Equity Bancshares, Inc. (NASDAQ:EQBK), a leading financial holding company, has reported its second quarter 2024 financial results, showcasing impressive performance and positioning the company for sustained growth. With net income of $11.7 million, or $0.76 per diluted share, and revenues of $55.43 million, Equity Bancshares has demonstrated its ability to navigate the evolving market landscape and deliver value to its shareholders.

Financial Highlights

The company's annual net income for the most recent fiscal year stood at $7.821 million, while its annual revenue reached $136.981 million. Equity Bancshares also generated a robust annual operating cash flow of $76.527 million and an annual free cash flow of $60.390 million, underscoring the strength and resilience of its business model.

Financials

In the second quarter of 2024, Equity Bancshares reported net income of $11.7 million, or $0.76 per diluted share. This performance was driven by a $2.3 million increase in net interest income compared to the previous quarter, as the company's earning streams continued to outpace rising funding costs. The net interest margin expanded from 3.76% to 3.94% during the quarter, reflecting the positive impact of the company's strategic decisions and the integration of the Bank of Kirksville acquisition.

The company's non-interest income remained in line with expectations, including a 6.3% linked-quarter increase in service charge line items. Non-interest expenses, excluding one-time merger-related charges, totaled $37.0 million, primarily due to the addition of the Bank of Kirksville operations, including core deposit intangible amortization, technology, and facility expenses.

Asset Quality

Equity Bancshares' asset quality metrics remained strong, with total classified loans closing the quarter at $49.6 million, or 8.8% of total bank regulatory capital. Non-accrual loans as a percentage of total loans stayed below 75 basis points, and net charge-offs annualized were 14 basis points for the quarter. The company's provision for credit losses was $265,000 during the quarter, as it continues to maintain healthy levels of capital and reserves to address any potential economic headwinds.

Loan Portfolio and Deposits

The company's loan portfolio experienced modest growth, with average loans increasing 2.3% during the quarter. Loan originations totaled $99 million with a weighted average coupon of 8.76%, compared to $116 million with a weighted average coupon of 8.61% in the previous quarter. The coupon yield on loans increased to 6.96% from 6.84%, driven by accretion from the Bank of Kirksville acquisition, the expiration of a pay-fixed interest rate swap, and higher-coupon originations.

Equity Bancshares' deposit base remained relatively stable, with total deposits closing the quarter at $4.34 billion. The company's loan-to-deposit ratio closed the quarter at 79.6%, positioning the bank to continue serving the lending needs of its customers.

Recent Developments

The company's management team has been proactive in driving growth and enhancing shareholder value. During the quarter, Equity Bancshares announced the promotions of Rick Sems to Bank CEO and Julie Huber to COO, further strengthening the leadership team and reinforcing the company's operating structure.

Equity Bancshares also announced and received regulatory approval for its acquisition of KansasLand Bancshares, which is expected to close in the third quarter of 2024. The KansasLand transaction, with $50 million in assets and two branch locations, is expected to contribute to Equity Bancshares' earnings per share upon completion.

Outlook

Looking ahead, Equity Bancshares has provided guidance for the third quarter and full-year 2024. The company expects its provision for credit losses to be approximately 12 basis points to average loans, reflecting its cautious approach and the continued strength of its asset quality. The company's management team remains optimistic about the company's growth prospects, both organically and through strategic acquisitions, as it leverages its strong capital position and liquidity to drive shareholder returns.

Conclusion

Equity Bancshares' performance in the second quarter of 2024 demonstrates its ability to navigate the evolving market conditions and deliver consistent financial results. With a focus on disciplined growth, strategic acquisitions, and a strong leadership team, the company is well-positioned to continue its positive momentum and create value for its shareholders.