WICHITA, Kan., Oct. 18, 2022 (GLOBE NEWSWIRE) -- Equity Bancshares, Inc. (NASDAQ:EQBK), ("Equity", "the Company", "we," "us," "our"), the Wichita-based holding company of Equity Bank, reported net income of $15.2 million and $0.93 earnings per diluted share for the quarter ended September 30, 2022.

"In 2022, our Company has realized meaningful, organic growth while emphasizing return to our stockholders via earnings, share buybacks, and an increasing dividend. Annualized growth within our commercial and commercial real estate loan portfolios of 17.13% is a credit to our sales and operational teams," said Brad S. Elliott, Chairman and CEO, Equity Bancshares, Inc. "We have been diligent in enhancing our sales process, expanding our marketing geography, and hiring exceptional operators which has and will continue to drive our Company's success."

"At the end of the quarter, our classified asset ratio is down more than 50% year-to-date and at an all-time low for our Company," continued Mr. Elliott. "The committed efforts of our sales and credit teams to source and underwrite strong credits while meeting the financing needs of the communities we serve allows our Company to hold true to its mission as a community bank."

Notable Items:

During the third quarter, the Company realized continued loan growth excluding the impact of PPP assets and sold branches bringing annualized loan growth year-to-date to 7.01%.
During the quarter, the Company realized linked period Net Interest Margin growth of 23 basis points, and Net Interest Income growth of $2.38 million.
The Company continued to emphasize investor returns through repurchase of 126,900 shares during the quarter, at an average price of $32.51, as well as the expansion of our quarterly dividend program to $0.10 per share. Also during the quarter, the Company's Board authorized the repurchase of up to 1 million shares and the Company received non-objection from the Federal Reserve Bank of Kansas City related to the repurchase plan.

Financial Results for the Quarter Ended September 30, 2022

Net income allocable to common stockholders was $15.2 million, or $0.93 per diluted share, for the three months ended September 30, 2022, as compared to $15.3 million, or $0.94 per diluted share, for the three months ended June 30, 2022. The decrease for the second quarter of 2022 is primarily driven by income taxes as a true-up of rate was experienced in the second quarter that, as expected, did not repeat. Pre-tax income increased $1.9 million as the Company's net interest income benefitted from increasing interest rates.

Net Interest Income

Net interest income was $41.9 million for the three months ended September 30, 2022, as compared to $39.6 million for the three months ended June 30, 2022, an increase of $2.4 million, or 6.1%. The yield on interest-earning assets increased 44 basis points to 4.18% during the quarter ended September 30, 2022, as compared to 3.74% for the quarter ended June 30, 2022. The cost of interest-bearing deposits increased by 29 basis points during the quarter, moving from 0.28% at June 30, 2022 to 0.57% at September 30, 2022.

Provision for Credit Losses

During the three months ended September 30, 2022, there was a net release of $136 thousand compared to a provision to the allowance for credit losses of $824 thousand in the previous quarter. The minimal release of provision for the quarter is the result of having a relatively similar sized loan portfolio and similar realized loss rates; however, the Company continues to estimate the allowance for credit loss with assumptions that anticipate slowing 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 September 30, 2022, we had net charge-offs of $1.6 million as compared to $176 thousand for the three months ended June 30, 2022.

Non-Interest Income

Total non-interest income was $9.0 million for the three months ended September 30, 2022, as compared to $9.6 million for the three months ended June 30, 2022, or a decrease of 6.9%, quarter over quarter. The $600 thousand decrease was primarily due to a decrease in net gain on acquisition and branch sales of $540 thousand.

Non-Interest Expense

Total non-interest expense for the quarter ended September 30, 2022, was $32.2 million as compared to $31.4 million for the quarter ended June 30, 2022. The $800 thousand change was primarily due to an increase in data processing of $496 thousand and an increase in the write-off of tax investments of $423 thousand for the quarter ended September 30, 2022, compared to the quarter ended June 30, 2022.

Asset Quality

As of September 30, 2022, Equity's allowance for credit losses to total loans decreased to 1.4% as compared to 1.5% at June 30, 2022. Nonperforming assets were $29.7 million as of September, 2022, or 0.6% of total assets, compared to $37.0 million at June 30, 2022, or 0.7% of total assets. Non-accrual loans were $23.1 million at September 30, 2022, as compared to $18.9 million at June 30, 2022. Total classified assets, including loans rated special mention or worse, other real estate owned and other repossessed assets were $63.1 million, or 11.0% of regulatory capital, down from $72.1 million, or 13.1% of regulatory capital as of June 30, 2022.

During the quarter ended September 30, 2022, non-performing assets decreased $7.3 million due to decreases in other repossessed assets of $8.7 million and other real estate owned of $2.5 million, partially offset by increases in non-accrual loans of $4.3 million.

Regulatory Capital

The Company's ratio of common equity tier 1 capital to risk-weighted assets was 12.1%, the total capital to risk-weighted assets was 16.0% and the total leverage ratio was 9.7% at September 30, 2022. At June 30, 2022, the Company's common equity tier 1 capital to risk-weighted assets ratio was 12.1%, the total capital to risk-weighted assets ratio was 16.0% and the total leverage ratio was 9.1%.

The Company's subsidiary, Equity Bank, had a ratio of common equity tier 1 capital to risk-weighted assets of 14.1%, a ratio of total capital to risk-weighted assets of 15.4% and a total leverage ratio of 10.5% at September 30, 2022. At June 30, 2022, Equity Bank's ratio of common equity tier 1 capital to risk-weighted assets was 13.9%, the ratio of total capital to risk-weighted assets was 15.1% and the total leverage ratio was 9.9%.

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 third quarter results on Wednesday, October 19, 2022 at 10 a.m. eastern time or 9 a.m. central time.

A live webcast of the call will be available on the Company's website at investor.equitybank.com. To access the call by phone, please go to this registration link, and you will be provided with dial in details. Investors, news media, and other participants are encouraged to dial into the conference call ten minutes ahead of the scheduled start time.

A replay of the call and webcast will be available two hours following the close of the call until October 26, 2022, accessible at investor.equitybank.com.

About Equity Bancshares, Inc.

Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions, including commercial loans, consumer banking, mortgage loans, trust and wealth management services and treasury management services, while delivering the high-quality, relationship-based customer service of a community bank. Equity's common stock is traded on the NASDAQ Global Select Market under the symbol "EQBK." Learn more at www.equitybank.com.

Special Note Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of Equity's management with respect to, among other things, future events and Equity's financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "project," "forecast," "goal," "target," "would" and "outlook," or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity's control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from Equity's expectations include COVID-19 related impacts; competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; and acquisitions and integration of acquired businesses; and similar variables. The foregoing list of factors is not exhaustive.

For discussion of these and other risks that may cause actual results to differ from expectations, please refer to "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Equity's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2022, and any updates to those risk factors set forth in Equity's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity's underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, 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 September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Interest and dividend income
Loans, including fees	$	41,555		$	37,581		$	114,710		$	102,392
Securities, taxable		5,792			3,920			16,767			11,242
Securities, nontaxable		687			655			2,020			2,096
Federal funds sold and other		514			290			1,327			846
Total interest and dividend income		48,548			42,446			134,824			116,576
Interest expense
Deposits		4,403			1,881			8,308			6,316
Federal funds purchased and retail repurchase agreements		71			24			150			72
Federal Home Loan Bank advances		409			10			594			155
Subordinated debt		1,721			1,556			4,973			4,669
Total interest expense		6,604			3,471			14,025			11,212

Net interest income		41,944			38,975			120,799			105,364
Provision (reversal) for credit losses		(136	)		1,058			276			(6,355	)
Net interest income after provision (reversal) for credit losses		42,080			37,917			120,523			111,719
Non-interest income
Service charges and fees		2,788			2,360			7,927			6,125
Debit card income		2,682			2,574			8,120			7,603
Mortgage banking		310			801			1,300			2,584
Increase in value of bank-owned life insurance		754			1,169			2,355			2,446
Net gain on acquisition and branch sales		—			—			540			585
Net gains (losses) from securities transactions		(17	)		381			(9	)		398
Other		2,452			546			7,395			3,902
Total non-interest income		8,969			7,831			27,628			23,643
Non-interest expense
Salaries and employee benefits		15,442			13,588			45,893			39,079
Net occupancy and equipment		3,127			2,475			9,304			7,170
Data processing		4,138			3,257			11,549			9,394
Professional fees		1,265			1,076			3,547			3,148
Advertising and business development		1,191			760			3,139			2,241
Telecommunications		487			439			1,399			1,531
FDIC insurance		340			465			780			1,305
Courier and postage		436			344			1,348			1,040
Free nationwide ATM cost		551			519			1,593			1,504
Amortization of core deposit intangibles		957			1,030			3,118			3,094
Loan expense		174			207			566			626
Other real estate owned		188			(342	)		201			(805	)
Loss on debt extinguishment		—			372			—			372
Merger expenses		115			4,015			526			4,627
Other		3,825			2,484			10,168			7,050
Total non-interest expense		32,236			30,689			93,131			81,376
Income (loss) before income tax		18,813			15,059			55,020			53,986
Provision for income taxes		3,642			3,286			8,940			11,972
Net income (loss) and net income (loss) allocable to common stockholders	$	15,171		$	11,773		$	46,080		$	42,014
Basic earnings (loss) per share	$	0.94		$	0.82		$	2.83		$	2.92
Diluted earnings (loss) per share	$	0.93		$	0.80		$	2.79		$	2.86
Weighted average common shares		16,056,658			14,384,302			16,303,586			14,397,146
Weighted average diluted common shares		16,273,231			14,669,312			16,516,787			14,688,092

TABLE 2. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share data)

	As of and for the three months ended
	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
Interest and dividend income
Loans, including fees	$	41,555		$	36,849		$	36,306		$	34,942		$	37,581
Securities, taxable		5,792			5,584			5,391			4,754			3,920
Securities, nontaxable		687			678			655			747			655
Federal funds sold and other		514			513			300			349			290
Total interest and dividend income		48,548			43,624			42,652			40,792			42,446
Interest expense
Deposits		4,403			2,183			1,722			1,939			1,881
Federal funds purchased and retail repurchase agreements		71			46			33			32			24
Federal Home Loan Bank advances		409			176			9			14			10
Subordinated debt		1,721			1,653			1,599			1,592			1,556
Total interest expense		6,604			4,058			3,363			3,577			3,471

Net interest income		41,944			39,566			39,289			37,215			38,975
Provision (reversal) for credit losses		(136	)		824			(412	)		(2,125	)		1,058
Net interest income after provision (reversal) for credit losses		42,080			38,742			39,701			39,340			37,917
Non-interest income
Service charges and fees		2,788			2,617			2,522			2,471			2,360
Debit card income		2,682			2,810			2,628			2,633			2,574
Mortgage banking		310			428			562			722			801
Increase in value of bank-owned life insurance		754			736			865			1,060			1,169
Net gain on acquisition and branch sales		—			540			—			—			—
Net gains (losses) from securities transactions		(17	)		(32	)		40			8			381
Other		2,452			2,538			2,405			2,305			546
Total non-interest income		8,969			9,637			9,022			9,199			7,831
Non-interest expense
Salaries and employee benefits		15,442			15,383			15,068			15,119			13,588
Net occupancy and equipment		3,127			3,007			3,170			2,967			2,475
Data processing		4,138			3,642			3,769			3,867			3,257
Professional fees		1,265			1,111			1,171			1,565			1,076
Advertising and business development		1,191			972			976			1,129			760
Telecommunications		487			442			470			435			439
FDIC insurance		340			260			180			360			465
Courier and postage		436			489			423			389			344
Free nationwide ATM cost		551			541			501			515			519
Amortization of core deposit intangibles		957			1,111			1,050			1,080			1,030
Loan expense		174			207			185			308			207
Other real estate owned		188			14			(1	)		617			(342	)
Loss on debt extinguishment		—			—			—			—			372
Merger expenses		115			88			323			4,562			4,015
Other		3,825			4,169			2,174			5,176			2,484
Total non-interest expense		32,236			31,436			29,459			38,089			30,689
Income (loss) before income tax		18,813			16,943			19,264			10,450			15,059
Provision for income taxes (benefit)		3,642			1,684			3,614			(16	)		3,286
Net income (loss) and net income (loss) allocable to common stockholders	$	15,171		$	15,259		$	15,650		$	10,466		$	11,773
Basic earnings (loss) per share	$	0.94		$	0.95		$	0.94		$	0.62		$	0.82
Diluted earnings (loss) per share	$	0.93		$	0.94		$	0.93		$	0.61		$	0.80
Weighted average common shares		16,056,658			16,206,978			16,652,556			16,865,167			14,384,302
Weighted average diluted common shares		16,273,231			16,413,248			16,869,152			17,141,174			14,669,312

TABLE 3. CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands)

	September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021
ASSETS
Cash and due from banks	$	155,039		$	103,126		$	89,764		$	259,131		$	141,645
Federal funds sold		374			458			286			823			673
Cash and cash equivalents		155,413			103,584			90,050			259,954			142,318
Available-for-sale securities		1,198,962			1,288,180			1,352,894			1,327,442			1,157,423
Loans held for sale		1,518			1,714			1,575			4,214			4,108
Loans, net of allowance for credit losses⁽¹⁾		3,208,524			3,175,208			3,194,987			3,107,262			2,633,148
Other real estate owned, net		10,412			12,969			9,897			9,523			10,267
Premises and equipment, net		100,566			101,212			103,168			104,038			90,727
Bank-owned life insurance		122,418			121,665			120,928			120,787			103,431
Federal Reserve Bank and Federal Home Loan Bank stock		24,428			21,479			19,890			17,510			14,540
Interest receivable		18,497			16,519			16,923			18,048			15,519
Goodwill		53,101			53,101			54,465			54,465			31,601
Core deposit intangibles, net		11,598			12,554			13,830			14,879			12,963
Other		94,978			93,971			100,016			99,509			47,223
Total assets	$	5,000,415		$	5,002,156		$	5,078,623		$	5,137,631		$	4,263,268
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand	$	1,217,094		$	1,194,863		$	1,255,793		$	1,244,117		$	984,436
Total non-interest-bearing deposits		1,217,094			1,194,863			1,255,793			1,244,117			984,436
Demand, savings and money market		2,335,847			2,445,545			2,511,478			2,522,289			2,092,849
Time		673,670			651,363			612,399			653,598			585,492
Total interest-bearing deposits		3,009,517			3,096,908			3,123,877			3,175,887			2,678,341
Total deposits		4,226,611			4,291,771			4,379,670			4,420,004			3,662,777
Federal funds purchased and retail repurchase agreements		47,443			52,750			48,199			56,006			39,137
Federal Home Loan Bank advances		186,001			80,000			50,000			—			—
Subordinated debt		96,263			96,135			96,010			95,885			88,030
Contractual obligations		15,562			15,813			17,307			17,692			18,771
Interest payable and other liabilities		32,729			37,572			35,422			47,413			36,804
Total liabilities		4,604,609			4,574,041			4,626,608			4,637,000			3,845,519
Commitments and contingent liabilities
Stockholders' equity
Common stock		204			204			204			203			178
Additional paid-in capital		482,668			480,897			480,106			478,862			392,321
Retained earnings		130,114			116,576			102,632			88,324			79,226
Accumulated other comprehensive income (loss), net of tax		(120,918	)		(77,426	)		(50,012	)		1,776			9,475
Treasury stock		(96,262	)		(92,136	)		(80,915	)		(68,534	)		(63,451	)
Total stockholders' equity		395,806			428,115			452,015			500,631			417,749
Total liabilities and stockholders' equity	$	5,000,415		$	5,002,156		$	5,078,623		$	5,137,631		$	4,263,268

⁽¹⁾ Allowance for credit losses	$	46,499		$	48,238		$	47,590		$	48,365		$	52,763

TABLE 4. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)

(Dollars in thousands, except per share data)

	As of and for the three months ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2022			2022			2022			2021			2021
Loans Held For Investment by Type
Commercial real estate	$	1,655,646		$	1,643,068		$	1,552,134		$	1,486,148		$	1,308,707
Commercial and industrial		607,722			578,899			629,181			567,497			569,513
Residential real estate		573,431			578,936			613,928			638,087			490,633
Agricultural real estate		200,415			197,938			198,844			198,330			138,793
Agricultural		115,048			124,753			150,077			166,975			93,767
Consumer		102,761			99,852			98,413			98,590			84,498
Total loans held-for-investment		3,255,023			3,223,446			3,242,577			3,155,627			2,685,911
Allowance for credit losses		(46,499	)		(48,238	)		(47,590	)		(48,365	)		(52,763	)
Net loans held for investment	$	3,208,524		$	3,175,208		$	3,194,987		$	3,107,262		$	2,633,148


Asset Quality Ratios
Allowance for credit losses on loans to total loans		1.43	%		1.50	%		1.47	%		1.53	%		1.96	%
Past due or nonaccrual loans to total loans		0.94	%		0.78	%		0.82	%		1.18	%		2.78	%
Nonperforming assets to total assets		0.59	%		0.74	%		0.74	%		1.28	%		1.74	%
Nonperforming assets to total loans plus other real estate owned		0.91	%		1.14	%		1.15	%		2.07	%		2.76	%
Classified assets to bank total regulatory capital		11.03	%		13.08	%		17.12	%		25.34	%		24.25	%


Selected Average Balance Sheet Data (QTD Average)
Investment securities	$	1,272,414		$	1,319,099		$	1,397,421		$	1,330,267		$	1,061,178
Total gross loans receivable		3,240,998			3,216,853			3,195,787			3,181,279			2,748,202
Interest-earning assets		4,602,568			4,675,967			4,715,389			4,713,817			4,005,509
Total assets		4,988,755			5,067,686			5,108,120			5,068,278			4,275,298
Interest-bearing deposits		3,081,245			3,112,300			3,163,777			3,101,657			2,702,040
Borrowings		221,514			238,062			160,094			165,941			132,581
Total interest-bearing liabilities		3,302,759			3,350,362			3,323,871			3,267,598			2,834,621
Total deposits		4,283,855			4,340,196			4,393,879			4,342,732			3,686,169
Total liabilities		4,552,564			4,630,204			4,615,521			4,505,232			3,852,419
Total stockholders' equity		436,191			437,483			492,599			563,046			422,879
Tangible common equity^*		369,746			368,505			422,418			501,860			376,544


Performance ratios
Return on average assets (ROAA) annualized		1.21	%		1.21	%		1.24	%		0.82	%		1.09	%
Return on average assets before income tax and provision for loan losses*		1.49	%		1.41	%		1.50	%		0.65	%		1.50	%
Return on average equity (ROAE) annualized		13.80	%		13.99	%		12.88	%		7.37	%		11.05	%
Return on average equity before income tax and provision for loan losses*		16.99	%		16.29	%		15.52	%		5.87	%		15.12	%
Return on average tangible common equity (ROATCE) annualized^*		17.12	%		17.60	%		15.85	%		8.97	%		13.27	%
Yield on loans annualized		5.09	%		4.59	%		4.61	%		4.36	%		5.43	%
Cost of interest-bearing deposits annualized		0.57	%		0.28	%		0.22	%		0.25	%		0.28	%
Cost of total deposits annualized		0.41	%		0.20	%		0.16	%		0.18	%		0.20	%
Net interest margin annualized		3.62	%		3.39	%		3.38	%		3.13	%		3.86	%
Efficiency ratio^*		63.07	%		64.38	%		60.36	%		72.25	%		56.65	%
Non-interest income / average assets		0.71	%		0.76	%		0.72	%		0.72	%		0.73	%
Non-interest expense / average assets		2.56	%		2.49	%		2.34	%		2.98	%		2.85	%


Capital Ratios
Tier 1 Leverage Ratio		9.46	%		9.11	%		9.07	%		9.09	%		9.02	%
Common Equity Tier 1 Capital Ratio		12.15	%		12.08	%		11.81	%		12.03	%		12.39	%
Tier 1 Risk Based Capital Ratio		12.77	%		12.71	%		12.43	%		12.67	%		12.90	%
Total Risk Based Capital Ratio		15.99	%		15.97	%		15.66	%		15.96	%		16.63	%
Total stockholders' equity to total assets		7.92	%		8.56	%		8.90	%		9.74	%		9.80	%
Tangible common equity to tangible assets^*		6.68	%		7.32	%		7.63	%		8.48	%		8.82	%
Dividend payout ratio		10.78	%		8.61	%		8.58	%		13.05	%		9.96	%
Book value per common share	$	24.71		$	26.58		$	27.47		$	29.87		$	29.08
Tangible book value per common share^*	$	20.59		$	22.42		$	23.24		$	25.65		$	25.90
Tangible book value per diluted common share^*	$	20.33		$	22.17		$	22.95		$	25.22		$	25.42

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

(Dollars in thousands)

	For the nine months ended							For the nine months ended
	September 30, 2022							September 30, 2021
	Average Outstanding Balance		Interest Income/ Expense		Average Yield/Rate⁽³⁾⁽⁴⁾			Average Outstanding Balance		Interest Income/ Expense		Average Yield/Rate⁽³⁾⁽⁴⁾
Interest-earning assets
Loans ⁽¹⁾
Commercial and industrial	$	579,610	$	22,994		5.30	%	$	752,795	$	34,609		6.15	%
Commercial real estate		1,236,282		45,995		4.97	%		990,803		34,943		4.72	%
Real estate construction		362,543		12,443		4.59	%		264,344		7,195		3.64	%
Residential real estate		604,218		16,336		3.61	%		457,761		14,167		4.14	%
Agricultural real estate		201,566		8,046		5.34	%		135,795		5,203		5.12	%
Agricultural		132,485		5,254		5.30	%		93,680		3,432		4.90	%
Consumer		101,341		3,642		4.80	%		84,285		2,843		4.51	%
Total loans		3,218,045		114,710		4.77	%		2,779,463		102,392		4.93	%
Securities
Taxable securities		1,220,045		16,767		1.84	%		898,461		11,242		1.67	%
Nontaxable securities		109,142		2,020		2.47	%		100,495		2,096		2.79	%
Total securities		1,329,187		18,787		1.89	%		998,956		13,338		1.79	%
Federal funds sold and other		116,997		1,327		1.52	%		175,761		846		0.64	%
Total interest-earning assets	$	4,664,229		134,824		3.86	%	$	3,954,180		116,576		3.94	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,480,113		5,461		0.29	%	$	2,076,643		2,728		0.18	%
Time deposits		638,692		2,847		0.60	%		606,151		3,588		0.79	%
Total interest-bearing deposits		3,118,805		8,308		0.36	%		2,682,794		6,316		0.31	%
FHLB advances		54,100		594		1.47	%		16,325		155		1.27	%
Other borrowings		152,682		5,123		4.49	%		131,516		4,741		4.82	%
Total interest-bearing liabilities	$	3,325,587		14,025		0.56	%	$	2,830,635		11,212		0.53	%

Net interest income			$	120,799						$	105,364
Interest rate spread						3.30	%						3.41	%

Net interest margin ⁽²⁾						3.46	%						3.56	%

⁽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
	September 30, 2022							September 30, 2021
	Average Outstanding Balance		Interest Income/ Expense		Average Yield/Rate⁽³⁾⁽⁴⁾			Average Outstanding Balance		Interest Income/ Expense		Average Yield/Rate⁽³⁾⁽⁴⁾
Interest-earning assets
Loans ⁽¹⁾
Commercial and industrial	$	575,149	$	7,750		5.35	%	$	630,622	$	13,646		8.59	%
Commercial real estate		1,307,244		18,023		5.47	%		1,009,141		12,072		4.75	%
Real estate construction		360,579		4,847		5.33	%		283,106		2,664		3.73	%
Residential real estate		582,938		5,464		3.72	%		512,135		5,073		3.93	%
Agricultural real estate		200,534		2,740		5.42	%		134,673		1,819		5.36	%
Agricultural		113,351		1,406		4.92	%		91,878		1,370		5.92	%
Consumer		101,203		1,325		5.20	%		86,647		937		4.29	%
Total loans		3,240,998		41,555		5.09	%		2,748,202		37,581		5.43	%
Securities
Taxable securities		1,164,697		5,793		1.97	%		966,651		3,920		1.61	%
Nontaxable securities		107,717		687		2.53	%		94,527		655		2.75	%
Total securities		1,272,414		6,480		2.02	%		1,061,178		4,575		1.71	%
Federal funds sold and other		89,156		513		2.29	%		196,129		290		0.59	%
Total interest-earning assets	$	4,602,568		48,548		4.18	%	$	4,005,509		42,446		4.20	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,425,824		3,118		0.51	%	$	2,082,515		862		0.16	%
Time deposits		655,421		1,285		0.78	%		619,525		1,019		0.65	%
Total interest-bearing deposits		3,081,245		4,403		0.57	%		2,702,040		1,881		0.28	%
FHLB advances		71,415		409		2.27	%		1,401		10		2.78	%
Other borrowings		150,099		1,792		4.74	%		131,180		1,580		4.78	%
Total interest-bearing liabilities	$	3,302,759		6,604		0.79	%	$	2,834,621		3,471		0.49	%

Net interest income			$	41,944						$	38,975
Interest rate spread						3.39	%						3.71	%

Net interest margin ⁽²⁾						3.62	%						3.86	%

⁽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
	September 30, 2022							June 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	$	575,149	$	7,750		5.35	%	$	588,126	$	7,483		5.10	%
Commercial real estate		1,307,244		18,023		5.47	%		1,210,185		14,521		4.81	%
Real estate construction		360,579		4,847		5.33	%		384,317		4,297		4.48	%
Residential real estate		582,938		5,464		3.72	%		597,680		5,206		3.49	%
Agricultural real estate		200,534		2,740		5.42	%		202,038		2,643		5.25	%
Agricultural		113,351		1,406		4.92	%		134,826		1,533		4.56	%
Consumer		101,203		1,325		5.20	%		99,680		1,166		4.69	%
Total loans		3,240,998		41,555		5.09	%		3,216,852		36,849		4.59	%
Securities
Taxable securities		1,164,697		5,793		1.97	%		1,210,828		5,584		1.85	%
Nontaxable securities		107,717		687		2.53	%		108,271		678		2.51	%
Total securities		1,272,414		6,480		2.02	%		1,319,099		6,262		1.90	%
Federal funds sold and other		89,156		513		2.29	%		140,016		513		1.47	%
Total interest-earning assets	$	4,602,568		48,548		4.18	%	$	4,675,967		43,624		3.74	%
Interest-bearing liabilities
Demand savings and money market deposits	$	2,425,824		3,118		0.51	%	$	2,481,602		1,346		0.22	%
Time deposits		655,421		1,285		0.78	%		630,698		837		0.53	%
Total interest-bearing deposits		3,081,245		4,403		0.57	%		3,112,300		2,183		0.28	%
FHLB advances		71,415		409		2.27	%		80,266		176		0.88	%
Other borrowings		150,099		1,792		4.74	%		157,796		1,699		4.32	%
Total interest-bearing liabilities	$	3,302,759		6,604		0.79	%	$	3,350,362		4,058		0.49	%

Net interest income			$	41,944						$	39,566
Interest rate spread						3.39	%						3.25	%

Net interest margin ⁽²⁾						3.62	%						3.39	%

⁽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
	September 30,			June 30,			March 31,			December 31,			September 30,
	2022			2022			2022			2021			2021

Total stockholders' equity	$	395,806		$	428,115		$	452,015		$	500,631		$	417,749
Less: goodwill		53,101			53,101			54,465			54,465			31,601
Less: core deposit intangibles, net		11,598			12,554			13,830			14,879			12,963
Less: mortgage servicing rights, net		201			226			251			276			—
Less: naming rights, net		1,054			1,065			1,076			1,087			1,098
Tangible common equity	$	329,852		$	361,169		$	382,393		$	429,924		$	372,087
Common shares outstanding at period end		16,017,834			16,106,818			16,454,966			16,760,115			14,365,785
Diluted common shares outstanding at period end		16,225,591			16,289,635			16,662,779			17,050,115			14,637,306
Book value per common share	$	24.71		$	26.58		$	27.47		$	29.87		$	29.08
Tangible book value per common share	$	20.59		$	22.42		$	23.24		$	25.65		$	25.90
Tangible book value per diluted common share	$	20.33		$	22.17		$	22.95		$	25.22		$	25.42

Total assets	$	5,000,415		$	5,002,156		$	5,078,623		$	5,137,631		$	4,263,268
Less: goodwill		53,101			53,101			54,465			54,465			31,601
Less: core deposit intangibles, net		11,598			12,554			13,830			14,879			12,963
Less: mortgage servicing rights, net		201			226			251			276			—
Less: naming rights, net		1,054			1,065			1,076			1,087			1,098
Tangible assets	$	4,934,461		$	4,935,210		$	5,009,001		$	5,066,924		$	4,217,606
Total stockholders' equity to total assets		7.92	%		8.56	%		8.90	%		9.74	%		9.80	%
Tangible common equity to tangible assets		6.68	%		7.32	%		7.63	%		8.48	%		8.82	%

Total average stockholders' equity	$	436,191		$	437,483		$	492,599		$	563,046		$	422,879
Less: average intangible assets		66,445			68,978			70,181			61,186			46,335
Average tangible common equity	$	369,746		$	368,505		$	422,418		$	501,860		$	376,544
Net income (loss) allocable to common stockholders	$	15,171		$	15,259		$	15,650		$	10,466		$	11,773
Add: amortization of intangible assets		992			1,148			1,085			1,116			1,040
Less: tax effect of intangible assets amortization		208			241			228			234			218
Adjusted net income (loss) allocable to common stockholders	$	15,955		$	16,166		$	16,507		$	11,348		$	12,595
Return on total average stockholders' equity (ROAE) annualized		13.80	%		13.99	%		12.88	%		7.37	%		11.05	%
Return on average tangible common equity (ROATCE) annualized		17.12	%		17.60	%		15.85	%		8.97	%		13.27	%

Non-interest expense	$	32,236		$	31,436		$	29,459		$	38,089		$	30,689
Less: loss on debt extinguishment		—			—			—			—		$	372
Less: merger expense		115			88			323			4,562			4,015
Adjusted non-interest expense	$	32,121		$	31,348		$	29,136		$	33,527		$	26,302
Net interest income	$	41,944		$	39,566		$	39,289		$	37,215		$	38,975
Non-interest income		8,969			9,637			9,022			9,199			7,831
Less: net gain on acquisition and branch sales		—			540			—			—			—
Less: net gains (losses) from securities transactions		(17	)		(32	)		40			8			381
Adjusted non-interest income	$	8,986		$	9,129		$	8,982		$	9,191		$	7,450
Net interest income plus adjusted non-interest income	$	50,930		$	48,695		$	48,271		$	46,406		$	46,425
Non-interest expense to net interest income plus non-interest income		63.32	%		63.89	%		60.98	%		82.06	%		65.57	%
Efficiency ratio		63.07	%		64.38	%		60.36	%		72.25	%		56.65	%
Net income (loss) allocable to common stockholders	$	15,171		$	15,259		$	15,650		$	10,466		$	11,773
Add: income tax provision		3,642			1,684			3,614			(16	)		3,286
Add: provision (reversal) of credit losses		(136	)		824			(412	)		(2,125	)		1,058
Pre-tax, pre-provision income	$	18,677		$	17,767		$	18,852		$	8,325		$	16,117
Total average assets	$	4,988,755		$	5,067,687		$	5,108,120		$	5,068,301		$	4,275,298
Total average stockholders' equity	$	436,191		$	437,483		$	492,599		$	563,023		$	422,879
Return on average assets (ROAA) annualized		1.21	%		1.21	%		1.24	%		0.82	%		1.09	%
Adjusted return on average assets		1.49	%		1.41	%		1.50	%		0.65	%		1.50	%
Adjusted return on average equity		16.99	%		16.29	%		15.52	%		5.87	%		15.12	%

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