adjustment
—
1,730
—
—
—
Adjusted operating net income
$
20,176
$
15,274
$
16,053
$
11,924
$
12,342
GAAP earnings (loss) per diluted
share
$
1.28
$
0.76
$
0.90
$
(1.84
)
$
0.80
Adjusted earnings (loss) per diluted
share
$
1.31
$
0.99
$
1.03
$
0.77
$
0.80
Total average assets
$
5,205,017
$
5,196,258
$
5,152,915
$
4,892,712
$
5,046,179
Adjusted Operating ROAA
1.54
%
1.18
%
1.25
%
0.97
%
0.97
%
Weighted average diluted common
shares
15,451,545
15,377,980
15,569,225
15,417,200
15,507,172
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241015781471/en/
Investor Contact:
Brian J. Katzfey VP, Director of Corporate Development and
Investor Relations Equity Bancshares, Inc. (316) 858-3128
bkatzfey@equitybank.com
Media Contact:
Russell Colburn Public Relations and Communication Manager
Equity Bancshares, Inc. (913) 583-8011 rcolburn@equitybank.com
Equity Bancshares (NYSE:EQBK)
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