Core earnings of
“I’m very proud of the collaboration and entrepreneurial spirit of our Equity teams. Our lending, operations, and customer service teams have worked together to create innovative processes and efficiencies that benefit our customers” said
“Throughout our footprint, our
In the quarter ended
The results in the quarter ended
Notable Items:
- The Company authorized a second stock repurchase program in the third quarter of 2020 totaling 800,000 shares. During the quarter ended
March 31, 2021 , the Company repurchased 233,012 shares at a weighted average cost of$25.35 per share, totaling$5.9 million . At the end of the quarter, capacity of 253,757 shares remained under the current repurchase program. - The Company adopted ASU 2016-13, also known as Current Expected Credit Losses (“CECL”) at
January 1, 2021 . Upon implementation, the Company recognized a day one after tax$12.4 million reduction in stockholders’ equity and transferred$11.8 million of purchase credit impaired (“PCI”) marks to the allowance for credit losses (“ACL”) as purchase credit deteriorated (“PCD”) reserves. On implementation, the allowance for credit losses, including reserve on unfunded commitments, increased to$62.1 million from$33.7 million atDecember 31, 2020 . - During the quarter ended
March 31, 2021 , there was a release of reserve for credit losses of$5.8 million as compared to a$1.0 million provision for loan losses in the quarter endedDecember 31, 2020 .
Equity’s Balance Sheet Highlights:
- Total loans held for investment of
$2.80 billion atMarch 31, 2021 , as compared to total loans held for investment of$2.59 billion atDecember 31, 2020 . - Total deposits of
$3.63 billion atMarch 31, 2021 , as compared to$3.45 billion atDecember 31, 2020 . Signature deposits, including core deposits comprised of checking, savings and money market accounts, were$3.05 billion atMarch 31, 2021 , relative to$2.82 billion atDecember 31, 2020 . Included in this signature deposit growth was a$180.7 million increase in non-interest-bearing deposits, from$791.6 million atDecember 31, 2020 , to$972.4 million atMarch 31, 2021 . - Total assets were
$4.20 billion atMarch 31, 2021 , as compared to$4.01 billion atDecember 31, 2020 .
Financial Results for the Quarter Ended
Net income allocable to common stockholders was
Net Interest Income
Net interest income was
Provision for Credit Losses
During the three months ended
Non-Interest Income
Total non-interest income was
Non-Interest Expense
Total non-interest expense for the quarter ended
Asset Quality
As of
The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.5%, the total capital to risk-weighted assets was 17.0% and the total leverage ratio was 8.7% at
Non-GAAP Financial Measures
In addition to evaluating the Company’s results of operations in accordance with accounting principles generally accepted in
The efficiency ratio is used as a common measure by banks as a comparable metric to understand the Company’s expense structure relative to its total revenue; in other words, for every dollar of total revenue recognized, how much of that dollar is expended. To improve the comparability of the ratio to our peers, non-core items are excluded. To improve transparency and acknowledging that banks are not consistent in their definition of the efficiency ratio, we include our calculation of this non-GAAP measure.
Return on average assets before income tax provision, provision for loan losses and goodwill impairment is a measure that the Company uses to understand fundamental operating performance before these expenses. Used as a ratio relative to average assets, we believe it demonstrates the “core” performance and can be viewed as an alternative measure of how efficiently the Company services its asset base. Used as a ratio relative to average equity, it can function as an alternative measure of the Company’s earnings performance in relationship to its equity.
Tangible common equity and related measures are non-GAAP financial measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These financial measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Return on average tangible common equity is used by management and readers of our financial statements to understand how efficiently the Company is deploying its common equity. Companies that are able to demonstrate more efficient use of common equity are more likely to be viewed favorably by current and prospective investors.
The Company believes that disclosing these non-GAAP financial measures is both useful internally and is expected by our investors and analysts in order to understand the overall performance of the Company. Other companies may calculate and define their non-GAAP financial measures and supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in Table 8 in the following press release tables.
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
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 COVID-19 related impacts; 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
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. Quarterly Consolidated Statements of Operations
- Table 2. Consolidated Balance Sheets
- Table 3. Selected Financial Highlights
- Table 4. Quarter-to-Date Net Interest Income Analysis
- Table 5. Quarter-Over-Quarter Net Interest Income Analysis
- Table 6. Non-GAAP Financial Measures
TABLE 1. QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share data)
As of and for the three months ended | ||||||||||||||||||||
2021 |
2020 |
2020 |
2020 |
2020 |
||||||||||||||||
Interest and dividend income | ||||||||||||||||||||
Loans, including fees | $ | 31,001 | $ | 35,383 | $ | 32,278 | $ | 32,627 | $ | 34,376 | ||||||||||
Securities, taxable | 3,799 | 3,408 | 3,476 | 4,017 | 4,620 | |||||||||||||||
Securities, nontaxable | 724 | 913 | 923 | 880 | 966 | |||||||||||||||
Federal funds sold and other | 288 | 285 | 405 | 409 | 595 | |||||||||||||||
Total interest and dividend income | 35,812 | 39,989 | 37,082 | 37,933 | 40,557 | |||||||||||||||
Interest expense | ||||||||||||||||||||
Deposits | 2,410 | 2,755 | 3,064 | 3,899 | 6,864 | |||||||||||||||
Federal funds purchased and retail repurchase agreements | 22 | 25 | 25 | 24 | 31 | |||||||||||||||
65 | 94 | 471 | 552 | 1,175 | ||||||||||||||||
— | — | — | 6 | — | ||||||||||||||||
Bank stock loan | — | — | — | 306 | 109 | |||||||||||||||
Subordinated debentures | 1,556 | 1,556 | 1,415 | 255 | 283 | |||||||||||||||
Total interest expense | 4,053 | 4,430 | 4,975 | 5,042 | 8,462 | |||||||||||||||
Net interest income | 31,759 | 35,559 | 32,107 | 32,891 | 32,095 | |||||||||||||||
Provision for credit losses | (5,756 | ) | 1,000 | 815 | 12,500 | 9,940 | ||||||||||||||
Net interest income after provision for credit losses | 37,515 | 34,559 | 31,292 | 20,391 | 22,155 | |||||||||||||||
Non-interest income | ||||||||||||||||||||
Service charges and fees | 1,596 | 1,759 | 1,706 | 1,365 | 2,026 | |||||||||||||||
Debit card income | 2,350 | 2,401 | 2,491 | 2,201 | 2,043 | |||||||||||||||
Mortgage banking | 935 | 855 | 877 | 831 | 590 | |||||||||||||||
Increase in value of bank-owned life insurance | 601 | 489 | 489 | 481 | 482 | |||||||||||||||
Net gain on acquisition | (78 | ) | 2,145 | — | — | — | ||||||||||||||
Net gains (losses) from securities transactions | 17 | (1 | ) | — | 4 | 8 | ||||||||||||||
Other | 1,291 | 852 | 922 | 850 | 157 | |||||||||||||||
Total non-interest income | 6,712 | 8,500 | 6,485 | 5,732 | 5,306 | |||||||||||||||
Non-interest expense | ||||||||||||||||||||
Salaries and employee benefits | 12,722 | 14,053 | 13,877 | 12,695 | 13,504 | |||||||||||||||
Net occupancy and equipment | 2,368 | 2,206 | 2,224 | 2,119 | 2,235 | |||||||||||||||
Data processing | 2,663 | 2,748 | 2,817 | 2,763 | 2,663 | |||||||||||||||
Professional fees | 1,073 | 1,095 | 877 | 943 | 1,367 | |||||||||||||||
Advertising and business development | 682 | 801 | 598 | 403 | 696 | |||||||||||||||
Telecommunications | 580 | 510 | 486 | 390 | 487 | |||||||||||||||
415 | 797 | 360 | 414 | 517 | ||||||||||||||||
Courier and postage | 369 | 338 | 366 | 353 | 384 | |||||||||||||||
Free nationwide ATM cost | 472 | 423 | 439 | 327 | 420 | |||||||||||||||
Amortization of core deposit intangibles | 1,034 | 1,044 | 1,030 | 974 | 802 | |||||||||||||||
Loan expense | 238 | 161 | 107 | 287 | 234 | |||||||||||||||
Other real estate owned | 5 | 1,600 | 133 | 269 | 308 | |||||||||||||||
Merger expenses | 152 | 299 | — | — | — | |||||||||||||||
— | — | 104,831 | — | — | ||||||||||||||||
Other | 2,108 | 2,385 | 2,690 | 2,000 | 2,141 | |||||||||||||||
Total non-interest expense | 24,881 | 28,460 | 130,835 | 23,937 | 25,758 | |||||||||||||||
Income (loss) before income tax | 19,346 | 14,599 | (93,058 | ) | 2,186 | 1,703 | ||||||||||||||
Provision for income taxes (benefit) | 4,271 | 2,111 | (2,653 | ) | 497 | 445 | ||||||||||||||
Net income (loss) and net income (loss) allocable to common stockholders | $ | 15,075 | $ | 12,488 | $ | (90,405 | ) | $ | 1,689 | $ | 1,258 | |||||||||
Basic earnings (loss) per share | $ | 1.04 | $ | 0.85 | $ | (6.01 | ) | $ | 0.11 | $ | 0.08 | |||||||||
Diluted earnings (loss) per share | $ | 1.02 | $ | 0.84 | $ | (6.01 | ) | $ | 0.11 | $ | 0.08 | |||||||||
Weighted average common shares | 14,464,291 | 14,760,810 | 15,040,407 | 15,209,483 | 15,387,697 | |||||||||||||||
Weighted average diluted common shares | 14,734,083 | 14,934,058 | 15,040,407 | 15,304,009 | 15,595,024 |
TABLE 2. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
2021 |
2020 |
2020 |
2020 |
2020 |
||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 136,190 | $ | 280,150 | $ | 65,534 | $ | 178,045 | $ | 141,989 | ||||||||||
Federal funds sold | 498 | 548 | 305 | 245 | 263 | |||||||||||||||
Cash and cash equivalents | 136,688 | 280,698 | 65,839 | 178,290 | 142,252 | |||||||||||||||
Interest-bearing time deposits in other banks | 249 | 249 | 499 | 2,248 | 2,498 | |||||||||||||||
Available-for-sale securities | 998,100 | 871,827 | 798,576 | 177,228 | 187,812 | |||||||||||||||
Held-to-maturity securities(1) | — | — | — | 662,522 | 721,992 | |||||||||||||||
Loans held for sale | 8,609 | 12,394 | 9,053 | 4,802 | 6,494 | |||||||||||||||
Loans, net of allowance for credit losses(2) | 2,740,215 | 2,557,987 | 2,691,626 | 2,772,256 | 2,485,208 | |||||||||||||||
Other real estate owned, net | 10,559 | 11,733 | 8,727 | 7,374 | 5,870 | |||||||||||||||
Premises and equipment, net | 90,322 | 89,412 | 86,087 | 87,055 | 84,732 | |||||||||||||||
Bank-owned life insurance | 102,645 | 77,044 | 76,555 | 76,066 | 75,585 | |||||||||||||||
15,174 | 16,415 | 32,545 | 31,832 | 31,662 | ||||||||||||||||
Interest receivable | 16,655 | 15,831 | 18,110 | 19,598 | 15,549 | |||||||||||||||
31,601 | 31,601 | 31,601 | 136,432 | 136,432 | ||||||||||||||||
Core deposit intangibles, net | 15,023 | 16,057 | 17,101 | 18,131 | 19,105 | |||||||||||||||
Other | 30,344 | 32,108 | 29,252 | 31,435 | 28,641 | |||||||||||||||
Total assets | $ | 4,196,184 | $ | 4,013,356 | $ | 3,865,571 | $ | 4,205,269 | $ | 3,943,832 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Deposits | ||||||||||||||||||||
Demand | $ | 972,364 | $ | 791,639 | $ | 693,967 | $ | 756,613 | $ | 508,441 | ||||||||||
Total non-interest-bearing deposits | 972,364 | 791,639 | 693,967 | 756,613 | 508,441 | |||||||||||||||
Savings, NOW and money market | 2,074,261 | 2,029,097 | 1,816,307 | 1,800,132 | 1,668,145 | |||||||||||||||
Time | 587,905 | 626,854 | 623,344 | 690,522 | 783,811 | |||||||||||||||
Total interest-bearing deposits | 2,662,166 | 2,655,951 | 2,439,651 | 2,490,654 | 2,451,956 | |||||||||||||||
Total deposits | 3,634,530 | 3,447,590 | 3,133,618 | 3,247,267 | 2,960,397 | |||||||||||||||
Federal funds purchased and retail repurchase agreements | 40,339 | 36,029 | 46,295 | 51,557 | 37,113 | |||||||||||||||
9,926 | 10,144 | 167,862 | 344,900 | 389,620 | ||||||||||||||||
Bank stock loan | — | — | — | — | 40,000 | |||||||||||||||
Subordinated debentures | 87,788 | 87,684 | 87,537 | 55,575 | 14,638 | |||||||||||||||
Contractual obligations | 4,856 | 5,189 | 5,478 | 5,571 | 5,781 | |||||||||||||||
Interest payable and other liabilities | 20,930 | 19,071 | 22,609 | 20,633 | 18,932 | |||||||||||||||
Total liabilities | 3,798,369 | 3,605,707 | 3,463,399 | 3,725,503 | 3,466,481 | |||||||||||||||
Commitments and contingent liabilities | ||||||||||||||||||||
Stockholders’ equity | ||||||||||||||||||||
Common stock | 175 | 174 | 174 | 174 | 174 | |||||||||||||||
Additional paid-in capital | 387,939 | 386,820 | 386,017 | 384,955 | 383,850 | |||||||||||||||
Retained earnings | 53,459 | 50,787 | 38,299 | 128,704 | 127,015 | |||||||||||||||
Accumulated other comprehensive income (loss) | 12,019 | 19,781 | 21,074 | 3,390 | 3,769 | |||||||||||||||
Employee stock loans | — | (43 | ) | (43 | ) | (43 | ) | (43 | ) | |||||||||||
(55,777 | ) | (49,870 | ) | (43,349 | ) | (37,414 | ) | (37,414 | ) | |||||||||||
Total stockholders’ equity | 397,815 | 407,649 | 402,172 | 479,766 | 477,351 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,196,184 | $ | 4,013,356 | $ | 3,865,571 | $ | 4,205,269 | $ | 3,943,832 | ||||||||||
(1) Fair market value of held-to-maturity securities | $ | — | $ | — | $ | — | $ | 689,206 | $ | 750,900 | ||||||||||
(2) Allowance for credit losses | 55,525 | 33,709 | 34,087 | 34,078 | 21,915 |
TABLE 3. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
(Dollars in thousands, except per share data)
As of and for the three months ended | ||||||||||||||||||||
2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||
Loans Held-For-Investment by Type | ||||||||||||||||||||
Commercial real estate | $ | 1,218,545 | $ | 1,188,696 | $ | 1,188,329 | $ | 1,191,336 | $ | 1,200,762 | ||||||||||
Commercial and industrial | 820,728 | 734,495 | 857,244 | 883,355 | 542,571 | |||||||||||||||
Residential real estate | 438,503 | 381,958 | 402,242 | 442,486 | 480,603 | |||||||||||||||
Agricultural real estate | 134,944 | 133,693 | 127,349 | 129,080 | 130,795 | |||||||||||||||
Consumer | 89,256 | 58,532 | 67,465 | 71,037 | 64,799 | |||||||||||||||
Agricultural | 93,764 | 94,322 | 83,084 | 89,040 | 87,593 | |||||||||||||||
Total loans held-for-investment | 2,795,740 | 2,591,696 | 2,725,713 | 2,806,334 | 2,507,123 | |||||||||||||||
Allowance for credit losses | (55,525 | ) | (33,709 | ) | (34,087 | ) | (34,078 | ) | (21,915 | ) | ||||||||||
Net loans held-for-investment | $ | 2,740,215 | $ | 2,557,987 | $ | 2,691,626 | $ | 2,772,256 | $ | 2,485,208 | ||||||||||
Asset Quality Ratios | ||||||||||||||||||||
Allowance for credit losses on loans and unfunded commitments to total loans |
2.02 | % | 1.30 | % | 1.25 | % | 1.21 | % | 0.87 | % | ||||||||||
Past due or nonaccrual loans to total loans | 2.58 | % | 1.99 | % | 2.12 | % | 1.88 | % | 2.47 | % | ||||||||||
Nonperforming assets to total assets | 1.67 | % | 1.36 | % | 1.55 | % | 1.37 | % | 1.22 | % | ||||||||||
Nonperforming assets to total loans plus other real estate owned |
2.50 | % | 2.10 | % | 2.19 | % | 2.05 | % | 1.92 | % | ||||||||||
Classified assets to bank total regulatory capital | 26.45 | % | 25.50 | % | 18.35 | % | 20.81 | % | 19.50 | % | ||||||||||
Selected Average Balance Sheet Data (QTD Average) | ||||||||||||||||||||
Investment securities | $ | 947,453 | $ | 814,114 | $ | 802,525 | $ | 877,308 | $ | 907,910 | ||||||||||
Total gross loans receivable | 2,736,918 | 2,692,223 | 2,758,680 | 2,806,865 | 2,525,344 | |||||||||||||||
Interest-earning assets | 3,891,140 | 3,647,730 | 3,679,168 | 3,786,629 | 3,519,267 | |||||||||||||||
Total assets | 4,143,752 | 3,910,628 | 4,041,187 | 4,159,336 | 3,888,205 | |||||||||||||||
Interest-bearing deposits | 2,690,159 | 2,551,219 | 2,430,407 | 2,487,187 | 2,531,508 | |||||||||||||||
Borrowings | 139,360 | 172,730 | 377,158 | 384,727 | 355,303 | |||||||||||||||
Total interest-bearing liabilities | 2,829,519 | 2,723,949 | 2,807,565 | 2,871,914 | 2,886,811 | |||||||||||||||
Total deposits | 3,577,625 | 2,960,791 | 3,145,810 | 3,257,631 | 3,021,181 | |||||||||||||||
Total liabilities | 3,748,114 | 3,501,056 | 3,558,099 | 3,675,731 | 3,405,638 | |||||||||||||||
Total stockholders' equity | 395,638 | 409,572 | 483,088 | 483,605 | 482,567 | |||||||||||||||
Tangible common equity* | 347,262 | 355,025 | 329,039 | 327,411 | 325,470 | |||||||||||||||
Performance ratios | ||||||||||||||||||||
Return on average assets (ROAA) annualized | 1.48 | % | 1.27 | % | (8.90 | )% | 0.16 | % | 0.13 | % | ||||||||||
Return on average assets before income tax, provision for loan losses and goodwill impairment* |
1.33 | % | 1.59 | % | 1.24 | % | 1.42 | % | 1.20 | % | ||||||||||
Return on average equity (ROAE) annualized | 15.45 | % | 12.13 | % | (74.45 | )% | 1.40 | % | 1.05 | % | ||||||||||
Return on average equity before income tax, provision for loan losses and goodwill impairment* |
13.93 | % | 15.15 | % | 10.37 | % | 12.21 | % | 9.70 | % | ||||||||||
Return on average tangible common equity (ROATCE) annualized* |
18.57 | % | 14.93 | % | (108.31 | )% | 3.03 | % | 2.35 | % | ||||||||||
Return on average tangible common equity adjusted for goodwill impairment* |
18.57 | % | 14.93 | % | 12.01 | % | 3.03 | % | 2.35 | % | ||||||||||
Yield on loans annualized | 4.59 | % | 5.23 | % | 4.65 | % | 4.68 | % | 5.47 | % | ||||||||||
Cost of interest-bearing deposits annualized | 0.36 | % | 0.43 | % | 0.50 | % | 0.63 | % | 1.09 | % | ||||||||||
Cost of total deposits annualized | 0.27 | % | 0.37 | % | 0.39 | % | 0.48 | % | 0.91 | % | ||||||||||
Net interest margin annualized | 3.31 | % | 3.88 | % | 3.47 | % | 3.49 | % | 3.67 | % | ||||||||||
Efficiency ratio* | 64.18 | % | 67.19 | % | 67.38 | % | 61.98 | % | 68.88 | % | ||||||||||
Non-interest income / average assets | 0.66 | % | 0.86 | % | 0.64 | % | 0.55 | % | 0.55 | % | ||||||||||
Non-interest expense / average assets | 2.44 | % | 2.90 | % | 12.88 | % | 2.31 | % | 2.66 | % | ||||||||||
Capital Ratios | ||||||||||||||||||||
Tier 1 Leverage Ratio | 8.73 | % | 9.30 | % | 8.76 | % | 8.52 | % | 9.02 | % | ||||||||||
Common Equity Tier 1 Capital Ratio | 12.52 | % | 12.82 | % | 12.76 | % | 12.02 | % | 11.67 | % | ||||||||||
Tier 1 Risk Based Capital Ratio | 13.07 | % | 13.37 | % | 13.32 | % | 12.57 | % | 12.20 | % | ||||||||||
Total Risk Based Capital Ratio | 17.02 | % | 17.35 | % | 17.35 | % | 15.33 | % | 13.00 | % | ||||||||||
Total stockholders' equity to total assets | 9.48 | % | 10.16 | % | 10.40 | % | 11.41 | % | 12.10 | % | ||||||||||
Tangible common equity to tangible assets* | 8.44 | % | 9.05 | % | 9.23 | % | 8.00 | % | 8.47 | % | ||||||||||
Book value per common share | $ | 27.66 | $ | 28.04 | $ | 27.08 | $ | 31.53 | $ | 31.41 | ||||||||||
Tangible book value per common share* | $ | 24.34 | $ | 24.68 | $ | 23.72 | $ | 21.29 | $ | 21.10 | ||||||||||
Tangible book value per diluted common share* | $ | 23.87 | $ | 24.32 | $ | 23.57 | $ | 21.13 | $ | 20.96 |
* 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 4. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For the three months ended | For the three months ended | ||||||||||||||||||||||
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) | |||||||||||||||||||||||
Commercial and industrial | $ | 803,012 | $ | 9,234 | 4.66 | % | $ | 555,927 | $ | 7,881 | 5.70 | % | |||||||||||
Commercial real estate | 971,825 | 11,441 | 4.77 | % | 913,065 | 12,942 | 5.70 | % | |||||||||||||||
Real estate construction | 255,677 | 2,178 | 3.45 | % | 267,388 | 3,575 | 5.38 | % | |||||||||||||||
Residential real estate | 394,329 | 4,452 | 4.58 | % | 496,186 | 5,302 | 4.30 | % | |||||||||||||||
Agricultural real estate | 140,875 | 1,696 | 4.88 | % | 137,664 | 2,091 | 6.11 | % | |||||||||||||||
Consumer | 76,413 | 963 | 5.11 | % | 67,160 | 1,275 | 7.64 | % | |||||||||||||||
Agricultural | 94,787 | 1,037 | 4.44 | % | 87,954 | 1,310 | 5.99 | % | |||||||||||||||
Total loans | 2,736,918 | 31,001 | 4.59 | % | 2,525,344 | 34,376 | 5.47 | % | |||||||||||||||
Securities | |||||||||||||||||||||||
Taxable securities | 839,349 | 3,799 | 1.84 | % | 774,653 | 4,620 | 2.40 | % | |||||||||||||||
Nontaxable securities | 108,104 | 724 | 2.72 | % | 133,257 | 966 | 2.92 | % | |||||||||||||||
Total securities | 947,453 | 4,523 | 1.94 | % | 907,910 | 5,586 | 2.47 | % | |||||||||||||||
Federal funds sold and other | 206,769 | 288 | 0.56 | % | 86,013 | 595 | 2.78 | % | |||||||||||||||
Total interest-earning assets | $ | 3,891,140 | 35,812 | 3.73 | % | $ | 3,519,267 | 40,557 | 4.64 | % | |||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||
Savings, NOW and money market deposits | $ | 2,079,057 | 971 | 0.19 | % | $ | 1,724,774 | 3,125 | 0.73 | % | |||||||||||||
Time deposits | 611,102 | 1,439 | 0.96 | % | 806,734 | 3,739 | 1.86 | % | |||||||||||||||
Total interest-bearing deposits | 2,690,159 | 2,410 | 0.36 | % | 2,531,508 | 6,864 | 1.09 | % | |||||||||||||||
FHLB advances | 10,013 | 65 | 2.63 | % | 295,677 | 1,175 | 1.60 | % | |||||||||||||||
Other borrowings | 129,347 | 1,578 | 4.95 | % | 59,626 | 423 | 2.85 | % | |||||||||||||||
Total interest-bearing liabilities | $ | 2,829,519 | 4,053 | 0.58 | % | $ | 2,886,811 | 8,462 | 1.18 | % | |||||||||||||
Net interest income | $ | 31,759 | $ | 32,095 | |||||||||||||||||||
Interest rate spread | 3.15 | % | 3.46 | % | |||||||||||||||||||
Net interest margin (2) | 3.31 | % | 3.67 | % | |||||||||||||||||||
(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. |
TABLE 5. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
For the three months ended | For the three months ended | ||||||||||||||||||||||
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) | |||||||||||||||||||||||
Commercial and industrial | $ | 803,012 | $ | 9,234 | 4.66 | % | $ | 782,433 | $ | 10,943 | 5.56 | % | |||||||||||
Commercial real estate | 971,825 | 11,441 | 4.77 | % | 980,686 | 12,647 | 5.13 | % | |||||||||||||||
Real estate construction | 255,677 | 2,178 | 3.45 | % | 216,714 | 2,301 | 4.22 | % | |||||||||||||||
Residential real estate | 394,329 | 4,452 | 4.58 | % | 406,450 | 5,005 | 4.90 | % | |||||||||||||||
Agricultural real estate | 140,875 | 1,696 | 4.88 | % | 135,337 | 2,244 | 6.60 | % | |||||||||||||||
Consumer | 76,413 | 963 | 5.11 | % | 78,430 | 1,080 | 5.48 | % | |||||||||||||||
Agricultural | 94,787 | 1,037 | 4.44 | % | 92,173 | 1,163 | 5.02 | % | |||||||||||||||
Total loans | 2,736,918 | 31,001 | 4.59 | % | 2,692,223 | 35,383 | 5.23 | % | |||||||||||||||
Securities | |||||||||||||||||||||||
Taxable securities | 839,349 | 3,799 | 1.84 | % | 698,985 | 3,408 | 1.94 | % | |||||||||||||||
Nontaxable securities | 108,104 | 724 | 2.72 | % | 115,129 | 913 | 3.15 | % | |||||||||||||||
Total securities | 947,453 | 4,523 | 1.94 | % | 814,114 | 4,321 | 2.11 | % | |||||||||||||||
Federal funds sold and other | 206,769 | 288 | 0.56 | % | 141,393 | 285 | 0.80 | % | |||||||||||||||
Total interest-earning assets | $ | 3,891,140 | 35,812 | 3.73 | % | $ | 3,647,730 | 39,989 | 4.36 | % | |||||||||||||
Interest-bearing liabilities | |||||||||||||||||||||||
Savings, NOW and money market deposits | $ | 2,079,057 | 971 | 0.19 | % | $ | 1,915,280 | 970 | 0.20 | % | |||||||||||||
Time deposits | 611,102 | 1,439 | 0.96 | % | 635,939 | 1,785 | 1.12 | % | |||||||||||||||
Total interest-bearing deposits | 2,690,159 | 2,410 | 0.36 | % | 2,551,219 | 2,755 | 0.43 | % | |||||||||||||||
FHLB advances | 10,013 | 65 | 2.63 | % | 39,245 | 94 | 0.95 | % | |||||||||||||||
Other borrowings | 129,347 | 1,578 | 4.95 | % | 133,485 | 1,581 | 4.71 | % | |||||||||||||||
Total interest-bearing liabilities | $ | 2,829,519 | 4,053 | 0.58 | % | $ | 2,723,949 | 4,430 | 0.65 | % | |||||||||||||
Net interest income | $ | 31,759 | $ | 35,559 | |||||||||||||||||||
Interest rate spread | 3.15 | % | 3.71 | % | |||||||||||||||||||
Net interest margin (2) | 3.31 | % | 3.88 | % | |||||||||||||||||||
(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. |
TABLE 6. NON-GAAP FINANCIAL MEASURES (Unaudited)
(Dollars in thousands, except per share data)
As of and for the three months ended | ||||||||||||||||||||
2021 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||
Income before income taxes | $ | 19,346 | $ | 14,599 | $ | (93,058 | ) | $ | 2,186 | $ | 1,703 | |||||||||
Add: goodwill impairment | — | — | 104,831 | — | — | |||||||||||||||
Less: tax effect | 4,271 | 2,111 | 2,652 | 497 | 445 | |||||||||||||||
Adjusted income | $ | 15,075 | $ | 12,488 | $ | 9,121 | $ | 1,689 | $ | 1,258 | ||||||||||
Weighted average common shares outstanding | 14,464,291 | 14,760,810 | 15,040,407 | 15,209,483 | 15,387,697 | |||||||||||||||
Effect of weighted average dilutive shares assuming positive net income | 269,792 | 173,248 | 82,804 | 94,526 | 207,327 | |||||||||||||||
Weighted average diluted shares | 14,734,083 | 14,934,058 | 15,123,211 | 15,304,009 | 15,595,024 | |||||||||||||||
Diluted earnings per share adjusted for goodwill impairment | $ | 1.02 | $ | 0.84 | $ | 0.60 | $ | 0.11 | $ | 0.08 | ||||||||||
Total stockholders' equity | $ | 397,815 | $ | 407,649 | $ | 402,172 | $ | 479,766 | $ | 477,351 | ||||||||||
Less: goodwill | 31,601 | 31,601 | 31,601 | 136,432 | 136,432 | |||||||||||||||
Less: core deposit intangibles, net | 15,023 | 16,057 | 17,101 | 18,131 | 19,105 | |||||||||||||||
Less: mortgage servicing asset, net | — | — | 1 | 2 | 4 | |||||||||||||||
Less: naming rights, net | 1,119 | 1,130 | 1,141 | 1,152 | 1,163 | |||||||||||||||
Tangible common equity | $ | 350,072 | $ | 358,861 | $ | 352,328 | $ | 324,049 | $ | 320,647 | ||||||||||
Common shares issued at period end | 14,383,913 | 14,540,556 | 14,853,487 | 15,218,301 | 15,198,986 | |||||||||||||||
Diluted common shares outstanding at period end | 14,668,287 | 14,756,378 | 14,945,282 | 15,333,977 | 15,297,319 | |||||||||||||||
Book value per common share | $ | 27.66 | $ | 28.04 | $ | 27.08 | $ | 31.53 | $ | 31.41 | ||||||||||
Tangible book value per common share | $ | 24.34 | $ | 24.68 | $ | 23.72 | $ | 21.29 | $ | 21.10 | ||||||||||
Tangible book value per diluted common share | $ | 23.87 | $ | 24.32 | $ | 23.57 | $ | 21.13 | $ | 20.96 | ||||||||||
Total assets | $ | 4,196,184 | $ | 4,013,356 | $ | 3,865,571 | $ | 4,205,269 | $ | 3,943,832 | ||||||||||
Less: goodwill | 31,601 | 31,601 | 31,601 | 136,432 | 136,432 | |||||||||||||||
Less: core deposit intangibles, net | 15,023 | 16,057 | 17,101 | 18,131 | 19,105 | |||||||||||||||
Less: mortgage servicing asset, net | — | — | 1 | 2 | 4 | |||||||||||||||
Less: naming rights, net | 1,119 | 1,130 | 1,141 | 1,152 | 1,163 | |||||||||||||||
Tangible assets | $ | 4,148,441 | $ | 3,964,568 | $ | 3,815,727 | $ | 4,049,552 | $ | 3,787,128 | ||||||||||
Total stockholders' equity to total assets | 9.48 | % | 10.16 | % | 10.40 | % | 11.41 | % | 12.10 | % | ||||||||||
Tangible common equity to tangible assets | 8.44 | % | 9.05 | % | 9.23 | % | 8.00 | % | 8.47 | % | ||||||||||
Total average stockholders' equity | $ | 395,638 | $ | 409,572 | $ | 483,088 | $ | 483,605 | $ | 482,567 | ||||||||||
Less: average intangible assets | 48,376 | 54,547 | 154,049 | 156,194 | 157,097 | |||||||||||||||
Average tangible common equity | $ | 347,262 | $ | 355,025 | $ | 329,039 | $ | 327,411 | $ | 325,470 | ||||||||||
Net income (loss) allocable to common stockholders | $ | 15,075 | $ | 12,488 | $ | (90,405 | ) | $ | 1,689 | $ | 1,258 | |||||||||
Add: goodwill impairment | — | — | 104,831 | — | — | |||||||||||||||
Less: tax effect of goodwill impairment | — | — | 5,305 | — | — | |||||||||||||||
Adjusted net income (loss) plus goodwill impairment | 15,075 | 12,488 | 9,121 | 1,689 | 1,258 | |||||||||||||||
Amortization of intangible assets | 1,045 | 1,055 | 1,043 | 986 | 814 | |||||||||||||||
Less: tax effect of intangible assets amortization | 219 | 222 | 234 | 207 | 171 | |||||||||||||||
Adjusted net income (loss) allocable to common stockholders | $ | 15,901 | $ | 13,321 | $ | 9,930 | $ | 2,468 | $ | 1,901 | ||||||||||
Return on total average stockholders' equity (ROAE) annualized | 15.45 | % | 12.13 | % | (74.45 | )% | 1.40 | % | 1.05 | % | ||||||||||
Return on average tangible common equity (ROATCE) annualized | 18.57 | % | 14.93 | % | (108.31 | )% | 3.03 | % | 2.35 | % | ||||||||||
Adjusted return on average tangible common equity | 18.57 | % | 14.93 | % | 12.01 | % | 3.03 | % | 2.35 | % | ||||||||||
Non-interest expense | $ | 24,881 | $ | 28,460 | $ | 130,835 | $ | 23,937 | $ | 25,758 | ||||||||||
Less: merger expense | 152 | 299 | — | — | — | |||||||||||||||
Less: goodwill impairment | — | — | 104,831 | — | — | |||||||||||||||
Non-interest expense, excluding merger expense and goodwill impairment | $ | 24,729 | $ | 28,161 | $ | 26,004 | $ | 23,937 | $ | 25,758 | ||||||||||
Net interest income | $ | 31,759 | $ | 35,559 | $ | 32,107 | $ | 32,891 | $ | 32,095 | ||||||||||
Non-interest income | 6,712 | 8,500 | 6,485 | 5,732 | 5,306 | |||||||||||||||
Less: net gain on acquisition | (78 | ) | 2,145 | — | — | — | ||||||||||||||
Less: net gains (losses) from securities transactions | 17 | (1 | ) | — | 4 | 8 | ||||||||||||||
Non-interest income, excluding gains (losses) from securities transactions | $ | 6,773 | $ | 6,356 | $ | 6,485 | $ | 5,728 | $ | 5,298 | ||||||||||
Net interest income plus non-interest income, excluding net gains (losses) from securities transactions | $ | 38,532 | $ | 41,915 | $ | 38,592 | $ | 38,619 | $ | 37,393 | ||||||||||
Non-interest expense to net interest income plus non-interest income | 64.67 | % | 64.60 | % | 339.02 | % | 61.98 | % | 68.87 | % | ||||||||||
Efficiency ratio | 64.18 | % | 67.19 | % | 67.38 | % | 61.98 | % | 68.88 | % | ||||||||||
Net income (loss) allocable to common stockholders | $ | 15,075 | $ | 12,488 | $ | (90,405 | ) | $ | 1,689 | $ | 1,258 | |||||||||
Add: income tax provision | 4,271 | 2,111 | (2,653 | ) | 497 | 445 | ||||||||||||||
Add: provision for loan losses | (5,756 | ) | 1,000 | 815 | 12,500 | 9,940 | ||||||||||||||
Add: goodwill impairment | — | — | 104,831 | — | — | |||||||||||||||
Adjusted net income | $ | 13,590 | $ | 15,599 | $ | 12,588 | $ | 14,686 | $ | 11,643 | ||||||||||
Total average assets | $ | 4,143,752 | $ | 3,910,628 | $ | 4,041,187 | $ | 4,159,336 | $ | 3,888,205 | ||||||||||
Total average stockholders' equity | $ | 395,638 | $ | 409,572 | $ | 483,088 | $ | 483,605 | $ | 482,567 | ||||||||||
Return on average assets (ROAA) annualized | 1.48 | % | 1.27 | % | (8.90 | )% | 0.16 | % | 0.13 | % | ||||||||||
Adjusted return on average assets | 1.33 | % | 1.59 | % | 1.24 | % | 1.42 | % | 1.20 | % | ||||||||||
Adjusted return on average equity | 13.93 | % | 15.15 | % | 10.37 | % | 12.21 | % | 9.70 | % |
Source: Equity Bancshares, Inc.