Last10K.com

Equity Bancshares Inc (EQBK) SEC Filing 10-Q Quarterly report for the period ending Tuesday, March 31, 2020

Equity Bancshares Inc

CIK: 1227500 Ticker: EQBK

 

Exhibit 99.1

Equity Bancshares, Inc.

PRESS RELEASE - 04/29/2020

Equity Bancshares, Inc. Announces First Quarter Earnings of $0.08

per Diluted Common Share and Net Income of $1.3 Million

Company reports net interest margin expansion in first quarter; provision for loan losses of $9.9 million or 85% of pre-tax income; and enters COVID-19 era with strong PPP lending for local businesses

 

WICHITA, Kansas, April 29, 2020 (GLOBE NEWSWIRE) – Equity Bancshares, Inc. (NASDAQ: EQBK), (“Equity”, “we”, “us”, “our”), the Wichita-based holding company of Equity Bank, reported its unaudited results for the first quarter ended March 31, 2020, including net income allocable to common stockholders of $1.3 million, or $0.08 per diluted share.

 

“Our first quarter 2020 results exceeded our expectations on a pre-loan loss provision basis,” said Brad Elliott, Chairman and CEO of Equity. “We were able to increase our net interest margin by moving swiftly to lower our cost of liabilities in the quarter.  In this COVID-19 environment we believe the prudent course of action, at this point, is to provide reserves for the unknown, which we did with a $9.9 million provision for loan losses.”

 

Equity completed over 1,600 Small Business Administration (“SBA”) loan applications through phase one of the Paycheck Protection Program (“PPP”) as part of the U.S. Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) signed into law on March 27, 2020.  The relief from Equity-administered loans helped more than 78,000 employees working in small businesses throughout Equity’s regions in Kansas, Missouri, Oklahoma and Arkansas.

 

Equity moved its branch operations to a “Branch Light, Drive Through First” model beginning on March 16, 2020 sequentially throughout its markets.  The Company continued to provide full service through its drive-through banking teams and offered lobby access to commercial, mortgage and consumer customers upon request.  Equity saw a 7% monthly increase in digital transactions, including bill payments, mobile deposits and transfers in March 2020, and a 9% monthly increase in total logins.

 

“In our first quarter, I’m proud of our collective efforts as a company to continue to deliver outstanding service to our customers while helping them manage through an unprecedented crisis,” said Mr. Elliott. “It’s critical for us to fulfill a leadership role in our communities, helping local businesses to continue to operate.  I am proud of our Equity Bank team members and their commitment to our communities, which is key to our success as a company.  Our bankers were front-and-center to businesses in need and our credit administration and loan processing teams have worked efficiently and swiftly to ensure our customers have uninterrupted services.”

 

Notable Items:

 

 

Net income before taxes for the first quarter of 2020 was $1.7 million, or $0.11 per diluted share, compared to a net loss before taxes of $5.2 million, or $0.33 per diluted share, for the same time period in 2019.  There were no merger expenses in the first quarter of 2020.  Net loss before taxes, adjusted to exclude merger expense was $4.6 million, or $0.29 per diluted share, for the first quarter of 2019.

 

Stated diluted income per share in the first quarter of 2020 was $0.08, as compared to $(0.26) in the first quarter of 2019.  Income before taxes and provision for loan losses during the periods ending March 31, 2020 and 2019, was $11.6 million and $10.4 million.

 

On April 18, 2019, the Board of Directors of Equity Bancshares, Inc. authorized the repurchase of up to 1,100,000 shares of our Class A Voting Common Stock, par value $0.01 per share, from time to time, beginning April 29, 2019, and concluding October 30, 2020.  The repurchase program does not obligate us to acquire a specific dollar amount or number of shares and it may be extended, modified or discontinued at any time without notice.  There was a total of 295,461 shares repurchased during the first quarter of 2020 at a weighted average price of $23.33.  In March, in response to the COVID-19 environment, the Board of Directors of Equity Bancshares voted to temporarily suspend the repurchase program.  A total of 383,523 shares remain authorized for repurchase.

 

The CARES Act provided temporary relief for the implementation of Accounting Standards Update No. 2016-13, Measurement of Credit Losses on Financial Instruments and the Company has elected to calculate the required allowance for loan losses and the resulting provision for loan losses using the prior probable-incurred-loss method.


The following information was filed by Equity Bancshares Inc (EQBK) on Wednesday, April 29, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 001-37624

 

EQUITY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

 

 

Kansas

 

72-1532188

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

7701 East Kellogg Drive, Suite 300

Wichita, KS

 

 

67207

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: 316.612.6000

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Class A, Common Stock, par value $0.01 per share

Trading Symbol

EQBK

Name of each exchange on which registered

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

 

As of April 27, 2020, the registrant had 15,198,986 shares of common stock, $0.01 par value per share, outstanding.

 

 


TABLE OF CONTENTS

 

Part I

Financial Information

5

Item 1.

Financial Statements

5

 

Consolidated Balance Sheets

5

 

Consolidated Statements of Operations

6

 

Consolidated Statements of Comprehensive Income (Loss)

7

 

Consolidated Statements of Stockholders’ Equity

8

 

Consolidated Statements of Cash Flows

9

 

Condensed Notes to Interim Consolidated Financial Statements

11

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

37

 

Overview

37

 

Critical Accounting Policies

39

 

Results of Operations

43

 

Financial Condition

49

 

Liquidity and Capital Resources

60

 

Non-GAAP Financial Measures

61

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

64

Item 4.

Controls and Procedures

66

Part II

Other Information

67

Item 1.

Legal Proceedings

67

Item 1A.

Risk Factors

67

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

67

Item 3.

Defaults Upon Senior Securities

68

Item 4.

Mine Safety Disclosures

68

Item 5.

Other Information

68

Item 6.

Exhibits

68

 

Important Notice about Information in this Quarterly Report

Unless we state otherwise or the context otherwise requires, references in this Quarterly Report to “we,” “our,” “us,” “the Company” and “Equity” refer to Equity Bancshares, Inc. and its consolidated subsidiaries, including Equity Bank, which we sometimes refer to as “Equity Bank,” “the Bank” or “our Bank.”

The information contained in this Quarterly Report is accurate only as of the date of this Quarterly Report on Form 10-Q and as of the dates specified herein.

2


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  These forward-looking statements reflect our current views with respect to, among other things, future events and our 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 our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control, particularly with regard to developments related to the COVID-19 pandemic.  Accordingly, we caution 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 we believe 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.  When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading “Item 1A - Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 10, 2020, and in Item 1A – Risk Factors of this Quarterly Report.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

 

an economic downturn related to the COVID-19 pandemic;

 

an economic downturn unrelated to the COVID-19 pandemic, especially one affecting our core market areas;

 

the occurrence of various events that negatively impact the real estate market, since a significant portion of our loan portfolio is secured by real estate;

 

generally difficult or unfavorable conditions in the market for financial products and services;

 

interest rate fluctuations, which could have an adverse effect on our profitability;

 

external economic and/or market factors, such as changes in monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve”), inflation or deflation, changes in the demand for loans, and fluctuations in consumer spending, borrowing and savings habits, which may have an adverse impact on our financial condition;

 

continued or increasing competition from other financial institutions, credit unions, and non-bank financial services companies, many of which are subject to different regulations than we are;

 

costs arising from the environmental risks associated with making loans secured by real estate;

 

losses resulting from a decline in the credit quality of the assets that we hold;

 

the adoption of ASU 2016-13, Financial Instruments – Credit Losses, and its impact on our allowance for loan losses and capital;

 

the effects of new federal tax laws, or changes to existing federal tax laws;

 

inadequacies in our allowance for loan losses, which could require us to take a charge to earnings and thereby adversely affect our financial condition;

 

differences in our qualitative factors used in our calculation of the allowance for loan losses from actual results;

 

inaccuracies or changes in the appraised value of real estate securing the loans that we originate, which could lead to losses if the real estate collateral is later foreclosed upon and sold at a price lower than the appraised value;

 

potential fraud related to Small Business Administration (“SBA”) loan applications through the Paycheck Protection Program (“PPP”) as part of the U.S. Coronavirus Aid, Relief and Economic Security Act (“CARES Act”);

 

the costs of integrating the businesses we acquire, which may be greater than expected;

 

challenges arising from unsuccessful attempts to expand into new geographic markets, products, or services;

 

a lack of liquidity resulting from decreased loan repayment rates, lower deposit balances, or other factors;

 

restraints on the ability of Equity Bank to pay dividends to us, which could limit our liquidity;

3


 

the loss of our largest loan and depositor relationships;

 

limitations on our ability to lend and to mitigate the risks associated with our lending activities as a result of our size and capital position;

 

additional regulatory requirements and restrictions on our business, which could impose additional costs on us;

 

increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all;

 

a failure in the internal controls we have implemented to address the risks inherent to the business of banking;

 

inaccuracies in our assumptions about future events, which could result in material differences between our financial projections and actual financial performance;

 

the departure of key members of our management personnel or our inability to hire qualified management personnel;

 

disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems;

 

unauthorized access to nonpublic personal information of our customers, which could expose us to litigation or reputational harm;

 

disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions;

 

required implementation of new accounting standards that significantly change certain of our existing recognition practices;

 

the occurrence of adverse weather or man-made events, which could negatively affect our core markets or disrupt our operations;

 

the effects of pandemic and widespread public health emergencies;

 

an increase in FDIC deposit insurance assessments, which could adversely affect our earnings;

 

the impact of the transition from London Interbank Offered Rate (“LIBOR”) and our ability to adequately manage such transition;

 

an inability to keep pace with the rate of technological advances due to a lack of resources to invest in new technologies;

 

our ability to remediate, on a timely basis, our material weakness in our control over financial reporting, relating to the reconciliation process, for a portion of our corporate accounts to our general ledger, and

 

other factors that are discussed in “Item 1A - Risk Factors.”

The foregoing factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in this Quarterly Report.  If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate.  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 we do 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, and it is not possible for us to predict those events or how they may affect us.  In addition, we cannot assess the impact of each factor on our 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 Quarterly Report on Form 10-Q are expressly qualified in their entirety by this cautionary statement.  This cautionary statement should also be considered in connection with any subsequent written or verbal forward-looking statements that we or persons acting on our behalf may issue.

 

4


PART I

 

 

Item 1: Financial Statements

EQUITY BANCSHARES, INC.

CONSOLIDATED BALANCE SHEETS

March 31, 2020 and December 31, 2019

(Dollar amounts in thousands)

 

 

 

(Unaudited)

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

141,989

 

 

$

88,973

 

Federal funds sold

 

 

263

 

 

 

318

 

Cash and cash equivalents

 

 

142,252

 

 

 

89,291

 

Interest-bearing time deposits in other banks

 

 

2,498

 

 

 

2,498

 

Available-for-sale securities

 

 

187,812

 

 

 

142,067

 

Held-to-maturity securities, fair value of $750,900 and $783,911

 

 

721,992

 

 

 

769,059

 

Loans held for sale

 

 

6,494

 

 

 

5,933

 

Loans, net of allowance for loan losses of $21,915 and $12,232

 

 

2,485,208

 

 

 

2,544,420

 

Other real estate owned, net

 

 

5,870

 

 

 

8,293

 

Premises and equipment, net

 

 

84,732

 

 

 

84,478

 

Bank-owned life insurance

 

 

75,585

 

 

 

75,103

 

Federal Reserve Bank and Federal Home Loan Bank stock

 

 

31,662

 

 

 

31,137

 

Interest receivable

 

 

15,549

 

 

 

15,738

 

Goodwill

 

 

136,432

 

 

 

136,432

 

Core deposit intangibles, net

 

 

19,105

 

 

 

19,907

 

Other

 

 

28,641

 

 

 

25,222

 

Total assets

 

$

3,943,832

 

 

$

3,949,578

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

Demand

 

$

508,441

 

 

$

481,298

 

Total non-interest-bearing deposits

 

 

508,441

 

 

 

481,298

 

Savings, NOW, and money market

 

 

1,668,145

 

 

 

1,749,048

 

Time

 

 

783,811

 

 

 

833,170

 

Total interest-bearing deposits

 

 

2,451,956

 

 

 

2,582,218

 

Total deposits

 

 

2,960,397

 

 

 

3,063,516

 

Federal funds purchased and retail repurchase agreements

 

 

37,113

 

 

 

35,708

 

Federal Home Loan Bank advances

 

 

389,620

 

 

 

324,373

 

Bank stock loan

 

 

40,000

 

 

 

8,990

 

Subordinated debentures

 

 

14,638

 

 

 

14,561

 

Contractual obligations

 

 

5,781

 

 

 

5,836

 

Interest payable and other liabilities

 

 

18,932

 

 

 

18,534

 

Total liabilities

 

 

3,466,481

 

 

 

3,471,518

 

Commitments and contingent liabilities, see Notes 11 and 12

 

 

 

 

 

 

 

 

Stockholders’ equity, see Note 7

 

 

 

 

 

 

 

 

Common stock

 

 

174

 

 

 

174

 

Additional paid-in capital

 

 

383,850

 

 

 

382,731

 

Retained earnings

 

 

127,015

 

 

 

125,757

 

Accumulated other comprehensive income (loss)

 

 

3,769

 

 

 

(3

)

Employee stock loans

 

 

(43

)

 

 

(77

)

Treasury stock

 

 

(37,414

)

 

 

(30,522

)

Total stockholders’ equity

 

 

477,351

 

 

 

478,060

 

Total liabilities and stockholders’ equity

 

$

3,943,832

 

 

$

3,949,578

 

See accompanying condensed notes to interim consolidated financial statements.

5


EQUITY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months ended March 31, 2020 and 2019

(Dollar amounts in thousands, except per share data)

 

 

(Unaudited)

Three Months Ended

March 31,

 

 

 

2020

 

 

2019

 

Interest and dividend income

 

 

 

 

 

 

 

 

Loans, including fees

 

$

34,376

 

 

$

36,533

 

Securities, taxable

 

 

4,620

 

 

 

5,082

 

Securities, nontaxable

 

 

966

 

 

 

953

 

Federal funds sold and other

 

 

595

 

 

 

634

 

Total interest and dividend income

 

 

40,557

 

 

 

43,202

 

Interest expense

 

 

 

 

 

 

 

 

Deposits

 

 

6,864

 

 

 

10,730

 

Federal funds purchased and retail repurchase agreements

 

 

31

 

 

 

32

 

Federal Home Loan Bank advances

 

 

1,175

 

 

 

1,305

 

Bank stock loan

 

 

109

 

 

 

162

 

Subordinated debentures

 

 

283

 

 

 

334

 

Total interest expense

 

 

8,462

 

 

 

12,563

 

Net interest income

 

 

32,095

 

 

 

30,639

 

Provision for loan losses

 

 

9,940

 

 

 

15,646

 

Net interest income after provision for loan losses

 

 

22,155

 

 

 

14,993

 

Non-interest income

 

 

 

 

 

 

 

 

Service charges and fees

 

 

2,026

 

 

 

1,923

 

Debit card income

 

 

2,043

 

 

 

1,738

 

Mortgage banking

 

 

590

 

 

 

317

 

Increase in value of bank-owned life insurance

 

 

482

 

 

 

488

 

Net gain (loss) from securities transactions

 

 

8

 

 

 

6

 

Other

 

 

157

 

 

 

852

 

Total non-interest income

 

 

5,306

 

 

 

5,324

 

Non-interest expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

13,504

 

 

 

14,098

 

Net occupancy and equipment

 

 

2,235

 

 

 

1,967

 

Data processing

 

 

2,663

 

 

 

2,405

 

Professional fees

 

 

1,367

 

 

 

1,156

 

Advertising and business development

 

 

696

 

 

 

646

 

Telecommunications

 

 

487

 

 

 

585

 

FDIC insurance

 

 

517

 

 

 

278

 

Courier and postage

 

 

384

 

 

 

327

 

Free nationwide ATM cost

 

 

420

 

 

 

361

 

Amortization of core deposit intangibles

 

 

802

 

 

 

779

 

Loan expense

 

 

234

 

 

 

268

 

Other real estate owned

 

 

308

 

 

 

112

 

Merger expenses

 

 

 

 

 

639

 

Other

 

 

2,141

 

 

 

1,922

 

Total non-interest expense

 

 

25,758

 

 

 

25,543

 

Income (loss) before income taxes

 

 

1,703

 

 

 

(5,226

)

Provision (benefit) for income taxes

 

 

445

 

 

 

(1,153

)

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

 

$

1,258

 

 

$

(4,073

)

Basic earnings (loss) per share

 

$

0.08

 

 

$

(0.26

)

Diluted earnings (loss) per share

 

$

0.08

 

 

$

(0.26

)

See accompanying condensed notes to interim consolidated financial statements.

6


EQUITY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the Three Months ended March 31, 2020 and 2019

(Dollar amounts in thousands)

 

 

 

(Unaudited)

Three Months Ended

March 31,

 

 

 

2020

 

 

2019

 

Net income (loss)

 

$

1,258

 

 

$

(4,073

)

Other comprehensive income:

 

 

 

 

 

 

 

 

Unrealized holding gains arising during the period on

   available-for-sale securities

 

 

4,862

 

 

 

2,520

 

Amortization of unrealized losses on held-to-maturity securities

 

 

177

 

 

 

293

 

Total other comprehensive income

 

 

5,039

 

 

 

2,813

 

Tax effect

 

 

(1,267

)

 

 

(713

)

Other comprehensive income, net of tax

 

 

3,772

 

 

 

2,100

 

Comprehensive income (loss)

 

$

5,030

 

 

$

(1,973

)

See accompanying condensed notes to interim consolidated financial statements.

 

 

7


EQUITY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months ended March 31, 2020 and 2019

(Unaudited)

(Dollar amounts in thousands, except share data)

 

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 

Accumulated

Other

 

 

Employee

 

 

 

 

 

 

Total

 

 

 

Shares

Outstanding

 

 

Amount

 

 

Paid-In

Capital

 

 

Retained

Earnings

 

 

Comprehensive

Income (Loss)

 

 

Stock

Loans

 

 

Treasury

Stock

 

 

Stockholders’

Equity

 

Balance at January 1, 2019

 

 

15,793,095

 

 

$

173

 

 

$

379,085

 

 

$

101,326

 

 

$

(4,867

)

 

$

(121

)

 

$

(19,655

)

 

$

455,941

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

(4,073

)

 

 

 

 

 

 

 

 

 

 

 

(4,073

)

Other comprehensive income,

   net of tax effects

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,100

 

 

 

 

 

 

 

 

 

2,100

 

Stock based compensation

 

 

 

 

 

 

 

 

734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

734

 

Common stock issued upon

   exercise of stock options

 

 

6,100

 

 

 

 

 

 

112

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

112

 

Common stock issued under

   stock-based incentive plan

 

 

21,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repayment on employee stock loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34

 

 

 

 

 

 

34

 

Cumulative effect of change in

   accounting principle from

   implementation of ASU 2017-08

 

 

 

 

 

 

 

 

 

 

 

(1,385

)

 

 

 

 

 

 

 

 

 

 

 

(1,385

)

Balance at March 31, 2019

 

 

15,820,303

 

 

$

173

 

 

$

379,931

 

 

$

95,868

 

 

$

(2,767

)

 

$

(87

)

 

$

(19,655

)

 

$

453,463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1, 2020

 

 

15,444,434

 

 

$

174

 

 

$

382,731

 

 

$

125,757

 

 

$

(3

)

 

$

(77

)

 

$

(30,522

)

 

$

478,060

 

Net income

 

 

 

 

 

 

 

 

 

 

 

1,258

 

 

 

 

 

 

 

 

 

 

 

 

1,258

 

Other comprehensive income,

   net of tax effects

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,772

 

 

 

 

 

 

 

 

 

3,772

 

Stock based compensation

 

 

 

 

 

 

 

 

756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

756

 

Common stock issued upon

   exercise of stock options

 

 

400

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

Common stock issued under

   stock-based incentive plan

 

 

32,849

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued under

   employee stock purchase plan

 

 

16,764

 

 

 

 

 

 

354

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

354

 

Repayment on employee stock loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34

 

 

 

 

 

 

34

 

Treasury stock purchases

 

 

(295,461

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,892

)

 

 

(6,892

)

Balance at March 31, 2020

 

 

15,198,986

 

 

$

174

 

 

$

383,850

 

 

$

127,015

 

 

$

3,769

 

 

$

(43

)

 

$

(37,414

)

 

$

477,351

 

See accompanying condensed notes to interim consolidated financial statements.

 

8


EQUITY BANCSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months ended March 31, 2020 and 2019

(Dollar amounts in thousands, except per share data)

 

 

 

(Unaudited)

March 31,

 

 

 

2020

 

 

2019

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,258

 

 

$

(4,073

)

Adjustments to reconcile net income to net cash from operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

756

 

 

 

734

 

Depreciation

 

 

933

 

 

 

863

 

Amortization of operating lease right-of-use asset

 

 

153

 

 

 

148

 

Amortization of cloud computing implementation costs

 

 

27

 

 

 

20

 

Provision for loan losses

 

 

9,940

 

 

 

15,646

 

Net (accretion) amortization of purchase accounting adjustments

 

 

(906

)

 

 

(1,233

)

Amortization (accretion) of premiums and discounts on securities

 

 

1,471

 

 

 

1,288

 

Amortization of intangibles

 

 

814

 

 

 

791

 

Deferred income taxes

 

 

257

 

 

 

(14

)

Federal Home Loan Bank stock dividends

 

 

(265

)

 

 

(184

)

Loss (gain) on sales and valuation adjustments on other real estate owned

 

 

177

 

 

 

(21

)

Net loss (gain) on securities transactions

 

 

 

 

 

(6

)

Change in unrealized loss (gain) on equity securities

 

 

(8

)

 

 

 

Loss (gain) on disposal of premises and equipment

 

 

 

 

 

(10

)

Loss (gain) on sale of foreclosed assets

 

 

27

 

 

 

15

 

Loss (gain) on sales of loans

 

 

(478

)

 

 

(260

)

Originations of loans held for sale

 

 

(23,381

)

 

 

(11,448

)

Proceeds from the sale of loans held for sale

 

 

23,298

 

 

 

12,540

 

Increase in the value of bank-owned life insurance

 

 

(482

)

 

 

(488

)

Change in fair value of derivatives recognized in earnings

 

 

495

 

 

 

(1,342

)

Payments on operating lease payable

 

 

(178

)

 

 

(222

)

Net change in:

 

 

 

 

 

 

 

 

Interest receivable

 

 

189

 

 

 

965

 

Other assets

 

 

(4,448

)

 

 

(156

)

Interest payable and other liabilities

 

 

(1,100

)

 

 

(803

)

Net cash provided by (used in) operating activities

 

 

8,549

 

 

 

12,750

 

Cash flows from (to) investing activities

 

 

 

 

 

 

 

 

Purchases of available-for-sale securities

 

 

(50,368

)

 

 

 

Purchases of held-to-maturity securities

 

 

(2,754

)

 

 

(27,022

)

Proceeds from sales, calls, pay-downs and maturities of available-for-sale securities

 

 

9,023

 

 

 

4,602

 

Proceeds from calls, pay-downs and maturities of held-to-maturity securities

 

 

48,989

 

 

 

23,942

 

Net change in interest-bearing time deposits in other banks

 

 

 

 

 

249

 

Net change in loans

 

 

50,501

 

 

 

(36,465

)

Capitalized construction cost of other real estate owned

 

 

(52

)

 

 

Purchase of premises and equipment

 

 

(1,204

)

 

 

(1,261

)

Proceeds from sale of premises and equipment

 

 

17

 

 

 

10

 

Proceeds from sale of foreclosed assets

 

 

97

 

 

 

73

 

Net redemption (purchase) of Federal Home Loan Bank and Federal Reserve

    Bank stock

 

 

(260

)

 

 

6,829

 

Proceeds from sale of other real estate owned

 

 

2,455

 

 

 

121

 

Net cash received from acquisition of MidFirst locations

 

 

 

 

 

85,360

 

Net cash provided by (used in) investing activities

 

 

56,444

 

 

 

56,438

 

Cash flows from (to) financing activities

 

 

 

 

 

 

 

 

Net increase (decrease) in deposits

 

 

(103,149

)

 

 

38,824

 

Net change in federal funds purchased and retail repurchase agreements

 

 

1,405

 

 

 

(6,635

)

Net borrowings (payments) on Federal Home Loan Bank line of credit

 

 

(184,223

)

 

 

(119,429

)

Proceeds from Federal Home Loan Bank term advances

 

 

250,000

 

 

 

 

9


Principal payments on Federal Home Loan Bank term advances

 

 

(525

)

 

 

(509

)

Proceeds from bank stock loan

 

 

38,354

 

 

 

 

Principal payments on bank stock loan

 

 

(7,344

)

 

 

(6,950

)

Principal payments on employee stock loans

 

 

34

 

 

 

34

 

Proceeds from the exercise of employee stock options

 

 

9

 

 

 

112

 

Proceeds from employee stock purchase plan

 

 

354

 

 

 

 

Purchase of treasury stock

 

 

(6,892

)

 

 

 

Net change in contractual obligations

 

 

(55

)

 

 

 

Net cash provided by (used in) financing activities

 

 

(12,032

)

 

 

(94,553

)

Net change in cash and cash equivalents

 

 

52,961