“I am pleased with our core earnings results in the third quarter, and two consecutive quarters of delivering growth in earnings per share to our stockholders,” said
“Our initiatives in building our full-service banking platform have resulted in additional signature deposit customers in our regions, including key business and treasury management relationships, resulting in noninterest income growth and expansion for our Company,” said Mr. Elliott. “Our teams throughout our regions, including operations, customer service, credit administration and quality care, will continue to prioritize innovation within our products and services, efficient and effective delivery to our markets and to maintain our focus on high credit standards.”
On
Notable Items:
- Net income before taxes for the third quarter of 2019 was
$13.2 million , or$0.84 per diluted share, compared to net income before taxes of$13.3 million , or$0.82 per diluted share, for the same time period in 2018. Net income before taxes, adjusted to exclude merger expense, was$13.2 million , or$0.84 per diluted share, for the third quarter of 2019, compared to net income before taxes, adjusted to exclude merger expense of$14.0 million , or$0.87 per diluted share, for the third quarter of 2018. - Stated diluted income per share in the third quarter of 2019 was
$0.66 . There were no merger expenses in the third quarter of 2019. Stated diluted income per share for the first nine months of 2019 was$0.98 . Merger expenses, adjusted for estimated income tax, were$694 thousand in the first nine months of 2019, or$0.04 per diluted share. - During the third quarter, the reserve ratio of the
Deposit Insurance Fund reached 1.40% resulting in the application of a credit to our quarterly assessments paid to theFederal Deposit Insurance Corporation . Application of the credit reduced expense during the three and nine month periods endedSeptember 30, 2019 by$505 thousand ($398 thousand after tax), a benefit of$0.03 per diluted share after tax. - On
April 18, 2019 , the Board of Directors ofEquity Bancshares, Inc. authorized the repurchase of up to 1,100,000 shares of our Class A Voting Common Stock, par value$0.01 per share, from time to time, beginningApril 29, 2019 and concludingOctober 30 , 2020. The repurchase program does not obligate us to acquire a specific dollar amount or number of shares and it may be extended, modified or discontinued at any time without notice. As ofSeptember 30, 2019 , a total of 421,016 shares have been repurchased under this authorization at an average price of$25.81 , including 143,210 shares during the third quarter at an average price of$25.55 per share.
Equity’s Balance Sheet Highlights:
- Total loans held for investment of
$2.60 billion atSeptember 30, 2019 , as compared to total loans held for investment of$2.58 billion atDecember 31 , 2018. The increase of$25.5 million includes growth of$19.0 million , or 0.7%, and$6.5 million of loans added in the MidFirst acquisition. - Total deposits were
$3.11 billion atSeptember 30, 2019 compared to$3.12 billion atDecember 31 , 2018. Signature deposits, including core deposits comprised of checking accounts, savings accounts and money market accounts, were$2.18 billion atSeptember 30, 2019 , compared to$2.12 billion atDecember 31 , 2018. Organic signature deposit growth was 0.7% for the nine months endedSeptember 30 , 2019. In addition, the MidFirst acquisition added total deposits of$98.5 million . - Total assets of
$4.07 billion atSeptember 30, 2019 , compared to$4.06 billion atDecember 31 , 2018. The MidFirst acquisition added total assets of$98.6 million . - Book value per common share of
$30.25 atSeptember 30, 2019 and$28.87 atDecember 31, 2018 . Tangible book value per common share of$19.99 atSeptember 30, 2019 and$19.08 atDecember 31, 2018 .
Financial Results for Nine Months Ended
Net income allocable to common stockholders was
Diluted earnings per share were
Net interest income was
Our net interest margin was 3.44% for the nine months ended
The provision for loan losses was
Total non-interest income was
Total non-interest expense was
Equity’s effective tax rate for the nine-month period ended
Financial Results for Quarter Ended
Net income allocable to common stockholders was
Diluted earnings per share were
Net interest income was
The net interest margin was 3.42% for the three months ended
The provision for loan losses was
Total non-interest income for the quarter ended
Total non-interest expense was
Equity’s effective tax rate for the quarter ended
Loans, Deposits and Total Assets
Loans held for investment were
As of
Total deposits were
At
Borrowings and Capital
At
At
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,
Investors, news media and other participants should register for the call or audio webcast at investor.equitybank.com. On
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
About
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.
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
Investor Contact:
SVP, Finance
(316) 612-6014
cnavratil@equitybank.com
Media Contact:
SVP, Senior Director of Marketing
(816) 505-4063
jhanley@equitybank.com
Unaudited Financial Tables
- Table 1. Selected Financial Highlights
- Table 2. Year-to-Date Analysis of Changes in Net Interest Income
- Table 3. Quarterly Analysis of Changes in Net Interest Income
- Table 4. Consolidated Balance Sheets
- Table 5. Consolidated Statements of Income
- Table 6. 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 | ||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||||||||
Statement of Income Data | ||||||||||||||||||||
Net interest income | $ | 31,526 | $ | 31,288 | $ | 30,639 | $ | 33,336 | $ | 32,755 | ||||||||||
Provision for loan losses | 679 | 974 | 15,646 | 750 | 1,291 | |||||||||||||||
Net gains (losses) from securities transactions | 4 | 7 | 6 | 5 | (4 | ) | ||||||||||||||
Other non-interest income | 6,568 | 6,444 | 5,318 | 5,444 | 5,437 | |||||||||||||||
Total non-interest income | 6,572 | 6,451 | 5,324 | 5,449 | 5,433 | |||||||||||||||
Merger expense | — | 276 | 639 | 938 | 757 | |||||||||||||||
Other non-interest expense | 24,223 | 24,747 | 24,904 | 24,200 | 22,890 | |||||||||||||||
Total non-interest expense | 24,223 | 25,023 | 25,543 | 25,138 | 23,647 | |||||||||||||||
Income (loss) before income taxes | 13,196 | 11,742 | (5,226 | ) | 12,897 | 13,250 | ||||||||||||||
Provision for income taxes (benefits) | 2,790 | 2,510 | (1,153 | ) | 2,972 | 2,928 | ||||||||||||||
Net income (loss) | 10,406 | 9,232 | (4,073 | ) | 9,925 | 10,322 | ||||||||||||||
Net income (loss) allocable to common stockholders | 10,406 | 9,232 | (4,073 | ) | 9,925 | 10,322 | ||||||||||||||
Basic earnings (loss) per share | 0.67 | 0.59 | (0.26 | ) | 0.63 | 0.65 | ||||||||||||||
Diluted earnings (loss) per share | 0.66 | 0.58 | (0.26 | ) | 0.62 | 0.64 | ||||||||||||||
Balance Sheet Data (at period end) | ||||||||||||||||||||
Available-for-sale securities | $ | 152,680 | $ | 161,082 | $ | 166,355 | $ | 168,875 | $ | 172,388 | ||||||||||
Held-to-maturity securities | 764,163 | 766,950 | 749,493 | 748,356 | 713,899 | |||||||||||||||
Gross loans held for investment | 2,600,924 | 2,679,985 | 2,618,986 | 2,575,408 | 2,598,729 | |||||||||||||||
Allowance for loan losses | 17,875 | 17,777 | 26,340 | 11,454 | 11,010 | |||||||||||||||
Intangible assets, net | 158,350 | 159,147 | 159,944 | 154,665 | 155,430 | |||||||||||||||
Total assets | 4,074,663 | 4,180,074 | 4,065,354 | 4,061,716 | 3,931,036 | |||||||||||||||
Total deposits | 3,106,929 | 3,185,893 | 3,260,870 | 3,123,447 | 2,821,246 | |||||||||||||||
Non-time deposits | 2,177,820 | 2,192,534 | 2,220,110 | 2,115,541 | 1,969,715 | |||||||||||||||
Borrowings | 480,000 | 515,582 | 331,221 | 464,676 | 652,755 | |||||||||||||||
Total liabilities | 3,607,613 | 3,721,668 | 3,611,891 | 3,605,775 | 3,487,799 | |||||||||||||||
Total stockholders’ equity | 467,050 | 458,406 | 453,463 | 455,941 | 443,237 | |||||||||||||||
Tangible common equity* | 308,700 | 299,259 | 293,519 | 301,276 | 287,807 | |||||||||||||||
Selected Average Balance Sheet Data (quarterly average) | ||||||||||||||||||||
Investment securities | $ | 926,839 | $ | 924,914 | $ | 918,804 | $ | 893,642 | $ | 860,940 | ||||||||||
Total gross loans receivable | 2,646,454 | 2,655,256 | 2,560,030 | 2,590,610 | 2,516,833 | |||||||||||||||
Interest-earnings assets | 3,657,970 | 3,665,618 | 3,560,815 | 3,578,487 | 3,457,871 | |||||||||||||||
Total assets | 4,030,606 | 4,025,764 | 3,926,359 | 3,935,722 | 3,804,114 | |||||||||||||||
Interest-bearing deposits | 2,673,007 | 2,726,443 | 2,709,596 | 2,501,227 | 2,251,937 | |||||||||||||||
Borrowings | 390,562 | 347,103 | 269,492 | 480,417 | 642,575 | |||||||||||||||
Total interest-bearing liabilities | 3,063,569 | 3,073,546 | 2,979,088 | 2,981,644 | 2,894,512 | |||||||||||||||
Total deposits | 3,152,785 | 3,200,624 | 3,178,164 | 2,991,657 | 2,709,741 | |||||||||||||||
Total liabilities | 3,567,354 | 3,568,661 | 3,466,646 | 3,486,272 | 3,364,343 | |||||||||||||||
Total stockholders' equity | 463,252 | 457,103 | 459,713 | 449,450 | 439,771 | |||||||||||||||
Tangible common equity* | 304,492 | 297,541 | 302,398 | 294,506 | 289,515 | |||||||||||||||
Performance ratios | ||||||||||||||||||||
Return on average assets (ROAA) annualized | 1.02 | % | 0.92 | % | (0.42 | )% | 1.00 | % | 1.08 | % | ||||||||||
Return on average equity (ROAE) annualized | 8.91 | % | 8.10 | % | (3.59 | )% | 8.76 | % | 9.31 | % | ||||||||||
Return on average tangible common equity (ROATCE) annualized* | 14.38 | % | 13.29 | % | (4.62 | )% | 14.17 | % | 14.91 | % | ||||||||||
Yield on loans annualized | 5.70 | % | 5.74 | % | 5.79 | % | 5.91 | % | 5.73 | % | ||||||||||
Cost of interest-bearing deposits annualized | 1.56 | % | 1.64 | % | 1.61 | % | 1.45 | % | 1.15 | % | ||||||||||
Cost of total deposits annualized | 1.32 | % | 1.40 | % | 1.37 | % | 1.21 | % | 0.95 | % | ||||||||||
Net interest margin annualized | 3.42 | % | 3.42 | % | 3.49 | % | 3.70 | % | 3.76 | % | ||||||||||
Efficiency ratio* | 63.59 | % | 65.59 | % | 69.26 | % | 62.40 | % | 59.93 | % | ||||||||||
Non-interest income / average assets | 0.65 | % | 0.64 | % | 0.55 | % | 0.55 | % | 0.57 | % | ||||||||||
Non-interest expense / average assets | 2.38 | % | 2.49 | % | 2.64 | % | 2.53 | % | 2.47 | % | ||||||||||
Capital Ratios | ||||||||||||||||||||
Tier 1 Leverage Ratio | 8.48 | % | 8.26 | % | 8.37 | % | 8.60 | % | 8.60 | % | ||||||||||
Common Equity Tier 1 Capital Ratio | 11.05 | % | 10.46 | % | 10.46 | % | 10.95 | % | 10.49 | % | ||||||||||
Tier 1 Risk Based Capital Ratio | 11.56 | % | 10.95 | % | 10.96 | % | 11.45 | % | 10.99 | % | ||||||||||
Total Risk Based Capital Ratio | 12.19 | % | 11.56 | % | 11.87 | % | 11.86 | % | 11.37 | % | ||||||||||
Total stockholders' equity to total assets | 11.46 | % | 10.97 | % | 11.15 | % | 11.23 | % | 11.28 | % | ||||||||||
Tangible common equity to tangible assets* | 7.88 | % | 7.44 | % | 7.52 | % | 7.71 | % | 7.62 | % | ||||||||||
Book value per common share | $ | 30.25 | $ | 29.45 | $ | 28.66 | $ | 28.87 | $ | 28.07 | ||||||||||
Tangible book value per common share* | $ | 19.99 | $ | 19.23 | $ | 18.55 | $ | 19.08 | $ | 18.22 | ||||||||||
Tangible book value per diluted common share* | $ | 19.73 | $ | 18.99 | $ | 18.30 | $ | 18.73 | $ | 17.86 |
* The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures, see Table 6. Non-GAAP Financial Measures
TABLE 2. YEAR-TO-DATE ANALYSIS OF CHANGES IN NET INTEREST INCOME (Unaudited)
(Dollars in thousands)
For the nine months ended | For the nine months ended | |||||||||||||||||
September 30, 2019 | September 30, 2018 | |||||||||||||||||
Average Outstanding Balance |
Interest Income/ Expense |
Average Yield/ Rate (3) (4) |
Average Outstanding Balance |
Interest Income/ Expense |
Average Yield/ Rate (3) (4) |
|||||||||||||
Interest-earning assets | ||||||||||||||||||
Loans (1) | $ | 2,620,897 | $ | 112,611 | 5.74 | % | $ | 2,320,402 | $ | 98,484 | 5.67 | % | ||||||
Total securities | 923,548 | 17,867 | 2.59 | % | 776,271 | 15,672 | 2.70 | % | ||||||||||
Federal funds sold and other | 84,045 | 2,037 | 3.24 | % | 72,102 | 1,820 | 3.38 | % | ||||||||||
Total interest-earning assets | 3,628,490 | 132,515 | 4.88 | % | 3,168,775 | 115,976 | 4.89 | % | ||||||||||
Interest-bearing liabilities | ||||||||||||||||||
Total interest-bearing demand and savings | 1,705,612 | 16,914 | 1.33 | % | 1,359,657 | 8,155 | 0.80 | % | ||||||||||
Certificates of deposit | 997,270 | 15,467 | 2.07 | % | 789,133 | 8,411 | 1.43 | % | ||||||||||
Total interest-bearing deposits | 2,702,882 | 32,381 | 1.60 | % | 2,148,790 | 16,566 | 1.03 | % | ||||||||||
FHLB advances & LOC | 266,118 | 5,103 | 2.56 | % | 442,370 | 6,548 | 1.98 | % | ||||||||||
Other borrowings | 70,044 | 1,578 | 3.01 | % | 67,644 | 1,400 | 2.77 | % | ||||||||||
Total interest-bearing liabilities | 3,039,044 | 39,062 | 1.72 | % | 2,658,804 | 24,514 | 1.23 | % | ||||||||||
Net interest income | $ | 93,453 | $ | 91,462 | ||||||||||||||
Interest rate spread | 3.16 | % | 3.66 | % | ||||||||||||||
Net interest margin (2) | 3.44 | % | 3.86 | % | ||||||||||||||
(1) Average loan balances include nonaccrual loans. | ||||||||||||||||||
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period. | ||||||||||||||||||
(3) Tax exempt income is not included in the above table on a tax-equivalent basis. | ||||||||||||||||||
(4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts. | ||||||||||||||||||
For the nine months ended | |||||||||
September 30, 2019 vs. 2018 | |||||||||
Total Increase/(Decrease) | |||||||||
Volume Variance (1) | Yield/Rate Variance (1) |
Total Variance | |||||||
Interest-earning assets | |||||||||
Loans | $ | 12,897 | $ | 1,230 | $ | 14,127 | |||
Total securities | 2,835 | (640 | ) | 2,195 | |||||
Federal funds sold and other | 292 | (75 | ) | 217 | |||||
Total interest-earning assets | 16,024 | 515 | 16,539 | ||||||
Interest-bearing liabilities | |||||||||
Total interest-bearing demand and savings | 2,485 | 6,274 | 8,759 | ||||||
Certificates of deposit | 2,589 | 4,467 | 7,056 | ||||||
Total interest-bearing deposits | 5,074 | 10,741 | 15,815 | ||||||
FHLB advances & LOC | (3,052 | ) | 1,607 | (1,445 | ) | ||||
Other borrowings | 43 | 135 | 178 | ||||||
Total interest-bearing liabilities | 2,065 | 12,483 | 14,548 | ||||||
Net interest income | $ | 13,959 | $ | (11,968 | ) | $ | 1,991 | ||
(1) The effect of changes in volume is determined by multiplying the change in volume by the previous year's average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the prior year's volume. The changes attributable to both volume and rate, which cannot be segregated, have been allocated to the volume variance and the rate variance in proportion to the relationship of the absolute dollar amount of the change in each. |
TABLE 3. QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME (Unaudited)
(Dollars in thousands)
For the three months ended | For the three months ended | ||||||||||||||||
September 30, 2019 | September 30, 2018 | ||||||||||||||||
Average Outstanding Balance |
Interest Income/ Expense |
Average Yield/ Rate (3) (4) |
Average Outstanding Balance |
Interest Income/ Expense |
Average Yield/ Rate (3) (4) |
||||||||||||
Interest-earning assets | |||||||||||||||||
Loans (1) | $ | 2,646,454 | $ | 38,051 | 5.70 | % | $ | 2,516,833 | $ | 36,335 | 5.73 | % | |||||
Total securities | 926,839 | 5,718 | 2.45 | % | 860,940 | 5,933 | 2.73 | % | |||||||||
Federal funds sold and other | 84,677 | 780 | 3.66 | % | 80,098 | 754 | 3.74 | % | |||||||||
Total interest-earning assets | 3,657,970 | 44,549 | 4.83 | % | 3,457,871 | 43,022 | 4.94 | % | |||||||||
Interest-bearing liabilities | |||||||||||||||||
Total interest-bearing demand and savings | 1,707,459 | 5,389 | 1.25 | % | 1,438,616 | 3,342 | 0.92 | % | |||||||||
Certificates of deposit | 965,548 | 5,118 | 2.10 | % | 813,321 | 3,168 | 1.55 | % | |||||||||
Total interest-bearing deposits | 2,673,007 | 10,507 | 1.56 | % | 2,251,937 | 6,510 | 1.15 | % | |||||||||
FHLB advances & LOC | 320,528 | 1,957 | 2.42 | % | 565,715 | 3,155 | 2.21 | % | |||||||||
Other borrowings | 70,034 | 559 | 3.16 | % | 76,860 | 602 | 3.11 | % | |||||||||
Total interest-bearing liabilities | 3,063,569 | 13,023 | 1.69 | % | 2,894,512 | 10,267 | 1.41 | % | |||||||||
Net interest income | $ | 31,526 | $ | 32,755 | |||||||||||||
Interest rate spread | 3.14 | % | 3.53 | % | |||||||||||||
Net interest margin (2) | 3.42 | % | 3.76 | % | |||||||||||||
(1) Average loan balances include nonaccrual loans. | |||||||||||||||||
(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period. | |||||||||||||||||
(3) Tax exempt income is not included in the above table on a tax-equivalent basis. | |||||||||||||||||
(4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts. | |||||||||||||||||
For the three months ended | |||||||||
September 30, 2019 vs. 2018 | |||||||||
Total Increase/(Decrease) | |||||||||
Volume Variance (1) | Yield/Rate Variance (1) |
Total Variance | |||||||
Interest-earning assets | |||||||||
Loans | $ | 1,864 | $ | (148 | ) | $ | 1,716 | ||
Total securities | 421 | (636 | ) | (215 | ) | ||||
Federal funds sold and other | 42 | (16 | ) | 26 | |||||
Total interest-earning assets | 2,327 | (800 | ) | 1,527 | |||||
Interest-bearing liabilities | |||||||||
Total interest-bearing demand and savings | 726 | 1,321 | 2,047 | ||||||
Certificates of deposit | 666 | 1,284 | 1,950 | ||||||
Total interest-bearing deposits | 1,392 | 2,605 | 3,997 | ||||||
FHLB advances & LOC | (1,474 | ) | 276 | (1,198 | ) | ||||
Other borrowings | (73 | ) | 30 | (43 | ) | ||||
Total interest-bearing liabilities | (155 | ) | 2,911 | 2,756 | |||||
Net interest income | $ | 2,482 | $ | (3,711 | ) | $ | (1,229 | ) | |
(1) The effect of changes in volume is determined by multiplying the change in volume by the previous year's average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the prior year's volume. The changes attributable to both volume and rate, which cannot be segregated, have been allocated to the volume variance and the rate variance in proportion to the relationship of the absolute dollar amount of the change in each. |
TABLE 4. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
September 30, | December 31, | |||||||
2019 | 2018 | |||||||
ASSETS | ||||||||
Cash and due from banks | $ | 167,895 | $ | 192,735 | ||||
Federal funds sold | 158 | 83 | ||||||
Cash and cash equivalents | 168,053 | 192,818 | ||||||
Interest-bearing time deposits in other banks | 3,497 | 4,991 | ||||||
Available-for-sale securities | 152,680 | 168,875 | ||||||
Held-to-maturity securities, fair value of $778,966 and $739,989 | 764,163 | 748,356 | ||||||
Loans held for sale | 8,784 | 2,972 | ||||||
Loans, net of allowance for loan losses of $17,875 and $11,454 | 2,583,049 | 2,563,954 | ||||||
Other real estate owned, net | 5,944 | 6,372 | ||||||
Premises and equipment, net | 84,481 | 80,442 | ||||||
Bank-owned life insurance | 74,599 | 73,105 | ||||||
Federal Reserve Bank and Federal Home Loan Bank stock | 31,710 | 29,214 | ||||||
Interest receivable | 16,994 | 17,372 | ||||||
Goodwill | 136,432 | 131,712 | ||||||
Core deposit intangibles, net | 20,727 | 21,725 | ||||||
Other | 23,550 | 19,808 | ||||||
Total assets | $ | 4,074,663 | $ | 4,061,716 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Deposits | ||||||||
Demand | $ | 488,214 | $ | 503,831 | ||||
Total non-interest-bearing deposits | 488,214 | 503,831 | ||||||
Savings, NOW and money market | 1,689,606 | 1,611,710 | ||||||
Time | 929,109 | 1,007,906 | ||||||
Total interest-bearing deposits | 2,618,715 | 2,619,616 | ||||||
Total deposits | 3,106,929 | 3,123,447 | ||||||
Federal funds purchased and retail repurchase agreements | 40,652 | 50,068 | ||||||
Federal Home Loan Bank advances | 410,093 | 384,898 | ||||||
Bank stock loan | 14,770 | 15,450 | ||||||
Subordinated debentures | 14,485 | 14,260 | ||||||
Contractual obligations | 3,744 | 3,965 | ||||||
Interest payable and other liabilities | 16,940 | 13,687 | ||||||
Total liabilities | 3,607,613 | 3,605,775 | ||||||
Commitments and contingent liabilities | ||||||||
Stockholders’ equity | ||||||||
Common stock | 174 | 173 | ||||||
Additional paid-in capital | 382,155 | 379,085 | ||||||
Retained earnings | 115,743 | 101,326 | ||||||
Accumulated other comprehensive loss | (423 | ) | (4,867 | ) | ||||
Employee stock loans | (77 | ) | (121 | ) | ||||
Treasury stock | (30,522 | ) | (19,655 | ) | ||||
Total stockholders’ equity | 467,050 | 455,941 | ||||||
Total liabilities and stockholders’ equity | $ | 4,074,663 | $ | 4,061,716 |
TABLE 5. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Interest and dividend income | ||||||||||||||||
Loans, including fees | $ | 38,051 | $ | 36,335 | $ | 112,611 | $ | 98,484 | ||||||||
Securities, taxable | 4,673 | 4,836 | 14,724 | 12,671 | ||||||||||||
Securities, nontaxable | 1,045 | 1,097 | 3,143 | 3,001 | ||||||||||||
Federal funds sold and other | 780 | 754 | 2,037 | 1,820 | ||||||||||||
Total interest and dividend income | 44,549 | 43,022 | 132,515 | 115,976 | ||||||||||||
Interest expense | ||||||||||||||||
Deposits | 10,507 | 6,510 | 32,381 | 16,566 | ||||||||||||
Federal funds purchased and retail repurchase agreements | 50 | 30 | 116 | 77 | ||||||||||||
Federal Home Loan Bank advances | 1,957 | 3,155 | 5,103 | 6,548 | ||||||||||||
Bank stock loan | 198 | 265 | 507 | 448 | ||||||||||||
Subordinated debentures | 311 | 307 | 955 | 875 | ||||||||||||
Total interest expense | 13,023 | 10,267 | 39,062 | 24,514 | ||||||||||||
Net interest income | 31,526 | 32,755 | 93,453 | 91,462 | ||||||||||||
Provision for loan losses | 679 | 1,291 | 17,299 | 3,211 | ||||||||||||
Net interest income after provision for loan losses | 30,847 | 31,464 | 76,154 | 88,251 | ||||||||||||
Non-interest income | ||||||||||||||||
Service charges and fees | 2,268 | 1,912 | 6,431 | 5,221 | ||||||||||||
Debit card income | 2,205 | 1,667 | 6,129 | 4,442 | ||||||||||||
Mortgage banking | 820 | 392 | 1,699 | 1,017 | ||||||||||||
Increase in value of bank-owned life insurance | 506 | 521 | 1,493 | 1,681 | ||||||||||||
Net gains (losses) from securities transactions | 4 | (4 | ) | 17 | (14 | ) | ||||||||||
Other | 769 | 945 | 2,578 | 1,929 | ||||||||||||
Total non-interest income | 6,572 | 5,433 | 18,347 | 14,276 | ||||||||||||
Non-interest expense | ||||||||||||||||
Salaries and employee benefits | 13,039 | 12,361 | 40,204 | 34,881 | ||||||||||||
Net occupancy and equipment | 2,177 | 2,125 | 6,332 | 5,938 | ||||||||||||
Data processing | 2,673 | 2,195 | 7,436 | 5,837 | ||||||||||||
Professional fees | 991 | 686 | 3,375 | 2,245 | ||||||||||||
Advertising and business development | 806 | 802 | 2,174 | 2,086 | ||||||||||||
Telecommunications | 523 | 451 | 1,593 | 1,252 | ||||||||||||
FDIC insurance | 111 | 457 | 1,119 | 1,211 | ||||||||||||
Courier and postage | 352 | 321 | 1,020 | 879 | ||||||||||||
Free nationwide ATM cost | 459 | 364 | 1,240 | 986 | ||||||||||||
Amortization of core deposit intangibles | 784 | 694 | 2,348 | 1,703 | ||||||||||||
Loan expense | 165 | 319 | 608 | 810 | ||||||||||||
Other real estate owned | (88 | ) | 355 | 326 | (48 | ) | ||||||||||
Merger expenses | — | 757 | 915 | 6,524 | ||||||||||||
Other | 2,231 | 1,760 | 6,099 | 4,945 | ||||||||||||
Total non-interest expense | 24,223 | 23,647 | 74,789 | 69,249 | ||||||||||||
Income before income tax | 13,196 | 13,250 | 19,712 | 33,278 | ||||||||||||
Provision for income taxes | 2,790 | 2,928 | 4,147 | 7,378 | ||||||||||||
Net income and net income allocable to common stockholders | $ | 10,406 | $ | 10,322 | $ | 15,565 | $ | 25,900 | ||||||||
Basic earnings per share | $ | 0.67 | $ | 0.65 | $ | 0.99 | $ | 1.70 | ||||||||
Diluted earnings per share | $ | 0.66 | $ | 0.64 | $ | 0.98 | $ | 1.66 |
TABLE 6. Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands, except per share data)
As of and for the three months ended | ||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
2019 | 2019 | 2019 | 2018 | 2018 | ||||||||||||||||
Total stockholders' equity | $ | 467,050 | $ | 458,406 | $ | 453,463 | $ | 455,941 | $ | 443,237 | ||||||||||
Less: goodwill | 136,432 | 136,432 | 136,432 | 131,712 | 131,723 | |||||||||||||||
Less: core deposit intangibles, net | 20,727 | 21,512 | 22,296 | 21,725 | 22,466 | |||||||||||||||
Less: mortgage servicing asset, net | 7 | 8 | 10 | 11 | 13 | |||||||||||||||
Less: naming rights, net | 1,184 | 1,195 | 1,206 | 1,217 | 1,228 | |||||||||||||||
Tangible common equity | $ | 308,700 | $ | 299,259 | $ | 293,519 | $ | 301,276 | $ | 287,807 | ||||||||||
Common shares issued at period end | 15,440,334 | 15,563,873 | 15,820,303 | 15,793,095 | 15,792,695 | |||||||||||||||
RSU shares vested | — | — | 108 | — | — | |||||||||||||||
Common shares outstanding at period end | 15,440,334 | 15,563,873 | 15,820,411 | 15,793,095 | 15,792,695 | |||||||||||||||
Diluted common shares outstanding at period end | 15,647,456 | 15,758,747 | 16,036,700 | 16,085,729 | 16,118,067 | |||||||||||||||
Book value per common share | $ | 30.25 | $ | 29.45 | $ | 28.66 | $ | 28.87 | $ | 28.07 | ||||||||||
Tangible book value per common share | $ | 19.99 | $ | 19.23 | $ | 18.55 | $ | 19.08 | $ | 18.22 | ||||||||||
Tangible book value per diluted common share | $ | 19.73 | $ | 18.99 | $ | 18.30 | $ | 18.73 | $ | 17.86 | ||||||||||
Total assets | $ | 4,074,663 | $ | 4,180,074 | $ | 4,065,354 | $ | 4,061,716 | $ | 3,931,036 | ||||||||||
Less: goodwill | 136,432 | 136,432 | 136,432 | 131,712 | 131,723 | |||||||||||||||
Less: core deposit intangibles, net | 20,727 | 21,512 | 22,296 | 21,725 | 22,466 | |||||||||||||||
Less: mortgage servicing asset, net | 7 | 8 | 10 | 11 | 13 | |||||||||||||||
Less: naming rights, net | 1,184 | 1,195 | 1,206 | 1,217 | 1,228 | |||||||||||||||
Tangible assets | $ | 3,916,313 | $ | 4,020,927 | $ | 3,905,410 | $ | 3,907,051 | $ | 3,775,606 | ||||||||||
Total stockholders' equity to total assets | 11.46 | % | 10.97 | % | 11.15 | % | 11.23 | % | 11.28 | % | ||||||||||
Tangible common equity to tangible assets | 7.88 | % | 7.44 | % | 7.52 | % | 7.71 | % | 7.62 | % | ||||||||||
Total average stockholders' equity | $ | 463,252 | $ | 457,103 | $ | 459,713 | $ | 449,450 | $ | 439,771 | ||||||||||
Less: average intangible assets | 158,760 | 159,562 | 157,315 | 154,944 | 150,256 | |||||||||||||||
Average tangible common equity | $ | 304,492 | $ | 297,541 | $ | 302,398 | $ | 294,506 | $ | 289,515 | ||||||||||
Net income (loss) allocable to common stockholders | $ | 10,406 | $ | 9,232 | $ | (4,073 | ) | $ | 9,925 | $ | 10,322 | |||||||||
Amortization of intangible assets | 797 | 797 | 791 | 752 | 707 | |||||||||||||||
Less: tax effect of intangible assets amortization | 167 | 167 | 166 | 158 | 148 | |||||||||||||||
Adjusted net income (loss) allocable to common stockholders | $ | 11,036 | $ | 9,862 | $ | (3,448 | ) | $ | 10,519 | $ | 10,881 | |||||||||
Return on total average stockholders' equity (ROAE) annualized | 8.91 | % | 8.10 | % | (3.59 | )% | 8.76 | % | 9.31 | % | ||||||||||
Return on average tangible common equity (ROATCE) annualized | 14.38 | % | 13.29 | % | (4.62 | )% | 14.17 | % | 14.91 | % | ||||||||||
Non-interest expense | $ | 24,223 | $ | 25,023 | $ | 25,543 | $ | 25,138 | $ | 23,647 | ||||||||||
Less: merger expenses | — | 276 | 639 | 938 | 757 | |||||||||||||||
Non-interest expense, excluding merger expenses | $ | 24,223 | $ | 24,747 | $ | 24,904 | $ | 24,200 | $ | 22,890 | ||||||||||
Net interest income | $ | 31,526 | $ | 31,288 | $ | 30,639 | $ | 33,336 | $ | 32,755 | ||||||||||
Non-interest income | 6,572 | 6,451 | 5,324 | 5,449 | 5,433 | |||||||||||||||
Less: net gains (losses) from securities transactions | 4 | 7 | 6 | 5 | (4 | ) | ||||||||||||||
Non-interest income, excluding gains (losses) from securities transactions | $ | 6,568 | $ | 6,444 | $ | 5,318 | $ | 5,444 | $ | 5,437 | ||||||||||
Net interest income plus non-interest income, excluding net gains (losses) from securities transactions | $ | 38,094 | $ | 37,732 | $ | 35,957 | $ | 38,780 | $ | 38,192 | ||||||||||
Non-interest expense to net interest income plus non-interest income | 63.58 | % | 66.31 | % | 71.03 | % | 64.81 | % | 61.92 | % | ||||||||||
Efficiency ratio | 63.59 | % | 65.59 | % | 69.26 | % | 62.40 | % | 59.93 | % |
Source: Equity Bancshares, Inc.