Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q2 2021 Earnings Presentation
39 slides from Equity Bancshares's earnings presentation, Jul 20, 2021
Slide 1: Second Quarter 2021 Results Presentation
Second Quarter 2021 Results Presentation July 19, 2021 Exhibit 99.2
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: Disclaimers: Important Additional Information
Disclaimers Important Additional Information The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction, Equity intends to file with the Securities an
Slide 4: EQBK's Value Proposition
EQBK’s Value Proposition Market Diversification and Strategy for Growth ° Experienced and Invested Management Team co Conservative Credit Culture and Effective 1000, Risk Management and Mitigation Robust Funding Capacity, Anchored by a Diverse, Low-Cost Deposit Base Focus on Efficient Performance Th
Slide 5: Proforma Franchise Overview
Proforma Franchise Overview 4 Current Security Bank Location Current ASBI Location Equity Bank Location
Slide 6: Security Bank of Kansas City Bank Location
Security Bank of Kansas City Bank Location Purchase 5 Security Bank Locations
Slide 7: Executive Leadership
Executive Leadership 6 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 8: Diverse Market Segments
Diverse Market Segments 7 Source: S&P Market Intelligence. Equity Bancshares, Inc. operating market reported above includes all bank locations and counties in which Equity Bank operates. Diverse market segments with economies based on transportation, manufacturing and healthcare Top employers in the
Slide 9: Continue Building Value via Strategic Execution
Continue Building Value via Strategic Execution 8 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 10: Proven Track Record of Executing on M&A
9 Proven Track Record of Executing on M&A Since July 2015, EQBK has closed and integrated 9 bank acquisitions Pricing Multiples Transaction Impact
Slide 11: Uniquely Positioned for Growth
10 Uniquely Positioned for Growth There are over 650 bank offices with deposits less than $750MM in our operating market.
Slide 12: Equity Bank Today
11 Equity Bank Today Percentages are reflective of 2021 year-to-date growth Checking Accounts 85,279 Online Banking Users 70,491 Bill Pay Subscribers 19,958 $993M +25% NIB Deposits 11,816 +6% Business Checking 59.9% +9% Online Banking Adoption 13,417 +18% Mobile Deposit Active Users
Slide 13: Diversified Loan Portfolio
Diversified Loan Portfolio(1, 2) 12 Year-to-Date Loan Yield(3) 4.51% 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 14: Credit Quality & Capital Ratios
Credit Quality & Capital Ratios 13 Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. (1) Capital Ratios Total Reserve Ratio Classified Assets
Slide 15: Asset Quality – Quarter-over-Quarter
Asset Quality – Quarter-over-Quarter 14 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 16: CECL Results
CECL Results 15 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 17: Bank Liquidity & Dividend Capacity
Bank Liquidity & Dividend Capacity 16 Dividend Capacity from the Bank Liquidity Analysis Amortized Cost Carrying Value Unrealized Gain / (Loss) Description Portfolio Characteristics
Slide 18: Tangible Book Value Growth
Tangible Book Value Growth 17 Tangible Book Value per Share(1) and Tangible Common Equity (1) TBV CAGR 2017 – Q2 2021: 10.6% Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation.
Slide 19: Tangible Book Value
Tangible Book Value 18 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 20: Strong Core Deposit Franchise
Fully integrated digital banking platform with an adoption rate of 59.9% 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 $200 million. 19 Strong Core Deposit Franchise For the quarter e
Slide 21: Core Deposit Growth
20 Core Deposit Growth Includes the impact of non-interest bearing deposits Dollars in millions Cost of Deposits(1) 0.22% 0.96% 1.30% 0.91% 0.52%
Slide 22: Robust Growth
Robust Growth 21 Gross Loans ($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 23: Net Interest Income & Net Interest Margin
Net Interest Income & Net Interest Margin 22 ($) Thousands (1) (1) (1) Excludes the impact of PPP loans. Including these balances the second, third, fourth quarter 2020, first and second quarter 2021 results would be 3.49%, 3.47%, 3.88%, 3.31% and 3.50%, respectively, while YTD 2020 and 2021 results
Slide 24: Interest Income & Net Interest Margin
Interest Income & Net Interest Margin 23 Government Programs PPP fee income increased due to forgiveness received by borrowers during the quarter. However, due to current year originations, more than $10 million in deferred fee balances remain on the books at quarter end. Increasing average balances
Slide 25: Income Performance Metrics
Income Performance Metrics 24 Non-GAAP financial measure. Refer to the non-GAAP reconciliation at the end of this presentation. Excludes impact of goodwill impairment recognized during the third quarter 2020. Return on Tangible Common Equity(1) Efficiency Ratio(1) 2H 2020, exclusive of goodwill impa
Slide 26: 2021 Second Quarter Highlights
25 2021 Second 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 $1.03 Revenue $47.4M ROAE 15.0
Slide 27: Second Quarter Highlights - Continued
Second Quarter Highlights - Continued 26 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 28: Outlook on Key Business Drivers
27 Outlook on Key Business Drivers Average Deposits $3,400-3,700M $3,625M 3-8% growth Key Driver Q2’21 Results Q2’21 Outlook Average Loans(1) $2,400-$2,500M $2,461M 3-8% growth Net Interest Margin(1) 3.15-3.35% 3.13% Contraction Non-Interest Income(2) $6.5-7.0M $7.5M 10-20% growth Non-Interest Expen
Slide 29: Focus Variables for Outlook & Forecast
28 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 30: Adjusted Operating Performance Trends – Quarter-over-Quarter
29 Adjusted Operating Performance Trends – Quarter-over-Quarter(1) Adjusted Diluted Earnings Per Share (3) Efficiency Ratio(1,2) & Non-Interest Expense / Average Assets(3) Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Does not include gains on sales and
Slide 31: Government Facilitated Lending Programs
30 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 32: Appendix
Appendix 31
Slide 33: Selected Income Statement Data
Selected Income Statement Data 32
Slide 34: Selected Balance Sheet Data
Selected Balance Sheet Data 33 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 35: Capitalization
Capitalization 34 (1) Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation. Maintaining a strong regulatory capital position
Slide 36: 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 35
Slide 37: TCE to TA and Tangible Book Value per Share
TCE to TA and Tangible Book Value per Share 36
Slide 38: ROATCE and Efficiency Ratio
ROATCE and Efficiency Ratio 37
Slide 39: Equity Bancshares, Inc.
EQUITY BANCSHARES, INC. investor.equitybank.com