Equity Bank(EQBK) - 2025 Q3 - Quarterly Results

Executive Summary & Highlights Equity Bancshares, Inc. reported a Q3 2025 net loss, but achieved adjusted net income, driven by strategic mergers, portfolio repositioning, and significant margin expansion Third Quarter 2025 Performance Overview Equity Bancshares, Inc. reported a net loss of $29.7 million, or $1.55 per diluted share, for Q3 2025. However, after adjusting for merger-related expenses, bond portfolio repositioning losses, and double-count provisioning for NBC loans, the adjusted net income was $22.5 million, or $1.17 per diluted share, reflecting continued execution and strategic integration efforts | Metric | Q3 2025 (GAAP) | Q3 2025 (Adjusted) | | :-------------------------------- | :------------- | :----------------- | | Net Income (Loss) | $(29.7) million | $22.5 million | | Diluted EPS | $(1.55) | $1.17 | - The Company successfully closed and integrated the merger with NBC, announced a definitive agreement with Frontier Holdings LLC, reissued subordinated debt, and repositioned its investment portfolio during the quarter[2] Notable Items and Strategic Initiatives Key highlights for Q3 2025 include a significant expansion in net interest margin, the successful acquisition and integration of NBC Oklahoma, a strategic repositioning of the securities portfolio, and an announced merger agreement with Frontier Holdings LLC, signaling further market expansion | Metric | Q3 2025 | Change (Linked Quarter) | | :-------------------------------- | :------ | :---------------------- | | Net Interest Margin | 4.45% | +28 basis points | | Book Value Per Share | $37.25 | +$0.98 | | Tangible Book Value Per Share | $31.69 | -1.5% | - The NBC merger contributed $664.6 million in loan balances and $807.1 million in deposit balances, resulting in $24.5 million in goodwill[3] - The Company sold $436.3 million in securities, realizing a pre-tax loss of $53.4 million, but improving the yield on underlying assets from approximately 2.20% to 5.00%[3] - Loan balances increased by 18.5% in the quarter and 21.9% year-to-date, including NBC balances. Excluding NBC, loans grew $3.3 million in the quarter[3] - A $0.18 dividend was announced, representing a 20% increase from the prior quarter, and the share repurchase program was renewed[3] - The Company announced a definitive merger agreement with Frontier Holdings LLC, which will add seven locations, $1.3 billion in loans, and $1.1 billion in deposits in the Nebraska market[4] Financial Results for the Quarter Ended September 30, 2025 This section details Equity Bancshares' Q3 2025 financial performance, covering net income, interest income, credit loss provisions, and non-interest revenues and expenses Overall Financial Performance Equity Bancshares reported a GAAP net loss of $29.7 million for Q3 2025, a significant shift from the prior quarter's net income. This loss was primarily driven by merger expenses, provisioning for acquired loans, and losses from bond portfolio repositioning. Adjusting for these non-core items, core net income was $22.5 million | Metric | Q3 2025 (GAAP) | Q2 2025 (GAAP) | Q3 2025 (Adjusted) | | :-------------------------------- | :------------- | :------------- | :----------------- | | Net Income (Loss) allocable to common stockholders | $(29.7) million | $15.3 million | $22.5 million | | Diluted EPS | $(1.55) | $0.86 | $1.17 | Net Interest Income Net interest income increased significantly to $62.5 million in Q3 2025, up from $49.8 million in the prior quarter. This growth was primarily fueled by the assets acquired through the NBC merger, which closed in early July, and an improved yield on interest-earning assets | Metric | Q3 2025 | Q2 2025 | Change (QoQ) | | :-------------------------- | :------ | :------ | :----------- | | Net Interest Income | $62.5 million | $49.8 million | +$12.7 million | | Yield on Interest Earning Assets | +27 bps | - | +27 bps | | Cost of Interest Bearing Liabilities | +3 bps | - | +3 bps | - The increase in net interest income was primarily driven by the addition of assets from the NBC merger[6] Provision for Credit Losses The provision for credit losses saw a substantial increase to $6.2 million in Q3 2025, primarily due to the addition of non-purchased credit deteriorated loans from the NBC merger. Net charge-offs also increased, though the allowance for credit losses to gross loans remained materially consistent | Metric | Q3 2025 | Q2 2025 | Change (QoQ) | | :------------------------------------------------ | :------ | :------ | :----------- | | Provision for Credit Losses | $6.2 million | $19 thousand | +$6.181 million | | Net Charge-offs | $1.1 million | $573 thousand | +$527 thousand | | Annualized Charge-offs to Average Loans | 0.10% | - | - | | Allowance for Credit Losses to Gross Loans Held for Investment | 1.25% | - | Materially consistent | | NBC non-PCD loans contributing to allowance | $631.2 million | - | - | Non-Interest Income Total non-interest income for Q3 2025 was significantly impacted by a $53.4 million loss on the sale of securities. Excluding this, adjusted non-interest income increased by 3.3% linked quarter, driven by higher service revenues from the NBC acquisition | Metric | Q3 2025 (GAAP) | Q3 2025 (Adjusted) | Q2 2025 (Adjusted) | Change (QoQ, Adjusted) | | :-------------------------- | :------------- | :----------------- | :----------------- | :--------------------- | | Total Non-Interest Income | $(44.479) million | $8.9 million | $8.6 million | +$284 thousand | | Loss on Sale of Securities | $(53.4) million | - | - | - | - The increase in adjusted non-interest income was driven by the addition of NBC, realized in service revenues including treasury, debit card, credit card, mortgage, and trust and wealth management[11] Non-Interest Expense Total non-interest expense rose to $49.1 million in Q3 2025, up from $40.0 million in the previous quarter. Adjusting for merger expenses, non-interest expense increased by 8.3%, primarily due to the NBC acquisition. Despite the increase, annualized non-interest expense as a percentage of average assets declined | Metric | Q3 2025 (GAAP) | Q2 2025 (GAAP) | Q3 2025 (Adjusted) | Change (QoQ, Adjusted) | | :------------------------------------------------ | :------------- | :------------- | :----------------- | :--------------------- | | Total Non-Interest Expense | $49.1 million | $40.0 million | - | +$3.3 million | | Non-Interest Expense (excluding merger expenses) | - | - | - | +8.3% | | Annualized Non-Interest Expense as % of Average Assets (excluding merger expenses) | - | - | 2.8% | -20 bps | - The increase in non-interest expense is primarily attributable to the addition of NBC at the beginning of the quarter, with system conversions completed at the end of August[12] - Non-interest expense also included $777 thousand in losses related to the disposition of other real estate owned[13] Income Tax Expense The effective tax rate for Q3 2025 was 20.5%, an increase from 16.9% in the prior quarter. This rise, despite a pre-tax loss, was due to additional tax benefits from bond sales losses and the reversal of prior tax expenses, partially offset by return-to-provision adjustments | Metric | Q3 2025 | Q2 2025 | Change (QoQ) | | :---------------- | :------ | :------ | :----------- | | Effective Tax Rate | 20.5% | 16.9% | +3.6% | - The increase in the tax rate (indicating a greater tax benefit with a pre-tax loss) resulted from additional tax benefits associated with the loss on the sale of bonds and the reversal of tax expense booked in previous quarters[15] - The anticipated tax rate for the full year, considering the bond sale loss, is expected to be between 17% and 19%[15] Balance Sheet and Asset Quality This section reviews Equity Bancshares' balance sheet, including significant growth in loans, assets, and deposits, alongside changes in asset quality and capital ratios Loans, Total Assets and Funding Total assets and loans held for investment significantly increased in Q3 2025, primarily driven by the NBC merger. Deposit balances also saw substantial growth, with organic growth contributing alongside the acquired NBC deposits | Metric | Q3 2025 End | Q2 2025 End | Change (QoQ) | | :-------------------------- | :---------- | :---------- | :----------- | | Loans Held for Investment | $4.3 billion | - | +$667.9 million | | Total Assets | $6.4 billion | - | +$982.4 million | | Total Deposit Balances | $5.1 billion | $4.2 billion | +$859.9 million (+20.3%) | | NBC Contribution to Loans | $664.6 million | - | - | | NBC Contribution to Deposits | $808.0 million | - | - | | Organic Deposit Growth | - | - | +$37.3 million | | Brokered Deposits as % of Total Deposits | 3.0% | 3.3% | -0.3% | Asset Quality Asset quality metrics showed an increase in nonperforming and classified assets in Q3 2025, largely attributable to the NBC acquisition. Despite this, nonperforming assets as a percentage of total assets slightly decreased | Metric | Q3 2025 End | Q2 2025 End | Change (QoQ) | | :------------------------------------------------ | :---------- | :---------- | :----------- | | Nonperforming Assets | $52.6 million | $45.7 million | +$6.9 million | | Nonperforming Assets as % of Total Assets | 0.8% | 0.9% | -0.1% | | Non-accrual Loans | $48.6 million | $42.6 million | +$6.0 million | | Total Classified Assets | $82.9 million | $71.0 million | +$11.9 million | | Classified Assets as % of Regulatory Capital | 12.4% | 11.4% | +1.0% | | NBC Contribution to Non-accrual Balances | $7.0 million | - | - | | NBC Contribution to Classified Assets | $16.7 million | - | - | Capital Book capital increased in Q3 2025, reflecting capital issued for the NBC transaction and current period earnings, excluding investment portfolio repositioning losses. However, tangible book value per share decreased due to the NBC transaction's impact. Regulatory capital ratios for both the Company and Equity Bank saw a decline linked quarter | Metric | Q3 2025 End | Q2 2025 End | Change (QoQ) | | :-------------------------------- | :---------- | :---------- | :----------- | | Book Capital | $711.9 million | - | +$76.3 million | | Tangible Book Value Per Share | $31.69 | $32.17 | $(0.48) | | Company Common Equity Tier 1 Capital Ratio | 12.9% | 15.0% | -2.1% | | Company Total Capital Ratio | 16.1% | 16.8% | -0.7% | | Company Total Leverage Ratio | 10.4% | 12.1% | -1.7% | | Equity Bank Common Equity Tier 1 Capital Ratio | 13.2% | 14.4% | -1.2% | | Equity Bank Total Capital Ratio | 14.3% | 15.6% | -1.3% | | Equity Bank Total Leverage Ratio | 10.3% | 11.1% | -0.8% | Non-GAAP Financial Measures This section explains the use and reconciliation of non-GAAP financial measures to provide a clearer view of core operating performance and financial condition Explanation of Non-GAAP Measures Management uses non-GAAP financial measures, such as efficiency ratio, core income, core return on average assets, core return on average equity, core earnings per share, and tangible common equity, to provide additional insights into operating results and financial condition. These measures are intended to supplement GAAP results, facilitate peer comparisons, and offer a clearer view of core performance by excluding non-core items - Non-GAAP measures are used to provide additional perspectives on operating results, financial condition, and performance trends, and to facilitate comparisons with other financial institutions[22] - The efficiency ratio helps understand the expense structure relative to total revenue, excluding non-core items for better comparability[23] - Core income calculations adjust GAAP income by non-core gains/losses and expenses to reflect fundamental operating performance[24] - Tangible common equity and related measures exclude intangible assets to consistently evaluate business performance, useful for understanding the efficient deployment of common equity[26][27] Corporate Information This section provides corporate details, including investor communications, company overview, forward-looking statements, and contact information Conference Call and Webcast Equity Bancshares, Inc. will host a conference call and webcast on October 15, 2025, to discuss its third-quarter results. Details for participation and replay access are provided - A conference call and webcast will be held on Wednesday, October 15, 2025, at 10 a.m. eastern time (9 a.m. central time) to discuss third-quarter results[29] - Participants can pre-register via a provided link to eliminate wait times, and a replay will be available until October 31, 2025, at investor.equitybank.com[30][31] About Equity Bancshares, Inc. Equity Bancshares, Inc. is the holding company for Equity Bank, offering a comprehensive suite of financial solutions including commercial and mortgage loans, consumer banking, trust and wealth management, and treasury management services, emphasizing high-quality, relationship-based customer service - Equity Bancshares, Inc. is the holding company for Equity Bank, providing commercial loans, consumer banking, mortgage loans, trust and wealth management services, and treasury management services[31] - Equity's common stock is traded on the New York Stock Exchange under the symbol 'EQBK'[31] Forward-Looking Statements This section contains cautionary statements regarding forward-looking information, highlighting that actual results may differ materially from expectations due to various risks and uncertainties. These include competition, economic policies, loan demand, collateral values, inflation, and risks associated with the proposed Frontier Bank transaction - The press release contains forward-looking statements that are subject to risks, assumptions, and uncertainties, and actual results may differ materially from expectations[32] - Key risk factors include competition, changes in trade, monetary, and fiscal policies, fluctuations in loan demand and collateral values, inflation, and uncertainties related to the proposed merger with Frontier Bank[33] - Investors are advised not to place undue reliance on forward-looking statements, and the Company does not undertake to update them except as required by law[34] Important Additional Information In connection with the proposed merger with Frontier, Equity Bancshares will file a registration statement on Form S-4 with the SEC, which will include a proxy statement/prospectus. Investors are urged to review these documents for important information - Equity intends to file a registration statement on Form S-4 with the SEC for the proposed merger with Frontier, which will include a proxy statement/prospectus[35] - Investors and security holders are urged to read the registration statement and other relevant documents for important information about Equity, Frontier, and the proposed transaction[36] - Documents filed with the SEC can be obtained free of charge from Equity's investor relations website or the SEC's website[37] No Offer or Solicitation This press release explicitly states that it does not constitute an offer to sell or a solicitation of an offer to buy securities, and any sale of securities will only occur in compliance with applicable laws and through a prospectus - This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities[38] - No sale of securities will occur in any jurisdiction where it would be unlawful prior to registration or qualification, and offers will only be made via a prospectus meeting Section 10 of the Securities Act of 1933[38] Contact Information Contact details for investor relations and media inquiries are provided for Equity Bancshares, Inc. - Investor Contact: Brian J. Katzfey, VP, Director of Corporate Development and Investor Relations, (316) 858-3128, bkatzfey@equitybank.com[39] - Media Contact: Russell Colburn, Public Relations and Communication Manager, (913) 583-8011, rcolburn@equitybank.com[39] Unaudited Financial Tables This section presents detailed unaudited financial tables, including statements of income, balance sheets, selected highlights, and net interest income analysis Consolidated Statements of Income This table presents the consolidated statements of income for Equity Bancshares, Inc. for the three and nine months ended September 30, 2025, and 2024, detailing interest income and expense, non-interest income and expense, and net income (loss) per share | Metric (in thousands) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total interest and dividend income | $91,098 | $74,965 | $239,969 | $221,864 | | Total interest expense | $28,613 | $28,934 | $77,390 | $85,175 | | Net interest income | $62,485 | $46,031 | $162,579 | $136,689 | | Provision (reversal) for credit losses | $6,228 | $1,183 | $8,969 | $2,448 | | Total non-interest income | $(44,479) | $9,317 | $(25,560) | $30,006 | | Total non-interest expense | $49,082 | $30,328 | $128,133 | $106,351 | | Net income (loss) allocable to common stockholders | $(29,663) | $19,851 | $642 | $45,635 | | Basic earnings (loss) per share | $(1.55) | $1.30 | $0.04 | $2.98 | | Diluted earnings (loss) per share | $(1.55) | $1.28 | $0.04 | $2.95 | Quarterly Consolidated Statements of Income This table provides a quarterly breakdown of the consolidated statements of income, allowing for a detailed comparison of financial performance across recent quarters, including Q3 2025, Q2 2025, Q1 2025, Q4 2024, and Q3 2024 | Metric (in thousands) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Total interest and dividend income | $91,098 | $74,187 | $74,684 | $74,979 | $74,965 | | Total interest expense | $28,613 | $24,385 | $24,392 | $25,506 | $28,934 | | Net interest income | $62,485 | $49,802 | $50,292 | $49,473 | $46,031 | | Provision (reversal) for credit losses | $6,228 | $19 | $2,722 | $98 | $1,183 | | Total non-interest income | $(44,479) | $8,589 | $10,330 | $8,816 | $9,317 | | Total non-interest expense | $49,082 | $40,001 | $39,050 | $37,806 | $30,328 | | Net income (loss) allocable to common stockholders | $(29,663) | $15,264 | $15,041 | $16,986 | $19,851 | | Basic earnings (loss) per share | $(1.55) | $0.87 | $0.86 | $1.06 | $1.30 | | Diluted earnings (loss) per share | $(1.55) | $0.86 | $0.85 | $1.04 | $1.28 | Consolidated Balance Sheets This table presents the consolidated balance sheets for Equity Bancshares, Inc. as of September 30, 2025, and prior quarters, detailing assets, liabilities, and stockholders' equity | Metric (in thousands) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total assets | $6,356,187 | $5,373,837 | $5,446,100 | $5,332,047 | $5,355,233 | | Loans, net of allowance for credit losses | $4,215,118 | $3,555,458 | $3,585,804 | $3,457,549 | $3,557,435 | | Total deposits | $5,094,769 | $4,234,918 | $4,405,364 | $4,374,789 | $4,362,944 | | Total liabilities | $5,644,295 | $4,738,201 | $4,828,776 | $4,739,129 | $4,851,195 | | Total stockholders' equity | $711,892 | $635,636 | $617,324 | $592,918 | $504,038 | | Allowance for credit losses | $53,469 | $45,270 | $45,824 | $43,267 | $43,490 | Selected Financial Highlights This table provides key financial highlights, including loan portfolio composition, asset quality ratios, selected average balance sheet data, performance ratios (GAAP and Core), and capital ratios, offering a comprehensive overview of the company's financial health and operational efficiency | Metric | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Total loans held-for-investment (in thousands) | $4,268,587 | $3,600,728 | $3,631,628 | $3,500,816 | $3,600,925 | | Allowance for credit losses on loans to total loans | 1.25% | 1.26% | 1.26% | 1.24% | 1.21% | | Nonperforming assets to total assets | 0.83% | 0.85% | 0.51% | 0.65% | 0.60% | | Net interest margin annualized | 4.45% | 4.17% | 4.27% | 4.17% | 3.87% | | Return on average assets (ROAA) annualized | (1.93)% | 1.18% | 1.17% | 1.31% | 1.52% | | Core earnings per diluted share | $1.21 | $0.99 | $0.90 | $1.10 | $1.32 | | Common Equity Tier 1 Capital Ratio | 12.87% | 15.07% | 14.70% | 14.51% | 11.37% | | Book value per common share | $37.25 | $36.27 | $35.23 | $34.04 | $32.97 | | Tangible book value per common share | $31.69 | $32.17 | $31.07 | $30.07 | $28.38 | Year-To-Date Net Interest Income Analysis This table provides a year-to-date analysis of net interest income for the nine months ended September 30, 2025, and 2024, detailing average outstanding balances, interest income/expense, and yields/rates for various interest-earning assets and interest-bearing liabilities | Metric (in thousands) | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total interest-earning assets (Average Outstanding Balance) | $5,049,091 | $4,739,916 | | Total interest and dividend income | $239,969 | $221,864 | | Total interest-bearing liabilities (Average Outstanding Balance) | $3,799,746 | $3,713,436 | | Total interest expense | $77,390 | $85,175 | | Net interest income | $162,579 | $136,689 | | Net interest margin | 4.31% | 3.85% | Quarter-To-Date Net Interest Income Analysis This table presents a quarter-to-date analysis of net interest income for the three months ended September 30, 2025, and 2024, breaking down average outstanding balances, interest income/expense, and yields/rates for different asset and liability categories | Metric (in thousands) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Total interest-earning assets (Average Outstanding Balance) | $5,574,815 | $4,731,927 | | Total interest and dividend income | $91,098 | $74,965 | | Total interest-bearing liabilities (Average Outstanding Balance) | $4,139,133 | $3,704,392 | | Total interest expense | $28,613 | $28,934 | | Net interest income | $62,485 | $46,031 | | Net interest margin | 4.45% | 3.87% | Quarter-Over-Quarter Net Interest Income Analysis This table provides a quarter-over-quarter comparison of net interest income for the three months ended September 30, 2025, versus June 30, 2025, detailing changes in average outstanding balances, interest income/expense, and yields/rates for various interest-earning assets and interest-bearing liabilities | Metric (in thousands) | Three Months Ended Sep 30, 2025 | Three Months Ended Jun 30, 2025 | | :-------------------------------- | :------------------------------ | :------------------------------ | | Total interest-earning assets (Average Outstanding Balance) | $5,574,815 | $4,791,664 | | Total interest and dividend income | $91,098 | $74,187 | | Total interest-bearing liabilities (Average Outstanding Balance) | $4,139,133 | $3,615,346 | | Total interest expense | $28,613 | $24,385 | | Net interest income | $62,485 | $49,802 | | Net interest margin | 4.45% | 4.17% | Non-GAAP Financial Measures Reconciliation This table provides a reconciliation of GAAP financial measures to non-GAAP measures, including tangible common equity, core net income, and various core performance ratios, for the three months ended September 30, 2025, and prior quarters | Metric (in thousands, except per share data) | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | :----------- | | Tangible common equity | $605,646 | $563,775 | $544,373 | $523,891 | $433,940 | | Tangible book value per common share | $31.69 | $32.17 | $31.07 | $30.07 | $28.38 | | Tangible common equity to tangible assets | 9.69% | 10.63% | 10.13% | 9.95% | 8.21% | | Core net income (loss) allocable to common stockholders | $23,310 | $17,515 | $15,987 | $17,834 | $20,427 | | Core earnings per diluted share | $1.21 | $0.99 | $0.90 | $1.10 | $1.32 | | Core return on average assets | 1.51% | 1.35% | 1.24% | 1.37% | 1.56% | | Core return on average equity | 12.47% | 11.18% | 10.69% | 13.29% | 16.73% | | Core return on average tangible common equity | 14.30% | 12.64% | 12.14% | 15.29% | 19.58% |