Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q1 2020 Earnings Presentation
37 slides from Equity Bancshares's earnings presentation, Apr 29, 2020
Slide 1: First Quarter 2020 Results Presentation
First Quarter 2020 Results Presentation April 29, 2020 Exhibit 99.2
Slide 2: Disclaimers
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 re
Slide 3: Equity Bank: We Are Here For You - COVID Outreach 2020
Equity Bank: We Are Here For You - COVID Outreach 2020 Customers Colleagues Community Paycheck Protection Program - Began communicating with customers prior to applications opening Liquidity and action plans Deferrals where appropriate Increased focus on digital banking Full DocuSign Implementation
Slide 4: COVID Outreach 2020: PPP Continuing to Accept Applications
Equity Bank: We Are Here For You - COVID Outreach 2020 PPP CONTINUING TO ACCEPT APPLICATIONS TO FACILITATE PHASE 2 78,000(1) Employees Assisted through SBA PPP loans 1,600 Completed Loans (Pull Through Rate of 98%) Digital Banking DocuSign implementation across products Online & Mobile traffic +9% +
Slide 5: COVID-19 Relief for Customers
Consumer RE Participants: 138 Amount: $28M COVID-19 RELIEF FOR CUSTOMERS Loan Payment Deferrals Deferral of principal & interest payments for a period of 90 to 180 days. Proactive communication with customer base to determine greatest need. Management team has worked directly with borrowers to ident
Slide 6: Loan Portfolio – Concentration
LOAN PORTFOLIO – CONCENTRATION
Slide 7: Hotel Portfolio
HOTEL PORTFOLIO Total exposure of $240M as of the end of the first quarter 2020. Currently low occupancy rates due to shelter-in-place orders associated with the COVID pandemic. Proactive communication with sophisticated borrowers has driven plans to conserve cash and fund operations. Based on measu
Slide 8: Agriculture Portfolio
AGRICULTURE PORTFOLIO Within our footprint crop yields have outperformed the average throughout the Midwest and nationwide. Approximately 59% of our portfolio is secured by real estate. Land values have seen very limited volatility in recent years. Throughout our footprint the Bank has experienced a
Slide 9: Construction Portfolio
CONSTRUCTION PORTFOLIO The Bank has $222M in outstanding construction exposure The top 40 commercial construction relationships comprised 73% of the total portfolio, or $161M. 95% of these projects have not been interrupted by the impact of the pandemic. Two projects have been delayed as the impact
Slide 10: Restaurants / Retail
RESTAURANTS / RETAIL Restaurants – Portfolio Details – $96M: Predominantly QSRs in national concepts with Wichita roots, including Freddy’s, Papa John’s, and Pizza Hut (57%). Top tier quick service restaurant brands with national scale and the resources to innovate and command market share. Our borr
Slide 11: C&I Manufacturing Portfolio
C&I MANUFACTURING PORTFOLIO The total manufacturing portfolio was $131.7M as of March 31. Aerospace exposure within the portfolio was $62.9M or 48%. Six borrowers comprise the aerospace segment of our portfolio. Original projected revenues for 2020 associated with the Boeing 737 Max for these compan
Slide 12: Syndicated National Credits
SYNDICATED NATIONAL CREDITS Diversified portfolio based on operating segment including technology, hospitality, restaurants, and logistics. The Company has reduced our exposure in these credits year-over-year from as high as $63M in June 2019.
Slide 13: Multifamily Portfolio
MULTIFAMILY PORTFOLIO Total Multi-family exposure within the portfolio is $85M. Comprised of 93 loans with an average balance of approximately $915K. Included within the portfolio is $9.5M in loans facilitating operations of low to moderate income apartment complexes. $12.7M of the portfolio is curr
Slide 14: Oil and Gas / Medical / Assisted Living
OIL AND GAS / MEDICAL / ASSISTED LIVING The Bank has very limited exposure to the oil and gas industry and no direct exposure to exploration. Total balance of $19M as of March 31, 2020, which is comprised of 59 loans with an average balance of $325K. The Bank has very limited exposure to the medical
Slide 15: 2020 First Quarter Highlights
Diluted earnings per share of $0.08 for 1Q 2020 Net income to common stockholders was $1.3 million Pre-tax, pre-provision income was $11.6 million EQBK Capital Ratios as of 3/31/2020: Leverage Ratio of 9.02% Total Risk-Based Capital Ratio of 13.00% Tangible Common Equity to Tangible Assets of 8.47%(
Slide 16: Operating Performance Trends – Year-over-Year
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
Slide 17: Operating Performance Trends – Quarter-over-Quarter
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 rec
Slide 18: Interest Income & Net Interest Margin
Interest Income & Net Interest Margin Performance Notes: Improved interest margin through proactive management of liability costs. (1) (1) Includes Non-interest bearing deposits
Slide 19: Margin Dynamic
Margin Dynamic 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. Quarter Prod: Fixed – 54% Variable – 46% ; 78%
Slide 20: Non-Interest Income
Non-Interest Income Does not include gains on sales and settlement of securities. Performance Notes: Continued strong performance in service income generation, increases in each category as compared to the same period last year. Quarter over quarter reduction in service fees reflects reductions in c
Slide 21: Non-Interest Expense
Non-Interest Expense Performance Notes: Specific expense categories are flat to declining Q/Q, with the exception of compensation Q/Q increase in compensation is based on timing of certain payroll driven costs realized as well as incentive compensation reductions that occurred in Q4 2019. Excluding
Slide 22: Tangible Book Value
Tangible Book Value Tangible Book Value per Share(1) and Total Assets TBV CAGR 2016 - 1Q 2020: 7.58% Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation.
Slide 23: Capital Position Over Time
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)
Slide 24: Total Loans by Purpose
Total Loans by Purpose(1) 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% $2,507,123 5.47% For financial statement reporting, management considers other factors in addition to purpose when assessing risk and identifying reporting
Slide 25: Allowance for Loan Losses
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 com
Slide 26: Asset Quality – Year-over-Year
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% 1.22% $0.26 68.5% 75.9% Purchased impaired loans classified as non-accrual th
Slide 27: Asset Quality – Quarter-over-Quarter
Asset Quality – Quarter-over-Quarter Nonperforming Assets 1.91% NPAs / Assets 1.61% Net Charge-Offs (NCO)/ Average Loans $6.70 $0.76 NCO in $ ($ in millions) Nonaccrual Detail Classified Assets to Total Regulatory Capital $9.54 1.40% 1.22% $0.26 37.3% 45.7% Purchased impaired loans classified as non
Slide 28: Bank Owned Life Insurance
Bank Owned Life Insurance Portfolio consists of insurance companies with a long and proven history of providing bank owned life insurance products. As of their most recently available financial statements, each of these providers showed significant capital, surplus, and asset valuation reserves. Eac
Slide 29: Total Deposits
Total Deposits Total ($000s) $3,123,447 $3,063,516 $1,630,451 $2,382,013 Year-to-Date Cost of Deposits* 0.56% 0.68% 0.96% 1.30% * Includes interest and non-interest bearing deposits. $2,960,397 0.91%
Slide 30: Appendix
Appendix
Slide 31: Selected Income Statement Data
Selected Income Statement Data Selected Income Statement Data ($000s) YTD 03/31/20 12/31/19 12/31/18 12/31/17 12/31/16 12/31/14 2013 Interest income $40,557 $,175,499 $,161,556 $,102,693 $61,799 $46,794 $46,845 Interest expense 8462 49641 36758 16691 9202 5433 5610 Net interest income 32095 125858 1
Slide 32: Selected Balance Sheet Data
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 03/31/20 12/31/19 12/31/18 12/31/17 12
Slide 33: Capitalization
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 03/31/20 12/31/19 12/31/18
Slide 34: Non-GAAP reconciliations overview
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
Slide 35: TCE to TA and Tangible Book Value per Share
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 March 31, 2020 December 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016 December 31,2012 Total stockholders’ equity $,477
Slide 36: ROATCE and Efficiency Ratio
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 ,
Slide 37: Equity Bancshares, Inc.
EQUITY BANCSHARES, INC. investor.equitybank.com