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, Kan., 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.

Equity’s Balance Sheet Highlights:

  • Total loans held for investment of $2.51 billion at March 31, 2020, as compared to total loans held for investment of $2.56 billion at December 31, 2019.
  • Total deposits were $2.96 billion at March 31, 2020, as compared to $3.06 billion at December 31, 2019.  Signature deposits, including core deposits comprised of checking, savings and money market accounts, were $2.18 billion at March 31, 2020, as compared to $2.23 billion at December 31, 2019.
  • Total assets were $3.94 billion at March 31, 2020, as compared to $3.95 billion at December 31, 2019.
  • Book value per common share was $31.41 at March 31, 2020, as compared to $30.95 at December 31, 2019. Tangible book value per common share was $21.10 at March 31, 2020, as compared to $20.75 at December 31, 2019.

Financial Results for the Quarter Ended March 31, 2020

Net income allocable to common stockholders was $1.3 million for the three months ended March 31, 2020, as compared to net loss allocable to common stockholders of $4.1 million for the three months ended March 31, 2019, an increase of $5.3 million.

Diluted earnings per share were $0.08 for the three months ended March 31, 2020, as compared to a loss per share of $0.26 for the comparable period in 2019.  Weighted average fully diluted shares were 15,595,024 and 15,804,508 for the three months ended March 31, 2020 and 2019.

Net interest income was $32.1 million for the three months ended March 31, 2020, as compared to $30.6 million for the three months ended March 31, 2019, a $1.5 million, or 4.7%, increase.  The increase in net interest income was primarily driven by average rates of interest-bearing liabilities repricing at a faster rate than average rates of interest-earning assets.

The net interest margin was 3.67% for the three months ended March 31, 2020, as compared to 3.49% for the three months ended March 31, 2019.  The increase in net interest margin was primarily due to a declining-rate environment where the average rate of interest-bearing liabilities fell faster than the average rate of interest-earning assets.  Higher cost deposits were repriced downward and our Federal Home Loan Bank advances were refinanced at lower rates.

The provision for loan losses was $9.9 million for the three months ended March 31, 2020, as compared to $15.6 million for the three months ended March 31, 2019.  Included in the first quarter of 2019 was a $14.5 million provision against one credit relationship we believe was an isolated incident that was unique within our portfolio.  For the three months ended March 31, 2020, we had net charge-offs of $257 thousand as compared to net charge-offs of $760 thousand for the same period in 2019.

Total non-interest income for the quarter ended March 31, 2020, was $5.3 million, as compared to $5.3 million for the quarter ended March 31, 2019.  A decrease in other non-interest income, mainly from the increase in derivative mark-to-market valuation losses, was principally offset by increases in debit card income, mortgage banking and service charges and fees.

Total non-interest expense was $25.8 million for the quarter ended March 31, 2020, as compared to $25.5 million for the quarter ended March 31, 2019.  The increase in non-interest expense is due largely to increases in net occupancy and equipment, data processing, FDIC insurance, professional fees, other non-interest expense and other real estate owned, partially offset by decreases in salaries and employee benefits and telecommunications.  Also, non-interest expense does not include any merger expenses for the three months ended March 31, 2020.  Merger expenses for the three months ended March 31, 2019, totaled $639 thousand ($487 thousand after tax).

Equity’s effective tax rate for the quarter ended March 31, 2020, was 26.1%, as compared to 22.1% for the quarter ended March 31, 2019.  For both of the comparable periods, the estimated annual effective tax rate at which income tax expense (benefits) have been provided reflect, in addition to statutory tax rates, the estimated tax-exempt interest income, non-taxable life insurance income, non-deductible facilitative merger expense and other non-deductible expense in proportion to anticipated annual income before income taxes, as well as federal income tax credits anticipated to be available in each annual period.  Income tax expense for the quarter ended March 31, 2020, includes $62 thousand of additional expense attributable to the settlement in stock of restricted stock units and the exercise of stock options.  The exercise of stock options and the settlement of restricted stock units in the quarter ended March 31, 2019, resulted in tax benefits of $8 thousand.

Loans, Deposits and Total Assets

Loans held for investment were $2.51 billion at March 31, 2020, as compared to $2.56 billion at December 31, 2019, a decrease of $49.5 million.  The decrease in loans is primarily the result of net paydowns in the commercial and industrial, agricultural real estate and residential real estate portfolios, which were partially offset by originations during the quarter.

As of March 31, 2020, Equity’s allowance for loan losses to total loans was 0.87%, as compared to 0.48% at December 31, 2019.  Total reserves, including purchase discounts, to total loans were approximately 1.26% as of March 31, 2020, as compared to 0.85% at December 31, 2019.  Nonperforming assets were $48.1 million as of March 31, 2020, or 1.22% of total assets.  Nonperforming assets were $46.9 million at December 31, 2019, or 1.19% of total assets.

Total deposits were $2.96 billion at March 31, 2020, as compared to $3.06 billion at December 31, 2019, a decrease of $103.1 million.  This decrease included $80.9 million of savings, NOW and money market deposits and $49.4 million of time deposits, partially offset by an increase of $27.1 million in demand deposits.  The changes in deposits are primarily from decreases by commercial customers and public fund balances related to distribution of tax monies at the local level and seasonality.  Signature deposits were $2.18 billion at March 31, 2020, as compared to $2.23 billion at December 31, 2019.

At March 31, 2020, Equity had consolidated total assets of $3.94 billion, as compared to $3.95 billion at December 31, 2019, a decrease of $5.7 million. 

Borrowings and Capital

At March 31, 2020, borrowings totaled $481.4 million, as compared to $383.6 million at December 31, 2019.  The increase in borrowings was principally due to a $65.2 million increase in Federal Home Loan Bank advances and a $31.0 million increase in the bank stock loan balance.

At March 31, 2020, common stockholders’ equity totaled $477.4 million, $31.41 per common share, as compared to $478.1 million, $30.95 per common share, at December 31, 2019.  Tangible common equity was $320.6 million and tangible book value per common share was $21.10 at March 31, 2020.  Tangible common equity was $320.5 million and tangible book value per common share was $20.75 at December 31, 2019.  During the first quarter of 2020, the company repurchased a total of 295,461 shares of our Class A Voting Common Stock at a total cost of $6.9 million, or $23.33 weighted average per share.  The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 11.67%, the total capital to risk-weighted assets was 13.00% and the total leverage ratio was 9.02% at March 31, 2020.  The Company’s subsidiary, Equity Bank’s, ratio of common equity tier 1 capital to risk-weighted assets was 12.71%, the total capital to risk-weighted assets was 13.50% and the total leverage ratio was 9.39% at March 31, 2020.

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 Chairman and Chief Executive Officer, Brad Elliott, and Chief Financial Officer, Greg Kossover, will hold a conference call and webcast to discuss first quarter 2020 results on Thursday, April 30, 2020, at 10 a.m. eastern time, 9:00 a.m. central time.

Investors, news media and other participants should register for the call or audio webcast at investor.equitybank.com. On Thursday, April 30, 2020, participants may also dial into the call toll-free at (844) 534-7311 from anywhere in the U.S. or (574) 990-1419 internationally, using conference ID no. 4407029.

Participants are encouraged to dial into the call or access the webcast approximately 10 minutes prior to the start time.  Presentation slides to pair with the call or webcast will be posted one hour prior to the call at investor.equitybank.com.

A replay of the call and webcast will be available two hours following the close of the call until May 7, 2020, accessible at (855) 859-2056 with conference ID no. 4407029 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 10, 2020, and any updates to those risk factors set forth in Equity’s subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity’s underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, such as COVID-19, and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity’s behalf may issue.

Investor Contact:

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

Media Contact:

John J. Hanley
SVP, Senior Director of Marketing
Equity Bancshares, Inc.
(816) 505-4063
jhanley@equitybank.com

Unaudited Financial Tables

  • Table 1. Selected Financial Highlights
  • Table 2. Year-to-Date Analysis of Changes in Net Interest Income
  • Table 3. Consolidated Balance Sheets
  • Table 4. Consolidated Statements of Operations
  • Table 5. Non-GAAP Financial Measures

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

  As of and for the three months ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
  2020  2019  2019  2019  2019 
Statement of Income Data                    
Net interest income $32,095  $32,405  $31,526  $31,288  $30,639 
Provision for loan losses  9,940   1,055   679   974   15,646 
Net gains (losses) from securities transactions  8   (3)  4   7   6 
Other non-interest income  5,298   6,644   6,568   6,444   5,318 
Total non-interest income  5,306   6,641   6,572   6,451   5,324 
Merger expense          276   639 
Other non-interest expense  25,758   24,846   24,223   24,747   24,904 
Total non-interest expense  25,758   24,846   24,223   25,023   25,543 
Income (loss) before income taxes  1,703   13,145   13,196   11,742   (5,226)
Provision for income taxes (benefits)  445   3,131   2,790   2,510   (1,153)
Net income (loss) allocable to common stockholders  1,258   10,014   10,406   9,232   (4,073)
Basic earnings (loss) per share  0.08   0.65   0.67   0.59   (0.26)
Diluted earnings (loss) per share  0.08   0.64   0.66   0.58   (0.26)
                     
Balance Sheet Data (at period end)                    
Available-for-sale securities $187,812  $142,067  $152,680  $161,082  $166,355 
Held-to-maturity securities  721,992   769,059   764,163   766,950   749,493 
Gross loans held for investment  2,507,123   2,556,652   2,600,924   2,679,985   2,618,986 
Allowance for loan losses  21,915   12,232   17,875   17,777   26,340 
Intangible assets, net  156,704   157,518   158,350   159,147   159,944 
Total assets  3,943,832   3,949,578   4,074,663   4,180,074   4,065,354 
Total deposits  2,960,397   3,063,516   3,106,929   3,185,893   3,260,870 
Non-time deposits  2,176,586   2,230,346   2,177,820   2,192,534   2,220,110 
Borrowings  481,371   383,632   480,000   515,582   331,221 
Total liabilities  3,466,481   3,471,518   3,607,613   3,721,668   3,611,891 
Total stockholders’ equity  477,351   478,060   467,050   458,406   453,463 
Tangible common equity*  320,647   320,542   308,700   299,259   293,519 
                     
Selected Average Balance Sheet Data (quarterly average)                    
Investment securities $907,910  $911,923  $926,839  $924,914  $918,804 
Total gross loans receivable  2,525,344   2,568,301   2,646,454   2,655,256   2,560,030 
Interest-earning assets  3,519,267   3,563,642   3,657,970   3,665,618   3,560,815 
Total assets  3,888,205   3,932,909   4,030,606   4,025,764   3,926,359 
Interest-bearing deposits  2,531,508   2,563,519   2,673,007   2,726,443   2,709,596 
Borrowings  355,303   377,561   390,562   347,103   269,492 
Total interest-bearing liabilities  2,886,811   2,941,080   3,063,569   3,073,546   2,979,088 
Total deposits  3,021,181   3,055,275   3,152,785   3,200,624   3,178,164 
Total liabilities  3,405,638   3,459,347   3,567,354   3,568,661   3,466,646 
Total stockholders' equity  482,567   473,562   463,252   457,103   459,713 
Tangible common equity*  325,470   315,569   304,492   297,541   302,398 
                     
Performance ratios                    
Return on average assets (ROAA) annualized  0.13%  1.01%  1.02%  0.92%  (0.42)%
Return on average equity (ROAE) annualized  1.05%  8.39%  8.91%  8.1%  (3.59)%
Return on average tangible common equity (ROATCE) annualized*  2.35%  13.42%  14.38%  13.29%  (4.62)%
Yield on loans annualized  5.47%  5.67%  5.7%  5.74%  5.79%
Cost of interest-bearing deposits annualized  1.09%  1.32%  1.56%  1.64%  1.61%
Cost of total deposits annualized  0.91%  1.11%  1.32%  1.4%  1.37%
Net interest margin annualized  3.67%  3.61%  3.42%  3.42%  3.49%
Efficiency ratio*  68.88%  63.63%  63.59%  65.59%  69.26%
Non-interest income / average assets  0.55%  0.67%  0.65%  0.64%  0.55%
Non-interest expense / average assets  2.66%  2.51%  2.38%  2.49%  2.64%
                     
Capital Ratios                    
Tier 1 Leverage Ratio  9.02%  9.02%  8.49%  8.26%  8.37%
Common Equity Tier 1 Capital Ratio  11.67%  11.63%  11.08%  10.46%  10.46%
Tier 1 Risk Based Capital Ratio  12.2%  12.15%  11.59%  10.95%  10.96%
Total Risk Based Capital Ratio  13%  12.59%  12.21%  11.56%  11.87%
Total stockholders' equity to total assets  12.1%  12.1%  11.46%  10.97%  11.15%
Tangible common equity to tangible assets*  8.47%  8.45%  7.88%  7.44%  7.52%
Book value per common share $31.41  $30.95  $30.25  $29.45  $28.66 
Tangible book value per common share* $21.1  $20.75  $19.99  $19.23  $18.55 
Tangible book value per diluted common share* $20.96  $20.39  $19.73  $18.99  $18.3 

* The value noted is considered a Non-GAAP financial measure.  For a reconciliation of Non-GAAP financial measures, see Table 5. Non-GAAP Financial Measure

TABLE 2. QUARTERLY ANALYSIS OF CHANGES IN NET INTEREST INCOME (Unaudited)
(Dollars in thousands) 

 For the quarter ended  For the quarter ended 
 31-Mar-20  31-Mar-19 
 Average
Outstanding
Balance
  Interest
Income/
Expense
  Average  Average Outstanding Balance  Interest Income/ Expense  Average 
Yield/Rate(3)(4)Yield/Rate(3)(4)
Interest-earning assets                       
Loans (1)$2,525,344  $34,376   5.47% $2,560,030  $36,533   5.79%
Total securities 907,910   5,586   2.47%  918,804   6,035   2.66%
Federal funds sold and other 86,013   595   2.78%  81,980   634   3.14%
Total interest-earning assets 3,519,267   40,557   4.64%  3,560,814   43,202   4.92%
Interest-bearing liabilities                       
Total interest-bearing demand and savings 1,724,774   3,125   0.73%  1,693,228   5,667   1.36%
Certificates of deposit 806,734   3,739   1.86%  1,016,369   5,063   2.02%
Total interest-bearing deposits 2,531,508   6,864   1.09%  2,709,597   10,730   1.61%
FHLB advances & LOC 295,677   1,175   1.6%  197,610   1,305   2.68%
Other borrowings 59,626   423   2.85%  71,882   528   2.98%
Total interest-bearing liabilities 2,886,811   8,462   1.18%  2,979,089   12,563   1.71%
                        
Net interest income    $32,095          $30,639     
Interest rate spread         3.46%          3.21%
                        
Net interest margin (2)         3.67%          3.49%
                        
(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. 


 For the quarter ended 
 March 31, 2020 vs. 2019 
 Total Increase/(Decrease) 
 Volume  Yield/Rate  Total 
Variance(1)Variance(1)Variance
Interest-earning assets           
Loans$(490) $(1,667) $(2,157)
Total securities (75)  (374)  (449)
Federal funds sold and other 30   (69)  (39)
Total interest-earning assets (535)  (2,110)  (2,645)
Interest-bearing liabilities           
Total interest-bearing demand and savings 105   (2,647)  (2,542)
Certificates of deposit (990)  (334)  (1,324)
Total interest-bearing deposits (885)  (2,981)  (3,866)
FHLB advances & LOC 504   (634)  (130)
Other borrowings (37)  (68)  (105)
Total interest-bearing liabilities (418)  (3,683)  (4,101)
            
Net interest income$(117) $1,573  $1,456 
            
(1) The effect of changes in volume is determined by multiplying the change in volume by the previous year's average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the prior year's volume. The changes attributable to both volume and rate, which cannot be segregated, have been allocated to the volume variance and the rate variance in proportion to the relationship of the absolute dollar amount of the change in each. 


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

      
   March 31,  December 31, 
    
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       
Stockholders’ equity       
Common stock  174  174 
Additional paid-in capital  383,850  382,731 
Retained earnings  127,015  125,757 
Accumulated other comprehensive gain (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 
        


TABLE 4. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share data) 

  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 gains (losses) 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 tax  1,703   (5,226)
Provision 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)
         


TABLE 5. Non-GAAP Financial Measures (Unaudited)
(Dollars in thousands, except per share data) 

  As of and for the three months ended 
  March 31,  December 31,  September 30,  June 30,  March 31, 
  2020  2019  2019  2019  2019 
Total stockholders' equity $477,351  $478,060  $467,050  $458,406  $453,463 
Less: goodwill  136,432   136,432   136,432   136,432   136,432 
Less: core deposit intangibles, net  19,105   19,907   20,727   21,512   22,296 
Less: mortgage servicing asset, net  4   5   7   8   10 
Less: naming rights, net  1,163   1,174   1,184   1,195   1,206 
Tangible common equity $320,647  $320,542  $308,700  $299,259  $293,519 
Common shares issued at period end  15,198,986   15,444,434   15,440,334   15,563,873   15,820,303 
RSU shares vested              108 
Common shares outstanding at period end  15,198,986   15,444,434   15,440,334   15,563,873   15,820,411 
Diluted common shares outstanding at period end  15,297,319   15,719,810   15,647,456   15,758,747   16,036,700 
Book value per common share $31.41  $30.95  $30.25  $29.45  $28.66 
Tangible book value per common share $21.1  $20.75  $19.99  $19.23  $18.55 
Tangible book value per diluted common share $20.96  $20.39  $19.73  $18.99  $18.3 
                     
Total assets $3,943,832  $3,949,578  $4,074,663  $4,180,074  $4,065,354 
Less: goodwill  136,432   136,432   136,432   136,432   136,432 
Less: core deposit intangibles, net  19,105   19,907   20,727   21,512   22,296 
Less: mortgage servicing asset, net  4   5   7   8   10 
Less: naming rights, net  1,163   1,174   1,184   1,195   1,206 
Tangible assets $3,787,128  $3,792,060  $3,916,313  $4,020,927  $3,905,410 
Total stockholders' equity to total assets  12.1%  12.1%  11.46%  10.97%  11.15%
Tangible common equity to tangible assets  8.47%  8.45%  7.88%  7.44%  7.52%
Total average stockholders' equity $482,567  $473,562  $463,252  $457,103  $459,713 
Less: average intangible assets  157,097   157,993   158,760   159,562   157,315 
Average tangible common equity $325,470  $315,569  $304,492  $297,541  $302,398 
Net income (loss) allocable to common stockholders $1,258  $10,014  $10,406  $9,232  $(4,073)
Amortization of intangible assets  814   833   797   797   791 
Less: tax effect of intangible assets amortization  171   175   167   167   166 
Adjusted net income (loss) allocable to common stockholders $1,901  $10,672  $11,036  $9,862  $(3,448)
Return on total average stockholders' equity (ROAE) annualized  1.05%  8.39%  8.91%  8.1%  (3.59)%
Return on average tangible common equity (ROATCE) annualized  2.35%  13.42%  14.38%  13.29%  (4.62)%
Non-interest expense $25,758  $24,846  $24,223  $25,023  $25,543 
Less: merger expenses           276   639 
Non-interest expense, excluding merger expenses $25,758  $24,846  $24,223  $24,747  $24,904 
Net interest income $32,095  $32,405  $31,526  $31,288  $30,639 
Non-interest income  5,306   6,641   6,572   6,451   5,324 
Less: net gains (losses) from securities transactions  8   (3)  4   7   6 
Non-interest income, excluding gains (losses) from securities transactions $5,298  $6,644  $6,568  $6,444  $5,318 
Net interest income plus non-interest income, excluding net gains (losses) from securities transactions $37,393  $39,049  $38,094  $37,732  $35,957 
Non-interest expense to net interest income plus non-interest income  68.87%  63.63%  63.58%  66.31%  71.03%
Efficiency ratio  68.88%  63.63%  63.59%  65.59%  69.26%