Equity Bancshares, Inc. Announces Record Net Income for First Quarter 2018

Integrates Recent Oklahoma Markets of Ponca City, Newkirk and Tulsa;
Prepares for Completion of First National Bank of Liberal/Hugoton and Adams Dairy Bank Mergers

WICHITA, Kan., April 19, 2018 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ:EQBK), (“Equity,” “we,” “us,” “our”), the Wichita-based holding company of Equity Bank, reported its unaudited results for the quarter ended March 31, 2018, including net income allocable to common stockholders for the quarter of $8.7 million, or $0.58 per diluted share.

Brad Elliott, Chairman and CEO of Equity, said, “We continue to focus on serving as a trusted community bank in our 40-plus bank offices in four states, while adding new communities to our footprint and new talented bankers to our team.  In the first quarter, our commercial, mortgage, treasury and retail sales teams worked diligently and effectively to spur organic growth in our markets, including our newest locations in Ponca City, Newkirk and Tulsa.  We’ve also added key positions throughout our operations, sales and management teams and we’ll continue to focus on organic growth for our customers and communities.”

Mr. Elliott continued, “Our new markets in Liberal, Hugoton and Blue Springs are tremendous cultural fits for our Company and we’ll continue to uphold their exemplary service and community focus in the future.  I am proud of each and every one of our Equity Bank operations, sales and service teams, who work swiftly, intelligently and with great purpose to fulfill our mission of offering sophisticated, customized banking solutions in a diverse group of markets, with an emphasis on local decision making.”

Notable Items:

  • Income before taxes for the first quarter of 2018 was $11.2 million, or $0.75 per diluted share, compared to $6.9 million, or $0.57 per diluted share, for the same time period in 2017.  Income before taxes, adjusted to exclude merger expense, was a record $11.8 million, or $0.79 per diluted share, for the first quarter of 2018, compared to $7.8 million, or $0.65 per diluted share, for the first quarter of 2017.
  • Stated diluted earnings per share in the first quarter of 2018 was a record $0.58.  Merger expenses, adjusted for estimated income tax, were $412 thousand in the first quarter of 2018, or $0.03 per diluted share. 
  • Net income allocable to common stockholders, adjusted for after-tax merger expense, was a record $9.1 million, or $0.61 per diluted share in the first quarter of 2018, compared to 2017 first quarter net income allocable to common stockholders, adjusted for after-tax merger expense, of $5.5 million, or $0.46 per diluted share.

Highlights of Equity’s growth include:

  • Total loans held for investment of $2.13 billion at March 31, 2018, as compared to total loans held for investment of $2.10 billion at December 31, 2017.
  • Total deposits were $2.37 billion at March 31, 2018, and $2.38 billion at December 31, 2017.  Signature Deposits, or core deposits comprised of checking accounts, savings accounts, and money market accounts, were $1.65 billion at March 31, 2018, compared to $1.61 billion at December 31, 2017. 
  • Total assets of $3.18 billion at March 31, 2018, compared to $3.17 billion at December 31, 2017.
  • Book value per common share of $26.09 at March 31, 2018 and $25.62 at December 31, 2017. Tangible book value per common share of $18.22 at March 31, 2018 and $17.61 at December 31, 2017.

On March 27, 2018, Equity announced the regulatory and shareholder approvals of mergers with Kansas Bank Corporation (“KBC”), parent company of First National Bank of Liberal, Kansas, and Adams Dairy Bancshares, Inc. (“Adams”), parent company of Adams Dairy Bank in Blue Springs, Missouri.  Equity announced each merger on December 18, 2017, and the Company expects each transaction to close on May 4, 2018.  The mergers with KBC and Adams will be the sixth and seventh since the Company’s initial public offering in November 2015 and Equity will have completed 17 business combinations since 2003.

After the mergers, Equity will operate 48 bank locations in four states, adding five bank offices in Southwest Kansas, including four locations in Liberal and one in Hugoton.  Equity will also add Blue Springs, Missouri, to its Kansas City presence of six bank offices, with three locations in Lee’s Summit, Missouri, two offices in Overland Park, Kansas, and one location in Kansas City, Missouri.

Equity added to its executive leadership team in March 2018, announcing the hire of Craig Anderson as Executive Vice President and Chief Operating Officer and the hire of Craig Mayo as Executive Vice President and Chief Credit Officer.  Mr. Anderson oversees commercial banking divisions in Equity’s metropolitan markets of Kansas City, Tulsa and Wichita.  Anderson joined Equity after 31 years in various executive and leadership roles at UMB Bank in Kansas City, Missouri, where he most recently served as President of UMB’s Commercial Banking – Eastern Region.

Mr. Mayo oversees Equity’s credit administration and loan operations personnel, processes and decisions throughout Equity’s four-state footprint.  Mayo joins Equity after serving as Executive Vice President and Chief Credit Officer for Investors Community Bank in Manitowoc, Wisconsin.

Financial Results for Quarter Ended March 31, 2018

Net income allocable to common stockholders was $8.7 million for the three months ended March 31, 2018, as compared to $4.9 million for the three months ended March 31, 2017, an increase of $3.8 million or 79.1%.  Financial results reflect the merger with Prairie State Bancshares, Inc. (“Prairie”), beginning March 11, 2017, the merger with Eastman National Bancshares, Inc. (“Eastman”), beginning November 11, 2017, and the merger with Cache Holdings, Inc. (“Cache”), also beginning November 11, 2017.  The Prairie merger added three locations in western Kansas with total assets of $153.1 million; the Eastman merger added four branches in Ponca City and Newkirk, Oklahoma with total assets of $259.7 million; and the Cache merger added one Tulsa, Oklahoma location with total assets of $324.6 million. During the three months ended March 31, 2018, there was $531 thousand ($412 thousand after-tax) of merger expense related to the Eastman, Cache, Adams and KBC mergers.

Diluted earnings per share were $0.58 for the three months ended March 31, 2018, as compared to $0.40 for the comparable period of 2017.  Weighted average fully diluted shares were 14,894,180 and 12,081,292 for the three months ended March 31, 2018 and 2017.  The increase in weighted average fully diluted shares reflects the issuance of 479,465 shares in connection with Equity’s March 2017 merger with Prairie and issuance of 1,179,747 and 1,190,941 shares in connection with Equity’s November 2017 mergers with Eastman and Cache.

Net interest income was $27.8 million for the three months ended March 31, 2018 as compared to $19.9 million for the three months ended March 31, 2017, a $7.9 million or 39.7% increase.  The increase in net interest income was primarily driven by growth in loan and securities balances, partially offset by an increase in interest expense as we funded additional earning assets with more deposits and borrowings at higher rates.

Our net interest margin was 3.91% for the three months ended March 31, 2018 as compared to 3.96% for the three months ended March 31, 2017.  The decrease in net interest margin was primarily due to a 29 basis point increase in our cost of interest-bearing liabilities partially offset by an 18 basis point increase in yield on interest-earning assets.

The provision for loan losses was $1.2 million for the three months ended March 31, 2018 as compared to $1.1 million for the three months ended March 31, 2017.  Net loan charge-offs for the three months ended March 31, 2018, came to $352 thousand compared to net charge-offs of $479 thousand for the same period in 2017.

Total non-interest income rose to $4.3 million for the three months ended March 31, 2018, versus $3.3 million for the three months ended March 31, 2017.  Increases in service charges and fees and in debit card income are principally attributable to the addition of accounts and higher transaction volumes associated with the Prairie, Eastman and Cache mergers.

Total non-interest expense was $19.6 million for the quarter ended March 31, 2018, compared to $15.2 million for the three months ended March 31, 2017.  These results reflect the effect of the March 2017 addition of three locations in western Kansas, the November 2017 additions of five locations in northern Oklahoma, as well as additional lending, customer service, corporate and operations staff indirectly attributable to mergers and organic growth.  Non-interest expense also includes merger expenses of $531 thousand for the quarter ended March 31, 2018.  Prairie merger expenses for the three months ended March 31, 2017, totaled $926 thousand.

Equity’s effective tax rate for the three-month period ended March 31, 2018, was 22.5% as compared to 29.6% for the comparable period ended March 31, 2017.  On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Reform”) was enacted, which reduced the U.S. Federal statutory income tax rate from the 35% applicable in 2017 to 21% in 2018.  This rate reduction reduced Equity’s estimated annual effective tax rate by approximately 11 percentage points in 2018.  Partially offsetting the benefit of the rate reduction was a decrease in excess tax benefits associated with the exercise of stock options recorded during the quarter ended March 31, 2018, as compared to the prior year first quarter.  Excess tax benefits were $6 thousand in the first quarter of 2018, down $201 thousand from the excess tax benefits recorded in the first quarter of 2017.

Loans, Deposits and Total Assets

Loans held for investment were $2.13 billion at March 31, 2018, compared to $2.10 billion at December 31, 2017, an increase of $22.0 million.

As of March 31, 2018, Equity’s allowance for loan losses to total loans was 0.44%, compared to 0.40% at December 31, 2017.  Total reserves, including purchase discounts, to total loans were approximately 1.19% as of March 31, 2018, compared to 1.21% at December 31, 2017.  Nonperforming assets of $42.4 million as of March 31, 2018, were 1.33% of total assets.  Nonperforming assets at December 31, 2017, were $48.2 million or 1.52% of total assets.

Total deposits were $2.37 billion at March 31, 2018, as compared to $2.38 billion at December 31, 2017.  Total deposits decreased $13.7 million between December 31, 2017, and March 31, 2018.  Signature Deposits were $1.65 billion at March 31, 2018, as compared to $1.61 billion at December 31, 2017. 

At March 31, 2018, Equity had consolidated total assets of $3.18 billion, compared to $3.17 billion at December 31, 2017, an increase of $5.6 million.

Capital and Borrowings

In connection with the Prairie merger, Equity issued 479,465 shares valued at $31.79 per share, Equity’s closing price on March 10, 2017.  Net of $329 thousand of stock issuance costs, the Prairie merger added $14.9 million to stockholders’ equity. Related to the Eastman and Cache mergers, Equity issued 1,179,747 and 1,190,941 shares, in each case, valued at $33.15 per share, Equity’s closing price on November 10, 2017.  Net of $299 thousand of stock issuance costs, the Eastman merger added $38.8 million to stockholders’ equity while the Cache merger added $39.2 million to stockholders’ equity, net of $252 thousand of stock issuance costs.

At March 31, 2018, common stockholders’ equity totaled $381.5 million, $26.09 per common share, compared to $374.1 million, $25.62 per common share, at December 31, 2017.  Tangible common equity was $266.5 million and tangible book value per common share was $18.22 at March 31, 2018.  Tangible common equity was $257.2 million and tangible book value per common share was $17.61 at December 31, 2017.  The ratio of common equity tier 1 capital to risk-weighted assets was approximately 11.80% and the total capital to risk-weighted assets was approximately 12.81% at March 31, 2018.

Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of this press release.

Conference Call and Webcast

Equity Chairman and Chief Executive Officer, Brad Elliott, and Chief Financial Officer, Greg Kossover, will hold a conference call and webcast to discuss first quarter 2018 results on Friday, April 20, 2018 at 9 a.m. central time.

Investors, news media and other participants should register for the call or audio webcast at investor.equitybank.com. On Friday, April 20, 2018, participants may dial into the call toll-free at (844) 534-7311 from anywhere in the U.S. or (574) 990-1419 internationally, using conference ID no. 7479776.

Participants are encouraged to dial into the call or access the webcast approximately 10 minutes prior to the start time.  Presentation slides to pair with the call or webcast will be posted one hour prior to the call at investor.equitybank.com.

A replay of the call and webcast will be available two hours following the close of the call until April 27, 2018, accessible at (855) 859-2056 with conference ID no. 7479776 at investor.equitybank.com.

About Equity Bancshares, Inc.

Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions, including commercial loans, consumer banking, mortgage loans and treasury management services. As of March 31, 2018, Equity had $3.18 billion in consolidated total assets, with 42 locations throughout Kansas, Missouri, Arkansas and Oklahoma, including corporate headquarters in Wichita, a bank in Tulsa and bank locations throughout the Kansas City metropolitan area. Learn more at www.equitybank.com.

Equity seeks to provide an enhanced banking experience for customers by providing a suite of sophisticated banking products and services tailored to their needs, while delivering the high-quality, relationship-based customer service of a community bank. Equity’s common stock is traded on the NASDAQ Global Select Market under the symbol “EQBK.”

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 reflect the current views of Equity’s management with respect to, among other things, future events and Equity’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature.  These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity’s control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.  Factors that could cause actual results to differ materially from Equity’s expectations include competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses, and similar variables. The foregoing list of factors is not exhaustive.

For discussion of these and other risks that may cause actual results to differ from expectations, please refer to “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Equity’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 16, 2018 and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.  If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity’s behalf may issue.

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 merger of Equity and each of KBC and Adams, Equity filed a registration statement on Form S-4 with the Securities and Exchange Commission (the “SEC”) with respect to each of the proposed mergers. Each registration statement included a proxy statement of KBC, and a proxy statement of Adams, respectively, and constitutes a prospectus of Equity, which KBC and Adams sent to their respective shareholders. Investors and shareholders are advised to read the proxy statement/prospectus because it contains important information about Equity, KBC and Adams and the proposed transactions.

This document and other documents relating to the merger filed by Equity can be obtained free of charge from the SEC's website at www.sec.gov. These documents also can be obtained free of charge by accessing Equity's website at www.equitybank.com under the tab “Investor Relations” and then under “Financials.” Alternatively, these documents can be obtained free of charge from Equity by directing a request to Equity Bancshares, Inc., 7701 East Kellogg, Wichita, Kansas 67207, Attention: Jacob Willis, Investor Relations Officer, Telephone: (316) 779-1675; or to Kansas Bank Corporation, 1700 North Lincoln Avenue, Liberal, Kansas 67901, Attention: Tina Call, President & CEO, Telephone: (620) 624-1971; or to Adams Dairy Bancshares, Inc.651 NE Coronado Drive, Blue Springs, Missouri, 64014, Attention: David Charles Chinnery, Chairman & CEO, Telephone: (816) 655-3333.

Participants in the Transactions

Equity, KBC, Adams, and certain of their respective directors and executive officers may be deemed under the rules of the SEC to be participants in the solicitation of proxies from the respective shareholders of KBC or Adams in connection with the proposed transaction. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, was included in the proxy statement/prospectus regarding each of the proposed transactions when it becomes available. Additional information about Equity and its directors and officers may be found in the definitive proxy statement of Equity relating to its 2018 Annual Meeting of Stockholders filed with the SEC on March 21, 2018 and Equity's annual report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 16, 2018. The definitive proxy statement and annual report can be obtained free of charge from the SEC's website at www.sec.gov.

No Offer or Solicitation

This press release shall not constitute an offer to sell, a solicitation of an offer to sell, or the solicitation or an offer to buy any securities. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirement of Section 10 of the Securities Act of 1933, as amended.

Unaudited Financial Tables
             

  • Table 1. Selected Financial Highlights
  • Table 2. Consolidated Balance Sheets
  • Table 3. Consolidated Statements of Income
  • Table 4. Non-GAAP Financial Measures

TABLE 1. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)

           
  As of and for the three months ended
  March 31,
2018
December 31,
2017
September 30,
2017
June 30,
2017
March 31,
2017
Statement of Income Data          
Net interest income  $ 27,787   $ 24,589   $ 20,321   $ 21,199   $ 19,893  
Provision for loan losses    1,170     503     727     628     1,095  
Net gain (loss) from securities transactions    (8 )       175     83     13  
Total non-interest income    4,251     4,104     4,035     3,962     3,339  
Merger expenses   531     3,267     1,023     136     926  
Total non-interest expense    19,627     20,718     16,388     15,131     15,226  
Income before income taxes    11,241     7,472     7,241     9,402     6,911  
Provision for income taxes   2,530     3,198     2,084     3,048     2,047  
Net income    8,711     4,274     5,157     6,354     4,864  
Net income allocable to common stockholders    8,711     4,274     5,157     6,354     4,864  
Basic earnings per share    0.60     0.32     0.42     0.52     0.41  
Diluted earnings per share    0.58     0.31     0.41     0.51     0.40  
           
Balance Sheet Data (at period end)          
Securities available-for-sale $ 174,717   $ 162,272   $ 81,116   $ 92,435   $ 103,178  
Securities held-to-maturity    522,021     535,462     528,944     532,159     519,239  
Gross loans held for investment    2,125,324     2,103,279     1,540,761     1,529,396     1,518,576  
Allowance for loan losses    9,316     8,498     7,969     7,568     7,048  
Intangible assets, net    115,032     116,922     71,353     71,608     71,790  
Total assets    3,176,062     3,170,509     2,405,426     2,408,624     2,399,256  
Total deposits    2,368,297     2,382,013     1,868,493     1,819,677     1,821,090  
Non-time deposits    1,647,105     1,605,514     1,223,244     1,163,904     1,199,266  
Borrowings    414,415     401,652     235,098     292,302     288,521  
Total liabilities    2,794,575     2,796,365     2,113,591     2,122,566     2,120,050  
Total stockholders’ equity    381,487     374,144     291,835     286,058     279,206  
Tangible common equity*    266,455     257,222     220,482     214,450     207,416  
           
Selected Average Balance Sheet Data (quarterly average)          
Total gross loans receivable $ 2,122,973   $ 1,850,045   $ 1,528,658   $ 1,519,289   $ 1,403,076  
Investment securities    699,055     669,220     621,055     613,914     580,467  
Interest-earning assets    2,883,960     2,573,043     2,192,275     2,175,517     2,036,177  
Total assets    3,169,131     2,820,548     2,402,599     2,382,886     2,236,252  
Interest-bearing deposits    2,043,784     1,821,850     1,584,618     1,539,763     1,458,107  
Borrowings    389,120     330,651     266,392     309,588     289,074  
Total interest-bearing liabilities    2,432,904     2,152,501     1,851,010     1,849,351     1,747,181  
Total deposits    2,390,648     2,140,490     1,837,726     1,781,181     1,673,249  
Total liabilities    2,791,236     2,483,029     2,113,592     2,099,699     1,971,516  
Total stockholders’ equity    377,895     337,519     289,007     283,187     264,736  
Tangible common equity*    261,261     240,899     217,542     211,467     199,551  
           
Performance ratios          
Return on average assets (ROAA) annualized    1.11 %   0.60 %   0.85 %   1.07 %   0.88 %
Return on average equity (ROAE) annualized    9.35 %   5.02 %   7.08 %   9.00 %   7.45 %
Return on average tangible common equity (ROATCE) annualized*    14.05 %   7.41 %   9.71 %   12.36 %   10.17 %
Yield on loans annualized    5.55 %   5.40 %   5.30 %   5.45 %   5.61 %
Cost of interest-bearing deposits annualized    0.94 %   0.87 %   0.82 %   0.75 %   0.72 %
Cost of total deposits annualized    0.80 %   0.74 %   0.71 %   0.65 %   0.62 %
Net interest margin annualized    3.91 %   3.79 %   3.68 %   3.91 %   3.96 %
Efficiency ratio*    59.59 %   60.82 %   63.54 %   59.79 %   61.59 %
Non-interest income / average assets    0.54 %   0.58 %   0.67 %   0.67 %   0.61 %
Non-interest expense / average assets   2.51 %   2.91 %   2.71 %   2.55 %   2.76 %
           
Capital Ratios          
Tier 1 Leverage Ratio    9.45 %   10.33 %   10.32 %   10.15 %   10.52 %
Common Equity Tier 1 Capital Ratio   11.80 %   11.56 %   13.33 %   13.07 %   12.72 %
Tier 1 Risk Based Capital Ratio    12.41 %   12.17 %   14.15 %   13.89 %   13.54 %
Total Risk Based Capital Ratio    12.81 %   12.54 %   14.62 %   14.34 %   13.96 %
Total stockholders’ equity to total assets    12.01 %   11.80 %   12.13 %   11.88 %   11.64 %
Tangible common equity to tangible assets*    8.70 %   8.42 %   9.45 %   9.18 %   8.91 %
Book value per share  $ 26.09   $ 25.62   $ 23.86   $ 23.44   $ 22.88  
Tangible common book value per share*  $ 18.22   $ 17.61   $ 18.03   $ 17.57   $ 17.00  
Tangible book value per diluted common share*  $ 17.85   $ 17.29   $ 17.64   $ 17.24   $ 16.66  

* The value noted is considered a Non-GAAP financial measure.  For a reconciliation of Non-GAAP financial measures, see Table 4. Non-GAAP Financial Measures.

TABLE 2. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

  March 31,
2018
December 31,
2017
ASSETS    
Cash and due from banks  $   42,526   $   48,034  
Federal funds sold      620       4,161  
Cash and cash equivalents    43,146       52,195  
     
Interest-bearing time deposits in other banks      3,496       3,496  
Available-for-sale securities     174,717       162,272  
Held-to-maturity securities, fair value of $511,138 and $532,744      522,021       535,462  
Loans held for sale      11,112       16,344  
Loans, net of allowance for loan losses of $9,316 and $8,498      2,116,008       2,094,781  
Other real estate owned, net      7,090       7,907  
Premises and equipment, net      62,572       63,449  
Bank-owned life insurance      68,690       68,384  
Federal Reserve Bank and Federal Home Loan Bank stock      25,437       24,373  
Interest receivable     12,450       12,371  
Goodwill      103,412       104,907  
Core deposit intangible, net      10,355       10,738  
Other      15,556       13,830  
Total assets $   3,176,062   $   3,170,509  
     
LIABILITIES AND STOCKHOLDERS’ EQUITY    
Deposits    
Demand  $   362,786   $   366,530  
Total non-interest-bearing deposits      362,786       366,530  
Savings, NOW and money market      1,284,319       1,238,984  
Time      721,192       776,499  
Total interest-bearing deposits      2,005,511       2,015,483  
Total deposits      2,368,297       2,382,013  
Federal funds purchased and retail repurchase agreements      42,101       37,492  
Federal Home Loan Bank advances     355,836       347,692  
Bank stock loan      2,438       2,500  
Subordinated debentures      14,040       13,968  
Contractual obligations      1,966       1,967  
Interest payable and other liabilities      9,897       10,733  
Total liabilities      2,794,575       2,796,365  
     
Stockholders’ equity    
Common stock      161       161  
Additional paid-in capital      332,075       331,339  
Retained earnings      74,212       65,512  
Accumulated other comprehensive loss      (5,185 )     (3,092 )
Employee stock loans      (121 )     (121 )
Treasury stock     (19,655 )     (19,655 )
Total stockholders’ equity      381,487       374,144  
Total liabilities and stockholders’ equity  $   3,176,062   $   3,170,509  


TABLE 3. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
  Three Months Ended
March 31,
    2018     2017
Interest and dividend income    
Loans, including fees  $ 29,048   $ 19,400
Securities, taxable    3,723     2,724
Securities, nontaxable    879     785
Federal funds sold and other    473     306
     
Total interest and dividend income    34,123     23,215
     
Interest expense    
Deposits    4,718     2,576
Federal funds purchased and retail repurchase agreements    23     12
Federal Home Loan Bank advances    1,299     502
Bank stock loan    27    
Subordinated debentures    269     232
     
Total interest expense    6,336     3,322
     
Net interest income    27,787     19,893
Provision for loan losses    1,170     1,095
     
Net interest income after provision for loan losses    26,617     18,798
Non-interest income    
Service charges and fees    1,580     1,182
Debit card income    1,253     1,005
Mortgage banking    313     485
Increase in value of bank owned life insurance    652     355
Net gain (loss) from securities transactions    (8 )   13
Other    461     299
     
Total non-interest income    4,251     3,339
     
Non-interest expense    
Salaries and employee benefits    10,891     7,806
Net occupancy and equipment    1,802     1,499
Data processing    1,674     1,161
Professional fees   715     516
Advertising and business development    619     518
Telecommunications    369     361
FDIC insurance    244     106
Courier and postage    255     226
Free nation-wide ATM cost    292     212
Amortization of core deposit intangible    384     209
Loan expense    346     177
Other real estate owned    268     205
Merger expenses   531     926
Other    1,237     1,304
     
Total non-interest expense    19,627     15,226
     
Income before income taxes    11,241     6,911
Provision for income taxes    2,530     2,047
     
Net income  $ 8,711   $ 4,864
     
Net income allocable to common stockholders  $ 8,711   $ 4,864
     
Basic earnings per share  $ 0.60   $ 0.41
     
Diluted earnings per share  $ 0.58   $ 0.40

TABLE 4. Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands, except per share data)

  As of and for the three months ended
  March 31,
2018
December 31,
2017
September 30,
2017
June 30,
2017
March 31,
2017
Total stockholders’ equity  $ 381,487   $ 374,144   $ 291,835   $ 286,058   $ 279,206  
Less: goodwill    103,412     104,907     64,587     64,587     64,521  
Less: core deposit intangibles, net    10,355     10,738     5,476     5,719     5,954  
Less: mortgage servicing asset, net    16     17     19     20     22  
Less: naming rights, net    1,249     1,260     1,271     1,282     1,293  
Tangible common equity  $ 266,455   $ 257,222   $ 220,482   $ 214,450   $ 207,416  
           
Common shares outstanding at period end    14,621,258     14,605,607     12,230,319     12,206,319     12,202,237  
           
Diluted common shares outstanding at period end    14,923,798     14,873,257     12,501,484     12,441,429     12,450,315  
           
Book value per common share  $ 26.09   $ 25.62   $ 23.86   $ 23.44   $ 22.88  
           
Tangible book value per common share  $ 18.22   $ 17.61   $ 18.03   $ 17.57   $ 17.00  
           
Tangible book value per diluted common share  $ 17.85   $ 17.29   $ 17.64   $ 17.24   $ 16.66  
           
Total assets  $ 3,176,062   $ 3,170,509   $ 2,405,426   $ 2,408,624   $ 2,399,256  
Less: goodwill    103,412     104,907     64,587     64,587     64,521  
Less: core deposit intangibles, net    10,355     10,738     5,476     5,719     5,954  
Less: mortgage servicing asset, net    16     17     19     20     22  
Less: naming rights, net    1,249     1,260     1,271     1,282     1,293  
           
Tangible assets  $ 3,061,030   $ 3,053,587   $ 2,334,073   $ 2,337,016   $ 2,327,466  
           
Total stockholders equity to total assets    12.01 %   11.80 %   12.13 %   11.88 %   11.64 %
           
Tangible common equity to tangible assets   8.70 %   8.42 %   9.45 %   9.18 %   8.91 %
           
Total average stockholders’ equity  $ 377,895   $ 337,519   $ 289,007   $ 283,187   $ 264,736  
Less: average intangible assets    116,634     96,620     71,465     71,720     65,185  
           
Average tangible common equity  $ 261,261   $ 240,899   $ 217,542   $ 211,467   $ 199,551  
           
Net income allocable to common stockholders  $ 8,711   $ 4,274   $ 5,157   $ 6,354   $ 4,864  
Amortization of intangible assets    525     349     256     247     218  
Less: tax effect of intangible assets amortization    184     122     90     86     76  
           
Adjusted net income allocable to common stockholders  $ 9,052   $ 4,501   $ 5,323   $ 6,515   $ 5,006  
           
Return on total average stockholders’ equity (ROAE)
annualized 
  9.35 %   5.02 %   7.08 %   9.00 %   7.45 %
           
Return on average tangible common equity (ROATCE) annualized    14.05 %   7.41 %   9.71 %   12.36 %   10.17 %
           
Non-interest expense  $ 19,627   $ 20,718   $ 16,388   $ 15,131   $ 15,226  
Less: merger expenses    531     3,267     1,023     136     926  
           
Non-interest expense, excluding merger expenses  $ 19,096   $ 17,451   $ 15,365   $ 14,995   $ 14,300  
           
Net interest income  $ 27,787   $ 24,589   $ 20,321   $ 21,199   $ 19,893  
           
Non-interest income $ 4,251   $ 4,104   $ 4,035   $ 3,962   $ 3,339  
Less: net gain (loss) from securities transactions    (8 )       175     83     13  
           
Non-interest income, excluding net gains (losses) on security transactions  $ 4,259   $ 4,104   $ 3,860   $ 3,879   $ 3,326  
           
Net interest income plus non-interest income, excluding net gains (losses) on security transactions $ 32,046   $ 28,693   $ 24,181   $ 25,078   $ 23,219  
Non-interest expense to net interest income plus non-interest income    61.26 %   72.21 %   67.29 %   60.14 %   65.54 %
           
Efficiency ratio    59.59 %   60.82 %   63.54 %   59.79 %   61.59 %
           

Investor Contact:
Jacob Willis
Investor Relations Officer
316-779-1675
jwillis@equitybank.com
investor.equitybank.com

Media Contact:
John Hanley
SVP, Director of Marketing
816-505-4063
jhanley@equitybank.com

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Source: Equity Bancshares, Inc.