Equity Bancshares, Inc. Third Quarter Results Include a Significant Recovery on Problem Asset and 16.9% Annualized Loan Growth

Rhea-AI Summary

Equity Bancshares (NYSE: EQBK) reported Q3 2024 net income of $19.8 million, or $1.28 per diluted share. Adjusted earnings per share reached $1.31, excluding merger expenses and gains on security transactions. The company closed its merger with KansasLand, adding $28.3 million in loans and $42.4 million in deposits. Loan balances grew by $117.8 million, up 13.6% annualized, excluding KansasLand. Tangible book value per share increased 10.4% to $28.38. The company resolved a significant problem asset, recognizing an $8.5 million pre-tax benefit. Equity Bancshares also announced a 25% increase in its quarterly dividend to $0.15 per share and approved a share repurchase plan for up to 1,000,000 shares. Net interest income was $46.0 million, slightly down from the previous quarter, while non-interest income was $9.3 million. The effective tax rate dropped to 16.7% from 28.1% in the prior quarter. Total assets grew to $5.4 billion, with a loan-to-deposit ratio of 82.5%.

Positive

• Net income of $19.8 million for Q3 2024.
• Adjusted EPS of $1.31, excluding merger expenses and gains.
• Merger with KansasLand added $28.3 million in loans and $42.4 million in deposits.
• Loan balances grew by $117.8 million, up 13.6% annualized.
• Tangible book value per share increased by 10.4%.
• Resolved a significant problem asset, recognizing an $8.5 million pre-tax benefit.
• Quarterly dividend increased by 25% to $0.15 per share.
• Share repurchase plan approved for up to 1,000,000 shares.

Negative

• Net interest income declined slightly to $46.0 million from $46.5 million.
• Non-performing assets increased to $32.3 million from $27.2 million.
• Provision for credit losses rose to $1.2 million from $265 thousand.

Insights

Financial Analyst

This earnings report for Equity Bancshares shows strong performance in Q3 2024. Key highlights include:

• Net income of $19.8 million or $1.28 per diluted share
• Adjusted earnings of $1.31 per share excluding merger costs
• Loan growth of 16.9% annualized
• Tangible book value growth of 10.4%
• $8.5 million pre-tax benefit from resolving a problem asset

The 16.9% annualized loan growth is particularly impressive, indicating strong organic growth. The 10.4% increase in tangible book value per share to $28.38 is also notable, reflecting solid capital generation. The resolution of a problem asset resulting in an $8.5 million benefit demonstrates effective risk management.

While net interest margin declined slightly to 3.87% from 3.94%, this was mainly due to declining non-accrual loan impacts and purchase accounting accretion. Overall, asset quality remains strong with non-performing assets at just 0.6% of total assets.

The 25% dividend increase and new share repurchase authorization signal management's confidence in the bank's financial position and outlook. With strong capital ratios and continued growth, Equity Bancshares appears well-positioned heading into Q4 and 2025.

Reports 10.4% Tangible Book Value Growth, Closes Merger with KansasLand, Adding to Kansas Franchise

WICHITA, Kan.--(BUSINESS WIRE)-- Equity Bancshares, Inc. (NYSE: EQBK), (“Equity”, “the Company,” “we,” “us,” “our”), the Wichita-based holding company of Equity Bank, reported net income of $19.8 million or $1.28 earnings per diluted share for the quarter ended September 30, 2024.

“Our Company realized another exceptional earnings quarter, which included the favorable resolution of a significant problem loan," said Brad S. Elliott, Chairman and CEO of Equity. "Our team is committed to serving our communities and, through prudent underwriting, mitigating risk. When challenges arise, we will pursue all avenues available to us for successful resolution on behalf of our shareholders."

"Also during this quarter, our team continued to execute on our mission as we grew customer relationships and loan balances while also expanding our footprint via the KansasLand Bancshares, Inc. ("KansasLand") acquisition," Mr. Elliott said. "We are well positioned to facilitate both organic growth and strategic M&A. We have the teams, the processes and the experience to be the premier community bank in our geography."

Notable Items:

• The Company realized earnings per diluted share of $1.28, or $1.31 adjusted to exclude pre-tax merger expense of $618 thousand and gain on security transactions of $206 thousand.
• The Company closed its merger with and completed its integration of KansasLand. Adding $28.3 million in loan balances and $42.4 million in deposit balances.
• During the quarter, the Company grew loan balances, excluding those acquired from KansasLand, by $117.8 million or 13.6% on an annualized basis.
• The Company resolved a significant problem asset, recognizing an $8.5 million pre-tax benefit during the quarter.
• The Company ended the quarter with deposit balances of $4.4 billion and a loan-to-deposit ratio of 82.5%.
• The Company increased its quarterly dividend by 25% to $0.15 per share, its third consecutive annual increase. The Company also announced the approval of a share repurchase plan allowing for the purchase of up to 1,000,000 shares from October 1, 2024 through September 30, 2025.
• The Company realized an increase in book and tangible book value of $42.6 million and $43.2 million, respectively. Linked quarter tangible book value per share improved 10.4% to $28.38 per share.
• Classified assets as a percentage of total risk-based capital at Equity Bank closed the period at 8.3% while non-performing assets remained historically low. The allowance for credit losses closed the quarter at 1.2% of total loans.

Financial Results for the Quarter Ended September 30, 2024

Net income allocable to common stockholders was $19.8 million, or $1.28 per diluted share. Adjusting to exclude $618 thousand in pre-tax costs associated with mergers and gain on security transactions of $206 thousand, net income was $20.2 million or $1.31 per diluted share.

Excluding merger expenses and the costs associated with repositioning a portion of our BOLI portfolio in the prior quarter, net income was $15.3 million, or $0.99 per diluted share. The drivers of the periodic change are discussed in detail in the following sections.

Net Interest Income

Net interest income was $46.0 million for the period ended September 30, 2024, as compared to $46.5 million for the three months ended June 30, 2024, the decline was driven by minor declines in average earning assets and margin, partially offset by an additional day in the current period. Net interest margin was 3.87% for the quarter compared to 3.94% as the yield on interest-earning assets declined 7 basis points to 6.30%.

The decline in earning asset yield was driven by declining trends in both non-accrual loan impacts and purchase accounting accretion. The comparative change in these components of interest income resulted in an 8 basis point decline in margin.

Provision for Credit Losses

During the quarter ended September 30, 2024, there was a provision of $1.2 million compared to a provision of $265 thousand in the previous quarter. The provision was primarily attributable to growth in loan balances during the period. The Company continues to estimate the allowance for credit loss with assumptions that anticipate slower prepayment rates and continued market disruption caused by elevated inflation, supply chain issues and the impact of monetary policy on consumers and businesses. During the quarter, we realized net charge-offs of $1.6 million as compared to $1.2 million for the previous quarter.

Non-Interest Income

Total non-interest income was $9.3 million for the quarter ended September 30, 2024, as compared to $9.0 million linked quarter. Included in current quarter results was gain realized on the acquisition of KansasLand of $831 thousand. Service fee revenue including deposit services, treasury, debit card, credit card, insurance and wealth management increased at an annualized rate of 2% during the quarter.

Non-Interest Expense

Total non-interest expense for the quarter was $30.3 million as compared to $38.9 million for the previous quarter. Adjusting for merger expenses in both periods, the decrease quarter over quarter was $6.9 million driven by the $8.5 million gain from a borrower's repurchase of our preferred equity interest in the borrower's company, partially offset by a $742 thousand write-down of a previous bank location now carried in Other Real Estate Owned and a $900 thousand increase in incentive accruals.

Income Tax Expense

The effective tax rate for the quarter was 16.7% as compared to 28.1% for the quarter ended June 30, 2024. The decrease in rate during the quarter was the result of the reversal of the non-recurring recognition of tax expense related to the liquidation of bank owned life insurance in the second quarter in addition to the reversal of deferred tax asset valuation allowance for the expected utilization of net operating loss carryforwards in the current tax year. Year-to-date effective tax rate is 21.2%.

Loans, Total Assets and Funding

Loans held for investment were $3.6 billion at September 30, 2024, increasing $146.5 million, or 16.9% on an annualized basis, during the quarter. Total assets were $5.4 billion as of the end of the period, increasing $109.7 million during the quarter.

Total deposits were $4.4 billion at September 30, 2024, increasing $21.5 million, or 2.0% on an annualized basis, from the previous quarter end. Of the total deposit balance, non-interest-bearing accounts comprise approximately 22.2%. Total Federal Home Loan Bank borrowings were $296.0 million as of the end of the quarter, up $45.7 million as compared to June 30, 2024.

Asset Quality

As of September 30, 2024, Equity’s allowance for credit losses to total loans was 1.2% down 5 basis points as compared to June 30, 2024. The decline was driven by realized charge-offs during the period. Nonperforming assets were $32.3 million as of September 30, 2024, or 0.6% of total assets, compared to $27.2 million at June 30, 2024, or 0.5% of total assets. Non-accrual loans were $31.2 million at September 30, 2024, as compared to $26.6 million at June 30, 2024. Total classified assets, including loans rated special mention or worse, other real estate owned, excluding previous branch locations, and other repossessed assets were $49.1 million, or 8.32% of regulatory capital, up from $48.4 million, or 8.5% of regulatory capital as of June 30, 2024.

Capital

Quarter over quarter, book capital increased $42.6 million to $504.0 million and tangible capital increased $43.2 million to $433.9 million. Tangible book value per share closed the quarter at $28.4, increasing 10.4% compared to prior quarter. The increase in capital is primarily due to earnings and improvement in unrealized losses on bonds and cash flow hedges of $22.0 million, partially offset by dividends of $2.3 million. Tangible capital was also positively affected by the amortization of core deposit intangibles during the quarter.

The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 11.4%, the total capital to risk-weighted assets was 14.8% and the total leverage ratio was 9.6% at September 30, 2024. At June 30, 2024, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 11.1%, the total capital to risk-weighted assets ratio was 14.6% and the total leverage ratio was 9.1%.

Equity Bank's ratio of common equity tier 1 capital to risk-weighted assets was 13.0%, total capital to risk-weighted assets was 14.1% and the total leverage ratio was 10.4% at September 30, 2024. At June 30, 2024, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 12.9%, the ratio of total capital to risk-weighted assets was 14.0% and the total leverage ratio was 10.1%.

Non-GAAP Financial Measures

In addition to evaluating the Company’s results of operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”), management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures that are intended to provide the reader with additional perspectives on operating results, financial condition and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company’s GAAP financial information.

The efficiency ratio is a common comparable metric used by banks to understand the expense structure relative to 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 and provision for loan losses 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 “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 6 in the following press release tables.

Conference Call and Webcast

Equity’s Chairman and Chief Executive Officer, Brad Elliott, and Chief Financial Officer, Chris Navratil, will hold a conference call and webcast to discuss third quarter results on Wednesday, October 16, 2024, at 10 a.m. eastern time or 9 a.m. central time.

A live webcast of the call will be available on the Company’s website at investor.equitybank.com. To access the call by phone, please go to this registration link, and you will be provided with dial in details. Investors, news media, and other participants are encouraged to dial into the conference call ten minutes ahead of the scheduled start time.

A replay of the call and webcast will be available following the close of the call 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, trust and wealth management services and treasury management services, while delivering the high-quality, relationship-based customer service of a community bank. Equity’s common stock is traded on the NYSE National, Inc. under the symbol “EQBK.” Learn more at www.equitybank.com.

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,” “positioned,” “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 on March 7, 2024, 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, except as required by law. 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.

Unaudited Financial Tables

• Table 1. Consolidated Statements of Income
• Table 2. Quarterly Consolidated Statements of Income
• Table 3. Consolidated Balance Sheets
• Table 4. Selected Financial Highlights
• Table 5. Year-To-Date Net Interest Income Analysis
• Table 6. Quarter-To-Date Net Interest Income Analysis
• Table 7. Quarter-Over-Quarter Net Interest Income Analysis
• Table 8. Non-GAAP Financial Measures

TABLE 1. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands)
		Three months ended September 30,								Nine months ended September 30,
		2024				2023				2024				2023
Interest and dividend income
Loans, including fees		$	62,089			$	55,152			$	182,436			$	156,281
Securities, taxable			9,809				5,696				29,862				17,456
Securities, nontaxable			400				369				1,192				1,606
Federal funds sold and other			2,667				3,822				8,374				7,075
Total interest and dividend income			74,965				65,039				221,864				182,418
Interest expense
Deposits			23,679				19,374				69,196				50,399
Federal funds purchased and retail repurchase agreements			261				246				893				633
Federal Home Loan Bank advances			3,089				968				8,022				2,939
Federal Reserve Bank borrowings			—				1,546				1,361				3,209
Subordinated debt			1,905				1,893				5,703				5,687
Total interest expense			28,934				24,027				85,175				62,867
Net interest income			46,031				41,012				136,689				119,551
Provision (reversal) for credit losses			1,183				1,230				2,448				1,162
Net interest income after provision (reversal) for credit losses			44,848				39,782				134,241				118,389
Non-interest income
Service charges and fees			2,424				2,690				7,534				7,888
Debit card income			2,665				2,591				7,733				7,798
Mortgage banking			287				226				720				527
Increase in value of bank-owned life insurance			1,344				794				3,083				3,134
Net gain on acquisition and branch sales			831				—				2,131				—
Net gains (losses) from securities transactions			206				(1	)			222				(1,291	)
Other			1,560				2,435				8,583				6,229
Total non-interest income			9,317				8,735				30,006				24,285
Non-interest expense
Salaries and employee benefits			18,494				15,857				54,418				47,786
Net occupancy and equipment			3,478				3,262				10,800				9,081
Data processing			5,152				4,553				15,016				12,962
Professional fees			1,487				1,312				4,657				4,341
Advertising and business development			1,368				1,419				3,897				3,827
Telecommunications			660				502				1,887				1,503
FDIC insurance			660				660				1,821				1,535
Courier and postage			686				548				1,912				1,469
Free nationwide ATM cost			544				516				1,569				1,565
Amortization of core deposit intangibles			1,112				799				3,229				2,635
Loan expense			143				132				447				385
Other real estate owned			(7,719	)			128				(7,786	)			318
Merger expenses			618				—				4,461				—
Other			3,645				4,556				10,023				13,196
Total non-interest expense			30,328				34,244				106,351				100,603
Income (loss) before income tax			23,837				14,273				57,896				42,071
Provision for income taxes			3,986				1,932				12,261				5,951
Net income (loss) and net income (loss) allocable to common stockholders		$	19,851			$	12,341			$	45,635			$	36,120
Basic earnings (loss) per share		$	1.30			$	0.80			$	2.98			$	2.32
Diluted earnings (loss) per share		$	1.28			$	0.80			$	2.95			$	2.30
Weighted average common shares			15,258,822				15,404,992				15,310,888				15,575,731
Weighted average diluted common shares			15,451,545				15,507,172				15,467,930				15,692,305

TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)
		As of and for the three months ended
		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
Interest and dividend income
Loans, including fees		$	62,089			$	61,518			$	58,829			$	54,932			$	55,152
Securities, taxable			9,809				10,176				9,877				6,417				5,696
Securities, nontaxable			400				401				391				354				369
Federal funds sold and other			2,667				3,037				2,670				2,591				3,822
Total interest and dividend income			74,965				75,132				71,767				64,294				65,039
Interest expense
Deposits			23,679				22,662				22,855				20,074				19,374
Federal funds purchased and retail repurchase agreements			261				306				326				298				246
Federal Home Loan Bank advances			3,089				3,789				1,144				1,005				968
Federal Reserve Bank borrowings			—				—				1,361				1,546				1,546
Subordinated debt			1,905				1,899				1,899				1,904				1,893
Total interest expense			28,934				28,656				27,585				24,827				24,027
Net interest income			46,031				46,476				44,182				39,467				41,012
Provision (reversal) for credit losses			1,183				265				1,000				711				1,230
Net interest income after provision (reversal) for credit losses			44,848				46,211				43,182				38,756				39,782
Non-interest income
Service charges and fees			2,424				2,541				2,569				2,299				2,690
Debit card income			2,665				2,621				2,447				2,524				2,591
Mortgage banking			287				245				188				125				226
Increase in value of bank-owned life insurance			1,344				911				828				925				794
Net gain on acquisition and branch sales			831				60				1,240				—				—
Net gains (losses) from securities transactions			206				(27	)			43				(50,618	)			(1	)
Other			1,560				2,607				4,416				1,331				2,435
Total non-interest income			9,317				8,958				11,731				(43,414	)			8,735
Non-interest expense
Salaries and employee benefits			18,494				17,827				18,097				16,598				15,857
Net occupancy and equipment			3,478				3,787				3,535				3,244				3,262
Data processing			5,152				5,036				4,828				4,471				4,553
Professional fees			1,487				1,778				1,392				1,413				1,312
Advertising and business development			1,368				1,291				1,238				1,598				1,419
Telecommunications			660				572				655				460				502
FDIC insurance			660				590				571				660				660
Courier and postage			686				620				606				577				548
Free nationwide ATM cost			544				531				494				508				516
Amortization of core deposit intangibles			1,112				1,218				899				739				799
Loan expense			143				195				109				155				132
Other real estate owned			(7,719	)			17				(84	)			224				128
Merger expenses			618				2,287				1,556				297				—
Other			3,645				3,122				3,256				4,054				4,556
Total non-interest expense			30,328				38,871				37,152				34,998				34,244
Income (loss) before income tax			23,837				16,298				17,761				(39,656	)			14,273
Provision for income taxes (benefit)			3,986				4,582				3,693				(11,357	)			1,932
Net income (loss) and net income (loss) allocable to common stockholders		$	19,851			$	11,716			$	14,068			$	(28,299	)		$	12,341
Basic earnings (loss) per share		$	1.30			$	0.77			$	0.91			$	(1.84	)		$	0.80
Diluted earnings (loss) per share		$	1.28			$	0.76			$	0.90			$	(1.84	)		$	0.80
Weighted average common shares			15,258,822				15,248,703				15,425,709				15,417,200				15,404,992
Weighted average diluted common shares			15,451,545				15,377,980				15,569,225				15,417,200				15,507,172

TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
ASSETS
Cash and due from banks		$	217,681			$	244,321			$	217,611			$	363,289			$	183,404
Federal funds sold			17,802				15,945				17,407				15,810				15,613
Cash and cash equivalents			235,483				260,266				235,018				379,099				199,017
Available-for-sale securities			1,041,000				1,042,176				1,091,717				919,648				1,057,009
Held-to-maturity securities			5,408				5,226				2,205				2,209				2,212
Loans held for sale			901				1,959				1,311				476				627
Loans, net of allowance for credit losses(1)			3,557,435				3,410,920				3,437,714				3,289,381				3,237,932
Other real estate owned, net			2,786				2,989				1,465				1,833				3,369
Premises and equipment, net			117,013				114,264				116,792				112,632				110,271
Bank-owned life insurance			131,670				130,326				125,693				124,865				124,245
Federal Reserve Bank and Federal Home Loan Bank stock			34,429				33,171				27,009				20,608				20,780
Interest receivable			28,398				27,381				27,082				25,497				23,621
Goodwill			53,101				53,101				53,101				53,101				53,101
Core deposit intangibles, net			16,029				16,636				17,854				7,222				7,961
Other			131,580				147,102				102,075				98,021				105,122
Total assets		$	5,355,233			$	5,245,517			$	5,239,036			$	5,034,592			$	4,945,267
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Demand		$	967,858			$	984,872			$	981,623			$	898,129			$	936,217
Total non-interest-bearing deposits			967,858				984,872				981,623				898,129				936,217
Demand, savings and money market			2,468,956				2,560,091				2,574,871				2,483,807				2,397,003
Time			926,130				796,474				814,532				763,519				748,950
Total interest-bearing deposits			3,395,086				3,356,565				3,389,403				3,247,326				3,145,953
Total deposits			4,362,944				4,341,437				4,371,026				4,145,455				4,082,170
Federal funds purchased and retail repurchase agreements			38,196				38,031				43,811				43,582				39,701
Federal Home Loan Bank advances and Federal Reserve Bank borrowings			295,997				250,306				219,931				240,000				240,000
Subordinated debt			97,336				97,196				97,058				96,921				96,787
Contractual obligations			19,683				23,770				18,493				19,315				29,019
Interest payable and other liabilities			37,039				33,342				31,941				36,459				39,460
Total liabilities			4,851,195				4,784,082				4,782,260				4,581,732				4,527,137
Commitments and contingent liabilities
Stockholders’ equity
Common stock			209				208				208				207				207
Additional paid-in capital			494,763				491,709				490,533				489,187				488,137
Retained earnings			180,588				163,068				153,201				141,006				171,188
Accumulated other comprehensive income (loss), net of tax			(40,012	)			(62,005	)			(60,788	)			(57,920	)			(122,047	)
Treasury stock			(131,510	)			(131,545	)			(126,378	)			(119,620	)			(119,355	)
Total stockholders’ equity			504,038				461,435				456,776				452,860				418,130
Total liabilities and stockholders’ equity		$	5,355,233			$	5,245,517			$	5,239,036			$	5,034,592			$	4,945,267
(1) Allowance for credit losses		$	43,490			$	43,487			$	44,449			$	43,520			$	44,186

TABLE 4. 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,
		2024				2024				2024				2023				2023
Loans Held For Investment by Type
Commercial real estate		$	1,916,863			$	1,793,544			$	1,797,192			$	1,759,855			$	1,721,761
Commercial and industrial			670,665				663,718				649,035				598,327				585,129
Residential real estate			567,063				572,523				581,988				556,328				558,188
Agricultural real estate			259,587				219,226				198,291				196,114				205,865
Agricultural			89,529				104,342				149,312				118,587				103,352
Consumer			97,218				101,054				106,345				103,690				107,823
Total loans held-for-investment			3,600,925				3,454,407				3,482,163				3,332,901				3,282,118
Allowance for credit losses			(43,490	)			(43,487	)			(44,449	)			(43,520	)			(44,186	)
Net loans held for investment		$	3,557,435			$	3,410,920			$	3,437,714			$	3,289,381			$	3,237,932
Asset Quality Ratios
Allowance for credit losses on loans to total loans			1.21	%			1.26	%			1.28	%			1.31	%			1.35	%
Past due or nonaccrual loans to total loans			1.17	%			1.15	%			1.10	%			1.10	%			1.03	%
Nonperforming assets to total assets			0.60	%			0.52	%			0.49	%			0.53	%			0.42	%
Nonperforming assets to total loans plus other real estate owned			0.90	%			0.79	%			0.73	%			0.79	%			0.63	%
Classified assets to bank total regulatory capital			8.32	%			8.47	%			6.85	%			7.09	%			6.27	%
Selected Average Balance Sheet Data (QTD Average)
Investment securities		$	1,055,833			$	1,065,979			$	1,074,101			$	985,591			$	1,085,905
Total gross loans receivable			3,475,885				3,459,476				3,452,553				3,293,755				3,281,483
Interest-earning assets			4,731,927				4,745,713				4,742,200				4,480,279				4,635,384
Total assets			5,205,017				5,196,259				5,152,915				4,892,712				5,046,179
Interest-bearing deposits			3,309,202				3,275,765				3,319,907				3,092,637				3,206,300
Borrowings			395,190				450,178				390,166				391,691				385,125
Total interest-bearing liabilities			3,704,392				3,725,943				3,710,073				3,484,328				3,591,425
Total deposits			4,275,424				4,250,843				4,254,883				4,019,362				4,177,332
Total liabilities			4,719,549				4,740,937				4,692,671				4,469,505				4,619,919
Total stockholders' equity			485,468				455,322				460,244				423,207				426,260
Tangible common equity*			414,644				383,899				398,041				361,451				363,625
Performance ratios
Return on average assets (ROAA) annualized			1.52	%			0.91	%			1.10	%			(2.29	)%			0.97	%
Return on average assets before income tax and provision for loan losses*			1.91	%			1.28	%			1.46	%			(3.16	)%			1.22	%
Return on average equity (ROAE) annualized			16.27	%			10.35	%			12.29	%			(26.53	)%			11.49	%
Return on average equity before income tax and provision for loan losses*			20.50	%			14.63	%			16.39	%			(36.51	)%			14.43	%
Return on average tangible common equity (ROATCE) annualized*			19.92	%			13.31	%			14.96	%			(30.39	)%			14.18	%
Yield on loans annualized			7.11	%			7.15	%			6.85	%			6.62	%			6.67	%
Cost of interest-bearing deposits annualized			2.85	%			2.78	%			2.77	%			2.58	%			2.40	%
Cost of total deposits annualized			2.20	%			2.14	%			2.16	%			1.98	%			1.84	%
Net interest margin annualized			3.87	%			3.94	%			3.75	%			3.49	%			3.51	%
Efficiency ratio*			54.70	%			66.03	%			65.16	%			74.35	%			68.83	%
Non-interest income / average assets			0.71	%			0.69	%			0.92	%			(3.52	)%			0.69	%
Non-interest expense / average assets			2.32	%			3.01	%			2.90	%			2.84	%			2.69	%
Capital Ratios
Tier 1 Leverage Ratio			9.55	%			9.14	%			9.10	%			9.46	%			9.77	%
Common Equity Tier 1 Capital Ratio			11.37	%			11.12	%			11.14	%			11.74	%			12.65	%
Tier 1 Risk Based Capital Ratio			11.94	%			11.70	%			11.73	%			12.36	%			13.27	%
Total Risk Based Capital Ratio			14.78	%			14.61	%			14.71	%			15.48	%			16.42	%
Total stockholders' equity to total assets			9.41	%			8.80	%			8.72	%			8.99	%			8.46	%
Tangible common equity to tangible assets*			8.21	%			7.55	%			7.45	%			7.87	%			7.29	%
Dividend payout ratio			11.74	%			15.79	%			13.31	%			(6.65	)%			15.13	%
Book value per common share		$	32.97			$	30.36			$	29.80			$	29.35			$	27.13
Tangible book value per common share*		$	28.38			$	25.70			$	25.10			$	25.37			$	23.09
Tangible book value per diluted common share*		$	28.00			$	25.44			$	24.87			$	25.05			$	22.96
* The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures, see Table 8. Non-GAAP Financial Measures.

TABLE 5. YEAR-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
	For nine months ended										For nine months ended
	September 30, 2024										September 30, 2023
	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	$	643,213		$	38,408			7.98	%		$	580,359		$	31,503			7.26	%
Commercial real estate		1,400,385			73,339			7.00	%			1,300,202			61,811			6.36	%
Real estate construction		400,317			26,350			8.79	%			450,147			24,764			7.36	%
Residential real estate		579,818			19,935			4.59	%			567,169			17,933			4.23	%
Agricultural real estate		218,334			11,777			7.21	%			202,963			10,399			6.85	%
Agricultural		116,520			7,398			8.48	%			100,450			5,039			6.71	%
Consumer		104,098			5,229			6.71	%			106,841			4,832			6.05	%
Total loans		3,462,685			182,436			7.04	%			3,308,131			156,281			6.32	%
Securities
Taxable securities		1,004,367			29,862			3.97	%			1,059,858			17,456			2.20	%
Nontaxable securities		60,903			1,192			2.62	%			82,230			1,606			2.61	%
Total securities		1,065,270			31,054			3.89	%			1,142,088			19,062			2.23	%
Federal funds sold and other		211,961			8,374			5.28	%			191,585			7,075			4.94	%
Total interest-earning assets	$	4,739,916			221,864			6.25	%		$	4,641,804			182,418			5.25	%
Interest-bearing liabilities
Demand, savings and money market deposits	$	2,535,852			48,090			2.53	%		$	2,365,972			32,288			1.82	%
Time deposits		765,800			21,106			3.68	%			856,862			18,111			2.83	%
Total interest-bearing deposits		3,301,652			69,196			2.80	%			3,222,834			50,399			2.09	%
FHLB advances		223,132			8,022			4.80	%			97,014			2,939			4.05	%
Other borrowings		188,652			7,957			5.63	%			243,007			9,529			5.24	%
Total interest-bearing liabilities	$	3,713,436			85,175			3.06	%		$	3,562,855			62,867			2.36	%
Net interest income				$	136,689									$	119,551
Interest rate spread								3.19	%									2.89	%
Net interest margin (2)								3.85	%									3.44	%
(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.

TABLE 6. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
	For the three months ended												For the three months ended
	September 30, 2024												September 30, 2023
	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	$	659,697			$	13,213				7.97	%		$	573,039			$	10,984				7.60	%
Commercial real estate		1,351,407				24,196				7.12	%			1,253,362				20,824				6.59	%
Real estate construction		442,857				9,732				8.74	%			480,355				9,838				8.13	%
Residential real estate		578,702				6,912				4.75	%			564,138				6,085				4.28	%
Agricultural real estate		251,595				4,365				6.90	%			203,399				3,898				7.60	%
Agricultural		91,500				1,906				8.29	%			99,773				1,856				7.38	%
Consumer		100,127				1,765				7.01	%			107,417				1,667				6.16	%
Total loans		3,475,885				62,089				7.11	%			3,281,483				55,152				6.67	%
Securities
Taxable securities		995,713				9,809				3.92	%			1,027,889				5,696				2.20	%
Nontaxable securities		60,120				400				2.65	%			58,016				369				2.52	%
Total securities		1,055,833				10,209				3.85	%			1,085,905				6,065				2.22	%
Federal funds sold and other		200,209				2,667				5.30	%			267,996				3,822				5.66	%
Total interest-earning assets	$	4,731,927				74,965				6.30	%		$	4,635,384				65,039				5.57	%
Interest-bearing liabilities
Demand, savings and money market deposits	$	2,555,916				16,484				2.57	%		$	2,423,380				13,331				2.18	%
Time deposits		753,286				7,195				3.80	%			782,920				6,043				3.06	%
Total interest-bearing deposits		3,309,202				23,679				2.85	%			3,206,300				19,374				2.40	%
FHLB advances		252,751				3,089				4.86	%			100,000				968				3.84	%
Other borrowings		142,439				2,166				6.05	%			285,125				3,685				5.13	%
Total interest-bearing liabilities	$	3,704,392				28,934				3.11	%		$	3,591,425				24,027				2.65	%
Net interest income					$	46,031											$	41,012
Interest rate spread										3.19	%											2.92	%
Net interest margin (2)										3.87	%											3.51	%
(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.

TABLE 7. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)
	For the three months ended												For the three months ended
	September 30, 2024												June 30, 2024
	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	$	659,697			$	13,213				7.97	%		$	635,123			$	12,782				8.09	%
Commercial real estate		1,351,407				24,196				7.12	%			1,401,109				24,541				7.04	%
Real estate construction		442,857				9,732				8.74	%			402,831				8,843				8.83	%
Residential real estate		578,702				6,912				4.75	%			580,338				6,563				4.55	%
Agricultural real estate		251,595				4,365				6.90	%			206,018				3,944				7.70	%
Agricultural		91,500				1,906				8.29	%			127,298				3,102				9.80	%
Consumer		100,127				1,765				7.01	%			106,759				1,743				6.57	%
Total loans		3,475,885				62,089				7.11	%			3,459,476				61,518				7.15	%
Securities
Taxable securities		995,713				9,809				3.92	%			1,006,018				10,176				4.07	%
Nontaxable securities		60,120				400				2.65	%			59,961				401				2.70	%
Total securities		1,055,833				10,209				3.85	%			1,065,979				10,577				3.99	%
Federal funds sold and other		200,209				2,667				5.30	%			220,258				3,037				5.54	%
Total interest-earning assets	$	4,731,927				74,965				6.30	%		$	4,745,713				75,132				6.37	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,555,916				16,484				2.57	%		$	2,530,899				15,946				2.53	%
Time deposits		753,286				7,195				3.80	%			744,866				6,716				3.63	%
Total interest-bearing deposits		3,309,202				23,679				2.85	%			3,275,765				22,662				2.78	%
FHLB advances		252,751				3,089				4.86	%			302,972				3,789				5.03	%
Other borrowings		142,439				2,166				6.05	%			147,206				2,205				6.03	%
Total interest-bearing liabilities	$	3,704,392				28,934				3.11	%		$	3,725,943				28,656				3.09	%
Net interest income					$	46,031											$	46,476
Interest rate spread										3.19	%											3.28	%
Net interest margin (2)										3.87	%											3.94	%
(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.

TABLE 8. 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,
		2024				2024				2024				2023				2023
Total stockholders' equity		$	504,038			$	461,435			$	456,776			$	452,860			$	418,130
Less: goodwill			53,101				53,101				53,101				53,101				53,101
Less: core deposit intangibles, net			16,029				16,636				17,854				7,222				7,961
Less: mortgage servicing rights, net			—				25				50				75				100
Less: naming rights, net			968				979				989				1,000				1,011
Tangible common equity		$	433,940			$	390,694			$	384,782			$	391,462			$	355,957
Common shares outstanding at period end			15,288,309				15,200,194				15,327,799				15,428,251				15,413,064
Diluted common shares outstanding at period end			15,497,466				15,358,396				15,469,531				15,629,185				15,500,749
Book value per common share		$	32.97			$	30.36			$	29.80			$	29.35			$	27.13
Tangible book value per common share		$	28.38			$	25.70			$	25.10			$	25.37			$	23.09
Tangible book value per diluted common share		$	28.00			$	25.44			$	24.87			$	25.05			$	22.96
Total assets		$	5,355,233			$	5,245,517			$	5,239,036			$	5,034,592			$	4,945,267
Less: goodwill			53,101				53,101				53,101				53,101				53,101
Less: core deposit intangibles, net			16,029				16,636				17,854				7,222				7,961
Less: mortgage servicing rights, net			—				25				50				75				100
Less: naming rights, net			968				979				989				1,000				1,011
Tangible assets		$	5,285,135			$	5,174,776			$	5,167,042			$	4,973,194			$	4,883,094
Total stockholders' equity to total assets			9.41	%			8.80	%			8.72	%			8.99	%			8.46	%
Tangible common equity to tangible assets			8.21	%			7.55	%			7.45	%			7.87	%			7.29	%
Total average stockholders' equity		$	485,468			$	455,322			$	460,244			$	423,207			$	426,260
Less: average intangible assets			70,824				71,423				62,203				61,756				62,635
Average tangible common equity		$	414,644			$	383,899			$	398,041			$	361,451			$	363,625
Net income (loss) allocable to common stockholders		$	19,851			$	11,716			$	14,068			$	(28,299	)		$	12,341
Add: amortization of intangible assets			1,148				1,254				935				775				835
Less: tax effect of intangible assets amortization			241				263				196				163				175
Adjusted net income (loss) allocable to common stockholders		$	20,758			$	12,707			$	14,807			$	(27,687	)		$	13,001
Return on total average stockholders' equity (ROAE) annualized			16.27	%			10.35	%			12.29	%			(26.53	)%			11.49	%
Return on average tangible common equity (ROATCE) annualized			19.92	%			13.31	%			14.96	%			(30.39	)%			14.18	%
Non-interest expense		$	30,328			$	38,871			$	37,152			$	34,998			$	34,244
Less: merger expense			618				2,287				1,556				297				—
Adjusted non-interest expense		$	29,710			$	36,584			$	35,596			$	34,701			$	34,244
Net interest income		$	46,031			$	46,476			$	44,182			$	39,467			$	41,012
Non-interest income			9,317				8,958				11,731				(43,414	)			8,735
Less: net gain on acquisition and branch sales			831				60				1,240				—				—
Less: net gains (losses) from securities transactions			206				(27	)			43				(50,618	)			(1	)
Adjusted non-interest income		$	8,280			$	8,925			$	10,448			$	7,204			$	8,736
Net interest income plus adjusted non-interest income		$	54,311			$	55,401			$	54,630			$	46,671			$	49,748
Non-interest expense to net interest income plus non-interest income			54.80	%			70.12	%			66.45	%			(886.70	)%			68.84	%
Efficiency ratio			54.70	%			66.03	%			65.16	%			74.35	%			68.83	%
Net income (loss) allocable to common stockholders		$	19,851			$	11,716			$	14,068			$	(28,299	)		$	12,341
Add: income tax provision			3,986				4,582				3,693				(11,357	)			1,932
Add: provision (reversal) of credit losses			1,183				265				1,000				711				1,230
Pre-tax, pre-provision income		$	25,020			$	16,563			$	18,761			$	(38,945	)		$	15,503
Total average assets		$	5,205,017			$	5,196,259			$	5,152,915			$	4,892,712			$	5,046,179
Total average stockholders' equity		$	485,468			$	455,322			$	460,244			$	423,207			$	426,620
Return on average assets (ROAA) annualized			1.52	%			0.91	%			1.10	%			(2.29	)%			0.97	%
Adjusted return on average assets			1.91	%			1.28	%			1.46	%			(3.16	)%			1.22	%
Adjusted return on average equity			20.50	%			14.63	%			16.39	%			(36.51	)%			14.43	%
Net income (loss) allocable to common stockholders		$	19,851			$	11,716			$	14,068			$	(28,299	)		$	12,341
Add: Day 1 -Provision			—				—				1,000				—				—
Less: Gain (loss) from securities transactions			206				(27	)			43				(50,618	)			(1	)
Add: Merger expense			618				2,287				1,556				297				—
Adjusted non-core items			412				2,314				2,513				50,915				1
Tax effected non-core items			325				1,828				1,985				40,223				1
BOLI tax adjustment			—				1,730				—				—				—
Adjusted operating net income		$	20,176			$	15,274			$	16,053			$	11,924			$	12,342
GAAP earnings (loss) per diluted share		$	1.28			$	0.76			$	0.90			$	(1.84	)		$	0.80
Adjusted earnings (loss) per diluted share		$	1.31			$	0.99			$	1.03			$	0.77			$	0.80
Total average assets		$	5,205,017			$	5,196,258			$	5,152,915			$	4,892,712			$	5,046,179
Adjusted Operating ROAA			1.54	%			1.18	%			1.25	%			0.97	%			0.97	%
Weighted average diluted common shares			15,451,545				15,377,980				15,569,225				15,417,200				15,507,172

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241015781471/en/

Investor Contact:

Brian J. Katzfey

VP, Director of Corporate Development and Investor Relations

Equity Bancshares, Inc.

(316) 858-3128

bkatzfey@equitybank.com

Media Contact:

Russell Colburn

Public Relations and Communication Manager

Equity Bancshares, Inc.

(913) 583-8011

rcolburn@equitybank.com

Source: Equity Bancshares

FAQ

What were the Q3 2024 earnings for Equity Bancshares (EQBK)?

Equity Bancshares reported Q3 2024 net income of $19.8 million, or $1.28 per diluted share.

How did the KansasLand merger impact Equity Bancshares (EQBK)?

The KansasLand merger added $28.3 million in loans and $42.4 million in deposits to Equity Bancshares.

What is the new quarterly dividend for Equity Bancshares (EQBK)?

Equity Bancshares increased its quarterly dividend by 25% to $0.15 per share.

What is the share repurchase plan for Equity Bancshares (EQBK)?

Equity Bancshares approved a share repurchase plan allowing for the purchase of up to 1,000,000 shares from October 1, 2024, through September 30, 2025.

How much did Equity Bancshares (EQBK) grow its loan balances in Q3 2024?

Excluding KansasLand, Equity Bancshares grew its loan balances by $117.8 million, or 13.6% on an annualized basis, in Q3 2024.