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Equity Bancshares, Inc. Second Quarter Results Highlighted by Record Net Interest Income and Net Interest Margin Expansion

Reports NIM of 3.94%, Announces Merger with KansasLand Bancshares, Inc., Adding to Kansas Franchise

Equity Bancshares, Inc. (NYSE: EQBK), (“Equity”, “the Company”, “we,” “us,” “our”), the Wichita-based holding company of Equity Bank, reported net income of $11.7 million or $0.76 earnings per diluted share for the quarter ended June 30, 2024. Adjusting to exclude $2.3 million in costs associated with mergers and $1.7 million in costs associated with the surrender and re-positioning of bank owned life insurance (“BOLI”), net income was $15.3 million or $0.99 per diluted share.

“Our Company realized another excellent quarter driven by a continued increase in margin," said Brad S. Elliott, Chairman and CEO of Equity. "Our team continued to capitalize on opportunities to enhance customer relationships and build stockholder value as we look to leverage our balance sheet position to grow our franchise."

"In addition, during the quarter, our team effectively merged core systems following the Bank of Kirksville transaction while also analyzing, negotiating, and subsequently closing our acquisition of KansasLand Bank," Mr. Elliott said. "We continue to be positioned to facilitate strategic M&A. We have the teams, the processes and the experience to be the preferred consolidation partner in our geography."

Notable Items:

  • The Company realized earnings per diluted share of $0.99, adjusted to exclude merger expenses of $2.3 million and $1.7 million in surrender costs related to repositioning of BOLI contracts.
  • The Company integrated the operations of its previously completed merger with Rockhold Bancshares, Inc., while also announcing and subsequently closing (July 1) its merger with KansasLand Bancshares, Inc.
  • The Company realized expansion in net interest income and net interest margin, as the benefits of previously announced strategic transactions continued to be realized. Total net interest income for the quarter was $46.5 million, an all-time high for the Company.
  • The Company was active in its share repurchase plan during the quarter, purchasing 152,982 shares at a weighted average cost of $33.35. Under the repurchase plan announced in the fourth quarter of 2023, 637,427 shares remain available for purchase.
  • Classified assets as a percentage of total risk based capital at Equity Bank closed the period at 8.5% while non-performing assets remained historically low. The allowance for credit losses closed the quarter at 1.3% of total loans.

Financial Results for the Quarter Ended June 30, 2024

Net income allocable to common stockholders was $11.7 million, or $0.76 per diluted share. Excluding merger expenses and the costs associated with repositioning a portion of our BOLI portfolio, net income was $15.3 million, or $0.99 per diluted share. Excluding the impact of the merger expenses and opening balance sheet provisioning for Bank of Kirksville balances, operating net income for the previous quarter was $16.1 million. The drivers of the periodic change are discussed in detail in the following sections.

Net Interest Income

Net interest income was $46.5 million for the period, as compared to $44.2 million for the three months ended March 31, 2024, the increase was driven by increasing average assets as well as a positive trend in margin. Net interest margin increased to 3.94% from 3.75% as the yield on interest-earning assets increased 28 basis points to 6.37% and the cost of interest-bearing deposits remained materially consistent at 2.78%. Total cost of deposits declined during the quarter to 2.14%, while utilization of debt and associated costs increased. Total cost of interest-bearing liabilities expanded 10 bps to 3.09%.

The earning asset improvement was driven by the continued increase in originated and re-priced loan coupons, loan and investment assets added through the Bank of Kirksville merger and the expiration of a receive-fixed swap during the quarter. Deposits acquired from the Bank of Kirksville contributed to maintaining cost of interest-bearing deposits and dropping total cost of deposits.

Provision for Credit Losses

During the quarter, there was a provision of $265 thousand compared to a provision of $1.0 million in the previous quarter. The provision was attributable to charge-offs realized 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 $1.2 million as compared to $667 thousand for the previous quarter.

Non-Interest Income

Total non-interest income was $9.0 million for the quarter, as compared to $11.7 million for the three months ended March 31, 2024. The previous quarter included $1.2 million in gain on acquisition and $2.3 million in gains on resolution of special assets that did not repeat in the current quarter. Excluding these items non-interest income increased $777 thousand during the quarter, driven by increased service fee revenue including deposit services, treasury, debit card, credit card, insurance and wealth management.

Non-Interest Expense

Total non-interest expense for the quarter was $38.9 million as compared to $37.1 million for the previous quarter. Adjusting for merger expenses in both periods, the increase quarter over quarter was $1.0 million driven by the addition of Bank of Kirksville, including $320 thousand in intangible amortization as well as additional salary, technology and facility expenses.

The conversion of systems following the acquisition of Bank of Kirksville was completed in the second quarter.

Income Tax Expense

The effective tax rate for the quarter was 28.1% as compared to 20.8% for the quarter ended March 31, 2024. The increase in rate during the quarter was the result of an $11.5 million tax gain and related penalty recognized in our annual effective tax rate due to the surrender of BOLI. The impact of this transaction was partially offset by tax benefit related to a new investment in tax credit structures made by the Company in the quarter. The tax rate in the second quarter, normalized to exclude the impact of the BOLI surrender, would have been 17.5%.

Loans, Total Assets and Funding

Loans held for investment were $3.5 billion at June 30, 2024, decreasing $27.8 million during the quarter. Total assets were $5.2 billion as of the end of the period, increasing $6.5 million during the quarter.

Total deposits were $4.3 billion at June 30, 2024, decreasing $29.6 million from the previous quarter end. Of the total deposit balance, non-interest-bearing accounts comprise approximately 22.7%. Total Federal Home Loan Bank borrowings were $250.3 million as of the end of the quarter, up $30.4 million as compared to March 31, 2024.

Asset Quality

As of June 30, 2024, Equity’s allowance for credit losses to total loans remained materially consistent at 1.3% as compared to March 31, 2024. Nonperforming assets were $27.2 million as of June 30, 2024, or 0.5% of total assets, compared to $25.4 million at March 31, 2024, or 0.5% of total assets. Non-accrual loans were $26.6 million at June 30, 2024, as compared to $24.2 million at March 31, 2024. Total classified assets, including loans rated special mention or worse, other real estate owned, excluding previous branch locations, and other repossessed assets were $48.4 million, or 8.47% of regulatory capital, up from $39.2 million, or 6.9% of regulatory capital as of March 31, 2024.

Capital

Quarter over quarter, book capital increased $4.7 million to $461.4 million and tangible capital increased $5.9 million to $390.7 million. The increase in capital is primarily due to earnings, partially offset by treasury share purchases of $5.2 million, increase in unrealized loss on bonds and cash flow hedges of $1.2 million and dividends declared of $1.9 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 11.1%, the total capital to risk-weighted assets was 14.6% and the total leverage ratio was 9.1% at June 30, 2024. At March 31, 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 14.7% and the total leverage ratio was 9.1%.

Equity Bank's ratio of common equity tier 1 capital to risk-weighted assets was 12.9%, total capital to risk-weighted assets was 14.0% and the total leverage ratio was 10.1% at June 30, 2024. At March 31, 2024, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 13.2%, the ratio of total capital to risk-weighted assets was 14.3% and the total leverage ratio was 10.2%.

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 second quarter results on Wednesday, July 17, 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 two hours following the close of the call until August 1, 2024, accessible 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

June 30,

 

Six months ended

June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Interest and dividend income

 

 

 

 

 

 

 

 

Loans, including fees

 

$

61,518

 

 

$

52,748

 

 

$

120,347

 

 

$

101,129

 

Securities, taxable

 

 

10,176

 

 

 

5,813

 

 

 

20,053

 

 

 

11,760

 

Securities, nontaxable

 

 

401

 

 

 

568

 

 

 

792

 

 

 

1,237

 

Federal funds sold and other

 

 

3,037

 

 

 

2,127

 

 

 

5,707

 

 

 

3,253

 

Total interest and dividend income

 

 

75,132

 

 

 

61,256

 

 

 

146,899

 

 

 

117,379

 

Interest expense

 

 

 

 

 

 

 

 

Deposits

 

 

22,662

 

 

 

17,204

 

 

 

45,517

 

 

 

31,025

 

Federal funds purchased and retail repurchase agreements

 

 

306

 

 

 

192

 

 

 

632

 

 

 

387

 

Federal Home Loan Bank advances

 

 

3,789

 

 

 

953

 

 

 

4,933

 

 

 

1,971

 

Federal Reserve Bank borrowings

 

 

 

 

 

1,528

 

 

 

1,361

 

 

 

1,663

 

Subordinated debt

 

 

1,899

 

 

 

1,950

 

 

 

3,798

 

 

 

3,794

 

Total interest expense

 

 

28,656

 

 

 

21,827

 

 

 

56,241

 

 

 

38,840

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

46,476

 

 

 

39,429

 

 

 

90,658

 

 

 

78,539

 

Provision (reversal) for credit losses

 

 

265

 

 

 

298

 

 

 

1,265

 

 

 

(68

)

Net interest income after provision (reversal) for credit losses

 

 

46,211

 

 

 

39,131

 

 

 

89,393

 

 

 

78,607

 

Non-interest income

 

 

 

 

 

 

 

 

Service charges and fees

 

 

2,541

 

 

 

2,653

 

 

 

5,110

 

 

 

5,198

 

Debit card income

 

 

2,621

 

 

 

2,653

 

 

 

5,068

 

 

 

5,207

 

Mortgage banking

 

 

245

 

 

 

213

 

 

 

433

 

 

 

301

 

Increase in value of bank-owned life insurance

 

 

911

 

 

 

757

 

 

 

1,739

 

 

 

2,340

 

Net gain on acquisition and branch sales

 

 

60

 

 

 

 

 

 

1,300

 

 

 

 

Net gains (losses) from securities transactions

 

 

(27

)

 

 

(1,322

)

 

 

16

 

 

 

(1,290

)

Other

 

 

2,607

 

 

 

1,996

 

 

 

7,023

 

 

 

3,794

 

Total non-interest income

 

 

8,958

 

 

 

6,950

 

 

 

20,689

 

 

 

15,550

 

Non-interest expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

17,827

 

 

 

15,237

 

 

 

35,924

 

 

 

31,929

 

Net occupancy and equipment

 

 

3,787

 

 

 

2,940

 

 

 

7,322

 

 

 

5,819

 

Data processing

 

 

5,036

 

 

 

4,493

 

 

 

9,864

 

 

 

8,409

 

Professional fees

 

 

1,778

 

 

 

1,645

 

 

 

3,170

 

 

 

3,029

 

Advertising and business development

 

 

1,291

 

 

 

1,249

 

 

 

2,529

 

 

 

2,408

 

Telecommunications

 

 

572

 

 

 

516

 

 

 

1,227

 

 

 

1,001

 

FDIC insurance

 

 

590

 

 

 

515

 

 

 

1,161

 

 

 

875

 

Courier and postage

 

 

620

 

 

 

463

 

 

 

1,226

 

 

 

921

 

Free nationwide ATM cost

 

 

531

 

 

 

524

 

 

 

1,025

 

 

 

1,049

 

Amortization of core deposit intangibles

 

 

1,218

 

 

 

918

 

 

 

2,117

 

 

 

1,836

 

Loan expense

 

 

195

 

 

 

136

 

 

 

304

 

 

 

253

 

Other real estate owned

 

 

17

 

 

 

71

 

 

 

(67

)

 

 

190

 

Merger expenses

 

 

2,287

 

 

 

 

 

 

3,843

 

 

 

 

Other

 

 

3,122

 

 

 

4,423

 

 

 

6,378

 

 

 

8,640

 

Total non-interest expense

 

 

38,871

 

 

 

33,130

 

 

 

76,023

 

 

 

66,359

 

Income (loss) before income tax

 

 

16,298

 

 

 

12,951

 

 

 

34,059

 

 

 

27,798

 

Provision for income taxes

 

 

4,582

 

 

 

1,495

 

 

 

8,275

 

 

 

4,019

 

Net income (loss) and net income (loss) allocable to common stockholders

 

$

11,716

 

 

$

11,456

 

 

$

25,784

 

 

$

23,779

 

Basic earnings (loss) per share

 

$

0.77

 

 

$

0.74

 

 

$

1.68

 

 

$

1.52

 

Diluted earnings (loss) per share

 

$

0.76

 

 

$

0.74

 

 

$

1.66

 

 

$

1.51

 

Weighted average common shares

 

 

15,248,703

 

 

 

15,468,378

 

 

 

15,337,206

 

 

 

15,662,515

 

Weighted average diluted common shares

 

 

15,377,980

 

 

 

15,554,255

 

 

 

15,473,386

 

 

 

15,789,061

 

TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share data)

 

 

 

As of and for the three months ended

 

 

June 30,

2024

 

March 31,

2024

 

December 31,

2023

 

September 30,

2023

 

June 30,

2023

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

61,518

 

 

$

58,829

 

 

$

54,932

 

 

$

55,152

 

 

$

52,748

 

Securities, taxable

 

 

10,176

 

 

 

9,877

 

 

 

6,417

 

 

 

5,696

 

 

 

5,813

 

Securities, nontaxable

 

 

401

 

 

 

391

 

 

 

354

 

 

 

369

 

 

 

568

 

Federal funds sold and other

 

 

3,037

 

 

 

2,670

 

 

 

2,591

 

 

 

3,822

 

 

 

2,127

 

Total interest and dividend income

 

 

75,132

 

 

 

71,767

 

 

 

64,294

 

 

 

65,039

 

 

 

61,256

 

Interest expense

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

22,662

 

 

 

22,855

 

 

 

20,074

 

 

 

19,374

 

 

 

17,204

 

Federal funds purchased and retail repurchase agreements

 

 

306

 

 

 

326

 

 

 

298

 

 

 

246

 

 

 

192

 

Federal Home Loan Bank advances

 

 

3,789

 

 

 

1,144

 

 

 

1,005

 

 

 

968

 

 

 

953

 

Federal Reserve Bank borrowings

 

 

 

 

 

1,361

 

 

 

1,546

 

 

 

1,546

 

 

 

1,528

 

Subordinated debt

 

 

1,899

 

 

 

1,899

 

 

 

1,904

 

 

 

1,893

 

 

 

1,950

 

Total interest expense

 

 

28,656

 

 

 

27,585

 

 

 

24,827

 

 

 

24,027

 

 

 

21,827

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

46,476

 

 

 

44,182

 

 

 

39,467

 

 

 

41,012

 

 

 

39,429

 

Provision (reversal) for credit losses

 

 

265

 

 

 

1,000

 

 

 

711

 

 

 

1,230

 

 

 

298

 

Net interest income after provision (reversal) for credit losses

 

 

46,211

 

 

 

43,182

 

 

 

38,756

 

 

 

39,782

 

 

 

39,131

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

Service charges and fees

 

 

2,541

 

 

 

2,569

 

 

 

2,299

 

 

 

2,690

 

 

 

2,653

 

Debit card income

 

 

2,621

 

 

 

2,447

 

 

 

2,524

 

 

 

2,591

 

 

 

2,653

 

Mortgage banking

 

 

245

 

 

 

188

 

 

 

125

 

 

 

226

 

 

 

213

 

Increase in value of bank-owned life insurance

 

 

911

 

 

 

828

 

 

 

925

 

 

 

794

 

 

 

757

 

Net gain on acquisition and branch sales

 

 

60

 

 

 

1,240

 

 

 

 

 

 

 

 

 

 

Net gains (losses) from securities transactions

 

 

(27

)

 

 

43

 

 

 

(50,618

)

 

 

(1

)

 

 

(1,322

)

Other

 

 

2,607

 

 

 

4,416

 

 

 

1,331

 

 

 

2,435

 

 

 

1,996

 

Total non-interest income

 

 

8,958

 

 

 

11,731

 

 

 

(43,414

)

 

 

8,735

 

 

 

6,950

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

17,827

 

 

 

18,097

 

 

 

16,598

 

 

 

15,857

 

 

 

15,237

 

Net occupancy and equipment

 

 

3,787

 

 

 

3,535

 

 

 

3,244

 

 

 

3,262

 

 

 

2,940

 

Data processing

 

 

5,036

 

 

 

4,828

 

 

 

4,471

 

 

 

4,553

 

 

 

4,493

 

Professional fees

 

 

1,778

 

 

 

1,392

 

 

 

1,413

 

 

 

1,312

 

 

 

1,645

 

Advertising and business development

 

 

1,291

 

 

 

1,238

 

 

 

1,598

 

 

 

1,419

 

 

 

1,249

 

Telecommunications

 

 

572

 

 

 

655

 

 

 

460

 

 

 

502

 

 

 

516

 

FDIC insurance

 

 

590

 

 

 

571

 

 

 

660

 

 

 

660

 

 

 

515

 

Courier and postage

 

 

620

 

 

 

606

 

 

 

577

 

 

 

548

 

 

 

463

 

Free nationwide ATM cost

 

 

531

 

 

 

494

 

 

 

508

 

 

 

516

 

 

 

524

 

Amortization of core deposit intangibles

 

 

1,218

 

 

 

899

 

 

 

739

 

 

 

799

 

 

 

918

 

Loan expense

 

 

195

 

 

 

109

 

 

 

155

 

 

 

132

 

 

 

136

 

Other real estate owned

 

 

17

 

 

 

(84

)

 

 

224

 

 

 

128

 

 

 

71

 

Merger expenses

 

 

2,287

 

 

 

1,556

 

 

 

297

 

 

 

 

 

 

 

Other

 

 

3,122

 

 

 

3,256

 

 

 

4,054

 

 

 

4,556

 

 

 

4,423

 

Total non-interest expense

 

 

38,871

 

 

 

37,152

 

 

 

34,998

 

 

 

34,244

 

 

 

33,130

 

Income (loss) before income tax

 

 

16,298

 

 

 

17,761

 

 

 

(39,656

)

 

 

14,273

 

 

 

12,951

 

Provision for income taxes (benefit)

 

 

4,582

 

 

 

3,693

 

 

 

(11,357

)

 

 

1,932

 

 

 

1,495

 

Net income (loss) and net income (loss) allocable to common stockholders

 

$

11,716

 

 

$

14,068

 

 

$

(28,299

)

 

$

12,341

 

 

$

11,456

 

Basic earnings (loss) per share

 

$

0.77

 

 

$

0.91

 

 

$

(1.84

)

 

$

0.80

 

 

$

0.74

 

Diluted earnings (loss) per share

 

$

0.76

 

 

$

0.90

 

 

$

(1.84

)

 

$

0.80

 

 

$

0.74

 

Weighted average common shares

 

 

15,248,703

 

 

 

15,425,709

 

 

 

15,417,200

 

 

 

15,404,992

 

 

 

15,468,378

 

Weighted average diluted common shares

 

 

15,377,980

 

 

 

15,569,225

 

 

 

15,417,200

 

 

 

15,507,172

 

 

 

15,554,255

 

TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands)

 

 

 

June 30,

2024

 

March 31,

2024

 

December 31,

2023

 

September 30,

2023

 

June 30,

2023

ASSETS

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

244,321

 

 

$

217,611

 

 

$

363,289

 

 

$

183,404

 

 

$

262,604

 

Federal funds sold

 

 

15,945

 

 

 

17,407

 

 

 

15,810

 

 

 

15,613

 

 

 

15,495

 

Cash and cash equivalents

 

 

260,266

 

 

 

235,018

 

 

 

379,099

 

 

 

199,017

 

 

 

278,099

 

Available-for-sale securities

 

 

1,042,176

 

 

 

1,091,717

 

 

 

919,648

 

 

 

1,057,009

 

 

 

1,094,748

 

Held-to-maturity securities

 

 

5,226

 

 

 

2,205

 

 

 

2,209

 

 

 

2,212

 

 

 

2,216

 

Loans held for sale

 

 

1,959

 

 

 

1,311

 

 

 

476

 

 

 

627

 

 

 

2,456

 

Loans, net of allowance for credit losses(1)

 

 

3,410,920

 

 

 

3,437,714

 

 

 

3,289,381

 

 

 

3,237,932

 

 

 

3,278,126

 

Other real estate owned, net

 

 

2,989

 

 

 

1,465

 

 

 

1,833

 

 

 

3,369

 

 

 

4,362

 

Premises and equipment, net

 

 

114,264

 

 

 

116,792

 

 

 

112,632

 

 

 

110,271

 

 

 

106,186

 

Bank-owned life insurance

 

 

130,326

 

 

 

125,693

 

 

 

124,865

 

 

 

124,245

 

 

 

123,451

 

Federal Reserve Bank and Federal Home Loan Bank stock

 

 

33,171

 

 

 

27,009

 

 

 

20,608

 

 

 

20,780

 

 

 

21,129

 

Interest receivable

 

 

27,381

 

 

 

27,082

 

 

 

25,497

 

 

 

23,621

 

 

 

21,360

 

Goodwill

 

 

53,101

 

 

 

53,101

 

 

 

53,101

 

 

 

53,101

 

 

 

53,101

 

Core deposit intangibles, net

 

 

16,636

 

 

 

17,854

 

 

 

7,222

 

 

 

7,961

 

 

 

8,760

 

Other

 

 

147,102

 

 

 

102,075

 

 

 

98,021

 

 

 

105,122

 

 

 

100,889

 

Total assets

 

$

5,245,517

 

 

$

5,239,036

 

 

$

5,034,592

 

 

$

4,945,267

 

 

$

5,094,883

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

Demand

 

$

984,872

 

 

$

981,623

 

 

$

898,129

 

 

$

936,217

 

 

$

978,968

 

Total non-interest-bearing deposits

 

 

984,872

 

 

 

981,623

 

 

 

898,129

 

 

 

936,217

 

 

 

978,968

 

Demand, savings and money market

 

 

2,560,091

 

 

 

2,574,871

 

 

 

2,483,807

 

 

 

2,397,003

 

 

 

2,397,524

 

Time

 

 

796,474

 

 

 

814,532

 

 

 

763,519

 

 

 

748,950

 

 

 

854,458

 

Total interest-bearing deposits

 

 

3,356,565

 

 

 

3,389,403

 

 

 

3,247,326

 

 

 

3,145,953

 

 

 

3,251,982

 

Total deposits

 

 

4,341,437

 

 

 

4,371,026

 

 

 

4,145,455

 

 

 

4,082,170

 

 

 

4,230,950

 

Federal funds purchased and retail repurchase agreements

 

 

38,031

 

 

 

43,811

 

 

 

43,582

 

 

 

39,701

 

 

 

44,770

 

Federal Home Loan Bank advances and Federal Reserve Bank borrowings

 

 

250,306

 

 

 

219,931

 

 

 

240,000

 

 

 

240,000

 

 

 

240,000

 

Subordinated debt

 

 

97,196

 

 

 

97,058

 

 

 

96,921

 

 

 

96,787

 

 

 

96,653

 

Contractual obligations

 

 

23,770

 

 

 

18,493

 

 

 

19,315

 

 

 

29,019

 

 

 

29,608

 

Interest payable and other liabilities

 

 

33,342

 

 

 

31,941

 

 

 

36,459

 

 

 

39,460

 

 

 

34,467

 

Total liabilities

 

 

4,784,082

 

 

 

4,782,260

 

 

 

4,581,732

 

 

 

4,527,137

 

 

 

4,676,448

 

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

208

 

 

 

208

 

 

 

207

 

 

 

207

 

 

 

207

 

Additional paid-in capital

 

 

491,709

 

 

 

490,533

 

 

 

489,187

 

 

 

488,137

 

 

 

487,225

 

Retained earnings

 

 

163,068

 

 

 

153,201

 

 

 

141,006

 

 

 

171,188

 

 

 

160,715

 

Accumulated other comprehensive income (loss), net of tax

 

 

(62,005

)

 

 

(60,788

)

 

 

(57,920

)

 

 

(122,047

)

 

 

(110,225

)

Treasury stock

 

 

(131,545

)

 

 

(126,378

)

 

 

(119,620

)

 

 

(119,355

)

 

 

(119,487

)

Total stockholders’ equity

 

 

461,435

 

 

 

456,776

 

 

 

452,860

 

 

 

418,130

 

 

 

418,435

 

Total liabilities and stockholders’ equity

 

$

5,245,517

 

 

$

5,239,036

 

 

$

5,034,592

 

 

$

4,945,267

 

 

$

5,094,883

 

 

 

 

 

 

 

 

 

 

 

 

(1) Allowance for credit losses

 

$

43,487

 

 

$

44,449

 

 

$

43,520

 

 

$

44,186

 

 

$

44,544

 

TABLE 4. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)

(Dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the three months ended

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

2024

 

2024

 

2023

 

2023

 

2023

Loans Held For Investment by Type

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

$

1,793,545

 

 

$

1,797,192

 

 

$

1,759,855

 

 

$

1,721,761

 

 

$

1,764,460

 

Commercial and industrial

 

 

663,718

 

 

 

649,035

 

 

 

598,327

 

 

 

585,129

 

 

 

583,664

 

Residential real estate

 

 

572,523

 

 

 

581,988

 

 

 

556,328

 

 

 

558,188

 

 

 

560,389

 

Agricultural real estate

 

 

219,226

 

 

 

198,291

 

 

 

196,114

 

 

 

205,865

 

 

 

202,317

 

Agricultural

 

 

104,341

 

 

 

149,312

 

 

 

118,587

 

 

 

103,352

 

 

 

104,510

 

Consumer

 

 

101,054

 

 

 

106,345

 

 

 

103,690

 

 

 

107,823

 

 

 

107,330

 

Total loans held-for-investment

 

 

3,454,407

 

 

 

3,482,163

 

 

 

3,332,901

 

 

 

3,282,118

 

 

 

3,322,670

 

Allowance for credit losses

 

 

(43,487

)

 

 

(44,449

)

 

 

(43,520

)

 

 

(44,186

)

 

 

(44,544

)

Net loans held for investment

 

$

3,410,920

 

 

$

3,437,714

 

 

$

3,289,381

 

 

$

3,237,932

 

 

$

3,278,126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality Ratios

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans to total loans

 

 

1.26

%

 

 

1.28

%

 

 

1.31

%

 

 

1.35

%

 

 

1.34

%

Past due or nonaccrual loans to total loans

 

 

1.15

%

 

 

1.10

%

 

 

1.10

%

 

 

1.03

%

 

 

0.78

%

Nonperforming assets to total assets

 

 

0.52

%

 

 

0.49

%

 

 

0.53

%

 

 

0.42

%

 

 

0.31

%

Nonperforming assets to total loans plus other

real estate owned

 

 

0.79

%

 

 

0.73

%

 

 

0.79

%

 

 

0.63

%

 

 

0.47

%

Classified assets to bank total regulatory capital

 

 

8.47

%

 

 

6.85

%

 

 

7.09

%

 

 

6.27

%

 

 

7.94

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Average Balance Sheet Data (QTD Average)

 

 

 

 

 

 

 

 

 

 

Investment securities

 

$

1,065,979

 

 

$

1,074,101

 

 

$

985,591

 

 

$

1,085,905

 

 

$

1,155,971

 

Total gross loans receivable

 

 

3,459,476

 

 

 

3,452,553

 

 

 

3,293,755

 

 

 

3,281,483

 

 

 

3,337,497

 

Interest-earning assets

 

 

4,745,713

 

 

 

4,742,200

 

 

 

4,480,279

 

 

 

4,635,384

 

 

 

4,678,744

 

Total assets

 

 

5,196,258

 

 

 

5,152,915

 

 

 

4,892,712

 

 

 

5,046,179

 

 

 

5,064,912

 

Interest-bearing deposits

 

 

3,275,765

 

 

 

3,319,907

 

 

 

3,092,637

 

 

 

3,206,300

 

 

 

3,226,965

 

Borrowings

 

 

450,178

 

 

 

390,166

 

 

 

391,691

 

 

 

385,125

 

 

 

385,504

 

Total interest-bearing liabilities

 

 

3,725,943

 

 

 

3,710,073

 

 

 

3,484,328

 

 

 

3,591,425

 

 

 

3,612,469

 

Total deposits

 

 

4,250,843

 

 

 

4,254,883

 

 

 

4,019,362

 

 

 

4,177,332

 

 

 

4,204,334

 

Total liabilities

 

 

4,740,936

 

 

 

4,692,671

 

 

 

4,469,505

 

 

 

4,619,919

 

 

 

4,640,050

 

Total stockholders' equity

 

 

455,322

 

 

 

460,244

 

 

 

423,207

 

 

 

426,260

 

 

 

424,862

 

Tangible common equity*

 

 

383,899

 

 

 

398,041

 

 

 

361,451

 

 

 

363,625

 

 

 

361,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance ratios

 

 

 

 

 

 

 

 

 

 

Return on average assets (ROAA) annualized

 

 

0.91

%

 

 

1.10

%

 

 

(2.29

)%

 

 

0.97

%

 

 

0.91

%

Return on average assets before income tax and

provision for loan losses*

 

 

1.28

%

 

 

1.46

%

 

 

(3.16

)%

 

 

1.22

%

 

 

1.05

%

Return on average equity (ROAE) annualized

 

 

10.35

%

 

 

12.29

%

 

 

(26.53

)%

 

 

11.49

%

 

 

10.82

%

Return on average equity before income tax and

provision for loan losses*

 

 

14.63

%

 

 

16.39

%

 

 

(36.51

)%

 

 

14.43

%

 

 

12.51

%

Return on average tangible common equity

(ROATCE) annualized*

 

 

13.31

%

 

 

14.96

%

 

 

(30.39

)%

 

 

14.18

%

 

 

13.55

%

Yield on loans annualized

 

 

7.15

%

 

 

6.85

%

 

 

6.62

%

 

 

6.67

%

 

 

6.34

%

Cost of interest-bearing deposits annualized

 

 

2.78

%

 

 

2.77

%

 

 

2.58

%

 

 

2.40

%

 

 

2.14

%

Cost of total deposits annualized

 

 

2.14

%

 

 

2.16

%

 

 

1.98

%

 

 

1.84

%

 

 

1.64

%

Net interest margin annualized

 

 

3.94

%

 

 

3.75

%

 

 

3.49

%

 

 

3.51

%

 

 

3.38

%

Efficiency ratio*

 

 

66.03

%

 

 

65.16

%

 

 

74.35

%

 

 

68.83

%

 

 

69.44

%

Non-interest income / average assets

 

 

0.69

%

 

 

0.92

%

 

 

(3.52

)%

 

 

0.69

%

 

 

0.55

%

Non-interest expense / average assets

 

 

3.01

%

 

 

2.90

%

 

 

2.84

%

 

 

2.69

%

 

 

2.62

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

9.14

%

 

 

9.10

%

 

 

9.46

%

 

 

9.77

%

 

 

9.54

%

Common Equity Tier 1 Capital Ratio

 

 

11.12

%

 

 

11.14

%

 

 

11.74

%

 

 

12.65

%

 

 

12.23

%

Tier 1 Risk Based Capital Ratio

 

 

11.70

%

 

 

11.73

%

 

 

12.36

%

 

 

13.28

%

 

 

12.84

%

Total Risk Based Capital Ratio

 

 

14.61

%

 

 

14.71

%

 

 

15.48

%

 

 

16.42

%

 

 

15.96

%

Total stockholders' equity to total assets

 

 

8.80

%

 

 

8.72

%

 

 

8.99

%

 

 

8.46

%

 

 

8.21

%

Tangible common equity to tangible assets*

 

 

7.55

%

 

 

7.45

%

 

 

7.87

%

 

 

7.29

%

 

 

7.06

%

Dividend payout ratio

 

 

15.79

%

 

 

13.31

%

 

 

(6.65

)%

 

 

15.13

%

 

 

13.53

%

Book value per common share

 

$

30.36

 

 

$

29.80

 

 

$

29.35

 

 

$

27.13

 

 

$

27.18

 

Tangible book value per common share*

 

$

25.70

 

 

$

25.10

 

 

$

25.37

 

 

$

23.09

 

 

$

23.08

 

Tangible book value per diluted common share*

 

$

25.44

 

 

$

24.87

 

 

$

25.05

 

 

$

22.96

 

 

$

22.98

 

 

 

 

 

 

 

 

 

 

 

 

* The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GGAP financial measures, see Table 8. Non-GAAP Financial Measures.

TABLE 5. YEAR-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)

(Dollars in thousands)

 

 

For six months ended

 

For six months ended

 

June 30, 2024

 

June 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

$

634,879

 

 

$

25,194

 

 

 

7.98%

 

$

584,081

 

 

$

20,519

 

 

 

7.08%

Commercial real estate

 

1,425,143

 

 

 

49,142

 

 

 

6.93%

 

 

1,324,010

 

 

 

40,987

 

 

 

6.24%

Real estate construction

 

378,815

 

 

 

16,618

 

 

 

8.82%

 

 

434,793

 

 

 

14,926

 

 

 

6.92%

Residential real estate

 

580,382

 

 

 

13,024

 

 

 

4.51%

 

 

568,710

 

 

 

11,848

 

 

 

4.20%

Agricultural real estate

 

201,520

 

 

 

7,412

 

 

 

7.40%

 

 

202,742

 

 

 

6,501

 

 

 

6.47%

Agricultural

 

129,167

 

 

 

5,493

 

 

 

8.55%

 

 

100,795

 

 

 

3,183

 

 

 

6.37%

Consumer

 

106,107

 

 

 

3,464

 

 

 

6.57%

 

 

106,546

 

 

 

3,165

 

 

 

5.99%

Total loans

 

3,456,013

 

 

 

120,347

 

 

 

7.00%

 

 

3,321,677

 

 

 

101,129

 

 

 

6.14%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable securities

 

1,008,742

 

 

 

20,053

 

 

 

4.00%

 

 

1,076,108

 

 

 

11,760

 

 

 

2.20%

Nontaxable securities

 

61,298

 

 

 

792

 

 

 

2.60%

 

 

94,538

 

 

 

1,237

 

 

 

2.64%

Total securities

 

1,070,040

 

 

 

20,845

 

 

 

3.92%

 

 

1,170,646

 

 

 

12,997

 

 

 

2.24%

Federal funds sold and other

 

217,902

 

 

 

5,707

 

 

 

5.27%

 

 

152,747

 

 

 

3,253

 

 

 

4.29%

Total interest-earning assets

$

4,743,955

 

 

 

146,899

 

 

 

6.23%

 

$

4,645,070

 

 

 

117,379

 

 

 

5.10%

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand, savings and money market deposits

$

2,525,710

 

 

 

31,605

 

 

 

2.52%

 

$

2,336,791

 

 

 

18,957

 

 

 

1.64%

Time deposits

 

772,126

 

 

 

13,912

 

 

 

3.62%

 

 

894,446

 

 

 

12,068

 

 

 

2.72%

Total interest-bearing deposits

 

3,297,836

 

 

 

45,517

 

 

 

2.78%

 

 

3,231,237

 

 

 

31,025

 

 

 

1.94%

FHLB advances

 

208,160

 

 

 

4,933

 

 

 

4.77%

 

 

95,497

 

 

 

1,971

 

 

 

4.16%

Other borrowings

 

212,013

 

 

 

5,791

 

 

 

5.48%

 

 

221,601

 

 

 

5,844

 

 

 

5.32%

Total interest-bearing liabilities

$

3,718,009

 

 

 

56,241

 

 

 

3.04%

 

$

3,548,335

 

 

 

38,840

 

 

 

2.21%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

90,658

 

 

 

 

 

 

 

$

78,539

 

 

 

Interest rate spread

 

 

 

 

 

 

 

3.19%

 

 

 

 

 

 

 

 

2.89%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (2)

 

 

 

 

 

 

 

3.84%

 

 

 

 

 

 

 

 

3.41%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

June 30, 2024

 

June 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

$

635,123

 

 

$

12,782

 

 

 

8.09%

 

$

590,634

 

 

$

10,885

 

 

 

7.39%

Commercial real estate

 

1,401,109

 

 

 

24,541

 

 

 

7.04%

 

 

1,303,520

 

 

 

20,875

 

 

 

6.42%

Real estate construction

 

402,831

 

 

 

8,843

 

 

 

8.83%

 

 

465,231

 

 

 

8,231

 

 

 

7.10%

Residential real estate

 

580,338

 

 

 

6,563

 

 

 

4.55%

 

 

567,297

 

 

 

6,048

 

 

 

4.28%

Agricultural real estate

 

206,018

 

 

 

3,944

 

 

 

7.70%

 

 

202,584

 

 

 

3,387

 

 

 

6.71%

Agricultural

 

127,298

 

 

 

3,102

 

 

 

9.80%

 

 

101,333

 

 

 

1,704

 

 

 

6.74%

Consumer

 

106,759

 

 

 

1,743

 

 

 

6.57%

 

 

106,898

 

 

 

1,618

 

 

 

6.07%

Total loans

 

3,459,476

 

 

 

61,518

 

 

 

7.15%

 

 

3,337,497

 

 

 

52,748

 

 

 

6.34%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable securities

 

1,006,018

 

 

 

10,176

 

 

 

4.07%

 

 

1,068,653

 

 

 

5,813

 

 

 

2.18%

Nontaxable securities

 

59,961

 

 

 

401

 

 

 

2.70%

 

 

87,318

 

 

 

568

 

 

 

2.61%

Total securities

 

1,065,979

 

 

 

10,577

 

 

 

3.99%

 

 

1,155,971

 

 

 

6,381

 

 

 

2.21%

Federal funds sold and other

 

220,258

 

 

 

3,037

 

 

 

5.54%

 

 

185,276

 

 

 

2,127

 

 

 

4.61%

Total interest-earning assets

$

4,745,713

 

 

 

75,132

 

 

 

6.37%

 

$

4,678,744

 

 

 

61,256

 

 

 

5.25%

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand, savings and money market deposits

$

2,530,899

 

 

 

15,946

 

 

 

2.53%

 

$

2,323,685

 

 

 

10,503

 

 

 

1.81%

Time deposits

 

744,866

 

 

 

6,716

 

 

 

3.63%

 

 

903,280

 

 

 

6,701

 

 

 

2.98%

Total interest-bearing deposits

 

3,275,765

 

 

 

22,662

 

 

 

2.78%

 

 

3,226,965

 

 

 

17,204

 

 

 

2.14%

FHLB advances

 

302,972

 

 

 

3,789

 

 

 

5.03%

 

 

101,845

 

 

 

953

 

 

 

3.75%

Other borrowings

 

147,206

 

 

 

2,205

 

 

 

6.03%

 

 

283,659

 

 

 

3,670

 

 

 

5.19%

Total interest-bearing liabilities

$

3,725,943

 

 

 

28,656

 

 

 

3.09%

 

$

3,612,469

 

 

 

21,827

 

 

 

2.42%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

46,476

 

 

 

 

 

 

 

$

39,429

 

 

 

Interest rate spread

 

 

 

 

 

 

 

3.28%

 

 

 

 

 

 

 

 

2.83%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (2)

 

 

 

 

 

 

 

3.94%

 

 

 

 

 

 

 

 

3.38%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

June 30, 2024

 

March 31, 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

$

635,123

 

 

$

12,782

 

 

 

8.09%

 

$

634,637

 

 

$

12,412

 

 

 

7.87%

Commercial real estate

 

1,401,109

 

 

 

24,541

 

 

 

7.04%

 

 

1,449,177

 

 

 

24,601

 

 

 

6.83%

Real estate construction

 

402,831

 

 

 

8,843

 

 

 

8.83%

 

 

354,801

 

 

 

7,775

 

 

 

8.81%

Residential real estate

 

580,338

 

 

 

6,563

 

 

 

4.55%

 

 

580,426

 

 

 

6,461

 

 

 

4.48%

Agricultural real estate

 

206,018

 

 

 

3,944

 

 

 

7.70%

 

 

197,023

 

 

 

3,468

 

 

 

7.08%

Agricultural

 

127,298

 

 

 

3,102

 

 

 

9.80%

 

 

131,035

 

 

 

2,391

 

 

 

7.34%

Consumer

 

106,759

 

 

 

1,743

 

 

 

6.57%

 

 

105,454

 

 

 

1,721

 

 

 

6.56%

Total loans

 

3,459,476

 

 

 

61,518

 

 

 

7.15%

 

 

3,452,553

 

 

 

58,829

 

 

 

6.85%

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable securities

 

1,006,018

 

 

 

10,176

 

 

 

4.07%

 

 

1,011,466

 

 

 

9,877

 

 

 

3.93%

Nontaxable securities

 

59,961

 

 

 

401

 

 

 

2.70%

 

 

62,635

 

 

 

391

 

 

 

2.51%

Total securities

 

1,065,979

 

 

 

10,577

 

 

 

3.99%

 

 

1,074,101

 

 

 

10,268

 

 

 

3.84%

Federal funds sold and other

 

220,258

 

 

 

3,037

 

 

 

5.54%

 

 

215,546

 

 

 

2,670

 

 

 

4.98%

Total interest-earning assets

$

4,745,713

 

 

 

75,132

 

 

 

6.37%

 

$

4,742,200

 

 

 

71,767

 

 

 

6.09%

Interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand savings and money market deposits

$

2,530,899

 

 

 

15,946

 

 

 

2.53%

 

$

2,520,521

 

 

 

15,660

 

 

 

2.50%

Time deposits

 

744,866

 

 

 

6,716

 

 

 

3.63%

 

 

799,386

 

 

 

7,195

 

 

 

3.62%

Total interest-bearing deposits

 

3,275,765

 

 

 

22,662

 

 

 

2.78%

 

 

3,319,907

 

 

 

22,855

 

 

 

2.77%

FHLB advances

 

302,972

 

 

 

3,789

 

 

 

5.03%

 

 

113,348

 

 

 

1,144

 

 

 

4.06%

Other borrowings

 

147,206

 

 

 

2,205

 

 

 

6.03%

 

 

276,818

 

 

 

3,586

 

 

 

5.21%

Total interest-bearing liabilities

$

3,725,943

 

 

 

28,656

 

 

 

3.09%

 

$

3,710,073

 

 

 

27,585

 

 

 

2.99%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

$

46,476

 

 

 

 

 

 

 

$

44,182

 

 

 

Interest rate spread

 

 

 

 

 

 

 

3.28%

 

 

 

 

 

 

 

 

3.10%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (2)

 

 

 

 

 

 

 

3.94%

 

 

 

 

 

 

 

 

3.75%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

2024

 

2024

 

2023

 

2023

 

2023

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

461,435

 

 

$

456,776

 

 

$

452,860

 

 

$

418,130

 

 

$

418,435

 

Less: goodwill

 

 

53,101

 

 

 

53,101

 

 

 

53,101

 

 

 

53,101

 

 

 

53,101

 

Less: core deposit intangibles, net

 

 

16,636

 

 

 

17,854

 

 

 

7,222

 

 

 

7,961

 

 

 

8,760

 

Less: mortgage servicing rights, net

 

 

25

 

 

 

50

 

 

 

75

 

 

 

100

 

 

 

126

 

Less: naming rights, net

 

 

979

 

 

 

989

 

 

 

1,000

 

 

 

1,011

 

 

 

1,022

 

Tangible common equity

 

$

390,694

 

 

$

384,782

 

 

$

391,462

 

 

$

355,957

 

 

$

355,426

 

Common shares outstanding at period end

 

 

15,200,194

 

 

 

15,327,799

 

 

 

15,428,251

 

 

 

15,413,064

 

 

 

15,396,739

 

Diluted common shares outstanding at period end

 

 

15,358,396

 

 

 

15,469,531

 

 

 

15,629,185

 

 

 

15,500,749

 

 

 

15,468,319

 

Book value per common share

 

$

30.36

 

 

$

29.80

 

 

$

29.35

 

 

$

27.13

 

 

$

27.18

 

Tangible book value per common share

 

$

25.70

 

 

$

25.10

 

 

$

25.37

 

 

$

23.09

 

 

$

23.08

 

Tangible book value per diluted common share

 

$

25.44

 

 

$

24.87

 

 

$

25.05

 

 

$

22.96

 

 

$

22.98

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

5,245,517

 

 

$

5,239,036

 

 

$

5,034,592

 

 

$

4,945,267

 

 

$

5,094,883

 

Less: goodwill

 

 

53,101

 

 

 

53,101

 

 

 

53,101

 

 

 

53,101

 

 

 

53,101

 

Less: core deposit intangibles, net

 

 

16,636

 

 

 

17,854

 

 

 

7,222

 

 

 

7,961

 

 

 

8,760

 

Less: mortgage servicing rights, net

 

 

25

 

 

 

50

 

 

 

75

 

 

 

100

 

 

 

126

 

Less: naming rights, net

 

 

979

 

 

 

989

 

 

 

1,000

 

 

 

1,011

 

 

 

1,022

 

Tangible assets

 

$

5,174,776

 

 

$

5,167,042

 

 

$

4,973,194

 

 

$

4,883,094

 

 

$

5,031,874

 

Total stockholders' equity to total assets

 

 

8.80

%

 

 

8.72

%

 

 

8.99

%

 

 

8.46

%

 

 

8.21

%

Tangible common equity to tangible assets

 

 

7.55

%

 

 

7.45

%

 

 

7.87

%

 

 

7.29

%

 

 

7.06

%

 

 

 

 

 

 

 

 

 

 

 

Total average stockholders' equity

 

$

455,322

 

 

$

460,244

 

 

$

423,207

 

 

$

426,260

 

 

$

424,862

 

Less: average intangible assets

 

 

71,423

 

 

 

62,203

 

 

 

61,756

 

 

 

62,635

 

 

 

63,453

 

Average tangible common equity

 

$

383,899

 

 

$

398,041

 

 

$

361,451

 

 

$

363,625

 

 

$

361,409

 

Net income (loss) allocable to common stockholders

 

$

11,716

 

 

$

14,068

 

 

$

(28,299

)

 

$

12,341

 

 

$

11,456

 

Add: amortization of intangible assets

 

 

1,254

 

 

 

935

 

 

 

775

 

 

 

835

 

 

 

954

 

Less: tax effect of intangible assets amortization

 

 

263

 

 

 

196

 

 

 

163

 

 

 

175

 

 

 

200

 

Adjusted net income (loss) allocable to common

stockholders

 

$

12,707

 

 

$

14,807

 

 

$

(27,687

)

 

$

13,001

 

 

$

12,210

 

Return on total average stockholders' equity

(ROAE) annualized

 

 

10.35

%

 

 

12.29

%

 

 

(26.53

)%

 

 

11.49

%

 

 

10.82

%

Return on average tangible common equity

(ROATCE) annualized

 

 

13.31

%

 

 

14.96

%

 

 

(30.39

)%

 

 

14.18

%

 

 

13.55

%

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

$

38,871

 

 

$

37,152

 

 

$

34,998

 

 

$

34,244

 

 

$

33,130

 

Less: merger expense

 

 

2,287

 

 

 

1,556

 

 

 

297

 

 

 

 

 

 

 

Adjusted non-interest expense

 

$

36,584

 

 

$

35,596

 

 

$

34,701

 

 

$

34,244

 

 

$

33,130

 

Net interest income

 

$

46,476

 

 

$

44,182

 

 

$

39,467

 

 

$

41,012

 

 

$

39,429

 

Non-interest income

 

 

8,958

 

 

 

11,731

 

 

 

(43,414

)

 

 

8,735

 

 

 

6,950

 

Less: net gain on acquisition and branch sales

 

 

60

 

 

 

1,240

 

 

 

 

 

 

 

 

 

 

Less: net gains (losses) from securities transactions

 

 

(27

)

 

 

43

 

 

 

(50,618

)

 

 

(1

)

 

 

(1,322

)

Adjusted non-interest income

 

$

8,925

 

 

$

10,448

 

 

$

7,204

 

 

$

8,736

 

 

$

8,272

 

Net interest income plus adjusted non-interest income

 

$

55,401

 

 

$

54,630

 

 

$

46,671

 

 

$

49,748

 

 

$

47,701

 

Non-interest expense to

net interest income plus non-interest income

 

 

70.12

%

 

 

66.45

%

 

 

-886.70

%

 

 

68.84

%

 

 

71.43

%

Efficiency ratio

 

 

66.03

%

 

 

65.16

%

 

 

74.35

%

 

 

68.83

%

 

 

69.45

%

Net income (loss) allocable to common stockholders

 

$

11,716

 

 

$

14,068

 

 

$

(28,299

)

 

$

12,341

 

 

$

11,456

 

Add: income tax provision

 

 

4,582

 

 

 

3,693

 

 

 

(11,357

)

 

 

1,932

 

 

 

1,495

 

Add: provision (reversal) of credit losses

 

 

265

 

 

 

1,000

 

 

 

711

 

 

 

1,230

 

 

 

298

 

Pre-tax, pre-provision income

 

$

16,563

 

 

$

18,761

 

 

$

(38,945

)

 

$

15,503

 

 

$

13,249

 

Total average assets

 

$

5,196,258

 

 

$

5,152,915

 

 

$

4,892,712

 

 

$

5,046,179

 

 

$

5,064,912

 

Total average stockholders' equity

 

$

455,322

 

 

$

460,244

 

 

$

423,207

 

 

$

426,620

 

 

$

424,862

 

Return on average assets (ROAA) annualized

 

 

0.91

%

 

 

1.10

%

 

 

(2.29

)%

 

 

0.97

%

 

 

0.91

%

Adjusted return on average assets

 

 

1.28

%

 

 

1.46

%

 

 

(3.16

)%

 

 

1.22

%

 

 

1.05

%

Adjusted return on average equity

 

 

14.63

%

 

 

16.39

%

 

 

(36.51

)%

 

 

14.43

%

 

 

12.51

%

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) allocable to common stockholders

 

$

11,716

 

 

$

14,068

 

 

$

(28,299

)

 

$

12,341

 

 

$

11,456

 

Add: Day 1 -Provision

 

 

 

 

 

1,000

 

 

 

 

 

 

 

 

 

 

Less: Gain (loss) from securities transactions

 

 

(27

)

 

 

43

 

 

 

(50,618

)

 

 

(1

)

 

 

(1,322

)

Add: Merger expense

 

 

2,287

 

 

 

1,556

 

 

 

297

 

 

 

 

 

 

 

Adjusted non-core items

 

 

2,314

 

 

 

2,513

 

 

 

50,915

 

 

 

1

 

 

 

1,322

 

Tax effected non-core items

 

 

1,828

 

 

 

1,985

 

 

 

40,223

 

 

 

1

 

 

 

1,044

 

BOLI tax adjustment

 

 

1,730

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating net income

 

$

15,274

 

 

$

16,053

 

 

$

11,924

 

 

$

12,342

 

 

$

12,500

 

GAAP earnings (loss) per diluted share

 

$

0.76

 

 

$

0.90

 

 

$

(1.84

)

 

$

0.80

 

 

$

0.74

 

Adjusted earnings (loss) per diluted share

 

$

0.99

 

 

$

1.03

 

 

$

0.77

 

 

$

0.80

 

 

$

0.81

 

Total average assets

 

$

5,196,258

 

 

$

5,152,915

 

 

$

4,892,712

 

 

$

5,046,179

 

 

$

5,064,912

 

Adjusted Operating ROAA

 

 

1.18

%

 

 

1.25

%

 

 

0.97

%

 

 

0.97

%

 

 

1.00

%

Weighted average diluted common shares

 

 

15,377,980

 

 

 

15,569,225

 

 

 

15,417,200

 

 

 

15,507,172

 

 

 

15,554,255

 

 

Contacts

Investor Contact:

Brian J. Katzfey

VP, Director of Corporate Development and Investor Relations

Equity Bank

(316) 858-3128

bkatzfey@equitybank.com

Media Contact:

John J. Hanley

Chief Marketing Officer

Equity Bancshares, Inc.

(913) 583-8004

jhanley@equitybank.com

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