Part I: Financial Information [Item 1: Financial Statements](index=5&type=section&id=Item%201%3A%20Financial%20Statements) This section presents the Company's unaudited condensed interim consolidated financial statements and detailed notes for Q1 2025 and Q4 2024 [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to **$5.446 billion** by March 31, 2025, driven by loans and cash, with liabilities and equity also increasing | Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | :------- | | Total Assets | $5,446,100 | $5,332,047 | $114,053 | 2.14% | | Total Liabilities | $4,828,776 | $4,739,129 | $89,647 | 1.89% | | Total Stockholders' Equity | $617,324 | $592,918 | $24,406 | 4.12% | | Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | :------- | | Cash and cash equivalents | $431,382 | $383,747 | $47,635 | 12.41% | | Available-for-sale securities | $950,453 | $1,004,455 | $(54,002) | (5.38)% | | Loans, net of allowance | $3,585,804 | $3,457,549 | $128,255 | 3.71% | | Total deposits | $4,405,364 | $4,374,789 | $30,575 | 0.70% | | Federal Home Loan Bank advances | $236,734 | $178,073 | $58,661 | 32.94% | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q1 2025 increased to **$15.041 million** (**6.92%**) due to higher net interest income, despite increased expenses | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Net income (loss) allocable to common stockholders | $15,041 | $14,068 | $973 | 6.92% | | Basic earnings (loss) per share | $0.86 | $0.91 | $(0.05) | (5.49)% | | Diluted earnings (loss) per share | $0.85 | $0.90 | $(0.05) | (5.56)% | | Item | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :------------------ | :------------------ | :-------------------- | :------- | | Total interest and dividend income | $74,684 | $71,767 | $2,917 | 4.06% | | Total interest expense | $24,392 | $27,585 | $(3,193) | (11.58)% | | Net interest income | $50,292 | $44,182 | $6,110 | 13.83% | | Provision (reversal) for credit losses | $2,722 | $1,000 | $1,722 | 172.20% | | Total non-interest income | $10,330 | $11,731 | $(1,401) | (11.94)% | | Total non-interest expense | $39,050 | $37,152 | $1,898 | 5.11% | [Consolidated Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income significantly increased to **$25.257 million** in Q1 2025, driven by positive unrealized gains on AFS securities | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Net income | $15,041 | $14,068 | $973 | 6.92% | | Total other comprehensive income (loss) | $13,619 | $(3,794) | $17,413 | (458.98)%| | Comprehensive income (loss) | $25,257 | $11,200 | $14,057 | 125.51% | | Year | Amount (in thousands) | | :--- | :-------------------- | | 2025 | $14,082 | | 2024 | $(6,180) | [Consolidated Statements of Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased by **$24.406 million** to **$617.324 million** due to net income and other comprehensive income | Metric | March 31, 2025 (in thousands) | January 1, 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Total Stockholders' Equity | $617,324 | $592,918 | $24,406 | 4.12% | - Key changes in stockholders' equity for the three months ended March 31, 2025, include net income of **$15,041 thousand**, other comprehensive income (loss) of **$10,216 thousand**, cash dividends of **$(2,629) thousand**, and stock-based compensation of **$1,422 thousand**[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to **$21.680 million** in Q1 2025, with overall cash and equivalents rising by **$47.635 million** | Activity | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :------------------ | :------------------ | :-------------------- | | Operating activities | $21,680 | $12,639 | $9,041 | | Investing activities | $(57,817) | $5,289 | $(63,106) | | Financing activities | $83,772 | $(162,009) | $245,781 | | Net change in cash and cash equivalents | $47,635 | $(144,081) | $191,716 | | Ending cash and cash equivalents | $431,382 | $235,018 | $196,364 | - Key drivers of investing activities in Q1 2025 included a net change in loans of **$(68,393) thousand** and purchase of government guaranteed loans of **$(61,987) thousand**, partially offset by proceeds from sales, calls, pay-downs and maturities of available-for-sale securities of **$78,346 thousand**[23](index=23&type=chunk) - Key drivers of financing activities in Q1 2025 included a net increase in deposits of **$30,556 thousand** and net borrowings on Federal Home Loan Bank line of credit of **$58,661 thousand**[23](index=23&type=chunk) [Condensed Notes to Interim Consolidated Financial Statements](index=12&type=section&id=Condensed%20Notes%20to%20Interim%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, investments, loans, derivatives, borrowings, equity, regulatory matters, and subsequent events [NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=NOTE%201%20%E2%80%93%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Interim financial statements adhere to **GAAP**, with new pronouncements impacting disclosures but not financial condition - The Company's interim consolidated financial statements are prepared in accordance with United States Generally Accepted Accounting Principles (**GAAP**) for interim financial information and **SEC guidance**, requiring management to make estimates and assumptions[27](index=27&type=chunk) - ASU 2023-09 (Income Taxes) and ASU 2024-03/2025-01 (Expense Disaggregation) are new accounting pronouncements that will impact financial statement disclosures but not the Company's financial condition, results of operations, or cash flows[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [NOTE 2 – INVESTMENTS](index=14&type=section&id=NOTE%202%20%E2%80%93%20INVESTMENTS) Available-for-sale securities decreased to **$950.453 million**, with unrealized losses reducing, while HTM securities remained stable | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :------------------------------ | :------------------------------- | :-------------------- | :------- | | Available-for-Sale Securities (Fair Value) | $950,453 | $1,004,455 | $(54,002) | (5.38)% | | Gross Unrealized Losses on AFS Securities | $(64,175) | $(76,133) | $11,958 | (15.71)% | | Held-to-Maturity Securities (Amortized Cost) | $5,226 | $5,217 | $9 | 0.17% | - Management does not anticipate credit losses in private label residential mortgage-backed, corporate debt, or state and political subdivisions securities, citing high credit quality and investment-grade ratings[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES](index=18&type=section&id=NOTE%203%20%E2%80%93%20LOANS%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) Total loans, net of allowance, increased by **$128.255 million** to **$3.586 billion**, with higher provision for credit losses | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Total loans | $3,631,628 | $3,500,816 | $130,812 | 3.74% | | Allowance for credit losses | $(45,824) | $(43,267) | $(2,557) | 5.91% | | Net loans | $3,585,804 | $3,457,549 | $128,255 | 3.71% | | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Provision for credit losses | $2,722 | $1,000 | $1,722 | 172.20% | | Loans charged-off | $(1,139) | $(882) | $(257) | 29.14% | | Recoveries | $974 | $215 | $759 | 353.02% | | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Non-accrual loans | $24,245 | $27,050 | $(2,805) | (10.37)% | [NOTE 4 – DERIVATIVE FINANCIAL INSTRUMENTS](index=31&type=section&id=NOTE%204%20%E2%80%93%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) Derivative notional amount increased to **$304.345 million** as the Company uses swaps to manage interest rate risk - The Company uses interest rate swaps as fair value hedges for commercial real estate loans and as cash flow hedges for subordinated debt and Federal Home Loan Bank advances interest expense and adjustable rate loans interest income[95](index=95&type=chunk)[96](index=96&type=chunk) | Derivative Type | March 31, 2025 Notional Amount (in thousands) | December 31, 2024 Notional Amount (in thousands) | Change (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :--------------------------------------------- | :-------------------- | | Derivatives designated as hedging instruments | $14,101 | $14,503 | $(402) | | Derivatives designated as cash flow hedges | $107,500 | $107,500 | $0 | | Derivatives not designated as hedging instruments | $182,744 | $143,831 | $38,913 | | **Total** | **$304,345** | **$265,834** | **$38,511** | | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :------------------ | :------------------ | :-------------------- | :------- | | Net gains (losses) on derivatives and hedging activities | $396 | $77 | $319 | 414.29% | [NOTE 5 – OTHER REAL ESTATE OWNED AND OTHER REPOSSESSED ASSETS](index=36&type=section&id=NOTE%205%20%E2%80%93%20OTHER%20REAL%20ESTATE%20OWNED%20AND%20OTHER%20REPOSSESSED%20ASSETS) OREO and other repossessed assets decreased by **50.19%** to **$4.774 million** due to sales proceeds | Asset Type | March 31, 2025 (in thousands) | January 1, 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Other Real Estate Owned | $4,464 | $4,773 | $(309) | (6.47)% | | Other Repossessed Assets | $310 | $4,811 | $(4,501) | (93.56)% | | **Total** | **$4,774** | **$9,584** | **$(4,810)** | **(50.19)%** | - Key activity for the three months ended March 31, 2025, included **$359 thousand** in transfers in, a net gain on sales of **$45 thousand**, and proceeds from sales of **$(5,214) thousand**[107](index=107&type=chunk) | Expense Type | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | | :--------------------------------------- | :------------------ | :------------------ | :-------------------- | | Net loss (gain) on sales | $(45) | $(99) | $54 | | Operating expenses, net of rental income | $146 | $61 | $85 | | **Total** | **$101** | **$(41)** | **$142** | [NOTE 6 – LEASE OBLIGATIONS](index=37&type=section&id=NOTE%206%20%E2%80%93%20LEASE%20OBLIGATIONS) Operating lease assets and liabilities remained stable, with costs increasing to **$177 thousand** in Q1 2025 | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Right-of-Use Asset (in thousands) | $3,474 | $3,600 | | Lease Liability (in thousands) | $3,471 | $3,601 | | Weighted Average Lease Term (Years) | **12.5** | **12.5** | | Weighted Average Discount Rate | **3.28%** | **3.29%** | | Cost Type | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Operating lease cost | $156 | $120 | $36 | 30.00% | | Variable lease cost | $21 | $29 | $(8) | (27.59)% | | **Total operating lease cost** | **$177** | **$149** | **$28** | **18.79%** | [NOTE 7 – BORROWINGS](index=38&type=section&id=NOTE%207%20%E2%80%93%20BORROWINGS) Total borrowings increased to **$371.126 million** due to higher Federal Home Loan Bank advances, with no Federal Reserve borrowings | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Total Borrowings | $371,126 | $312,796 | $58,330 | 18.65% | | Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------ | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Federal Home Loan Bank advances | $236,734 | $178,073 | $58,661 | 32.94% | | Federal Reserve Bank borrowings | $0 | $0 | $0 | 0.00% | | Subordinated debt | $97,620 | $97,477 | $143 | 0.15% | - There were no outstanding principal balances on the bank stock loan at March 31, 2025, and December 31, 2024[128](index=128&type=chunk) [NOTE 8 – STOCKHOLDERS' EQUITY](index=43&type=section&id=NOTE%208%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) Class A common stock outstanding increased, and **$10.216 million** reduction in unrealized losses improved comprehensive income | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :----- | | Class A common stock – outstanding | **17,530,762** | **17,427,626** | +103,136 | - The Board of Directors approved a share repurchase plan for up to **1,000,000** shares of outstanding common stock, effective October 1, 2024, to September 30, 2025. As of March 31, 2025, **1,000,000** shares remain for repurchase under the program, with no shares repurchased during Q1 2025[149](index=149&type=chunk)[357](index=357&type=chunk) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------ | :---------------------------- | :----------------------------- | :-------------------- | | Accumulated other comprehensive income (loss) | $(44,965) | $(55,181) | $10,216 | [NOTE 9 – REGULATORY MATTERS](index=45&type=section&id=NOTE%209%20%E2%80%93%20REGULATORY%20MATTERS) The Company and Equity Bank meet all capital adequacy requirements and are categorized as **well capitalized** - Both Equity Bancshares, Inc. and Equity Bank meet all capital adequacy requirements to which they are subject as of March 31, 2025, and December 31, 2024[153](index=153&type=chunk)[156](index=156&type=chunk) - Equity Bank is categorized as "**well capitalized**" under the regulatory framework for prompt corrective action, maintaining minimum regulatory capital ratios[155](index=155&type=chunk)[316](index=316&type=chunk) | Ratio | Actual Ratio (March 31, 2025) | Minimum Required (Basel III) | | :------------------------------------------ | :---------------------------- | :--------------------------- | | Total capital to risk weighted assets | **18.32%** | **10.50%** | | Tier 1 capital to risk weighted assets | **15.30%** | **8.50%** | | Common equity Tier 1 capital to risk weighted assets | **14.70%** | **7.00%** | | Tier 1 leverage to average assets | **11.76%** | **4.00%** | [NOTE 10 – EARNINGS PER SHARE](index=46&type=section&id=NOTE%2010%20%E2%80%93%20EARNINGS%20PER%20SHARE) Basic and diluted EPS decreased to **$0.86** and **$0.85** respectively, despite higher net income, due to more shares outstanding | Metric | 2025 | 2024 | Change | % Change | | :------------------------------------------------- | :--- | :--- | :----- | :------- | | Basic earnings (loss) per common share | $0.86 | $0.91 | $(0.05) | (5.49)% | | Diluted earnings (loss) per common share | $0.85 | $0.90 | $(0.05) | (5.56)% | - Weighted average common shares outstanding for basic EPS increased to **17,475,058** in 2025 from **15,416,060** in 2024, and for diluted EPS increased to **17,659,593** in 2025 from **15,569,225** in 2024[159](index=159&type=chunk) | Metric | March 31, 2025 | March 31, 2024 | | :-------------------------- | :------------- | :------------- | | Total antidilutive shares | **311,267** | **182,740** | [NOTE 11 – FAIR VALUE](index=48&type=section&id=NOTE%2011%20%E2%80%93%20FAIR%20VALUE) Fair values of financial instruments are measured using a three-level hierarchy, primarily Level 2 for AFS securities and derivatives - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1 prices), and Level 3 (significant unobservable inputs)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - Available-for-sale securities and derivatives are primarily valued using Level 2 inputs, while equity securities with readily determinable fair value use Level 1 inputs[167](index=167&type=chunk)[168](index=168&type=chunk)[170](index=170&type=chunk) - Loans individually evaluated for credit losses and other real estate owned are measured on a non-recurring basis using Level 3 inputs, relying on real estate appraisals or broker price opinions with significant judgment[172](index=172&type=chunk)[173](index=173&type=chunk)[177](index=177&type=chunk) [NOTE 12 – COMMITMENTS AND CREDIT RISK](index=54&type=section&id=NOTE%2012%20%E2%80%93%20COMMITMENTS%20AND%20CREDIT%20RISK) Commitments to make loans and unused lines of credit decreased, while standby letters of credit remained stable | Commitment Type | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Commitments to make loans | $349,625 | $418,128 | $(68,503) | (16.38)% | | Unused lines of credit | $525,366 | $539,844 | $(14,478) | (2.68)% | | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :---------------------------- | :----------------------------- | | Standby letters of credit | $41,938 | $42,796 | - The credit risk involved in off-balance-sheet commitments and letters of credit is managed using the same credit policies and procedures as for on-balance-sheet instruments[188](index=188&type=chunk) [NOTE 13 – LEGAL MATTERS](index=55&type=section&id=NOTE%2013%20%E2%80%93%20LEGAL%20MATTERS) Equity Bank faces three class action lawsuits regarding overdraft fees, which the Company intends to vigorously defend - Equity Bank is party to three class action lawsuits alleging improperly collected overdraft fees, filed in Sedgwick County Kansas District Court and Jackson County, Missouri District Court[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) - The Company believes the lawsuits are without merit and intends to vigorously defend against the claims[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) - At this time, the Company is unable to reasonably estimate the loss amount of this litigation[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) [NOTE 14 – REVENUE RECOGNITION](index=55&type=section&id=NOTE%2014%20%E2%80%93%20REVENUE%20RECOGNITION) Total non-interest income decreased by **$1.401 million** (**11.9%**) due to reduced zero-basis loan recovery and acquisition gains - The majority of the Company's revenues are from interest income on financial instruments, which are outside the scope of ASC 606[195](index=195&type=chunk) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Total non-interest income | $10,330 | $11,731 | $(1,401) | (11.94)% | - The decrease in non-interest income was largely attributable to a reduction in recovery on zero-basis loans and net gain on acquisition, offset by an increase in the value of bank-owned life insurance due to a death benefit realization[238](index=238&type=chunk)[236](index=236&type=chunk) [NOTE 15 – BUSINESS COMBINATIONS AND BRANCH SALES](index=56&type=section&id=NOTE%2015%20%E2%80%93%20BUSINESS%20COMBINATIONS%20AND%20BRANCH%20SALES) The Company agreed to acquire NBC Corp. of Oklahoma, with the acquisition expected to close in Q2 2025 - On April 2, 2025, the Company entered into an agreement to acquire NBC Corp. of Oklahoma (NBC), which includes NBC Oklahoma, an Oklahoma state bank with seven branch locations[198](index=198&type=chunk)[205](index=205&type=chunk) - Acquisition-related costs for the NBC transaction during the three months ended March 31, 2025, were **$66 thousand** (**$50 thousand** on an after-tax basis)[198](index=198&type=chunk) - The acquisition is expected to close in the second quarter of 2025 and will result in the recording of core deposit intangibles and goodwill[205](index=205&type=chunk) [NOTE 16 – SEGMENT REPORTING](index=56&type=section&id=NOTE%2016%20%E2%80%93%20SEGMENT%20REPORTING) Equity Bancshares, Inc. operates as a **single operating segment** through Equity Bank, with distinct performance metrics - Equity Bancshares, Inc. operates as a **single operating segment** for financial reporting purposes, primarily through its wholly-owned subsidiary, Equity Bank[199](index=199&type=chunk) - The executive leadership team uses gross profit and profit or loss from operations before interest and income taxes to allocate resources for the holding company, and net-interest income and non-interest income for Equity Bank[200](index=200&type=chunk) [NOTE 17 – SUBSEQUENT EVENTS](index=59&type=section&id=NOTE%2017%20%E2%80%93%20SUBSEQUENT%20EVENTS) The Company will acquire NBC Corp. of Oklahoma, adding **$903.349 million** in assets and **$810.727 million** in deposits - On April 2, 2025, the Company entered into an agreement to acquire NBC Corp. of Oklahoma (NBC), parent company of NBC Oklahoma[205](index=205&type=chunk) | Metric | March 31, 2025 (in thousands) | | :------------------------------------ | :---------------------------- | | Total assets | $903,349 | | Total loans | $690,012 | | Total liabilities | $832,998 | | Deposits | $810,727 | | Net income before income taxes (Q1 2025) | $3,291 | - The Company anticipates recording core deposit intangibles and goodwill with this acquisition[205](index=205&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=60&type=section&id=Item%202%3A%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, critical accounting policies, results of operations, financial condition, liquidity, and capital resources [Overview](index=62&type=section&id=Overview) Equity Bancshares, Inc. operates Equity Bank across four states, reporting **$5.45 billion** in assets and **$15.0 million** net income for Q1 2025 - Equity Bancshares, Inc. is a financial holding company operating Equity Bank with **71** full-service banking sites in Arkansas, Kansas, Missouri, and Oklahoma[211](index=211&type=chunk) | Metric | Amount (in millions) | | :------------------------------------ | :------------------- | | Consolidated total assets | $5,450 | | Total loans held for investment, net of allowance | $3,590 | | Total deposits | $4,410 | | Total stockholders' equity | $617.3 | | Year | Net Income (in millions) | | :--- | :----------------------- | | 2025 | $15.0 | | 2024 | $14.1 | [Critical Accounting Policies](index=62&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies for Allowance for Credit Losses and Goodwill involve significant management judgments and assumptions - The Allowance for Credit Losses (ACL) represents management's estimate of all expected credit losses over the expected life of the loan portfolio, based on historical experience, economic conditions, and asset quality trends[214](index=214&type=chunk) - Goodwill, resulting from business acquisitions, is assessed at least annually for impairment (December 31) and more frequently if triggering events occur. A qualitative assessment for Q1 2025 found no evidence of impairment[216](index=216&type=chunk) - Determining the ACL and performing goodwill impairment assessments require complex management judgment and assumptions, and actual results could differ materially from estimates[214](index=214&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk) [Results of Operations](index=64&type=section&id=Results%20of%20Operations) Net income increased due to higher net interest income, despite increased provision for credit losses and non-interest expenses [Net Income](index=64&type=section&id=Net%20Income) Net income allocable to common stockholders increased to **$15.0 million** (diluted EPS **$0.85**) in Q1 2025, driven by net interest income | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Net income (loss) allocable to common stockholders | $15,041 | $14,068 | $973 | 6.92% | | Diluted earnings (loss) per share | $0.85 | $0.90 | $(0.05) | (5.56)% | - The increase in net income was largely due to an increase in net interest income of **$4.4 million**, offset by a decrease of **$1.40 million** in other income and an increase in other non-interest expense of **$1.90 million**[221](index=221&type=chunk) [Net Interest Income and Net Interest Margin Analysis](index=64&type=section&id=Net%20Interest%20Income%20and%20Net%20Interest%20Margin%20Analysis) Net interest income increased by **$6.110 million** (**13.83%**), with net interest margin improving by **52 basis points** to **4.27%** | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Net interest income | $50,292 | $44,182 | $6,110 | 13.83% | | Metric | 2025 | 2024 | Change (bps) | | :------------------ | :---- | :---- | :----------- | | Net interest margin | **4.27%** | **3.75%** | +52 | | Interest rate spread | **3.63%** | **3.10%** | +53 | - Interest income increased **$2.9 million** due to **$1.8 million** from increased asset volume and **$1.1 million** from higher rates/yields on interest-earning assets. Interest expense decreased **$3.2 million** due to deposit portfolio repricing and reduced Federal Reserve Bank borrowings, partially offset by increased FHLB borrowing[229](index=229&type=chunk)[230](index=230&type=chunk) [Provision for Credit Losses](index=68&type=section&id=Provision%20for%20Credit%20Losses) Provision for credit losses increased to **$2.7 million** due to loan growth and a general decline in the economic outlook | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Provision for credit losses | $2,722 | $1,000 | $1,722 | 172.20% | | Net charge-offs | $165 | $668 | $(503) | (75.30)% | - The higher provision for credit losses is primarily attributable to loan growth and a general decline in the economic outlook, influenced by recent volatility, potential stress from US trade policy, elevated inflation, supply chain issues, and monetary policy impacts[233](index=233&type=chunk) [Non-Interest Income](index=68&type=section&id=Non-Interest%20Income) Total non-interest income decreased by **$1.401 million** (**11.9%**) due to reduced zero-basis loan recovery and absence of acquisition gains | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Total non-interest income | $10,330 | $11,731 | $(1,401) | (11.94)% | | Item | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :------------------ | :------------------ | :-------------------- | :------- | | Service charges and fees | $2,064 | $2,569 | $(505) | (19.7)% | | Increase in value of bank-owned life insurance | $3,593 | $828 | $2,765 | 333.9% | | Recovery on zero-basis purchased loans | $2 | $3,345 | $(3,343) | (99.9)% | | Net gain on acquisition and branch sales | $0 | $1,240 | $(1,240) | (100.0)% | - The increase in the value of bank-owned life insurance was driven by the realization of a death benefit on an insured during the quarter[238](index=238&type=chunk) [Non-Interest Expense](index=70&type=section&id=Non-Interest%20Expense) Total non-interest expense increased by **$1.898 million** (**5.1%**) due to higher salaries and data processing costs, offset by lower merger expenses | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Total non-interest expense | $39,050 | $37,152 | $1,898 | 5.11% | | Item | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :------------------ | :------------------ | :-------------------- | :------- | | Salaries and employee benefits | $19,954 | $18,097 | $1,857 | 10.3% | | Data processing | $5,086 | $4,828 | $258 | 5.3% | | Amortization of core deposit intangible | $1,045 | $899 | $146 | 16.2% | | Merger expenses | $66 | $1,556 | $(1,490) | (95.8)% | - The increase in salaries and employee benefits was primarily due to additional payroll costs, increased incentive compensation, and stock-related compensation expense, partly driven by staff increases from 2024 Rockhold and KansasLand mergers. The decrease in merger expenses was due to the completion of the Rockhold merger and preliminary work for the NBC merger[241](index=241&type=chunk)[244](index=244&type=chunk) [Efficiency Ratio](index=70&type=section&id=Efficiency%20Ratio) The efficiency ratio improved to **62.43%** in Q1 2025, indicating more efficient resource allocation due to income growth | Year | Ratio | | :--- | :----- | | 2025 | **62.43%** | | 2024 | **63.45%** | - The improvement in the efficiency ratio was primarily due to a greater percentage increase in interest and other income compared to the percentage increase in non-interest expenses[246](index=246&type=chunk) - The efficiency ratio is a non-GAAP financial measure computed by dividing non-interest expense (excluding goodwill impairment, merger expenses, and loss on debt extinguishment) by the sum of net interest income and non-interest income (excluding net gains on sales of securities and gain on acquisition)[245](index=245&type=chunk) [Income Taxes](index=72&type=section&id=Income%20Taxes) The effective income tax rate decreased to **20.2%** due to increased tax benefits from non-taxable items and lower transaction costs | Year | Rate | | :--- | :---- | | 2025 | **20.2%** | | 2024 | **20.8%** | - The decrease in the effective tax rate was a result of increased tax benefits related to non-taxable bank-owned life insurance, stock compensation, and a reduction in non-deductible transaction costs in the current quarter[248](index=248&type=chunk) - This was partially offset by a tax benefit related to a bargain purchase gain recognized in the quarter ended March 31, 2024[248](index=248&type=chunk) [Financial Condition](index=72&type=section&id=Financial%20Condition) Total assets grew, driven by loans and cash, with liabilities and equity also increasing, and improved credit quality indicators - Total assets increased by **$114.1 million** to **$5.45 billion** at March 31, 2025, driven by a **$130.8 million** increase in loans held for investment and a **$47.6 million** increase in cash and cash equivalents, partially offset by a **$54.0 million** decrease in available-for-sale securities[249](index=249&type=chunk) - Total liabilities rose by **$89.6 million** to **$4.83 billion**, mainly due to increases in total deposits of **$30.6 million** and Federal Home Loan Bank advances of **$58.7 million**[249](index=249&type=chunk) - Total stockholders' equity increased by **$24.4 million** to **$617.3 million**, principally due to net income for the three months ended March 31, 2025, and a decrease in unrealized losses on available-for-sale securities, net of tax[249](index=249&type=chunk) [Loan Portfolio](index=72&type=section&id=Loan%20Portfolio) Total loans held for investment increased by **$130.812 million** (**3.7%**) to **$3.632 billion**, with commercial loans seeing the largest rise | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------ | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Total loans held for investment | $3,631,628 | $3,500,816 | $130,812 | 3.7% | | Loan Type | March 31, 2025 Amount (in thousands) | % of Total (2025) | December 31, 2024 Amount (in thousands) | % of Total (2024) | Change (in thousands) | % Change | | :-------------------------- | :----------------------------------- | :---------------- | :------------------------------------ | :---------------- | :-------------------- | :------- | | Commercial and industrial | $762,906 | **21.0%** | $658,865 | **18.8%** | $104,041 | **15.8%** | | Commercial real estate | $1,863,200 | **51.3%** | $1,830,514 | **52.3%** | $32,686 | **1.8%** | | Residential real estate | $563,954 | **15.5%** | $566,766 | **16.2%** | $(2,812) | (0.5)% | - As of March 31, 2025, **62.8%** of loans had adjustable/floating interest rates (**$2,281,262 thousand**), while **37.2%** had predetermined fixed interest rates (**$1,350,366 thousand**)[262](index=262&type=chunk) [Credit Quality Indicators](index=75&type=section&id=Credit%20Quality%20Indicators) Loans are categorized into risk categories (Pass, Special Mention, Substandard, Doubtful) based on borrower ability and economic trends - Loans are categorized into risk categories: Pass, Special Mention, Substandard, and Doubtful, based on factors like borrower's financial information, payment experience, credit documentation, and economic trends[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[266](index=266&type=chunk) - Consumer loans are generally considered pass credits unless downgraded due to payment status or reviewed as part of a larger credit relationship[72](index=72&type=chunk)[266](index=266&type=chunk) [Nonperforming Assets](index=75&type=section&id=Nonperforming%20Assets) Total nonperforming assets decreased by **$6.813 million** (**19.65%**) to **$27.862 million**, improving asset quality ratios | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Total nonperforming assets | $27,862 | $34,675 | $(6,813) | (19.65)% | | Ratio | March 31, 2025 | December 31, 2024 | | :------------------------------------------ | :------------- | :---------------- | | Nonperforming assets to total assets | **0.51%** | **0.65%** | | Nonperforming assets to total loans plus OREO and repossessed assets | **0.77%** | **0.99%** | - Non-accrual loans decreased to **$24.245 million** at March 31, 2025, from **$27.050 million** at December 31, 2024, consisting of **310** separate credits and **257** separate borrowers[270](index=270&type=chunk)[271](index=271&type=chunk) [Potential Problem Loans](index=76&type=section&id=Potential%20Problem%20Loans) Potential problem loans decreased to **$33.1 million**, with close monitoring and evaluation for impairment | Metric | March 31, 2025 (in millions) | December 31, 2024 (in millions) | Change (in millions) | % Change | | :-------------------------- | :--------------------------- | :------------------------------ | :------------------- | :------- | | Potential problem loans | $33.1 | $35.4 | $(2.3) | (6.49)% | - Potential problem loans are performing loans classified as special mention or substandard, for which management has concerns about the borrower's ability to comply with repayment terms[273](index=273&type=chunk) - These loans are reviewed and evaluated for impairment, with potential write-downs or additions to the allowance for credit losses based on the unlikelihood of full repayment or the net realizable value of collateral[274](index=274&type=chunk) [Allowance for Credit Losses](index=76&type=section&id=Allowance%20for%20Credit%20Losses) The allowance for credit losses of **$45.824 million** is deemed adequate, with the total reserve percentage at **1.3%** of total loans | Metric | March 31, 2025 (in thousands) | | :-------------------------- | :---------------------------- | | Allowance for credit losses | $45,824 | - Management believes the allowance for credit losses at March 31, 2025, was adequate to cover current expected credit losses in the loan portfolio[278](index=278&type=chunk) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | ACL to total loans | **1.3%** | **1.3%** | | ACL for collectively measured loans to total collectively measured loans | **1.1%** | **1.1%** | [Securities](index=79&type=section&id=Securities) Securities decreased to **$950.453 million** (**17.5%** of assets), with AFS securities declining and HTM remaining stable | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Securities as % of total assets | **17.5%** | **18.9%** | | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------ | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Available-for-Sale Securities (Fair Value) | $950,453 | $1,004,455 | $(54,002) | (5.38)% | | Held-to-Maturity Securities (Amortized Cost) | $5,226 | $5,217 | $9 | 0.17% | - At March 31, 2025, **71.4%** of residential mortgage-backed securities had contractual final maturities of more than **ten years**, with a weighted average life of **4.7 years** and a modified duration of **3.9 years**[290](index=290&type=chunk) [Goodwill Impairment Assessment](index=81&type=section&id=Goodwill%20Impairment%20Assessment) An interim qualitative analysis at March 31, 2025, found no indications of goodwill impairment - At March 31, 2025, an interim qualitative analysis was performed, concluding no indications of goodwill impairment[291](index=291&type=chunk) - Goodwill is assessed at least annually for impairment (December 31) and more frequently if a triggering event occurs[216](index=216&type=chunk) - Quantitative goodwill impairment assessments require significant management judgment related to industry performance, business performance, and economic and market conditions[217](index=217&type=chunk) [Deposits](index=81&type=section&id=Deposits) Total deposits increased by **$30.6 million** (**0.7%**) to **$4.41 billion**, though non-brokered deposits decreased | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Total deposits | $4,405,364 | $4,374,789 | $30,575 | 0.7% | - Total deposits, excluding brokered deposits, decreased by **$109.4 million** or **2.6%**. This was driven by decreases in interest-bearing demand and savings and money market deposits, partially offset by an increase in time deposits[295](index=295&type=chunk) | Deposit Type | March 31, 2025 (in thousands) | | :-------------------------- | :---------------------------- | | Reciprocal | $487,417 | | Non-reciprocal brokered | $265,087 | | **Total** | **$737,404** | [Other Borrowed Funds](index=83&type=section&id=Other%20Borrowed%20Funds) Total borrowings increased to **$371.126 million** due to higher FHLB advances, with no Federal Reserve Bank borrowings - The Company utilizes borrowings to supplement deposits to fund its lending and investing activities[303](index=303&type=chunk) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :-------------------------- | :---------------------------- | :----------------------------- | :-------------------- | :------- | | Total Borrowings | $371,126 | $312,796 | $58,330 | 18.65% | - Federal Home Loan Bank advances increased, while Federal Reserve Bank borrowings were zero at March 31, 2025[121](index=121&type=chunk)[123](index=123&type=chunk) [Liquidity and Capital Resources](index=83&type=section&id=Liquidity%20and%20Capital%20Resources) The Company manages liquidity through core deposits and asset maturities, maintaining strong capital positions above regulatory minimums [Liquidity](index=83&type=section&id=Liquidity) Cash and cash equivalents increased by **$47.6 million** to **$431.4 million** in Q1 2025, driven by financing and operating activities - Liquidity is managed to meet anticipated customer demands and unexpected cash needs, primarily through core deposits, security and loan maturities, and amortizing portfolios[305](index=305&type=chunk)[307](index=307&type=chunk) | Metric | March 31, 2025 (in millions) | December 31, 2024 (in millions) | Change (in millions) | % Change | | :-------------------------- | :--------------------------- | :------------------------------ | :------------------- | :------- | | Cash and cash equivalents | $431.4 | $383.8 | $47.6 | 12.4% | - The increase in cash and cash equivalents was driven by **$83.8 million** net cash provided by financing activities and **$21.7 million** net cash provided by operating activities, offset by **$57.8 million** net cash used in investing activities[309](index=309&type=chunk) [Off-Balance-Sheet Items](index=85&type=section&id=Off-Balance-Sheet%20Items) Off-balance-sheet items like credit commitments and letters of credit are managed with the same credit policies as on-balance-sheet instruments - The Company enters into off-balance-sheet transactions, including commitments to extend credit and standby and commercial letters of credit, to meet customer financing needs[311](index=311&type=chunk) - These transactions involve elements of credit risk and interest rate risk, which are managed using the same credit policies and procedures as for on-balance-sheet instruments[311](index=311&type=chunk) - The fair value of off-balance-sheet items is not considered material[183](index=183&type=chunk) [Capital Resources](index=85&type=section&id=Capital%20Resources) The Company and Equity Bank maintain capital levels well above minimum regulatory requirements, categorized as **well capitalized** - Both Equity Bancshares, Inc. and Equity Bank meet all capital adequacy requirements to which they are subject as of March 31, 2025[314](index=314&type=chunk) - Equity Bank is categorized as "**well capitalized**" under the regulatory framework for prompt corrective action[316](index=316&type=chunk) - Capital management focuses on providing equity to support current and future operations[313](index=313&type=chunk) [Non-GAAP Financial Measures](index=85&type=section&id=Non-GAAP%20Financial%20Measures) The Company uses non-GAAP measures like Tangible Book Value and Efficiency Ratio to provide alternative perspectives on financial performance - The Company uses non-GAAP financial measures to provide alternative perspectives on financial performance by adjusting GAAP measures for specific items, such as goodwill and intangible assets[317](index=317&type=chunk)[321](index=321&type=chunk)[324](index=324&type=chunk) - Key non-GAAP measures include Tangible Book Value Per Common Share, Tangible Common Equity to Tangible Assets, Core Return on Average Equity, Return on Average Tangible Common Equity, Core Net Income and Earnings Per Share, and Efficiency Ratio[320](index=320&type=chunk)[323](index=323&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk)[331](index=331&type=chunk)[332](index=332&type=chunk)[335](index=335&type=chunk) - These measures are important to investors and analysts for evaluating changes in financial performance and quality of earnings, exclusive of the effects of intangible assets and non-core items[321](index=321&type=chunk)[324](index=324&type=chunk)[328](index=328&type=chunk)[332](index=332&type=chunk)[336](index=336&type=chunk) [Tangible Book Value Per Common Share and Tangible Book Value Per Diluted Common Share](index=87&type=section&id=Tangible%20Book%20Value%20Per%20Common%20Share%20and%20Tangible%20Book%20Value%20Per%20Diluted%20Common%20Share) Tangible book value per common share increased to **$31.07**, providing a clearer view of book value excluding intangible assets | Metric | March 31, 2025 | December 31, 2024 | Change | % Change | | :------------------------------------------ | :------------- | :---------------- | :----- | :------- | | Tangible book value per common share | $31.07 | $30.07 | $1.00 | 3.33% | | Tangible book value per diluted common share | $30.84 | $29.70 | $1.14 | 3.84% | - Tangible book value is a non-GAAP measure calculated as total stockholders' equity less preferred stock, goodwill, core deposit intangibles, and other intangible assets, divided by common shares outstanding (or diluted common shares outstanding)[320](index=320&type=chunk) [Tangible Common Equity to Tangible Assets](index=87&type=section&id=Tangible%20Common%20Equity%20to%20Tangible%20Assets) The tangible common equity to tangible assets ratio increased to **10.13%**, reflecting stronger capital relative to tangible assets | Metric | March 31, 2025 | December 31, 2024 | Change (percentage points) | | :------------------------------------------ | :------------- | :---------------- | :------------------------- | | Tangible common equity to tangible assets | **10.13%** | **9.95%** | +0.18 | - This non-GAAP measure is calculated as tangible common equity (total stockholders' equity less preferred stock, goodwill, and other intangibles) divided by tangible assets (total assets less goodwill and other intangibles)[323](index=323&type=chunk) [Core Return on Average Equity](index=88&type=section&id=Core%20Return%20on%20Average%20Equity) Core return on average equity decreased to **10.69%**, reflecting return generated from core operations and tangible capital | Year | Ratio | | :--- | :----- | | 2025 | **10.69%** | | 2024 | **13.11%** | - Core return on average equity is calculated by adjusting GAAP net income for non-core gains and losses and excluding non-core expenses, net of tax, and dividing by a simple average of net income and core net income plus average stockholders' equity[326](index=326&type=chunk) [Return on Average Tangible Common Equity](index=88&type=section&id=Return%20on%20Average%20Tangible%20Common%20Equity) Return on average tangible common equity decreased to **12.12%**, assessing profitability from tangible common equity | Year | Ratio | | :--- | :----- | | 2025 | **12.12%** | | 2024 | **14.96%** | - This non-GAAP measure is calculated as core net income allocable to common stockholders (adjusted for goodwill impairment and amortization of intangible assets, net of tax) divided by average tangible common equity (total average stockholders' equity less average intangible assets and preferred stock)[327](index=327&type=chunk) [Core Net Income and Earnings Per Share](index=89&type=section&id=Core%20Net%20Income%20and%20Earnings%20Per%20Share) Core net income increased to **$15.987 million**, while core diluted EPS decreased to **$0.90**, adjusting for non-core impacts | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------------- | :------------------ | :------------------ | :-------------------- | :------- | | Core net income allocable to common stockholders | $15,987 | $15,022 | $965 | 6.42% | | Year | EPS | | :--- | :---- | | 2025 | **$0.90** | | 2024 | **$0.96** | - Core net income and earnings per share are calculated by adjusting GAAP net income for non-core impacts such as amortization of intangible assets, net gain on acquisition, securities transactions, and merger expenses, net of tax[331](index=331&type=chunk)[332](index=332&type=chunk) [Efficiency Ratio](index=90&type=section&id=Efficiency%20Ratio) The efficiency ratio improved to **62.43%**, indicating better operating expense management relative to operating revenue | Year | Ratio | | :--- | :----- | | 2025 | **62.43%** | | 2024 | **63.45%** | - The efficiency ratio is a non-GAAP measure calculated by dividing non-interest expense (excluding goodwill impairment, merger expenses, and loss on debt extinguishment) by the sum of net interest income and non-interest income (excluding net gains on the sale of available-for-sale securities and other securities transactions, and net gain on acquisition)[335](index=335&type=chunk) - Management believes these adjustments allow investors and analysts to better assess operating expenses in relation to operating revenue by removing non-core items[336](index=336&type=chunk) [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=91&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Interest rate volatility is the primary market risk, with NII showing positive impact for rising rates and EVE negative for rising rates - The Company's primary component of market risk is interest rate volatility, managed by the Asset Liability Committee (ALCO) through balance sheet structuring and simulation analysis[340](index=340&type=chunk)[342](index=342&type=chunk)[344](index=344&type=chunk) | Change in prevailing interest rates | Impact on Net Interest Income (March 31, 2025) | | :---------------------------------- | :--------------------------------------------- | | +300 basis points | **11.5%** | | +200 basis points | **7.6%** | | +100 basis points | **3.7%** | | -100 basis points | **(2.0)%** | | -200 basis points | **(4.1)%** | | -300 basis points | **(6.8)%** | | Change in prevailing interest rates | Impact on Economic Value of Equity (March 31, 2025) | | :---------------------------------- | :-------------------------------------------------- | | +300 basis points | **(8.7)%** | | +200 basis points | **(5.8)%** | | +100 basis points | **(3.0)%** | | -100 basis points | **0.1%** | | -200 basis points | **(2.1)%** | | -300 basis points | **(6.5)%** | [Item 4: Controls and Procedures](index=94&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective as of March 31, 2025, with no material changes in internal control - The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective as of March 31, 2025, to provide reasonable assurance for timely and accurate information disclosure[352](index=352&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q[353](index=353&type=chunk) Part II: Other Information [Item 1: Legal Proceedings](index=95&type=section&id=Item%201%3A%20Legal%20Proceedings) Equity Bank is involved in three class action lawsuits regarding overdraft fees, which the Company intends to vigorously defend - Equity Bank is party to three class action lawsuits alleging improperly collected overdraft fees[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[354](index=354&type=chunk) - The Company believes these lawsuits are without merit and intends to vigorously defend against the claims[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) - At this time, the Company is unable to reasonably estimate the loss amount of this litigation[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) [Item 1A: Risk Factors](index=95&type=section&id=Item%201A%3A%20Risk%20Factors) No material changes to the Company's risk factors were disclosed in its Annual Report on Form 10-K filed on March 7, 2025 - There have been no material changes in the Company's risk factors previously disclosed in its Annual Report on Form 10-K filed with the SEC on March 7, 2025[355](index=355&type=chunk) [Item 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A share repurchase program for **1,000,000** shares was authorized, with no repurchases made as of March 31, 2025 - The Board of Directors authorized a share repurchase program for up to **1,000,000** shares of outstanding common stock, beginning on October 1, 2024, and concluding on September 30, 2025[356](index=356&type=chunk) - No shares were repurchased under this program during the three months ended March 31, 2025[357](index=357&type=chunk) - As of March 31, 2025, **1,000,000** shares remain available for repurchase under the program[357](index=357&type=chunk) [Item 3: Defaults Upon Senior Securities](index=95&type=section&id=Item%203%3A%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities - The Company reported no defaults upon senior securities[358](index=358&type=chunk) [Item 4: Mine Safety Disclosures](index=95&type=section&id=Item%204%3A%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[358](index=358&type=chunk) [Item 5: Other Information](index=95&type=section&id=Item%205%3A%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements in Q1 2025 - None of the Company's directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2025[359](index=359&type=chunk) [Item 6: Exhibits](index=96&type=section&id=Item%206%3A%20Exhibits) Exhibits include an amendment to a loan agreement, CEO/CFO certifications, and Inline XBRL documents - Exhibits filed include an Eighth Amendment to Loan and Security Agreement, CEO and CFO certifications (Rule 13a-14(a) and 18 U.S.C. Section 1350), and Inline XBRL documents[360](index=360&type=chunk) - Certifications pursuant to 18 U.S.C. Section 1350 are furnished, not deemed "filed" for purposes of Section 18 of the Exchange Act, and not subject to its liability[361](index=361&type=chunk)

Financial Data and Key Metrics Changes - The company reported net income of $15 million, or $0.85 per diluted share, with tangible common equity earnings of $16 million, or $0.90 per diluted share [13] - Net interest income increased from $49.5 million to $50.3 million, driving net interest margin to 4.27% from 4.17% [14] - The tangible common equity (TCE) ratio improved to 10.13%, up 36% year-over-year, and tangible book value per share increased to $31.07, up 24% [11] Business Line Data and Key Metrics Changes - Loans increased by $131 million, reflecting an annualized growth rate of 15.5% [9] - Organic originations totaled $197 million, up 64% compared to the previous quarter, with total production at $254 million [30] - Non-interest income for the quarter was $10.3 million, up $1.5 million from the previous quarter, primarily due to a death benefit realized on bank-owned life insurance [15] Market Data and Key Metrics Changes - Non-accrual loans decreased by 10.3% to $24.2 million, while non-performing assets declined by 19.6% to $27.9 million [20] - Delinquency over 30 days increased to $18.2 million but remained low at approximately 50 basis points of total loans [22] - The company anticipates a positive credit outlook for 2025, with problem trends below historic norms [24] Company Strategy and Development Direction - The company announced a merger with NBC Corp, which is expected to add approximately $900 million to assets and expand its market presence in Oklahoma [6][7] - The management emphasized a dual strategy of organic growth and strategic mergers and acquisitions, with active conversations for potential deals [10][37] - The company aims to enhance its product offerings and customer experience through the integration of NBC's capabilities [72][74] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining margin and earnings growth despite economic uncertainties related to tariffs [43] - The company is focused on managing expenses and improving efficiency to offset potential revenue headwinds [92] - The management team is prepared for growth opportunities and remains disciplined in assessing M&A opportunities [38][37] Other Important Information - The company closed the quarter with a TCE ratio of 10.13% and a tangible book value per share of $31.07, indicating a strong balance sheet [11] - The company has retained approximately $67 million in capital from a common stock raise in December, ready for strategic growth [9] Q&A Session Summary Question: Impact of tariffs on commercial customers - Management noted that customers have provisions in contracts to pass on costs, and there is currently no indication of a slowdown [42] Question: Update on sales initiatives and loan growth - Management indicated they are in the early stages of sales initiatives, with significant contributions from Tulsa and Kansas City [45][46] Question: Expectations for loan purchases - Management clarified that recent loan purchases were a one-time deal and not part of a consistent strategy [53] Question: Community market activity and growth - Management sees significant opportunities in community markets and is focused on building relationships with local businesses [55] Question: M&A confidence amidst market volatility - Management believes there are still opportunities for deals, driven by age of ownership and management in potential target companies [59] Question: Expected deal accretion from NBC - Management expects about 50 cents in accretion for year two post-merger, with specific figures to be provided later [62] Question: Deposit market competition and cost of funds - Management noted a more rational competition in deposit markets and plans to mirror Fed moves regarding deposit costs [66] Question: Margin expectations with potential Fed rate cuts - Management indicated that while they can defend margins, there may be modest upside potential if rates are cut [90]

Core Insights - Equity Bancshares (EQBK) reported revenue of $60.62 million for Q1 2025, an 8.4% year-over-year increase, with an EPS of $0.90 compared to $1.03 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $55.94 million by 8.38%, while the EPS surpassed the consensus estimate of $0.82 by 9.76% [1] Financial Performance Metrics - Average Outstanding Balance of total interest-earning assets was $4.77 billion, slightly below the estimated $4.80 billion [4] - Net Interest Margin stood at 4.3%, exceeding the average estimate of 4% [4] - Efficiency ratio improved to 62.4%, better than the estimated 66.5% [4] - Total Non-Interest Income was reported at $10.33 million, surpassing the estimate of $8.35 million [4] - Net Interest Income reached $50.29 million, compared to the average estimate of $47.59 million [4] Stock Performance - Shares of Equity Bancshares have declined by 11% over the past month, while the Zacks S&P 500 composite decreased by 3.9% [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]

Financial Performance - Net income for the quarter ended March 31, 2025, was $15.0 million, or $0.85 per diluted share, compared to $17.0 million, or $1.04 per diluted share in the prior quarter[3]. - Non-interest income for the quarter was $10.3 million, an increase from $8.8 million in the previous quarter, driven by a $1.7 million improvement in Bank Owned Life Insurance[9]. - Net income for the quarter was $15,041,000, down from $16,986,000 in the previous quarter, representing a decrease of about 11.5%[33]. - Adjusted net income allocable to common stockholders was $15,945 thousand for the latest quarter, down from $17,832 thousand in the previous quarter, a decrease of 10.5%[42]. - Core earnings per diluted share decreased to $0.90 for the quarter ended March 31, 2025, down from $1.10 in the previous quarter[36]. - Diluted earnings per share decreased to $0.85 from $1.04 in the previous quarter, a decline of 18.3%[42]. Interest Income and Margin - Net interest margin for the quarter was 4.27%, positively impacted by non-recurring nonaccrual reversals of approximately $2.3 million; excluding these items, the margin was 4.08%[4]. - Net interest income after provision for credit losses was $47,570,000, compared to $49,375,000 in the previous quarter, reflecting a decrease of approximately 3.6%[33]. - For the three months ended March 31, 2025, net interest income was $50,292,000, an increase from $44,182,000 for the same period in 2024, representing a growth of 7.5%[38]. - The net interest margin increased to 4.27% for the three months ended March 31, 2025, up from 3.75% in the same period last year[38]. - The interest rate spread improved to 3.63% for the three months ended March 31, 2025, compared to 3.10% for the same period in 2024[38]. Loan and Deposit Growth - Loan balances increased to $3.63 billion, reflecting linked quarter growth of $130.8 million, or 15.2% annualized[4]. - Total deposits were $4.4 billion, consistent with the prior quarter, with a decrease of $109.4 million in deposits excluding brokered balances due to seasonal outflows[4]. - Total loans held-for-investment increased to $3,631,628 thousand as of March 31, 2025, up from $3,500,816 thousand at December 31, 2024, representing a growth of 3.75%[36]. - Total deposits reached $4,405,364 thousand, up from $4,374,789 thousand, reflecting a growth of 0.7%[35]. - Time deposits increased to $841,463 thousand from $736,527 thousand, reflecting a growth of 14.2%[35]. Expenses and Provisions - Total non-interest expense was $39.1 million, up from $37.8 million in the previous quarter, primarily due to payroll dynamics and higher incentive accruals[10]. - The provision for credit losses was $2.7 million, compared to $98 thousand in the previous quarter, reflecting loan growth and economic uncertainty[7]. - Provision for credit losses was $2,722,000, compared to a reversal of $98,000 in the previous quarter, indicating a significant change in credit loss expectations[33]. Capital and Equity - Tangible common equity to tangible assets closed the period at 10.1%[4]. - The Company's ratio of common equity tier 1 capital to risk-weighted assets was 14.7% at March 31, 2025, up from 14.5% at the end of the previous quarter[17]. - Stockholders' equity increased to $617,324 thousand from $592,918 thousand, indicating a rise of 4.2%[35]. - Common Equity Tier 1 Capital Ratio improved to 14.70% as of March 31, 2025, compared to 14.51% at December 31, 2024[37]. - Total stockholders' equity to total assets ratio was 11.34% as of March 31, 2025, compared to 11.12% at December 31, 2024[37]. Mergers and Acquisitions - The Company announced a merger with NBC Corp. of Oklahoma, which has approximately $682 million in loans and $816 million in deposits, expected to close in Q3 2025[4]. - The company is currently facing uncertainties related to the proposed transaction with NBC Corp. of Oklahoma, which may impact future performance[29].

Core Insights - Analysts forecast that Equity Bancshares (EQBK) will report quarterly earnings of $0.82 per share, reflecting a year-over-year decline of 20.4% [1] - Expected revenues are projected to be $55.94 million, showing no change compared to the same quarter last year [1] Earnings Estimates - The consensus EPS estimate has been revised downward by 3.9% over the past 30 days, indicating a collective reassessment by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3] Key Metrics - Analysts estimate that the 'Average Outstanding Balance - Total interest-earning assets' will reach $4.80 billion, up from $4.74 billion in the same quarter last year [5] - The 'Net Interest Margin' is expected to be 4.0%, compared to 3.8% a year ago [5] - The 'Efficiency ratio' is forecasted to be 66.5%, slightly higher than the previous year's 65.2% [5] - 'Total Non-Interest Income' is estimated at $8.35 million, down from $11.73 million year-over-year [6] - 'Net Interest Income' is projected to be $47.59 million, an increase from $44.18 million in the prior year [6] Stock Performance - Equity Bancshares shares have decreased by 6.1% in the past month, compared to a 5.3% decline in the Zacks S&P 500 composite [7] - With a Zacks Rank 2 (Buy), EQBK is expected to outperform the overall market in the near term [7]

Core Viewpoint - Equity Bancshares (EQBK) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended March 2025, with the actual results being crucial for its near-term stock price movement [1][2]. Earnings Expectations - The consensus estimate for Equity Bancshares is an earnings per share (EPS) of $0.82, reflecting a year-over-year decrease of 20.4%, while revenues are projected to be $55.94 million, a slight increase of 0.1% from the previous year [3]. - The earnings report is expected to be released on April 15, and the stock may react positively if the results exceed expectations, whereas a miss could lead to a decline [2]. Estimate Revisions - Over the past 30 days, the consensus EPS estimate has been revised down by 3.85%, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. - The Most Accurate Estimate for Equity Bancshares is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.44%, which complicates the prediction of an earnings beat [10][11]. Earnings Surprise History - In the last reported quarter, Equity Bancshares had an EPS expectation of $0.92 but delivered $1.10, resulting in a positive surprise of 19.57% [12]. - The company has successfully beaten consensus EPS estimates in the last four quarters [13]. Industry Comparison - FB Financial (FBK), another player in the Zacks Banks - Northeast industry, is expected to report an EPS of $0.85, unchanged from the previous year, with revenues projected to increase by 23.5% to $132.69 million [17]. - FB Financial's consensus EPS estimate has remained stable, but a higher Most Accurate Estimate has led to an Earnings ESP of 0.78%, suggesting a likely earnings beat, supported by a Zacks Rank of 2 (Buy) [18].

Loan Portfolio - As of December 31, 2024, total loans amounted to $3.46 billion, representing 64.8% of total assets[30] - Commercial real estate loans were $1.83 billion, constituting 52.3% of total loans, while commercial and industrial loans were $658.9 million (18.8%) and residential real estate loans were $566.8 million (16.2%) as of December 31, 2024[30] - The aggregate amount of loans to the ten largest borrowers was approximately $314.6 million, or 9.0% of total loans[32] - The bank's legal lending limit on loans to a single borrower was $151.9 million, with an in-house limit of $25.0 million[37] - The company offers a variety of loans, including commercial, industrial, residential, and agricultural loans, tailored to meet customer needs[39] - Agricultural real estate loans generally amortize over periods not exceeding 20 years and have a loan-to-value ratio under 80%[50] - Agricultural operating loans are typically originated for terms of up to 7 years, with fixed rates for loans secured by breeding livestock and/or farm equipment for up to 5 years[51] - Consumer loans are underwritten based on the borrower's income, current debt level, past credit history, and collateral value, with greater risk compared to residential real estate loans[52] Risk Management - The company emphasizes a disciplined approach to loan underwriting, with centralized credit policies and ongoing risk monitoring[33] - The company maintains strong risk management practices, overseen by experienced audit and risk committees, to ensure sound policies and procedures[30] - The effectiveness of the company's enterprise risk management framework is critical to avoid unexpected losses[201] - The company is exposed to risks from potential claims and litigation related to fiduciary responsibilities, which could result in significant financial liability[188] - Operational risks include potential fraud by employees and third parties, which could adversely affect business operations[200] Capital and Regulatory Compliance - Equity Bank must maintain a minimum common equity Tier 1 (CET1) risk-based capital ratio of 4.5% and a total risk-based capital ratio of 8% under Basel III rules[86] - As of December 31, 2024, Equity Bank exceeded the capital levels required to be deemed well capitalized[92] - The Kansas Banking Code requires Equity Bank to transfer 25% of its net profits to its surplus fund before declaring dividends[104] - Equity Bank's ability to pay dividends is restricted if its capital conservation buffer is less than or equal to 2.5%[86] - The Federal Reserve can impose civil money penalties for unsafe banking practices, which can be as high as $1 million per day[84] - Equity Bank is subject to regulatory capital requirements that may be higher for institutions making acquisitions or experiencing internal growth[87] - The bank's dividend policy is subject to the discretion of its board of directors, which considers various financial factors[106] - The company is required to maintain specific capital standards, and failure to do so could adversely affect customer confidence and result in regulatory restrictions[219] - The company may need to raise additional capital in the future due to potential increased minimum capital thresholds, which could be dilutive to stockholders[221] Competition and Market Conditions - The financial services industry is highly competitive, with the company focusing on competitive pricing, personalized service, and community involvement to retain and attract customers[67] - The company faces significant competition from larger financial institutions, which may offer more attractive interest rates and terms, impacting loan growth[171] - Competition for acquisition candidates is high, potentially hindering growth strategy[161] - The company’s operations are concentrated in Arkansas, Kansas, Missouri, and Oklahoma, making it vulnerable to regional economic conditions[168] - Difficult market conditions for financial products may lead to increased delinquencies and adversely affect business operations[170] Technology and Innovation - Significant investments are being made in information technology systems to enhance capabilities and support future growth and acquisitions[65] - The company offers a comprehensive suite of online banking solutions, including mobile banking and electronic delivery of customer statements[58] - The company utilizes a customized customer relationship management system, Equity Connect, to improve customer service and relationship management[30] Employee and Talent Development - The company has invested in talent development and leadership programs, such as "Equity University," to enhance employee capabilities[30] - As of December 31, 2024, the company employed 810 full-time equivalent employees, with no employees represented by collective bargaining units[70] Cybersecurity and Operational Risks - The company faces heightened risks from cyber threats, requiring significant capital and resources to protect against potential breaches[193] - Recent data breaches in the industry have led to increased operating costs for security improvements[194] - Cybersecurity risks have escalated due to the proliferation of new technologies and sophisticated attack methods[195] - The company invests in systems to detect and prevent breaches but acknowledges the challenges in fully mitigating risks[196] Financial Performance and Profitability - Company’s profitability is vulnerable to interest rate fluctuations, significantly impacting net interest income[155] - Interest rate spreads have narrowed in recent years, which could adversely affect financial condition and results of operations[156] - Company attempts to minimize adverse effects of interest rate changes by structuring asset-liability composition[157] - Financial instruments measured at fair value may increase earnings volatility and affect accumulated other comprehensive income (AOCI)[158] Legislative and Regulatory Environment - The company is subject to significant legislative changes that could impact its business, particularly in the financial services sector, with unclear prospects for major banking reform legislation[212] - The CFPB's enforcement actions may impose higher compliance standards on the company, affecting its operations and requiring significant adjustments[215] - Changes in laws and regulations may lead to increased costs and lower revenues for the company, affecting its operations and financial condition[210] Dividend and Stockholder Considerations - The ability to pay dividends is restricted by legal and regulatory limitations, impacting cash available for stockholder dividends[243] - The market price of Class A common stock may be subject to substantial fluctuations, making it difficult for stockholders to sell shares at desired prices[235] - Future acquisitions may involve issuing additional common stock, which could be dilutive to existing stockholders[247] - Significant institutional investors hold a large portion of outstanding equity, potentially conflicting with other stockholders' interests[249] - Directors and executive officers beneficially own a significant portion of Class A common stock, allowing them to exert substantial influence over company affairs[250]

Financial Data and Key Metrics Changes - The company reported record earnings per share of $4.04 for the year, indicating strong financial performance [6]. Business Line Data and Key Metrics Changes - The company experienced net interest margin expansion and strong earnings, contributing to overall financial growth [6]. Market Data and Key Metrics Changes - The company completed two M&A transactions, which contributed to franchise growth [6]. Company Strategy and Development Direction - The company is focused on capital raising through common stock and aims to continue its growth trajectory through strategic acquisitions [6]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance and highlighted the successful completion of the year with strong financial results [6]. Other Important Information - The call included a reminder about forward-looking statements and the associated risks [4]. Q&A Session Summary Question: What were the key drivers behind the record earnings? - Management attributed the record earnings to net interest margin expansion and successful capital raising efforts [6].

Exhibit 99.2 2024 4th Quarter Financial Results January 22, 2025 Forward Looking Statements This presentation 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 the management of Equity Bancshares, Inc. ("Equity," "we," "us," "our," "the company") with respect to, among other things, future events and Equity's financ ...

Company Performance - Equity Bancshares (EQBK) reported quarterly earnings of $1.10 per share, exceeding the Zacks Consensus Estimate of $0.92 per share, and up from $0.77 per share a year ago, representing an earnings surprise of 19.57% [1] - The company posted revenues of $58.29 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.81%, compared to revenues of -$3.95 million a year ago [2] - Over the last four quarters, Equity Bancshares has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Market Outlook - The stock has gained approximately 3.2% since the beginning of the year, outperforming the S&P 500's gain of 2.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.84 on revenues of $56.85 million, and for the current fiscal year, it is $3.77 on revenues of $235.74 million [7] - The Zacks Industry Rank for Banks - Northeast is in the top 24% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] Earnings Estimate Revisions - The estimate revisions trend for Equity Bancshares is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting it may underperform the market in the near future [6] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]