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Equity Bancshares, Inc. Reports Record Earnings of $10.1 Million for 2015

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WICHITA, Kan., Jan. 28, 2016 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ: EQBK), ("Equity"), the Wichita-based holding company of Equity Bank, reported unaudited results for the year ended December 31, 2015, including record net income allocable to common stockholders of $10.1 million.

Brad Elliott, Chairman and CEO of Equity, said, "Our financial results and net income for 2015 indicate the diligent, hard work of our many company associates. We will continue to focus on delivering loan and deposit services and products tailored to the many needs of our community and metro customers, while managing our expenses. We also welcomed a new group of bankers, communities, and customers to our company in the fourth quarter, and we are focused on continuing to grow business and relationships in our new Southeast Kansas communities, along with all of the markets we serve."

Highlights of Equity's performance include:

- Net income allocable to common stockholders of $10.1 million for the year ended December 31, 2015, compared to $8.3 million for the previous year ended December 31, 2014, a 22 percent increase.
- Earnings per diluted share of $1.54 for the year ended December 31, 2015, compared to $1.30 for the year ended December 31, 2014, an 18 percent increase.
- Total loans held for investment of $960 million at December 31, 2015, an increase of $234 million as compared to December 31, 2014.
- Total deposits of $1.2 billion at December 31, 2015, an increase of $235 million as compared to December 31, 2014.
- Total assets of $1.6 billion at December 31, 2015, an increase of $411 million as compared to December 31, 2014.
- Book value per common share of $18.37 and tangible book value per common share of $15.97 at December 31, 2015.

Equity completed its initial public offering on November 16, 2015 with the issue of 1,941,000 shares of Class A common stock at a price to the public of $22.50 per share. The shares began trading on the NASDAQ Global Select Market on November 11, 2015 under the ticker symbol "EQBK."

Equity also completed its acquisition of First Independence Corporation ("First Independence"), and its wholly-owned subsidiary, First Federal Savings & Loan of Independence, Kansas on October 9, 2015. First Independence had consolidated total assets of $134 million, net loans of $90 million, and total deposits of $87 million. Equity now operates the former First Independence offices in Coffeyville, Independence, Neodesha, and Pittsburg, Kansas, as Equity Bank branches.

Financial Results For Year and Quarter Ended December 31, 2015

Net income allocable to common stockholders was $10.1 million, or $1.54 per diluted share, for the year ended December 31, 2015, as compared to $8.3 million, or $1.30 per diluted share for the year ended December 31, 2014. Net interest income for the current year was $46.3 million as compared to $41.4 million for the prior year. The increase in net interest income was primarily driven by growth in loan and securities balances, partially offset by an increase in interest expense as Equity funded the increase in earning assets with increased deposits and borrowings. The net interest margin was 3.65% and 3.92% for the years ended December 31, 2015 and 2014. The net interest margin for 2015 includes the utilization of our "leverage" or "spread" opportunity, as more fully discussed in our IPO Prospectus. Our net interest margin excluding this opportunity was approximately 3.75% for the year ended December 31, 2015.

The provision for loan losses was $3.0 million for the year ended December 31, 2015 as compared to $1.2 million for the year ended December 31, 2014. The provision for loan losses increased primarily due to loan growth and consideration for recent changes in the current business environment and economic factors.

Total non-interest income for the year ended December 31, 2015 was $9.8 million, compared to $8.7 million for the year ended December 31, 2014. Total non-interest expense for the year ended December 31, 2015 was $38.6 million, compared to $35.6 million for the year ended December 31, 2014. Non-interest income includes a net gain on the fourth-quarter-2015 acquisition of First Independence of $682 thousand, and merger expenses of $1.7 million also related to this acquisition are included in non-interest expense for the year of 2015.

Equity's 2015 effective income tax rate was 30.1% on income before taxes, not including the net gain on acquisition, and reflects the benefit of increased income tax credits from investments in qualified affordable housing projects. Equity's effective income tax rate for the year ended December 31, 2014 was 31.86%.

Net income allocable to common stockholders for the fourth quarter ended December 31, 2015 was $2.5 million, compared to $1.7 million for the comparable quarter ended December 31, 2014. Net interest income for the quarter ended December 31, 2015 was $12.3 million, compared to $10.3 million for the quarter ended December 31, 2014. Net interest margin was 3.26% and 3.85% for the fourth quarters of 2015 and 2014. The net interest margin for the fourth quarter of 2015 also includes the utilization of our "leverage" or "spread" opportunity as discussed above. Our net interest margin excluding this opportunity was approximately 3.50% for the quarter ended December 31, 2015.

Non-interest income for the quarter ended December 31, 2015 was $3.4 million, including the $682 thousand recorded gain on acquisition, compared to $2.2 million of non-interest income for the quarter ended December 31, 2014. Non-interest expense for the quarter ended December 31, 2015 was $11.7 million, including $1.6 million of merger expenses, compared to $9.8 million of non-interest expense for the quarter ended December 31, 2014.

Loans, Deposits, And Total Assets

Loans held for investment were $960 million at December 31, 2015, compared to $726 million at December 31, 2014. Excluding the $90 million of net loans acquired in the First Independence transaction, Equity's loan portfolio increased by $145 million in 2015.

As of December 31, 2015, Equity's allowance for loan losses to total loans was approximately 0.57%, compared to 0.82% as of December 31, 2014. The total reserve, including purchase discounts, to total loans was approximately 0.81% as of December 31, 2015, compared to 1.12% as of December 31, 2014.  Nonperforming assets as of December 31, 2015 were 0.88% to total assets, as compared to 1.33% as of December 31, 2014.

Total deposits were $1.2 billion at December 31, 2015, as compared to $981 million for the year ended December 31, 2014. Excluding the $87 million in deposits acquired in the First Independence transaction, Equity's deposits grew by $147 million in 2015.

At December 31, 2015, Equity had consolidated total assets of approximately $1.6 billion, compared to $1.2 billion at December 31, 2014.

Capital

As of December 31, 2015, the ratio of common equity tier 1 capital to risk-weighted assets was approximately 12.31% and the total capital to risk-weighted assets was approximately 14.52%. Equity had tangible common equity of $131.2 million and tangible book value per common share of $15.97 as of December 31, 2015. For the year ended December 31, 2015, the return on average equity was 8.19%.

Non-GAAP Financial Measures

This press release includes certain Non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided at the end of this press release.

Conference Call and Webcast

Equity Bancshares will host a conference call to review these results on Friday, January 29, 2016 at 9:30 a.m. central time. Investors, news media, and other participants may register for the webcast at www.investor.equitybank.com. Participants may dial into the call toll-free at (877) 637-1713 from anywhere in the U.S. or (503) 406-4038 internationally, using conference ID no. 19355297. Participants are encouraged to dial into the call approximately 10 minutes prior to the start time. A replay of the call and webcast will be available two hours following the close of the call until February 4, 2016, accessible at (855) 859-2056 or www.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, and treasury management services. As of the period ended December 31, 2015, Equity had $1.6 billion in consolidated total assets, with 29 locations throughout Kansas and Missouri, including corporate headquarters in Wichita and branches throughout the Kansas City metropolitan area. Learn more at www.equitybank.com.

Founded in November 2002 in Andover, Kansas by current Chairman and CEO Brad Elliott, Equity expanded into Wichita in 2005, Kansas City in 2007, Western Kansas in 2008, Topeka in 2011, Western Missouri in 2012, and Southeastern Kansas in 2015. Equity's principal objective is to increase stockholder value and generate consistent growth by expanding our commercial banking franchise organically and by acquisition, serving as a home for seasoned bankers, businesspersons, and customers with an entrepreneurial spirit. Equity seeks to provide an enhanced banking experience for customers by providing a suite of sophisticated banking products and services tailored to their needs, 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."

Special Note Concerning Forward-Looking Statements

Certain statements contained herein may be considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995.  These statements are based upon the belief of Equity Bancshares, Inc. ("the Company") management, as well as assumptions made beyond information currently available to the Company's management, and may be, but not necessarily are, identified by such words as "will," "expect," "plan," "anticipate," "target," "forecast" and "goal."  Because such "forward-looking statements" are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.  Factors that could cause actual results to differ materially from the Company's expectations include competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the  Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses, and similar variables. The foregoing list of factors is not exhaustive.  Except as otherwise stated in this news announcement, the Company does not undertake any obligation to update publicly or revise any forward-looking statements because of new information, future events or otherwise.

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 our most recent Form S-1 SEC Registration Statement, or other SEC filings. If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained herein. Accordingly, you should not place undue reliance on any forward-looking statements, which speak only as of the date made.  Equity Bancshares, Inc. assumes no obligation to update or revise any forward-looking statements that are made from time to time.

Unaudited Financial Tables

  • Table 1. Selected Financial Highlights
  • Table 2. Consolidated Balance Sheets
  • Table 3. Consolidated Statements of Income
  • Table 4. Non-GAAP Financial Measures


TABLE 1. SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
(Dollars in thousands, except per share data)

 Years Ended December 31,
 2015 2014 2013
Statement of Income Data   
Net interest income$46,262 $41,361 $41,235 
Provision for loan losses 3,047  1,200  2,583 
Net gain on acquisition 682     
Net gain on sale, and settlement of securities  756  986  500 
Total non-interest income 9,802  8,674  7,892 
Merger expenses 1,691     
Total non-interest expense 38,575  35,645  35,137 
Income before income taxes 14,442  13,190  11,407 
Provision for income taxes 4,142  4,203  3,534 
Net income 10,300  8,987  7,873 
Dividends and discount accretion on preferred stock (177) (708) (978)
Net income allocable to common stockholders 10,123  8,279  6,895 
Basic earnings per share 1.55  1.31  0.93 
Diluted earnings per share 1.54  1.30  0.92 
    
Balance Sheet Data (at period end)   
Securities available-for-sale$130,810 $52,985 $65,450 
Securities held-to-maturity 310,539  261,017  284,407 
Gross loans held for investment 960,355  725,876  660,294 
Allowance for loan losses 5,506  5,963  5,614 
Goodwill and core deposit intangibles, net 19,679  19,237  19,600 
Total assets 1,585,727  1,174,515  1,139,897 
Total deposits 1,215,914  981,177  947,319 
Non-time deposits 777,302  639,017  584,109 
Borrowings 194,064  70,370  43,365 
Total liabilities 1,418,494  1,056,786  1,000,024 
Total stockholders' equity 167,233  117,729  139,873 
Tangible common equity 131,152  82,133  88,381 
    
Performance ratios   
Return on average assets (ROAA) 0.75% 0.78% 0.67%
Return on average equity (ROAE) 8.19% 7.30% 5.71%
Yield on loans 5.31% 5.63% 5.63%
Cost of interest-bearing deposits 0.55% 0.49% 0.53%
Cost of total deposits 0.48% 0.43% 0.46%
Net interest margin 3.65% 3.92% 3.87%
Efficiency ratio 66.94% 72.67% 72.26%
Non-interest income / average assets 0.71% 0.75% 0.67%
Non-interest expense / average assets 2.81% 3.08% 2.99%
    
Capital Ratios   
Tier 1 Leverage Ratio 9.43% 9.62% 11.59%
Tier 1 Common Capital Ratio 12.31% N/A  N/A 
Tier 1 Risk Based Capital Ratio 13.82% 13.16% 17.01%
Total Risk Based Capital Ratio 14.52% 13.86% 17.74%
Equity / Assets 10.55% 10.02% 12.27%
Book value per share$18.37 $16.71 $14.62 
Tangible book value per share$15.97 $13.54 $11.97 
Tangible common equity to tangible assets 8.37% 7.11% 7.89%
    

TABLE 2. CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)

 20152014
ASSETS      
Cash and due from banks $  36,276 $  31,193 
Federal funds sold    20,553    514 
       
Cash and cash equivalents    56,829    31,707 
       
Interest-bearing time deposits in other banks    5,245    5,995 
Available-for-sale securities    130,810    52,985 
Held-to-maturity securities, fair value of $312,802 and $265,189   310,539    261,017 
Loans held for sale    3,504    897 
Loans, net of allowance for loan losses of $5,506 and $5,963    954,849    719,913 
Other real estate owned, net   5,811    4,754 
Premises and equipment, net   39,147    33,946 
Bank owned life insurance    32,555    28,729 
Federal Reserve Bank and Federal Home Loan Bank stock   11,013    4,312 
Interest receivable    4,540    3,592 
Goodwill    18,130    18,130 
Core deposit intangible, net   1,549    1,107 
Other    11,206    7,431 
   
Total assets$  1,585,727 $  1,174,515 
   
LIABILITIES AND STOCKHOLDERS' EQUITY  
Deposits   
Demand$  157,834 $  128,919 
Savings, NOW, and money market    619,468    510,098 
Time   438,612    342,160 
   
Total deposits    1,215,914    981,177 
   
Federal funds purchased and retail repurchase agreements    20,762    25,301 
Federal Home Loan Bank advances    145,439    20,976 
Bank stock loan    18,612    15,152 
Subordinated debentures    9,251    8,941 
Contractual obligations    3,093    3,146 
Interest payable and other liabilities   5,423    2,093 
Total liabilities    1,418,494    1,056,786 
   
   
Stockholders' equity   
Preferred stock, Series C (liquidation preference of $16,372)    16,372    16,359 
Common stock    97    76 
Additional paid-in capital    138,077    98,398 
Retained earnings    34,955    24,832 
Accumulated other comprehensive loss   (2,371)   (2,281)
Employee stock loans   (242)   - 
Treasury stock    (19,655)   (19,655)
Total stockholders' equity   167,233    117,729 
Total liabilities and stockholders' equity$  1,585,727 $  1,174,515 

 

TABLE 3. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share data)

 Three Months EndedYear Ended
 December 31,December 31,
 2015201420152014
Interest and dividend income    
Loans, including fees$11,474 $9,917 $43,361 $38,406 
Securities, taxable 2,193  1,588  7,634  7,204 
Securities, nontaxable 311  210  1,057  839 
Federal funds sold and other 427  101  976  345 
     
Total interest and dividend income 14,405  11,816  53,028  46,794 
     
Interest expense    
Deposits 1,517  1,051  4,926  4,084 
Federal funds purchased and retail repurchase agreements 14  20  61  75 
Federal Home Loan Bank advances 228  80  495  345 
Bank stock loan 195  158  641  295 
Subordinated debentures 163  159  643  634 
     
Total interest expense 2,117  1,468  6,766  5,433 
     
Net interest income  12,288  10,348  46,262  41,361 
Provision for loan losses 1,180    3,047  1,200 
     
Net interest income after provision for loan losses  11,108  10,348  43,215  40,161 
Non-interest income    
Service charges and fees 910  707  2,708  2,737 
Debit card income 624  351  2,161  1,462 
Mortgage banking 233  255  1,088  894 
Increase in value of bank owned life insurance 257  244  957  960 
Net gain on acquisition 682  -  682  - 
Net gains on sales and settlement of securities 386  261  756  986 
Other 258  382  1,450  1,635 
     
Total non-interest income  3,350  2,200  9,802  8,674 
     
Non-interest expense    
Salaries and employee benefits 4,959  5,637  19,202  19,621 
Net occupancy and equipment 1,077  1,158  4,155  4,536 
Data processing 812  722  2,939  2,530 
Professional fees 676  576  2,086  2,279 
Advertising and business development 336  287  1,199  1,057 
Telecommunications 229  179  811  755 
FDIC insurance 272  184  840  727 
Courier and postage 169  138  544  562 
Amortization of core deposit intangible 93  116  275  363 
Loan expense 116  79  388  327 
Other real estate owned 113  (18) 287  21 
Loss on debt extinguishment -  -  316  - 
Merger Expenses 1,614  -  1,691  - 
Other 1,198  697  3,842  2,867 
     
Total non-interest expense  11,664  9,755  38,575  35,645 
     
Income before income tax 2,794  2,793  14,442  13,190 
Provision for income taxes 240  1,014  4,142  4,203 
     
Net income  2,554  1,779  10,300  8,987 
Dividends and discount accretion on preferred stock (48) (42) (177) (708)
     
Net income allocable to common stockholders $2,506 $1,737 $10,123 $8,279 
     
Basic earnings per share$0.35 $0.28 $1.55 $1.31 
     
Diluted earnings per share$0.34 $0.28 $1.54 $1.30 

 

TABLE 4. Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands, except per share data) 

 Years Ended December 31,
  
 20152014  2013
Total stockholders' equity$167,232 $117,729 $139,873 
Less: preferred stock  16,372  16,359  31,892 
Less: goodwill  18,130  18,130  18,130 
Less: core deposit intangibles, net  1,549  1,107  1,470 
Less: mortgage servicing asset 29     
    
Tangible common equity$131,152 $82,133 $88,381 
    
Common shares outstanding at period end  8,211,727  6,067,511  7,385,603 
    
Book value per common share $18.37 $16.71 $14.62 
    
Tangible book value per common share $15.97 $13.54 $11.97 
    
Total assets $1,585,727 $1,174,515 $1,139,897 
Less: goodwill  18,130  18,130  18,130 
Less: core deposit intangibles, net  1,549  1,107  1,470 
Less: mortgage servicing asset 29     
    
Tangible assets $1,566,019 $1,155,278 $1,120,297 
    
Tangible common equity to tangible assets  8.37% 7.11% 7.89%
    
Non-interest expense$38,575 $35,645 $35,137 
Less: merger expenses  1,691     
Less: loss on debt extinguishment  316     
    
Non-interest expense, excluding merger expenses and loss on debt extinguishment $36,568 $35,645 $35,137 
    
Net interest income $46,262 $41,361 $41,235 
    
Non-interest income $9,802 $8,674 $7,892 
Less: net gains on sales and settlement of securities  756  986  500 
Less: net gain on acquisition  682     
    
Non-interest income, excluding net gains on sales and settlement of securities and net gain on acquisition $8,364 $7,688 $7,392 
    
Efficiency ratio 66.94% 72.67% 72.26%
    
    


Media and Investor Contact: John Hanley, Director of Investor Relations 913-583-8004 / jhanley@equitybank.com investor.equitybank.com

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