Equity Bancshares, Inc. · NYSE:EQBK
Equity Bancshares — Q2 2023 Earnings Presentation
29 slides from Equity Bancshares's earnings presentation, Jul 19, 2023
Slide 1: Second Quarter 2023 Earnings Presentation
Exhibit 99.2 Second Quarter 2023 Earnings Presentation July 19, 2023
Slide 2: Forward Looking Statements
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 manage
Slide 3: Our Company
Our Company Equity Bancshares, Inc. NYSE: EQBK Committed to our Entrepreneurial Spirit Start-Up: 2002 - 2007 Brad Elliott, Chairman and CEO, founded Equity Bancshares, Inc. in 2002. ✓Completed 5 branch or whole bank acquisitions ✓Opened 2 branches in Missouri Growth: 2008 - 2016 ✓Opened branches in
Slide 4: Our Value Proposition
Our 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 our D
Slide 5: Strong Senior Leadership Team
Strong Senior Leadership Team Brad Elliott Eric Newell Chairman & CEO Chief Financial Officer Years in Banking: 34 Years in Banking: 21 • Founded Equity Bank in 2002 • Served as CFO at United Bank in Hartford, CT ($7.3B assets) • 2018 EY Entrepreneur of the Year National Finalist • Served as CFO and
Slide 6: Long Term Key Strategic Objectives
Long Term Key Strategic Objectives Grow Tangible Book Maximize Risk Adjusted Value Return on Assets • Efficiently grow core earnings • Re-mix cash flows into higher yielding instruments funded with low-cost core deposits • Effectively deploy capital through share repurchases, dividends and whole ban
Slide 7: Q2 2023 Financial Highlights
Q2 2023 Financial Highlights Balance sheet strength through market adversity Net Income ▪ Net Interest Margin of 3.38% $11.5M ▪ Loan yield of 6.34% ▪ Cost of interest-bearing liabilities of 2.42% Diluted EPS ▪ Non-Brokered Deposit growth of $46.0 million, or 4.7% $0.74 annualized Total Deposits ▪ Di
Slide 8: Net Income Walk
Net Income Walk Drivers of Net Income Change Period over Period Net Income Drivers Net Interest Income Net interest income totaled $39.4 million in the second quarter, up 319 thousand from the first quarter, driven by an increase in average earning assets Noninterest Income During the quarter we rec
Slide 9: Performance Metrics
Performance Metrics Return on Tangible Common Equity(1) Pre-Tax, Pre-Provision ROAA(1) 17.6% 17.1% 1.49% 1.41% 14.7% 14.9% 13.6% 1.22% 1.18% 1.05% 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 Efficiency Ratio(1) TCE / TA excluding AOCI(1) 8.92% 9.12% 8.90% 9.06%
Slide 10: Revenue Trends
Revenue Trends Quarterly Results 3.62% 3.67% 18.5% 17.6% 15.7% 18.0% 17.3% 3.39% 3.44% 3.38% 0.76% 0.71% 0.67% 0.70% 0.55% $8,986 $7,893 $9,129 $8,568 $8,272 $41,944 $42,031 $39,566 $39,110 $39,429 $39,566 $41,944 $42,031 $39,110 $39,429 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 6/30/22 9/30/22 12/31
Slide 11: Net Interest Income
Net Interest Income Key Net Interest Income Drivers Net Interest Income Period over Period Noninterest-Bearing Deposits Noninterest-bearing deposits constitute 23% of total deposits. Loan Yield Loan yield is up 40bps linked quarter, as we continue to originate higher yielding credits and benefit fro
Slide 12: Yield / Cost Components
Yield / Cost Components Cost Analysis Cumulative Betas 2.42% 4Q ‘21 3Q ‘22 4Q ‘22 1Q ‘23 2Q ‘23 1.98% Average FF Rate 0.08% 2.20% 3.65% 4.51% 4.99% 2.14% 1.36% 1.73% 1.64% Loans 34% 34% 36% 40% 0.79% 1.05% 1.31% 0.41% 0.49% 0.57% 0.76% 0.28% Deposits 11% 16% 25% 30% 0.22% 0.41% 0.16% 0.20% Q1 '22 Q2
Slide 13: Strong Core Deposit Franchise
Strong Core Deposit Franchise Current Deposit Composition Core Deposits(1) / Total Deposits Savings, 7% Time Deposits > 100k, 15% 90.2% 89.5% 86.2% 83.4% 85.1% Time Deposits MMDA, 25% < 100k, 5% $3,869 $3,782 $3,658 $3,575 $3,601 Non-Interest Bearing DDA, 23% Interest Bearing DDA, 6/30/22 9/30/22 12
Slide 14: Diversified Loan Portfolio
Diversified Loan Portfolio QTD Commercial Real Estate C&I Residential Real Estate Agriculture Consumer Loan Yield 6/30/23 40% 31% 17% 9% 3% 6.34% 3/31/23 40% 30% 17% 9% 3% 5.94% 12/31/22 41% 29% 17% 10% 3% 5.59% 9/30/22 40% 29% 18% 10% 3% 5.09% 6/30/22 40% 29% 18% 10% 3% 4.59% 0% 20% 40% 60% 80% 100
Slide 15: Asset Quality Trends – Annual
Asset Quality Trends – Annual Nonperforming Assets Total Reserve Ratio 1.36% 1.28% 1.19% 1.98% 0.68% 1.65% $10.8 1.43% 1.39% $36.4 0.37% 0.12% $8.5 0.31% 0.05% 0.05% 0.73% $0.6 1.53% $43.7 $0.7 1.30% 1.38% 1.34% $38.4 0.25% $29.4 Millions $17.6 $15.0 0.48% 12/31/19 12/31/20 12/31/21 12/31/22 6/30/23
Slide 16: Asset Quality Trends - Quarterly
Asset Quality Trends - Quarterly Nonperforming Assets Total Reserve Ratio 0.74% 1.60% 0.59% 1.50% 1.43% 1.40% 1.39% 0.37% 0.33% 0.31% 0.10% 0.07% 0.05% 0.05% 0.05% $17.6 $6.6 $0.6 $0.4 1.50% 1.43% 1.38% $0.7 1.35% 1.34% Millions $18.9 $23.1 $17.6 $16.6 $15.0 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23
Slide 17: Allowance for Credit Loss (ACL)
Allowance for Credit Loss (ACL) ACL intra-quarter movement Loan Classification ACL Loans ACL / Loans (%) Commercial Real Estate 16,652 1,764,460 0.94% Commercial & Industrial 15,194 583,664 2.60% Residential Real Estate 8,855 560,389 1.58% Agricultural Real Estate 583 202,317 0.29% Agricultural 1,28
Slide 18: Investment Portfolio Strategy
Investment Portfolio Strategy Environment Shift: 2020 -> 2023 ✓ As we began 2020, investment portfolio was over 80% Investment Portfolio Thesis Agency MBS and CMOs • We believe the structure in the portfolio outperforms peers through the cycle ✓ As rates collapsed, the majority of the portfolio prep
Slide 19: Tangible Book Value
Tangible Book Value Tangible book value per share(1) increased $0.12 in Q2 2023 (1) Non-GAAP financial measure. Refer to the non-GAAP reconciliation at the end of this presentation. 19
Slide 20: Capital Management
Capital Management Capital Management Strategy Capital Targets The Company’s capital ratios are comfortably above well capitalized EQBK establishes capital targets based on the following levels as of 6/30/2023 objectives: ✓ Maintain designation as a “well capitalized” institution Regulatory Well Equ
Slide 21: Outlook on Key Business Drivers
Outlook on Key Business Drivers Consideration & Expectations • Continued uncertainty of inflation, supply chain disruption and input cost escalation. • Focus on continued balance sheet strength and security while continuing to pursue growth. Key Driver Q2’23 Outlook Q2’23 Results Q3’23 Outlook FY’23
Slide 22: Focus Variables for Outlook & Forecast
Focus Variables for Outlook & Forecast Our outlook requires clarity around certain variables, including: Economic • Business activity creates opportunity for lending and deposit growth. Pandemic Environment response and resolution will be significant driver. Customer • Directly related to credit qua
Slide 23: Our Markets
Our Markets Kansas Missouri 21 Counties 10 counties 37 branches 16 branches Deposits Market Deposits Market Rank Institution Branches Rank Institution Branches ($mm) Share ( % ) ($mm) Share ( % ) 1 Bank of America Corp. $6,834 10.36 23 1 UMB Financial Corp. $20,932 41.47 20 2 Capitol Federal Financi
Slide 24: Our Markets
Our Markets Oklahoma Arkansas Kay | Texas | Tulsa Benton | Boone | Carroll 9 branches 5 branches Deposits Market Deposits Market Rank Institution Branches Rank Institution Branches ($mm) Share ( % ) ($mm) Share ( % ) 1 BOK Financial Group $10,898 33.23 21 1 Arvest Bank Group Inc. $5,254 47.81 28 2 A
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations 25
Slide 26: TCE to TA and Tangible Book Value per Share
TCE to TA and Tangible Book Value per Share Non-GAAP Financial Measures (Unaudited) (Dollars in thousands, except per share data) June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Total stockholder's equity $ 418,435 $ 425,123 $ 410,058 $ 395,806 $ 428,115 Less: goodwil
Slide 27: ROATCE and Efficiency Ratio
ROATCE and Efficiency Ratio Non-GAAP Financial Measures (Unaudited) (Dollars in thousands, except per share data) June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Total average stockholders' equity $ 424,862 $ 420,500 $ 398,270 $ 436,191 $ 437,483 Less: average intangi
Slide 28: ROAA and PTPP ROAA
ROAA and PTPP ROAA Non-GAAP Financial Measures (Unaudited) (Dollars in thousands, except per share data) June 30, March 31, December 31, September 30, June 30, 2023 2023 2022 2022 2022 Net income (loss) allocable to common stockholders 11,456 12,323 11,608 15,171 15,259 Add: income tax provision 1,4
Slide 29: investor.equitybank.com
=| EQUITY BANCSHARES, INC. investor.equitybank.com