Part I [Business](index=5&type=section&id=Item%201.%20Business) Equity Bancshares, Inc. operates as a bank holding company through Equity Bank, with 52 branches across four states, holding **$3.95 billion in assets** as of December 31, 2019 - The company's principal objective is to increase stockholder value through both organic growth and strategic acquisitions of community banks[11](index=11&type=chunk) - A key strategy involves utilizing low-cost, stable core deposits from community markets to fund higher-yield commercial loan growth in metropolitan areas[20](index=20&type=chunk) Company Overview (as of December 31, 2019) | Metric | Value (Billions) | | :--- | :--- | | Total Assets | $3.95 | | Total Deposits | $3.06 | | Total Loans (net) | $2.54 | | Total Stockholders' Equity | $0.478 | Loan Portfolio Composition (as of December 31, 2019) | Loan Type | Percentage of Portfolio | | :--- | :--- | | Commercial Loans | 68.5% | | - Commercial Real Estate | 66.2% (of commercial) | | - Commercial & Industrial | 33.8% (of commercial) | - In February 2019, the company acquired three branch locations from MidFirst Bank, increasing deposits by **$98.5 million** and loans by **$6.5 million**[14](index=14&type=chunk)[29](index=29&type=chunk) - The company and its bank subsidiary are subject to extensive regulation and supervision by authorities including the Federal Reserve, FDIC, OCC, Kansas OSBC, and the CFPB[82](index=82&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its business, regulatory environment, and common stock, including geographic concentration and acquisition challenges - The company's banking operations are geographically concentrated in Arkansas, Kansas, Missouri, and Oklahoma, making its financial condition dependent on the economic health of these specific markets[151](index=151&type=chunk) - A substantial part of historical growth has come from acquisitions, and the company faces a highly competitive market for finding and integrating suitable acquisition candidates[159](index=159&type=chunk)[162](index=162&type=chunk) - The company has significant concentration risk, with its ten largest loan relationships totaling over **$215.7 million** (**8.4%** of the total loan portfolio) and its ten largest non-brokered depositors accounting for **$353.3 million** (**11.5%** of total deposits) as of December 31, 2019[170](index=170&type=chunk)[171](index=171&type=chunk) - The transition away from LIBOR as a reference rate after 2021 could create considerable costs and additional risk for the company's financial instruments that are dependent on it[190](index=190&type=chunk)[191](index=191&type=chunk) - The company is subject to extensive regulation that imposes significant costs and may limit operations, with non-compliance potentially leading to sanctions or growth restrictions[249](index=249&type=chunk)[255](index=255&type=chunk) - The company has pledged all of the stock of its subsidiary, Equity Bank, as collateral for a third-party loan with a balance of **$9.0 million** as of December 31, 2019, where a default could lead to foreclosure on this principal asset[247](index=247&type=chunk) [Unresolved Staff Comments](index=48&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[301](index=301&type=chunk) [Properties](index=48&type=section&id=Item%202.%20Properties) The company's principal executive offices are in Wichita, Kansas, operating 52 branches across four states as of December 31, 2019 - The company's main executive offices are located at 7701 East Kellogg Drive, Wichita, Kansas[301](index=301&type=chunk) - As of December 31, 2019, the company operated **52 branches** across Kansas, Missouri, Arkansas, and Oklahoma[301](index=301&type=chunk) [Legal Proceedings](index=51&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various litigation matters incidental to its business, with further details in NOTE 23 of the financial statements - The company is involved in various litigation matters in the ordinary course of business, with further details provided in NOTE 23 of the financial statements[308](index=308&type=chunk) [Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - This item is not applicable[309](index=309&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on NASDAQ under "EQBK", has not historically paid dividends, and repurchased **421,016 shares** in 2019 - The company's common stock is listed on the NASDAQ Global Select Market under the ticker symbol "**EQBK**"[311](index=311&type=chunk) - The company has not historically paid cash dividends and does not anticipate doing so in the foreseeable future, intending to retain earnings to support operations and finance growth[313](index=313&type=chunk) 2019 Stock Repurchase Program Activity | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Apr 2019 | 15,000 | $26.35 | | May 2019 | 165,944 | $26.38 | | Jun 2019 | 96,862 | $25.15 | | Aug 2019 | 110,406 | $25.47 | | Sep 2019 | 32,804 | $25.84 | | **Total** | **421,016** | **$25.81** | [Selected Financial Data](index=56&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of key consolidated financial data from 2015 to 2019, highlighting significant growth in assets, loans, and deposits Selected Historical Financial Data (2015-2019, in Millions) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $25.6 | $35.8 | $20.6 | $9.4 | $10.3 | | **Diluted EPS** | $1.61 | $2.28 | $1.62 | $1.07 | $1.54 | | **Total Assets** | $3,949.6 | $4,061.7 | $3,170.5 | $2,192.2 | $1,585.7 | | **Gross Loans** | $2,556.7 | $2,575.4 | $2,117.3 | $1,383.6 | $960.4 | | **Total Deposits** | $3,063.5 | $3,123.4 | $2,382.0 | $1,630.5 | $1,215.9 | | **Total Equity** | $478.1 | $455.9 | $374.1 | $258.0 | $167.2 | | **ROAA** | 0.64% | 1.00% | 0.84% | 0.55% | 0.75% | | **ROAE** | 5.52% | 8.52% | 7.03% | 5.55% | 8.19% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=60&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2019, net income decreased to **$25.6 million** due to a **$14.4 million** increase in loan loss provision, while net interest margin compressed to **3.48%** Financial Highlights (FY 2019 vs. FY 2018) | Metric | 2019 | 2018 | Change | | :--- | :--- | :--- | :--- | | Net Income | $25.6M | $35.8M | -28.6% | | Total Assets | $3.95B | $4.06B | -2.8% | | Total Loans (HFI) | $2.56B | $2.58B | -0.7% | | Total Deposits | $3.06B | $3.12B | -1.9% | | Book Value per Share | $30.95 | $28.87 | +7.2% | - The provision for loan losses increased by **$14.4 million** in 2019, primarily due to a **$14.5 million** provision related to a single credit relationship that subsequently filed for bankruptcy[384](index=384&type=chunk)[458](index=458&type=chunk)[459](index=459&type=chunk) Net Interest Income and Margin | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Net Interest Income | $125.9M | $124.8M | | Net Interest Margin | 3.48% | 3.81% | - Non-interest income increased by **26.7%** to **$25.0 million**, driven by higher debit card income (**+$2.1 million**) and service charges (**+$1.4 million**)[389](index=389&type=chunk)[391](index=391&type=chunk) - Non-interest expense increased by **5.6%** to **$99.6 million**, primarily due to higher salaries and employee benefits (**+$4.1 million**) and data processing costs (**+$2.0 million**)[396](index=396&type=chunk)[397](index=397&type=chunk) Nonperforming Assets (NPA) | Metric | Dec 31, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total NPAs | $46.9M | $39.6M | | NPAs to Total Assets | 1.19% | 0.98% | [Quantitative and Qualitative Disclosure About Market Risk](index=89&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company's primary market risk is interest rate volatility, managed by ALCO, with a **100 basis point** rate increase projected to decrease NII by **3.5%** and EVE by **0.6%** - The primary component of the company's market risk is interest rate volatility, which affects both income levels and the market value of assets and liabilities[538](index=538&type=chunk) - The Asset Liability Committee (ALCO) manages interest rate risk exposure using simulation analysis to test the sensitivity of Net Interest Income (NII) and Economic Value of Equity (EVE)[540](index=540&type=chunk)[541](index=541&type=chunk) Simulated Impact of Immediate Interest Rate Changes (as of Dec 31, 2019) | Change in Interest Rates | Impact on Net Interest Income (12 mo.) | Impact on Economic Value of Equity | | :--- | :--- | :--- | | +300 bps | (12.3)% | (7.6)% | | +200 bps | (7.6)% | (3.0)% | | +100 bps | (3.5)% | (0.6)% | | -100 bps | 1.9% | (4.4)% | [Financial Statements and Supplementary Data](index=91&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes the company's audited consolidated financial statements for 2017-2019, the independent auditor's report, and unaudited quarterly financial data - This item includes the company's audited consolidated financial statements and the report from its independent registered public accounting firm, Crowe LLP[552](index=552&type=chunk)[580](index=580&type=chunk) 2019 Unaudited Quarterly Results (in Millions) | Quarter | Total Interest Income | Net Interest Income | Provision for Loan Loss | Net Income | | :--- | :--- | :--- | :--- | :--- | | Q1 2019 | $43.2 | $30.6 | $15.6 | ($4.1) | | Q2 2019 | $44.8 | $31.3 | $1.0 | $9.2 | | Q3 2019 | $44.5 | $31.5 | $0.7 | $10.4 | | Q4 2019 | $43.0 | $32.4 | $1.1 | $10.0 | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=92&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - There were no disagreements with accountants on accounting and financial disclosures[556](index=556&type=chunk) [Controls and Procedures](index=92&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of December 31, 2019, due to a material weakness in corporate account reconciliation, which has since been remediated - Management concluded that disclosure controls and procedures were not effective as of the end of the period covered by the report[556](index=556&type=chunk) - A material weakness was identified in the control over financial reporting related to the reconciliation process for a portion of the company's corporate accounts to its general ledger[557](index=557&type=chunk) - The company has implemented remediation efforts, including new supervision, review processes, and assigning knowledgeable personnel to the reconciliation function[557](index=557&type=chunk) [Other Information](index=92&type=section&id=Item%209B.%20Other%20Information) There is no other information to report in this section - None[559](index=559&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=93&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2020 Proxy Statement - The information required by this item is incorporated by reference from the registrant's Proxy Statement for the 2020 Annual Meeting of Stockholders[560](index=560&type=chunk) [Executive Compensation](index=93&type=section&id=Item%2011.%20Executive%20Compensation) Details concerning executive compensation are incorporated by reference from the company's 2020 Proxy Statement - The information required by this item is incorporated by reference from the registrant's Proxy Statement for the 2020 Annual Meeting of Stockholders[562](index=562&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=93&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and related stockholder matters is incorporated by reference from the company's 2020 Proxy Statement - The information required by this item is incorporated by reference from the registrant's Proxy Statement for the 2020 Annual Meeting of Stockholders[563](index=563&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=93&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's 2020 Proxy Statement - The information required by this item is incorporated by reference from the registrant's Proxy Statement for the 2020 Annual Meeting of Stockholders[564](index=564&type=chunk) [Principal Accounting Fees and Services](index=93&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Details on principal accounting fees and services are incorporated by reference from the company's 2020 Proxy Statement - The information required by this item is incorporated by reference from the registrant's Proxy Statement for the 2020 Annual Meeting of Stockholders[565](index=565&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=94&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, including a detailed exhibit index - This item lists the financial statements, schedules, and exhibits filed as part of the Form 10-K, with a detailed exhibit index provided[567](index=567&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number 001-37624 EQUITY BANCSHARES, INC. (Exact name of registrant as specified in its charter) Kansas 72-1532188 (State or othe ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ | --- | --- | --- | |---------------------------------------------------------------------------------------------------------------|---------------- ...

Part I Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended March 31, 2019, show total assets of $4.07 billion, a slight increase from year-end 2018. A significant net loss of $4.1 million was recorded for the first quarter of 2019, a sharp contrast to the $8.7 million net income in the same period of 2018. This loss was primarily driven by a substantial $15.6 million provision for loan losses. The statements also reflect the acquisition of three branch locations from MidFirst Bank in February 2019 Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2019 ($ billions) | December 31, 2018 ($ billions) | | :--- | :--- | :--- | | Total Assets | $4.07B | $4.06B | | Loans, net | $2.59B | $2.56B | | Goodwill | $136.4M | $131.7M | | Total Deposits | $3.26B | $3.12B | | Total Liabilities | $3.61B | $3.61B | | Total Stockholders' Equity | $453.5M | $455.9M | Consolidated Statement of Operations Highlights (Unaudited, Three Months Ended) | Account | March 31, 2019 ($ millions) | March 31, 2018 ($ millions) | | :--- | :--- | :--- | | Net Interest Income | $30.6M | $27.8M | | Provision for Loan Losses | $15.6M | $1.2M | | Non-interest Income | $5.3M | $4.3M | | Non-interest Expense | $25.5M | $19.6M | | Net Income (Loss) | ($4.1M) | $8.7M | | Diluted EPS | ($0.26) | $0.58 | - On February 8, 2019, Equity Bank acquired the assets and assumed the deposits of three branch locations in Oklahoma from MidFirst Bank, resulting in goodwill of **$4.7 million**[161](index=161&type=chunk)[163](index=163&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a net loss of $4.1 million for Q1 2019, a significant downturn from an $8.7 million net income in Q1 2018. The loss was primarily caused by a $14.5 million increase in the provision for loan losses, attributed to a single, isolated credit relationship with two related borrowers who filed for Chapter 11 bankruptcy. Nonperforming assets more than doubled to $77.4 million. Despite the loss, the company completed the acquisition of three branches from MidFirst Bank and maintained a 'well capitalized' regulatory status [Overview](index=38&type=section&id=Overview) Equity Bancshares, Inc. is a bank holding company with $4.07 billion in consolidated total assets as of March 31, 2019. The company operates through its subsidiary, Equity Bank, with 52 locations across Arkansas, Kansas, Missouri, and Oklahoma. For the first quarter of 2019, the company reported a net loss of $4.1 million, compared to a net income of $8.7 million for the same period in 2018 - As of March 31, 2019, the company had consolidated total assets of **$4.07 billion**, total loans of **$2.59 billion** (net), and total deposits of **$3.26 billion**[170](index=170&type=chunk) Quarterly Performance Summary | Metric | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Net Income (Loss) | ($4.1M) | $8.7M | | Diluted EPS | ($0.26) | $0.58 | | ROAA | (0.42)% | 1.11% | | ROAE | (3.59)% | 9.35% | [Results of Operations](index=42&type=section&id=Results%20of%20Operations) The company's operating results for Q1 2019 were dominated by a $14.5 million increase in the provision for loan losses, leading to a net loss of $4.1 million. Net interest income grew by $2.9 million year-over-year to $30.6 million, but the net interest margin compressed to 3.49% from 3.91% due to rising deposit costs. Non-interest income increased by $1.1 million, while non-interest expense rose by $5.9 million, driven by costs associated with recent acquisitions - The net loss of **$4.1 million** in Q1 2019 was a **$12.8 million** decrease from the **$8.7 million** net income in Q1 2018, primarily due to a **$14.5 million** increase in the provision for loan losses[192](index=192&type=chunk) - The significant increase in the provision for loan losses was attributed to a single credit relationship that management believes is an isolated incident[209](index=209&type=chunk) Net Interest Margin Analysis | Metric | Q1 2019 ($ millions) | Q1 2018 ($ millions) | | :--- | :--- | :--- | | Net Interest Income | $30.6M | $27.8M | | Net Interest Margin | 3.49% | 3.91% | | Yield on Earning Assets | 4.92% | 4.80% | | Cost of Interest-Bearing Liabilities | 1.71% | 1.06% | - Non-interest expense increased by **30.1%** to **$25.5 million**, largely due to a **$3.2 million** rise in salaries and employee benefits following recent mergers and acquisitions[217](index=217&type=chunk)[218](index=218&type=chunk) [Financial Condition](index=48&type=section&id=Financial%20Condition) As of March 31, 2019, total assets stood at $4.07 billion. The loan portfolio grew 1.7% to $2.62 billion since year-end 2018. However, credit quality deteriorated significantly, with nonperforming assets more than doubling to $77.4 million, representing 1.90% of total assets. This was driven by a large commercial and industrial credit relationship being placed on nonaccrual status. Consequently, the allowance for loan losses was increased substantially to $26.3 million, or 1.01% of total loans, up from 0.44% at year-end Nonperforming Assets (NPAs) | Metric | March 31, 2019 ($ millions) | December 31, 2018 ($ millions) | | :--- | :--- | :--- | | Nonaccrual loans | $71.0M | $33.2M | | Total NPAs | $77.4M | $39.6M | | NPAs to Total Assets | 1.90% | 0.97% | - The allowance for loan losses increased to **$26.3 million** (**1.01%** of total loans) from **$11.5 million** (**0.44%** of total loans) at year-end 2018[274](index=274&type=chunk) - The company recorded a **$14.5 million** allowance against a credit relationship with two related borrowers operating as franchisors, which filed for Chapter 11 bankruptcy in Q1 2019. The total exposure to these borrowers was **$28.3 million** at year-end 2018[285](index=285&type=chunk)[286](index=286&type=chunk) - Total deposits increased by **$137.4 million** (**4.4%**) to **$3.26 billion**, partly due to the MidFirst acquisition which added **$98.5 million** in deposits[307](index=307&type=chunk)[308](index=308&type=chunk) [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily sourced from core deposits, loan and security cash flows, and FHLB borrowings. As of March 31, 2019, management believes the company meets all capital adequacy requirements and its banking subsidiary, Equity Bank, is categorized as 'well capitalized' under the regulatory framework. The company maintains access to various funding sources to meet anticipated customer demands and obligations - The company's primary sources of funds are deposits and FHLB borrowings, while the primary uses are loans and securities[324](index=324&type=chunk) - As of March 31, 2019, Equity Bank was categorized as '**well capitalized**' by federal regulatory agencies[335](index=335&type=chunk) Company Capital Ratios | Ratio | March 31, 2019 | Minimum for Adequacy (Fully Phased-In) | | :--- | :--- | :--- | | Common Equity Tier 1 | 10.46% | 7.00% | | Tier 1 Capital | 10.96% | 8.50% | | Total Capital | 11.87% | 10.50% | | Tier 1 Leverage | 8.37% | 4.00% | [Non-GAAP Financial Measures](index=63&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes several non-GAAP financial measures, such as Tangible Book Value per Share, Tangible Common Equity to Tangible Assets, Return on Average Tangible Common Equity, and the Efficiency Ratio, to provide investors with a clearer view of its core performance by excluding the impact of intangible assets and certain non-recurring items like merger expenses Tangible Book Value Reconciliation | Metric | March 31, 2019 ($) | December 31, 2018 ($) | | :--- | :--- | :--- | | Book Value Per Share | $28.66 | $28.87 | | Tangible Book Value Per Share | $18.55 | $19.08 | Efficiency Ratio (Non-GAAP) | Period | Efficiency Ratio (%) | | :--- | :--- | | Q1 2019 | 69.26% | | Q1 2018 | 59.59% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate volatility. This risk is managed by the Asset Liability Committee (ALCO) through simulation analysis to monitor the sensitivity of Net Interest Income (NII) and Economic Value of Equity (EVE) to interest rate changes. The analysis as of March 31, 2019, indicates that a 200 basis point increase in rates would decrease NII by 7.5% over 12 months, while a 100 basis point decrease would increase NII by 1.1% - The company's primary market risk is interest rate volatility, which is managed by the Asset Liability Committee (ALCO) in accordance with board-approved policies[355](index=355&type=chunk)[357](index=357&type=chunk) Interest Rate Sensitivity Analysis (Simulated Change over 12 months) | Change in Interest Rates | Impact on Net Interest Income (NII) (%) | Impact on Economic Value of Equity (EVE) (%) | | :--- | :--- | :--- | | +300 bps | (12.4)% | (15.2)% | | +200 bps | (7.5)% | (7.3)% | | +100 bps | (3.3)% | (2.0)% | | -100 bps | 1.1% | (2.7)% | [Item 4. Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2019, and concluded they were effective. There were no material changes to the company's internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period[368](index=368&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[369](index=369&type=chunk) Part II Other Information [Item 1. Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a lawsuit with CitiMortgage, Inc. regarding alleged breaches of contract related to loan repurchase obligations. An initial judgment was partially in favor of Equity Bank, but the decision has been appealed by Citi. The company maintains it has meritorious defenses and is vigorously contesting the matter - Equity Bank is a party to a lawsuit filed by CitiMortgage, Inc. concerning loan repurchase obligations with alleged damages of **$2.7 million** plus interest. The case is currently under appeal by Citi[151](index=151&type=chunk) [Item 1A. Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those previously disclosed in its Annual Report on Form 10-K filed on March 20, 2019 - No material changes in risk factors were reported since the company's last Annual Report on Form 10-K[372](index=372&type=chunk) [Other Items](index=69&type=section&id=Item%202,%203,%204,%205,%206) This section covers standard SEC filing requirements. There were no unregistered sales of equity securities, defaults upon senior securities, or mine safety disclosures to report. The exhibits section lists the documents filed with this quarterly report, including officer certifications and XBRL data files - No information was reported for Unregistered Sales of Equity Securities, Defaults Upon Senior Securities, or Mine Safety Disclosures[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk) - Item 6 lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL instance documents[373](index=373&type=chunk)

Part I [Business](index=5&type=section&id=Item%201.%20Business) Equity Bancshares, Inc. is a bank holding company with $4.06 billion in assets, operating 49 branches and focused on growth through organic expansion and strategic acquisitions Company Snapshot (as of December 31, 2018) | Metric | Value | | :--- | :--- | | Total Assets | $4.06 billion | | Total Deposits | $3.12 billion | | Total Loans (net) | $2.56 billion | | Total Stockholders' Equity | $455.9 million | | Full Service Branches | 49 | - The company's principal objective is to grow stockholder value through a dual strategy of organic expansion and strategic acquisitions of community banks[13](index=13&type=chunk) - A core strategy is to leverage low-cost, stable core deposits from community markets to finance higher-yield commercial loan growth in metropolitan markets like Wichita, Kansas City, and Tulsa[22](index=22&type=chunk)[25](index=25&type=chunk) 2018 Acquisitions Summary | Acquired Entity | Date | Key Metrics Added | | :--- | :--- | :--- | | Kansas Bank Corporation (KBC) | May 2018 | Deposits: $288.4M, Loans: $159.4M, Assets: $336.1M | | Adams Dairy Bancshares, Inc. (Adams) | May 2018 | Deposits: $97.1M, Loans: $82.7M, Assets: $119.8M | | City Bank and Trust Company (City Bank) | August 2018 | Deposits: $126.9M, Loans: $77.1M, Assets: $163.3M | [Our Company](index=5&type=section&id=Our%20Company) Founded in 2003, the company grew through 16 acquisitions and organic expansion to 49 branches and 627 employees by 2018, completing its IPO in 2015 - The company was founded in 2002 and began operations in 2003 with the acquisition of National Bank of Andover, which had **$32 million in assets** and was under a regulatory enforcement agreement[14](index=14&type=chunk) - Since its inception through December 31, 2018, the company has grown from **19 to 627 full-time equivalent employees** and from **two to 49 branches**[18](index=18&type=chunk) - The company completed its Initial Public Offering (IPO) on November 16, 2015, with its common stock trading on the NASDAQ Global Select Market under the ticker **"EQBK"**[19](index=19&type=chunk) [Our Banking Services](index=10&type=section&id=Our%20Banking%20Services) The company offers comprehensive banking services, with lending focused on commercial and real estate, alongside diverse deposit products and treasury management Loan Portfolio Composition (December 31, 2018) | Loan Type | Amount (millions) | % of Total Loans (net) | | :--- | :--- | :--- | | Commercial & Industrial | $582.5 | 22.7% | | Commercial Real Estate | $1,250.0 | 48.8% | | Residential Real Estate | $444.5 | 17.3% | - The company's ten largest borrowing relationships amounted to approximately **$240.3 million**, or **9.3%** of the total loan portfolio, as of December 31, 2018[40](index=40&type=chunk)[172](index=172&type=chunk) - The bank's legal lending limit to a single borrower was **$84.5 million**, but it maintains a more conservative in-house limit of **$25.0 million**[47](index=47&type=chunk) - The company offers a full suite of commercial treasury management services, including lockbox, remote deposit capture, positive pay, and sweep accounts[70](index=70&type=chunk) [Supervision and Regulation](index=16&type=section&id=Supervision%20and%20Regulation) The company and Equity Bank are extensively regulated by federal and state authorities, with key areas covering capital adequacy, dividends, insider transactions, and consumer protection laws - The company is a registered bank holding company subject to supervision and regulation by the Federal Reserve[87](index=87&type=chunk) - Equity Bank is a Kansas state-chartered bank regulated by the Kansas Office of State Bank Commissioner (OSBC) and the Federal Reserve[117](index=117&type=chunk) - The company is subject to Basel III capital rules, which require minimum ratios for Common Equity Tier 1 (CET1), Tier 1, and Total Capital, plus a capital conservation buffer, and as of year-end 2018, its capital ratios exceeded the levels required to be considered **"well capitalized"**[96](index=96&type=chunk)[97](index=97&type=chunk)[100](index=100&type=chunk) - The Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB), which promulgates rules affecting consumer financial products, and while institutions over **$10 billion** in assets are directly examined by the CFPB, Equity Bank (with under **$10 billion**) is still subject to its rules[137](index=137&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) The company faces business, regulatory, and common stock risks, including geographic concentration, acquisition dependence, credit losses, evolving regulations, and stock price volatility [Risks Relating to Our Business](index=24&type=section&id=Risks%20Relating%20to%20Our%20Business) The company's business faces risks from geographic concentration, acquisition dependence, loan portfolio concentration, credit risk, interest rate fluctuations, and increasing cyber threats - The company's banking operations are geographically concentrated in Arkansas, Kansas, Missouri, and Oklahoma, making its financial condition dependent on the economic health of these specific markets[155](index=155&type=chunk) - A significant portion of historical growth is from acquisitions, and the company faces risks in finding, funding, and integrating future acquisitions in a competitive market[163](index=163&type=chunk)[164](index=164&type=chunk) - As of December 31, 2018, the ten largest loan relationships totaled over **$240.3 million**, representing **9.3%** of the total loan portfolio, creating concentration risk[172](index=172&type=chunk) - The company is vulnerable to interest rate fluctuations, which can impact net interest income, loan demand, and borrowers' ability to repay floating-rate debt[188](index=188&type=chunk) - The company faces increasing information security risks from cyber attacks, which could lead to reputational harm, litigation, and financial loss[226](index=226&type=chunk) [Risks Related to the Regulation of Our Industry](index=39&type=section&id=Risks%20Related%20to%20the%20Regulation%20of%20Our%20Industry) Operating in a highly regulated environment, the company faces risks from evolving laws, compliance costs, and potential sanctions for non-compliance with capital adequacy, AML, and fair lending laws - The company is subject to extensive federal and state regulation that limits operations and imposes significant compliance costs[246](index=246&type=chunk) - Failure to maintain **"well capitalized"** status could result in regulatory restrictions on growth, activities, and customer confidence[252](index=252&type=chunk) - Stringent Basel III capital requirements may adversely impact return on equity and constrain the ability to pay dividends or repurchase shares[254](index=254&type=chunk) - Non-compliance with fair lending laws like the Community Reinvestment Act (CRA) or anti-money laundering laws like the Bank Secrecy Act could lead to significant sanctions and reputational damage[256](index=256&type=chunk)[257](index=257&type=chunk) [Risks Related to Our Class A Common Stock](index=43&type=section&id=Risks%20Related%20to%20Our%20Class%20A%20Common%20Stock) Investment in Class A common stock carries risks including price volatility, public company obligations, no anticipated dividends, lower trading volume, and corporate governance provisions that could hinder takeovers - The market price of the Class A common stock is subject to substantial fluctuations, which may be unrelated to the company's operating performance[267](index=267&type=chunk)[268](index=268&type=chunk) - The company has not historically paid cash dividends and does not expect to in the foreseeable future, retaining earnings to support operations and growth[272](index=272&type=chunk) - As an **"emerging growth company"** under the JOBS Act, the company is subject to reduced disclosure requirements, which may make its stock less attractive to some investors[287](index=287&type=chunk) - Certain provisions in the company's Articles of Incorporation and Bylaws, such as a classified board and the ability to issue preferred stock without stockholder approval, could make a takeover more difficult[291](index=291&type=chunk) [Unresolved Staff Comments](index=48&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - None[297](index=297&type=chunk) [Properties](index=48&type=section&id=Item%202.%20Properties) As of December 31, 2018, the company's principal executive offices are in Wichita, Kansas, operating 49 branches across four states, with suitable facilities - The company's principal executive offices are located at **7701 East Kellogg Drive, Wichita, Kansas 67207**[297](index=297&type=chunk) - As of December 31, 2018, the company operated a total of **49 branches** across four states: Kansas (Wichita, Kansas City, Topeka, Western, Southeast, Southwest), Missouri (Kansas City, Western), Arkansas (Northern), and Oklahoma (Tulsa, Northern, Western)[297](index=297&type=chunk) [Legal Proceedings](index=51&type=section&id=Item%203.%20Legal%20Proceedings) The company is party to various litigation matters incidental to its business, with details in Note 23 of the Consolidated Financial Statements - The company is involved in various litigation matters in the ordinary course of business, with further details available in Note 23 to the Consolidated Financial Statements[305](index=305&type=chunk) [Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[306](index=306&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=52&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on NASDAQ under "EQBK", with no historical or anticipated dividends, and details on equity compensation plans - The company's Class A common stock is listed on the NASDAQ Global Select Market under the ticker symbol **"EQBK"**[308](index=308&type=chunk) - The company has not historically paid cash dividends and does not expect to in the foreseeable future, retaining all future earnings to support operations and finance growth[310](index=310&type=chunk) Class A Common Stock Price Range (2018) | Quarter Ended | High ($) | Low ($) | | :--- | :--- | :--- | | March 31, 2018 | 40.77 | 34.72 | | June 30, 2018 | 44.26 | 36.57 | | September 30, 2018 | 44.30 | 37.11 | | December 31, 2018 | 40.00 | 31.32 | Equity Compensation Plan Information (as of Dec 31, 2018) | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price ($) | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Approved by Security Holders | 834,663 | - | 614,424 | | Not Approved by Security Holders | 150,000 | 12.00 | - | | **Total** | **984,663** | **23.57** | **614,424** | [Selected Financial Data](index=55&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected financial data shows significant growth from 2014 to 2018, with total assets reaching $4.06 billion, net loans $2.56 billion, and net income $35.8 million, driven by acquisitions Selected Financial Data (2014-2018) | (in thousands, except per share) | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | $4,061,716 | $3,170,509 | $2,192,192 | $1,585,727 | $1,174,515 | | **Gross Loans Held for Investment** | $2,575,408 | $2,117,270 | $1,383,605 | $960,355 | $725,876 | | **Total Deposits** | $3,123,447 | $2,382,013 | $1,630,451 | $1,215,914 | $981,177 | | **Net Interest Income** | $124,798 | $86,002 | $52,597 | $46,262 | $41,361 | | **Net Income Allocable to Common Stockholders** | $35,825 | $20,649 | $9,373 | $10,123 | $8,279 | | **Diluted Earnings Per Share** | $2.28 | $1.62 | $1.07 | $1.54 | $1.30 | | **Book Value Per Share** | $28.87 | $25.62 | $22.09 | $18.37 | $16.71 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=59&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2018, net income increased by 73.5% to $35.8 million, driven by net interest income growth and acquisitions, despite slight net interest margin compression and higher non-interest expenses 2018 vs. 2017 Performance Highlights | Metric | 2018 | 2017 | % Change | | :--- | :--- | :--- | :--- | | Net Income | $35.8M | $20.6M | +73.5% | | Total Assets | $4.06B | $3.17B | +28.1% | | Total Loans | $2.58B | $2.12B | +21.6% | | Total Deposits | $3.12B | $2.38B | +31.1% | | Book Value per Share | $28.87 | $25.62 | +12.7% | - The increase in net income was primarily driven by a **$38.8 million** increase in net interest income, partially offset by a **$26.9 million** rise in non-interest expenses and a **$1.0 million** increase in the provision for loan losses[359](index=359&type=chunk) - The net interest margin decreased slightly from **3.83%** in 2017 to **3.81%** in 2018, as the cost of interest-bearing liabilities (**1.34%**) rose faster than the yield on interest-earning assets (**4.94%**)[364](index=364&type=chunk)[372](index=372&type=chunk) - Non-interest expense increased by **39.9%** to **$94.4 million** in 2018, largely due to a **$14.1 million** increase in salaries and benefits and **$7.5 million** in merger expenses related to the year's acquisitions[391](index=391&type=chunk)[392](index=392&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=90&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company's primary market risk is interest rate volatility, managed by ALCO through simulation analysis, with a 100 bps rate increase projected to decrease NII by 3.8% - The primary market risk for the company is interest rate volatility, managed by the Asset Liability Committee (ALCO) through balance sheet structuring and simulation analysis[542](index=542&type=chunk)[544](index=544&type=chunk) Interest Rate Sensitivity Analysis (as of Dec 31, 2018) | Change in Interest Rates | Impact on Net Interest Income (12 months) | Impact on Economic Value of Equity | | :--- | :--- | :--- | | +300 bps | (13.0)% | (16.2)% | | +200 bps | (8.0)% | (8.2)% | | +100 bps | (3.8)% | (2.5)% | | -100 bps | +2.0% | +0.3% | [Financial Statements and Supplementary Data](index=92&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section includes the company's audited consolidated financial statements, independent auditor's report, and unaudited supplementary quarterly financial data 2018 Unaudited Quarterly Financial Data (in thousands, except per share) | Quarter | Total Interest Income | Net Interest Income | Net Income | Diluted EPS | | :--- | :--- | :--- | :--- | :--- | | Q1 2018 | $34,123 | $27,787 | $8,711 | $0.58 | | Q2 2018 | $38,831 | $30,920 | $6,867 | $0.44 | | Q3 2018 | $43,022 | $32,755 | $10,322 | $0.64 | | Q4 2018 | $45,580 | $33,336 | $9,925 | $0.62 | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=93&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[557](index=557&type=chunk) [Controls and Procedures](index=93&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of December 31, 2018, with no material changes to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[557](index=557&type=chunk) - There were no material changes in internal control over financial reporting during the last fiscal quarter[558](index=558&type=chunk) - Management assessed internal control over financial reporting as effective based on the COSO 2013 framework, and an auditor attestation report is not required as the company is an Emerging Growth Company[559](index=559&type=chunk) [Other Information](index=93&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[560](index=560&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=94&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the registrant's Proxy Statement for the 2019 Annual Meeting of Stockholders[561](index=561&type=chunk) [Executive Compensation](index=94&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the registrant's Proxy Statement for the 2019 Annual Meeting of Stockholders[563](index=563&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=94&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the registrant's Proxy Statement for the 2019 Annual Meeting of Stockholders[564](index=564&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=94&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Related party transactions and director independence information is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the registrant's Proxy Statement for the 2019 Annual Meeting of Stockholders[565](index=565&type=chunk) [Principal Accounting Fees and Services](index=94&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Principal accounting fees and services information is incorporated by reference from the 2019 Proxy Statement - Information is incorporated by reference from the registrant's Proxy Statement for the 2019 Annual Meeting of Stockholders[566](index=566&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=95&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K, including an index - This section contains the index to the Audited Financial Statements and a list of all exhibits filed with the Form 10-K[568](index=568&type=chunk) Financial Statements [Consolidated Balance Sheets](index=100&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet shows significant 2018 growth, with total assets reaching $4.06 billion, driven by increased net loans and deposits Consolidated Balance Sheet Highlights (as of Dec 31) | (in thousands) | 2018 | 2017 | | :--- | :--- | :--- | | **Total Assets** | **$4,061,716** | **$3,170,509** | | Cash and cash equivalents | $192,818 | $52,195 | | Loans, net | $2,563,954 | $2,108,772 | | Goodwill | $131,712 | $104,907 | | **Total Liabilities** | **$3,605,775** | **$2,796,365** | | Total deposits | $3,123,447 | $2,382,013 | | FHLB advances | $384,898 | $347,692 | | **Total Stockholders' Equity** | **$455,941** | **$374,144** | [Consolidated Statements of Income](index=101&type=section&id=Consolidated%20Statements%20of%20Income) For 2018, net interest income grew to $124.8 million, resulting in a 73.5% increase in net income to $35.8 million and diluted EPS of $2.28 Consolidated Income Statement Summary (Year Ended Dec 31) | (in thousands, except per share) | 2018 | 2017 | 2016 | | :--- | :--- | :--- | | Net Interest Income | $124,798 | $86,002 | $52,597 | | Provision for Loan Losses | $3,961 | $2,953 | $2,119 | | Non-interest Income | $19,725 | $15,440 | $10,466 | | Non-interest Expense | $94,387 | $67,463 | $47,075 | | **Net Income** | **$35,825** | **$20,649** | **$9,374** | | **Diluted EPS** | **$2.28** | **$1.62** | **$1.07** | [Consolidated Statements of Cash Flows](index=105&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For 2018, operating activities provided $36.7 million in cash, investing activities used $171.5 million, and financing activities provided $275.4 million, leading to a $140.6 million net cash increase Consolidated Cash Flow Summary (Year Ended Dec 31) | (in thousands) | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $36,666 | $27,628 | $15,548 | | Net cash used in investing activities | ($171,488) | ($222,924) | ($140,689) | | Net cash provided by financing activities | $275,445 | $212,396 | $103,407 | | **Net change in cash and cash equivalents** | **$140,623** | **$17,100** | **($21,734)** | [Notes to Consolidated Financial Statements](index=107&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on accounting policies and financial statement components, including business combinations, loan portfolio, securities, goodwill, deposits, borrowings, regulatory matters, and subsequent events - Note 2 details the 2018 acquisitions of City Bank, Kansas Bank Corporation (KBC), and Adams Dairy Bancshares, Inc., including consideration paid and the fair value of assets acquired and liabilities assumed, adding a combined **$28.3 million** in goodwill[673](index=673&type=chunk)[677](index=677&type=chunk)[683](index=683&type=chunk) - Note 4 provides a detailed breakdown of the loan portfolio by type and credit quality indicators, with **96.7%** of the loan portfolio categorized as **"Unclassified" (Pass)** as of December 31, 2018[723](index=723&type=chunk)[743](index=743&type=chunk) - Note 16 confirms that as of December 31, 2018, both the company and Equity Bank met all capital adequacy requirements under Basel III rules and were categorized as **"well capitalized"** under prompt corrective action regulations[818](index=818&type=chunk)[822](index=822&type=chunk) - Note 25 discloses a subsequent event: the acquisition of three branches from MidFirst Bank, which closed on February 8, 2019, adding approximately **$98.5 million** in deposits and **$6.5 million** in loans[888](index=888&type=chunk)