Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q1 2023 Earnings Presentation
29 slides from Equity Bancshares's earnings presentation, Apr 19, 2023
Slide 1: First Quarter 2023 Earnings Presentation
Exhibit 99.2 First Quarter 2023 Earnings Presentation 4/19/2023
Slide 2: Forward Looking Statements
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 views of the manage
Slide 3: Our Company
Equity Bancshares, Inc. Our Company NASDAQ: EQBK Start-Up: 2002 - 2007 Brad Elliott, current Chairman and CEO, founded Equity Committed to our Entrepreneurial Spirit Bancshares, Inc. in 2002. Completed 5 branch or whole bank acquisitions Opened 2 branches in Missouri Growth: 2008 - 2016 Opened
Slide 4: Our Value Proposition
Our Value Proposition 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 D
Slide 5: Strong Senior Leadership Team
Strong Senior Leadership Team Brad Elliott Eric Newell Chairman & CEO Chief Financial Officer Years at Equity: 21 | Years in Banking: 34 Years at Equity: 3 | Years in Banking: 21 Founded Equity Bank in 2002 Served as CFO at United Bank in Hartford, CT ($7.3B assets) 2018 EY Entrepreneur of the
Slide 6: Long Term Key Strategic Objectives
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 Effectively deploy capital through share instruments funded with low-cost core deposits repurchases, dividends and whole ban
Slide 7: Q1 2023 Financial Highlights
Q1 2023 Financial Highlights Balance sheet strength through market adversity Net Income Net Interest Margin of 3.44% $12.3M Loan yield of 5.94% Cost of interest-bearing liabilities of 1.98% Diluted EPS Loan growth of $19.1 million, or 2.3% annualized $0.77 Diluted EPS of $0.77 Total Deposi
Slide 8: Net Income Walk
Net Income Walk Drivers of Net Income Change Period over Period Net Income Drivers Net Interest Income Net Interest decreased $2.9 million as the Company as we saw pressure on cost of funds. Actions that took place during the quarter to bolster liquidity we net interest income neutral. Noninterest I
Slide 9: Revenue Trends
Revenue Trends Quarterly Results 0.18% 0.18% 0.18% 0.18% 0.16% 17.7% 18.9% 18.9% 18.8% 15.8% 3.62% 3.68% 3.37% 3.44% $8,986 $7,893 3.33% $9,129 $9,057 $8,982 $41,918 $41,994 $41,944 $42,031 $38,462 $39,164 $39,093 $39,289 $39,566 $39,110 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 3/31/22 6/30/22 9/30/
Slide 10: Net Interest Income
Net Interest Income Key Net Interest Income Drivers Non-Interest Bearing Deposits Net Interest Income Period over Period Non-interest bearing deposits constitute 24% of total deposits. Loan Yield Loan yield is up 35bps linked quarter, as we continue to originate higher yielding credits and benefit f
Slide 11: Yield / Cost Components
Yield / Cost Components Cost Analysis Cumulative Betas 1.98% 4Q ‘21 2Q ‘22 3Q ‘22 4Q ‘22 1Q ‘23 1.73% 1.36% Average FF Rate 0.07% 0.76% 2.20% 3.65% 4.51% 1.05% 1.31% 0.79% 0.43% 0.41% 0.49% 0.57% Loans 33% 34% 34% 36% 0.76% 0.28% 0.25% 0.22% 0.41% 0.18% 0.16% 0.20% Deposits 3% 11% 16% 25% Q4 '21 Q1
Slide 12: Performance Metrics
Performance Metrics Return on Tangible Common Equity(1) Pre-Tax, Pre-Provision ROAA(1) 17.6% 17.1% 15.9% 14.7% 14.9% 1.50% 1.49% 1.41% 1.22% 1.18% 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 Efficiency Ratio(1) TCE / TA excluding AOCI(1) 8.75% 8.92% 9.12% 8.90%
Slide 13: Strong Core Deposit Franchise
Strong Core Deposit Franchise Current Deposit Composition Core Deposits(1) / Total Deposits Savings, 8% Time Deposits > 100k, 17% 91.3% 90.2% 89.5% 86.2% 83.4% MMDA, 24% Time Deposits < 100k, 5% $3,998 $3,869 $3,782 Non-Interest $3,658 $3,575 Bearing DDA, 24% Interest Bearing DDA, 23% 3/31/22 6/30/2
Slide 14: Asset Quality Trends – Annual
Asset Quality Trends – Annual Nonperforming Assets Total Reserve Ratio 1.36% 1.28% 1.19% 2.12% 0.82% 1.65% $10.8 $36.4 0.37% 1.43% 1.40% Millions 0.33% 0.12% $8.5 0.05% 0.05% 0.85% $43.7 $0.6 1.53% 1.38% $38.4 0.37% 1.30% 1.35% $29.4 $0.4 $17.6 $16.6 0.48% 12/31/19 12/31/20 12/31/21 12/31/22 3/31/23
Slide 15: Asset Quality Trends - Quarterly
Asset Quality Trends - Quarterly Nonperforming Assets Total Reserve Ratio 0.74% 0.74% 1.60% 0.59% 1.58% 1.50% 0.37% 1.43% 1.40% Millions 0.33% 0.11% 0.10% 0.07% 0.05% 0.05% $16.8 $17.6 $6.6 $0.6 $0.4 1.47% 1.50% 1.43% 1.38% 1.35% $20.7 $18.9 $23.1 $17.6 $16.6 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23
Slide 16: Diversified Loan Portfolio
Diversified Loan Portfolio Quarter-to-Date Loan Yield 3/31/23 39% 28% 11% 9% 6% 3% 4% 5.95% 12/31/22 39% 28% 11% 9% 6% 3% 4% 5.59% 9/30/22 40% 27% 11% 10% 6% 3% 3% 5.09% 6/30/22 40% 27% 11% 10% 6% 3% 3% 4.56% 3/31/22 41% 26% 12% 10% 6% 3% 3% 4.54% 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,
Slide 17: Allowance for Credit Loss (ACL)
Allowance for Credit Loss (ACL) ACL intra-quarter movement Loan Classification ACL Loans ACL / Loans (%) Commercial Real Estate 16,611 1,746,834 0.95% Commercial & Industrial 15,620 605,576 2.58% Residential Real Estate 8,751 563,791 1.55% Agricultural Real Estate 586 202,274 0.29% Agricultural 1,54
Slide 18: Investment Portfolio Strategy
Investment Portfolio Strategy Environment Shift: 2020 -> 2023 As we began 2020, investment portfolio was over 80% Agency MBS and CMOs Investment Portfolio Thesis As rates collapsed, the majority of the portfolio We believe the structure in the portfolio outperforms peers through prepaid, leavi
Slide 19: Tangible Book Value
Tangible Book Value Tangible book value per share(1) increased $1.29 in Q1 2023 (1) Non-GAAP financial measure. Refer to the non-GAAP reconciliation at the end of this presentation. 19
Slide 20: Capital Management
Capital Management Capital Management Strategy Capital Targets The Company’s capital ratios are comfortably above well capitalized EQBK establishes capital targets based on the following objectives: levels as of 3/31/2023 Maintain designation as a “well capitalized” institution Regulatory Well Equ
Slide 21: Outlook on Key Business Drivers
Outlook on Key Business Drivers Consideration & Expectations Continued uncertainty of inflation, supply chain disruption and input cost escalation. Focus on continued balance sheet strength and security while continuing to pursue growth. Key Driver Q1’23 Outlook Q1’23 Results Q2’23 Outlook FY’23
Slide 22: Focus Variables for Outlook & Forecast
Focus Variables for Outlook & Forecast Our outlook requires clarity around certain variables, including: Business activity creates opportunity for lending and deposit growth. Pandemic Economic Environment response and resolution will be significant driver. Directly related to credit quality as w
Slide 23: Our Markets
Our Markets Kansas Missouri 21 Counties 10 counties 37 branches 16 branches Deposits Market Deposits Market Rank Institution Branches Rank Institution Branches ($mm) Share ( % ) ($mm) Share ( % ) 1 Bank of America Corp. $6,834 10.36 23 1 UMB Financial Corp. $20,932 41.47 20 2 Capitol Federal Financi
Slide 24: Our Markets
Our Markets Oklahoma Arkansas Kay | Texas | Tulsa Benton | Boone | Carroll 9 branches 5 branches Deposits Market Deposits Market Rank Institution Branches Rank Institution Branches ($mm) Share ( % ) ($mm) Share ( % ) 1 BOK Financial Group $10,898 33.23 21 1 Arvest Bank Group Inc. $5,254 47.81 28 2 A
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations 25
Slide 26: TCE to TA and Tangible Book Value per Share
TCE to TA and Tangible Book Value per Share Non-GAAP Financial Measures (Unaudited) (Dollars in thousands, except per share data) March 31, December 31, September 30, June 30, March 31, 2023 2022 2022 2022 2022 Total stockholder's equity $ 425,123 $ 410,058 $ 395,806 $ 428,115 $ 452,015 Less: goodwi
Slide 27: ROATCE and Efficiency Ratio
ROATCE and Efficiency Ratio Non-GAAP Financial Measures (Unaudited) (Dollars in thousands, except per share data) March 31, December 31, September 30, June 30, March 31, 2023 2022 2022 2022 2022 Total average stockholders' equity $ 420,500 $ 398,270 $ 436,191 $ 437,483 $ 492,599 Less: average intang
Slide 28: ROAA and PTPP ROAA
ROAA and PTPP ROAA Non-GAAP Financial Measures (Unaudited) (Dollars in thousands, except per share data) March 31, December 31, September 30, June 30, March 31, 2023 2022 2022 2022 2022 Net income (loss) allocable to common stockholders 12,323 11,608 15,171 15,259 15,650 Add: income tax provision 2,
Slide 29: investor.equitybank.com
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