EQUITY BANCSHARES INC Q1 FY2025 earnings call

• Brad Elliott highlighted the strong start to 2025, including strong earnings, margin expansion, the merger with NBC Corp. expanding presence in Oklahoma, and a dual strategy of organic growth and M&A.
• Chris Navratil walked through financial results, noting net interest income improvement, noninterest income details, noninterest expense changes, provision for credit loss, and TCE ratio information.
• Krzysztof Slupkowski discussed asset quality trends, including nonaccrual loans, nonperforming assets, and classified assets.
• Rick Sems reported loan growth of over $130 million, organic originations of $197 million (up 64% from previous quarter), deposit balance trends, and announced Greg Kossover's new role for NBC integration.

In the first quarter, Equity Bancshares achieved strong earnings. Net income was $15.0 million or $0.85 per diluted share, excluding amortization, it was $16.0 million or $0.90 per diluted share. Net interest income improved to $50.3 million from $49.5 million, with a net interest margin of 4.27%. Noninterest income was $10.3 million, up $1.5 million from Q4, driven by a bank-owned life insurance death benefit. Noninterest expenses were $39.1 million, up $1.2 million from Q4. The provision for credit loss was $2.7 million due to increasing loan balances and economic uncertainty. The TCE ratio was 10.13% at the holding company and 9.87% at the bank level. Loans increased by $131 million, an annualized growth rate of 15.5%, and the NBC merger is expected to add approximately $900 million to assets. Asset quality saw nonaccrual loans decrease 10.3% to $24.2 million, nonperforming assets decline 19.6% to $27.9 million, and classified assets at 10.24% of total bank regulatory capital.

• Chris Navratil anticipates a margin between 4% and 4.10% in the second quarter on average earning assets between $4.8 billion and $4.9 billion, with provision forecasted at 12 basis points to average loans annualized. Full year outlook will be adjusted with the NBC merger closing in Q2.
• Brad Elliott mentioned active M&A conversations and expects deals to be announced this year, with full year guidance to be updated post-NBC merger integration.

• Tariffs could impact the overall economy, and the company added to loan loss reserves due to economic uncertainty related to trade policy announcements. Economic uncertainty poses potential risks to loan quality.

Q: Terry McEvoy asked about how tariffs could impact commercial customers and actions to minimize risk to the bank.

A: Brad Elliott said customers can pass on tariff expenses, the company added to loan loss reserves for such uncertainties, but no slowdown in operating markets was seen yet.

Q: Terry McEvoy followed up on sales initiatives.

A: Rick Sems said sales are in early innings, with good calling metrics, TM wins in Tulsa, and fee income still in early stages of growth.

Q: Jeff Rulis asked about M&A mindset and deal accretion on the NBC deal.

A: Brad Elliott said M&A is driven by age of ownership and management, and Chris Navratil mentioned expected $0.50 accretion in 2026 and $0.18 in the back half of 2025 for the NBC deal.

Q: Brett Rabatin asked about deposits and product sets in the NBC deal.

A: Richard Sems talked about cost of funds trends, and Chris Navratil said the NBC team has good relationships and product capabilities will be additive.

Q: Andrew Liesch asked about loan guidance and margin guide.

A: Chris Navratil said full year guidance will be adjusted post-NBC merger, and margin guide will be updated with NBC integration.

Q: Damon Del Monte asked about margin defense and expense flexibility.

A: Chris Navratil said the bank can defend margin and is focused on expense management to create value for shareholders