Equity Bancshares, Inc. (NASDAQ: EQBK), (“Equity”, “the Company”,
“we,” “us,” “our”), the Wichita-based holding company of Equity
Bank, reported net income of $11.6 million and $0.72 earnings per
diluted share for the quarter ended December 31, 2022. For the full
year ending December 31, 2022, reported net income totaled $57.7
million or $3.51 per diluted share compared to $52.5 million or
$3.43 per diluted share for the full year ending December 31, 2021.
"Our Company was able to deliver two records in
2022. First, record net income of $57.7 million and second, record
revenue of $197.8 million. These achievements are a testament to
the strength of our franchise despite economic uncertainty and
changing consumer habits,” said Brad S. Elliott, Chairman and CEO,
Equity Bancshares, Inc. “We’ve been able to offer competitive
products and rely on our local market leadership to continue to add
customer relationships based on value, convenience, and our brand.
As we compete for business and consumer relationships, our teams
continue working tirelessly to enhance our products and technology
while delivering superior customer service.”
Mr. Elliott continued, “We also saw improvement in
key credit ratios, including non-performing assets to total assets
down to 0.37% from 1.28% year-over-year, thanks to the disciplined
work of our bankers. We took the opportunity in 2022 to invest in
our people and technology, allowing us to deliver best-in-class
banking products and services into the future. Our Equity teams
helped us earn regional honors like Best Places to Work by the
Wichita Business Journal, and we were recognized as one of
Newsweek’s Best Banks in the U.S. With our prudent loan
underwriting standards, growing capital base, and diversified
deposit portfolio, we are well positioned to continue to generate
excellent financial results for our shareholders.”
Notable Items:
- The Company’s loan growth, excluding PPP and branch sales, was
$56.8 million, or 6.9% linked quarter annualized including 9.25%
annualized growth within the commercial and commercial real estate
portfolios. Loan growth for the full year of 2022 was $220.0
million or 9.5% as compared to year-end 2021.
- Total FHLB borrowings declined $47.1 million during the quarter
ending December 31, 2022 or 25.3% from $186 million at September
30, 2022. Deposits increased $15.2 million during the fourth
quarter, or 0.4%.
- Book Value per Common Share increased $1.03 linked quarter to
$25.74, while Tangible Book Value per Common Share increased $1.08
to $21.67.
- During the quarter, the Company realized linked period Net
Interest Margin growth of 5 basis points, equating to record Net
Interest Income of $42.0 million.
- Equity repurchased $5.5 million of common stock representing
1.0% of shares outstanding as of the end of the third quarter.
- During the quarter ending December 31, 2022, the ratio of
non-performing assets to total assets improved 22bps linked quarter
to 0.4%, and the ratio of Classified Assets to Bank Regulatory
Capital improved to 10.0% from 11.0%.
Financial Results for the Quarter Ended
December 31, 2022
Net income allocable to common stockholders was
$11.6 million, or $0.72 per diluted share, for the three months
ended December 31, 2022, as compared to $15.2 million, or $0.93 per
diluted share, for the three months ended September 30, 2022. The
decrease during the quarter was primarily driven by an increase in
non-interest expense of $3.0 million as the Company continued to
invest in its people, processes and the communities we serve.
Net Interest Income
Net interest income was $42.0 million for the
three months ended December 31, 2022, as compared to $41.9 million
for the three months ended September 30, 2022, an increase of $87
thousand, or 0.2%. The yield on interest-earning assets increased
49 basis points to 4.7%. The cost of interest-bearing deposits
increased by 48 basis points during the quarter, moving from 0.6%
at September 30, 2022, to 1.1% at December 31, 2022.
During the quarter, the Company realized the
benefit of an emphasis on re-positioning interest earning assets
into the loan portfolio with realized expansion of loans as a
percentage of average assets. While total average assets were down,
driven by the impact of the fair value mark on the investment
portfolio, average loans in total and as a percentage of earning
assets increased, comprising 72.2% of average earnings assets
during the quarter. The Company continues to expect repositioning
of investment portfolio assets into the loan portfolio.
Average interest-bearing liabilities moved up
slightly during the quarter as the Company experienced a minor
compositional shift from noninterest-bearing deposits into interest
bearing categories while also paying down the level of debt on the
balance sheet. Overall deposit levels increased $15.2 million, or
1.4% annualized linked quarter.
Provision for Credit Losses
During the three months ended December 31, 2022,
there was a net release of $151 thousand compared to a net release
of $136 thousand in the previous quarter. The minimal release of
provision for the quarter is the result of continued positive
credit trends without realization of meaningful losses. The Company
continues to estimate the allowance for credit loss with
assumptions that anticipate slower prepayments rates and continued
market disruption caused by elevated inflation, supply chain issues
and the impact of monetary policy on consumers and businesses. For
the three months ended December 31, 2022, we had net charge-offs of
$501 thousand as compared to $1.6 million for the three months
ended September 30, 2022.
Non-Interest Income
Total non-interest income was $8.3 million for the
three months ended December 31, 2022, as compared to $9.0 million
for the three months ended September 30, 2022, or a decrease of
7.1%, quarter-over-quarter. The $640 thousand decrease was
primarily due to a decrease in loan repurchase obligation reversal
of $280 thousand, mortgage banking revenue of $194 thousand, and
derivative fair valuation changes of $175 thousand.
Non-Interest Expense
Total non-interest expense for the quarter ended
December 31, 2022, was $35.2 million as compared to $32.2 million
for the quarter ended September 30, 2022. The $3.0 million change
was primarily due to increases in advertising and business
development of $712 thousand driven by deposit campaigns, salaries
and employee benefits of $671 thousand reflecting higher full-time
equivalents reducing our job vacancy rate, write-off of tax credit
investments of $537 thousand and an unfavorable change in losses on
disposal of repossessed assets of $343 thousand reflecting a $333
thousand gain recognized in the third quarter of 2022.
Income Tax Expense
At December 31, 2022, the full year effective tax
rate for 2022 was 17.9% as compared to an expectation of 16.2% as
of September 30, 2022. The comparative increase in tax rate
resulted in $1.2 million in additive income tax expense during the
fourth quarter calculated as the full year’s pre-tax income
multiplied by the change in effective tax rate expectation.
The increase in the effective tax rate was driven
by the Company’s investment in solar tax credits for which timing
of implementation and credit receipt is not certain. During the
quarter, the timing on one of the investments moved back compared
to expectations as of the end of September, resulting in less
credits being received in 2022. The timing issue is expected to be
resolved in the first quarter of 2023 with no material impact to
the overall return on the investment.
Loans, Total Assets and
Funding
Loans held for investments were $3.3 billion at
December 31, 2022, increasing 6.9% on an annualized basis compared
to previous quarter end. Excluding the impact of PPP loans and
loans sold in branch transactions, balances have increased $220.0
million, or 9.5% year-over-year. Included in the annual growth, is
$301.7 million within the commercial and industrial and commercial
real estate portfolios, or 15.0%. Total assets were $5.0 billion as
of December 31, 2022.
Total deposits were $4.2 billion at December 31,
2022, increasing 1.4% annualized compared to previous quarter end.
Of this balance, non-interesting bearing accounts comprise
approximately 25.9%. Borrowings from the FHLB declined $47.1
million to $138.9 million during the quarter.
Asset Quality
As of December 31, 2022, Equity’s allowance for
credit losses to total loans remained materially consistent at 1.4%
as compared to September 30, 2022. Nonperforming assets were $18.2
million as of December 31, 2022, or 0.4% of total assets, compared
to $29.7 million at September 30, 2022, or 0.6% of total assets.
Non-accrual loans were $17.6 million at December 31, 2022, as
compared to $23.1 million at September 30, 2022. Total classified
assets, including loans rated special mention or worse, other real
estate owned, excluding previous branch locations, and other
repossessed assets were $58.7 million, or 10.0% of regulatory
capital, down from $63.1 million, or 11.0% of regulatory capital as
of September 30, 2022.
During the quarter ended December 31, 2022,
non-performing assets decreased $11.4 million due to decreases in
other real estate owned of $5.7 million, non-accrual loans of $5.5
million and other repossessed assets of $174 thousand.
Capital
During the quarter, the Company realized expansion
in both book and tangible capital, as well as book and tangible
capital per share as dividends and costs incurred to repurchase
shares were outpaced by earnings and partial recovery of the
negative fair value mark on the investment portfolio.
The Company’s ratio of common equity tier 1
capital to risk-weighted assets was 12.3%, the total capital to
risk-weighted assets was 16.1% and the total leverage ratio was
9.6% at December 31, 2022. At September 30, 2022, the Company’s
common equity tier 1 capital to risk-weighted assets ratio was
12.2%, the total capital to risk-weighted assets ratio was 16.1%
and the total leverage ratio was 9.5%.
The Company’s subsidiary, Equity Bank, had a ratio
of common equity tier 1 capital to risk-weighted assets of 14.5%, a
ratio of total capital to risk-weighted assets of 15.7% and a total
leverage ratio of 10.8% at December 31, 2022. At September 30,
2022, Equity Bank’s ratio of common equity tier 1 capital to
risk-weighted assets was 14.2%, the ratio of total capital to
risk-weighted assets was 15.5% and the total leverage ratio was
10.5%.
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 fourth quarter results on
Thursday, January 26, 2023, 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 February 3, 2023,
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, except as required by law. 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 December
31, |
|
|
Year ended December 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Interest and
dividend income |
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
46,149 |
|
|
$ |
34,942 |
|
|
$ |
160,859 |
|
|
$ |
137,334 |
|
Securities, taxable |
|
5,946 |
|
|
|
4,754 |
|
|
|
22,713 |
|
|
|
15,996 |
|
Securities, nontaxable |
|
678 |
|
|
|
747 |
|
|
|
2,698 |
|
|
|
2,843 |
|
Federal funds sold and other |
|
651 |
|
|
|
349 |
|
|
|
1,978 |
|
|
|
1,195 |
|
Total interest and dividend income |
|
53,424 |
|
|
|
40,792 |
|
|
|
188,248 |
|
|
|
157,368 |
|
Interest
expense |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
8,013 |
|
|
|
1,939 |
|
|
|
16,321 |
|
|
|
8,255 |
|
Federal funds purchased and retail repurchase agreements |
|
82 |
|
|
|
32 |
|
|
|
232 |
|
|
|
104 |
|
Federal Home Loan Bank advances |
|
1,500 |
|
|
|
14 |
|
|
|
2,094 |
|
|
|
169 |
|
Subordinated debt |
|
1,798 |
|
|
|
1,592 |
|
|
|
6,771 |
|
|
|
6,261 |
|
Total interest expense |
|
11,393 |
|
|
|
3,577 |
|
|
|
25,418 |
|
|
|
14,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income |
|
42,031 |
|
|
|
37,215 |
|
|
|
162,830 |
|
|
|
142,579 |
|
Provision
(reversal) for credit losses |
|
(151 |
) |
|
|
(2,125 |
) |
|
|
125 |
|
|
|
(8,480 |
) |
Net
interest income after provision (reversal) for credit
losses |
|
42,182 |
|
|
|
39,340 |
|
|
|
162,705 |
|
|
|
151,059 |
|
Non-interest
income |
|
|
|
|
|
|
|
|
|
|
|
Service charges and fees |
|
2,705 |
|
|
|
2,471 |
|
|
|
10,632 |
|
|
|
8,596 |
|
Debit card income |
|
2,557 |
|
|
|
2,633 |
|
|
|
10,677 |
|
|
|
10,236 |
|
Mortgage banking |
|
116 |
|
|
|
722 |
|
|
|
1,416 |
|
|
|
3,306 |
|
Increase in value of bank-owned life insurance |
|
758 |
|
|
|
1,060 |
|
|
|
3,113 |
|
|
|
3,506 |
|
Net gain on acquisition and branch sales |
|
422 |
|
|
|
— |
|
|
|
962 |
|
|
|
585 |
|
Net gains (losses) from securities transactions |
|
14 |
|
|
|
8 |
|
|
|
5 |
|
|
|
406 |
|
Other |
|
1,757 |
|
|
|
2,305 |
|
|
|
9,152 |
|
|
|
6,207 |
|
Total non-interest income |
|
8,329 |
|
|
|
9,199 |
|
|
|
35,957 |
|
|
|
32,842 |
|
Non-interest
expense |
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
16,113 |
|
|
|
15,119 |
|
|
|
62,006 |
|
|
|
54,198 |
|
Net occupancy and equipment |
|
2,919 |
|
|
|
2,967 |
|
|
|
12,223 |
|
|
|
10,137 |
|
Data processing |
|
4,334 |
|
|
|
3,867 |
|
|
|
15,883 |
|
|
|
13,261 |
|
Professional fees |
|
1,404 |
|
|
|
1,565 |
|
|
|
4,951 |
|
|
|
4,713 |
|
Advertising and business development |
|
1,903 |
|
|
|
1,129 |
|
|
|
5,042 |
|
|
|
3,370 |
|
Telecommunications |
|
517 |
|
|
|
435 |
|
|
|
1,916 |
|
|
|
1,966 |
|
FDIC insurance |
|
360 |
|
|
|
360 |
|
|
|
1,140 |
|
|
|
1,665 |
|
Courier and postage |
|
533 |
|
|
|
389 |
|
|
|
1,881 |
|
|
|
1,429 |
|
Free nationwide ATM cost |
|
510 |
|
|
|
515 |
|
|
|
2,103 |
|
|
|
2,019 |
|
Amortization of core deposit intangibles |
|
924 |
|
|
|
1,080 |
|
|
|
4,042 |
|
|
|
4,174 |
|
Loan expense |
|
262 |
|
|
|
308 |
|
|
|
828 |
|
|
|
934 |
|
Other real estate owned |
|
388 |
|
|
|
617 |
|
|
|
589 |
|
|
|
(188 |
) |
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
372 |
|
Merger expenses |
|
68 |
|
|
|
4,562 |
|
|
|
594 |
|
|
|
9,189 |
|
Other |
|
5,014 |
|
|
|
5,176 |
|
|
|
15,182 |
|
|
|
12,226 |
|
Total non-interest expense |
|
35,249 |
|
|
|
38,089 |
|
|
|
128,380 |
|
|
|
119,465 |
|
Income
(loss) before income tax |
|
15,262 |
|
|
|
10,450 |
|
|
|
70,282 |
|
|
|
64,436 |
|
Provision
for income taxes |
|
3,654 |
|
|
|
(16 |
) |
|
|
12,594 |
|
|
|
11,956 |
|
Net
income (loss) and net income (loss) allocable to common
stockholders |
$ |
11,608 |
|
|
$ |
10,466 |
|
|
$ |
57,688 |
|
|
$ |
52,480 |
|
Basic
earnings (loss) per share |
$ |
0.73 |
|
|
$ |
0.62 |
|
|
$ |
3.56 |
|
|
$ |
3.49 |
|
Diluted
earnings (loss) per share |
$ |
0.72 |
|
|
$ |
0.61 |
|
|
$ |
3.51 |
|
|
$ |
3.43 |
|
Weighted
average common shares |
|
15,948,360 |
|
|
|
16,865,167 |
|
|
|
16,214,049 |
|
|
|
15,019,221 |
|
Weighted
average diluted common shares |
|
16,204,185 |
|
|
|
17,141,174 |
|
|
|
16,437,906 |
|
|
|
15,306,431 |
|
TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS
OF INCOME (Unaudited) (Dollars in thousands, except per
share data)
|
As of and
for the three months ended |
|
|
December 31, 2022 |
|
|
September 30, 2022 |
|
|
June 30, 2022 |
|
|
March 31, 2022 |
|
|
December 31, 2021 |
|
Interest and
dividend income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
46,149 |
|
|
$ |
41,555 |
|
|
$ |
36,849 |
|
|
$ |
36,306 |
|
|
$ |
34,942 |
|
Securities, taxable |
|
5,946 |
|
|
|
5,792 |
|
|
|
5,584 |
|
|
|
5,391 |
|
|
|
4,754 |
|
Securities, nontaxable |
|
678 |
|
|
|
687 |
|
|
|
678 |
|
|
|
655 |
|
|
|
747 |
|
Federal funds sold and other |
|
651 |
|
|
|
514 |
|
|
|
513 |
|
|
|
300 |
|
|
|
349 |
|
Total interest and dividend income |
|
53,424 |
|
|
|
48,548 |
|
|
|
43,624 |
|
|
|
42,652 |
|
|
|
40,792 |
|
Interest
expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
8,013 |
|
|
|
4,403 |
|
|
|
2,183 |
|
|
|
1,722 |
|
|
|
1,939 |
|
Federal funds purchased and retail repurchase agreements |
|
82 |
|
|
|
71 |
|
|
|
46 |
|
|
|
33 |
|
|
|
32 |
|
Federal Home Loan Bank advances |
|
1,500 |
|
|
|
409 |
|
|
|
176 |
|
|
|
9 |
|
|
|
14 |
|
Subordinated debt |
|
1,798 |
|
|
|
1,721 |
|
|
|
1,653 |
|
|
|
1,599 |
|
|
|
1,592 |
|
Total interest expense |
|
11,393 |
|
|
|
6,604 |
|
|
|
4,058 |
|
|
|
3,363 |
|
|
|
3,577 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
interest income |
|
42,031 |
|
|
|
41,944 |
|
|
|
39,566 |
|
|
|
39,289 |
|
|
|
37,215 |
|
Provision
(reversal) for credit losses |
|
(151 |
) |
|
|
(136 |
) |
|
|
824 |
|
|
|
(412 |
) |
|
|
(2,125 |
) |
Net
interest income after provision (reversal) for credit
losses |
|
42,182 |
|
|
|
42,080 |
|
|
|
38,742 |
|
|
|
39,701 |
|
|
|
39,340 |
|
Non-interest
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges and fees |
|
2,705 |
|
|
|
2,788 |
|
|
|
2,617 |
|
|
|
2,522 |
|
|
|
2,471 |
|
Debit card income |
|
2,557 |
|
|
|
2,682 |
|
|
|
2,810 |
|
|
|
2,628 |
|
|
|
2,633 |
|
Mortgage banking |
|
116 |
|
|
|
310 |
|
|
|
428 |
|
|
|
562 |
|
|
|
722 |
|
Increase in value of bank-owned life insurance |
|
758 |
|
|
|
754 |
|
|
|
736 |
|
|
|
865 |
|
|
|
1,060 |
|
Net gain on acquisition and branch sales |
|
422 |
|
|
|
— |
|
|
|
540 |
|
|
|
— |
|
|
|
— |
|
Net gains (losses) from securities transactions |
|
14 |
|
|
|
(17 |
) |
|
|
(32 |
) |
|
|
40 |
|
|
|
8 |
|
Other |
|
1,757 |
|
|
|
2,452 |
|
|
|
2,538 |
|
|
|
2,405 |
|
|
|
2,305 |
|
Total non-interest income |
|
8,329 |
|
|
|
8,969 |
|
|
|
9,637 |
|
|
|
9,022 |
|
|
|
9,199 |
|
Non-interest
expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
16,113 |
|
|
|
15,442 |
|
|
|
15,383 |
|
|
|
15,068 |
|
|
|
15,119 |
|
Net occupancy and equipment |
|
2,919 |
|
|
|
3,127 |
|
|
|
3,007 |
|
|
|
3,170 |
|
|
|
2,967 |
|
Data processing |
|
4,334 |
|
|
|
4,138 |
|
|
|
3,642 |
|
|
|
3,769 |
|
|
|
3,867 |
|
Professional fees |
|
1,404 |
|
|
|
1,265 |
|
|
|
1,111 |
|
|
|
1,171 |
|
|
|
1,565 |
|
Advertising and business development |
|
1,903 |
|
|
|
1,191 |
|
|
|
972 |
|
|
|
976 |
|
|
|
1,129 |
|
Telecommunications |
|
517 |
|
|
|
487 |
|
|
|
442 |
|
|
|
470 |
|
|
|
435 |
|
FDIC insurance |
|
360 |
|
|
|
340 |
|
|
|
260 |
|
|
|
180 |
|
|
|
360 |
|
Courier and postage |
|
533 |
|
|
|
436 |
|
|
|
489 |
|
|
|
423 |
|
|
|
389 |
|
Free nationwide ATM cost |
|
510 |
|
|
|
551 |
|
|
|
541 |
|
|
|
501 |
|
|
|
515 |
|
Amortization of core deposit intangibles |
|
924 |
|
|
|
957 |
|
|
|
1,111 |
|
|
|
1,050 |
|
|
|
1,080 |
|
Loan expense |
|
262 |
|
|
|
174 |
|
|
|
207 |
|
|
|
185 |
|
|
|
308 |
|
Other real estate owned |
|
388 |
|
|
|
188 |
|
|
|
14 |
|
|
|
(1 |
) |
|
|
617 |
|
Loss on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Merger expenses |
|
68 |
|
|
|
115 |
|
|
|
88 |
|
|
|
323 |
|
|
|
4,562 |
|
Other |
|
5,014 |
|
|
|
3,825 |
|
|
|
4,169 |
|
|
|
2,174 |
|
|
|
5,176 |
|
Total non-interest expense |
|
35,249 |
|
|
|
32,236 |
|
|
|
31,436 |
|
|
|
29,459 |
|
|
|
38,089 |
|
Income
(loss) before income tax |
|
15,262 |
|
|
|
18,813 |
|
|
|
16,943 |
|
|
|
19,264 |
|
|
|
10,450 |
|
Provision
for income taxes (benefit) |
|
3,654 |
|
|
|
3,642 |
|
|
|
1,684 |
|
|
|
3,614 |
|
|
|
(16 |
) |
Net
income (loss) and net income (loss) allocable to common
stockholders |
$ |
11,608 |
|
|
$ |
15,171 |
|
|
$ |
15,259 |
|
|
$ |
15,650 |
|
|
$ |
10,466 |
|
Basic
earnings (loss) per share |
$ |
0.73 |
|
|
$ |
0.94 |
|
|
$ |
0.95 |
|
|
$ |
0.94 |
|
|
$ |
0.62 |
|
Diluted
earnings (loss) per share |
$ |
0.72 |
|
|
$ |
0.93 |
|
|
$ |
0.94 |
|
|
$ |
0.93 |
|
|
$ |
0.61 |
|
Weighted
average common shares |
|
15,948,360 |
|
|
|
16,056,658 |
|
|
|
16,206,978 |
|
|
|
16,652,556 |
|
|
|
16,865,167 |
|
Weighted
average diluted common shares |
|
16,204,185 |
|
|
|
16,273,231 |
|
|
|
16,413,248 |
|
|
|
16,869,152 |
|
|
|
17,141,174 |
|
TABLE 3. CONSOLIDATED BALANCE
SHEETS (Unaudited) (Dollars in thousands)
|
December 31, 2022 |
|
|
September 30, 2022 |
|
|
June 30, 2022 |
|
|
March 31, 2022 |
|
|
December 31, 2021 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
101,662 |
|
|
$ |
155,039 |
|
|
$ |
103,126 |
|
|
$ |
89,764 |
|
|
$ |
259,131 |
|
Federal
funds sold |
|
415 |
|
|
|
374 |
|
|
|
458 |
|
|
|
286 |
|
|
|
823 |
|
Cash and cash equivalents |
|
102,077 |
|
|
|
155,413 |
|
|
|
103,584 |
|
|
|
90,050 |
|
|
|
259,954 |
|
Available-for-sale securities |
|
1,184,390 |
|
|
|
1,198,962 |
|
|
|
1,288,180 |
|
|
|
1,352,894 |
|
|
|
1,327,442 |
|
Held-to-maturity securities |
|
1,948 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loans held
for sale |
|
349 |
|
|
|
1,518 |
|
|
|
1,714 |
|
|
|
1,575 |
|
|
|
4,214 |
|
Loans, net
of allowance for credit losses(1) |
|
3,265,701 |
|
|
|
3,208,524 |
|
|
|
3,175,208 |
|
|
|
3,194,987 |
|
|
|
3,107,262 |
|
Other real
estate owned, net |
|
4,409 |
|
|
|
10,412 |
|
|
|
12,969 |
|
|
|
9,897 |
|
|
|
9,523 |
|
Premises and
equipment, net |
|
101,492 |
|
|
|
100,566 |
|
|
|
101,212 |
|
|
|
103,168 |
|
|
|
104,038 |
|
Bank-owned
life insurance |
|
123,176 |
|
|
|
122,418 |
|
|
|
121,665 |
|
|
|
120,928 |
|
|
|
120,787 |
|
Federal
Reserve Bank and Federal Home Loan Bank stock |
|
21,695 |
|
|
|
24,428 |
|
|
|
21,479 |
|
|
|
19,890 |
|
|
|
17,510 |
|
Interest
receivable |
|
20,630 |
|
|
|
18,497 |
|
|
|
16,519 |
|
|
|
16,923 |
|
|
|
18,048 |
|
Goodwill |
|
53,101 |
|
|
|
53,101 |
|
|
|
53,101 |
|
|
|
54,465 |
|
|
|
54,465 |
|
Core deposit
intangibles, net |
|
10,596 |
|
|
|
11,598 |
|
|
|
12,554 |
|
|
|
13,830 |
|
|
|
14,879 |
|
Other |
|
92,087 |
|
|
|
94,978 |
|
|
|
93,971 |
|
|
|
100,016 |
|
|
|
99,509 |
|
Total assets |
$ |
4,981,651 |
|
|
$ |
5,000,415 |
|
|
$ |
5,002,156 |
|
|
$ |
5,078,623 |
|
|
$ |
5,137,631 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
$ |
1,097,899 |
|
|
$ |
1,217,094 |
|
|
$ |
1,194,863 |
|
|
$ |
1,255,793 |
|
|
$ |
1,244,117 |
|
Total non-interest-bearing deposits |
|
1,097,899 |
|
|
|
1,217,094 |
|
|
|
1,194,863 |
|
|
|
1,255,793 |
|
|
|
1,244,117 |
|
Demand, savings and money market |
|
2,329,584 |
|
|
|
2,335,847 |
|
|
|
2,445,545 |
|
|
|
2,511,478 |
|
|
|
2,522,289 |
|
Time |
|
814,324 |
|
|
|
673,670 |
|
|
|
651,363 |
|
|
|
612,399 |
|
|
|
653,598 |
|
Total interest-bearing deposits |
|
3,143,908 |
|
|
|
3,009,517 |
|
|
|
3,096,908 |
|
|
|
3,123,877 |
|
|
|
3,175,887 |
|
Total deposits |
|
4,241,807 |
|
|
|
4,226,611 |
|
|
|
4,291,771 |
|
|
|
4,379,670 |
|
|
|
4,420,004 |
|
Federal
funds purchased and retail repurchase agreements |
|
46,478 |
|
|
|
47,443 |
|
|
|
52,750 |
|
|
|
48,199 |
|
|
|
56,006 |
|
Federal Home
Loan Bank advances |
|
138,864 |
|
|
|
186,001 |
|
|
|
80,000 |
|
|
|
50,000 |
|
|
|
— |
|
Subordinated
debt |
|
96,392 |
|
|
|
96,263 |
|
|
|
96,135 |
|
|
|
96,010 |
|
|
|
95,885 |
|
Contractual
obligations |
|
15,218 |
|
|
|
15,562 |
|
|
|
15,813 |
|
|
|
17,307 |
|
|
|
17,692 |
|
Interest
payable and other liabilities |
|
32,834 |
|
|
|
32,729 |
|
|
|
37,572 |
|
|
|
35,422 |
|
|
|
47,413 |
|
Total liabilities |
|
4,571,593 |
|
|
|
4,604,609 |
|
|
|
4,574,041 |
|
|
|
4,626,608 |
|
|
|
4,637,000 |
|
Commitments
and contingent liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
205 |
|
|
|
204 |
|
|
|
204 |
|
|
|
204 |
|
|
|
203 |
|
Additional paid-in capital |
|
484,989 |
|
|
|
482,668 |
|
|
|
480,897 |
|
|
|
480,106 |
|
|
|
478,862 |
|
Retained earnings |
|
140,095 |
|
|
|
130,114 |
|
|
|
116,576 |
|
|
|
102,632 |
|
|
|
88,324 |
|
Accumulated other comprehensive income (loss), net of tax |
|
(113,511 |
) |
|
|
(120,918 |
) |
|
|
(77,426 |
) |
|
|
(50,012 |
) |
|
|
1,776 |
|
Treasury stock |
|
(101,720 |
) |
|
|
(96,262 |
) |
|
|
(92,136 |
) |
|
|
(80,915 |
) |
|
|
(68,534 |
) |
Total stockholders’ equity |
|
410,058 |
|
|
|
395,806 |
|
|
|
428,115 |
|
|
|
452,015 |
|
|
|
500,631 |
|
Total liabilities and stockholders’ equity |
$ |
4,981,651 |
|
|
$ |
5,000,415 |
|
|
$ |
5,002,156 |
|
|
$ |
5,078,623 |
|
|
$ |
5,137,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Allowance for credit losses |
$ |
45,847 |
|
|
$ |
46,499 |
|
|
$ |
48,238 |
|
|
$ |
47,590 |
|
|
$ |
48,365 |
|
TABLE 4. SELECTED FINANCIAL
HIGHLIGHTS (Unaudited) (Dollars in thousands, except per
share data)
|
As of and
for the three months ended |
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
Loans Held For Investment by Type |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real estate |
$ |
1,721,269 |
|
|
$ |
1,655,646 |
|
|
$ |
1,643,068 |
|
|
$ |
1,552,134 |
|
|
$ |
1,486,148 |
|
Commercial and industrial |
|
594,862 |
|
|
|
607,722 |
|
|
|
578,899 |
|
|
|
629,181 |
|
|
|
567,497 |
|
Residential real estate |
|
570,550 |
|
|
|
573,431 |
|
|
|
578,936 |
|
|
|
613,928 |
|
|
|
638,087 |
|
Agricultural real estate |
|
199,189 |
|
|
|
200,415 |
|
|
|
197,938 |
|
|
|
198,844 |
|
|
|
198,330 |
|
Agricultural |
|
120,003 |
|
|
|
115,048 |
|
|
|
124,753 |
|
|
|
150,077 |
|
|
|
166,975 |
|
Consumer |
|
105,675 |
|
|
|
102,761 |
|
|
|
99,852 |
|
|
|
98,413 |
|
|
|
98,590 |
|
Total loans held-for-investment |
|
3,311,548 |
|
|
|
3,255,023 |
|
|
|
3,223,446 |
|
|
|
3,242,577 |
|
|
|
3,155,627 |
|
Allowance for credit losses |
|
(45,847 |
) |
|
|
(46,499 |
) |
|
|
(48,238 |
) |
|
|
(47,590 |
) |
|
|
(48,365 |
) |
Net loans held for investment |
$ |
3,265,701 |
|
|
$ |
3,208,524 |
|
|
$ |
3,175,208 |
|
|
$ |
3,194,987 |
|
|
$ |
3,107,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for credit losses on loans to total loans |
|
1.38 |
% |
|
|
1.43 |
% |
|
|
1.50 |
% |
|
|
1.47 |
% |
|
|
1.53 |
% |
Past due or nonaccrual loans to total loans |
|
0.72 |
% |
|
|
0.94 |
% |
|
|
0.78 |
% |
|
|
0.82 |
% |
|
|
1.18 |
% |
Nonperforming assets to total assets |
|
0.37 |
% |
|
|
0.59 |
% |
|
|
0.74 |
% |
|
|
0.74 |
% |
|
|
1.28 |
% |
Nonperforming assets to total loans plus other real estate
owned |
|
0.55 |
% |
|
|
0.91 |
% |
|
|
1.14 |
% |
|
|
1.15 |
% |
|
|
2.07 |
% |
Classified assets to bank total regulatory capital |
|
9.98 |
% |
|
|
11.03 |
% |
|
|
13.08 |
% |
|
|
17.12 |
% |
|
|
25.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Average Balance Sheet Data (QTD
Average) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
$ |
1,184,452 |
|
|
$ |
1,272,414 |
|
|
$ |
1,319,099 |
|
|
$ |
1,397,421 |
|
|
$ |
1,330,267 |
|
Total gross loans receivable |
|
3,275,284 |
|
|
|
3,240,998 |
|
|
|
3,216,853 |
|
|
|
3,195,787 |
|
|
|
3,181,279 |
|
Interest-earning assets |
|
4,538,177 |
|
|
|
4,602,568 |
|
|
|
4,675,967 |
|
|
|
4,715,389 |
|
|
|
4,713,817 |
|
Total assets |
|
4,930,231 |
|
|
|
4,988,755 |
|
|
|
5,067,686 |
|
|
|
5,108,120 |
|
|
|
5,068,278 |
|
Interest-bearing deposits |
|
3,032,902 |
|
|
|
3,081,245 |
|
|
|
3,112,300 |
|
|
|
3,163,777 |
|
|
|
3,101,657 |
|
Borrowings |
|
299,191 |
|
|
|
221,514 |
|
|
|
238,062 |
|
|
|
160,094 |
|
|
|
165,941 |
|
Total interest-bearing liabilities |
|
3,335,557 |
|
|
|
3,302,759 |
|
|
|
3,350,362 |
|
|
|
3,323,871 |
|
|
|
3,267,598 |
|
Total deposits |
|
4,185,904 |
|
|
|
4,283,855 |
|
|
|
4,340,196 |
|
|
|
4,393,879 |
|
|
|
4,342,732 |
|
Total liabilities |
|
4,531,959 |
|
|
|
4,552,564 |
|
|
|
4,630,204 |
|
|
|
4,615,521 |
|
|
|
4,505,232 |
|
Total stockholders' equity |
|
398,270 |
|
|
|
436,191 |
|
|
|
437,483 |
|
|
|
492,599 |
|
|
|
563,046 |
|
Tangible common equity* |
|
332,820 |
|
|
|
369,746 |
|
|
|
368,505 |
|
|
|
422,418 |
|
|
|
501,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets (ROAA) annualized |
|
0.93 |
% |
|
|
1.21 |
% |
|
|
1.21 |
% |
|
|
1.24 |
% |
|
|
0.82 |
% |
Return on average assets before income tax and provision for loan
losses* |
|
1.22 |
% |
|
|
1.49 |
% |
|
|
1.41 |
% |
|
|
1.50 |
% |
|
|
0.65 |
% |
Return on average equity (ROAE) annualized |
|
11.56 |
% |
|
|
13.80 |
% |
|
|
13.99 |
% |
|
|
12.88 |
% |
|
|
7.37 |
% |
Return on average equity before income tax and provision for loan
losses* |
|
15.05 |
% |
|
|
16.99 |
% |
|
|
16.29 |
% |
|
|
15.52 |
% |
|
|
5.87 |
% |
Return on average tangible common equity (ROATCE) annualized* |
|
14.74 |
% |
|
|
17.12 |
% |
|
|
17.60 |
% |
|
|
15.85 |
% |
|
|
8.97 |
% |
Yield on loans annualized |
|
5.59 |
% |
|
|
5.09 |
% |
|
|
4.59 |
% |
|
|
4.61 |
% |
|
|
4.36 |
% |
Cost of interest-bearing deposits annualized |
|
1.05 |
% |
|
|
0.57 |
% |
|
|
0.28 |
% |
|
|
0.22 |
% |
|
|
0.25 |
% |
Cost of total deposits annualized |
|
0.76 |
% |
|
|
0.41 |
% |
|
|
0.20 |
% |
|
|
0.16 |
% |
|
|
0.18 |
% |
Net interest margin annualized |
|
3.67 |
% |
|
|
3.62 |
% |
|
|
3.39 |
% |
|
|
3.38 |
% |
|
|
3.13 |
% |
Efficiency ratio* |
|
70.47 |
% |
|
|
63.07 |
% |
|
|
64.38 |
% |
|
|
60.36 |
% |
|
|
72.25 |
% |
Non-interest income / average assets |
|
0.67 |
% |
|
|
0.71 |
% |
|
|
0.76 |
% |
|
|
0.72 |
% |
|
|
0.72 |
% |
Non-interest expense / average assets |
|
2.84 |
% |
|
|
2.56 |
% |
|
|
2.49 |
% |
|
|
2.34 |
% |
|
|
2.98 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 Leverage Ratio |
|
9.61 |
% |
|
|
9.46 |
% |
|
|
9.11 |
% |
|
|
9.07 |
% |
|
|
9.09 |
% |
Common Equity Tier 1 Capital Ratio |
|
12.26 |
% |
|
|
12.15 |
% |
|
|
12.08 |
% |
|
|
11.81 |
% |
|
|
12.03 |
% |
Tier 1 Risk Based Capital Ratio |
|
12.88 |
% |
|
|
12.77 |
% |
|
|
12.71 |
% |
|
|
12.43 |
% |
|
|
12.67 |
% |
Total Risk Based Capital Ratio |
|
16.08 |
% |
|
|
15.99 |
% |
|
|
15.97 |
% |
|
|
15.66 |
% |
|
|
15.96 |
% |
Total stockholders' equity to total assets |
|
8.23 |
% |
|
|
7.92 |
% |
|
|
8.56 |
% |
|
|
8.90 |
% |
|
|
9.74 |
% |
Tangible common equity to tangible assets* |
|
7.02 |
% |
|
|
6.68 |
% |
|
|
7.32 |
% |
|
|
7.63 |
% |
|
|
8.48 |
% |
Dividend payout ratio |
|
14.01 |
% |
|
|
10.78 |
% |
|
|
8.61 |
% |
|
|
8.58 |
% |
|
|
13.05 |
% |
Book value per common share |
$ |
25.74 |
|
|
$ |
24.71 |
|
|
$ |
26.58 |
|
|
$ |
27.47 |
|
|
$ |
29.87 |
|
Tangible book value per common share* |
$ |
21.67 |
|
|
$ |
20.59 |
|
|
$ |
22.42 |
|
|
$ |
23.24 |
|
|
$ |
25.65 |
|
Tangible book value per diluted common share* |
$ |
21.35 |
|
|
$ |
20.33 |
|
|
$ |
22.17 |
|
|
$ |
22.95 |
|
|
$ |
25.22 |
|
TABLE 5. YEAR-TO-DATE NET INTEREST INCOME
ANALYSIS (Unaudited) (Dollars in thousands)
|
For the year
ended |
|
|
For the year
ended |
|
|
December 31, 2022 |
|
|
December 31, 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 |
$ |
583,295 |
|
$ |
32,258 |
|
|
5.53 |
% |
|
$ |
714,561 |
|
$ |
41,580 |
|
5.82 |
% |
Commercial real estate |
|
1,259,257 |
|
|
65,122 |
|
|
5.17 |
% |
|
|
1,040,443 |
|
|
48,676 |
|
4.68 |
% |
Real estate construction |
|
363,902 |
|
|
18,269 |
|
|
5.02 |
% |
|
|
277,307 |
|
|
10,256 |
|
3.70 |
% |
Residential real estate |
|
597,196 |
|
|
22,004 |
|
|
3.68 |
% |
|
|
498,164 |
|
|
19,341 |
|
3.88 |
% |
Agricultural real estate |
|
201,295 |
|
|
11,399 |
|
|
5.66 |
% |
|
|
153,607 |
|
|
8,122 |
|
5.29 |
% |
Agricultural |
|
125,342 |
|
|
6,697 |
|
|
5.34 |
% |
|
|
108,276 |
|
|
5,361 |
|
4.95 |
% |
Consumer |
|
102,185 |
|
|
5,110 |
|
|
5.00 |
% |
|
|
88,383 |
|
|
3,998 |
|
4.52 |
% |
Total loans |
|
3,232,472 |
|
|
160,859 |
|
|
4.98 |
% |
|
|
2,880,741 |
|
|
137,334 |
|
4.77 |
% |
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable securities |
|
1,185,750 |
|
|
22,713 |
|
|
1.92 |
% |
|
|
976,942 |
|
|
15,996 |
|
1.64 |
% |
Nontaxable securities |
|
106,955 |
|
|
2,698 |
|
|
2.52 |
% |
|
|
105,522 |
|
|
2,843 |
|
2.69 |
% |
Total securities |
|
1,292,705 |
|
|
25,411 |
|
|
1.97 |
% |
|
|
1,082,464 |
|
|
18,839 |
|
1.74 |
% |
Federal
funds sold and other |
|
107,278 |
|
|
1,978 |
|
|
1.84 |
% |
|
|
182,443 |
|
|
1,195 |
|
0.65 |
% |
Total interest-earning assets |
$ |
4,632,455 |
|
|
188,248 |
|
|
4.06 |
% |
|
$ |
4,145,648 |
|
|
157,368 |
|
3.80 |
% |
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand,
savings and money market deposits |
$ |
2,433,364 |
|
|
10,797 |
|
|
0.44 |
% |
|
$ |
2,162,807 |
|
|
3,705 |
|
0.17 |
% |
Time
deposits |
|
663,790 |
|
|
5,524 |
|
|
0.83 |
% |
|
|
625,562 |
|
|
4,550 |
|
0.73 |
% |
Total interest-bearing deposits |
|
3,097,154 |
|
|
16,321 |
|
|
0.53 |
% |
|
|
2,788,369 |
|
|
8,255 |
|
0.30 |
% |
FHLB
advances |
|
79,775 |
|
|
2,094 |
|
|
2.63 |
% |
|
|
16,797 |
|
|
169 |
|
1.01 |
% |
Other
borrowings |
|
151,172 |
|
|
7,003 |
|
|
4.63 |
% |
|
|
135,607 |
|
|
6,365 |
|
4.69 |
% |
Total interest-bearing liabilities |
$ |
3,328,101 |
|
|
25,418 |
|
|
0.76 |
% |
|
$ |
2,940,773 |
|
|
14,789 |
|
0.50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
|
$ |
162,830 |
|
|
|
|
|
|
$ |
142,579 |
|
|
|
Interest
rate spread |
|
|
|
|
|
3.30 |
% |
|
|
|
|
|
3.30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin (2) |
|
|
|
|
|
3.52 |
% |
|
|
|
|
|
3.44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Average loan
balances include nonaccrual loans. |
|
(2) Net interest
margin is calculated by dividing annualized net interest income by
average interest-earning assets for the period. |
|
(3) Tax exempt income
is not included in the above table on a tax-equivalent basis. |
|
(4) Actual unrounded
values are used to calculate the reported yield or rate disclosed.
Accordingly, recalculations using the amounts in thousands as
disclosed in this report may not produce the same amounts. |
|
TABLE 6. QUARTER-TO-DATE NET INTEREST
INCOME ANALYSIS (Unaudited) (Dollars in thousands)
|
For the
three months ended |
|
|
For the
three months ended |
|
|
December 31, 2022 |
|
|
December 31, 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 |
$ |
594,221 |
|
$ |
9,264 |
|
6.19 |
% |
|
$ |
601,103 |
|
$ |
6,971 |
|
4.60 |
% |
Commercial real estate |
|
1,327,438 |
|
|
19,127 |
|
5.72 |
% |
|
|
1,187,747 |
|
|
13,732 |
|
4.59 |
% |
Real estate construction |
|
367,935 |
|
|
5,827 |
|
6.28 |
% |
|
|
315,774 |
|
|
3,062 |
|
3.85 |
% |
Residential real estate |
|
576,357 |
|
|
5,667 |
|
3.90 |
% |
|
|
618,057 |
|
|
5,174 |
|
3.32 |
% |
Agricultural real estate |
|
200,492 |
|
|
3,353 |
|
6.64 |
% |
|
|
206,462 |
|
|
2,919 |
|
5.61 |
% |
Agricultural |
|
104,146 |
|
|
1,443 |
|
5.50 |
% |
|
|
151,589 |
|
|
1,929 |
|
5.05 |
% |
Consumer |
|
104,695 |
|
|
1,468 |
|
5.57 |
% |
|
|
100,547 |
|
|
1,155 |
|
4.56 |
% |
Total loans |
|
3,275,284 |
|
|
46,149 |
|
5.59 |
% |
|
|
3,181,279 |
|
|
34,942 |
|
4.36 |
% |
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable securities |
|
1,083,986 |
|
|
5,946 |
|
2.18 |
% |
|
|
1,209,826 |
|
|
4,754 |
|
1.56 |
% |
Nontaxable securities |
|
100,466 |
|
|
678 |
|
2.68 |
% |
|
|
120,441 |
|
|
747 |
|
2.46 |
% |
Total securities |
|
1,184,452 |
|
|
6,624 |
|
2.22 |
% |
|
|
1,330,267 |
|
|
5,501 |
|
1.64 |
% |
Federal
funds sold and other |
|
78,441 |
|
|
651 |
|
3.29 |
% |
|
|
202,271 |
|
|
348 |
|
0.68 |
% |
Total interest-earning assets |
$ |
4,538,177 |
|
|
53,424 |
|
4.67 |
% |
|
$ |
4,713,817 |
|
|
40,791 |
|
3.43 |
% |
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand,
savings and money market deposits |
$ |
2,294,639 |
|
|
5,336 |
|
0.92 |
% |
|
$ |
2,418,492 |
|
|
978 |
|
0.16 |
% |
Time
deposits |
|
738,263 |
|
|
2,677 |
|
1.44 |
% |
|
|
683,165 |
|
|
962 |
|
0.56 |
% |
Total interest-bearing deposits |
|
3,032,902 |
|
|
8,013 |
|
1.05 |
% |
|
|
3,101,657 |
|
|
1,940 |
|
0.25 |
% |
FHLB
advances |
|
155,964 |
|
|
1,500 |
|
3.82 |
% |
|
|
18,197 |
|
|
15 |
|
0.32 |
% |
Other
borrowings |
|
146,691 |
|
|
1,880 |
|
5.09 |
% |
|
|
147,744 |
|
|
1,624 |
|
4.36 |
% |
Total interest-bearing liabilities |
$ |
3,335,557 |
|
|
11,393 |
|
1.36 |
% |
|
$ |
3,267,598 |
|
|
3,579 |
|
0.43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
|
$ |
42,031 |
|
|
|
|
|
|
$ |
37,212 |
|
|
|
Interest
rate spread |
|
|
|
|
3.31 |
% |
|
|
|
|
|
3.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin (2) |
|
|
|
|
3.67 |
% |
|
|
|
|
|
3.13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
|
December 31, 2022 |
|
|
September 30, 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 |
$ |
594,221 |
|
$ |
9,264 |
|
6.19 |
% |
|
$ |
575,149 |
|
$ |
7,750 |
|
5.35 |
% |
Commercial real estate |
|
1,327,438 |
|
|
19,127 |
|
5.72 |
% |
|
|
1,307,244 |
|
|
18,023 |
|
5.47 |
% |
Real estate construction |
|
367,935 |
|
|
5,827 |
|
6.28 |
% |
|
|
360,579 |
|
|
4,847 |
|
5.33 |
% |
Residential real estate |
|
576,357 |
|
|
5,667 |
|
3.90 |
% |
|
|
582,938 |
|
|
5,464 |
|
3.72 |
% |
Agricultural real estate |
|
200,492 |
|
|
3,353 |
|
6.64 |
% |
|
|
200,534 |
|
|
2,740 |
|
5.42 |
% |
Agricultural |
|
104,146 |
|
|
1,443 |
|
5.50 |
% |
|
|
113,351 |
|
|
1,406 |
|
4.92 |
% |
Consumer |
|
104,695 |
|
|
1,468 |
|
5.57 |
% |
|
|
101,203 |
|
|
1,325 |
|
5.20 |
% |
Total loans |
|
3,275,284 |
|
|
46,149 |
|
5.59 |
% |
|
|
3,240,998 |
|
|
41,555 |
|
5.09 |
% |
Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable securities |
|
1,083,986 |
|
|
5,946 |
|
2.18 |
% |
|
|
1,164,697 |
|
|
5,793 |
|
1.97 |
% |
Nontaxable securities |
|
100,466 |
|
|
678 |
|
2.68 |
% |
|
|
107,717 |
|
|
687 |
|
2.53 |
% |
Total securities |
|
1,184,452 |
|
|
6,624 |
|
2.22 |
% |
|
|
1,272,414 |
|
|
6,480 |
|
2.02 |
% |
Federal
funds sold and other |
|
78,441 |
|
|
651 |
|
3.29 |
% |
|
|
89,156 |
|
|
513 |
|
2.29 |
% |
Total interest-earning assets |
$ |
4,538,177 |
|
|
53,424 |
|
4.67 |
% |
|
$ |
4,602,568 |
|
|
48,548 |
|
4.18 |
% |
Interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
savings and money market deposits |
$ |
2,294,639 |
|
|
5,336 |
|
0.92 |
% |
|
$ |
2,425,824 |
|
|
3,118 |
|
0.51 |
% |
Time
deposits |
|
738,263 |
|
|
2,677 |
|
1.44 |
% |
|
|
655,421 |
|
|
1,285 |
|
0.78 |
% |
Total interest-bearing deposits |
|
3,032,902 |
|
|
8,013 |
|
1.05 |
% |
|
|
3,081,245 |
|
|
4,403 |
|
0.57 |
% |
FHLB
advances |
|
155,964 |
|
|
1,500 |
|
3.82 |
% |
|
|
71,415 |
|
|
409 |
|
2.27 |
% |
Other
borrowings |
|
146,691 |
|
|
1,880 |
|
5.09 |
% |
|
|
150,099 |
|
|
1,792 |
|
4.74 |
% |
Total interest-bearing liabilities |
$ |
3,335,557 |
|
|
11,393 |
|
1.36 |
% |
|
$ |
3,302,759 |
|
|
6,604 |
|
0.79 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
income |
|
|
$ |
42,031 |
|
|
|
|
|
|
$ |
41,944 |
|
|
|
Interest
rate spread |
|
|
|
|
3.31 |
% |
|
|
|
|
|
3.39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin (2) |
|
|
|
|
3.67 |
% |
|
|
|
|
|
3.62 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
|
December 31, |
|
|
September 30, |
|
|
June 30, |
|
|
March 31, |
|
|
December 31, |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
$ |
410,058 |
|
|
$ |
395,806 |
|
|
$ |
428,115 |
|
|
$ |
452,015 |
|
|
$ |
500,631 |
|
Less:
goodwill |
|
53,101 |
|
|
|
53,101 |
|
|
|
53,101 |
|
|
|
54,465 |
|
|
|
54,465 |
|
Less: core
deposit intangibles, net |
|
10,596 |
|
|
|
11,598 |
|
|
|
12,554 |
|
|
|
13,830 |
|
|
|
14,879 |
|
Less:
mortgage servicing rights, net |
|
176 |
|
|
|
201 |
|
|
|
226 |
|
|
|
251 |
|
|
|
276 |
|
Less: naming
rights, net |
|
1,044 |
|
|
|
1,054 |
|
|
|
1,065 |
|
|
|
1,076 |
|
|
|
1,087 |
|
Tangible common equity |
$ |
345,141 |
|
|
$ |
329,852 |
|
|
$ |
361,169 |
|
|
$ |
382,393 |
|
|
$ |
429,924 |
|
Common
shares outstanding at period end |
|
15,930,112 |
|
|
|
16,017,834 |
|
|
|
16,106,818 |
|
|
|
16,454,966 |
|
|
|
16,760,115 |
|
Diluted
common shares outstanding at period end |
|
16,163,253 |
|
|
|
16,225,591 |
|
|
|
16,289,635 |
|
|
|
16,662,779 |
|
|
|
17,050,115 |
|
Book value per common share |
$ |
25.74 |
|
|
$ |
24.71 |
|
|
$ |
26.58 |
|
|
$ |
27.47 |
|
|
$ |
29.87 |
|
Tangible book value per common share |
$ |
21.67 |
|
|
$ |
20.59 |
|
|
$ |
22.42 |
|
|
$ |
23.24 |
|
|
$ |
25.65 |
|
Tangible book value per diluted common share |
$ |
21.35 |
|
|
$ |
20.33 |
|
|
$ |
22.17 |
|
|
$ |
22.95 |
|
|
$ |
25.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
4,981,651 |
|
|
$ |
5,000,415 |
|
|
$ |
5,002,156 |
|
|
$ |
5,078,623 |
|
|
$ |
5,137,631 |
|
Less:
goodwill |
|
53,101 |
|
|
|
53,101 |
|
|
|
53,101 |
|
|
|
54,465 |
|
|
|
54,465 |
|
Less: core
deposit intangibles, net |
|
10,596 |
|
|
|
11,598 |
|
|
|
12,554 |
|
|
|
13,830 |
|
|
|
14,879 |
|
Less:
mortgage servicing rights, net |
|
176 |
|
|
|
201 |
|
|
|
226 |
|
|
|
251 |
|
|
|
276 |
|
Less: naming
rights, net |
|
1,044 |
|
|
|
1,054 |
|
|
|
1,065 |
|
|
|
1,076 |
|
|
|
1,087 |
|
Tangible assets |
$ |
4,916,734 |
|
|
$ |
4,934,461 |
|
|
$ |
4,935,210 |
|
|
$ |
5,009,001 |
|
|
$ |
5,066,924 |
|
Total stockholders' equity to total assets |
|
8.23 |
% |
|
|
7.92 |
% |
|
|
8.56 |
% |
|
|
8.90 |
% |
|
|
9.74 |
% |
Tangible common equity to tangible assets |
|
7.02 |
% |
|
|
6.68 |
% |
|
|
7.32 |
% |
|
|
7.63 |
% |
|
|
8.48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
average stockholders' equity |
$ |
398,270 |
|
|
$ |
436,191 |
|
|
$ |
437,483 |
|
|
$ |
492,599 |
|
|
$ |
563,046 |
|
Less:
average intangible assets |
|
65,450 |
|
|
|
66,445 |
|
|
|
68,978 |
|
|
|
70,181 |
|
|
|
61,186 |
|
Average tangible common equity |
$ |
332,820 |
|
|
$ |
369,746 |
|
|
$ |
368,505 |
|
|
$ |
422,418 |
|
|
$ |
501,860 |
|
Net income
(loss) allocable to common stockholders |
$ |
11,608 |
|
|
$ |
15,171 |
|
|
$ |
15,259 |
|
|
$ |
15,650 |
|
|
$ |
10,466 |
|
Add:
amortization of intangible assets |
|
961 |
|
|
|
992 |
|
|
|
1,148 |
|
|
|
1,085 |
|
|
|
1,116 |
|
Less: tax
effect of intangible assets amortization |
|
202 |
|
|
|
208 |
|
|
|
241 |
|
|
|
228 |
|
|
|
234 |
|
Adjusted net income (loss) allocable to common
stockholders |
$ |
12,367 |
|
|
$ |
15,955 |
|
|
$ |
16,166 |
|
|
$ |
16,507 |
|
|
$ |
11,348 |
|
Return on total average stockholders' equity
(ROAE) annualized |
|
11.56 |
% |
|
|
13.80 |
% |
|
|
13.99 |
% |
|
|
12.88 |
% |
|
|
7.37 |
% |
Return on average tangible common equity
(ROATCE) annualized |
|
14.74 |
% |
|
|
17.12 |
% |
|
|
17.60 |
% |
|
|
15.85 |
% |
|
|
8.97 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-interest
expense |
$ |
35,248 |
|
|
$ |
32,236 |
|
|
$ |
31,436 |
|
|
$ |
29,459 |
|
|
$ |
38,089 |
|
Less: loss
on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Less: merger
expense |
|
68 |
|
|
|
115 |
|
|
|
88 |
|
|
|
323 |
|
|
|
4,562 |
|
Adjusted
non-interest expense |
$ |
35,180 |
|
|
$ |
32,121 |
|
|
$ |
31,348 |
|
|
$ |
29,136 |
|
|
$ |
33,527 |
|
Net interest
income |
$ |
42,031 |
|
|
$ |
41,944 |
|
|
$ |
39,566 |
|
|
$ |
39,289 |
|
|
$ |
37,215 |
|
Non-interest
income |
|
8,330 |
|
|
|
8,969 |
|
|
|
9,637 |
|
|
|
9,022 |
|
|
|
9,199 |
|
Less: net
gain on acquisition and branch sales |
|
422 |
|
|
|
— |
|
|
|
540 |
|
|
|
— |
|
|
|
— |
|
Less: net
gains (losses) from securities transactions |
|
14 |
|
|
|
(17 |
) |
|
|
(32 |
) |
|
|
40 |
|
|
|
8 |
|
Adjusted
non-interest income |
$ |
7,894 |
|
|
$ |
8,986 |
|
|
$ |
9,129 |
|
|
$ |
8,982 |
|
|
$ |
9,191 |
|
Net interest income plus adjusted non-interest
income |
$ |
49,925 |
|
|
$ |
50,930 |
|
|
$ |
48,695 |
|
|
$ |
48,271 |
|
|
$ |
46,406 |
|
Non-interest expense to net interest
income plus non-interest income |
|
69.99 |
% |
|
|
63.32 |
% |
|
|
63.89 |
% |
|
|
60.98 |
% |
|
|
82.06 |
% |
Efficiency ratio |
|
70.47 |
% |
|
|
63.07 |
% |
|
|
64.38 |
% |
|
|
60.36 |
% |
|
|
72.25 |
% |
Net income
(loss) allocable to common stockholders |
$ |
11,608 |
|
|
$ |
15,171 |
|
|
$ |
15,259 |
|
|
$ |
15,650 |
|
|
$ |
10,466 |
|
Add: income
tax provision |
|
3,654 |
|
|
|
3,642 |
|
|
|
1,684 |
|
|
|
3,614 |
|
|
|
(16 |
) |
Add:
provision (reversal) of credit losses |
|
(151 |
) |
|
|
(136 |
) |
|
|
824 |
|
|
|
(412 |
) |
|
|
(2,125 |
) |
Pre-tax, pre-provision income |
$ |
15,111 |
|
|
$ |
18,677 |
|
|
$ |
17,767 |
|
|
$ |
18,852 |
|
|
$ |
8,325 |
|
Total
average assets |
$ |
4,930,231 |
|
|
$ |
4,988,755 |
|
|
$ |
5,067,687 |
|
|
$ |
5,108,120 |
|
|
$ |
5,068,301 |
|
Total
average stockholders' equity |
$ |
398,270 |
|
|
$ |
436,191 |
|
|
$ |
437,483 |
|
|
$ |
492,599 |
|
|
$ |
563,023 |
|
Return on average assets (ROAA) annualized |
|
0.93 |
% |
|
|
1.21 |
% |
|
|
1.21 |
% |
|
|
1.24 |
% |
|
|
0.82 |
% |
Adjusted return on average assets |
|
1.22 |
% |
|
|
1.49 |
% |
|
|
1.41 |
% |
|
|
1.50 |
% |
|
|
0.65 |
% |
Adjusted return on average equity |
|
15.05 |
% |
|
|
16.99 |
% |
|
|
16.29 |
% |
|
|
15.52 |
% |
|
|
5.87 |
% |
Equity Bancshares (NASDAQ:EQBK)
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