Equity Bancshares
Annual Report 2012

Plain-text annual report

2012ANNUAL REPORT STRENGTH in NUMBERS 1532697481012936878to my fellow SHAREHOLDERS, The year 2012 brought many changes to Equity Bancshares, and we couldn’t be more excited for the company’s future. We nearly doubled our earnings prior to our acquisition of First Community Bancshares, which doubled the size of our company in assets, employees, and regional footprint. We’re truly on the way to becoming the best bank in our region. The economy continued to show signs of recovery in 2012, and the steps we’ve taken to grow will help position us for further growth and success in the future. Net income of Equity Bancshares in 2012 was nearly $4.2 million, an increase of $1.9 million over 2011. $1.2 BILLION ASSET SIZE Our leap in earnings would have been accomplished even without the acquisition of First Community Bancshares, holding company of First Community Bank in Lee’s Summit, Mo. We closed this purchase on October 25, 2012, and we’re now a regional community bank with approximately $1.2 billion in assets, with 29 bank offices throughout Kansas and Missouri. Not only did we grow in size, we also welcomed talented and dedicated people into our Equity Bancshares family. Also, we’ve 29BANK LOCATIONS more than doubled our ability to create earnings in the future. Now serving strong, vibrant and diverse communities in western Missouri and throughout the Kansas City metro, we are a top-10 bank within our footprint. If 2011 was a capstone year for Equity Bank, 2012 represented another sizable leap forward. We’re truly a community bank, and we’re proud of the hard work and dedicated service our employees provide to business and personal customers. Our team is key for our future growth, and we thank our employees for the considerable hours, effort, and energy during the changes in 2012. We continue to be proud of our solid foundation for future growth, and our strength as evidenced by our results, our associates, and our growing footprint. As a $1.2 billion bank with unmatched service and skill, we’re ready for the future, and poised for continued success. Acquisitions On October 25, 2012, we successfully completed our acquisition of First Community Bancshares and became a $1.2 billion bank. We now operate branches in Clinton, Higginsville, Knob Noster, Sedalia, Sweet Springs, Warrensburg, Warsaw, and Windsor, Missouri, and we added locations in Lee’s Summit and Kansas City, Missouri, and De Soto, Kansas. $4MILLION NET INCOME AFTER TAXES The merger represented a significant step forward for Equity Bank, and we continue to explore acquisition opportunities in 2013. Much like our previous acquisitions, new opportunities must be a good fit culturally and operationally as well as financially. On the Way Up In 2013, the dust may have settled from a few tumultuous years for others in our industry. Fortunately, because of our capital position and our commitment to strong lending, our communities, and our employees, we’re positioned for opportunities ranging from western Kansas to central Missouri. We have the strength, capability, power, and agility to compete in all of our markets. 12593710681259374106818And we continue to work daily, from the teller to the loan officer to the director, operating with diligence and care, with our mission delivered to customers, associates, and shareholders: “We never forget it’s your money!” 10YEARS On behalf of Equity Bank associates and our Board of Directors, thank you for your continued support! Brad Elliott Chairman & CEO The Board of Directors and Executive Team photos were taken at the Kansas City Federal Reserve, located at 1 Memorial Drive in Kansas City. On the cover, the flags of the United States, Kansas, and Missouri fly in front of the main building and Money Museum. The 600,000-square foot building is the newest in the U.S. Federal Reserve system, completed in 2008, and more than 1000 employees support the Tenth Federal District: western Missouri, Nebraska, Kansas, Oklahoma, Wyoming, Colorado and northern New Mexico. Statues, hand-carved stone panels and three water fountains serve as tribute to Kansas City. Equity Bank is a Member bank of the Federal Reserve. other 2012 FINANCIAL HIGHLIGHTS Capital In 2012, Equity Bancshares (the “Company”) remained in a financially strong position. With Tier 1 Capital of approximately $125.8 million, the Company’s capital ratios exceed regulatory requirements. period in 2011, an increase of nearly $7.7 million. The net interest margin on average assets was 3.51% in 2012 compared to 3.54% in 2011. Non-interest income, which includes service charges, debit and credit card income and mortgage income, was $4.8 million for the year ended December 31, 2012, an increase of $2.6 million from the comparable period in 2011. Net Earnings MILLION IN LOANS $720 Net income was $4.186 million for the year ended December 31, 2012, as compared to $2.272 million for the prior year ended December 31, 2011, an increase of $1.914 million. Net income allocable to common shareholders was $3.814 million for the year ended December 31, 2012; an increase of $2.443 million compared to the year ended December 31, 2011. Basic earnings per share were $0.66 and $0.30 for the years ended December 31, 2012 and 2011, respectively. Net interest income was almost $25.6 million for the year ended December 31, 2012, up from $17.9 million for the comparable Shareholder Equity $993 MILLION IN DEPOSITS The Company’s book equity as of December 31, 2012 totaled approximately $138.2 million, up $57.4 million from $80.8 million on December 31, 2011. This increase reflects the net proceeds after costs of the current-year capital raise and the issuance of common and preferred stock in connection with the acquisition of FCB. As of December 31, 2012, the Company had 7,431,513 common shares outstanding and the book value per common share was $14.30. Tangible book value stood at $11.78 per common share on December 31, 2012, compared to $11.08 as of December 31, 2011. 91012593741068125937468FINANCIAL STATEMENTS Balance Sheet Cash & Cash Equivalents Total Investments Loans, net of allowance for loan losses of $4,353 and $3,647 Total Other Assets Total Assets Total Deposits Total Liabilities Total Equity Capital Total Liabilities & Capital Income Statement Net Interest Income Provision for Loan Losses Net Interest Income After Provision Total Noninterest Income Total Noninterest Expense Income Before Taxes Provision for Income Taxes Net Income After Taxes Less: Dividends and Accretion on Preferred Stock* Net Income Allocable to Common Shareholders Shareholder Data Earnings Per Share Fully Diluted Earnings Per Share Weighted Average Shares Outstanding Fully Diluted Weighted Average Shares Outstanding Shares Outstanding Fully Diluted Shares Outstanding Book Value Per Share Book Value Per Share-Fully Diluted Tangible Book Value Tangible Book Value-Fully Diluted 2012 2011 $100,371 $256,045 $720,689 $111,745 $1,188,850 $993,128 $1,050,681 $138,169 $1,188,850 2012 2011 $25,570 ($1,656) $23,914 $4,826 ($22,900) $5,840 ($1,654) $4,186 ($372) $3,814 2012 $0.66 $0.65 5,820,054 5,863,543 7,431,513 7,475,002 $14.30 $14.22 $11.78 $11.70 $40,005 $197,889 $329,526 $42,578 $609,998 $479,410 $529,182 $80,816 $609,998 $17,890 ($1,202) $16,688 $2,252 ($15,918) $3,022 ($750) $2,272 ($901) $1,371 2011 $0.30 $0.30 4,550,206 4,550,206 4,550,206 4,550,206 $14.17 $14.17 $11.08 $11.08 Regulatory Standard 4.00% 4.00% 8.00% CAPITAL RATIOS | Equity Bancshares, Inc. 12/31/12 Core capital (leverage) ratio Tier 1 risk-based capital ratio Total risk-based capital ratio 12.56% 15.92% 16.48% All numbers are in thousands of dollars except for the number of shares and per share amounts. This financial information is internally prepared by bank management and is accurate to the best of our knowledge, but is not audited or reviewed. Some items in the prior year financial information were reclassified to conform to the current year presentation. *All dividends and accretion on Preferred Stock are paid to the U. S. Treasury under the CPP and/or SBLF programs. 12593741068Net Loans (thousands of dollars) CAGR 27% Total Deposits (thousands of dollars) CAGR 36% 720,689 993,128 291,761 303,412 282,404 329,526 222,396 347,247 374,066 479,410 302,688 213,968 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Net Interest Income (thousands of dollars) CAGR 27% Total Assets (thousands of dollars) CAGR 33% 25,570 1,188,850 15,823 15,782 17,890 11,777 7,765 383,725 439,847 288,096 609,998 491,909 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 Book Value & Tangible Book Value (dollars per share) Stockholder’s Equity (thousands of dollars) CAGR 3% Tangible Book Value Book Value Tangible Book Value CAGR 34% 16.31 16.51 15.02 10.34 13.71 14.17 14.30 11.15 11.26 10.91 11.08 11.78 138,169 80,816 70,783 49,461 40,665 32,265 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 CAGR=Compounded Annual Growth Rate 12593741068our LOCATIONS Spring Hill De Soto Overland Park Hays Ellis Haddam Topeka Ellis Hays Wichita Webb Road 8th Street 29th & Gage Andover Wichita West Rock Road Headquarters Topeka Main Wanamaker KANSAS12593741068Higginsville Sweet Springs Sedalia Kansas City, North Knob Noster Kansas City Windsor Warsaw Lee’s Summit Warrensburg Clinton KANSASMISSOURI125937410683Board of Directors Left to Right: Julie Huber, Brad Elliott, Drayton Alldritt Brad Elliott Jim Berglund Roger Buller Chairman/CEO, Equity Bancshares, Inc., Wichita, Kan. Bank Advisor, Retired President/CEO, Sunflower Bank, Salina, Kan. SVP/Regional Manager, Benjamin F. Edwards & Co., Wichita, Kan. Michael Downing Retired Owner/President, Ellis State Bank, Ellis, Kan. P. John Eck Greg Gaeddert Michael High Randee Koger Owner, AGV Corp., Eck Agency, Inc., Attica, Kan. Managing Partner, B12 Capital Partners, LLC, Kansas City, Mo. Managing Principal, Patriot Financial Partners, Philadelphia, Pa. Attorney/Partner, Wise & Reber, L.C., McPherson, Kan. Greg Kossover President & Chief Financial Officer, Physician’s Development Group, Wichita, Kan. John McCarthy Chief Investment Officer, Centaur Capital Partners, Inc., Chicago, Ill. David B. Moore Managing Principal, Marathon Capital Holdings, Inc., San Diego, Calif. Shawn Penner Harvey Sorensen Owner, Shamrock Development, LLC, Wichita, Kan. Attorney/Partner, Foulston Siefkin LLP, Wichita, Kan. Left to right: Greg Gaeddert, Randee Koger, Shawn Penner, Michael High, David B. Moore, P. John Eck, Jim Berglund, Brad Elliott, Michael Downing, Harvey Sorensen, Greg Kossover, Roger Buller, John McCarthy 15326974812593741068Senior Leadership Brad Elliott Julie Huber Chairman of the Board/CEO Patrick Harbert President, Community Markets Bruce Benyshek EVP  Chief Financial Officer Mark Parman EVP  Chief Risk Officer Dana Cass President, Western Missouri SVP  Special Assets Manager Jennifer Johnson EVP  Chief Operations & Information Officer Drayton Alldritt President, Equity Bancshares Patrick Salmans Travis Whitacre SVP  Human Resources Director Brian Roby SVP  Chief Accounting Officer Beth Money President, Kansas City SVP  Retail Director Left to Right: Mark Parman, Dana Cass, Brian Roby, Beth Money Left to Right: Patrick Salmans, Bruce Benyshek, Jennifer Johnson, Patrick Harbert, Travis Whitacre 1259374106812593741068our MISSION Build the most attractive commercial banking franchise in our region from the perspective and positive experience of our customers, our shareholders, our associates and our peers. EQUITY BANK LEAD OFFICERS Commercial Services Jody Barker Matthew Baty Bradley Cole Dan Dewitt Michael Doyle Tracey Dreiling Randall Eaton Jake Esser Keith Fenwick Greg Hall Larry Hillier Stephen Kelly David King Donald Knehans Ted Krause Brent Lathrom Joseph Lollis Jeremy Machain Larry McCoig Don Olson Brian Orr Michelle Pfister James Ragan Sandra Rice Chris Ryan President, Clinton VP  Treasury Management VP  Commercial Lender, Kansas City VP  Commercial Lender, Overland Park VP  Commercial Lender, Overland Park VP  Business Services President, Warsaw VP  Commercial Lender, Overland Park VP  Commercial Lender, Lee’s Summit VP  Commercial Lender, Warrensburg VP  Commercial Lender, Lee’s Summit VP  Credit Manager, Overland Park President, West Wichita President, Higginsville VP  Commercial Lender, Higginsville VP  Commercial Lender, De Soto VP  Commercial Lender, Sedalia VP  Commercial Lender President, Topeka VP  Commercial Lender, Lee’s Summit VP  Investment Sales, Lee’s Summit VP  Treasury Management, Overland Park SVP  Investment Sales Manager, Overland Park VP  Investment Sales, Sedalia VP  Commercial Lender, Lee’s Summit Rhonda Scott Jason Shaffer Duane Vogelsmeier Tim Waite Jill Warren Allen Weber Finance Rhonda Bethe Barbara Noyes Operations Jim Brunsell Kristi Bueno Aaron Ferguson John Hanley Jesse Nienke Retail Belinda DeWerff Sharon Holmes Mandi Martinson Melinda Mitchell Linda North Patty Sellers Janet Thayer Debra Vickrey President, Windsor VP  Commercial Lender President, Sweet Springs President, Western Kansas VP  Investment Sales, Higginsville VP  Branch Manager, Ellis VP  Finance Officer VP  Controller VP  IT Manager VP  BSA/Compliance Officer SVP  Director of Loan Operations VP  Senior Marketing Director VP  Systems Administrator VP  Branch Manager, Hays VP  Retail Sales Manager, Lee’s Summit VP  Retail Support Manager VP  Retail Sales Manager, Western Missouri VP  Branch Manager, Warrensburg VP  Branch Manager, Knob Noster VP  Branch Manager, Topeka Main/8th Street VP  Branch Manager, Higginsville Located in Wichita unless otherwise noted. 125937410681532697482002 Equity Bancshares, Inc. formed by Brad Elliott, present Chairman/CEO. 2004 National Bank of Andover changes name to Equity Bank. 2006 Equity Bancshares, Inc. opens a loan production office in Lee’s Summit, Missouri, and later begins operating a full service branch in Missouri. 2008 Equity Bancshares, Inc. acquires Ellis State Bank, adding locations in Hays and Ellis, Kansas. A new retail branch is opened in Lee’s Summit, Missouri. 2010 $20 Million Capital Raise completed in October. 2012 Equity Bank becomes state-chartered financial institution in June. Equity Bancshares merges Signature Bank into Equity Bank. Equity Bancshares, Inc. acquires First Community Bancshares, Inc. on October 25. 2003 Equity Bancshares, Inc. purchases the National Bank of Andover. 2005 Equity Bancshares, Inc. purchases two Wichita branches of Hillcrest Bank. 2007 Equity Bancshares, Inc. merges with Signature Bancshares, Inc. and two Signature branches begin operating under the Equity Bank banner. 2009 Equity Bank opens the Kansas City Commercial & Retail Branch in Overland Park, KS at 107th & Roe in February and a new retail branch at 151st Street in March. 2011 In December, Equity Bank welcomes customers after the acquisition of four Topeka locations from Citizens Bank & Trust. 1259374106812593741068Kansas Andover  De Soto  Ellis  Hays  Haddam  Overland Park  Spring Hill  Topeka  Wichita Missouri Clinton  Higginsville  Kansas City  Knob Noster  Lee’s Summit  Sedalia  Sweet Springs  Warrensburg  Warsaw  Windsor Form 4010 / 04-13 © 2013 Equity Bancshares and Equity Bank 

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