Equity Bancshares, Inc. Reports Second Quarter Results, Continued Organic Growth

Источник: Nasdaq GlobeNewswire / 19 июл 2022 15:56:20 America/Chicago

WICHITA, Kansas, July 19, 2022 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ: EQBK), (“Equity”, “the Company”, “we,” “us,” “our”), the Wichita-based holding company of Equity Bank, reported net income of $15.3 million and $0.94 earnings per diluted share for the quarter ended June 30, 2022.

“In 2022, we’ve demonstrated our ability to deliver organic growth absent a merger partner. Our 8.5% organic loan growth represents the hard work of our sales and operations teams to provide value to customers,” said Brad S. Elliott, Chairman and CEO, Equity Bancshares, Inc. “We have a great leadership team dedicated to driving loans, treasury services, deposit products, and new products such as our recently introduced healthcare services offerings. These efforts to deliver sophisticated products and customer experience solutions had the effect of increasing earnings, improving net interest margin, increasing fee income and improving our loan to deposit ratio.”

“In the third quarter, we expect to continue to strengthen our loan to deposit ratio and to serve as a resource for our customers as they continue to navigate economic challenges for their businesses and families,” said Mr. Elliott. “Our brand reflects our entrepreneurial spirit, and as we add talent to our leadership teams, new products and services, and new service channels, we’ll continue to operate with our local customers in mind.”

Notable Items:

During the second quarter, the Company realized continued loan growth excluding the impact of PPP assets and the branch sale, bring annualized loan growth year-to-date to 8.51%.
During the quarter, the Company realized linked period growth of 5.38% in service fee income, driven by additional debit card revenue and service charges on Equity Bank deposit products.
The Company closed on the sale of three branches to United Bank & Trust in Belleville, Clyde and Concordia, Kansas, which resulted in a net gain of $540 thousand.
At June 30, 2022, classified assets to regulatory capital has declined to 13.1% from 17.1% at March 31, 2022.
The Company continued to emphasize investor returns through repurchase of 355,844 shares during the quarter, at an average price of $31.54, as well as the continuation of our quarterly dividend program at $0.08 per share. Under the currently active repurchase program, the Company is authorized to purchase an additional 126,900 shares.

Financial Results for the Quarter Ended June 30, 2022

Net income allocable to common stockholders was $15.3 million, or $0.94 per diluted share, for the three months ended June 30, 2022, as compared to $15.7 million, or $0.93 per diluted share, for the three months ended March 31, 2022. The decrease for the second quarter of 2022 is primarily due to increases in non-interest expense of $2.0 million and provision for credit losses of $1.2 million, partially offset by an increase in non-interest income of $615 thousand and net interest income of $277 thousand.

Net Interest Income

Net interest income was $39.6 million for the three months ended June 30, 2022, as compared to $39.3 million for the three months ended March 31, 2022, an increase of $277 thousand, or 0.7%. The yield on interest-earning assets increased 7-basis points to 3.74% during the quarter ended June 30, 2022, as compared to 3.67% for the quarter ended March 31, 2022. The cost of interest-bearing deposits increased by 6 basis points during the quarter, moving from 0.22% at March 31, 2022 to 0.28% at June 30, 2022.

Provision for Credit Losses

During the three months ended June 30, 2022, there was a provision to the allowance for credit losses of $824 thousand compared to a net release of $412 thousand in the previous quarter. The comparative increase was primarily driven by the increase in general reserves driven by slowing prepayment speeds and the perceived risk associated with the current economic environment, which includes, significant inflation, supply chain concerns and the impact of monetary policy on consumers and businesses. For the three months ended June 30, 2022, we had net charge-offs of $176 thousand as compared to $362 thousand for the three months ended March 31, 2022.

Non-Interest Income

Total non-interest income was $9.6 million for the three months ended June 30, 2022, as compared to $9.0 million for the three months ended March 31, 2022, or an increase of 6.8%, quarter over quarter. The increase was primarily due to an increase in net gain on acquisition and branch sales of $540 thousand.

Non-Interest Expense

Total non-interest expense for the quarter ended June 30, 2022, was $31.4 million as compared to $29.5 million for the quarter ended March 31, 2022. The $2.0 million change was primarily due to increases in other non-interest expense of $2.0 million driven by a provision to reserve for unfunded commitments of $288 thousand for the quarter ended June 30, 2022, compared to a release of reserve for unfunded commitments of $1.0 million for the quarter ended March 31, 2022.

Asset Quality

As of June 30, 2022, Equity’s allowance for credit losses to total loans remained constant at 1.5%, as compared to March 31, 2022. Nonperforming assets were $37.0 million as of June 30, 2022, or 0.7% of total assets, compared to $37.5 million at March 31, 2022, or 0.7% of total assets. Non-accrual loans were $18.9 million at June 30, 2022, as compared to $20.7 million at March 31, 2022. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $72.1 million, or 13.1% of regulatory capital, down from $94.2 million, or 17.1% of regulatory capital as of March 31, 2022.

During the quarter ended June 30, 2022, non-performing assets decreased $500 thousand due to decreases in non-accrual loans of $1.8 million partially offset by increases in closed bank branches classified as other real estate owned of $881 thousand and other repossessed assets of $83 thousand.

Regulatory Capital

The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 12.1%, the total capital to risk-weighted assets was 16.0% and the total leverage ratio was 9.1% at June 30, 2022. At March 31, 2022, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 11.8%, the total capital to risk-weighted assets ratio was 15.7% and the total leverage ratio was 9.1%.

The Company’s subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 13.9%, a ratio of total capital to risk-weighted assets of 15.1% and a total leverage ratio of 9.9% at June 30, 2022. At March 31, 2022, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 13.7%, the ratio of total capital to risk-weighted assets was 14.9% and the total leverage ratio was 10.0%.

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, Eric Newell, will hold a conference call and webcast to discuss second quarter results on Wednesday, July 20, 2022 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 July 27, 2022, 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 NASDAQ Global Select Market 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,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity’s control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from Equity’s expectations include COVID-19 related impacts; competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the 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 9, 2022, and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, 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.

Investor Contact:

Chris Navratil
SVP, Finance
Equity Bancshares, Inc.
(316) 612-6014
cnavratil@equitybank.com

Media Contact:

John J. Hanley
SVP, Senior Director of Marketing
Equity Bancshares, Inc.
(913) 583-8004
jhanley@equitybank.com

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, except per share data)

	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022		2021
Interest and dividend income
Loans, including fees	$	36,849		$	33,810		$	73,155	$	64,811
Securities, taxable		5,584			3,523			10,975		7,322
Securities, nontaxable		678			717			1,333		1,441
Federal funds sold and other		513			268			813		556
Total interest and dividend income		43,624			38,318			86,276		74,130
Interest expense
Deposits		2,183			2,025			3,905		4,435
Federal funds purchased and retail repurchase agreements		46			26			79		48
Federal Home Loan Bank advances		176			80			185		145
Subordinated debt		1,653			1,557			3,252		3,113
Total interest expense		4,058			3,688			7,421		7,741

Net interest income		39,566			34,630			78,855		66,389
Provision (reversal) for credit losses		824			(1,657	)		412		(7,413	)
Net interest income after provision (reversal) for credit losses		38,742			36,287			78,443		73,802
Non-interest income
Service charges and fees		2,617			2,169			5,139		3,765
Debit card income		2,810			2,679			5,438		5,029
Mortgage banking		428			848			990		1,783
Increase in value of bank-owned life insurance		736			676			1,601		1,277
Net gain on acquisition and branch sales		540			663			540		585
Net gains (losses) from securities transactions		(32	)		—			8		17
Other		2,538			2,065			4,943		3,356
Total non-interest income		9,637			9,100			18,659		15,812
Non-interest expense
Salaries and employee benefits		15,383			12,769			30,451		25,491
Net occupancy and equipment		3,007			2,327			6,177		4,695
Data processing		3,642			3,474			7,411		6,137
Professional fees		1,111			999			2,282		2,072
Advertising and business development		972			799			1,948		1,481
Telecommunications		442			512			912		1,092
FDIC insurance		260			425			440		840
Courier and postage		489			327			912		696
Free nationwide ATM cost		541			513			1,042		985
Amortization of core deposit intangibles		1,111			1,030			2,161		2,064
Loan expense		207			181			392		419
Other real estate owned		14			(468	)		13		(463	)
Merger expenses		88			460			411		612
Other		4,169			2,458			6,343		4,566
Total non-interest expense		31,436			25,806			60,895		50,687
Income (loss) before income tax		16,943			19,581			36,207		38,927
Provision for income taxes		1,684			4,415			5,298		8,686
Net income (loss) and net income (loss) allocable to common stockholders	$	15,259		$	15,166		$	30,909	$	30,241
Basic earnings (loss) per share	$	0.95		$	1.06		$	1.88	$	2.10
Diluted earnings (loss) per share	$	0.94		$	1.03		$	1.86	$	2.06
Weighted average common shares		16,106,683			14,356,958			16,428,535		14,410,328
Weighted average diluted common shares		16,312,953			14,674,838			16,639,970		14,704,240

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, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
Interest and dividend income
Loans, including fees	$	36,849		$	36,306		$	34,942		$	37,581		$	33,810
Securities, taxable		5,584			5,391			4,754			3,920			3,523
Securities, nontaxable		678			655			747			655			717
Federal funds sold and other		513			300			349			290			268
Total interest and dividend income		43,624			42,652			40,792			42,446			38,318
Interest expense
Deposits		2,183			1,722			1,939			1,881			2,025
Federal funds purchased and retail repurchase agreements		46			33			32			24			26
Federal Home Loan Bank advances		176			9			14			10			80
Subordinated debt		1,653			1,599			1,592			1,556			1,557
Total interest expense		4,058			3,363			3,577			3,471			3,688

Net interest income		39,566			39,289			37,215			38,975			34,630
Provision (reversal) for credit losses		824			(412	)		(2,125	)		1,058			(1,657	)
Net interest income after provision (reversal) for credit losses		38,742			39,701			39,340			37,917			36,287
Non-interest income
Service charges and fees		2,617			2,522			2,471			2,360			2,169
Debit card income		2,810			2,628			2,633			2,574			2,679
Mortgage banking		428			562			722			801			848
Increase in value of bank-owned life insurance		736			865			1,060			1,169			676
Net gain on acquisition and branch sales		540			—			—			—			663
Net gains (losses) from securities transactions		(32	)		40			8			381			—
Other		2,538			2,405			2,305			546			2,065
Total non-interest income		9,637			9,022			9,199			7,831			9,100
Non-interest expense
Salaries and employee benefits		15,383			15,068			15,119			13,588			12,769
Net occupancy and equipment		3,007			3,170			2,967			2,475			2,327
Data processing		3,642			3,769			3,867			3,257			3,474
Professional fees		1,111			1,171			1,565			1,076			999
Advertising and business development		972			976			1,129			760			799
Telecommunications		442			470			435			439			512
FDIC insurance		260			180			360			465			425
Courier and postage		489			423			389			344			327
Free nationwide ATM cost		541			501			515			519			513
Amortization of core deposit intangibles		1,111			1,050			1,080			1,030			1,030
Loan expense		207			185			308			207			181
Other real estate owned		14			(1	)		617			(342	)		(468	)
Loss on debt extinguishment		—			—			—			372			—
Merger expenses		88			323			4,562			4,015			460
Other		4,169			2,174			5,176			2,484			2,458
Total non-interest expense		31,436			29,459			38,089			30,689			25,806
Income (loss) before income tax		16,943			19,264			10,450			15,059			19,581
Provision for income taxes (benefit)		1,684			3,614			(16	)		3,286			4,415
Net income (loss) and net income (loss) allocable to common stockholders	$	15,259		$	15,650		$	10,466		$	11,773		$	15,166
Basic earnings (loss) per share	$	0.95		$	0.94		$	0.62		$	0.82		$	1.06
Diluted earnings (loss) per share	$	0.94		$	0.93		$	0.61		$	0.80		$	1.03
Weighted average common shares		16,106,683			16,652,556			16,865,167			14,384,302			14,356,958
Weighted average diluted common shares		16,312,953			16,869,152			17,141,174			14,669,312			14,674,838

TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021
ASSETS
Cash and due from banks	$	103,126		$	89,764		$	259,131		$	141,645		$	138,869
Federal funds sold		458			286			823			673			452
Cash and cash equivalents		103,584			90,050			259,954			142,318			139,321
Available-for-sale securities		1,288,180			1,352,894			1,327,442			1,157,423			1,041,613
Loans held for sale		1,714			1,575			4,214			4,108			6,183
Loans, net of allowance for credit losses⁽¹⁾		3,175,208			3,194,987			3,107,262			2,633,148			2,763,227
Other real estate owned, net		12,969			9,897			9,523			10,267			10,861
Premises and equipment, net		101,212			103,168			104,038			90,727			90,876
Bank-owned life insurance		121,665			120,928			120,787			103,431			103,321
Federal Reserve Bank and Federal Home Loan Bank stock		21,479			19,890			17,510			14,540			18,454
Interest receivable		16,519			16,923			18,048			15,519			15,064
Goodwill		53,101			54,465			54,465			31,601			31,601
Core deposit intangibles, net		12,554			13,830			14,879			12,963			13,993
Other		93,971			100,016			99,509			47,223			33,702
Total assets	$	5,002,156		$	5,078,623		$	5,137,631		$	4,263,268		$	4,268,216
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Demand	$	1,194,863		$	1,255,793		$	1,244,117		$	984,436		$	992,565
Total non-interest-bearing deposits		1,194,863			1,255,793			1,244,117			984,436			992,565
Demand, savings and money market		2,445,545			2,511,478			2,522,289			2,092,849			2,035,496
Time		651,363			612,399			653,598			585,492			659,494
Total interest-bearing deposits		3,096,908			3,123,877			3,175,887			2,678,341			2,694,990
Total deposits		4,291,771			4,379,670			4,420,004			3,662,777			3,687,555
Federal funds purchased and retail repurchase agreements		52,750			48,199			56,006			39,137			47,184
Federal Home Loan Bank advances		80,000			50,000			—			—			9,208
Subordinated debt		96,135			96,010			95,885			88,030			87,908
Contractual obligations		15,813			17,307			17,692			18,771			4,469
Interest payable and other liabilities		37,572			35,422			47,413			36,804			18,897
Total liabilities		4,574,041			4,626,608			4,637,000			3,845,519			3,855,221
Commitments and contingent liabilities
Stockholders’ equity
Common stock		204			204			203			178			176
Additional paid-in capital		480,897			480,106			478,862			392,321			389,394
Retained earnings		116,576			102,632			88,324			79,226			68,625
Accumulated other comprehensive income, net of tax		(77,426	)		(50,012	)		1,776			9,475			13,450
Treasury stock		(92,136	)		(80,915	)		(68,534	)		(63,451	)		(58,650	)
Total stockholders’ equity		428,115			452,015			500,631			417,749			412,995
Total liabilities and stockholders’ equity	$	5,002,156		$	5,078,623		$	5,137,631		$	4,263,268		$	4,268,216

⁽¹⁾ Allowance for credit losses	$	48,238		$	47,590		$	48,365		$	52,763		$	51,834

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,
	2022			2022			2021			2021			2021
Loans Held For Investment by Type
Commercial real estate	$	1,643,068		$	1,552,134		$	1,486,148		$	1,308,707		$	1,261,214
Commercial and industrial		578,899			629,181			567,497			569,513			732,126
Residential real estate		578,936			613,928			638,087			490,633			503,110
Agricultural real estate		197,938			198,844			198,330			138,793			129,020
Agricultural		124,753			150,077			166,975			93,767			97,912
Consumer		99,852			98,413			98,590			84,498			91,679
Total loans held-for-investment		3,223,446			3,242,577			3,155,627			2,685,911			2,815,061
Allowance for credit losses		(48,238	)		(47,590	)		(48,365	)		(52,763	)		(51,834	)
Net loans held for investment	$	3,175,208		$	3,194,987		$	3,107,262		$	2,633,148		$	2,763,227


Asset Quality Ratios
Allowance for credit losses on loans to total loans		1.50	%		1.47	%		1.53	%		1.96	%		1.84	%
Past due or nonaccrual loans to total loans		0.78	%		0.82	%		1.18	%		2.78	%		2.09	%
Nonperforming assets to total assets		0.74	%		0.74	%		1.28	%		1.74	%		1.56	%
Nonperforming assets to total loans plus other real estate owned		1.14	%		1.15	%		2.07	%		2.76	%		2.36	%
Classified assets to bank total regulatory capital		13.08	%		17.12	%		25.34	%		24.25	%		23.20	%


Selected Average Balance Sheet Data (QTD Average)
Investment securities	$	1,319,099		$	1,397,421		$	1,330,267		$	1,061,178		$	986,986
Total gross loans receivable		3,216,853			3,195,787			3,181,279			2,748,202			2,853,145
Interest-earning assets		4,675,967			4,715,389			4,713,817			4,005,509			3,964,633
Total assets		5,067,686			5,108,120			5,068,278			4,275,298			4,231,439
Interest-bearing deposits		3,112,300			3,163,777			3,101,657			2,702,040			2,656,052
Borrowings		238,062			160,094			165,941			132,581			171,658
Total interest-bearing liabilities		3,350,362			3,323,871			3,267,598			2,834,621			2,827,710
Total deposits		4,340,196			4,393,879			4,342,732			3,686,169			3,624,950
Total liabilities		4,630,204			4,615,521			4,505,232			3,852,419			3,827,400
Total stockholders' equity		437,483			492,599			563,046			422,879			404,039
Tangible common equity^*		368,505			422,418			501,860			376,544			356,705


Performance ratios
Return on average assets (ROAA) annualized		1.21	%		1.24	%		0.82	%		1.09	%		1.44	%
Return on average assets before income tax and provision for loan losses*		1.41	%		1.50	%		0.65	%		1.50	%		1.70	%
Return on average equity (ROAE) annualized		13.99	%		12.88	%		7.37	%		11.05	%		15.06	%
Return on average equity before income tax and provision for loan losses*		16.29	%		15.52	%		5.87	%		15.12	%		17.79	%
Return on average tangible common equity (ROATCE) annualized^*		17.60	%		15.85	%		8.97	%		13.27	%		17.98	%
Yield on loans annualized		4.59	%		4.61	%		4.36	%		5.43	%		4.75	%
Cost of interest-bearing deposits annualized		0.28	%		0.22	%		0.25	%		0.28	%		0.31	%
Cost of total deposits annualized		0.20	%		0.16	%		0.18	%		0.20	%		0.22	%
Net interest margin annualized		3.39	%		3.38	%		3.13	%		3.86	%		3.50	%
Efficiency ratio^*		64.38	%		60.36	%		72.25	%		56.65	%		58.85	%
Non-interest income / average assets		0.76	%		0.72	%		0.72	%		0.73	%		0.86	%
Non-interest expense / average assets		2.49	%		2.34	%		2.98	%		2.85	%		2.45	%


Capital Ratios
Tier 1 Leverage Ratio		9.11	%		9.07	%		9.09	%		9.02	%		8.88	%
Common Equity Tier 1 Capital Ratio		12.08	%		11.81	%		12.03	%		12.39	%		12.41	%
Tier 1 Risk Based Capital Ratio		12.71	%		12.43	%		12.67	%		12.90	%		12.93	%
Total Risk Based Capital Ratio		15.97	%		15.66	%		15.96	%		16.63	%		16.74	%
Total stockholders' equity to total assets		8.56	%		8.90	%		9.74	%		9.80	%		9.68	%
Tangible common equity to tangible assets^*		7.32	%		7.63	%		8.48	%		8.82	%		8.68	%
Dividend payout ratio		8.61	%		8.58	%		13.05	%		9.96	%		0.00	%
Book value per common share	$	26.58		$	27.47		$	29.87		$	29.08		$	28.76
Tangible book value per common share^*	$	22.42		$	23.24		$	25.65		$	25.90		$	25.51
Tangible book value per diluted common share^*	$	22.17		$	22.95		$	25.22		$	25.42		$	24.98

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

	For the six months ended							For the six months ended
	June 30, 2022							June 30, 2021
	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	$	581,880	$	15,244		5.28	%	$	814,895	$	20,962		5.19	%
Commercial real estate		1,200,212		27,972		4.70	%		981,482		22,873		4.70	%
Real estate construction		363,542		7,596		4.21	%		254,807		4,531		3.59	%
Residential real estate		615,035		10,872		3.56	%		430,123		9,093		4.26	%
Agricultural real estate		202,091		5,306		5.29	%		136,366		3,384		5.00	%
Agricultural		142,210		3,849		5.46	%		94,596		2,062		4.40	%
Consumer		101,409		2,316		4.60	%		83,083		1,906		4.63	%
Total loans		3,206,379		73,155		4.60	%		2,795,352		64,811		4.68	%
Securities
Taxable securities		1,248,178		10,975		1.77	%		863,801		7,322		1.71	%
Nontaxable securities		109,866		1,333		2.45	%		103,529		1,441		2.81	%
Total securities		1,358,044		12,308		1.83	%		967,330		8,763		1.83	%
Federal funds sold and other		131,148		813		1.25	%		165,408		556		0.68	%
Total interest-earning assets	$	4,695,571		86,276		3.71	%	$	3,928,090		74,130		3.81	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,507,707		2,342		0.19	%	$	2,073,658		1,865		0.18	%
Time deposits		630,189		1,563		0.50	%		599,353		2,570		0.86	%
Total interest-bearing deposits		3,137,896		3,905		0.25	%		2,673,011		4,435		0.33	%
FHLB advances		45,299		185		0.82	%		23,911		145		1.22	%
Other borrowings		153,995		3,331		4.36	%		131,687		3,161		4.84	%
Total interest-bearing liabilities	$	3,337,190		7,421		0.45	%	$	2,828,609		7,741		0.55	%

Net interest income			$	78,855						$	66,389
Interest rate spread						3.26	%						3.26	%

Net interest margin ⁽²⁾						3.39	%						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, 2022							June 30, 2021
	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	$	588,126	$	7,483		5.10	%	$	826,647	$	11,729		5.69	%
Commercial real estate		1,210,185		14,521		4.81	%		991,033		11,433		4.63	%
Real estate construction		384,317		4,297		4.48	%		253,947		2,352		3.71	%
Residential real estate		597,680		5,206		3.49	%		465,525		4,642		4.00	%
Agricultural real estate		202,038		2,643		5.25	%		131,906		1,687		5.13	%
Agricultural		134,826		1,533		4.56	%		94,407		1,024		4.35	%
Consumer		99,680		1,166		4.69	%		89,680		943		4.22	%
Total loans		3,216,852		36,849		4.59	%		2,853,145		33,810		4.75	%
Securities
Taxable securities		1,210,828		5,584		1.85	%		887,983		3,523		1.59	%
Nontaxable securities		108,271		678		2.51	%		99,003		717		2.90	%
Total securities		1,319,099		6,262		1.90	%		986,986		4,240		1.72	%
Federal funds sold and other		140,016		513		1.47	%		124,502		268		0.86	%
Total interest-earning assets	$	4,675,967		43,624		3.74	%	$	3,964,633		38,318		3.88	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,481,602		1,346		0.22	%	$	2,068,319		895		0.17	%
Time deposits		630,698		837		0.53	%		587,733		1,130		0.77	%
Total interest-bearing deposits		3,112,300		2,183		0.28	%		2,656,052		2,025		0.31	%
FHLB advances		80,266		176		0.88	%		37,656		80		0.86	%
Other borrowings		157,796		1,699		4.32	%		134,002		1,583		4.74	%
Total interest-bearing liabilities	$	3,350,362		4,058		0.49	%	$	2,827,710		3,688		0.52	%

Net interest income			$	39,566						$	34,630
Interest rate spread						3.25	%						3.36	%

Net interest margin ⁽²⁾						3.39	%						3.50	%

⁽¹⁾ Average loan balances include nonaccrual loans.
⁽²⁾ Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.
⁽³⁾ Tax exempt income is not included in the above table on a tax-equivalent basis.

TABLE 7. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)
(Dollars in thousands)

	For the three months ended							For the three months ended
	June 30, 2022							March 31, 2022
	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	$	588,126	$	7,483		5.10	%	$	575,563	$	7,761		5.47	%
Commercial real estate		1,210,185		14,521		4.81	%		1,190,128		13,451		4.58	%
Real estate construction		384,317		4,297		4.48	%		342,536		3,299		3.91	%
Residential real estate		597,680		5,206		3.49	%		632,581		5,665		3.63	%
Agricultural real estate		202,038		2,643		5.25	%		202,145		2,663		5.34	%
Agricultural		134,826		1,533		4.56	%		149,676		2,316		6.28	%
Consumer		99,680		1,166		4.69	%		103,158		1,151		4.53	%
Total loans		3,216,852		36,849		4.59	%		3,195,787		36,306		4.61	%
Securities
Taxable securities		1,210,828		5,584		1.85	%		1,285,942		5,391		1.70	%
Nontaxable securities		108,271		678		2.51	%		111,479		655		2.38	%
Total securities		1,319,099		6,262		1.90	%		1,397,421		6,046		1.75	%
Federal funds sold and other		140,016		513		1.47	%		122,181		300		1.00	%
Total interest-earning assets	$	4,675,967		43,624		3.74	%	$	4,715,389		42,652		3.67	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,481,602		1,346		0.22	%	$	2,534,102		996		0.16	%
Time deposits		630,698		837		0.53	%		629,675		726		0.47	%
Total interest-bearing deposits		3,112,300		2,183		0.28	%		3,163,777		1,722		0.22	%
FHLB advances		80,266		176		0.88	%		9,943		9		0.38	%
Other borrowings		157,796		1,699		4.32	%		150,151		1,632		4.41	%
Total interest-bearing liabilities	$	3,350,362		4,058		0.49	%	$	3,323,871		3,363		0.41	%

Net interest income			$	39,566						$	39,289
Interest rate spread						3.25	%						3.26	%

Net interest margin ⁽²⁾						3.39	%						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.

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,
	2022			2022			2021			2021			2021

Total stockholders' equity	$	428,115		$	452,015		$	500,631		$	417,749		$	412,995
Less: goodwill		53,101			54,465			54,465			31,601			31,601
Less: core deposit intangibles, net		12,554			13,830			14,879			12,963			13,993
Less: mortgage servicing asset, net		226			251			276			—			—
Less: naming rights, net		1,065			1,076			1,087			1,098			1,109
Tangible common equity	$	361,169		$	382,393		$	429,924		$	372,087		$	366,292
Common shares issued at period end		16,106,818			16,454,966			16,760,115			14,365,785			14,360,172
Diluted common shares outstanding at period end		16,289,635			16,662,779			17,050,115			14,637,306			14,664,603
Book value per common share	$	26.58		$	27.47		$	29.87		$	29.08		$	28.76
Tangible book value per common share	$	22.42		$	23.24		$	25.65		$	25.90		$	25.51
Tangible book value per diluted common share	$	22.17		$	22.95		$	25.22		$	25.42		$	24.98

Total assets	$	5,002,156		$	5,078,623		$	5,137,631		$	4,263,268		$	4,268,216
Less: goodwill		53,101			54,465			54,465			31,601			31,601
Less: core deposit intangibles, net		12,554			13,830			14,879			12,963			13,993
Less: mortgage servicing asset, net		226			251			276			—			—
Less: naming rights, net		1,065			1,076			1,087			1,098			1,109
Tangible assets	$	4,935,210		$	5,009,001		$	5,066,924		$	4,217,606		$	4,221,513
Total stockholders' equity to total assets		8.56	%		8.90	%		9.74	%		9.80	%		9.68	%
Tangible common equity to tangible assets		7.32	%		7.63	%		8.48	%		8.82	%		8.68	%

Total average stockholders' equity	$	437,483		$	492,599		$	563,046		$	422,879		$	404,039
Less: average intangible assets		68,978			70,181			61,186			46,335			47,334
Average tangible common equity	$	368,505		$	422,418		$	501,860		$	376,544		$	356,705
Net income (loss) allocable to common stockholders	$	15,259		$	15,650		$	10,466		$	11,773		$	15,166
Amortization of intangible assets		1,148			1,085			1,116			1,040			1,041
Less: tax effect of intangible assets amortization		241			228			234			218			219
Adjusted net income (loss) allocable to common stockholders	$	16,166		$	16,507		$	11,348		$	12,595		$	15,988
Return on total average stockholders' equity (ROAE) annualized		13.99	%		12.88	%		7.37	%		11.05	%		15.06	%
Return on average tangible common equity (ROATCE) annualized		17.60	%		15.85	%		8.97	%		13.27	%		17.98	%

Non-interest expense	$	31,436		$	29,459		$	38,089		$	30,689		$	25,806
Loss on debt extinguishment		—			—			—		$	372			—
Less: merger expense		88			323			4,562			4,015			460
Non-interest expense	$	31,348		$	29,136		$	33,527		$	26,302		$	25,346
Net interest income	$	39,566		$	39,289		$	37,215		$	38,975		$	34,630
Non-interest income		9,637			9,022			9,199			7,831			9,100
Less: net gain on acquisition and branch sales		540			—			—			—			663
Less: net gains (losses) from securities transactions		(32	)		40			8			381			—
Adjusted non-interest income, adjusted	$	9,129		$	8,982		$	9,191		$	7,450		$	8,437
Net interest income plus adjusted non-interest income	$	48,695		$	48,271		$	46,406		$	46,425		$	43,067
Non-interest expense to net interest income plus non-interest income		63.89	%		60.98	%		82.06	%		65.57	%		59.01	%
Efficiency ratio		64.38	%		60.36	%		72.25	%		56.65	%		58.85	%
Net income (loss) allocable to common stockholders	$	15,259		$	15,650		$	10,466		$	11,773		$	15,166
Add: income tax provision		1,684			3,614			(16	)		3,286			4,415
Add: provision (reversal) of credit losses		824			(412	)		(2,125	)		1,058			(1,657	)
Adjusted net income	$	17,767		$	18,852		$	8,325		$	16,117		$	17,924
Total average assets	$	5,067,687		$	5,108,120		$	5,068,301		$	4,275,298		$	4,231,439
Total average stockholders' equity	$	437,483		$	492,599		$	563,023		$	422,879		$	404,039
Return on average assets (ROAA) annualized		1.21	%		1.24	%		0.82	%		1.09	%		1.44	%
Adjusted return on average assets		1.41	%		1.50	%		0.65	%		1.50	%		1.70	%
Adjusted return on average equity		16.29	%		15.52	%		5.87	%		15.12	%		17.79	%

Equity Bancshares, Inc. Reports Second Quarter Results, Continued Organic Growth

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