Equity Bancshares, Inc. (NYSE:EQBK) Q2 2021 Earnings Conference Call July 20, 2021 10:00 AM ET Company Participants Chris Navratil - Senior Vice President, Finance Brad Elliott - Chairman and CEO Eric Newell - Chief Financial Officer Greg Kossover - Chief Operating Officer Craig Anderson - President Conference Call Participants Terry McEvoy - Stephens Andrew Liesch - Piper Sandler Jeff Rulis - D.A. Davidson Damon Delmonte - KBW Operator Good day and thank you for standing by. Welcome to the Equity Bancshare ...

Exhibit 99.2 Second Quarter 2021 Results Presentation July 19, 2021 Disclaimers 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 stat ...

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, 2021 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 ju ...

Equity Bancshares, Inc. (NYSE:EQBK) Q1 2021 Earnings Conference Call April 21, 2021 10:00 AM ET Company Participants Chris Navratil - Senior Vice President, Finance Brad Elliott - Chairman and CEO Eric Newell - Chief Financial Officer Greg Kossover - Chief Operating Officer Craig Anderson - President Conference Call Participants Jeff Rulis - D.A. Davidson Terry McEvoy - Stephens Andrew Liesch - Piper Sandler Operator Good day and thank you for standing by. And welcome to the Q1 2021 Equity Bancshares Earnin ...

Exhibit 99.2 First Quarter 2021 Results Presentation April 21, 2021 Disclaimers 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 stat ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 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 | --- | --- | |---------------------------------------------------------------------------------------------------|----------------------- ...

Exhibit 99.2 Fourth Quarter 2020 Results Presentation January 25, 2021 Disclaimers 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 s ...

Financial Performance - The company reported a net loss of $90.4 million for the three-month period ended September 30, 2020, compared to a net income of $10.4 million for the same period in 2019[201]. - For the three months ended September 30, 2020, the net loss was $90.4 million, a decrease of $100.8 million compared to a net income of $10.4 million for the same period in 2019[224]. - For the nine months ended September 30, 2020, the net loss was $87.5 million, a decrease of $103.0 million compared to a net income of $15.6 million for the same period in 2019[224]. - Non-interest expense increased by $106.6 million in the three months ended September 30, 2020, primarily due to a $104.8 million charge to goodwill impairment[224]. - The company recorded a goodwill impairment charge of $104.8 million for the quarter, contributing to the net loss[204]. Assets and Liabilities - As of September 30, 2020, the company had consolidated total assets of $3.87 billion, total loans held for investment of $2.69 billion, total deposits of $3.13 billion, and total stockholders' equity of $402.2 million[201]. - The company's total liabilities were $3.46 billion, with total stockholders' equity at $402.2 million[204]. - Total assets as of September 30, 2020, were $4,029,618 thousand, an increase from $3,994,626 thousand in 2019[231]. - Total loans held for investment increased to $2,725,713 thousand, a rise of $169,061 thousand or 6.6% from $2,556,652 thousand[284]. - The allowance for loan losses reached $34.1 million, or 1.25% of total loans, significantly up from $12.2 million, or 0.48% of total loans, at December 31, 2019[316]. Loan Performance - The provision for loan losses was $815,000 for the quarter, significantly lower than $12.5 million in the previous quarter[204]. - The allowance for loan losses is significantly impacted by changes in economic conditions due to COVID-19, with potential for further increases in required allowances if conditions worsen[210]. - The company had nine non-performing loan relationships totaling $41.3 million with outstanding balances exceeding $1.0 million as of September 30, 2020[309]. - Nonaccrual loans increased to $52.7 million as of September 30, 2020, compared to $38.4 million at December 31, 2019[307]. - Total nonperforming assets rose to $61.7 million, representing 1.60% of total assets, up from 1.19% at the end of 2019[307]. Deposits - Total deposits increased to $3.13 billion, up from $2.96 billion in the previous year[204]. - Non-interest-bearing demand deposits increased to $693.97 million, representing 22.1% of total deposits, up from 15.7% at December 31, 2019[346]. - Interest-bearing demand deposits rose to $870.40 million, accounting for 27.8% of total deposits, compared to 23.0% in the previous year[346]. - Time deposits fell to $623.34 million, representing 19.9% of total deposits, down from 27.2%[346]. Interest Income and Expenses - Net interest income for the quarter was $32.1 million, a slight decrease from $32.4 million in the previous quarter[204]. - The net interest margin for the three months ended September 30, 2020, was 3.47%, compared to 3.42% for the same period in 2019[228]. - The average outstanding balance of total loans for the three months ended September 30, 2020, was $2.76 billion, with a total interest income of $32.3 million[228]. - The cost of interest-bearing deposits decreased by 106 basis points from 1.56% to 0.50%, contributing to a total cost of interest-bearing liabilities that fell to 0.70% from 1.69%[229]. - The impact of loan fees on net interest income was $2.5 million for the three months ended September 30, 2020, compared to $1.3 million for the same period in 2019[229]. COVID-19 Response - The company has 63 loans totaling $40.2 million that have been granted a payment deferral as part of its COVID-19 response, with deferrals lasting either 90 or 180 days[215]. - The company continues to monitor the safety of staff and has introduced temporary changes to assist customers facing financial hardship due to COVID-19[221]. - The company has implemented a modified working strategy emphasizing social distancing and remote work to ensure business continuity during the pandemic[214]. - The company’s interest and fee income could be reduced due to COVID-19, with potential reversals of accrued interest income if credit losses on deferred payments emerge[210]. Capital and Ratios - The Tier 1 Risk Based Capital Ratio was 13.32%, indicating a strong capital position[205]. - The efficiency ratio was 67.4% for the three months ended September 30, 2020, compared with 63.6% for the same period in 2019, indicating increased non-interest expenses[270]. - The ratio of tangible common equity to tangible assets was 9.23% as of September 30, 2020, up from 8.00% for June 30, 2020[380]. - Return on average tangible common equity (ROATCE) for the period was 12.01%, compared to 3.03% for June 30, 2020, indicating significant improvement in earnings quality[384]. Market Risk Management - The primary component of market risk for the company is interest rate volatility, which affects net interest income (NII) and economic value of equity (EVE) due to fluctuations in interest rates[390]. - The Asset Liability Committee (ALCO) manages interest rate risk, meeting monthly to review the sensitivity of assets and liabilities to interest rate changes and other financial metrics[392]. - ALCO employs simulation analysis to monitor the pricing and maturity of assets and liabilities, incorporating various assumptions to assess the potential impact on NII and EVE[393]. - The company does not have material exposure to leveraged derivatives or foreign exchange risks, focusing instead on managing interest rate risk through its balance sheet structure[391].

[Part I Financial Information](index=5&type=section&id=Part%20I%20Financial%20Information) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited interim consolidated financial statements for Equity Bancshares, Inc. as of June 30, 2020, reflecting financial position, operational results, and cash flow activities, including initial COVID-19 impacts [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2020, total assets increased to $4.21 billion, driven by a $227.8 million rise in net loans, including PPP loans, while total deposits grew to $3.25 billion Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$4,205,269** | **$3,949,578** | | Cash and cash equivalents | $178,290 | $89,291 | | Loans, net of allowance | $2,772,256 | $2,544,420 | | Goodwill | $136,432 | $136,432 | | **Total Liabilities** | **$3,725,503** | **$3,471,518** | | Total deposits | $3,247,267 | $3,063,516 | | Federal Home Loan Bank advances | $344,900 | $324,373 | | **Total Stockholders' Equity** | **$479,766** | **$478,060** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Net income for Q2 2020 sharply decreased to $1.7 million from $9.2 million, primarily due to a significant increase in the provision for loan losses reflecting COVID-19 uncertainty Key Performance Metrics (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | Six Months 2020 | Six Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $32,891 | $31,288 | $64,986 | $61,927 | | Provision for Loan Losses | $12,500 | $974 | $22,440 | $16,620 | | **Net Income** | **$1,689** | **$9,232** | **$2,947** | **$5,159** | | Diluted Earnings Per Share | $0.11 | $0.58 | $0.19 | $0.32 | [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income for Q2 2020 declined to $1.3 million from $10.7 million in 2019, driven by lower net income and a net other comprehensive loss Comprehensive Income (Loss) (in thousands) | Metric | Q2 2020 | Q2 2019 | Six Months 2020 | Six Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $1,689 | $9,232 | $2,947 | $5,159 | | Other comprehensive income (loss), net of tax | ($379) | $1,476 | $3,393 | $3,576 | | **Comprehensive Income** | **$1,310** | **$10,708** | **$6,340** | **$8,735** | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity slightly increased to $479.8 million, primarily due to net income and other comprehensive income, partially offset by treasury stock purchases - During the six months ended June 30, 2020, the company repurchased **295,461 shares** of its common stock for a total cost of **$6.9 million**[30](index=30&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased by $89.0 million in the first half of 2020, with net cash provided by operating and financing activities offsetting investing activities Six Months Ended June 30, 2020 Cash Flow Summary (in thousands) | Cash Flow Category | Amount | | :--- | :--- | | Net cash provided by operating activities | $24,646 | | Net cash used in investing activities | ($180,840) | | Net cash provided by financing activities | $245,193 | | **Net change in cash and cash equivalents** | **$88,999** | [Condensed Notes to Interim Consolidated Financial Statements](index=12&type=section&id=Condensed%20Notes%20to%20Interim%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial items, highlighting the significant impact of COVID-19, PPP loans, loan deferrals, CECL deferral, and subsequent events - The company is actively participating in the Paycheck Protection Program (PPP), originating **3,081 loans** with an outstanding balance of **$373.0 million** as of June 30, 2020[57](index=57&type=chunk) - In response to COVID-19, the company offered payment deferrals to affected borrowers, executing **1,296 deferrals** on outstanding loan balances of **$649.3 million** as of June 30, 2020[53](index=53&type=chunk) - The company elected to utilize the temporary relief provided by the CARES Act to delay the implementation of the Current Expected Credit Losses (CECL) accounting standard[61](index=61&type=chunk) - Subsequent to the quarter end, on July 23, 2020, the company issued an additional **$33.0 million** of subordinated notes and reinstated its stock repurchase program[199](index=199&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, emphasizing COVID-19 impacts, increased loan loss provision, PPP participation, loan deferrals, and exposure to at-risk industries [Overview](index=40&type=section&id=Overview) Equity Bancshares, Inc. is a bank holding company with $4.21 billion in total assets, $2.77 billion in net loans, and $3.25 billion in total deposits as of June 30, 2020 Financial Highlights as of June 30, 2020 (in billions) | Metric | Value | | :--- | :--- | | Total Assets | $4.21 | | Total Loans (net) | $2.77 | | Total Deposits | $3.25 | | Total Stockholders' Equity | $0.48 | [Critical Accounting Policies](index=42&type=section&id=Critical%20Accounting%20Policies) The allowance for loan losses and goodwill impairment are critical accounting policies, with a recent quantitative goodwill test showing no impairment but a narrow margin - The allowance for loan losses is a critical accounting estimate based on past experience, portfolio nature, borrower information, economic conditions, and other factors[208](index=208&type=chunk) - A quantitative goodwill impairment test performed at June 30, 2020, concluded no impairment, but the fair value exceeded carrying value by only **0.23%**, indicating high sensitivity to assumptions[210](index=210&type=chunk) [Recent Developments (COVID-19 Impact)](index=44&type=section&id=Recent%20Developments) This section details the company's response to COVID-19, including $373.0 million in PPP loans, $649.3 million in loan deferrals, and monitoring of at-risk industry exposures - The company originated **$373.0 million** in PPP loans and granted payment deferrals on **$649.3 million** of loans in response to the COVID-19 pandemic[217](index=217&type=chunk) Exposure to At-Risk Industries (as of June 30, 2020) | Industry | Exposure (approx.) | % of Total Loans (ex-PPP) | | :--- | :--- | :--- | | Hospitality | $273.0 million | 11.2% | | Restaurants | $108.0 million | 4.4% | | Retail | $206.0 million | 8.5% | | Aircraft Manufacturing | $63.0 million | 2.6% | [Results of Operations](index=46&type=section&id=Results%20of%20Operations) Net income for Q2 2020 decreased significantly due to an $11.5 million increase in loan loss provision, while net interest income and margin improved - Q2 2020 net income decreased by **$7.5 million** year-over-year, primarily due to an **$11.5 million** increase in the provision for loan losses[228](index=228&type=chunk) Net Interest Margin Analysis (Q2 2020 vs Q2 2019) | Metric | Q2 2020 | Q2 2019 | | :--- | :--- | :--- | | Net Interest Income | $32,891 thousand | $31,288 thousand | | Net Interest Margin | 3.49% | 3.42% | | Yield on Loans | 4.68% | 5.74% | | Cost of Interest-Bearing Deposits | 0.63% | 1.64% | - The provision for loan losses in Q2 2020 was **$12.5 million**, a significant increase from **$974 thousand** in Q2 2019, largely due to qualitative adjustments for the projected economic impact of COVID-19[255](index=255&type=chunk) - The non-GAAP efficiency ratio improved to **62.0%** for Q2 2020 from **65.6%** in Q2 2019, reflecting better expense management relative to operating revenue[284](index=284&type=chunk) [Financial Condition](index=56&type=section&id=Financial%20Condition) Total assets grew to $4.21 billion, driven by loan growth including PPP, while the allowance for loan losses significantly increased reflecting heightened credit risk - Gross loans held for investment increased by **$249.7 million (9.8%)** from December 31, 2019, primarily due to a **$311.7 million** increase in commercial and industrial loans, which includes PPP loans[292](index=292&type=chunk)[297](index=297&type=chunk) - The allowance for loan losses as a percentage of total loans increased to **1.21%** at June 30, 2020, from **0.48%** at December 31, 2019, reflecting management's assessment of probable incurred losses due to COVID-19[332](index=332&type=chunk) - Nonperforming assets increased to **$57.8 million (1.37% of total assets)** at June 30, 2020, compared to **$46.9 million (1.19% of total assets)** at December 31, 2019[321](index=321&type=chunk) - Total deposits increased by **$183.8 million (6.0%)** from year-end 2019, with non-interest-bearing demand deposits growing by **$275.3 million**[353](index=353&type=chunk)[354](index=354&type=chunk) [Liquidity and Capital Resources](index=67&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity and capital, with cash increasing and all regulatory capital ratios exceeding 'well capitalized' thresholds - Cash and cash equivalents increased by **$89.0 million** during the first six months of 2020 to **$178.3 million**[365](index=365&type=chunk) - As of June 30, 2020, the company had total commitments to extend credit and standby letters of credit of **$434.3 million**[370](index=370&type=chunk) - The company and Equity Bank met all capital adequacy requirements and were categorized as **'well capitalized'** under the regulatory framework as of June 30, 2020[373](index=373&type=chunk)[375](index=375&type=chunk) [Non-GAAP Financial Measures](index=68&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles non-GAAP measures like Tangible Book Value Per Share and Efficiency Ratio, providing a clearer view of core operating performance Key Non-GAAP Financial Measures | Metric | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Tangible book value per common share | $21.29 | $20.75 | | Tangible common equity to tangible assets | 8.00% | 8.45% | | Return on average tangible common equity (annualized, Q2) | 3.03% | 13.42% (Q4 2019) | | Efficiency Ratio (Q2) | 61.98% | 63.63% (Q4 2019) | [Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk using simulations, with a liability-sensitive balance sheet showing varying impacts on NII and EVE from rate shocks Interest Rate Sensitivity Analysis (as of June 30, 2020) | Change in Interest Rates | Impact on Net Interest Income (12 months) | Impact on Economic Value of Equity | | :--- | :--- | :--- | | +300 bps | (8.4)% | +6.0% | | +200 bps | (5.2)% | +6.7% | | +100 bps | (2.3)% | +6.0% | | -100 bps | (3.0)% | (15.3)% | [Controls and Procedures](index=73&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the period - The CEO and COO concluded that the company's disclosure controls and procedures are effective at a reasonable assurance level[408](index=408&type=chunk) - No changes were identified during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[409](index=409&type=chunk) [Part II Other Information](index=74&type=section&id=Part%20II%20Other%20Information) [Legal Proceedings](index=74&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various litigation matters in the ordinary course of business, with further details in Note 12 of the financial statements - The company is involved in various litigation matters incidental to its business, with further details provided in Note 12 of the financial statements[411](index=411&type=chunk) [Risk Factors](index=74&type=section&id=Item%201A.%20Risk%20Factors) A new material risk factor highlights the significant uncertainty and potential adverse economic impacts of the COVID-19 pandemic on the company's financial condition - A significant new risk factor has been added regarding the adverse economic impact of the COVID-19 pandemic, which could affect the company's financial condition and results of operations[413](index=413&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=74&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company discusses its stock repurchase program, with 716,477 shares repurchased as of June 30, 2020, and 383,523 shares remaining authorized - As of June 30, 2020, the company has repurchased **716,477 shares** under its stock repurchase program at a weighted average price of **$24.79 per share**, with **383,523 shares** remaining authorized for repurchase[414](index=414&type=chunk) [Other Information](index=74&type=section&id=Item%205.%20Other%20Information) The company announced executive leadership changes, with Eric Newell becoming CFO and Greg Kossover transitioning to COO, effective July 31, 2020 - Effective July 31, 2020, Eric Newell will succeed Greg Kossover as Chief Financial Officer, following Mr. Kossover's transition to Chief Operating Officer[416](index=416&type=chunk) [Exhibits](index=75&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the quarterly report, including agreements, employment contracts, and required certifications

[Part I: Financial Information](index=5&type=section&id=Part%20I%20Financial%20Information) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Equity Bancshares, Inc.'s unaudited interim consolidated financial statements as of March 31, 2020, detail financial position, operating results, and key notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets were **$3.94 billion** as of March 31, 2020, a slight decrease from year-end 2019, with shifts in loans, cash, and deposits Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$3,943,832** | **$3,949,578** | | Cash and cash equivalents | $142,252 | $89,291 | | Loans, net of allowance | $2,485,208 | $2,544,420 | | Goodwill | $136,432 | $136,432 | | **Total Liabilities** | **$3,466,481** | **$3,471,518** | | Total deposits | $2,960,397 | $3,063,516 | | Federal Home Loan Bank advances | $389,620 | $324,373 | | **Total Stockholders' Equity** | **$477,351** | **$478,060** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2020 net income reached **$1.3 million**, a significant turnaround from a **$4.1 million** net loss in Q1 2019, driven by reduced loan loss provision and increased net interest income Quarterly Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net Interest Income | $32,095 | $30,639 | | Provision for Loan Losses | $9,940 | $15,646 | | Non-interest Income | $5,306 | $5,324 | | Non-interest Expense | $25,758 | $25,543 | | **Net Income (Loss)** | **$1,258** | **($4,073)** | | **Diluted Earnings (Loss) Per Share** | **$0.08** | **($0.26)** | [Condensed Notes to Interim Consolidated Financial Statements](index=11&type=section&id=Condensed%20Notes%20to%20Interim%20Consolidated%20Financial%20Statements) Notes detail COVID-19 impacts, including loan deferrals, PPP, CECL deferral, increased allowance for loan losses, and stable capital ratios - In response to the COVID-19 pandemic, the company implemented a payment deferral program for affected clients. As of April 27, 2020, **927 deferrals** were executed on loan balances of **$474.7 million**. These are not considered troubled debt restructurings per regulatory guidance[42](index=42&type=chunk)[88](index=88&type=chunk) - The company is an active participant in the SBA's Paycheck Protection Program (PPP). As of April 27, 2020, it had closed or approved **1,776 PPP loans** totaling **$470.1 million**[43](index=43&type=chunk)[194](index=194&type=chunk) - The company elected to defer the implementation of the new Current Expected Credit Losses (CECL) accounting standard, as permitted by the CARES Act. The allowance for loan losses at March 31, 2020 was calculated using the prior incurred loss method[47](index=47&type=chunk) Allowance for Loan Losses Activity (in thousands) | | Three Months Ended March 31, 2020 | | :--- | :--- | | Beginning Balance | $12,232 | | Provision for Loan Losses | $9,940 | | Charge-offs | ($357) | | Recoveries | $100 | | **Ending Balance** | **$21,915** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2020 financial performance, attributing improved net income to lower loan loss provision and higher net interest income, with significant focus on COVID-19 impacts and credit risk [Recent Developments (COVID-19 Impact)](index=42&type=section&id=Recent%20Developments) COVID-19 significantly impacted Q1 2020 results, increasing loan loss allowance, prompting deferrals and PPP, and identifying at-risk loan categories - The COVID-19 pandemic materially impacted the allowance for loan losses, which was significantly increased due to worsening economic forecasts, even without any direct charge-offs related to the pandemic in Q1[189](index=189&type=chunk) Loan Exposure in At-Risk Industries (as of March 31, 2020) | Industry | Exposure (in millions) | % of Total Loans | | :--- | :--- | :--- | | Hospitality | $239.9 | 9.6% | | Construction | $222.2 | 8.9% | | Retail | $144.2 | 6.0% | | Restaurants | $96.4 | 3.8% | | Multifamily | $85.1 | 3.4% | | Aircraft Manufacturing | $62.9 | 2.5% | [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Q1 2020 net income was **$1.3 million**, a **$5.3 million** increase from Q1 2019, driven by higher net interest income and a lower loan loss provision Key Performance Metrics | Metric | Q1 2020 | Q1 2019 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $32.1M | $30.6M | +$1.5M | | Net Interest Margin | 3.67% | 3.49% | +18 bps | | Provision for Loan Losses | $9.9M | $15.6M | -$5.7M | | Net Income (Loss) | $1.3M | ($4.1M) | +$5.3M | - The increase in net interest margin was largely due to interest-bearing liabilities repricing downward at a faster rate than interest-earning assets in a declining interest rate environment[222](index=222&type=chunk) - The Q1 2020 provision for loan loss of **$9.9 million** was primarily driven by increases in qualitative factors related to the projected economic impact of COVID-19[225](index=225&type=chunk) [Financial Condition](index=50&type=section&id=Financial%20Condition) Total assets were **$3.94 billion** at March 31, 2020, with a significant increase in the allowance for loan losses to **0.87%** of total loans due to COVID-19 risks Credit Quality Metrics | Metric | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Nonperforming Assets | $48.1M | $46.9M | | Nonperforming Assets / Total Assets | 1.22% | 1.19% | | Allowance for Loan Losses | $21.9M | $12.2M | | Allowance / Total Loans | 0.87% | 0.48% | - The allowance for loan losses as a percentage of total loans nearly doubled from **0.48%** at year-end 2019 to **0.87%** at March 31, 2020, primarily due to management's evaluation of the economic impact of COVID-19[285](index=285&type=chunk)[287](index=287&type=chunk) - Classified loans increased by **$955 thousand** to **$66.5 million** at March 31, 2020, representing **2.7%** of the total loan portfolio[273](index=273&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate volatility, managed by ALCO using simulation analysis to assess impacts on Net Interest Income and Economic Value of Equity Interest Rate Sensitivity Analysis (Simulated Immediate Change) | Change in Interest Rates | Impact on Net Interest Income (12 months) | Impact on Economic Value of Equity | | :--- | :--- | :--- | | +300 bps | (7.6)% | (0.9)% | | +200 bps | (4.5)% | 1.9% | | +100 bps | (1.7)% | 3.5% | | -100 bps | (3.7)% | (14.1)% | - The company manages interest rate risk through its Asset Liability Committee (ALCO), which uses simulation analysis to monitor the sensitivity of Net Interest Income (NII) and Economic Value of Equity (EVE) to rate changes[352](index=352&type=chunk)[354](index=354&type=chunk) [Item 4. Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2020, and fully remediated a previously identified material weakness in internal control over financial reporting - The company has fully remediated the material weakness in internal control over financial reporting that was identified as of December 31, 2019[366](index=366&type=chunk) - Management concluded that as of March 31, 2020, the company's disclosure controls and procedures were effective at a reasonable assurance level[363](index=363&type=chunk) [Part II: Other Information](index=69&type=section&id=Part%20II%20Other%20Information) [Item 1. Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various litigation matters, including a **$1.47 million** judgment with CitiMortgage and a vigorously defended securities class action lawsuit - The company is party to a lawsuit with CitiMortgage, with a judgment of **$1.47 million** against Equity Bank. A loss contingency of **$477 thousand** was previously recorded[170](index=170&type=chunk) - A securities class action lawsuit was filed against the company in May 2019, alleging misleading statements. The company has filed a motion to dismiss and believes the suit is without merit[173](index=173&type=chunk) [Item 1A. Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) A significant new risk factor addresses the unprecedented economic dislocation and uncertainty caused by the COVID-19 pandemic on the company's operations - A material new risk factor has been added regarding the adverse effects of the COVID-19 pandemic on the company's financial condition and results of operations, citing significant economic dislocation and uncertainty[372](index=372&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **295,461 shares** of common stock in Q1 2020 at an average price of **$23.33**, with the program temporarily suspended in March due to COVID-19 Common Stock Repurchases (Q1 2020) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2020 | 15,000 | $27.26 | | Feb 2020 | 69,996 | $27.68 | | Mar 2020 | 210,465 | $21.60 | | **Total Q1** | **295,461** | **$23.33** | - The company's share repurchase program was temporarily suspended in March 2020 in response to the COVID-19 environment[126](index=126&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data files