Equity Bank(US:EQBK)2025-11-03 21:46Financial Performance - Net interest income increased to $62,485 thousand, up 25.4% from $49,802 thousand in the previous quarter[233]. - Net income (loss) for the quarter was $(29,663) thousand, compared to $15,264 thousand in the previous quarter[233]. - Basic earnings (loss) per share was $(1.55), a decrease from $0.87 in the previous quarter[233]. - For the three months ended September 30, 2025, the company reported a net loss of $(29.7) million, or $(1.55) diluted earnings per share, compared to a net income of $19.9 million, or $1.28 diluted earnings per share for the same period in 2024, representing a decrease of $49.5 million[245]. - For the nine months ended September 30, 2025, net income was $642 thousand, or $0.04 diluted earnings per share, down from $45.6 million, or $2.95 diluted earnings per share for the same period in 2024, a decrease of $45.0 million[247]. - The company reported an increase in net interest income of $25.9 million for the nine months ended September 30, 2025, despite the overall decrease in net income[247]. - Core earnings per diluted share increased to $1.21, up from $0.99 in the previous quarter[233]. - The efficiency ratio improved to 58.31%, compared to 63.62% in the previous quarter[233]. - The efficiency ratio for the three months ended September 30, 2025, was 58.31%, an increase from 52.59% for the same period in 2024[298]. - Core net income allocable to common stockholders for the three months ended September 30, 2025, was $23,310 thousand, compared to $20,427 thousand for the same period last year, an increase of 13.9%[391]. Financial Condition - Total assets reached $6,365,631 thousand, an increase from $5,373,837 thousand in the previous quarter[233]. - Total deposits grew to $5,094,769 thousand, up from $4,234,918 thousand in the previous quarter[233]. - As of September 30, 2025, the company had consolidated total assets of $6.36 billion, total loans of $4.22 billion, total deposits of $5.09 billion, and total stockholders' equity of $711.9 million[235]. - Total assets increased by $1.03 billion to $6.37 billion as of September 30, 2025, primarily due to a $767.8 million increase in loans held for investment[305]. - Total liabilities rose by $914.6 million to $5.65 billion, driven by a $720.0 million increase in total deposits[305]. - Stockholders' equity increased by $119.0 million to $711.9 million, mainly due to a $74.1 million rise in additional paid-in-capital[306]. - Total loans held for investment increased by $767.8 million, or 21.9%, to $4.27 billion as of September 30, 2025[309]. - Total assets grew to $6,365,631 thousand as of September 30, 2025, compared to $5,355,233 thousand a year earlier, an increase of 18.8%[387]. Credit Losses and Nonperforming Assets - Provision for credit losses was $6,228 thousand, a significant increase from $19 thousand in the previous quarter[233]. - The allowance for credit losses is based on management's evaluation of historical default and loss experience, current economic conditions, and other relevant factors, indicating potential variability in future periods[238]. - As of September 30, 2025, total nonperforming assets amounted to $52.6 million, an increase from $34.7 million on December 31, 2024, representing a 51.5% increase[325]. - Non-accrual loans reached $48.6 million as of September 30, 2025, compared to $27.1 million at the end of 2024, indicating an increase of 79.6%[325]. - The ratio of nonperforming assets to total assets was 0.83% as of September 30, 2025, up from 0.65% at December 31, 2024[325]. - The allowance for credit losses (ACL) totaled $53.469 million, with total loans outstanding at $4.268 billion, resulting in an ACL to total loans ratio of 1.3%[334]. Interest Income and Margin - Interest income increased by $16.1 million for the quarter ended September 30, 2025, compared to the same quarter in 2024, primarily due to a $15.7 million increase from the volume of average interest-earning assets attributed to the NBC merger[255]. - Net interest margin increased by 58 basis points to 4.45% for the quarter ended September 30, 2025, from 3.87% in the same quarter of 2024[258]. - Total interest-earning assets averaged $5.57 billion for the quarter ended September 30, 2025, with a yield of 6.48%, compared to $4.73 billion and a yield of 6.30% in the prior year[251]. - The average yield on loans was 7.10% for the nine months ended September 30, 2025, compared to 7.04% for the same period in 2024[1]. Deposits and Funding - Total deposits as of September 30, 2025, were $5.09 billion, an increase of $720.0 million, or 16.5%, compared to $4.37 billion at December 31, 2024[353]. - The company acquired $806.0 million in deposits from the NBC merger, which contributed significantly to total deposits[353]. - Non-interest-bearing demand deposits rose to $1.15 billion, accounting for 22.5% of total deposits as of September 30, 2025[351]. - Interest-bearing demand deposits decreased by $200.0 million, or 17.0%, primarily due to seasonality of municipal deposits[353]. Expenses and Efficiency - Non-interest expense for the three months ended September 30, 2025, totaled $49.1 million, an increase of $18.8 million or 61.8% compared to the same period in 2024[282]. - Salaries and employee benefits increased by $4.3 million or 23.1% for the three months ended September 30, 2025, primarily due to additional payroll costs from the NBC merger[285]. - The company experienced a significant decrease in mortgage banking income, down $225 thousand or 78.4% for the three months ended September 30, 2025[277]. - The bank reported a non-cash loss of $53.3 million from the repositioning of the investment portfolio during the nine months ended September 30, 2025[370]. Regulatory and Capital Position - The bank is categorized as "well capitalized" under regulatory standards as of September 30, 2025, meeting all capital adequacy requirements[376]. - Common Equity Tier 1 Capital Ratio decreased to 12.84% from 15.07% in the previous quarter[233]. - Tangible common equity rose to $605,646 thousand as of September 30, 2025, compared to $433,940 thousand a year ago, marking an increase of 39.5%[384]. - Book value per common share reached $37.25, up from $32.97 a year earlier, reflecting a year-over-year increase of 13.8%[384]. Market Risk and Interest Rate Sensitivity - The impact on net interest income from a +300 basis points change in prevailing interest rates is projected to be 14.7% for September 30, 2025, compared to 11.9% for December 31, 2024[411]. - Change in prevailing interest rates significantly impacts economic value of equity, with a +300 basis points change resulting in a -4.0% impact for 2025 and -6.5% for 2024[413].