Equity Bancshares, Inc. Second Quarter Results Highlighted by Net Interest Margin Expansion

Company Completed Acquisition of NBC Oklahoma, Adding Seven Locations

Equity Bancshares, Inc. (NYSE:EQBK), ("Equity", "the Company," "we," "us," "our"), the Wichita-based holding company of Equity Bank, reported net income of $15.3 million or $0.86 earnings per diluted share for the quarter ended June 30, 2025. Adjusting for expenses associated with our merger with NBC and the extinguishment of debt totaling $1.7 million, earnings were $0.94 per diluted share.

"Our Company continued the momentum generated in the first quarter, while actively working toward the approval and closure of our merger with NBC," said Brad S. Elliott, Chairman and CEO of Equity. "Our results reflect the extraordinary efforts of our team while positioning the Company for continued strong performance over the remainder of 2025."

"As we enter the second half of the year, we continue to be well positioned to drive growth both organically and via strategic M&A," Mr. Elliott continued. "Our teams are motivated and realizing the benefits of their committed efforts to our current and proforma markets and look to continue to drive our organization forward through the remainder of 2025 and beyond."

Notable Items:

• For the second quarter 2025, net interest margin for the quarter was 4.17%. Excluding non-recurring items from the previous quarter, this compares to 4.08%, an expansion of 9 basis points. Expansion was driven by increasing contribution of loans to average earning assets and continued positive re-pricing in the portfolio.
• The Company realized book value per share expansion of $1.04 per share, or 3.0%. Tangible book value per share improved $1.10 per share, or 3.5%. Tangible common equity to tangible assets expanded 50 basis point during the quarter closing the period at 10.6%.
• Loan balances closed the period at $3.60 billion, while average loan balances for the quarter were $3.63 billion, an expansion of $55.8 million or 6.2% annualized.
• Deposit balances, excluding brokered, decreased $43.4 million driven by seasonal outflows on municipality and commercial relationships. Brokered deposits declined $127.1 million to $138.0 million, or 3.26% of total deposits
• During the quarter realized net charge-offs were $573 thousand for the quarter ended, or 0.06% annualized. Year to date net charge-offs were $738 thousand, or 0.04% annualized. Reserves closed the quarter at 1.26% of outstanding balances, materially consistent quarter over quarter.
• The Company announced a $0.15 dividend on outstanding common shares as of June 30, 2025. Our repurchase program remains active, with 7,500 shares purchased during the quarter at a weighted average cost of $36.46.
• During the quarter we received final approvals for our merger with NBC Corp. of Oklahoma. The transaction officially closed on July 2, 2025, adding approximately $695.1 million in loans, $800.5 million in deposits, and new markets to the Equity Bank footprint, including Oklahoma City.

Financial Results for the Quarter Ended June 30, 2025

Net income allocable to common stockholders was $15.3 million, or $0.86 per diluted share as compared to $15.0 million, or $0.85 per diluted share in the prior quarter. The drivers of the periodic change are discussed in detail in the following sections. Excluding merger expenses and the cost to extinguish debt, totaling $1.7 million, net income was $16.7 million, or $0.94 per diluted share.

Net Interest Income

Net interest income was $49.8 million for the period, as compared to $50.3 million for the previous quarter. Adjusting the stated number for non-recurring nonaccrual reversals and excess prepayment fee realization of $2.3 million in the previous quarter, net interest income increased by $1.8 million. The improvement in earnings was driven by increased volume and coupon rates within the loan portfolio coupled with an additional day in the period.

Average interest bearing liabilities as a percentage of average interest earning assets declined to 75.5%, while total average interest earning assets increased $19.7 million as compared to the previous quarter. Coupon yield on interest earning assets increased by 7 basis points while the cost of interest bearing liabilities decreased by 1 basis points during the period. In the previous quarter the non-recurring items added 20 basis points to margin. Excluding these items margin expanded 10 basis points in the quarter from 4.07% to 4.17%.

Provision for Credit Losses

During the quarter, there was a provision of $19 thousand compared to $2.7 million in the previous quarter, while the bank realized net charge-offs of $573 thousand as compared to $165 thousand in the previous quarter. The comparatively lower provision was driven by a decline in ending loan balances during the period offset by charge-offs and the lack of meaningful change in the economic outlook. At the close of the quarter, the ratio of allowance for credit losses to gross loans held for investment was 1.26%, unchanged from the previous quarter.

The Company continues to estimate the allowance for credit loss with assumptions that anticipate slower prepayment rates and continued market disruption caused by trade policy, elevated inflation, supply chain issues and the impact of monetary policy on consumers and businesses.

Non-Interest Income

Total non-interest income was $8.6 million for the quarter, as compared to $10.3 million linked quarter. The previous quarter includes a $2.2 million death benefit on a bank owned life insurance policy. Excluding this periodic change, non-interest income was up $459 thousand in the quarter attributable to improving trends in service revenues including treasury, debit card, credit card, mortgage and trust and wealth management..

Non-Interest Expense

Total non-interest expense for the quarter was $40.0 million as compared to $39.1 million for the previous quarter. The comparative increase during the period was driven by expenses associated with our merger with NBC and the costs to extinguish our subordinated debt. Excluding these items, non-interest expense decreased $699 thousand during the quarter, or 1.8%

Income Tax Expense

At June 30, 2025, the effective tax rate for the quarter was 16.9% as compared to a rate of 20.2% for the quarter ended March 31, 2025.

The decrease in the quarter over quarter tax rate was the result of the receipt of interest income included in income tax expense in the current quarter related to federal carryback claims filed by the Company in addition to tax benefits related to an investment in a new tax credit structure in the current quarter which were partially offset by non-recurring benefits recognized in the prior quarter related to stock compensation.

Loans, Total Assets and Funding

Loans held for investment were $3.6 billion at period end, decreasing $30.9 million during the quarter. Total assets were $5.4 billion, decreasing $72 million during the quarter.

Excluding brokered deposit balances, total deposits were down $43.4 million during the quarter. Including brokered balances, total deposits were $4.2 billion as of the end of the period, decreasing $170.4 million from the previous quarter end. Of the total deposit balance, non-interest-bearing accounts comprise approximately 21.6%. Total Federal Home Loan Bank borrowings were $383.7 million as of the end of the quarter, up $146.9 million from previous quarter end. The increase in borrowings offsets the decline in brokered funding. Wholesale balances in total declined $127.1 million during the period.

Asset Quality

Nonperforming assets were $45.7 million, or 0.9% of total assets, compared to $27.9 million as of the end of the previous quarter, or 0.5% of total assets. Non-accrual loans were $42.6 million, as compared to $24.2 million at the end of the previous quarter. Total classified assets, including loans rated special mention or worse, other real estate owned, excluding previous branch locations, and other repossessed assets were $71.0 million, or 11.4% of regulatory capital, up from $63.9 million, or 10.2% of regulatory capital as of the end of the previous quarter.

Capital

Quarter over quarter, book capital increased $18.3 million to $635.6 million. Tangible book value and Tangible book value per share closed the quarter at $563.8 million and $32.17, up from $31.07 for the previous quarter. The increase in capital is primarily due to earnings and an improvement in the unrealized loss position on our bond portfolio as accumulated other comprehensive income improved $15.3 million.

The Company's ratio of common equity tier 1 capital to risk-weighted assets was 15.0%, the total capital to risk-weighted assets was 16.8% and the total leverage ratio was 12.1% at June 30, 2025. At March 31, 2025, the Company's common equity tier 1 capital to risk-weighted assets ratio was 14.7%, the total capital to risk-weighted assets ratio was 18.3% and the total leverage ratio was 11.8%.

Equity Bank's ratio of common equity tier 1 capital to risk-weighted assets was 14.4%, total capital to risk-weighted assets was 15.6% and the total leverage ratio was 11.1% at June 30, 2025. At March 31, 2025, Equity Bank's ratio of common equity tier 1 capital to risk-weighted assets was 14.4%, the ratio of total capital to risk-weighted assets was 15.6% and the total leverage ratio was 11.1%.

Non-GAAP Financial Measures

In addition to evaluating the Company's results of operations in accordance with accounting principles generally accepted in the United States of America ("GAAP"), management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures that are intended to provide the reader with additional perspectives on operating results, financial condition and performance trends, while facilitating comparisons with the performance of other financial institutions. Non-GAAP financial measures are not a substitute for GAAP measures, rather, they should be read and used in conjunction with the Company's GAAP financial information.

The efficiency ratio is a common comparable metric used by banks to understand the expense structure relative to total revenue. In other words, for every dollar of total revenue recognized, how much of that dollar is expended. To improve the comparability of the ratio to our peers, non-core items are excluded. To improve transparency and acknowledging that banks are not consistent in their definition of the efficiency ratio, we include our calculation of this non-GAAP measure.

Core income calculations are a non-GAAP measure that management believes is an effective alternative measure of how efficiently the company utilizes its asset base. Core income is calculated by adjusting GAAP income by non-core gains and losses and excluding non-core expenses, net of tax, as outlined in the table below. We calculate (a) core net income (loss) allocable to common stockholders plus merger expenses, tax effected non-core items, goodwill impairment and BOLI tax adjustment, less gain (loss) from securities transactions; (b) adjusted operating net income as net income (loss) allocable to common stockholders plus adjusted non-core items, tax effected non-core items and BOLI tax adjustments

Core return on average assets before income tax provision and provision for loan losses is a measure that the Company uses to understand fundamental operating performance before these expenses. Used as a ratio relative to average assets, we believe it demonstrates "core" performance and can be viewed as an alternative measure of how efficiently the Company services its asset base. Used as a ratio relative to average equity, it can function as an alternative measure of the Company's earnings performance in relationship to its equity.

Core return on average equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate by taking core net income allocable to common stockholders divided by a simple average of net income and core net income plus average stockholders' equity. For return on average equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.

Core earnings per share is a non-GAAP financial measures we calculate by taking GAAP net income less non-core impacts to net income to arrive at core net income and core diluted earnings per share. This financial measure is used by financial statement users to evaluate the core financial performance of the Company

Tangible common equity and related measures are non-GAAP financial measures that exclude the impact of intangible assets, net of deferred taxes, and their related amortization. These financial measures are useful for evaluating the performance of a business consistently, whether acquired or developed internally. Return on average tangible common equity is used by management and readers of our financial statements to understand how efficiently the Company is deploying its common equity. Companies that are able to demonstrate more efficient use of common equity are more likely to be viewed favorably by current and prospective investors.

The Company believes that disclosing these non-GAAP financial measures is both useful internally and is expected by our investors and analysts in order to understand the overall performance of the Company. Other companies may calculate and define their non-GAAP financial measures and supplemental data differently. A reconciliation of GAAP financial measures to non-GAAP measures and other performance ratios, as adjusted, are included in Table 6 in the following press release tables.

Conference Call and Webcast

Equity's Chairman and Chief Executive Officer, Brad Elliott, and Chief Financial Officer, Chris Navratil, will hold a conference call and webcast to discuss second quarter results on Tuesday, July 15, 2025, at 10 a.m. eastern time or 9 a.m. central time.

Those wishing to participate in the conference call should call the applicable number below and reference the Access Code below.

United States (Local): +1 404 975 4839

United States (Toll-Free): +1 833 470 1428

Global Dial-In Numbers

Access Code: 67814

To eliminate wait times, conference call participants may pre-register using this registration link. After registering, a confirmation with access details will be sent via email.

A replay of the call and webcast will be available two hours following the close of the call until July 22, 2025, accessible at investor.equitybank.com. Webcast URL: https://events.q4inc.com/attendee/864827706

About Equity Bancshares, Inc.

Equity Bancshares, Inc. is the holding company for Equity Bank, offering a full range of financial solutions, including commercial loans, consumer banking, mortgage loans, trust and wealth management services and treasury management services, while delivering the high-quality, relationship-based customer service of a community bank. Equity's common stock is traded on the New York Stock Exchange. under the symbol "EQBK." Learn more at www.equitybank.com.

Special Note Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect the current views of Equity's management with respect to, among other things, future events and Equity's financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "project," "positioned," "forecast," "goal," "target," "would" and "outlook," or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity's industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity's control. Accordingly, Equity cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from Equity's expectations include competition from other financial institutions and bank holding companies; the effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board; changes in the demand for loans; fluctuations in value of collateral and loan reserves; inflation, interest rate, market and monetary fluctuations; changes in consumer spending, borrowing and savings habits; the possibility that the expected benefits related to the proposed transaction with NBC Corp. of Oklahoma ("NBC") may not materialize as expected; the proposed transaction not being timely completed, if completed at all; prior to the completion of the proposed transaction, the business of NBC experiencing disruptions due to transaction-related uncertainty or other factors making it more difficult to maintain relationships with employees, customers, other business partners or governmental entities, difficulty retaining key employees; the ability to obtain regulatory approval of the NBC transactions; and the ability to successfully implement integration strategies or to achieve expected synergies and operating efficiencies within the expected time-frames or at all; and similar variables. The foregoing list of factors is not exhaustive.

For discussion of these and other risks that may cause actual results to differ from expectations, please refer to "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in Equity's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 7, 2025, and any updates to those risk factors set forth in Equity's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. If one or more events related to these or other risks or uncertainties materialize, or if Equity's underlying assumptions prove to be incorrect, actual results may differ materially from what Equity anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity does not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. New risks and uncertainties arise from time to time and it is not possible for us to predict those events or how they may affect us. In addition, Equity cannot assess the impact of each factor on Equity's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity or persons acting on Equity's behalf may issue.

Unaudited Financial Tables

• Table 1. Consolidated Statements of Income
• Table 2. Quarterly Consolidated Statements of Income
• Table 3. Consolidated Balance Sheets
• Table 4. Selected Financial Highlights
• Table 5. Year-To-Date Net Interest Income Analysis
• Table 6. Quarter-To-Date Net Interest Income Analysis
• Table 7. Quarter-Over-Quarter Net Interest Income Analysis
• Table 8. Non-GAAP Financial Measures