Equity Bank(EQBK) - 2025 Q2 - Quarterly Results

Executive Summary & Second Quarter Highlights Equity Bancshares, Inc. reported strong Q2 2025 results, marked by increased net income, expanded net interest margin, and the successful acquisition of NBC Oklahoma Q2 2025 Performance Overview Equity Bancshares, Inc. reported net income of $15.3 million or $0.86 earnings per diluted share for Q2 2025, with adjusted earnings of $0.94 per diluted share, alongside margin expansion and a key acquisition Net Income and Diluted EPS (GAAP vs. Adjusted) | Metric | Q2 2025 (GAAP) | Q2 2025 (Adjusted) | | :-------------------------------- | :------------- | :----------------- | | Net Income | $15.3 million | $16.7 million | | Diluted EPS | $0.86 | $0.94 | - Net interest margin for Q2 2025 was 4.17%, an expansion of 9 basis points compared to 4.08% (excluding non-recurring items from the previous quarter)[2] - The Company completed the acquisition of NBC Corp. of Oklahoma on July 2, 2025, adding approximately $695.1 million in loans, $800.5 million in deposits, and new markets including Oklahoma City[2] Key Performance Metrics | Metric | Q2 2025 | Change QoQ | | :-------------------------------- | :------ | :--------- | | Book value per share expansion | $1.04 | 3.0% | | Tangible book value per share improvement | $1.10 | 3.5% | | Tangible common equity to tangible assets | 10.6% | +50 bps | | Loan balances (period end) | $3.60 billion | - | | Average loan balances (quarter) | $3.63 billion | +$55.8 million (6.2% annualized) | | Deposit balances (excluding brokered) | - | -$43.4 million | | Brokered deposits decline | $138.0 million | -$127.1 million | | Net charge-offs (annualized) | 0.06% | - | | Dividend on common shares | $0.15 | - | | Shares repurchased | 7,500 | - | Financial Results for the Quarter Ended June 30, 2025 This section details the company's Q2 2025 financial performance, including net income, net interest income, credit loss provisions, non-interest income, and expenses Net Income Net income allocable to common stockholders for Q2 2025 was $15.3 million, a slight increase from $15.0 million in the prior quarter, with adjusted net income reaching $16.7 million Net Income and Diluted EPS | Metric | Q2 2025 | Q1 2025 | Change QoQ | | :-------------------------------- | :------ | :------ | :--------- | | Net income allocable to common stockholders | $15.3 million | $15.0 million | +$0.3 million | | Diluted EPS | $0.86 | $0.85 | +$0.01 | | Adjusted Net Income (excluding $1.7 million expenses) | $16.7 million | - | - | | Adjusted Diluted EPS (excluding $1.7 million expenses) | $0.94 | - | - | Net Interest Income Net interest income was $49.8 million for Q2 2025, a decrease from $50.3 million in the prior quarter, but an adjusted increase of $1.8 million, driven by higher loan volume and coupon rates, expanding the net interest margin by 10 basis points to 4.17% Net Interest Income and Margin | Metric | Q2 2025 | Q1 2025 | Change QoQ | | :-------------------------------- | :------ | :------ | :--------- | | Net Interest Income (GAAP) | $49.8 million | $50.3 million | -$0.5 million | | Adjusted Net Interest Income (excluding non-recurring items) | - | - | +$1.8 million | | Net Interest Margin (GAAP) | 4.17% | 4.27% | -10 bps | | Adjusted Net Interest Margin (excluding non-recurring items) | 4.17% | 4.07% | +10 bps | | Coupon yield on interest earning assets | +7 bps | - | - | | Cost of interest bearing liabilities | -1 bps | - | - | Provision for Credit Losses The provision for credit losses significantly decreased to $19 thousand in Q2 2025, primarily due to declining loan balances and a stable economic outlook, while net charge-offs increased to $573 thousand Provision for Credit Losses and Asset Quality | Metric | Q2 2025 | Q1 2025 | Change QoQ | | :-------------------------------- | :------ | :------ | :--------- | | Provision for Credit Losses | $19 thousand | $2.7 million | -$2.681 million | | Net Charge-offs | $573 thousand | $165 thousand | +$408 thousand | | Allowance for credit losses to gross loans held for investment | 1.26% | 1.26% | Unchanged | - The lower provision was driven by a decline in ending loan balances during the period, offset by charge-offs and the lack of meaningful change in the economic outlook[6] - The Company continues to estimate the allowance for credit loss with assumptions that anticipate slower prepayment rates and continued market disruption caused by trade policy, elevated inflation, supply chain issues and the impact of monetary policy on consumers and businesses[7] Non-Interest Income Total non-interest income for Q2 2025 was $8.6 million, down from $10.3 million in the prior quarter, primarily due to a non-recurring death benefit in Q1, but showing an adjusted increase of $459 thousand driven by improving service revenues Non-Interest Income | Metric | Q2 2025 | Q1 2025 | Change QoQ | | :-------------------------------- | :------ | :------ | :--------- | | Total Non-Interest Income | $8.6 million | $10.3 million | -$1.7 million | | Non-recurring death benefit (Q1 2025) | - | $2.2 million | - | | Adjusted Non-Interest Income (excluding non-recurring) | - | - | +$459 thousand | | Drivers of increase (adjusted) | Improving trends in service revenues (treasury, debit/credit card, mortgage, trust/wealth management) | - | - | Non-Interest Expense Total non-interest expense increased to $40.0 million in Q2 2025 from $39.1 million in the prior quarter, driven by merger and debt extinguishment costs, but decreased by $699 thousand (1.8%) when adjusted for these items Non-Interest Expense | Metric | Q2 2025 | Q1 2025 | Change QoQ | | :-------------------------------- | :------ | :------ | :--------- | | Total Non-Interest Expense | $40.0 million | $39.1 million | +$0.9 million | | Merger expenses | $355 thousand | $66 thousand | +$289 thousand | | Loss on debt extinguishment | $1.361 million | $0 | +$1.361 million | | Adjusted Non-Interest Expense (excluding merger/debt extinguishment) | - | - | -$699 thousand (1.8%) | Income Tax Expense The effective tax rate for Q2 2025 decreased to 16.9% from 20.2% in Q1 2025, primarily due to interest income from federal carryback claims and tax benefits from a new tax credit structure Effective Tax Rate | Metric | Q2 2025 | Q1 2025 | Change QoQ | | :-------------------------------- | :------ | :------ | :--------- | | Effective Tax Rate | 16.9% | 20.2% | -3.3 percentage points | - The decrease in the tax rate was due to interest income from federal carryback claims and tax benefits from a new tax credit structure, partially offset by prior quarter non-recurring benefits related to stock compensation[10] Balance Sheet and Asset Quality Overview This overview presents the company's balance sheet, highlighting changes in loans, total assets, funding structure, and asset quality metrics for Q2 2025 Loans, Total Assets and Funding Loans held for investment decreased by $30.9 million to $3.6 billion, total assets decreased by $72 million to $5.4 billion, and total deposits declined by $170.4 million to $4.2 billion, with Federal Home Loan Bank borrowings increasing to offset wholesale funding declines Balance Sheet Highlights | Metric | Q2 2025 | Q1 2025 | Change QoQ | | :-------------------------------- | :------ | :------ | :--------- | | Loans held for investment | $3.6 billion | $3.63 billion | -$30.9 million | | Total assets | $5.4 billion | $5.446 billion | -$72 million | | Total deposits (including brokered) | $4.2 billion | $4.405 billion | -$170.4 million | | Non-interest-bearing deposits as % of total | 21.6% | - | - | | Federal Home Loan Bank borrowings | $383.7 million | $236.7 million | +$146.9 million | | Wholesale balances | - | - | -$127.1 million | Asset Quality Asset quality metrics deteriorated in Q2 2025, with nonperforming assets increasing to $45.7 million (0.9% of total assets) and non-accrual loans rising to $42.6 million, while total classified assets also increased to $71.0 million (11.4% of regulatory capital) Asset Quality Metrics | Metric | Q2 2025 | Q1 2025 | Change QoQ | | :-------------------------------- | :------ | :------ | :--------- | | Nonperforming assets | $45.7 million | $27.9 million | +$17.8 million | | Nonperforming assets to total assets | 0.9% | 0.5% | +0.4 percentage points | | Non-accrual loans | $42.6 million | $24.2 million | +$18.4 million | | Total classified assets | $71.0 million | $63.9 million | +$7.1 million | | Total classified assets to regulatory capital | 11.4% | 10.2% | +1.2 percentage points | Capital This section details the company's capital position and key regulatory ratios, reflecting an increase in book capital and improved tangible book value per share Capital Position and Ratios Book capital increased by $18.3 million to $635.6 million, driven by earnings and an improved bond portfolio, leading to a tangible book value per share of $32.17 and strong capital ratios, including a Common Equity Tier 1 Capital Ratio of 15.0% Capital Ratios | Metric | Q2 2025 | Q1 2025 | Change QoQ | | :-------------------------------- | :------ | :------ | :--------- | | Book capital | $635.6 million | $617.3 million | +$18.3 million | | Tangible book value | $563.8 million | - | - | | Tangible book value per share | $32.17 | $31.07 | +$1.10 | | Common equity tier 1 capital to risk-weighted assets | 15.0% | 14.7% | +0.3 percentage points | | Total capital to risk-weighted assets | 16.8% | 18.3% | -1.5 percentage points | | Total leverage ratio | 12.1% | 11.8% | +0.3 percentage points | - The increase in capital is primarily due to earnings and an improvement in the unrealized loss position on the bond portfolio as accumulated other comprehensive income improved $15.3 million[14] Non-GAAP Financial Measures This section explains the use of non-GAAP financial measures to provide additional insights into the company's operating results and financial condition Explanation of Non-GAAP Measures Management uses non-GAAP financial measures like efficiency ratio, core income, and tangible common equity to offer additional insights into operating results, financial condition, and performance trends, aiding in peer comparisons - Non-GAAP financial measures are used to provide additional perspectives on operating results, financial condition and performance trends, while facilitating comparisons with the performance of other financial institutions[17] - Key non-GAAP measures include efficiency ratio, core income, core return on average assets, core return on average equity, core earnings per share, tangible common equity, and return on average tangible common equity[18][19][20][21] - Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company's GAAP financial information[17] Reconciliation Reference A comprehensive reconciliation of GAAP to non-GAAP financial measures and other adjusted performance ratios is provided in Table 6 of the press release tables for transparency - A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in Table 6 in the following press release tables[22] Corporate Information This section provides corporate details, including information on the Q2 earnings call, company overview, forward-looking statements, and investor contacts Conference Call and Webcast Equity's Chairman and CEO, Brad Elliott, and CFO, Chris Navratil, will host a conference call and webcast on Tuesday, July 15, 2025, at 10 a.m. eastern time to discuss the second quarter results, with a replay available until July 22, 2025 - A conference call and webcast to discuss second quarter results will be held on Tuesday, July 15, 2025, at 10 a.m. eastern time[23] - Participants can pre-register using the provided link to eliminate wait times. A replay of the call and webcast will be available until July 22, 2025, at investor.equitybank.com[24] About Equity Bancshares, Inc. Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full suite of financial solutions including commercial loans, consumer banking, mortgage loans, trust and wealth management, and treasury management services, with its common stock traded on the NYSE under 'EQBK' - Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions[25] - Services include commercial loans, consumer banking, mortgage loans, trust and wealth management services and treasury management services[25] - Equity's common stock is traded on the New York Stock Exchange under the symbol 'EQBK'[25] Special Note Concerning Forward-Looking Statements This press release contains forward-looking statements subject to various risks, assumptions, and uncertainties, including competition, economic and monetary policy changes, loan demand fluctuations, and NBC acquisition challenges, which could cause actual results to differ materially from expectations - The press release contains forward-looking statements reflecting current views on future events and financial performance, identified by words like 'expect,' 'anticipate,' 'believe,' etc[26] - These statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties, including competition, changes in trade/monetary/fiscal policies, demand for loans, value fluctuations, and integration challenges from the NBC acquisition[26] - Readers should not place undue reliance on forward-looking statements, and the Company does not undertake any obligation to publicly update or review them, except as required by law[27][28] Investor and Media Contacts Contact information is provided for investor relations, Brian J. Katzfey, and media relations, Russell Colburn, for any inquiries regarding Equity Bancshares, Inc - Investor Contact: Brian J. Katzfey, VP, Director of Corporate Development and Investor Relations, (316) 858-3128, bkatzfey@equitybank.com[29] - Media Contact: Russell Colburn, Public Relations and Communication Manager, (913) 583-8011, rcolburn@equitybank.com[29] Unaudited Financial Tables This section presents unaudited financial tables, including consolidated statements of income, balance sheets, selected highlights, and net interest income analyses TABLE 1. Consolidated Statements of Income Table 1 presents the unaudited consolidated statements of income for the three and six months ended June 30, 2025, and 2024, detailing interest and dividend income, interest expense, net interest income, provision for credit losses, non-interest income, non-interest expense, and net income | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total interest and dividend income | $74,187 | $75,132 | $148,871 | $146,899 | | Total interest expense | $24,385 | $28,656 | $48,777 | $56,241 | | Net interest income | $49,802 | $46,476 | $100,094 | $90,658 | | Provision for credit losses | $19 | $265 | $2,741 | $1,265 | | Total non-interest income | $8,589 | $8,958 | $18,919 | $20,689 | | Total non-interest expense | $40,001 | $38,871 | $79,051 | $76,023 | | Net income allocable to common stockholders | $15,264 | $11,716 | $30,305 | $25,784 | | Basic earnings per share | $0.87 | $0.77 | $1.73 | $1.68 | | Diluted earnings per share | $0.86 | $0.76 | $1.72 | $1.67 | TABLE 2. Quarterly Consolidated Statements of Income Table 2 provides a quarterly breakdown of the consolidated statements of income for the past five quarters, from June 30, 2024, to June 30, 2025, enabling a detailed quarter-over-quarter trend analysis of key income statement components | Metric (in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total interest and dividend income | $74,187 | $74,684 | $74,979 | $74,965 | $75,132 | | Total interest expense | $24,385 | $24,392 | $25,506 | $28,934 | $28,656 | | Net interest income | $49,802 | $50,292 | $49,473 | $46,031 | $46,476 | | Provision for credit losses | $19 | $2,722 | $98 | $1,183 | $265 | | Total non-interest income | $8,589 | $10,330 | $8,816 | $9,317 | $8,958 | | Total non-interest expense | $40,001 | $39,050 | $37,806 | $30,328 | $38,871 | | Net income allocable to common stockholders | $15,264 | $15,041 | $16,986 | $19,851 | $11,716 | | Basic earnings per share | $0.87 | $0.86 | $1.06 | $1.30 | $0.77 | | Diluted earnings per share | $0.86 | $0.85 | $1.04 | $1.28 | $0.76 | TABLE 3. Consolidated Balance Sheets Table 3 presents the unaudited consolidated balance sheets for the past five quarters, from June 30, 2024, to June 30, 2025, providing a detailed view of assets, liabilities, and stockholders' equity at each period end | Metric (in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total assets | $5,373,837 | $5,446,100 | $5,332,047 | $5,355,233 | $5,245,517 | | Loans, net of allowance for credit losses | $3,555,458 | $3,585,804 | $3,457,549 | $3,557,435 | $3,410,920 | | Total deposits | $4,234,918 | $4,405,364 | $4,374,789 | $4,362,944 | $4,341,437 | | Total liabilities | $4,738,201 | $4,828,776 | $4,739,129 | $4,851,195 | $4,784,082 | | Total stockholders' equity | $635,636 | $617,324 | $592,918 | $504,038 | $461,435 | | Allowance for credit losses | $45,270 | $45,824 | $43,267 | $43,490 | $43,487 | TABLE 4. Selected Financial Highlights Table 4 provides selected financial highlights for the past five quarters, including a breakdown of loans held for investment by type, key asset quality ratios, average balance sheet data, and various performance and capital ratios (both GAAP and non-GAAP) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total loans held-for-investment | $3,600,728 | $3,631,628 | $3,500,816 | $3,600,925 | $3,454,407 | | Allowance for credit losses on loans to total loans | 1.26% | 1.26% | 1.24% | 1.21% | 1.26% | | Nonperforming assets to total assets | 0.85% | 0.51% | 0.65% | 0.60% | 0.52% | | Return on average assets (ROAA) annualized | 1.18% | 1.17% | 1.31% | 1.52% | 0.91% | | Net interest margin annualized | 4.17% | 4.27% | 4.17% | 3.87% | 3.94% | | Efficiency ratio | 63.62% | 62.43% | 63.02% | 52.59% | 63.77% | | Common Equity Tier 1 Capital Ratio | 15.07% | 14.70% | 14.51% | 11.37% | 11.12% | | Tangible common equity to tangible assets | 10.63% | 10.13% | 9.95% | 8.21% | 7.55% | | Tangible book value per common share | $32.17 | $31.07 | $30.07 | $28.38 | $25.70 | TABLE 5. Year-To-Date Net Interest Income Analysis Table 5 provides a detailed year-to-date analysis of net interest income for the six months ended June 30, 2025, and 2024, breaking down average outstanding balances, interest income/expense, and average yields/rates for various interest-earning assets and interest-bearing liabilities | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total loans (average outstanding balance) | $3,603,259 | $3,456,013 | | Total loans (interest income) | $125,865 | $120,347 | | Total loans (average yield/rate) | 7.04% | 7.00% | | Total interest-earning assets (average outstanding balance) | $4,781,872 | $4,743,955 | | Total interest-earning assets (interest income) | $148,871 | $146,899 | | Total interest-earning assets (average yield/rate) | 6.28% | 6.23% | | Total interest-bearing liabilities (average outstanding balance) | $3,627,242 | $3,718,009 | | Total interest-bearing liabilities (interest expense) | $48,777 | $56,241 | | Total interest-bearing liabilities (average yield/rate) | 2.71% | 3.04% | | Net interest income | $100,094 | $90,658 | | Interest rate spread | 3.57% | 3.19% | | Net interest margin | 4.22% | 3.84% | TABLE 6. Quarter-To-Date Net Interest Income Analysis Table 6 provides a detailed quarter-to-date analysis of net interest income for the three months ended June 30, 2025, and 2024, presenting average outstanding balances, interest income/expense, and average yields/rates for various interest-earning assets and interest-bearing liabilities | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Total loans (average outstanding balance) | $3,630,981 | $3,459,476 | | Total loans (interest income) | $62,868 | $61,518 | | Total loans (average yield/rate) | 6.94% | 7.15% | | Total interest-earning assets (average outstanding balance) | $4,791,664 | $4,745,713 | | Total interest-earning assets (interest income) | $74,187 | $75,132 | | Total interest-earning assets (average yield/rate) | 6.21% | 6.37% | | Total interest-bearing liabilities (average outstanding balance) | $3,615,346 | $3,725,943 | | Total interest-bearing liabilities (interest expense) | $24,385 | $28,656 | | Total interest-bearing liabilities (average yield/rate) | 2.71% | 3.09% | | Net interest income | $49,802 | $46,476 | | Interest rate spread | 3.50% | 3.28% | | Net interest margin | 4.17% | 3.94% | TABLE 7. Quarter-Over-Quarter Net Interest Income Analysis Table 7 provides a quarter-over-quarter analysis of net interest income for the three months ended June 30, 2025, compared to March 31, 2025, detailing average outstanding balances, interest income/expense, and average yields/rates for interest-earning assets and interest-bearing liabilities, highlighting recent trends | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | | :-------------------------------- | :------------------------------- | :-------------------------------- | | Total loans (average outstanding balance) | $3,630,981 | $3,575,230 | | Total loans (interest income) | $62,868 | $62,997 | | Total loans (average yield/rate) | 6.94% | 7.15% | | Total interest-earning assets (average outstanding balance) | $4,791,664 | $4,771,972 | | Total interest-earning assets (interest income) | $74,187 | $74,684 | | Total interest-earning assets (average yield/rate) | 6.21% | 6.35% | | Total interest-bearing liabilities (average outstanding balance) | $3,615,346 | $3,639,268 | | Total interest-bearing liabilities (interest expense) | $24,385 | $24,392 | | Total interest-bearing liabilities (average yield/rate) | 2.71% | 2.72% | | Net interest income | $49,802 | $50,292 | | Interest rate spread | 3.50% | 3.63% | | Net interest margin | 4.17% | 4.27% | TABLE 8. Non-GAAP Financial Measures Table 8 provides a reconciliation of GAAP financial measures to non-GAAP measures for the past five quarters, including calculations for tangible common equity, core net income, and various adjusted performance ratios, offering a clearer view of the company's underlying financial performance | Metric (in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total stockholders' equity | $635,636 | $617,324 | $592,918 | $504,038 | $461,435 | | Tangible common equity | $563,775 | $544,373 | $523,891 | $433,940 | $390,694 | | Tangible book value per common share | $32.17 | $31.07 | $30.07 | $28.38 | $25.70 | | Tangible common equity to tangible assets | 10.63% | 10.13% | 9.95% | 8.21% | 7.55% | | Net income allocable to common stockholders | $15,264 | $15,041 | $16,986 | $19,851 | $11,716 | | Core net income allocable to common stockholders | $17,515 | $15,987 | $17,834 | $20,427 | $16,217 | | Core earnings per diluted share | $0.99 | $0.90 | $1.10 | $1.32 | $1.05 | | Core return on average assets | 1.35% | 1.24% | 1.37% | 1.56% | 1.25% | | Core return on average equity | 11.18% | 10.69% | 13.29% | 16.73% | 14.25% |