Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q3 2021 Earnings Presentation
37 slides from Equity Bancshares's earnings presentation, Oct 19, 2021
Slide 1: Third Quarter 2021 Results Presentation
Third Quarter 2021 Results Presentation October 19, 2021 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: EQBK's Value Proposition
EQBK’s 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 ou
Slide 4: Proforma Franchise Overview
Proforma Franchise Overview 3 Current Security Bank Location Current ASBI Location Equity Bank Location
Slide 5: Executive Leadership
Executive Leadership 4 Founded Equity Bank in 2002 2018 EY Entrepreneur of the Year National Finalist 2014 Most Influential CEO, Wichita Business Journal Served as Regional President of Sunflower Bank prior to forming Equity Bank Served as Director of Sales and Marketing for Koch Industries Brad Ell
Slide 6: Diverse Market Segments
Diverse Market Segments 5 Source: S&P Market Intelligence. Equity Bancshares, Inc. operating market reported above includes all bank locations and counties in which Pro Forma Equity Bank with ASB&T operates for 2021 and 2020 data. Diverse market segments with economies based on transportation, manuf
Slide 7: Continue Building Value via Strategic Execution
Continue Building Value via Strategic Execution 6 2009 $8.8MM of TARP issued Opened 2 branches in Overland Park, KS 2014 Repurchased 1.3mm shares Refinanced TARP with Loan Close/Sell 3 branches and opened branch at Waterfront 2012 First Community Bancshares (FCB) merger $20.4M Capital Raise 2011 Rep
Slide 8: Proven Track Record of Executing on M&A
7 Proven Track Record of Executing on M&A Since July 2015, EQBK has closed and integrated 10 bank acquisitions Pricing Multiples Transaction Impact (1) The American State Bancshares, Inc. merger was closed and converted on 10/1
Slide 9: Uniquely Positioned for Growth
8 Uniquely Positioned for Growth There are over 1000 bank offices with deposits less than $750MM in our operating market.
Slide 10: Equity Bank Today
9 Equity Bank Today Percentages are reflective of 2021 year-to-date growth Checking Accounts 87,478 Online Banking Users 73,604 Bill Pay Subscribers 21,335 $193M +24% NIB Deposits 14,703 +14% Business Checking 58% +14% Online Banking Adoption 13,187 +16% Mobile Deposit Active Users
Slide 11: Diversified Loan Portfolio
Diversified Loan Portfolio(1, 2) 10 Year-to-Date Loan Yield(3) 4.52% 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 such, the above is not intended to reconcile to the Company’s
Slide 12: Credit Quality & Capital Ratios
Credit Quality & Capital Ratios 11 Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. (1) Capital Ratios Total Reserve Ratio Classified Assets
Slide 13: Asset Quality – Quarter-over-Quarter
Asset Quality – Quarter-over-Quarter 12 Nonperforming Assets Net Charge-Offs (NCO)/ Average Loans Nonaccrual Detail Includes loans 90+ days past due and other repossessed assets which are not highlighted in the table. Excludes Bank owned branch assets, totaling $1.0M, classified as Other Real Estate
Slide 14: CECL Results
CECL Results 13 The company adopted ASC 326, Financials Instruments – Credit Losses ( “CECL”), on January 1, 2021. Dollars in thousands Impact of CECL adoption(1) and Subsequent Intra-Quarter Movement
Slide 15: Bank Liquidity & Dividend Capacity
Bank Liquidity & Dividend Capacity 14 Dividend Capacity from the Bank Liquidity Analysis Amortized Cost Carrying Value Unrealized Gain / (Loss) Description Portfolio Characteristics
Slide 16: Tangible Book Value Growth
Tangible Book Value Growth 15 Tangible Book Value per Share(1) and Tangible Common Equity (1) TBV CAGR 2017 – Q3 2021: 10.3% Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation.
Slide 17: Tangible Book Value
Tangible Book Value 16 Tangible Book Value per Share(1) Intra-Quarter movement Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation.
Slide 18: Strong Core Deposit Franchise
Fully integrated digital banking platform with an adoption rate of 58.3% among core banking customers Continued emphasis on development of relationships to drive growth in non-interest bearing deposits. Year-to-date growth of more than $190 million. 17 Strong Core Deposit Franchise For the quarter e
Slide 19: Core Deposit Growth
18 Core Deposit Growth Includes the impact of non-interest bearing deposits Dollars in millions Cost of Deposits(1) 0.20% 0.96% 1.30% 0.91% 0.52%
Slide 20: Robust Growth
Robust Growth 19 Gross Loans ($Millions) Total Deposits ($Millions) Tangible Book Value per Share(1) Pre-Tax, Pre-Provision Net Revenue ($Thousands)(2) Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Excludes merger expenses and gain on acquisition in all
Slide 21: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin 20 ($) Thousands (1) (1) (1) Excludes the impact of PPP loans. Including these balances in the third, fourth quarter 2020, and first, second, and third quarter 2021 results would be 3.47%, 3.88%, and 3.31%, 3.50%, and 3.86% respectively, while YTD 2020 and 2
Slide 22: Interest Income & Net Interest Margin
Interest Income & Net Interest Margin 21 Government Programs PPP fee income increased due to forgiveness received by borrowers during the quarter. However, due to current year originations, roughly $3 million in deferred fee balances remain on the books at quarter end. Increasing average balances as
Slide 23: Income Performance Metrics
Income Performance Metrics 22 Non-GAAP financial measure. Refer to the non-GAAP reconciliation at the end of this presentation. Return on Tangible Common Equity(1) Efficiency Ratio(1) 1H 2021 shows positive results, partially impacted by provision for credit losses benefit. 2H 2021 continued positiv
Slide 24: 2021 Third Quarter Highlights
23 2021 Third Quarter Highlights Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Year-over-Year is a comparison to comparable quarter end in previous year. Quarter-over-Quarter is comparison to previous quarter. Diluted EPS $0.80 Revenue $46.4M ROAE 11.05
Slide 25: Third Quarter Highlights - Continued
Third Quarter Highlights - Continued 24 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
Slide 26: Adjusted Operating Performance Trends – Quarter-over-Quarter
25 Adjusted Operating Performance Trends – Quarter-over-Quarter(1) Adjusted Diluted Earnings Per Share (2) Efficiency Ratio(1) & Non-Interest Expense / Average Assets(2) Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Does not include merger expense or ga
Slide 27: Outlook on Key Business Drivers
26 Outlook on Key Business Drivers Average Deposits $3,400-3,700M $3,686M 1-2% growth Key Driver Q3’21 Results Q3’21 Outlook Average Loans(1) $2,400-$2,600M $2,569M 3-8% growth Net Interest Margin(1,5) 2.90-3.10% 3.19% Maintain Non-Interest Income(2) $6.5-7.5M $7.5M 10-20% growth Non-Interest Expens
Slide 28: Focus Variables for Outlook & Forecast
27 Focus Variables for Outlook & Forecast Business activity creates opportunity for lending and deposit growth. Pandemic response and resolution will be significant driver. Directly related to credit quality as well as trust in our business. Stimulus efforts and associated effect may have significan
Slide 29: Government Facilitated Lending Programs
28 Government Facilitated Lending Programs Equity was an active participant in the first round of PPP. Funding more than $375M in loans to protect jobs and businesses within our footprint. The management team has worked expeditiously to obtain forgiveness on behalf of our borrowers. Through the end
Slide 30: Appendix
Appendix 29
Slide 31: Selected Income Statement Data
Selected Income Statement Data 30
Slide 32: Selected Balance Sheet Data
Selected Balance Sheet Data 31 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.
Slide 33: Capitalization
Capitalization 32 (1) Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Maintaining a strong regulatory capital position
Slide 34: Non-GAAP reconciliations
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 33
Slide 35: TCE to TA and Tangible Book Value per Share
TCE to TA and Tangible Book Value per Share 34
Slide 36: ROATCE and Efficiency Ratio
ROATCE and Efficiency Ratio 35
Slide 37: Equity Bancshares, Inc.
EQUITY BANCSHARES, INC. investor.equitybank.com