Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q4 2019 Earnings Presentation
36 slides from Equity Bancshares's earnings presentation, Jan 23, 2020
Slide 1: Fourth Quarter and Year End 2019 Results Presentation
Fourth Quarter and Year End 2019 Results Presentation January 23, 2020 Exhibit 99.2
Slide 2: About EQBK
NASDAQ: EQBK 15.4 million shares outstanding / $436.9 million (1) $3.95 billion Market Cap 65.5% Exchange / Ticker Total Assets Efficiency Ratio (2) Locations FTEs Loan Portfolio 52 branches in Kansas, Missouri, Arkansas and Oklahoma 607 45% of loans in commercial real estate, 20% in residential rea
Slide 3: Equity Bancshares – Share Price & Consensus Estimates
Equity Bancshares – Share Price & Consensus Estimates As of January 17, 2020 market closing. Estimates as of January 17, 2020. Non-GAAP financial measures. See the non-GAAP reconciliation at the end of this presentation. Based on 15,444,434 shares outstanding as of January 17, 2020. Share price data
Slide 4: Franchise Overview
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Slide 5: Company history and capital activity timeline
Note: Gray shading indicates capital activity. * Data as of 12/31/2007. ** Data as of 12/31/2011. *** Data as of 12/31/2016. ****As of 12/31/2019. 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 opene
Slide 6: 2019 Fourth Quarter Highlights
Diluted earnings per share of $0.64 for 4Q 2019 Net income to common stockholders was $10.0 million EQBK Capital Ratios as of 12/31/2019: Leverage Ratio of 9.02% Total Risk-Based Capital Ratio of 12.59% Tangible Common Equity to Tangible Assets of 8.45%(1) Tangible common book value per share of $20
Slide 7: 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 8: 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 Non-GAAP financial measure. See the non-GAAP reconciliat
Slide 9: Interest Income & Net Interest Margin Performance
Interest Income & Net Interest Margin Performance Notes: Improved Q4 interest margin through proactive management of liability costs. Approximately maintained loan yields in a declining rate environment. (1) (1) Includes Non-interest bearing deposits
Slide 10: Margin Dynamic
Margin Dynamic 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 $275MM from $600MM to $325MM as market rates continued to rise.
Slide 11: Non-Interest Income
Non-Interest Income Does not include gains on sales and settlement of securities. Performance Notes: Continued strong performance in service income generation, including year-over-year growth for the fourth quarter of 21% in debit card income and 10% in deposit related service charges Mortgage Banki
Slide 12: Digital Services: Online Banking Mobile App
Digital Services: Online Banking Mobile App Seamless Online and Mobile Experience Across Devices Biometric ID Validation FaceID Validation Mobile Check Deposit Online Bill Pay Mobile Bill Pay Person-to-Person Payments Customized Personal Financial Management Commercial Online Banking Positive Pay Ap
Slide 13: Credit card product offering
Develop a new product offering for both commercial and consumer costumers to assist with their credit needs, further enhancing development of relational banking. Within this offering provide a robust suite of card types meeting varying needs of our current and prospective customer base. Meet the nee
Slide 14: Trust & Wealth Business Strategy
Develop a comprehensive suite of products and offerings for trust and wealth management customers, including: Private Banking Investment Management Trust Services Estate and Financial Planning Our footprint is diverse, with strong need for trust and wealth management services. Our one-stop, relation
Slide 15: Non-Interest Expense
Non-Interest Expense Performance Notes: Increased expenditures related to reduction of non-performing assets, including professional fees and OREO losses of $836. Exclusive of the additional non-performing asset expense, non-interest expense is down Q/Q as the management team continues to strive for
Slide 16: Branch Network Optimization Strategy
Right-size the Bank’s footprint in our market area to efficiently and effectively service current customers while continuing to build market share. Targeted consolidation of overlapping banking centers within our footprint which would be expected to result in increased efficiency for the network as
Slide 17: Tangible Book Value
Tangible Book Value Tangible Book Value per Share(1) and Asset Growth TBV CAGR 2015 - 4Q 2019: 6.76% Non-GAAP financial measure. See the non-GAAP reconciliation at the end of this presentation.
Slide 18: 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 19: Total Loans by Purpose
Total Loans by Purpose(1) Gross Total Loans ($000s) $2,117,270 $2,575,408 $960,355 $1,383,605 Year-to-Date Loan Yield 5.31% 4.98% 5.43% 5.74% $2,556,652 5.73% For financial statement reporting, management considers other factors in addition to purpose when assessing risk and identifying reporting cl
Slide 20: Metro Market Organic Loan & Bank-Wide Core Organic Deposit Growth
Metro Market Organic Loan & Bank-Wide Core Organic Deposit Growth Metro Market Organic Loan Growth Since 12/31/2015 Bank-Wide Core(1) Organic Deposit Growth Since 12/31/2015 Defined as Equity signature deposits, including checking, savings, and money market accounts.
Slide 21: Asset Quality – Year-over-Year
Asset Quality – Year-over-Year Nonperforming Assets 0.89% NPAs / Assets 1.43% Net Charge-Offs (NCO)/ Average Loans $3.50 $1.19 NCO ($ in millions) Nonaccrual Detail Classified Assets to Total Regulatory Capital $0.89 1.52% 1.19% $17.58 68.5% 75.9% Purchased impaired loans classified as non-accrual t
Slide 22: Asset Quality – Quarter-over-Quarter
Asset Quality – Quarter-over-Quarter Nonperforming Assets 0.98% NPAs / Assets 1.91% Net Charge-Offs (NCO)/ Average Loans $0.58 $0.31 NCO in $ ($ in millions) Nonaccrual Detail Classified Assets to Total Regulatory Capital $0.76 1.61% 1.19% $6.70 45.7% 54.6% Purchased impaired loans classified as non
Slide 23: Total Deposits
Total Deposits Total ($000s) $2,382,013 $3,123,447 $1,215,914 $1,630,451 Year-to-Date Cost of Deposits* 0.48% 0.56% 0.68% 0.96% * Includes interest and non-interest bearing deposits. $3,063,516 1.30%
Slide 24: Footprint & Target
Footprint & Target There are over 500 banks with deposits less than $750MM in our operating market.
Slide 25: Appendix
Appendix
Slide 26: Executive Leadership
CRAIG ANDERSON Chief Operating Officer Joined Equity Bank in March 2018 Served as President of UMBF Commercial Banking More than 31 years of banking experience Executive Leadership BRAD ELLIOTT Chairman & CEO Founded Equity Bank in 2002 Served as Regional President of Sunflower Bank prior to forming
Slide 27: Experienced Senior Leadership Team
Experienced Senior Leadership Team Team Member Role Years with EQBK Years in Banking Patrick Harbert EVP, Community Markets, Sales & Service 16 24 Julie Huber EVP, Strategic Initiatives 16 25 Craig Mayo EVP, Chief Credit Officer 1 35 John Blakeney EVP, Chief Information Officer 2 31 Gaylyn McGregor
Slide 28: Diverse Market Segments
Diverse Market Segments 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 r
Slide 29: Market Data
Market Data Boeing Cargill Meat Solutions Cessna Aircraft Co. Spirit AeroSystems Inc. Blue Cross and Blue Shield of Kansas and Oklahoma Hill’s Pet Nutrition Goodyear Tire Co. Jostens Publishing Hallmark Cards, Inc. H&R Block Honeywell Sprint Garmin Teva DST Systems Inc. Whiteman Airforce Base Stahl
Slide 30: Selected Income Statement Data
Selected Income Statement Data Selected Income Statement Data ($000s) 12/31/19 12/31/18 12/31/17 12/31/16 12/31/15 2013 Interest income $,175,499 $,161,556 $,102,693 $61,799 $53,028 $46,845 Interest expense 49641 36758 16691 9202 6766 5610 Net interest income 125858 124798 86002 52597 46262 41235 Pr
Slide 31: Selected Balance Sheet Data
Selected Balance Sheet Data Demonstrating balance sheet strength Includes interest-bearing deposits in other banks. (2) Includes Federal Reserve Bank and Federal Home Loan Bank stock. Selected Balance Sheet Data ($000s) ASSETS 12/31/14 12/31/19 12/31/18 12/31/17 12/31/16 12/31/15 Cash and cash equiv
Slide 32: 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 12/31/19 12/31/18 12/31/17
Slide 33: 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 34: 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) December 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016 December 31,2015 December 31,2012 Total stockholders’ equity $,478,0
Slide 35: 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 2017 2016 2015 Total stockholders’ equity $,381,487 $,374,144 $,257,964 $,167,232 Less: preferred stock 0 0 0 16,372 Less: goodwill ,103,412 ,104,907 5
Slide 36: Equity Bancshares, Inc.
EQUITY BANCSHARES, INC. investor.equitybank.com