Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Conference Presentation (September 2020)
38 slides from Equity Bancshares's conference presentation, Sep 21, 2020
Slide 1: September 21-22, 2020
September 21-22, 2020 Exhibit 99.1
Slide 2: Disclaimers: Special Note Concerning Forward-Looking Statements
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: Franchise Overview
Franchise Overview LUE SPRINGS DowNTOWN TOPEKA fC NORTE TOPEKA EIGHTH STREET ee Hays TOPEKA 29TH 8 GAGE CVERANG PARK EIST ELUS s Tees SUMMIT NORTH HONE TOPEKA LES SUMMIT DOWNTOWN QUINTER Lees suMMiT WEST WICHITA SWEET SPRINGS @ WARRENSBURG NORTH Noove KNOB NOSTER mcut SSER naan roan WICHITA WATERERO
Slide 4: Diverse Market Segments
Diverse Market Segments Diverse market segments with economies based on transportation, manufacturing and healthcare Top employers in the region include a diverse range of operations such as telecommunications, professional services, aircraft manufacturing, OEM manufacturing and transportation. Equi
Slide 5: Experienced Management Team
Experienced Management Team 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 Previously served as Director of Sales and Marketing for Koch Ind
Slide 6: Experienced Senior Leadership Team
Experienced Senior Leadership Team Team Member Role Years with EQBK Years in Banking Julie Huber EVP, Strategic Initiatives 17 26 Craig Mayo EVP, Chief Credit Officer 2 36 Brett Reber EVP, General Counsel 2 2 Mark Parman EVP, President - Kansas City and Director of Metro Banking 10 39 Gaylyn McGrego
Slide 7: Board of Directors
Board of Directors Board Member Principal Occupation Brad S. Elliott Chairman & CEO, Equity Bancshares Gary C. Allerheiligen Retired Partner, Grant Thornton LLP. James L. Berglund Retired CEO & President, Sunflower Bank Inc. and Director, Wichita Metro Junetta M. Everett Chamber of Commerce Benjamen
Slide 8: Performance: Proven Acquirer and Integrator
Performance Proven Acquirer and Integrator Successful track record Disciplined merger metrics Ability to integrate, operate and enhance revenue Growth in Commercial Banking Franchise Commercial banking customers comprise ~70% of loans Three metro markets and four-state presence Manufacturing, transp
Slide 9: Continue Building Value via Strategic Execution
Continue Building Value via Strategic Execution 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 Repai
Slide 10: M&A Strategy
M&A Strategy
Slide 11: Proven Track Record of Executing on M&A
Proven Track Record of Executing on M&A Since July 2015, EQBK has announced and integrated 8 whole bank acquisitions First Independence Corp. Community First Bancshares Prairie State Bancshares Eastman National Bancshares Cache Holdings, Inc. Kansas Bank Corporation Adams Dairy Bancshares City Bank
Slide 12: Uniquely Positioned for Growth
Uniquely Positioned for Growth There are over 500 banks with deposits less than $750MM in our operating market.
Slide 13: 2020 Results
2020 Results
Slide 14: 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 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 21: 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 22: Deferral Program – COVID Relief
Deferral Program – COVID Relief With the onset of the pandemic associated with COVID-19, as a service to our customers, management implemented a payment deferral program. Regulatory guidance encouraging financial institutions to work prudently with their customers who are or may be unable to meet th
Slide 23: Deferral Program – COVID Relief
Deferral Program – COVID Relief 22 Following the emergence of the pandemic and implementation of relief efforts for our borrowers, management has stayed closely connected with our customers to understand current and expected, prospective impact on their businesses. Based on these touch points and ac
Slide 24: COVID-19 Deferral Update – Select Industries: Hotels, Restaurants
COVID-19 Deferral Update – Select Industries 23 HOTELS RESTAURANTS
Slide 25: COVID-19 Deferral Update – Select Industries: Retail, C&I, Manufacturing
COVID-19 Deferral Update – Select Industries 24 RETAIL C&I MANUFACTURING
Slide 26: 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 27: 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 28: 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 29: 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 30: 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 31: Appendix
Appendix
Slide 32: 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 33: 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 34: 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 06/30/20 12/31/19 12/31/18 12/31/17 12/31
Slide 35: 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 36: 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 37: 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 38: Equity Bancshares, Inc.
EQUITY BANCSHARES, INC. investot.equitybank.com
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