Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Investor Day (June 2024)
47 slides from Equity Bancshares's investor day presentation, Jun 11, 2024
Slide 1: Investor Day June 11, 2024
Exhibit 99.1 a EQUITY BANCSHARES, INC. Investor Day June 11, 2024
Slide 2: 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 management of Equity Bancshares,
Slide 3: Agenda
Agenda Brad Elliott Equity Bancshares, Inc. Chairman & CEO Welcome & Introduction Kristof Slupkowski Chief Credit Officer Credit Rick Sems Equity Bank CEO Balance Sheet & Growth Julie Huber Chief Operating Officer Strategy & Operating Effectiveness Brad Elliott Equity Bancshares, Inc. Chairman & CEO
Slide 4: Welcome & Introduction
Welcome & Introduction Brad Elliott Equity Bancshares, Inc. Chairman & CEO
Slide 5: Strategic Execution Of Acquisitions
Equity Bancshares, Inc.| NYSE: EQBK Strategic Execution Of Acquisitions SCALE 11 Completed Bank Acquisitions SINCE IPO 2002 2008 2015 2024 START-UP 4 acquisitions GROWTH 4 acquisitions IPO KANSASLAND BANK MERGER Announced During Q2 2024 BANK OF KIRKSVILLE MERGER Closed During Q1 2024 $380M $5.2B 27.
Slide 6: Leadership Team
Leadership Team Brad Elliott Equity Bancshares, Inc. Chairman & CEO Years in Banking: 35 Founded Equity Bank in 2002 2018 EY Entrepreneur of the Year National Finalist 2014 Most Influential CEO, Wichita Business Journal Chris Navratil Chief Financial Officer Years in Banking: 13 Promoted to Chief Fi
Slide 7: Our Value Proposition
Our Value Proposition Organic Growth Strategic Mergers & Acquisitions Disciplined Credit Standards Effective Balance Sheet & Capital Management EPS & Tangible Book Value Growth Our guiding principles and commitment to our entrepreneurial spirit are part of our longstanding framework for delivering s
Slide 8: Execution framework: result and output
RESULT OUTPUT Organic EXECUTION Growth Credit Quality & Diversification BALANCE SHEET Profitability Shareholder Returns Tangible Book Value Team Members | Tech Focused Operating Who Think Like Owners Effectiveness Low-Cost Core Deposits Mergers & Acquisitions Strategy Strong Capital
Slide 9: Capital Management
As of March 31, 2024, the tangible common equity ratio is being negatively impacted by $61 million in accumulated other comprehensive income. Adjusting for this decline in fair value, which management views as temporary, would result in a Tangible Common Equity Ratio of 8.52%. Tangible Common Equit
Slide 10: Proven Record of M&A Execution
Proven Record of M&A Execution Note: Transaction impact assumes cost savings are fully realized. First Ind. Corp. Community First Bancshares Prairie State Bancshares Eastman National Bancshares Cache Holdings, Inc. Kansas Bank Corporation Adams Dairy Bancshares City Bank & Trust Company Almena State
Slide 11: Locations Our Opportunity
74 Locations Our Opportunity Source: S&P Capital IQ. Banks < $1B in Assets is comprised of banks with headquarters in Kansas, Missouri, Arkansas, Oklahoma, Nebraska and Iowa. Over 900 banks in our operating footprint with assets less than $1B Market Banks < $1B in Assets Kansas 188 Missouri 175 Arka
Slide 12: Credit
Credit Kristof Slupkowski Chief Credit Officer
Slide 13: Credit Quality
Credit Quality NPAs / Assets Includes loans 90+ days past due NPA / Assets (%) NCO / Avg. Loans (%)
Slide 14: Credit Concentration
Credit Concentration Source: Y9C – Loans and Leases HC-C Non-Owner Occupied CRE NonFarm / NonResidential Multi-Family Construction
Slide 15: Asset Quality Trends - Quarterly
Nonperforming Assets1,2 Total Reserve Ratio Asset Quality Trends - Quarterly Net Charge-offs / Average Loans Classified Assets OREO & Other Rep. Assets excludes Bank owned branch assets, totaling $1.1M, classified as Other Real Estate Owned within the Statements of Condition. NPAs / Assets Includes
Slide 16: Asset Quality Trends – Annual
Asset Quality Trends – Annual Net Charge-offs / Average Loans Classified Assets Nonperforming Assets1,2 Total Reserve Ratio OREO & Other Rep. Assets excludes Bank owned branch assets, totaling $1.1M, classified as Other Real Estate Owned within the Statements of Condition. NPAs / Assets Includes loa
Slide 17: Rick Sems, Equity Bank CEO
Rick Sems EQUITY Equity Bank BANCSHARES, INC. CEO
Slide 18: Organic Growth
Organic Growth EXPANSION OF LOAN PORTFOLIO RETAIL EMPHASIS Enhance C&I exposure in diverse operating segments LPO Opportunities Deeper understanding of consumer base & market segments Geographical ringing strategy to expand outreach without additive brick & mortar. REFINED SALES APPROACH EXPANSION O
Slide 19: Employees Who Think Like Owners
197 Participants in Employee Stock Purchase Plan Other Avenues of Ownership: Restricted Stock Units Performance Restricted Stock Units Non-qualified Stock Options Performance Stock Options Employees Who Think Like Owners 27% of Employees are owners in EQBK Achieved based on pre-established organic g
Slide 20: Deposit Market Share
Deposit Market Share Source: S&P Capital IQ, based on June 30, 2023 Deposit Data. Top 3 Markets $972.6M Wichita, KS Market Rank 6 Market Share 4.38% Percent of Franchise 21.03% $487.9M Kansas City, MO-KS Market Rank 26 Market Share 0.56% Percent of Franchise 10.55% $304.5M Kirksville, MO Market Rank
Slide 21: Low-cost Core Deposits
Low-cost Core Deposits Proxy Peer Group consists of 20 banks Cost of Total Deposits Proxy Peer Median Cost of IB Deposits Proxy Peer Median
Slide 22: Yield
Yield Proxy Peer Group consists of 20 banks Yield on Total Loans Proxy Peer Median Yield on Interest-earning Assets Proxy Peer Median
Slide 23: Loan / Deposits
Loan / Deposits Note: Potential Impact to Interest Income is based on a 2.50% Spread from repositioning Cash/Securities to Loans. Potential Impact to Interest Income represents a forward-looking statement and is not a guaranty of future performance and is subject to risks, assumptions and uncertaint
Slide 24: Opportunity to Enhance Returns
Opportunity to Enhance Returns Note: Peer 75th Percentile is based on 5-Qtr rolling Core ROAA median. Peer group consists of 20 banks. 0.96 Avg. Since IPO Peer 75th Percentile Core ROAA 1.10 Consensus 1.29 90% L/D Ratio
Slide 25: Strategy & Operations
Strategy & Operations Julie Huber Chief Operating Officer
Slide 26: Strategy & Operating Effectiveness
Strategy & Operating Effectiveness SCALABLE EFFICIENCIES – ITMS DIGITAL CHANNEL ENGAGEMENT RISK – SCALE TO $10 BILLION Launched in 2023 Interactive Teller Machine Network 40 Machines – Installed to Date 10-15 Machines – Schedules for Remainder of 2024 75% Transactions opt for self-service instead of
Slide 27: Strategic Execution of Mergers & Acquisitions
M&A M&A M&A M&A Strategic Execution of Mergers & Acquisitions Integration Planning and Execution Fair Valuation / Deal Structure / Synergy Realization Strategic Fit & Alignment Regulatory and Compliance Considerations Integration strategy, clear and consistent communication, and change management st
Slide 28: Brad Elliott, Chairman & CEO
Brad Elliott Equity Bancshares, Inc. Chairman & CEO
Slide 29: Tangible Book Value Per Share
Tangible Book Value Per Share1 7.37% Compound Annual Growth Rate Ex. AOCI AOCI Impact Tangible Book Value per diluted common share. Non-GAAP Measure. For a reconciliation of Non-GAAP measures, please see appendix.
Slide 30: Total Assets
Total Assets 15.59% Compound Annual Growth Rate Since 2015 MRQ Growth fueled by organic production and strategic M&A Black dotted line: 2015-2024Q1 CAGR Yellow dotted line: 3-year CAGR (2020Y-2023Y) Past Results are not necessarily indicative of future performance. Figures presented represent forwar
Slide 31: Core EPS & Share Count
Core EPS & Share Count % of Total Assets -3.51% Share % of Total Asset CAGR Since 2015 CORE EPS 1.10% Return on Assets Growth fueled by organic production and strategic M&A 1. Asset CAGR: 15.59% based on historical growth since 2015. Forecasted share count grows @ 500,0000 shares a year. Return on A
Slide 32: Shareholder Returns
39.68% Return since IPO vs. 9.12% on KRX 46.62% 1-Year Return Shareholder Returns Market Data is provided by S&P Capital IQ. Data is from 11/10/2015 5/30/2024 EQBK has been a consistent outperformer vs the KRX since IPO in 2015 Equity Bancshares, Inc. KRX Nasdaq Banking Index
Slide 33: Updated Outlook 2nd Quarter & Full Year 2024
Updated Outlook 2nd Quarter & Full Year 2024
Slide 34: Outlook on Key Business Drivers
Outlook on Key Business Drivers 2nd QUARTER 2024 ORIGINAL UPDATE $4,350 – 4,425M $4,250 – 4,300M Avg. Deposits $3,500 - 3,550M $3,475 - 3,550M Avg. Loans $4,750 - 4,825M $4,725 - 4,800M Avg. Earning Assets 3.75 - 3.85% 3.85 - 3.95% Net Interest Margin $0.5 – 1.5M $0.5 – 1.5M Provision For Credit Los
Slide 35: Outlook variables
OUR OUTLOOK REQUIRES CLARITY AROUND CERTAIN VARIABLES, INCLUDING: ECONOMIC ENVIRONMENT CUSTOMER NEEDS COST OF FUNDING COMPETITIVE MARKET INVESTMENT OPPORTUNITIES POLITICAL ENVIRONMENT Business activity creates opportunity for lending and deposit growth. Current macro-environment response and resolut
Slide 36: Appendix
EQUITY Appendix BANCSHARES, INC.
Slide 37: 1st Quarter 2024 Financial Highlights
1st Quarter 2024 | Financial Highlights EARNINGS & PROFITABILITY1,2 Q1 24 Q4 23 Q1 23 Earnings Per Share $1.03 $0.77 $0.77 Tangible Book Value Per Share $25.10 $25.37 $22.96 Net Income $16.1M $11.9M $12.3M Net Interest Margin 3.75% 3.49% 3.44% Efficiency Ratio 65.16% 74.35% 69.69% ROAA 1.25% 0.97% 1
Slide 38: Primary Drivers
Primary Drivers Net Interest Income Noninterest Income Rate Protection Noninterest Expense Net interest income totaled $44.2 million in the first quarter, up $4.7 million from the fourth quarter, driven by an increase in average earning assets due to the completion of the Bank of Kirksville merger.
Slide 39: Performance Metrics
Performance Metrics Adjusted Return On Tangible Common Equity1 Adjusted Return on Average Assets1 Efficiency Ratio2 TCE / TA Excluding AOCI2 Reflective of, and calculated using Adjusted Operating Net Income & Revenue is exclusive of merger expenses and Gain/(Loss) on Securities Transactions, as well
Slide 40: Profitability
Profitability Revenue Composition1 Profitability Ratios1 Adjusted Noninterest Income is exclusive of merger expenses and Gain/(Loss) on Securities Transactions
Slide 41: Primary Drivers
Primary Drivers Deposits Cost of Deposits Loan Yield Rate Protection Repositioning Excess Liquidity Noninterest-bearing deposits constitute 22.5% of total deposits. Average deposits increased $293M quarter over quarter. Cost of total deposits increased 18bps and cost of interest-bearing deposits inc
Slide 42: Current Deposit Composition
Current Deposit Composition Strong Core Deposit Franchise Trending Deposit Composition & Loan To Deposit Ratio Core Deposits excludes time deposits > $100K Core Deposits1 / Total Deposits Millions
Slide 43: Our Markets
Our Markets Kansas Market Rank #7 Deposits $2.5b Deposit Market Share 4.06% Missouri Market Rank #7 Deposits $861m Deposit Market Share 1.64% Oklahoma Market Rank #10 Deposits $570m Deposit Market Share 1.84% Arkansas Market Rank #6 Deposits $350m Deposit Market Share 3.36% Source: S&P Capital IQ, D
Slide 44: Non-GAAP reconciliations: Tangible Common Equity
Non-GAAP reconciliations CALCULATIONS OF TANGIBLE COMMON EQUITY AND RELATED MEASURES ($ in thousands, except per share data)
Slide 45: Non-GAAP reconciliations: ROATCE and Efficiency Ratio
Non-GAAP reconciliations CALCULATIONS OF ROATCE AND EFFICIENCY RATIO ($ in thousands, except per share data)
Slide 46: Non-GAAP reconciliations: ROAA and Average Equity
Non-GAAP reconciliations CALCULATIONS OF RETURN ON AVERAGE ASSETS AND AVERAGE EQUITY ($ in thousands, except per share data)
Slide 47: Equity Bancshares, Inc.
EQUITY BANCSHARES, INC. investor.equitybank.com