Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q4 2023 Earnings Presentation
29 slides from Equity Bancshares's earnings presentation, Jan 25, 2024
Slide 1: Earnings Presentation 4th Quarter 2023
Exhibit 99.2 E ARNINGS P RESENTATION 4th QUARTER 2023
Slide 2: Our Company: Corporate Snapshot
EQUITY BANCSHARES Our Company Equity Bancshares, Inc. Corporate Snapshot NYSE: EQBK • Founded In 2002, Wichita Headquartered, Midwest Franchise Start-Up: 2002 – 2007 • Seasoned Management Team Brad Elliott, Chairman and CEO, founded Equity Bancshares, Inc. in 2002 • Consistent Execution And Strategy
Slide 3: Our Value Proposition
EQUITY BANCSHARES Our Value Proposition MARKET D IVERSIFICATION A ND S TRATEGY FOR G ROWTH E XPERIENCED A ND INVESTED MANAGEMENT T EAM CONSERVATIVE CREDIT CULTURE A ND E FFECTIVE R ISK MANAGEMENT A ND MITIGATION S TRATEGIC & D ISCIPLINED M&A P ARTNER R OBUST FUNDING CAPACITY , A NCHORED B Y A D IVER
Slide 4: Strong Senior Leadership Team
EQUITY BANCSHARES Strong Senior Leadership Team Brad Elliott Chairman & CEO Years in Banking: 34 Rick Sems President Years in Banking: 23 Founded Equity Bank in 2002 Served as Chief Banking Officer of First Bank St. Louis 2018 EY Entrepreneur of the Year National Finalist Former President & CEO of R
Slide 5: Long Term Key Strategic Objectives
EQUITY BANCSHARES Long Term Key Strategic Objectives Grow Tangible Book Maximize Risk Adjusted Value Return on Assets • Efficiently grow core earnings • Re-mix cash flows into higher yielding instruments • Effectively deploy capital through share funded with low-cost core deposits repurchases, divid
Slide 6: Q4 2023 Financial Highlights
EQUITY BANCSHARES Q4 2023 Financial Highlights ADJUSTED OPERATING BALANCE SHEET STRENGTH AND NET INCOME (1) EARNINGS CONSISTENCY $11.9 Million THROUGH MARKET ADVERSITY NET INTEREST MARGIN DILUTED EARNINGS PER SHARE ( 1 ) 3.49 % $(1.84) / $0.77 a d j u s t e d o p e r a t i n g ADJUSTED OPERATING YIE
Slide 7: Net Income Walk
EQUITY BANCSHARES Net Income Walk Primary Drivers Net Interest Income Noninterest Income Noninterest Expense Net interest income totaled $39.5 million in the Noninterest income declined due to the recognition Noninterest expenses totaled $35.0 million in the fourth quarter, down $1.5 million from th
Slide 8: Performance Metrics
EQUITY BANCSHARES Performance Metrics Adjusted Return on Tangible Common Equity Adjusted Pre-Tax, Pre-Provision ROAA (1) (2) 1.22% 1.22% 14.9% 1.18% 14.7% 14.2% 13.8% 13.6% 1.05% 0.97% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Efficiency Ratio TCE / TA excluding
Slide 9: Revenue Trends
EQUITY BANCSHARES Revenue Trends Quarterly Results (1) Net Interest Income Net Interest Margin Net Interest Income Noninterest Income Noninterest % Operating Revenue Noninterest Income / AA 3.67% 15.7% 18.0% 17.3% 17.6% 15.4% 3.51% 3.49% 3.44% 3.38% 0.67% 0.70% 0.55% 0.69% 0.58% $7,894 $8,736 $8,568
Slide 10: Net Interest Income
EQUITY BANCSHARES Net Interest Income Primary Drivers Deposits Cost of Deposits Loan Yield Rate Protection Repositioning Excess Liquidity Noninterest-bearing Cost of interest- Loan yield declined Proactive effort to During the quarter, the Excess on balance deposits constitute bearing deposits 5bps
Slide 11: Strong Core Deposit Franchise
EQUITY BANCSHARES Strong Core Deposit Franchise Current Deposit Composition Core Deposits / Total Deposits (1) (2) Savings Time Deposits > 100k Core Deposits Core Deposits / Total Deposits 7% 14% 86.2% 85.1% 86.6% 86.2% Time Deposits < 100k 83.4% 5% MMDA 29% Non-Interest Bearing DDA $3,658 $3,575 $3
Slide 12: Yield / Cost Components
EQUITY BANCSHARES Yield / Cost Components Cost Analysis Cumulative Betas Cost of Deposits Cost of IB Deposits Q4 2021 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Average Fed Funds 0.08% 4.51% 4.99% 5.26% 5.33% Rate 2.40% 2.58% Loans 41% 47% 49% 50% 2.14% 1.73% 1.84% 1.98% 1.05% 1.64% 1.31% Deposits 25% 30% 32%
Slide 13: Diversified Loan Portfolio
EQUITY BANCSHARES Diversified Loan Portfolio Loan Mix Total Loans & Yield on Loans 6.62% 5.73% 5.00% 4.77% 4.98% $3.16B $3.31B $3.32B C&I $2.56B $2.59B 18% Commercial Real Estate 43% Residential Real 2019 2020 2021 2022 Q4 2023 Estate 17% RE Construction TOTAL CLASSIFIED ASSETS 10% Agriculture $40.5
Slide 14: Asset Quality Trends - Quarterly
EQUITY BANCSHARES Asset Quality Trends - Quarterly Nonperforming Assets Total Reserve Ratio (1) (2) Nonaccruals OREO & Other Repo. Assets NPAs / Assets Allowance for Credit Losses Purchase Discount 1.43% 1.40% 1.39% 1.39% 0.37% 0.42% 0.53% 1.35% 0.33% 0.31% 0.05% 0.05% 0.05% 0.04% 0.04% $1.2 $0.6 $0
Slide 15: Asset Quality Trends – Annual
EQUITY BANCSHARES Asset Quality Trends – Annual Nonperforming Assets Total Reserve Ratio (1) (2) Nonaccruals OREO & Other Repo. Assets NPAs / Assets Allowance for Credit Losses Purchase Discount 1.36% 1.98% 1.28% 1.19% 1.65% $10.8 1.43% $36.4 0.68% 0.12% 1.35% $8.5 0.53% 0.37% 0.05% 0.04% $1.2 0.73%
Slide 16: Allowance for Credit Loss
EQUITY BANCSHARES Allowance for Credit Loss ACL Intra-Quarter Movement Q3 Q4 Loan Classification ACL Loans ACL / Loans (%) Commercial Real Estate $13,476 $1,759,855 0.77% Commercial & Industrial $17,954 $598,327 3.00% Residential Real Estate $7,784 $556,328 1.40% Agricultural Real Estate $1,718 $196
Slide 17: Investment Portfolio Repositioning
EQUITY BANCSHARES Investment Portfolio Repositioning Announced in December $442M $0.81 IMPROVES BALANCE SHEET EFFICIENCY PROVIDES SIGNIFICANT EARNINGS BENEFIT SECURITIES SOLD available-for-sale M A I N TA I N S C A P I TA L S T R E N G T H A N D 2024E ENHANCES LIQUIDITY APPROX. YIELD OF 1.33% EPS AC
Slide 18: Tangible Book Value
EQUITY BANCSHARES Tangible Book Value Increased $2.28 in Q4 2023 to $25.37 Q3 Q4 Q4 (1) Non-GAAP financial measure. Refer to the non-GAAP reconciliation at the end of this presentation. 18
Slide 19: Capital Management Strategy
EQUITY BANCSHARES Capital Management Strategy Capital Management Capital Targets The Company’s capital ratios are comfortably above well capitalized EQBK establishes capital targets based on the levels as of 12/31/2023 following objectives: • Maintain designation as a “well capitalized” Regulatory W
Slide 20: Outlook on Key Business Drivers
EQUITY BANCSHARES Outlook on Key Business Drivers 2023 4th Quarter FORWARD LOOKING (1)(2) ESTIMATES RESULTS 2024 1st Quarter FY 2024 Estimate AVERAGE $4,000 - 4,200M $4,019M $4,000 - 4,100M $4,000 - 4,100M DEPOSITS AVERAGE $3,200 - 3,400M $3,293M $3,350 - 3,425M $3,400 - 3,500M LOANS AVERAGE $4,500
Slide 21: Focus Variables for Outlook & Forecast
EQUITY BANCSHARES Focus Variables for Outlook & Forecast Our outlook requires clarity around certain variables, including: Economic • Business activity creates opportunity for lending and deposit growth. Current macro- Environment environment response and resolution will be a significant driver. Cus
Slide 22: Our Markets: Kansas and Missouri
EQUITY BANCSHARES Our Markets Kansas Missouri 21 counties 10 counties 37 branches 16 branches Deposits Market Deposits Market Rank Institution Branches Rank Institution Branches ($mm) Share ( % ) ($mm) Share ( % ) 1 Bank of America Corp. $6,902 11.36 21 1 UMB Financial Corp. $23,649 45.07 19 2 Capit
Slide 23: Our Markets: Oklahoma and Arkansas
EQUITY BANCSHARES Our Markets Oklahoma Arkansas Kay | Texas | Tulsa Benton | Boone | Carroll 9 branches 5 branches Deposits Market Deposits Market Rank Institution Branches Rank Institution Branches ($mm) Share ( % ) ($mm) Share ( % ) 1 BOK Financial Group $9,111 31.97 21 1 Arvest Bank Group Inc. $4
Slide 24: Non-GAAP reconciliations
EQUITY BANCSHARES Non-GAAP reconciliations
Slide 25: Calculations of Tangible Common Equity and Related Measures
EQUITY BANCSHARES Non-GAAP reconciliations Calculations of Tangible Common Equity and Related Measures ($ in thousands, except per share data) Quarter Ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Total stockholder's equity $ 452,860 $ 418,130 $ 418,435 $
Slide 26: Calculations of ROATCE and Efficiency Ratio
EQUITY BANCSHARES Non-GAAP reconciliations Calculations of ROATCE and Efficiency Ratio ($ in thousands, except per share data) Quarter Ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Total average stockholders' equity $ 423,207 $ 426,260 $ 424,862 $ 420,500
Slide 27: Calculations of Return on Average Assets and Average Equity
EQUITY BANCSHARES Non-GAAP reconciliations Calculations of Return on Average Assets and Average Equity ($ in thousands, except per share data) Quarter Ended December 31, September 30, June 30, March 31, December 31, 2023 2023 2023 2023 2022 Net income (loss) allocable to common stockholders (28,299)
Slide 28: Forward Looking Statements
EQUITY BANCSHARES Forward Looking Statements This presentation 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 v
Slide 29: investor.equitybank.com
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