Equity Bank(EQBK) - 2022 Q3 - Quarterly Report

Part I Financial Information Item 1. Financial Statements Presents unaudited condensed interim consolidated financial statements, including balance sheets, income, comprehensive income, equity, and cash flows, with detailed notes on key accounting areas - The financial statements are prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) for interim financial information and guidance from the Securities and Exchange Commission (SEC)[34] - Management's preparation of consolidated financial statements requires estimates and assumptions, and actual results could differ from these estimates[34] - Operating results for the nine months ended September 30, 2022, are not necessarily indicative of the results expected for the full year ending December 31, 2022, or any other period[34] Consolidated Balance Sheets Total assets decreased to $5.00 billion, driven by reduced cash and securities, while stockholders' equity significantly declined due to comprehensive loss Total Assets | Date | Amount ($ thousands) | | :--- | :--- | | Sep 30, 2022 | 5,000,415 | | Dec 31, 2021 | 5,137,631 | | Change | (137,216) | | % Change | (2.67%) | Key Asset Changes (Sep 30, 2022 vs Dec 31, 2021) | Asset Category | Dec 31, 2021 ($ thousands) | Sep 30, 2022 ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 259,954 | 155,413 | (104,541) | | Available-for-sale securities | 1,327,442 | 1,198,962 | (128,480) | | Loans, net | 3,107,262 | 3,208,524 | 101,262 | Total Stockholders' Equity | Date | Amount ($ thousands) | | :--- | :--- | | Sep 30, 2022 | 395,806 | | Dec 31, 2021 | 500,631 | | Change | (104,825) | | % Change | (20.94%) | Consolidated Statements of Income Net income increased for both the three and nine months ended September 30, 2022, driven by higher net interest and non-interest income, despite increased non-interest expenses Net Income (Three Months Ended Sep 30) | Metric | Sep 30, 2022 ($ thousands) | Sep 30, 2021 ($ thousands) | Change ($ thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Income | 15,171 | 11,773 | 3,398 | 28.86% | Net Income (Nine Months Ended Sep 30) | Metric | Sep 30, 2022 ($ thousands) | Sep 30, 2021 ($ thousands) | Change ($ thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Income | 46,080 | 42,014 | 4,066 | 9.68% | Key Income/Expense Changes (Three Months Ended Sep 30, 2022 vs 2021) | Metric | Sep 30, 2022 ($ thousands) | Sep 30, 2021 ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Total interest and dividend income | 48,548 | 42,446 | 6,102 | | Total interest expense | 6,604 | 3,471 | 3,133 | | Net interest income | 41,944 | 38,975 | 2,969 | | Total non-interest income | 8,969 | 7,831 | 1,138 | | Total non-interest expense | 32,236 | 30,689 | 1,547 | Consolidated Statements of Comprehensive Income Comprehensive income significantly decreased to a loss for both periods, primarily due to substantial unrealized holding losses on available-for-sale securities Comprehensive Income (Loss) (Three Months Ended Sep 30) | Metric | Sep 30, 2022 ($ thousands) | Sep 30, 2021 ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Comprehensive Income (Loss) | (28,321) | 7,798 | (36,119) | Comprehensive Income (Loss) (Nine Months Ended Sep 30) | Metric | Sep 30, 2022 ($ thousands) | Sep 30, 2021 ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Comprehensive Income (Loss) | (76,614) | 31,708 | (108,322) | - Unrealized holding gains (losses) on available-for-sale securities, net of tax, were $(43,492) thousand for the three months ended September 30, 2022, compared to $(3,975) thousand in the prior year, and $(122,694) thousand for the nine months ended September 30, 2022, compared to $(10,306) thousand in the prior year[21] Consolidated Statements of Stockholders' Equity Stockholders' equity decreased by $104.8 million, primarily due to significant other comprehensive losses and treasury stock purchases Total Stockholders' Equity | Date | Amount ($ thousands) | | :--- | :--- | | Sep 30, 2022 | 395,806 | | Jan 1, 2022 | 500,631 | | Change | (104,825) | | % Change | (20.94%) | - Key changes in stockholders' equity for the nine months ended September 30, 2022, included net income of $46,080 thousand, other comprehensive loss of $(122,694) thousand, cash dividends of $(4,208) thousand, and treasury stock purchases of $(27,728) thousand[26] - Accumulated other comprehensive income (loss), net of tax effects, shifted from a gain of $1,776 thousand at January 1, 2022, to a loss of $(120,918) thousand at September 30, 2022[26] Consolidated Statements of Cash Flows Operating cash flow decreased, investing activities used less cash, and financing activities shifted to a smaller net inflow, resulting in a net decrease in cash and cash equivalents Net Cash Provided by (Used in) Operating Activities (Nine Months Ended Sep 30) | Metric | Sep 30, 2022 ($ thousands) | Sep 30, 2021 ($ thousands) | Change ($ thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 57,696 | 79,635 | (21,939) | (27.55%) | Net Cash Provided by (Used in) Investing Activities (Nine Months Ended Sep 30) | Metric | Sep 30, 2022 ($ thousands) | Sep 30, 2021 ($ thousands) | Change ($ thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Cash from Investing Activities | (166,620) | (414,493) | 247,873 | (59.80%) | Net Cash Provided by (Used in) Financing Activities (Nine Months Ended Sep 30) | Metric | Sep 30, 2022 ($ thousands) | Sep 30, 2021 ($ thousands) | Change ($ thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Net Cash from Financing Activities | 4,383 | 196,478 | (192,095) | (97.77%) | Condensed Notes to Interim Consolidated Financial Statements This section provides detailed notes to the interim consolidated financial statements, covering significant accounting policies, investments, loans, derivatives, lease obligations, borrowings, regulatory matters, earnings per share, fair value measurements, commitments, legal proceedings, revenue recognition, and business combinations/branch sales - The financial statements are prepared in accordance with GAAP for interim financial information and SEC guidance, relying on management estimates and assumptions[34] - Operating results for the nine months ended September 30, 2022, are not necessarily indicative of the full year or other periods[34] - The Company is evaluating new FASB ASUs (2022-01, 2022-02, 2022-03) but does not expect a material financial impact, though some will affect future disclosures[39][40