Equity Bancshares, Inc. (EQBK) Earnings

Management highlights

- Entering Nebraska market was a strategic priority, with Frontier acquisition driving 20% increase in assets and record quarterly revenue. - Completed Frontier core system conversion on time and on plan, with team's ability to align vendors and execute integrations as competitive advantage. - Asset base grew over 40% compared to March 2025, tangible book value per share grew 5%, core EPS $1.32, core return on average tangible equity 16.1%. - Bankers focused on mission, rolling out new products/processes, retail teams opened record DDA accounts. - Deploying capital with conviction, capital strong, capital generation capacity at all-time high.

Guidance

- Confident in $5 per share target for 2026. - Forecast full-year effective tax rate of 22% to 23%. - Anticipate full-year results consistent with margin in 4.20% to 4.35% range, with periodic variability tied to purchase accounting.

Segment performance

Asset base grew by more than 40% compared to March 2025. GAAP net income was $17 million, or $0.80 per diluted share. Adjusted earnings were $26.2 million, or $1.23 per diluted share. Net interest income was $73.7 million, up $10.2 million linked quarter. Margin was 4.33% versus 4.47% last quarter. Noninterest income held steady at $9.5 million. Noninterest expenses were $55 million. Pretax pre-provision net revenue was $34.7 million, or $1.63 per share. Ending ACL coverage was 1.18%.

Risks & headwinds

- Loans past due and nonaccrual as a percentage of end-of-period loans increased due to merger process issue in one acquired market, but anticipated full resolution in Q2. - Frontier carried brokered funding positions, need to reprice and replace with core relationship deposits over time.

Analyst Q&A

• Q: Good morning. Just a question on the acquired loan balance. Do you have the Frontier loan balance at acquisition in millions?

  A: Yeah, Jeff. It was about $1.28 billion in terms of acquired assets pre-purchase accounting mark.

• Q: And then maybe a similar question on the nonaccrual increase. I think roughly $8 million added from Frontier, $4 million from sort of the legacy unit. And maybe if you could put any color on the type of loans that were brought on? And then second piece to that—I think, Rick, you mentioned, sorry, I missed the piece about the—sounded like there was a past due. If you could just outline the balance of that one that was brought on that sounds like it has a quick resolution ahead.

  A: It really was not a single loan. We have one specific market from Nebraska that did not understand how to get renewals done and manage those during that time. Those are all correcting themselves or already have been corrected at this point, Jeff. Brad, what was the balance of those loans? A: It is a little over $30 million. But it is not one loan. It is about 30 or 40 different relationships.

• Q: The margin—maybe, Chris, you kind of talked about a 4.29% core. Do you know what that core NIM was for the month of March? It sounds like you have an opportunity to kind of alter Frontier's funding mix a bit, and it sounded more leaning upward than not. But do you have a March figure that would compare to the 4.29% core for the quarter?

  A: Yeah, Jeff, March actually compares pretty consistently with that 4.29% figure. There are still some potential tailwinds as we look into Q2 and beyond as we are working to reprice some of those Frontier deposits. But that was happening throughout the quarter and really accelerating towards the end of the quarter, so we are not seeing that benefit in March. We will see more of it in April and beyond. The range that is provided in the outlook—I have some optimism that we can hit the high end of that range based on some of those dynamics. But I think because of the periodicity of accretion and the challenges of continuing to work through a balance sheet, there is a risk there as well. So somewhere in that range is fully accomplishable. I think the high end is also accomplishable based on some of those dynamics, but we have to execute on it.

• Q: Hi. I am on for Nathan Race. Good morning, and thanks for taking my question. Maybe starting on funding costs—you know, with deposit costs rising this quarter with the Frontier acquisition, and I know they had a piece of brokered deposits—so I guess I am curious if you could provide some additional color into repricing opportunities you have on the deposit side from both DDA and nonmaturity.

  A: I think there is an ample amount of repricing capacity. For some color, they had about $100 million that did get repriced in Q1. That was at a weighted average cost of 4.50%. So that is an aspect of their cost of funds that, again, accelerated towards the end of the quarter, that we have been able to reposition into what is comparatively cheaper. Even the newly issued brokered in the period is about 3.75%, so you are picking up 75 basis points on $100 million. They brought in a relatively higher overall cost of funding base, so we will continue to see opportunities to reprice. Some of that did have some duration on it—there is some lockout—so we will continue to have some heavier cost over time, but we are going to continue to see opportunities to bring some of those things down and anticipate being able to do so.

• Q: Maybe moving to capital management. It is nice to see the step up in the buyback during the quarter, and you have obviously been active on the M&A front with the two deals over the past year. Do you expect to continue to be active on the buyback, and are you seeing opportunities on the M&A front as well?

  A: We look at capital utilization all the time. Yes, we continue to look opportunistically at buybacks, and we also think we have plenty of capital for continued M&A. We have good capital ratios. We are building capital at a little over $25 million of capital generation a quarter, so we have good capital generation from the operating company. We have different prospects and lots of different opportunities we are talking to on the M&A front, and we will remain active on the buyback side if it works.

• Q: Wanted to ask more about the expense outlook from here and get some updated thoughts around deal cost savings from Frontier with that conversion now behind us. I am curious how the cost savings are looking compared to the original expectations, and would just love to get some thoughts on when you expect to get the fully loaded cost savings this year.

  A: A couple of things on that, Matt. On the technology side—the integration as well as some of the people that we maintained through that conversion date—all of those items have been fully taken out of run rate at this point. The cost savings on technology and people are in line with what we expected, and we will start to realize that. We started to realize it at the back end of the first quarter, and we will fully realize it in the second quarter. Generally speaking, as it relates to the cost saves around this transaction, they were relatively conservative—something around 23% on expected cost savings—and I think our execution will realize that or better as we think into Q2 and beyond. So we anticipate being in line to a little bit ahead of where we originally anticipated as we contemplated the transaction.

• Q: Good morning, guys. Hope everybody is doing well. Thanks for taking my questions. Probably for Chris on the reserve and the provision outlook. The reserve came down six basis points quarter over quarter even though there were purchase marks against the acquired loans. Just trying to get a feel for where you are comfortable with where the loan loss reserve can trend over the coming quarters?

  A: Yeah, Damon, I would look at it as being consistent with where it is on a relative-to-asset basis. As we start to see depletion of those purchase accounting marks and look at the total position relative to the portfolio, there may be opportunity or need to build back up to, call it, a 1.23% type of reserve. But I think in the near term, thinking about it as 1.18% from here plus whatever production is makes sense. My anticipation for need to provide—absent any significant specific reserve items or specific deterioration in credits—is that it is going to account for the production in the portfolio. As we grow the portfolio, so too will we grow the reserve.

• Q: Okay. So the $6 million to $8 million guidance for 2026 for the total provision—if you back out the one-time CECL impact in the first quarter—we kind of just extrapolate the remaining three quarters to fall in between that range?

  A: Maybe a little bit less, Damon. I think thinking about it as kind of a $1.5 million to $2 million run rate depending on growth is a good way to continue to think about it.

• Q: And then lastly, on the fee income side of things, can you talk about some of the opportunities to tap into the Frontier franchise and what products and services you think have the best opportunity to ramp up revenues for you?

  A: First and foremost, treasury management. We have brought in a new head of treasury management, and we see that as a real opportunity. That was not something that was really at the forefront of what they were doing. Second, they had a decent-sized mortgage business, and we are continuing to see some potential for mortgage fees going forward. We see that across the footprint—continuing to get the team built out—and we use that as a product for our core customers and for bringing in core customers. We are not really a mortgage shop just to bring in mortgages. Third is wealth management. We are already seeing some real positive results there and being able to grow wealth management. We are looking to add a couple of additional people in our markets. We do really well in the community markets, so in Nebraska—Falls City, Pender, Norfolk, and Madison, where we are—we see those as real opportunities for growth in the future as well.