Attached files
file | filename |
---|---|
EX-99.4 - EX-99.4 - EQUITY BANCSHARES INC | d516773dex994.htm |
EX-99.3 - EX-99.3 - EQUITY BANCSHARES INC | d516773dex993.htm |
EX-99.2 - EX-99.2 - EQUITY BANCSHARES INC | d516773dex992.htm |
EX-99.1 - EX-99.1 - EQUITY BANCSHARES INC | d516773dex991.htm |
EX-23.2 - EX-23.2 - EQUITY BANCSHARES INC | d516773dex232.htm |
EX-23.1 - EX-23.1 - EQUITY BANCSHARES INC | d516773dex231.htm |
8-K - FORM 8-K - EQUITY BANCSHARES INC | d516773d8k.htm |
Exhibit 99.5
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINED FINANCIAL INFORMATION
On November 10, 2017, Equity Bancshares, Inc. (the Company) completed its merger with Eastman National Bancshares, Inc., an Oklahoma corporation (Eastman), pursuant to the terms of the Agreement and Plan of Reorganization, dated July 14, 2017 (the Eastman Agreement), by and among the Company, ENB Merger Sub, Inc., an Oklahoma corporation and wholly-owned subsidiary of the Company (ENB Merger Sub), and Eastman. At the effective time (the Eastman Effective Time), ENB Merger Sub merged with and into Eastman, with Eastman surviving the merger as a wholly-owned subsidiary of the Company. Following the Eastman Effective Time, Eastman merged into the Company, with the Company surviving the merger and thereafter, The Eastman National Bank of Newkirk, Eastmans wholly-owned bank subsidiary, merged with and into the Companys wholly-owned bank subsidiary, Equity Bank, with Equity Bank surviving the merger.
Also on November 10, 2017, the Company completed its merger with Cache Holdings, Inc., an Oklahoma corporation (Cache), pursuant to the terms of the Agreement and Plan of Reorganization, dated July 14, 2017 (the Cache Agreement), by and between the Company and Cache. At the effective time (the Cache Effective Time), Cache merged with and into the Company, with the Company surviving the merger. Following the Cache Effective Time, Patriot Bank, Caches wholly-owned bank subsidiary, merged with and into the Companys wholly-owned bank subsidiary, Equity Bank, with Equity Bank surviving the merger.
The following unaudited Pro Forma Condensed Consolidated Combined Balance Sheet reflects the historical position of Equity, Cache and Eastman as of September 30, 2017, with pro forma adjustments based on the assumption that the mergers were completed on September 30, 2017. The pro forma adjustments are based on the acquisition method of accounting. The unaudited Pro Forma Condensed Consolidated Combined Statements of Income assume that each of the mergers were completed on January 1, 2016. The historical consolidated financial information has been adjusted to reflect factually supportable items that are directly attributable to the mergers and, with respect to the income statements only, expected to have a continuing impact on consolidated results of operations. The pro forma adjustments do not consider any potential revenue opportunities or anticipated cost savings and expense efficiencies.
The following information should be read in conjunction with and is qualified in its entirety by Equitys consolidated financial statements and accompanying notes and the consolidated financial statements and accompanying notes of Cache and Eastman.
The unaudited pro forma condensed consolidated combined financial information is intended for informational purposes and is not necessarily indicative of the future financial position or future operating results of the combined company or of the financial position or operating results of the combined company that would have actually occurred had the merger been in effect as of the date or for the periods presented.
1
Unaudited Pro Forma Condensed Consolidated Combined Balance Sheet
As of September 30, 2017
(Dollars in thousands)
Equity Historical |
Cache Historical |
Pro Forma Adjustments |
Pro Forma Equity & Cache Combined |
Eastman Historical |
Pro Forma Adjustments |
Pro Forma Equity, Cache & Eastman Combined |
||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||
Cash and due from banks |
$ | 27,444 | $ | 6,067 | $ | (12,517 | ) | (a) | $ | 20,994 | $ | 9,607 | $ | (10,331 | ) | (n) | $ | 20,270 | ||||||||||||||
Federal funds sold |
21 | 5,097 | | 5,118 | 33 | | 5,151 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Cash and cash equivalents |
27,465 | 11,164 | (12,517 | ) | 26,112 | 9,640 | (10,331 | ) | 25,421 | |||||||||||||||||||||||
Interest-bearing time deposits in other banks |
3,741 | | | 3,741 | | | 3,741 | |||||||||||||||||||||||||
Investment securities |
610,060 | | | 610,060 | 60,200 | | 670,260 | |||||||||||||||||||||||||
Loans held for sale |
4,283 | 27,126 | | 31,409 | | | 31,409 | |||||||||||||||||||||||||
Loans held for investment |
1,540,761 | 282,174 | (3,779 | ) | (b) | 1,819,156 | 186,519 | (6,757 | ) | (o) | 1,998,918 | |||||||||||||||||||||
Allowance for loan losses |
(7,969 | ) | (4,055 | ) | 4,055 | (c) | (7,969 | ) | (3,784 | ) | 3,784 | (p) | (7,969 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Loans, net |
1,532,792 | 278,119 | 276 | 1,811,187 | 182,735 | (2,973 | ) | 1,990,949 | ||||||||||||||||||||||||
Other real estate owned, net |
8,169 | | | 8,169 | 54 | (8 | ) | (q) | 8,215 | |||||||||||||||||||||||
Premises and equipment, net |
55,596 | 4,009 | 212 | (d) | 59,817 | 1,815 | 107 | (r) | 61,739 | |||||||||||||||||||||||
Bank owned life insurance |
49,123 | 3,874 | | 52,997 | | | 52,997 | |||||||||||||||||||||||||
Federal Reserve Bank and Federal Home Loan Bank stock |
17,107 | 1,610 | | 18,717 | 436 | | 19,153 | |||||||||||||||||||||||||
Interest receivable |
9,761 | 804 | | 10,565 | 1,166 | | 11,731 | |||||||||||||||||||||||||
Goodwill |
64,587 | 2,867 | 14,806 | (e) | 82,260 | | 20,022 | (s) | 102,282 | |||||||||||||||||||||||
Core deposit intangible, net |
5,476 | | 1,580 | (f) | 7,056 | | 4,020 | (t) | 11,076 | |||||||||||||||||||||||
Other assets |
17,266 | 342 | (1,030 | ) | (g) | 16,578 | 1,478 | (792 | ) | (u) | 17,264 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total assets |
$ | 2,405,426 | $ | 329,915 | $ | 3,327 | $ | 2,738,668 | $ | 257,524 | $ | 10,045 | $ | 3,006,237 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
LIABILITIES AND STOCKHOLDERSEQUITY |
|
|||||||||||||||||||||||||||||||
Non-interest-bearing deposits |
$ | 263,746 | $ | 21,816 | $ | | $ | 285,562 | $ | 69,143 | $ | | $ | 354,705 | ||||||||||||||||||
Interest-bearing transaction and savings |
959,498 | 131,421 | | 1,090,919 | 121,687 | | 1,212,606 | |||||||||||||||||||||||||
Time deposits |
645,249 | 124,292 | (23 | ) | (h) | 769,518 | 29,019 | (91 | ) | (v) | 798,446 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total deposits |
1,868,493 | 277,529 | (23 | ) | 2,145,999 | 219,849 | (91 | ) | 2,365,757 | |||||||||||||||||||||||
Federal funds purchased and retail repurchase agreements |
31,181 | | | 31,181 | 9,667 | 6 | (w) | 40,854 | ||||||||||||||||||||||||
Federal Home Loan Bank advances |
190,021 | 13,259 | | 203,280 | 1,000 | | 204,280 | |||||||||||||||||||||||||
Bank stock loan |
| 1,000 | 1,500 | (i) | 2,500 | | | 2,500 | ||||||||||||||||||||||||
Subordinated debentures |
13,896 | | | 13,896 | | | 13,896 | |||||||||||||||||||||||||
Contractual obligations |
2,211 | | | 2,211 | | | 2,211 | |||||||||||||||||||||||||
Interest payable and other liabilities |
7,789 | 1,866 | (371 | ) | (j) | 9,284 | 538 | (811 | ) | (x) | 9,011 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total liabilities |
2,113,591 | 293,654 | 1,106 | 2,408,351 | 231,054 | (896 | ) | 2,638,509 | ||||||||||||||||||||||||
Commitments and contingent liabilities |
|
|||||||||||||||||||||||||||||||
Stockholders equity |
||||||||||||||||||||||||||||||||
Common stock |
137 | 21 | (21 | ) | (k) | 149 | 20 | (20 | ) | (y) | 161 | |||||||||||||||||||||
12 | (l) | 12 | (z) | |||||||||||||||||||||||||||||
Additional paid-in-capital |
253,027 | 23,410 | (23,410 | ) | (k) | 292,243 | 2,560 | (2,560 | ) | (y) | 331,099 | |||||||||||||||||||||
39,468 | (l) | 39,097 | (z) | |||||||||||||||||||||||||||||
(252 | ) | (m) | (241 | ) | (aa) | |||||||||||||||||||||||||||
Retained earnings |
60,703 | 12,830 | (12,830 | ) | (k) | 59,957 | 25,206 | (25,206 | ) | (y) | 58,500 | |||||||||||||||||||||
(746 | ) | (m) | (1,457 | ) | (aa) | |||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) |
(2,220 | ) | | | (2,220 | ) | (138 | ) | 138 | (y) | (2,220 | ) | ||||||||||||||||||||
Employee stock loans |
(157 | ) | | | (157 | ) | | | (157 | ) | ||||||||||||||||||||||
Treasury stock |
(19,655 | ) | | | (19,655 | ) | (1,178 | ) | 1,178 | (y) | (19,655 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total stockholders equity |
291,835 | 36,261 | 2,221 | 330,317 | 26,470 | 10,941 | 367,728 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total liabilities and stockholders equity |
$ | 2,405,426 | $ | 329,915 | $ | 3,327 | $ | 2,738,668 | $ | 257,524 | $ | 10,045 | $ | 3,006,237 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to pro forma condensed consolidated combined financial information
2
Unaudited Pro Forma Condensed Consolidated Combined Statement of Income
For the Nine Months Ended September 30, 2017
(Dollars in thousands, except per share amounts)
Equity Historical |
Cache Historical |
Pro Forma Adjustments |
Pro Forma Equity & Cache Combined |
Eastman Historical |
Pro Forma Adjustments |
Pro Forma Equity, Cache & Eastman Combined |
||||||||||||||||||||||||||
Interest and dividend income |
||||||||||||||||||||||||||||||||
Loans, including fees |
$ | 60,482 | $ | 11,354 | $ | 478 | (bb) | $ | 72,314 | $ | 7,492 | $ | 410 | (jj) | $ | 80,216 | ||||||||||||||||
Securities |
11,440 | | | 11,440 | 585 | | 12,025 | |||||||||||||||||||||||||
Other interest income |
963 | 175 | (190 | ) | (cc) | 948 | 54 | (153 | ) | (kk) | 849 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total interest and dividend income |
72,885 | 11,529 | 288 | 84,702 | 8,131 | 257 | 93,090 | |||||||||||||||||||||||||
Interest expense |
||||||||||||||||||||||||||||||||
Deposits |
8,740 | 1,730 | 9 | (dd) | 10,479 | 236 | 30 | (ll) | 10,745 | |||||||||||||||||||||||
Federal funds purchased and retail repurchase agreements |
40 | | | 40 | 9 | | 49 | |||||||||||||||||||||||||
Federal Home Loan Bank advances |
1,967 | 135 | | 2,102 | | | (mm) | 2,102 | ||||||||||||||||||||||||
Bank stock loan |
| 31 | 45 | (ee) | 76 | | | 76 | ||||||||||||||||||||||||
Subordinated debentures |
725 | | | 725 | | | 725 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total interest expense |
11,472 | 1,896 | 54 | 13,422 | 245 | 30 | 13,697 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net interest income |
61,413 | 9,633 | 234 | 71,280 | 7,886 | 227 | 79,393 | |||||||||||||||||||||||||
Provision for loan losses |
2,450 | 440 | | 2,890 | 1,161 | | 4,051 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net interest income after provision for loan losses |
58,963 | 9,193 | 234 | 68,390 | 6,725 | 227 | 75,342 | |||||||||||||||||||||||||
Non-interest income |
||||||||||||||||||||||||||||||||
Service charges and fees |
3,679 | 65 | | 3,744 | 1,086 | | 4,830 | |||||||||||||||||||||||||
Debit card income |
3,385 | | | 3,385 | 510 | | 3,895 | |||||||||||||||||||||||||
Mortgage banking |
1,546 | 133 | | 1,679 | | | 1,679 | |||||||||||||||||||||||||
Increase in value of bank owned life insurance |
1,068 | 81 | | 1,149 | | | 1,149 | |||||||||||||||||||||||||
Net gains from investment securities transactions |
271 | | | 271 | | | 271 | |||||||||||||||||||||||||
Other non-interest income |
1,387 | 49 | | 1,436 | 120 | | 1,556 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total non-interest income |
11,336 | 328 | | 11,664 | 1,716 | | 13,380 | |||||||||||||||||||||||||
Non-interest expense |
||||||||||||||||||||||||||||||||
Salaries and employee benefits |
24,395 | 2,344 | (62 | ) | (ff) | 26,677 | 2,563 | | 29,240 | |||||||||||||||||||||||
Net occupancy and equipment |
4,621 | 323 | 4 | (gg) | 4,948 | 447 | 2 | (nn) | 5,397 | |||||||||||||||||||||||
Data processing |
3,570 | 146 | | 3,716 | 527 | | 4,243 | |||||||||||||||||||||||||
Professional fees |
1,737 | 132 | | 1,869 | 98 | | 1,967 | |||||||||||||||||||||||||
Amortization of core deposit intangible |
687 | | 194 | (hh) | 881 | | 493 | (oo) | 1,374 | |||||||||||||||||||||||
Other real estate owned, net |
494 | | | 494 | | | 494 | |||||||||||||||||||||||||
Merger expenses |
2,085 | | | 2,085 | 360 | | 2,445 | |||||||||||||||||||||||||
Other non-interest expense |
9,156 | 944 | | 10,100 | 1,061 | | 11,161 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total non-interest expense |
46,745 | 3,889 | 136 | 50,770 | 5,056 | 495 | 56,321 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Income before income taxes |
23,554 | 5,632 | 98 | 29,284 | 3,385 | (268 | ) | 32,401 | ||||||||||||||||||||||||
Provision for income taxes |
7,179 | | 2,191 | (ii) | 9,370 | 1,499 | (103 | ) | (pp) | 10,766 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net income |
16,375 | 5,632 | (2,093 | ) | 19,914 | 1,886 | (165 | ) | 21,635 | |||||||||||||||||||||||
Dividends and discount accretion on preferred stock |
| | | | | | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Net income allocable to common stockholders |
$ | 16,375 | $ | 5,632 | $ | (2,093 | ) | $ | 19,914 | $ | 1,886 | $ | (165 | ) | $ | 21,635 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Basic earnings per share |
$ | 1.36 | $ | 269.02 | $ | 1.50 | $ | 9.82 | $ | 1.50 | ||||||||||||||||||||||
Weighted average shares outstanding |
12,078,347 | 20,935 | 13,269,288 | 192,131 | 14,449,035 | |||||||||||||||||||||||||||
Diluted earnings per share |
$ | 1.33 | $ | 1.47 | $ | 1.47 | ||||||||||||||||||||||||||
Weighted average shares outstanding |
12,335,711 | 13,526,652 | 14,706,399 |
See accompanying notes to pro forma condensed consolidated combined financial information
3
Unaudited Pro Forma Condensed Consolidated Combined Statement of Income
For the Year Ended December 31, 2016
(Dollars in thousands, except per share amounts)
Equity Historical |
Cache Historical |
Pro Forma Adjustments |
Pro Forma Equity & Cache Combined |
Eastman Historical |
Pro Forma Adjustments |
Pro Forma Equity, Cache & Eastman Combined |
||||||||||||||||||||||||||||||||||
Interest and dividend income |
||||||||||||||||||||||||||||||||||||||||
Loans, including fees |
$ | 50,272 | $ | 12,338 | $ | 637 | (bb | ) | $ | 63,247 | $ | 9,864 | $ | 546 | (jj | ) | $ | 73,657 | ||||||||||||||||||||||
Securities |
9,765 | | | 9,765 | 1,054 | | 10,819 | |||||||||||||||||||||||||||||||||
Other interest income |
1,762 | 143 | (253 | ) | (cc | ) | 1,652 | 23 | (204 | ) | (kk | ) | 1,471 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total interest and dividend income |
61,799 | 12,481 | 384 | 74,664 | 10,941 | 170 | 85,947 | |||||||||||||||||||||||||||||||||
Interest expense |
||||||||||||||||||||||||||||||||||||||||
Deposits |
7,042 | 1,587 | 12 | (dd | ) | 8,641 | 275 | 41 | (ll | ) | 8,957 | |||||||||||||||||||||||||||||
Federal funds purchased and retail repurchase agreements |
58 | | | 58 | 15 | | 73 | |||||||||||||||||||||||||||||||||
Federal Home Loan Bank advances |
1,400 | 60 | | 1,460 | 7 | (6 | ) | (mm | ) | 1,461 | ||||||||||||||||||||||||||||||
Bank stock loan |
31 | 10 | 60 | (ee | ) | 101 | | | 101 | |||||||||||||||||||||||||||||||
Subordinated debentures |
671 | | | 671 | | | 671 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total interest expense |
9,202 | 1,657 | 72 | 10,931 | 297 | 35 | 11,263 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net interest income |
52,597 | 10,824 | 312 | 63,733 | 10,644 | 307 | 74,684 | |||||||||||||||||||||||||||||||||
Provision for loan losses |
2,119 | 1,035 | | 3,154 | 125 | | 3,279 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net interest income after provision for loan losses |
50,478 | 9,789 | 312 | 60,579 | 10,519 | 307 | 71,405 | |||||||||||||||||||||||||||||||||
Non-interest income |
||||||||||||||||||||||||||||||||||||||||
Service charges and fees |
3,552 | 98 | | 3,650 | 2,155 | | 5,805 | |||||||||||||||||||||||||||||||||
Debit card income |
2,898 | | | 2,898 | | | 2,898 | |||||||||||||||||||||||||||||||||
Mortgage banking |
1,394 | 407 | | 1,801 | | | 1,801 | |||||||||||||||||||||||||||||||||
Increase in value of bank owned life insurance |
1,000 | 114 | | 1,114 | | | 1,114 | |||||||||||||||||||||||||||||||||
Net gains on investment securities transactions |
479 | | | 479 | 309 | | 788 | |||||||||||||||||||||||||||||||||
Other non-interest income |
1,143 | 49 | | 1,192 | 125 | | 1,317 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total non-interest income |
10,466 | 668 | | 11,134 | 2,589 | | 13,723 | |||||||||||||||||||||||||||||||||
Non-interest expense |
||||||||||||||||||||||||||||||||||||||||
Salaries and employee benefits |
21,951 | 2,897 | (68 | ) | (ff | ) | 24,780 | 3,457 | | 28,237 | ||||||||||||||||||||||||||||||
Net occupancy and equipment |
4,586 | 444 | 5 | (gg | ) | 5,035 | 624 | 3 | (nn | ) | 5,662 | |||||||||||||||||||||||||||||
Data processing |
3,568 | 214 | | 3,782 | 700 | | 4,482 | |||||||||||||||||||||||||||||||||
Professional fees |
2,075 | 157 | | 2,232 | 245 | | 2,477 | |||||||||||||||||||||||||||||||||
Amortization of core deposit intangible |
413 | | 287 | (hh | ) | 700 | | 731 | (oo | ) | 1,431 | |||||||||||||||||||||||||||||
Other real estate owned, net |
386 | | | 386 | 2 | | 388 | |||||||||||||||||||||||||||||||||
Merger expenses |
5,294 | | | 5,294 | | | 5,294 | |||||||||||||||||||||||||||||||||
Other non-interest expense |
8,802 | 848 | | 9,650 | 1,415 | | 11,065 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total non-interest expense |
47,075 | 4,560 | 224 | 51,859 | 6,443 | 734 | 59,036 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Income before income taxes |
13,869 | 5,897 | 88 | 19,854 | 6,665 | (427 | ) | 26,092 | ||||||||||||||||||||||||||||||||
Provision for income taxes |
4,495 | | 2,290 | (ii | ) | 6,785 | 2,361 | (163 | ) | (pp | ) | 8,983 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net income |
9,374 | 5,897 | (2,202 | ) | 13,069 | 4,304 | (264 | ) | 17,109 | |||||||||||||||||||||||||||||||
Dividends and discount accretion on preferred stock |
(1 | ) | | | (1 | ) | | | (1 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net income allocable to common stockholders |
$ | 9,373 | $ | 5,897 | $ | (2,202 | ) | $ | 13,068 | $ | 4,304 | $ | (264 | ) | $ | 17,108 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Basic earnings per share |
$ | 1.09 | $ | 281.68 | $ | 1.33 | $ | 22.41 | $ | 1.56 | ||||||||||||||||||||||||||||||
Weighted average shares outstanding |
8,624,108 | 20,935 | 9,815,049 | 192,088 | 10,994,796 | |||||||||||||||||||||||||||||||||||
Diluted earnings per share |
$ | 1.07 | $ | 1.31 | $ | 1.54 | ||||||||||||||||||||||||||||||||||
Weighted average shares outstanding |
8,755,526 | 9,946,467 | 11,126,214 |
See accompanying notes to pro forma condensed consolidated combined financial information
4
Notes to Unaudited Pro Forma Condensed Consolidated Combined Financial Information
(Dollars in thousands, except per share amounts)
The following pro forma adjustments have been reflected in the unaudited pro forma condensed consolidated combined financial information. All adjustments are based on current assumptions and valuations, but applied to historical financial statements.
(a) | This adjustment includes the cash portion of the merger consideration of $12.9 million; pre-tax stock issuance costs and direct-incremental merger expense of $1.1 million ($998 thousand, after-tax), which are in addition to the stock issuance costs and direct-incremental merger expenses reflected in Equitys September 30, 2017 financial statements; the $2.5 million proceeds of Equitys bank stock loan; and Equitys repayment of Caches $1.0 million bank stock loan. |
(b) | This adjustment represents the fair value adjustments on loans. The purchase accounting adjustment for the acquired loan portfolio is comprised of $762 thousand of non-accretable credit adjustments and $3.0 million of accretable interest-rate adjustments. |
(c) | This adjustment represents the elimination of Caches allowance for loan losses as part of the purchase accounting transactions. |
(d) | This adjustment represents the fair value adjustments of premises and equipment. |
(e) | This adjustment represents the purchase price allocation for the merger, calculated as follows: |
Issue 1,190,941 Equity shares valued at $33.15, the closing price for Equity common stock on November 10, 2017 |
$ | 39,480 | ||
Cash merger consideration, including cash in lieu of fractional shares |
12,878 | |||
|
|
|||
Total purchase price |
52,358 | |||
Less: Caches equity at book value |
(36,261 | ) | ||
Allocated to loan fair value |
3,779 | |||
Elimination of allowance for loan losses as part of purchase accounting |
(4,055 | ) | ||
Allocated to premises and equipment |
(212 | ) | ||
Allocated to core deposit intangibles |
(1,580 | ) | ||
Allocated to time deposit fair value |
(23 | ) | ||
Allocated to net deferred tax assets |
800 | |||
|
|
|||
Eliminate Caches goodwill and record estimated goodwill |
$ | 14,806 | ||
|
|
(f) | This adjustment represents the recognition of core deposit intangibles. |
(g) | This adjustment includes $230 thousand of stock issuance costs incurred at September 30, 2017, which are transferred to additional paid-in-capital in connection with recording the merger. This adjustment also includes the impact on deferred income taxes of the purchase accounting adjustments, calculated as follows: |
Loan fair value adjustments |
$ | (276 | ) | |
Premises and equipment |
(212 | ) | ||
Core deposit intangibles |
(1,580 | ) | ||
Time deposits fair value adjustments |
(23 | ) | ||
|
|
|||
Subtotal of fair value adjustments |
(2,091 | ) | ||
|
|
|||
Calculated deferred taxes at Equitys estimated statutory rate of 38.25% |
$ | (800 | ) | |
|
|
(h) | This adjustment reflects interest-bearing time deposits at their estimated fair values. |
(i) | This adjustment reflects Equitys draw of $2.5 million against its line of credit and the repayment of Caches $1.0 million bank stock loan. |
(j) | This adjustment represents the impact on income taxes payable of an estimated $371 thousand of tax benefit on the direct, incremental merger expenses, which are in addition to merger expenses incurred at September 30, 2017. |
(k) | This adjustment represents the elimination of the historical equity of Cache. |
(l) | This adjustment represents issuance of 1,190,941 shares of Equity common stock, par value $0.01 per share, to stockholders of Cache, valued at $33.15, the closing price for Equity common stock on November 10, 2017. |
5
(m) | This adjustment represents the after-tax stock issuance costs of $252 thousand transferred to paid-in-capital as part of recording the merger and the after-tax incremental merger expenses of $746 thousand ($1.1 million, pre-tax), which are in addition to those reflected in Equitys September 30, 2017 financial statements. |
(n) | This adjustment includes the cash portion of the merger consideration of $8.0 million and pre-tax stock issuance costs and direct-incremental merger expense of $2.3 million ($1.7 million, after-tax), which are in addition to the stock issuance costs and direct-incremental merger expenses reflected in Equitys September 30, 2017 financial statements. |
(o) | This adjustment represents the fair value adjustments on loans. The purchase accounting adjustment for the acquired loan portfolio is comprised of $4.1 million of non-accretable credit adjustments and $2.7 million of accretable interest-rate adjustments. |
(p) | This adjustment represents the elimination of Eastmans allowance for loan losses as part of the purchase accounting transactions. |
(q) | This adjustment represents fair value adjustments on real estate acquired through or instead of foreclosure (other real estate owned). |
(r) | This adjustment represents the fair value adjustment of premises and equipment. |
(s) | This adjustment represents the purchase price allocation for the merger, calculated as follows: |
Issue 1,179,747 Equity shares valued at $33.15, the closing price for Equity common stock on November 10, 2017 |
$ | 39,109 | ||
Cash merger consideration, including cash in lieu of fractional shares |
8,040 | |||
|
|
|||
Total purchase price |
47,149 | |||
Less: Eastmans equity at book value |
(26,470 | ) | ||
Allocated to loan fair value |
6,757 | |||
Elimination of allowance for loan losses as part of purchase accounting |
(3,784 | ) | ||
Allocated to other real estate owned fair value |
8 | |||
Allocated to premises and equipment fair value |
(107 | ) | ||
Allocated to core deposit intangibles |
(4,020 | ) | ||
Allocated to other assets fair value |
165 | |||
Allocated to time deposit fair value |
(91 | ) | ||
Allocated to Federal Home Loan Bank term advances fair value |
6 | |||
Allocated to net deferred tax assets |
409 | |||
|
|
|||
Adjustment for estimated goodwill to be recognized |
$ | 20,022 | ||
|
|
(t) | This adjustment represents the recognition of core deposit intangibles. |
(u) | This adjustment includes $218 thousand of stock issuance costs incurred at September 30, 2017, which are transferred to additional paid-in-capital in connection with recording the merger. This adjustment also includes $165 thousand of fair value adjustments related to other assets and the impact on deferred income taxes of the purchase accounting adjustments, calculated as follows: |
Loan fair value adjustments |
$ | 2,973 | ||
Other real estate owned fair value adjustments |
8 | |||
Premises and equipment fair value adjustments |
(107 | ) | ||
Core deposit intangibles |
(4,020 | ) | ||
Other asset fair value adjustments |
165 | |||
Time deposits fair value adjustments |
(91 | ) | ||
Federal Home Loan Bank term advances fair value |
6 | |||
|
|
|||
Subtotal of fair value adjustments |
(1,066 | ) | ||
|
|
|||
Calculated deferred taxes at Equitys estimated statutory rate of 38.25% |
$ | (409 | ) | |
|
|
(v) | This adjustment reflects interest-bearing time deposits at their estimated fair values. |
(w) | This adjustment reflects the Federal Home Loan Bank term advances at their estimated fair values. |
6
(x) | This adjustment represents the impact on income taxes payable of an estimated $811 thousand of tax benefit on the direct, incremental merger expenses, which are in addition to merger expenses incurred at September 30, 2017. |
(y) | This adjustment represents the elimination of the historical equity of Eastman. |
(z) | This adjustment represents the issuance of 1,179,747 shares of Equity common stock, par value $0.01 per share, to stockholders of Eastman, valued at $33.15, the closing price for Equity common stock on November 10, 2017. |
(aa) | This adjustment represents the after-tax stock issuance cost of $241 thousand transferred to paid-in-capital as part of recording the merger and the after-tax incremental merger expenses of $1.5 million ($2.3 million, pre-tax), which are in addition to those reflected in Equitys September 30, 2017 financial statements. |
7
For the Nine Months Ended September 30, 2017 |
Year Ended December 31, 2016 |
|||||||||
(bb) |
Adjustment to loan interest income | |||||||||
To reflect accretion of loan discount from interest rate fair value adjustment computed on a level yield method over the contractual life of the loans. | $ | 478 | $ | 637 | ||||||
(cc) |
Adjustment to other interest income | |||||||||
To reflect the estimated loss of investment income related to the uses of cash for the cash portion of the merger consideration, the after-tax stock issuance costs and the after-tax direct, incremental merger expenses, offset by the incremental principal addition to the bank stock loan, assuming a reinvestment rate of 2.0%. | $ | (190 | ) | $ | (253 | ) | ||||
(dd) |
Adjustment to deposit interest expense | |||||||||
To reflect amortization of the time deposit fair value adjustment. The amortization has been reflected over the contractual maturity of the time deposits. | $ | 9 | $ | 12 | ||||||
(ee) |
Adjustment to bank stock loan interest expense | |||||||||
To reflect additional interest expense on the incremental $1.5 million borrowing. Both Equitys line of credit and Caches bank stock loan bear interest at prime. | $ | 45 | $ | 60 | ||||||
(ff) |
Adjustment to salaries and employee benefits expense | |||||||||
To reflect the reduction of Caches historical share-based compensation expense associated with the Cache options which will be settled by issuing additional stock consideration as part of the merger. | $ | (62 | ) | $ | (68 | ) | ||||
(gg) |
Adjustment to depreciation expense | |||||||||
To reflect additional depreciation on the fair value adjustments of the facilities computed on a straight-line method over 39 years. | $ | 4 | $ | 5 | ||||||
(hh) |
Adjustment to amortization of core deposit intangible | |||||||||
To reflect amortization of the core deposit intangible on an accelerated basis over an estimated ten years. | $ | 194 | $ | 287 | ||||||
(ii) |
Adjustment to provision for income taxes | |||||||||
To reflect the net tax effect of the pro forma adjustments using Equitys statutory tax rate of 38.25%. |
$ | 37 | $ | 34 | ||||||
Cache, as a subchapter S corporation, is not subject to federal or Oklahoma state tax at the corporate level. This adjustment provides an estimated provision for income taxes on Caches pre-tax income using Equitys statutory tax rate of 38.25%. |
2,154 | 2,256 | ||||||||
|
|
|
|
|||||||
$ | 2,191 | $ | 2,290 | |||||||
|
|
|
|
|||||||
(jj) |
Adjustment to loan interest income |
|||||||||
To reflect accretion of loan discount from interest rate fair value adjustment computed on a level yield method over the contractual life of the loans. | $ | 410 | $ | 546 |
8
(kk) |
Adjustment to other interest income | |||||||||
To reflect the estimated loss of investment income related to the uses of cash for the cash portion of the merger consideration, the after-tax stock issuance costs and the after-tax direct, incremental merger expenses assuming a reinvestment rate of 2.0%. | $ | (153 | ) | $ | (204 | ) | ||||
(ll) |
Adjustment to deposit interest expense | |||||||||
To reflect amortization of the time deposit fair value adjustment. The amortization has been reflected over the contractual maturity of the time deposits. | $ | 30 | $ | 41 | ||||||
(mm) |
Adjustment to interest expense on Federal Home Loan Bank advances | |||||||||
To reflect amortization of the fair value adjustment on the Federal Home Loan Bank advances upon repayment in the first year after merger. | $ | | $ | (6 | ) | |||||
(nn) |
Adjustment to depreciation expense | |||||||||
To reflect additional depreciation on the fair value adjustments of the facilities computed on a straight-line method over 39 years. | $ | 2 | $ | 3 | ||||||
(oo) |
Adjustment to amortization of core deposit intangible | |||||||||
To reflect amortization of the core deposit intangible on an accelerated basis over an estimated ten years. | $ | 493 | $ | 731 | ||||||
(pp) |
Adjustment to provision for income taxes | |||||||||
To reflect the net tax effect of the pro forma adjustments using Equitys statutory tax rate of 38.25%. | $ | (103 | ) | $ | (163 | ) |
9