Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q1 2022 Earnings Presentation
39 slides from Equity Bancshares's earnings presentation, Apr 19, 2022
Slide 1: First Quarter Earnings Presentation
First Quarter Earnings Presentation April 20, 2022 Exhibit 99.2
Slide 2: Forward Looking Statements
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
Slide 3: Our Company
Our Company 3 Committed to our Entrepreneurial Spirit Equity Bancshares, Inc. NASDAQ: EQBK Start-Up: 2002 - 2007 Brad Elliott, current Chairman and CEO, founded Equity Bancshares, Inc. in 2002. Closed 5 branch or whole bank acquisitions Opened 2 branches in Missouri Growth: 2008 - 2016 Opened branch
Slide 4: Our Leadership Team
Our Leadership Team 4 Brad Elliott Chairman & CEO Years at Equity: 20 | Years in Banking: 33 Eric Newell Chief Financial Officer Years at Equity: 2 | Years in Banking: 20 Craig Anderson President Years at Equity: 4 | Years in Banking: 40 Greg Kossover Chief Operating Officer Years at Equity: 9 | Yea
Slide 5: Our Value Proposition
Our Value Proposition 5 Market Diversification and Strategy for Growth Experienced and Invested Management Team Conservative Credit Culture and Effective Risk Management and Mitigation Robust Funding Capacity, Anchored by a Diverse, Low-Cost Deposit Base Focus on Efficient Performance Throughout our
Slide 6: Core Values & ESG Impact
Our Core Values embody everything we do at Equity Bank, including teamwork with colleagues, conduct within our communities, and especially our respect for our customers. Our core values are: Integrity Community Focus Accountability Respect Entrepreneurial Spirit Core Values & ESG Impact 6 For the ye
Slide 7: Our Operating Footprint
Our Operating Footprint 7
Slide 8: Proven record of M&A execution
Proven record of M&A execution 8 Pricing Multiples Transaction Impact
Slide 9: Our Opportunity
Our Opportunity 9 There are over 1000 bank offices with deposits less than $750MM in our operating market
Slide 10: Long Term Key Strategic Objectives
Long Term Key Strategic Objectives 10 Grow Tangible Book Value Maximize Risk Adjusted Return on Assets Offer best-in-class banking products and services Drive organic fee income generation Efficiently grow core earnings Effectively deploy capital through share repurchases, dividends and whole bank m
Slide 11: Strong Core Deposit Franchise
Strong Core Deposit Franchise 11 Deposit Composition(1) Fully integrated digital banking platform with an adoption rate of 60.1% among core banking customers Continued emphasis on development of relationships to drive growth in non-interest bearing deposits. Cost of Deposits: 0.16%(1) Core Deposits(
Slide 12: Core Deposit Growth
Core Deposit Growth 12 Cost of Deposits(1) 0.16% 0.22% 0.52% 0.91% 1.30% Year-to-date, Includes the impact of non-interest bearing deposits Dollars in millions
Slide 13: Asset Quality Commentary
Asset Quality 13 Commentary Net charge-offs were $362 thousand for the quarter, or 5 bps of average loan assets annualized. Reserve ratio, exclusive of PPP assets, is 1.48% remaining well positioned for any losses which materialize from the current economic uncertainty surrounding inflation and re
Slide 14: Credit Quality
Credit Quality 14 Total Reserve Ratio Classified Assets Nonaccrual Detail
Slide 15: Diversified Loan Portfolio
Diversified Loan Portfolio 15 Year-to-Date Loan Yield 4.44% 5.19% 5.73% 5.74% For financial statement reporting, management considers other factors in addition to purpose when assessing risk and identifying reporting classes. As such, the above is not intended to reconcile to the Company’s loan disc
Slide 16: Allowance for Credit Loss (ACL)
Allowance for Credit Loss (ACL) 16 Impact of CECL adoption and subsequent intra-quarter movement
Slide 17: Capital Management
Capital Management 17 Capital Management Strategy Capital Targets EQBK establishes capital targets based on the following objectives: Maintain designation as a “well capitalized” institution under fully phased-in Basel III regulatory definitions Ensure capital levels are commensurate with the Compan
Slide 18: Bank Liquidity
Bank Liquidity 18 Liquidity Analysis Portfolio Characteristics Dividend Capacity from the Bank Description Amortized Cost Unrealized Gain / (Loss) Carrying Value
Slide 19: Revenue Mix
Revenue Mix 19 2022 YTD Operating Revenue(1) Noninterest Income 18.9% 2022 YTD operating revenue is equal to $48.3M, defined as net interest income of $39.3M plus non-interest income excluding gain / (loss) on securities transaction of $9.0M. YTD operating revenue less PPP income is equal to $48.3M
Slide 20: Noninterest Income
Noninterest Income 20 Quarterly Results(1) (1) Excludes the impact of PPP loans, net gain on acquisition, and net gain / (loss) on securities transactions Annual Results(1)
Slide 21: Net Interest Income
Net Interest Income 21 Quarterly Results Annual Results (1) Excludes the impact of PPP loans. Including these balances in the first, second, third, fourth quarter 2021 and first quarter 2022 results would be 3.31%, 3.50%, 3.86%, 3.13% and 3.38% respectively, while YTD 2020 and 2021 results would be
Slide 22: Net Interest Margin
Net Interest Margin 22 Key Net Interest Margin Drivers Government Programs PPP fee income due to forgiveness received by borrowers decreased during the quarter. Roughly $500 thousand in deferred fee balances remain on the books at quarter end. Non-Interest Bearing Deposits Non-interest bearing depos
Slide 23: Performance Metrics
Performance Metrics 23 Commentary Q1 2022 saw increased levels of core profitability, however further lift was seen from the decrease in AOCI Adjusting out average AOCI yields ROATCE of > 15% Q1 2022, growing non-interest income lines, increased loan production and release of allowance for unfunded
Slide 24: Tangible Book Value
Tangible Book Value 24 Tangible book value per share(1) decreased $2.41 in Q1 2022, driven by unrealized losses in the investment portfolio Non-GAAP financial measure. Refer to the non-GAAP reconciliation at the end of this presentation.
Slide 25: Robust Growth
Robust Growth 25 Gross Loans 7.4% CAGR Total Deposits 11.0% CAGR
Slide 26: First Quarter Highlights
First Quarter Highlights 26 Favorable (unfavorable) comparison to previous period. Year-over-Year is a comparison to comparable quarter end in previous year. Quarter-over-Quarter is a comparison to prior quarter end. Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this pres
Slide 27: Adjusted Operating Performance
Adjusted Operating Performance 27 Adjusted Net Income Adjusted Diluted Earnings Per Share Efficiency Ratio & Adj. Non-Interest Expense / Average Assets Adjusted Pre-Tax, Pre-Provision Net Revenue Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Does not in
Slide 28: Outlook on Key Business Drivers
Outlook on Key Business Drivers 28 Consideration & Expectations Continued uncertainty of inflation, supply chain disruption and input cost escalation. Focus on continued balance sheet strength and security while continuing to pursue growth. NOTE: Figures presented in this outlook represent forward-l
Slide 29: Focus Variables for Outlook & Forecast
Focus Variables for Outlook & Forecast 29 Our outlook requires clarity around certain variables, including:
Slide 30: Appendix
30 Appendix
Slide 31: Our Markets
Our Markets 31 Missouri 10 counties 16 branches Kansas 21 Counties 38 branches Source: S&P Market Intelligence. Equity Bancshares, Inc. operating market reported above includes all bank locations and counties in which Equity
Slide 32: Our Markets
Our Markets 32 Arkansas Benton | Boone | Carroll 5 branches Oklahoma Kay | Texas | Tulsa | Washita 10 branches Source: S&P Market Intelligence. Equity Bancshares, Inc. operating market reported above includes all bank locations and counties in which Equity
Slide 33: Selected Income Statement Data
Selected Income Statement Data 33
Slide 34: Selected Balance Sheet Data
Selected Balance Sheet Data 34 Includes interest-bearing deposits in other banks. Includes Federal Reserve Bank and Federal Home Loan Bank stock. Includes loans held-for-sale.
Slide 35: Capitalization
Capitalization 35 (1) Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Maintaining a strong regulatory capital position
Slide 36: Non-GAAP reconciliations overview
36 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 37: TCE to TA and Tangible Book Value per Share
37 TCE to TA and Tangible Book Value per Share
Slide 38: ROATCE and Efficiency Ratio
38 ROATCE and Efficiency Ratio
Slide 39: Equity Bancshares, Inc.
EQUITY BANCSHARES, INC. investor.equitybank.com