EQUITY BANCSHARES INC Q4 FY2025 earnings call

• Brad Elliott highlighted the strong year for Equity Bank, ending with a strong balance sheet and earnings beating expectations, with assets growing nearly 50% due to the Frontier merger. • Chris Navratil discussed financial metrics including net income, net interest income, margin, noninterest income/expenses, asset quality metrics like nonaccrual loans and reserve ratios, and capital ratios (TCE, CET1, total capital). • Rick Sems talked about positive outcomes in the credit portfolio, loan production (quarterly loans at $220 million, pipeline at $452 million), deposit growth (total deposits up ~$43.5 million), and the team's efforts in integrating NBC and preparing for Frontier. • Brad Elliott emphasized the team's accomplishment in 2025, commitment to empowering people, serving customers/communities, and delivering strong returns, and thanked the team for M&A and organic growth efforts.

Net income for the quarter was $22.1 million or $1.15 per diluted share. Adjusted earnings were $23.3 million or $1.21 per diluted share. Net interest income was $63.5 million, up $1 million linked quarter. Margin was 4.47%, an improvement of 2 basis points. Noninterest income was $9.5 million. Noninterest expenses were $46.6 million. Nonaccrual loans moved down to $40.3 million from $48.6 million linked quarter, a 17% decline. Net charge-offs annualized were 7 basis points for the quarter. Total assets started the year at $5.3 billion and ended at $6.4 billion, with the Frontier merger adding $1.4 billion.

• Aim to earn more than $5 per share in 2026. • Margin for 2026 expected to be 4.2% to 4.35%. • Merger with Frontier is expected to be accretive to NII but dilutive to margins, add noninterest expense of $23 million to $24 million and noninterest income of $2 million to $3 million. • Anticipate loans as a percentage of average earning assets in Q1 2026 to be approximately 80% and loan-to-deposit ratio to be 88%.

Q: On the margin guide, does it include expected accretion from Frontier?

A: Yes, the margin guide includes accretion from Frontier into 2026.

Q: Are you seeing competition stretch on pricing or underwriting standards?

A: Yes, seeing some competition stretch on pricing, but strategically holding pricing higher to avoid stretching on rates when expecting higher rates on the balance sheet soon.

Q: What types of loans are the participations from Frontier?

A: A combination of types, around $50 million in total, not just one type.

Q: Thoughts on cost saves for Frontier merger?

A: The 23% cost save target is a good baseline, with opportunity to hit the lower end of the expense guide and possibly do better as we progress through Q1.

Q: Buyback appetite and M&A outlook?

A: Look at buybacks when it makes sense, deploy capital accordingly, and there are still active M&A discussions ongoing.

Q: Margin outlook for Q1 and impact of Frontier's higher cost funding?

A: First quarter margin outlook is around 4.25%, contemplating repositioning of debt and high-cost liabilities from Frontier.

Q: Cadence of loan growth in 2026?

A: Pipeline is strong, expecting similar production to current quarter, with second and third quarters potentially being good growth opportunities, though payoffs can be unpredictable.

Q: Competitively, what are you seeing with deposits and deposit generation in newer markets?

A: Deposit account gathering is good, disciplined on pricing, seeing growth opportunities in new markets like Oklahoma City, Omaha, etc., despite challenging environment.

Q: Loan growth in specific markets and loan pricing?

A: Markets like Missouri, Oklahoma (Tulsa, Oklahoma City), Kansas City are expected to outperform. New originations are accretive, about 50 basis points ahead of coupon yield included in margin.