Executive Summary / Key Takeaways

• Dual Growth Engine Ignited: Equity Bancshares is executing a potent dual growth strategy, combining disciplined M&A with revitalized organic expansion, evidenced by significant balance sheet growth and strategic market entries into Oklahoma City and Omaha in 2025.
• Transformational Acquisitions Drive Scale: The successful integration of NBC Corp. of Oklahoma and the pending Frontier Bank merger are pivotal, adding substantial loans and deposits, expanding geographic reach, and providing ready-built scale in key metro markets.
• Margin Expansion and Capital Strength: Despite a challenging rate environment, EQBK has demonstrated net interest margin expansion, supported by strategic asset repositioning and liability management, while maintaining robust capital ratios, including a tangible common equity ratio of 9.7% at Q3 2025.
• Disciplined Credit Management: The company maintains a positive credit outlook with problem trends below historical norms, actively managing specific credit situations like the QSR relationship without anticipating losses in excess of existing marks.
• 2026 EPS Target Signals Strong Future: Management's ambitious target to earn $5 per share in 2026, alongside a projected 40% balance sheet growth, underscores confidence in the long-term value creation from its strategic initiatives.

A Regional Powerhouse Forges Ahead

Equity Bancshares, Inc. (EQBK), headquartered in Wichita, Kansas, operates as the bank holding company for Equity Bank, a community-oriented financial institution providing a comprehensive suite of banking, mortgage banking, and financial services. Its footprint spans Arkansas, Kansas, Missouri, and Oklahoma, with an announced expansion into Nebraska. The company's overarching strategy is built on a dual model of aggressive organic growth and disciplined, strategic mergers and acquisitions (M&A), aiming to expand its market presence and enhance service offerings. This approach has been instrumental in shaping its current position, allowing it to leverage community ties while scaling operations.

The regional banking landscape in the Midwest is characterized by a mix of larger regional players and numerous smaller community banks. EQBK competes directly with institutions like Commerce Bancshares, Inc. (CBSH), UMB Financial Corporation (UMBF), Simmons First National Corporation (SFNC), and BancFirst Corporation (BANF). While larger competitors such as CBSH and UMBF often boast more extensive branch networks, broader market reach, and potentially more visible investments in digital banking enhancements, EQBK differentiates itself through its community-focused approach and tailored services. This allows it to foster stronger customer relationships, particularly with small businesses and in niche areas like agricultural and real estate financing. However, EQBK acknowledges potential technological gaps and a smaller scale compared to some rivals, which could lead to higher operating costs or slower innovation speed. Indirect competitors, including fintech companies like PayPal (PYPL) and digital banks such as Chime, also pose a threat by offering alternative, often easier-to-implement digital services that appeal to tech-savvy consumers.

Technological Edge in Integration and Customer Experience

Equity Bancshares' technological differentiation lies not in a single proprietary invention, but in its robust core banking system and its effective deployment of digital tools to enhance customer experience and streamline operations, particularly during M&A integration. The company's ability to execute "near seamless conversions" of acquired entities onto its core system, as demonstrated with NBC, is a significant operational advantage. This capability minimizes disruption for customers and accelerates the realization of synergies post-acquisition.

The company leverages a digital product suite, including the Q2 platform for treasury management, online banking solutions, mobile banking with remote check deposits, and a network of ITMs and ATMs. These offerings are designed to provide convenience and efficiency, enhancing the customer experience. For instance, the treasury team at NBC expressed excitement about the Q2 platform, anticipating it will "be an enhancement to their customer base and their customer experience." While the company does not detail specific R&D initiatives with quantifiable targets, its strategic intent is clear: to continuously improve its digital strategy and technology integration to support both organic growth in commercial products and the efficient onboarding of new customers through acquisitions. This focus on operational technology and digital service delivery contributes to EQBK's competitive moat by improving efficiency, fostering customer stickiness, and allowing it to compete effectively against rivals who may be slower to adapt or less focused on community-level digital engagement.

Strategic Expansion and Financial Performance

Equity Bancshares' history is marked by strategic growth. In 2024, the company completed two whole bank acquisitions and revitalized its organic growth engine. This momentum carried into 2025, a truly "transformational" year. The acquisition of NBC Corp. of Oklahoma, which closed on July 2, 2025, added $665 million in loans and $808 million in deposits, expanding EQBK's presence into the Oklahoma City metro market and adding seven new branch locations. This was followed by a $75 million subordinated debt raise in Q3 2025, bolstering capital for continued growth. In September 2025, EQBK announced a definitive merger agreement with Frontier Holdings, set to extend its footprint into Nebraska, including Omaha and Lincoln. These strategic moves align with management's stated goal of entering Oklahoma City and Omaha in 2025, providing "ready-built scale" in these markets.

The company's financial performance in the first nine months of 2025 reflects these strategic initiatives. For the three months ended September 30, 2025, EQBK reported a net loss of $29.7 million, or $1.55 diluted earnings per share. This GAAP loss was primarily driven by a significant $53.4 million loss from a bond portfolio repositioning, where lower-yielding assets (averaging 2.2%) were sold and proceeds reinvested in higher-yielding cash and securities (approximately 5%). Excluding this repositioning loss and merger-related expenses, adjusted net income for the quarter was $22.5 million, or $1.17 per diluted share.

Net interest income for Q3 2025 increased by $16.1 million year-over-year, largely due to a $15.7 million increase from higher volume of average interest-earning assets, primarily attributable to the NBC merger. The net interest margin expanded by 58 basis points to 4.45% in Q3 2025, and the net interest spread increased by 55 basis points to 3.74%, reflecting the strategic asset repositioning and effective liability management. Total assets grew by $1.03 billion from December 31, 2024, to $6.37 billion at September 30, 2025, with loans held for investment increasing by $767.8 million and deposits by $720 million. Organic deposit growth in Q3 2025 was approximately $37 million, excluding NBC and brokered growth. Loan production in Q3 2025 was $243 million, up 23% linked quarter, with new originations averaging 7.14%.

Liquidity, Capital, and Risk Management

Equity Bancshares maintains a strong liquidity position, primarily funded by core deposits, loan and security maturities, and amortizing portfolios. Supplemental funding comes from federal funds purchased, brokered certificates of deposit, and FHLB and Federal Reserve Bank borrowings. Total stockholders' equity increased by $119 million to $711.9 million at September 30, 2025, supported by a $74.1 million increase in additional paid-in-capital. The tangible common equity (TCE) ratio stood at 9.7% at quarter-end, reflecting the impact of the NBC transaction offset by core earnings. Management emphasizes that the company is "exceedingly well capitalized" with a "solid balance sheet structure."

Credit quality remains a key focus. The allowance for credit losses (ACL) is determined through a comprehensive evaluation of historical loss experience, economic conditions, and portfolio risks. The provision for credit losses in Q3 2025 was primarily due to establishing reserves for non-PCD loans acquired in the NBC acquisition and growth in the legacy portfolio. Non-accrual loans totaled $48.6 million and classified assets were $82.8 million at September 30, 2025. While the NBC acquisition added $7 million in non-accrual relationships and $16.7 million in classified assets, management is actively working on resolutions and "does not anticipate losses in excess of marks." A specific QSR-related customer has contributed to classified assets, but management has a "good path to exiting the under locations" and does not expect losses. The company's credit outlook for 2025 remains positive, with problem trends "below historic norms," supported by disciplined underwriting and robust monitoring tools.

Outlook and Strategic Vision

Equity Bancshares' outlook reflects confidence in its strategic direction. For Q4 2025, management anticipates a net interest margin in the range of 4.4% to 4.5%, driven by additional tailwinds from the investment portfolio repositioning, partially offset by normalization of purchase accounting accretion. This guidance excludes future rate changes but incorporates the effects of lagging repricing in loan and deposit portfolios. The company projects a provision for credit losses of approximately 12 basis points to average loans on an annualized basis.

Looking further ahead, management has set an ambitious target to grow the balance sheet by approximately 40% and position the company to earn $5 per share in 2026. This forward-looking guidance is inclusive of the anticipated impacts from the Frontier acquisition, which is expected to close in late 2025 or early 2026. The company's M&A pipeline remains robust, with "active conversations at a level we haven't experienced in recent years," driven by age of ownership and management of target institutions. EQBK plans to remain disciplined in its M&A approach, prioritizing value, controlling dilution, and adhering to earn-back timelines. The re-entry of Greg Kossover to oversee capital market strategy and Oklahoma market expansion further underscores the company's commitment to both organic and inorganic growth.

Conclusion

Equity Bancshares, Inc. is in a period of significant transformation and strategic execution. By successfully integrating acquisitions, optimizing its balance sheet through initiatives like the bond portfolio repositioning, and leveraging its digital capabilities for operational efficiency and customer engagement, EQBK is actively shaping its future as a growing regional bank. The company's disciplined approach to M&A, coupled with a revitalized organic growth engine and a strong capital base, positions it favorably to achieve its ambitious 2026 earnings target. While the regional banking sector faces ongoing competitive pressures from both traditional and fintech players, EQBK's focus on community ties, strategic market expansion, and prudent risk management provides a compelling investment thesis for discerning investors seeking growth in the Midwest banking landscape.