Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q2 2020 Earnings Presentation
29 slides from Equity Bancshares's earnings presentation, Jul 21, 2020
Slide 1: Second Quarter 2020 Results Presentation
Second Quarter 2020 Results Presentation July 21, 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
Equity Bank: We Are Here For You - COVID Outreach 2020 PPP CONTINUING TO ACCEPT APPLICATIONS TO FACILITATE PHASE 2 90,000(1) Employees Assisted through SBA PPP loans 3,198 Completed Loans Digital Banking DocuSign implementation across products Online & Mobile traffic +10% +13% New Account Applicatio
Slide 4: 2020 Second Quarter Highlights
Diluted earnings per share of $0.11 for 2Q 2020 Net income to common stockholders was $1.7 million Pre-tax, pre-provision income was $14.7 million EQBK Capital Ratios as of 6/30/2020: Leverage Ratio of 8.52%, or 9.41% adjusted to exclude PPP loans Total Risk-Based Capital Ratio of 15.33% Tangible Co
Slide 5: 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 6: 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 7: Interest Income & Net Interest Margin Performance
Interest Income & Net Interest Margin Performance Notes: Exclusive of PPP loan impact margin was down 2 bps Q/Q driven by reduced loan volume and reduced accretion. Y/Y adjusted NIM is up 23 bps. Downward movement in stated NIM of 3.49% was primarily driven by material levels of PPP loan balances an
Slide 8: Margin Dynamic – Adjusted to Exclude PPP Loans
Margin Dynamic – Adjusted to Exclude PPP Loans 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. (1) (1) Second
Slide 9: Successfully Managing Profitability
Successfully Managing Profitability Does not include gains on sales and settlement of securities. Does not include merger expenses. Q/Q and Y/Y reductions in service charge levels driven by reduced transaction activity stemming from COVID pandemic control efforts by federal and state authorities thr
Slide 10: Loan Portfolio - Concentration
Loan Portfolio - Concentration(1) (1) Excludes PPP loans.
Slide 11: Deferral Program – COVID Relief
Deferral Program – COVID Relief (1) With the onset of the pandemic associated with COVID-19, as a service to our customers, management implemented a payment deferral program. The Bank offered 3-6 month deferrals of P&I payments as well as 6 month deferrals of principal only. These deferrals were not
Slide 12: Hotel Portfolio
Hotel Portfolio Total exposure of $273M as of the end of the second quarter 2020. Total deferrals within the portfolio for the first round were $195M, or 71%. During the quarter, the Bank did not experience any significant changes in the composition of this portfolio. It continues to be predominantl
Slide 13: Restaurant / Retail Portfolios
Restaurant / Retail Portfolios Restaurants: Total exposure of $108M as of the end of the second quarter 2020. Total deferrals within the portfolio for the first round were $81M, or 75%. Within the QSR portfolio, results through the second quarter were generally very positive as the segment did not s
Slide 14: C&I Manufacturing Portfolio
C&I Manufacturing Portfolio Total exposure of $135M as of the end of the second quarter 2020. Total deferrals within the portfolio for the first round were $46M, or 34%. Aerospace deferrals were $18M, or 28% of the $63M portfolio. The aerospace industry has been adversely impacted by both the Boeing
Slide 15: Tangible Book Value
Tangible Book Value Tangible Book Value per Share(1) and Total Assets TBV CAGR 2016 - 2Q 2020: 7.29% Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation.
Slide 16: 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 17: Total Loans by Purpose
Total Loans by Purpose(1, 2) 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% For financial statement reporting, management considers other factors in addition to purpose when assessing risk and identifying reporting classes. As su
Slide 18: 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 19: 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% 1.37% $0.59 68.5% 75.9% Purchased impaired loans classified as non-accrual th
Slide 20: Asset Quality – Quarter-over-Quarter
Asset Quality – Quarter-over-Quarter Nonperforming Assets NPAs / Assets 1.61% Net Charge-Offs (NCO)/ Average Loans $6.70 NCO in $ ($ in millions) Nonaccrual Detail Classified Assets to Total Bank Regulatory Capital $9.54 1.40% 1.22% $0.26 62.5% 37.3% Purchased impaired loans classified as non-accrua
Slide 21: Total Deposits
Total Deposits Total ($000s) $3,123,447 $3,063,516 $2,382,013 Year-to-Date Cost of Deposits* 0.68% 0.96% 1.30% * Includes interest and non-interest bearing deposits. $2,960,397 0.91% $3,247,267 0.69%
Slide 22: Appendix
Appendix
Slide 23: Selected Income Statement Data
Selected Income Statement Data Selected Income Statement Data ($000s) YTD 06/30/20 12/31/19 12/31/18 12/31/17 12/31/16 12/31/14 2013 Interest income $78,490 $,175,499 $,161,556 $,102,693 $61,799 $46,794 $46,845 Interest expense 13504 49641 36758 16691 9202 5433 5610 Net interest income 64986 125858
Slide 24: 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 06/30/20 12/31/19 12/31/18 12/31/17 12
Slide 25: 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 06/31/20 12/31/19 12/31/18
Slide 26: 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 27: 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 June 30, 2020 December 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016 December 31,2012 Total stockholders’ equity $,479,
Slide 28: 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 29: Equity Bancshares, Inc.
EQUITY BANCSHARES, INC. investor.equitybank.com