UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2025
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 001-37624
EQUITY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Kansas
72-1532188
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
7701 East Kellogg Drive, Suite 300
Wichita, KS
67207
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: 316.612.6000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Class A, Common Stock, par value $0.01 per share
Trading Symbol
EQBK
Name of each exchange on which registered
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No
As of April 30, 2025, the registrant had 17,515,494 shares of Class A common stock, $0.01 par value per share, outstanding.
TABLE OF CONTENTS
Part I
Financial Information
5
Item 1.
Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Income
6
Consolidated Statements of Comprehensive Income
7
Consolidated Statements of Stockholders’ Equity
8
Consolidated Statements of Cash Flows
9
Condensed Notes to Interim Consolidated Financial Statements
11
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
49
Overview
51
Critical Accounting Policies
Results of Operations
52
Financial Condition
57
Liquidity and Capital Resources
66
Non-GAAP Financial Measures
67
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
72
Item 4.
Controls and Procedures
74
Part II
Other Information
75
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Item 6.
Exhibits
76
Important Notice about Information in this Quarterly Report
Unless we state otherwise or the context otherwise requires, references in this Quarterly Report to “we,” “our,” “us,” “the Company” and “Equity” refer to Equity Bancshares, Inc. and its consolidated subsidiaries, including Equity Bank, which we sometimes refer to as “Equity Bank,” “the Bank” or “our Bank.”
The information contained in this Quarterly Report is accurate only as of the date of this Quarterly Report on Form 10-Q and as of the dates specified herein.
2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, future events and our 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,” “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 our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution 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 we believe 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. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading “Item 1A - Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 7, 2025, and in Item 1A – Risk Factors of this Quarterly Report.
There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:
3
The foregoing factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in this Quarterly Report. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. 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 we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. 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, we cannot assess the impact of each factor on our 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 Quarterly Report on Form 10-Q are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or verbal forward-looking statements that we or persons acting on our behalf may issue.
4
PART I
Item 1: Financial Statements
CONSOLIDATED BALANCE SHEETS
March 31, 2025, and December 31, 2024
(Dollar amounts in thousands)
See accompanying condensed notes to interim consolidated financial statements.
(Unaudited)March 31,
December 31,
2025
2024
ASSETS
Cash and due from banks
$
431,131
383,503
Federal funds sold
251
244
Cash and cash equivalents
431,382
383,747
Available-for-sale securities
950,453
1,004,455
Held-to-maturity securities, fair value of $5,295 and $5,214
5,226
5,217
Loans held for sale
338
513
Loans, net of allowance for credit losses of $45,824 and $43,267
3,585,804
3,457,549
Other real estate owned, net
4,464
4,773
Premises and equipment, net
117,041
117,132
Bank-owned life insurance
132,317
133,032
Federal Reserve Bank and Federal Home Loan Bank stock
31,960
27,875
Interest receivable
26,791
28,913
Goodwill
53,101
Core deposit intangibles, net
13,924
14,969
Other
93,299
100,771
Total assets
5,446,100
5,332,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Demand
949,791
954,065
Total non-interest-bearing deposits
Demand, savings and money market
2,614,110
2,684,197
Time
841,463
736,527
Total interest-bearing deposits
3,455,573
3,420,724
Total deposits
4,405,364
4,374,789
Federal funds purchased and retail repurchase agreements
36,772
37,246
Federal Home Loan Bank advances
236,734
178,073
Subordinated debt
97,620
97,477
Contractual obligations
9,398
12,067
Interest payable and other liabilities
42,888
39,477
Total liabilities
4,828,776
4,739,129
Commitments and contingent liabilities, see Notes 12 and 13
Stockholders’ equity, see Note 8
Common stock
231
230
Additional paid-in capital
586,251
584,424
Retained earnings
207,282
194,920
Accumulated other comprehensive income (loss)
(44,965
)
(55,181
Treasury stock
(131,475
Total stockholders’ equity
617,324
592,918
Total liabilities and stockholders’ equity
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended March 31, 2025, and 2024
(Dollar amounts in thousands, except per share data)
(Unaudited)Three Months EndedMarch 31,
Interest and dividend income
Loans, including fees
62,997
58,829
Securities, taxable
9,114
9,877
Securities, nontaxable
377
391
Federal funds sold and other
2,196
2,670
Total interest and dividend income
74,684
71,767
Interest expense
19,377
22,855
248
326
2,916
1,144
Federal Reserve Bank borrowings
—
1,361
1,851
1,899
Total interest expense
24,392
27,585
Net interest income
50,292
44,182
Provision (reversal) for credit losses
2,722
1,000
Net interest income after provision (reversal) for credit losses
47,570
43,182
Non-interest income
Service charges and fees
2,064
2,569
Debit card income
2,504
2,447
Mortgage banking
106
188
Increase in value of bank-owned life insurance
3,593
828
Net gain on acquisition and branch sales
1,240
Net gain (loss) from securities transactions
12
43
2,051
4,416
Total non-interest income
10,330
11,731
Non-interest expense
Salaries and employee benefits
19,954
18,097
Net occupancy and equipment
3,675
3,535
Data processing
5,086
4,828
Professional fees
1,527
1,392
Advertising and business development
1,344
1,238
Telecommunications
587
655
FDIC insurance
630
571
Courier and postage
799
606
Free nationwide ATM cost
494
Amortization of core deposit intangibles
1,045
899
Loan expense
129
109
Other real estate owned and repossessed assets, net
101
(41
Merger expenses
1,556
3,594
3,213
Total non-interest expense
39,050
37,152
Income (loss) before income tax
18,850
17,761
Provision (benefit) for income taxes
3,809
3,693
Net income (loss) and net income (loss) allocable to common stockholders
15,041
14,068
Basic earnings (loss) per share
0.86
0.91
Diluted earnings (loss) per share
0.85
0.90
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income
Other comprehensive income (loss):
Unrealized holding gains (losses) arising during the period on available-for-sale securities
14,082
(6,180
Reclassification for net (gains) losses included in net income
(13
252
Unrealized holding gains (losses) arising during the period on cash flow hedges
(450
2,134
Total other comprehensive income (loss)
13,619
(3,794
Tax effect
(3,403
926
Other comprehensive income (loss), net of tax
10,216
(2,868
Comprehensive income (loss)
25,257
11,200
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(Dollar amounts in thousands, except share and per share data)
Common Stock
Additional
AccumulatedOther
Total
SharesOutstanding
Amount
Paid-InCapital
RetainedEarnings
ComprehensiveIncome (Loss)
TreasuryStock
Stockholders’Equity
Balance at January 1, 2024
15,443,651
207
489,187
141,006
(57,920
(119,620
452,860
Other comprehensive income (loss), net of tax effects
Cash dividends - common stock, $0.12 per share
(1,843
Dividend equivalents- restricted stock units and restricted stock awards, $0.12 per share
(30
Stock-based compensation
950
Common stock issued upon exercise of stock options
1,250
29
Common stock issued under stock-based incentive plan
91,005
1
(1
Common stock issued under employee stock purchase plan
16,884
368
Treasury stock purchase
(209,591
(6,758
Balance at March 31, 2024
15,343,199
208
490,533
153,201
(60,788
(126,378
456,776
Balance at January 1, 2025
17,427,626
Cash dividends - common stock, $0.15 per share
(2,629
Dividend equivalents- restricted stock units and restricted stock awards, $0.15 per share
(50
1,422
33
88,215
13,921
446
Common stock issued with private placement, net of offering costs
(73
Treasury stock purchases
Balance at March 31, 2025
17,530,762
CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities
Adjustments to reconcile net income to net cash from operating activities:
Depreciation
1,432
1,325
Amortization of operating lease right-of-use asset
127
92
Amortization of cloud computing implementation costs
21
35
Net amortization (accretion) of purchase valuation adjustments
(577
(436
Amortization (accretion) of premiums and discounts on securities
(443
(821
Amortization of intangible assets
1,103
935
Deferred income taxes
224
(1,633
Federal Home Loan Bank stock dividends
(337
(142
Loss (gain) on sales and valuation adjustments on other real estate owned
(34
(109
Net loss (gain) on sales and settlements of securities
Change in unrealized (gains) losses on equity securities
Loss (gain) on disposal of premises and equipment
(150
(7
Loss (gain) on sales of foreclosed assets
(11
Loss (gain) on sales of loans
(86
565
Originations of loans held for sale
(4,131
(8,234
Proceeds from the sale of loans held for sale
4,393
10,511
Increase in the value of bank-owned life insurance
(3,593
(828
Change in fair value of derivatives recognized in earnings
196
Gain on acquisition
(1,239
Payments on operating lease payable
(159
(136
Net change in:
2,122
493
Other assets
3,683
1,936
(1,273
(6,001
Net cash provided by operating activities
21,680
12,639
Cash flows (to) from investing activities
Purchases of available-for-sale securities
(9,834
(120,451
Proceeds from sales, calls, pay-downs and maturities of available-for-sale securities
78,346
107,651
Proceeds from calls, pay-downs and maturities of held-to-maturity securities
Net change in loans
(68,393
(30,566
Purchase of government guaranteed loans
(61,987
(4,180
Purchase of premises and equipment
(1,464
(2,012
Proceeds from sale of premises and equipment
273
Proceeds from sale of foreclosed assets
4,758
228
Net redemptions (purchases) of Federal Home Loan Bank and Federal Reserve Bank stock
(3,748
(6,259
Net redemptions (purchases) of correspondent and miscellaneous other stock
(537
(622
Proceeds from sale of other real estate owned
456
574
Proceeds from bank-owned life insurance death benefits
4,308
Purchase of Net Assets of Rockhold BanCorp, net of cash acquired
60,914
Net cash (used in) provided by investing activities
(57,817
5,289
Cash flows (to) from financing activities
Net increase (decrease) in deposits
30,556
(124,244
Net change in federal funds purchased and retail repurchase agreements
(474
(8,589
Net borrowings (repayments) on Federal Home Loan Bank line of credit
58,661
119,931
Proceeds from Federal Home Loan Bank term advances
300,000
Principal repayments on Federal Home Loan Bank term advances
(300,000
Principal payments on Federal Reserve Bank borrowings
(140,000
Proceeds from issuance of common stock, net
Proceeds from the exercise of employee stock options
Proceeds from employee stock purchase plan
Purchase of treasury stock
Net change in contractual obligations
(2,669
(822
Dividends paid on common stock
(2,708
(1,924
Net cash (used in) provided by financing activities
83,772
(162,009
Net change in cash and cash equivalents
47,635
(144,081
Cash and cash equivalents, beginning of period
379,099
Ending cash and cash equivalents
235,018
Supplemental cash flow information:
Interest paid
21,865
30,647
Income taxes paid, net of refunds
Supplemental noncash disclosures:
Other real estate owned acquired in settlement of loans
113
100
Other repossessed assets acquired in settlement of loans
246
247
Total fair value of assets acquired in purchase of Rockhold BanCorp, net of cash
300,957
Total fair value of liabilities assumed in purchase of Rockhold BanCorp
360,632
10
CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The interim consolidated financial statements include the accounts of Equity Bancshares, Inc., its wholly-owned subsidiaries, Equity Bank (“Equity Bank”), EBAC, LLC (“EBAC”) and Equity Risk Management, Inc. ("ERMI"). ERMI provides property and casualty insurance coverage to Equity Bancshares and Equity Bank and reinsurance to other third party insurance captives for which insurance may not be currently available or economically feasible in today's insurance marketplace. The wholly-owned subsidiaries of Equity Bank are comprised of SA Holdings, Inc. ("SA Holdings"), SA Property LLC ("SA Property"), and EQBK Investments, LLC. ("EQBK Investments"). SA Holdings and SA Property were established for the purpose of holding and selling other real estate owned. EQBK Investments was established for the purpose to hold Equity Bank's investment in a real estate investment trust. These entities are collectively referred to as the “Company”. All significant intercompany accounts and transactions have been eliminated in consolidation.
The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and in accordance with guidance provided by the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial information. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In the opinion of management, the interim statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows of the Company on a consolidated basis and all such adjustments are of a normal recurring nature. These financial statements and the accompanying notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 7, 2025. Operating results for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any other period.
Reclassifications
Some items in prior financial statements were reclassified to conform to the current presentation. Management determined the items reclassified are immaterial to the consolidated financial statements taken as a whole and did not result in a change in equity or net income for the periods reported.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The amendments in ASU 2023-09 require public business entities on an annual basis to disclose: (1) specific categories in the rate reconciliation; (2) provide additional information for reconciling items that meet a quantitative threshold of five percent of pretax income multiplied by the statutory rate; (3) provide a qualitative description of the state and local jurisdictions that make up a majority of the state and local income tax category; (4) requires the entity to provide an explanation of the nature, effect and underlying causes of the reconciling items disclosed and the judgment used in categorizing the reconciling items; (5) requires that all entities disclose on an annual basis income taxes paid (net of refunds received) disaggregated by federal, state and foreign taxes, and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than five percent of total income taxes paid (net of refunds); (6) requires disclosure of income from continuing operations before income tax expense to be disaggregated between domestic and foreign, and income tax expense disaggregated by federal, state and foreign; and (7) removes the disclosures of estimating the range of reasonably possible change in unrecognized tax benefits balance in the next 12 months and removes the requirement to disclose the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures. The amendments in this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis; however, retrospective application is permitted. The Company's financial condition, results of operations and cash flows will not be impacted by this guidance; however, this guidance will impact the Company's financial statement disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. The amendments in ASU 2024-03, update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments will require an the Company to disclose employee compensation, depreciation, and intangible amortization included in each relevant expense caption on the face of the income statement. In addition, certain amounts already required to be disclosed under other current GAAP will be disclosed in this disaggregation and a qualitative description of the remaining amounts remaining in each relevant expense caption. The amendments in this update are effective for annual periods beginning after December 15, 2026, and early adoptions is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis; however, retrospective application is permitted. The Company's financial condition, results of operations and cash flows will not be impacted by this guidance; however, this guidance will impact the Company's financial statement disclosures.
In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures - Clarifying the Effective Date. The amendments in ASU 2025-01, clarify that all public entities should initially adopt the disclosure requirements of ASU 2024-03 in the first annual reporting period beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The transition guidance included in ASU 2024-03 is unchanged by this guidance. The Company's financial condition, results of operations and cash flows will not be impacted by this guidance; however, this guidance will impact the Company's financial statement disclosures.
NOTE 2 – INVESTMENTS
The amortized cost and fair value of available-for-sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) are listed below.
AmortizedCost
GrossUnrealizedGains
GrossUnrealizedLosses
Allowancefor CreditLosses
FairValue
U.S. Government-sponsored entities
71,250
214
(5,214
66,250
U.S. Treasury securities
36,661
132
36,793
Mortgage-backed securities
Government-sponsored residential mortgage-backed securities
613,665
2,880
(29,100
587,445
Private label residential mortgage-backed securities
141,745
(17,860
123,885
Corporate
59,984
212
(2,210
57,986
Small Business Administration loan pools
6,221
(244
5,977
State and political subdivisions
81,655
(9,547
72,117
1,011,181
3,447
(64,175
December 31, 2024
71,173
68
(6,147
65,094
86,523
118
(78
86,563
624,228
946
(36,002
589,172
144,971
(20,307
124,664
61,947
177
(3,472
58,652
6,542
(276
6,266
83,868
27
(9,851
74,044
1,079,252
1,336
(76,133
The amortized cost and fair value of held-to-maturity securities and the related gross unrecognized gains and losses are listed in the following tables.
GrossUnrecognizedGains
GrossUnrecognizedLosses
Held-to-maturity securities
3,942
80
(15
4,007
1,284
1,288
91
(22
5,295
3,932
(26
3,909
1,285
26
(6
1,305
(32
5,214
The fair value and amortized cost of debt securities at March 31, 2025, by contractual maturity, is shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.
Available-for-Sale
Held-to-Maturity
Within one year
40,629
40,662
One to five years
56,065
55,646
Five to ten years
122,766
112,990
172
165
After ten years
36,311
29,825
1,112
1,123
755,410
711,330
Total debt securities
The following table shows the carrying value and fair value of securities pledged as collateral to secure public fund deposits, borrowings from the Federal Home Loan Bank and Federal Reserve Bank and retail repurchase obligations at March 31, 2025, and December 31, 2024.
Book Value
Fair Value
Public fund deposits
700,945
669,147
732,935
690,855
Federal Home Loan Bank pledging
102,487
89,571
104,888
90,406
6,868
6,723
10,481
10,358
Retail repurchase agreements
41,020
38,459
49,021
45,249
Total securities pledged
851,320
803,900
897,325
836,868
13
The following tables show gross unrealized or unrecognized losses and fair value, aggregated by investment category, and length of time that individual securities have been in a continuous loss position at March 31, 2025, and December 31, 2024.
Less Than 12 Months
12 Months or More
UnrealizedLoss
32,859
57,034
(326
267,993
(28,774
325,027
4,355
(12
44,302
(2,198
48,657
3,745
(40
2,232
(204
5,865
(62
63,183
(9,485
69,048
70,999
(440
534,454
(63,735
605,453
15,084
32,195
(6,085
47,279
2,940
19,943
(77
22,883
168,783
(1,600
268,364
(34,402
437,147
1,765
47,022
(3,438
48,787
3,983
(3
2,284
(273
6,267
7,948
(89
62,119
(9,762
70,067
200,503
(1,789
556,591
(74,344
757,094
UnrecognizedLoss
Residential mortgage-backed (issued by government-sponsored entities)
860
166
1,026
853
167
1,020
The tables above present unrealized losses on available-for-sale securities and unrecognized losses on held-to-maturity securities since the date of purchase, independent of the impact associated with changes in cost basis upon transfer from the available-for-sale designation to the held-to-maturity designation. As of March 31, 2025, the Company held 442 available-for-sale in an unrealized loss position and two held-to-maturity security in an unrecognized loss position.
Unrealized losses on available-for-sale securities and unrecognized losses on held-to-maturity securities have not been recognized into income because the security issuers are of high credit quality, management does not intend to sell and it is more likely than not that the Company will not be required to sell the securities prior to their anticipated recovery. The decline in fair value is largely due to changes in interest rates and the fair value is expected to recover as the securities approach maturity.
14
The Company's available-for-sale and held-to-maturity investments that carry some form of credit risk are private label residential mortgage-backed, corporate and state and political subdivisions securities.
The Company's private label residential mortgage-backed exposure consists of 32 securities held by the Company and are senior in the capital structure, carry substantial credit enhancement and are 20% risk weighted by the Simplified Supervisory Formula Approach ("SSFA"). At March 31, 2025, the Company does not anticipate any credit losses in the private label residential mortgage-backed securities portfolio.
The Company's corporate debt exposure consists of 18 separate positions in U.S. financial institutions, all of which the Company has determined to be investment grade. Substantially all of the positions are subordinated debt issued by bank holding companies. The Company periodically reviews financial data of the issuers to ensure their continued investment grade status. At March 31, 2025, the Company does not anticipate any credit losses in the corporate debt securities portfolio.
The Company's portfolio of state and political subdivisions securities is comprised of 164 positions of which 86% of the positions are rated "A" or better by a Nationally Recognized Statistical Ratings Organization ("NRSRO"), and 62% of the overall portfolio is made up of general obligation bonds. The Company periodically reviews financial data of the entities and regularly monitors credit ratings changes of the entities. At March 31, 2025, the Company does not anticipate any credit losses in the state and political subdivisions securities portfolio.
The proceeds from sales and the associated gains and losses on available-for-sale securities reclassified from other comprehensive income to income are listed below.
Three Months EndedMarch 31,
Proceeds
640
726
Gross gain
Gross losses
255
Income tax expense/(benefit)
The Company also invests in several other investments, including investments in stocks and partnerships, which are included in other assets. The following table shows the various investment balances and method of accounting at March 31, 2025, and December 31, 2024.
Investments in stocks
Accounted for at fair value through net income
1,008
1,009
Accounted for at amortized cost assessed for impairment
1,976
1,982
Total investments in stocks
2,984
2,991
Investments in partnerships
Accounted for under the equity method
3,037
2,500
Accounted for under the hypothetical liquidation book value
1,861
1,961
Accounted for under proportional amortization
22,736
23,498
Total investments in partnerships
27,634
27,959
Total other investments
30,618
30,950
The unrealized gain/(loss) for investments accounted for at fair value that were still held at the reporting period were ($11) and $3 at March 31, 2025, and December 31, 2024.
15
The following table discloses the financial statement impact of tax credit investments for the three month periods ended March 31, 2025, and 2024.
Income Tax Credits Recognized During Period (a)
Other Income Tax Benefits (a)
Total Tax Benefits
Investment Amortization Included in Income Tax Expense
Investments and tax credit structures:
Included in proportional amortization
(619
(258
(877
761
Not included in proportional amortization
62
March 31, 2024
(826
(225
(1,051
924
23
(a) Reported in income tax expense on statements of income and reported in net change in other assets on statements of cash flows.
NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES
Types of loans and normal collateral securing those loans are listed below.
Commercial real estate: Commercial real estate loans include all loans secured by non-farm, nonresidential properties and by multifamily residential properties, as well as 1-4 family investment-purpose real estate loans.
Commercial and industrial: Commercial and industrial loans include loans used to purchase fixed assets, provide working capital or meet other financing needs of the business. Loans are normally secured by the assets being purchased or already owned by the borrower, inventory or accounts receivable. These may include SBA and other guaranteed or partially guaranteed types of loans.
Residential real estate: Residential real estate loans include loans secured by primary or secondary personal residences.
Agricultural real estate: Agricultural real estate loans are loans typically secured by farmland.
Agricultural: Agricultural loans are primarily operating lines subject to annual farming revenues including productivity/yield of the agricultural commodities produced. These loans may be secured by growing crops, stored crops, livestock, equipment, and miscellaneous receivables.
Consumer: Consumer loans may include installment loans, unsecured and secured personal lines of credit, overdraft protection and letters of credit. These loans are generally secured by consumer assets but may be unsecured.
The following table reconciles the outstanding balance of loans at March 31, 2025, and December 31, 2024.
Net loan balance
3,639,255
3,504,218
Loan origination fees and expenses
(1,101
(848
Merger fair value adjustments
(5,761
(6,300
Hedge fair market value adjustments
(1,441
(1,658
Purchased premium and discounts
676
5,404
3,631,628
3,500,816
16
The following table lists categories of loans at March 31, 2025, and December 31, 2024.
Commercial real estate
1,863,200
1,830,514
Commercial and industrial
762,906
658,865
Residential real estate
563,954
566,766
Agricultural real estate
260,683
267,248
Agricultural
94,199
87,339
Consumer
86,686
90,084
Total loans
Allowance for credit losses
(45,824
(43,267
Net loans
From time to time, the Company has purchased pools of residential real estate loans originated by other financial institutions to hold for investment with the intent to diversify the residential real estate portfolio. During the three months ended March 31, 2025, and 2024, the Company did not purchase any pools of residential loans. As of March 31, 2025, and December 31, 2024, residential real estate loans include $271,003 and $274,922 of purchased residential real estate loans.
The Company occasionally purchases the government guaranteed portion of loans originated by other financial institutions to hold for investment. During the three months ended March 31, 2025, the Company purchased $61,987 in loans guaranteed by governmental agencies. During the three months ended March 31, 2024, the Company purchased $4,180 in loans guaranteed by governmental agencies.
The unamortized purchase accounting discounts related to non-purchase credit deteriorated loans included in the loan totals above are $4,376 with related loans of $221,921 at March 31, 2025, and $4,659 with related loans of $252,309 at December 31, 2024.
Overdraft deposit accounts are reclassified and included in consumer loans above. These accounts totaled $306 at March 31, 2025, and $329 at December 31, 2024.
The following tables present the activity in the allowance for credit losses by class for the three month periods ended March 31, 2025, and 2024.
CommercialReal Estate
Commercialand Industrial
ResidentialRealEstate
AgriculturalRealEstate
Allowance for credit losses:
Beginning balance
14,948
14,005
8,553
3,504
439
1,818
43,267
Provision for credit losses
754
(418
278
1,606
(67
569
Initial PCD on Acquired loans
Loans charged-off
(17
(638
(1,139
Recoveries
442
404
54
64
974
Total ending allowance balance
16,122
13,548
8,827
5,158
356
1,813
45,824
13,476
17,954
7,784
1,718
995
1,593
43,520
116
367
(31
359
122
119
184
284
596
(631
(27
(181
(882
142
215
13,582
17,651
8,319
1,688
1,612
1,597
44,449
17
The following tables present the recorded investment in loans and the balance in the allowance for credit losses by portfolio and class based on the method to determine allowance for credit loss as of March 31, 2025, and December 31, 2024.
CommercialandIndustrial
Individually evaluated for credit losses
1,140
1,730
1,150
241
178
164
4,603
Collectively evaluated for credit losses
14,982
11,818
7,677
4,917
1,649
41,221
Loan Balance:
8,273
8,230
5,159
2,901
1,870
769
27,202
1,854,927
754,676
558,795
257,782
92,329
85,917
3,604,426
1,053
1,618
1,167
701
147
201
4,887
13,895
12,387
7,386
2,803
292
1,617
38,380
7,854
8,593
4,996
5,839
1,740
871
29,893
1,822,660
650,272
561,770
261,409
85,599
89,213
3,470,923
The following tables present information related to non-accrual loans at March 31, 2025, and December 31, 2024.
UnpaidPrincipalBalance
RecordedInvestment
Allowance forCredit LossesAllocated
With no related allowance recorded:
3,061
3,036
18
3,664
1,935
24
Subtotal
6,818
4,971
With an allowance recorded:
5,047
4,702
1,100
11,827
7,593
1,601
5,115
4,578
1,113
1,421
965
714
96
756
722
159
25,219
19,274
4,310
32,037
24,245
3,068
19
2,490
2,014
31
5,608
5,082
4,719
4,390
1,015
12,424
7,798
1,482
5,260
4,670
1,145
5,594
3,737
697
953
592
73
846
781
187
29,796
21,968
4,599
35,404
27,050
The tables below present average recorded investment and interest income related to non-accrual loans for the three months ended March 31, 2025, and 2024. Interest income recognized in the following table was substantially recognized on the cash basis. The recorded investment in loans excludes accrued interest receivable due to immateriality.
As of and for the Three Months Ended
Average Recorded Investment
Interest Income Recognized
3,052
3,372
996
1,975
32
947
5,027
5,315
4,813
2,368
8,014
4,897
4,915
5,510
2,351
3,274
1,231
2,574
775
688
22,099
19,311
27,126
37
24,626
The following table presents the amount of non-accrual interest income written off for the three months ended March 31, 2025, and 2024.
38
65
The following tables present the aging of the recorded investment in past due loans as of March 31, 2025, and December 31, 2024, by portfolio and class of loans.
30 - 59DaysPast Due
60 - 89DaysPast Due
GreaterThan90 DaysPastDue Still OnAccrual
Non-accrual
Loans NotPast Due
3,904
2,697
360
7,738
1,848,501
1,702
521
753,090
1,846
355
239
556,936
735
2,138
385
2,900
254,525
1,667
873
90,945
639
155
85,170
10,493
6,739
984
3,589,167
3,502
2,030
156
7,458
1,817,368
1,314
644
25
649,084
2,396
634
559,066
457
312
5,751
260,728
411
86,256
666
88,441
8,746
3,896
181
3,460,943
Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. Consumer loans are considered pass credits unless downgraded due to payment status or reviewed as part of a larger credit relationship. The Company uses the following definitions for risk ratings.
Pass: Loans classified as pass include all loans that do not fall under one of the three following categories.
Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date.
Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize
20
the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.
Based on the analysis performed at March 31, 2025, the risk category of loans by type and year of origination is as follows.
2023
2022
2021
Prior
Revolving LoansAmortized Cost
Revolving LoansConverted to Term
Risk rating
Pass
119,564
331,874
165,036
319,083
149,267
272,686
490,670
1,849,033
Special mention
331
88
375
671
1,465
Substandard
741
586
3,747
878
6,580
170
12,702
Doubtful
Total commercial real estate
332,946
165,622
322,918
150,145
279,641
491,511
112,076
120,397
73,578
58,902
35,017
63,076
265,600
956
729,602
855
1,260
9,532
8,034
260
2,981
10,317
647
31,967
77
Total commercial and industrial
130,035
81,612
59,254
35,293
66,989
276,044
1,603
11,891
20,855
33,118
34,661
256,735
133,376
67,391
558,473
294
366
274
329
281
3,395
791
45
Total residential real estate
33,392
34,990
257,016
137,065
68,254
491
16,843
40,151
15,901
22,161
9,171
53,365
96,214
265
254,071
1,681
136
731
2,548
202
1,034
4,064
Total agricultural real estate
41,832
17,876
22,363
9,952
54,535
97,017
10,200
18,952
3,444
4,896
1,638
3,546
50,485
48
93,209
445
958
Total agricultural
3,775
4,911
1,673
4,023
50,617
24,976
13,019
15,348
11,906
4,751
4,769
11,193
85,962
50
162
195
102
724
Total consumer
13,069
15,510
12,121
4,946
4,871
295,550
545,248
306,425
451,609
456,579
530,818
981,553
2,568
3,570,350
2,118
1,692
5,671
10,323
11,362
4,704
2,430
14,537
11,482
692
55,530
557,689
317,787
456,557
459,025
547,124
994,636
3,260
Based on the analysis performed at December 31, 2024, the risk category of loans by type and year of origination is as follows.
2020
332,078
191,947
337,048
162,180
148,732
166,614
474,324
1,813,778
103
378
497
1,309
795
459
3,499
365
6,277
339
15,427
333,204
192,406
340,844
165,679
149,097
173,269
475,160
114,421
78,335
69,294
32,227
53,119
16,902
261,227
994
626,519
121
160
870
131
1,300
8,256
8,189
315
1,592
10,563
667
30,969
122,798
86,524
69,769
32,519
54,232
19,441
271,921
1,661
25,981
33,933
35,687
260,180
7,622
130,242
66,981
572
561,198
300
372
253
403
123
3,370
807
5,196
34,128
35,940
260,583
7,745
133,912
67,860
617
52,369
16,936
24,551
11,468
20,508
36,834
95,410
277
258,353
1,541
151
138
595
2,425
2,054
56
3,659
6,470
53,910
18,990
24,758
12,039
20,584
40,631
96,059
15,428
4,045
5,364
2,576
3,674
1,308
53,757
86,201
185
36
143
1,106
15,473
4,230
5,383
2,850
4,078
1,376
53,900
35,412
17,503
14,157
5,765
2,732
2,724
11,007
89,300
234
289
784
35,425
17,737
14,446
5,935
2,775
2,759
575,689
342,699
486,101
474,396
236,387
354,624
962,706
2,747
3,435,349
1,993
414
1,295
5,438
9,109
11,316
4,625
5,191
2,124
712
59,952
586,791
354,015
491,140
479,605
238,511
371,388
975,907
3,459
22
The following table discloses the charge-off and recovery activity by loan type and year of origination for the three month period ending March 31, 2025.
Gross charge-offs
(14
(4
Gross recoveries
199
243
Net charge-offs
420
(25
(37
(20
(310
86
279
(21
(39
(2
(8
(5
(16
(70
(125
(60
(36
(123
(205
(53
(61
(574
(95
(157
(285
(84
(404
(44
222
93
611
(90
(151
(63
(165
The following table discloses the charge-off and recovery activity by loan type and year of origination for the three month period ending March 31, 2024.
(10
(168
(104
(316
104
(64
(75
(308
(489
(19
(45
(28
34
(18
(127
(237
(47
(153
(344
110
82
(43
(71
(333
(667
Modifications to Debtors Experiencing Financial Difficulty
The following table presents the amortized cost basis of loans at March 31, 2025, and 2024, that were both experiencing financial difficulty and modified during the three months ended March 31, 2025, and 2024, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.
Payment Delay
Rate Change
Term Extension
Combination Payment Delay and Term Extension
Total Modifications
Total Class of Financing Receivable
0.01
%
78
287
0.04
0.00
272
387
39
60
0.23
1,223
0.82
496
0.05
At March 31, 2025, and 2024, there were $30 and $235 in commitments to lend additional amounts on these loans.
At modification date, the Company considers loans modified to borrowers in financial distress as loans that do not share similar risk characteristics with collectively evaluated loans at modification date for the purposes of calculating the allowance for credit losses. These loans will be evaluated for credit losses based on either discounted cash flows or the fair value of collateral at modification date; however, subsequent to the modification date these loans will be evaluated for credit losses as part of the collectively evaluated pools after a period of ongoing performance under the terms of the modified loan.
The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified during the twelve months ended March 31, 2025, and 2024.
30 - 59 Days Past Due
60 - 89 Days Past Due
Greater Than 89 days Past Due
Total Past Due
643
3,584
3,662
4,227
4,900
40
2,224
2,249
2,236
2,301
The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three months ended March 31, 2025, and 2024.
Principal Forgiveness
Weighted Average Interest Rate Reduction
Weighted Average Term Extension in Years
0.49
0.25
0.67
3.00
1.89
0.88
Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures
The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk from a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The allowance for credit losses on off-balance-sheet credit exposures is adjusted as a provision for credit loss expense recognized within other non-interest expense on the consolidated statements of income and included in other liabilities on the consolidated balance sheets. The estimated credit loss includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The estimate of expected credit loss is based on the historical loss rate for the class of loan the commitments would be classified as if funded.
The following table lists allowance for credit losses on off-balance-sheet credit exposures as of March 31, 2025, and December 31, 2024.
Allowance forCredit Losses
1,230
1,170
69
Total allowance for credit losses
1,438
1,442
NOTE 4 – DERIVATIVE FINANCIAL INSTRUMENTS
The Company is exposed to interest-rate risk primarily from the effect of interest rate changes on its interest-earning assets and its sources of funding these assets. The Company will periodically enter into interest rate swaps or interest rate caps/floors to manage certain interest rate risk exposure.
Interest Rate Swaps Designated as Fair Value Hedges
The Company periodically enters into interest rate swaps to hedge the fair value of certain commercial real estate loans. These transactions are designated as fair value hedges. In this type of transaction, the Company typically receives from the counterparty a variable-rate cash flow based on the one-month LIBOR or one-month SOFR plus a spread to the index and pays a fixed-rate cash flow equal to the customer loan rate. At March 31, 2025, the portfolio of interest rate swaps had a weighted average maturity of 5.7 years, a weighted average pay rate of 4.60% and a weighted average rate received of 7.46%. At December 31, 2024, the portfolio of interest rate swaps had a weighted average maturity of 5.9 years, a weighted average pay rate of 4.60% and a weighted average rate received of 7.70%.
Interest Rate Swaps Designated as Cash Flow Hedges
The Company has entered into cash flow hedges to hedge future cash flows related to subordinated debt and Federal Home Loan Bank advances interest expense and adjustable rate loans interest income. These agreements are designated as cash flow hedges and are marked to market through other comprehensive income.
The following table lists the cash flow hedges at March 31, 2025, and December 31, 2024.
Weighted AverageMaturity in Years
Weighted Average Pay Rate
Weighted Average Rate Received
Subordinated debt hedges
10.5
2.81
6.42
10.7
7.01
Variable rate FHLB advance hedges
1.0
3.59
4.34
1.2
3.58
4.42
Prime based receivable loan hedges
Total cash flow hedges
1.6
3.53
4.48
1.9
3.54
4.60
Stand-Alone Derivatives
The Company periodically enters into interest rate swaps with our borrowers and simultaneously enters into swaps with a counterparty with offsetting terms for the purpose of providing our borrowers long-term fixed rate loans, in addition to stand alone interest-rate swaps designed to offset the economic impact of fixed rate loans. Neither swap is designated as a hedge, and both are marked to market through earnings. At March 31, 2025, this portfolio of interest rate swaps had a weighted average maturity of 5.9 years, weighted average pay rate of 7.27% and a weighted average rate received of 7.35%. At December 31, 2024, this portfolio of interest rate swaps had a weighted average maturity of 5.6 years, weighted average pay rate of 6.72% and weighted average rate received of 6.85%.
Reconciliation of Derivative Fair Values and Gains/(Losses)
The notional amount of a derivative contract is a factor in determining periodic interest payments or cash flows received or paid. The notional amount of derivatives serves as a level of involvement in various types of derivatives. The notional amount does not represent the Company’s overall exposure to credit or market risk, generally, the exposure is significantly smaller.
The following table shows the notional balances and fair values (including net accrued interest) of the derivatives outstanding by derivative type at March 31, 2025, and December 31, 2024.
NotionalAmount
DerivativeAssets
DerivativeLiabilities
Derivatives designated as hedging instruments:
Interest rate swaps
14,101
1,174
14,503
Derivatives designated as cash flow hedges:
107,500
2,298
2,753
Total derivatives designated as hedging relationships
121,601
3,472
122,003
4,218
Derivatives not designated as hedging instruments:
182,744
3,140
2,966
143,831
3,837
Total derivatives not designated as hedging instruments
304,345
6,612
265,834
8,055
Cash collateral
5,584
7,270
Netting adjustments
(5,061
(7,173
Net amount presented in Balance Sheet
1,551
3,489
882
3,643
The table below lists designated and qualifying hedged items in fair value hedges at March 31, 2025, and December 31, 2024.
Carrying Amount
Hedging Fair Value Adjustment
Fair Value Adjustments on Discontinued Hedges
Commercial real estate loans
14,669
(387
14,985
(399
The Company reports hedging derivative gains (losses) as adjustments to loan interest income and loan interest expense along with the related net interest settlements. The non-hedging derivative gains (losses) and related net interest settlements for economic derivatives are reported in other income. For the three month period ended March 31, 2025, and 2024, the Company recorded net gains (losses) on derivatives and hedging activities as shown in the table below.
Total net gain (loss) related to derivatives designated as hedging instruments
Total net gain (loss) related to derivatives designated as cash flow hedges
Total net gains (losses) related to hedging relationships
Economic hedges:
389
Total net gains (losses) related to derivatives not designated as hedging instruments
Net gains (losses) on derivatives and hedging activities
396
The following tables show the recorded net gains (losses) on derivatives and the related hedged items in fair value hedging relationships and the impact of those derivatives on the Company’s net interest income for the three month periods ended March 31, 2025, and 2024.
28
Gain/(Loss)on Derivatives
Gain/(Loss)on HedgedItems
Net Fair ValueHedgeGain/(Loss)
Effect ofDerivatives onNet InterestIncome
(199
206
115
146
(145
161
The following tables show the recorded net gains or (losses) on derivatives and the related hedged items in cash flow hedging relationships and the impact of those derivatives on the Company's net interest income for the three month periods ended March 31, 2025, and 2024.
Gain/(Loss)onDerivatives
Gain/(Loss)Recorded in Accumulated Other Comprehensive Income
Prime based loan receivable hedges
FHLB advance hedges
(256
(194
Subordinated note hedges
(137
(331
992
749
(1,098
981
436
NOTE 5 – OTHER REAL ESTATE OWNED AND OTHER REPOSSESSED ASSETS
Changes in other real estate owned and other repossessed assets for the three months ended March 31, 2025 and March 31, 2024 were as follows.
Other Real Estate Owned
Other Repossessed Assets
Beginning of period
4,811
9,584
Transfers in
Net (loss) gain on sales
Proceeds from sales
(456
(4,758
310
4,774
Additions to valuation reserve
Capitalized cost
Recorded investment
1,833
380
2,213
347
99
(228
(802
392
1,857
Expenses related to other real estate owned and other repossessed assets for the three months ended March 31, 2024 and 2023 were as follows.
Net loss (gain) on sales
Gain on initial valuation of collateral
Provision for unrealized losses
Operating expenses, net of rental income
53
(106
(99
61
The balance of other real estate owned includes $117 of foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property at March 31, 2025, and $134 at December 31, 2024. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process was $380 at March 31, 2025, and $553 at December 31, 2024. At March 31, 2024 and December 31 ,2024, included in the other real estate owned balance is $2,141 related to closed bank locations transferred from premises and equipment.
NOTE 6 – LEASE OBLIGATIONS
30
Right-of-use asset and lease obligations by type of property for the periods ended March 31, 2025, and December 31, 2024, are listed below.
Right-of-UseAsset
Lease Liability
WeightedAverageLease Termin Years
WeightedAverageDiscountRate
Operating Leases
Land and building leases
3,474
3,471
12.5
3.28
Total operating leases
3,600
3,601
3.29
Operating lease costs for the three months ended March 31, 2025, and 2024, are listed below.
Operating lease cost
120
Short-term lease cost
Variable lease cost
Total operating lease cost
149
There were no sale and leaseback transactions, leverage leases, lease transactions with related parties or leases that had not yet commenced during the three month period ended March 31, 2025.
A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liability is listed below.
Lease Payments
March 31,2025
Due in one year or less
575
Due after one year through two years
Due after two years through three years
545
Due after three years through four years
Due after four years through five years
219
Thereafter
1,953
Total undiscounted cash flows
4,275
Discount on cash flows
(804
Total operating lease liability
NOTE 7 – BORROWINGS
Federal funds purchased and retail repurchase agreements as of March 31, 2025, and December 31, 2024, are listed below.
December 31,2024
Federal funds purchased
Securities sold under agreements to repurchase (retail repurchase agreements) consist of obligations of the Company to other parties. The obligations are secured by residential mortgage-backed securities held by the Company with a fair value of $57,930 and $45,249 at March 31, 2025, and December 31, 2024. The agreements are on a day-to-day basis and can be terminated on demand.
The following table presents the borrowing usage and interest rate information for federal funds purchased and retail repurchase agreements at March 31, 2025, and December 31, 2024.
Average daily balance during the period
39,706
39,791
Average interest rate during the period
1.82
Maximum month-end balance year-to-date
40,423
47,312
Weighted average interest rate at period-end
1.63
1.74
Federal Home Loan Bank advances include both draws against the Company’s line of credit and fixed rate term advances.
Federal Home Loan Bank advances as of March 31, 2025, and December 31, 2024, are as follows.
Federal Home Loan Bank line of credit advances
136,734
78,073
Federal Home Loan Bank fixed-rate term advances
100,000
Total Federal Home Loan Bank advances
At March 31, 2025, and December 31, 2024, the Company had un-disbursed advance commitments (letters of credit) with the Federal Home Loan Bank of $47,850 and $118,326. These letters of credit were obtained in lieu of pledging securities to secure public fund deposits that are over the FDIC insurance limit.
The advances, Mortgage Partnership Finance credit enhancement obligations and letters of credit were collateralized by certain qualifying loans of $820,482 and securities of $78,734 for a total of $899,216 at March 31, 2025, and qualifying loans of $885,128 and securities of $79,417 for a total of $964,545 at December 31, 2024. Based on this collateral and the Company’s holdings of Federal Home Loan Bank stock, the Company was eligible to borrow an additional $613,630 and $667,092 at March 31, 2025, and December 31, 2024.
At March 31, 2025, and December 31, 2024, the Company had a borrowing capacity of $676,667 and $648,183, for which the Company has pledged loans with an outstanding balance of $879,619 and $852,957 and securities with a fair value of $6,955 and $9,070. The Company had no outstanding borrowings at March 31, 2025.
Bank stock loan
The Company entered into an agreement with an unaffiliated financial institution that provided for an initial maximum borrowing facility of $40,000, secured by the Company’s stock in Equity Bank. Each draw of funds on the facility will create a separate note that is repayable over a term of five years. Each note will bear interest at the greater of a variable interest rate equal to the prime rate published in the “Money Rates” section of The Wall Street Journal (or any generally recognized successor), floating daily, or a floor of 3.50%. Accrued interest and principal payments will be due quarterly with one final payment of unpaid principal and interest due at the end of the five-year term of each separate note.
The loan was renewed and amended on February 11, 2022, with a new maturity date of February 11, 2023. With this amendment, the maximum borrowing amount was decreased from $40,000 to $25,000. Each note will bear interest at the greater of a variable interest rate equal to the prime rate published in the “Money Rates” section of The Wall Street Journal (or any generally recognized successor), floating daily, or a floor of 3.25%. The Company is also required to pay an unused commitment fee in an amount equal to 20 basis points per annum on the unused portion of the maximum borrowing facility due on the maturity date of the renewal.
The loan was renewed on February 10, 2023, with a new maturity date of February 10, 2024. With this renewal, the maximum borrowing amount remained at $25,000. Each note will bear interest at the greater of a variable interest rate equal to the prime rate published in the “Money Rates” section of The Wall Street Journal (or any generally recognized successor), floating daily, or a floor
of 3.25%. The Company is also required to pay an unused commitment fee in an amount equal to 20 basis points per annum on the unused portion of the maximum borrowing facility due on the maturity date of the renewal.
The loan was renewed and amended on February 10, 2024, with the same terms as the previous renewal and a new maturity date of February 10, 2025.
The loan was renewed and amended on February 10, 2025, with the same terms as the previous renewal and a new maturity date of February 10, 2026.
There were no outstanding principal balances on the bank stock loan at March 31, 2025, and December 31, 2024.
The terms of the borrowing facility require the Company and Equity Bank to maintain minimum capital ratios and other covenants. In the event of default, the lender has the option to declare all outstanding balances immediately due. The Company believes it is in compliance with the terms of the borrowing facility and has not been otherwise notified of noncompliance.
Subordinated debt as of March 31, 2025, and December 31, 2024, are listed below.
Subordinated debentures
24,035
23,946
Subordinated notes
73,585
73,531
In conjunction with prior acquisitions, the Company assumed certain subordinated debentures owed to special purpose unconsolidated subsidiaries that are controlled by the Company. These subordinated debentures have the same terms as the trust preferred securities issued by the special purpose unconsolidated subsidiaries.
FCB Capital Trust II (“CTII”): The trust preferred securities issued by CTII were initially issued to accrue and pay distributions quarterly at three-month LIBOR plus 2.00%; however on July 12, 2023, after the LIBOR transition it will now accrue and pay distributions quarterly at three-month CME term SOFR plus a tenor spread adjustment of 0.26% plus 2.00 % on the stated liquidation amount of the trust preferred securities. These trust preferred securities are mandatorily redeemable upon maturity on April 15, 2035, or upon earlier redemption.
FCB Capital Trust III (“CTIII”): The trust preferred securities issued by CTIII were initially issued to accrue and pay distributions quarterly at three-month LIBOR plus 1.89%; however on September 15, 2023, after the LIBOR transition it will now accrue and pay distributions quarterly at three-month CME term SOFR plus a tenor spread adjustment of 0.26% plus 1.89% on the stated liquidation amount of the trust preferred securities. These trust preferred securities are mandatorily redeemable upon maturity on June 15, 2037, or upon earlier redemption.
Community First (AR) Statutory Trust I (“CFSTI”): The trust preferred securities issued by CFSTI were initially issued to accrue and pay distributions quarterly at three-month LIBOR plus 3.25%; however on September 26, 2023, after the LIBOR transition it will now accrue and pay distributions quarterly at three-month CME term SOFR plus a tenor spread adjustment of 0.26% plus 3.25% on the stated liquidation amount of the trust preferred securities. These trust preferred securities are mandatorily redeemable upon maturity on December 26, 2032, or upon earlier redemption.
American State Bank Statutory Trust I (“ASBSTI”): The trust preferred securities issued by ASBSTI were initially issued to accrue and pay distributions quarterly at three-month LIBOR plus 1.80%; however on September 15, 2023, after the LIBOR transition it will now accrue and pay distributions quarterly at three-month CME term SOFR plus a tenor spread adjustment of 0.26% plus 1.80% on the stated liquidation amount of the trust preferred securities. These trust preferred securities are mandatorily redeemable upon maturity on September 15, 2035, or upon earlier redemption.
Subordinated debentures as of March 31, 2025, and December 31, 2024, are listed below.
Weighted Average Rate
Weighted Average Term in Years
CTII subordinated debentures
10,310
6.56
10.0
CTIII subordinated debentures
5,155
6.45
12.2
CFSTI subordinated debentures
7.81
7.5
ASBSTI subordinated debentures
7,732
6.36
Total contractual balance
28,352
Fair market value adjustments
(4,317
Total subordinated debentures
6.92
10.3
6.51
7.84
8.0
(4,406
On June 29, 2020, the Company entered into Subordinated Note Purchase Agreements with certain qualified institutional buyers and institutional accredited investors pursuant to which the Company issued and sold $42,000 in aggregate principal amount of its 7.00% Fixed-to-Floating Rate Subordinated notes due 2030. The notes were issued under an Indenture, dated as of June 29, 2020 (the “Indenture”), by and between the Company and UMB Bank, N.A., as trustee. The notes will mature on June 30, 2030. From June 29, 2020, through June 29, 2025, the Company will pay interest on the notes semi-annually in arrears on June 30 and December 30 of each year, commencing on December 30, 2020, at a fixed interest rate of 7.00%. Beginning June 30, 2025, the notes convert to a floating interest rate, to be reset quarterly, equal to the then-current Three-Month Term SOFR, as defined in the Indenture, plus 688 basis points. Interest payments during the floating-rate period will be paid quarterly in arrears on March 30, June 30, September 30 and December 30 of each year, commencing on September 30, 2025. On July 23, 2020, the Company closed on an additional $33,000 of subordinated notes with the same terms as the June 29, 2020, issue.
Subordinated notes as of March 31, 2025, are listed below.
75,000
7.00
5.3
Total principal outstanding
Debt issuance cost
(1,415
Total subordinated notes
Subordinated notes as of December 31, 2024, are listed below.
5.5
(1,469
Future principal repayments
Future principal repayments of the March 31, 2025, outstanding balances are as follows.
Retail Repurchase Agreements
FHLB Advances
Subordinated Debentures
Subordinated Notes
FRB Borrowings
273,506
103,352
376,858
NOTE 8 – STOCKHOLDERS’ EQUITY
Preferred stock
The Company’s articles of incorporation provide for the issuance of shares of preferred stock. At March 31, 2025, and December 31, 2024, there was no preferred stock outstanding.
The Company’s articles of incorporation provide for the issuance of 45,000,000 shares of Class A voting common stock (“Class A common stock”) and 5,000,000 shares of Class B non-voting common stock (“Class B common stock”), both of which have a par value of $0.01 per share.
The following table presents shares that were issued, held in treasury or were outstanding at March 31, 2025, and December 31, 2024.
Class A common stock – issued
22,910,299
22,807,163
Class A common stock – held in treasury
(5,379,537
Class A common stock – outstanding
Class B common stock – issued
234,903
Class B common stock – held in treasury
(234,903
Class B common stock – outstanding
Treasury stock is stated at cost, determined by the first-in first-out method.
In 2019, the Company’s Board of Directors adopted the Equity Bancshares, Inc. 2019 Employee Stock Purchase Plan (“ESPP”). The ESPP enables eligible employees to purchase the Company’s common stock at a price per share equal to 85% of the lower of the fair market value of the common stock at the beginning or end of each offering period. ESPP compensation expense of $41 was recorded for the three months ended March, 2025. ESPP compensation expense of $35 was recorded for the three months ended March 2024. The following table presents the offering periods and costs associated with this program during the reporting period.
Offering Period
Shares Purchased
Cost Per Share
Compensation Expense
August 15, 2023 to February 14, 2024
21.79
February 15, 2024 to August 14, 2024
12,581
28.52
63
August 15, 2024 to February 14, 2025
32.05
79
In July of 2023, the Company’s Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company's outstanding common stock, from time to time, beginning on October 1, 2023, and concluding on September 30, 2024. The repurchase program does not obligate the Company to acquire a specific dollar amount or number of shares, and it may be extended, modified or discontinued at any time without notice. Under this program, during the years ended December 2023 and 2024, the Company repurchased a total of 362,573 shares of the Company’s outstanding common stock at an average price paid of $32.71 per share. At September 30, 2024, there are 637,427 shares remaining under the program that expired on September 30, 2024.
In September of 2024, the Company’s Board of Directors approved a share repurchase plan for up to 1,000,000 shares of outstanding common stock beginning on October 1, 2024, and concluding on September 30, 2025. The repurchase program does not obligate the Company to acquire a specific dollar amount or number of shares, and it may be extended, modified or discontinued at any time without notice. Non-objection from the Federal Reserve Bank of Kansas City related to this repurchase plan was received October 7, 2024. At March 31, 2025, there are 1,000,000 shares remaining for repurchase under the program.
At March 31, 2025, and December 31, 2024, accumulated other comprehensive income (loss) consisted of (i) the after-tax effect of unrealized gains (losses) on available-for-sale securities and (ii) unrealized gains (losses) on cash flow hedges.
Components of accumulated other comprehensive income as of March 31, 2025, and December 31, 2024, are listed below.
Available-for-SaleSecurities
Cash Flow Hedges
AccumulatedOtherComprehensiveIncome (Loss)
Net unrealized or unamortized gains (losses)
(60,728
1,623
(59,105
14,521
(381
14,140
(46,207
1,242
(74,797
2,073
(72,724
18,041
(498
17,543
(56,756
1,575
NOTE 9 – REGULATORY MATTERS
Banks and bank holding companies (on a consolidated basis) are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. The Basel III rules require banks to maintain a Common Equity Tier 1 capital ratio of 6.5%, a total Tier 1 capital ratio of 8%, a total capital ratio of 10% and a leverage ratio of 5% to be deemed “well capitalized” for purposes of certain rules and prompt corrective action requirements. The risk-based ratios include a “capital conservation buffer” of 2.5% which can limit certain activities of an institution, including payment of dividends, share repurchases and discretionary bonuses to executive officers, if its capital level is below the buffer amount. Management believes as of March 31, 2025, the Company and Bank meet all capital adequacy requirements to which they are subject.
Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as are asset growth and acquisitions, and capital restoration plans are required.
As of March 31, 2025, the most recent notifications from the federal regulatory agencies categorized Equity Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, Equity Bank must maintain minimum regulatory capital ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed Equity Bank’s category.
The Company’s and Equity Bank’s capital amounts and ratios at March 31, 2025, and December 31, 2024, are presented in the table below. Ratios provided for Equity Bancshares, Inc. represent the ratios of the Company on a consolidated basis.
Actual
Minimum Required forCapital Adequacy Under Basel III
To Be WellCapitalized UnderPrompt CorrectiveProvisions
Ratio
Total capital to risk weighted assets
Equity Bancshares, Inc.
733,650
18.32
420,589
10.50
N/A
Equity Bank
623,900
15.62
419,523
399,546
10.00
Tier 1 capital to risk weighted assets
612,803
15.30
340,477
8.50
576,538
14.43
339,614
319,637
8.00
Common equity Tier 1 capital to risk weighted assets
588,768
14.70
280,392
576,638
279,682
259,705
6.50
Tier 1 leverage to average assets
11.76
208,490
4.00
11.09
207,933
259,916
5.00
720,736
18.07
418,716
607,579
15.27
417,722
397,830
602,496
15.11
338,961
562,870
14.15
338,156
318,264
578,550
14.51
279,144
278,481
258,590
11.67
206,442
10.93
206,000
257,500
Equity Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval.
NOTE 10 – EARNINGS PER SHARE
The following table presents earnings per share for the three months ended March 2025, and 2024.
Three Months Ended
March 31,2024
Basic:
Net income (loss) allocable to common stockholders
Weighted average common shares outstanding
17,475,058
15,416,060
Weighted average vested restricted stock units
7,763
9,649
Weighted average shares
17,482,821
15,425,709
Basic earnings (loss) per common share
Diluted:
Weighted average common shares outstanding for:
Basic earnings per common share
Dilutive effects of the assumed exercise of stock options
62,743
52,609
Dilutive effects of the assumed vesting of restricted stock units
112,291
89,685
Dilutive effects of the assumed exercise of ESPP purchases
1,738
1,222
Average shares and dilutive potential common shares
17,659,593
15,569,225
Diluted earnings (loss) per common share
Average shares not included in the computation of diluted earnings per share because they were antidilutive are shown in the following table as of March 31, 2025, and 2024.
Stock options
237,004
177,563
Restricted stock units
74,263
5,177
Total antidilutive shares
311,267
182,740
NOTE 11 – FAIR VALUE
The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to disclose the fair value of its financial instruments. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. For disclosure purposes, the Company groups its financial and non-financial assets and liabilities into three different levels based on the nature of the instrument and the availability and reliability of the information that is used to determine fair value. The three levels of inputs that may be used to measure fair values are defined as follows.
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
Level 1 inputs are considered to be the most transparent and reliable. The Company assumes the use of the principal market to conduct a transaction of each particular asset or liability being measured and then considers the assumptions that market participants would use when pricing the asset or liability. Whenever possible, the Company first looks for quoted prices for identical assets or liabilities in active markets (Level 1 inputs) to value each asset or liability. However, when inputs from identical assets or liabilities on active markets are not available, the Company utilizes market observable data for similar assets and liabilities. The Company maximizes the use of observable inputs and limits the use of unobservable inputs to occasions when observable inputs are not available. The need to use unobservable inputs generally results from the lack of market liquidity of the actual financial instrument or of the underlying collateral. Although, in some instances, third party price indications may be available, limited trading activity can challenge the implied value of those quotations.
The following is a description of the valuation methodologies used for assets and liabilities measured at fair value, as well as the general classification of each instrument under the hierarchy.
Fair Value of Assets and Liabilities Measured on a Recurring Basis
The fair values of securities available-for-sale and equity securities with readily determinable fair value are carried at fair value on a recurring basis. To the extent possible, observable quoted prices in an active market are used to determine fair value and, as such, these securities are classified as Level 1. For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities, generally determined by matrix pricing, which is a mathematical technique widely used in the industry to value securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The Company’s available-for-sale securities, including U.S. Government sponsored entity securities, residential mortgage-backed securities (all of which are issued or guaranteed by government sponsored agencies), private-label residential mortgage-backed securities, corporate securities, Small Business Administration securities, and State and Political Subdivision securities are classified as Level 2.
The fair values of derivatives are determined based on a valuation pricing model using readily available observable market parameters such as interest rate yield curves (Level 2 inputs) adjusted for credit risk attributable to the seller of the interest rate derivative. Cash collateral received from or delivered to a derivative counterparty is classified as Level 1.
Assets and liabilities measured at fair value on a recurring basis are summarized in the following tables as of March 31, 2025, and December 31, 2024.
(Level 1)
(Level 2)
(Level 3)
Assets:
Available-for-sale securities:
Derivative assets:
Derivative assets (included in other assets)
Cash collateral held by counterparty and netting adjustments
Total derivative assets
Other assets:
Equity securities with readily determinable fair value
Total other assets
32,740
920,272
Liabilities:
Derivative liabilities:
Derivative liabilities (included in other liabilities)
523
Total derivative liabilities
Government-sponsored residential mortgage- backed securities
1,031
80,421
925,947
97
There were no material transfers between levels during the three months ended March 31, 2025, or the year ended December 31, 2024. The Company’s policy is to recognize transfers into or out of a level as of the end of a reporting period.
Fair Value of Assets and Liabilities Measured on a Non-recurring Basis
Certain assets are measured at fair value on a non-recurring basis when there is evidence of loans individually assessed for credit losses. The fair value of loans individually assessed for credit losses with specific allowance for credit losses are generally based on recent real estate appraisals of the collateral. Declines in the fair values of other real estate owned, subsequent to their initial acquisitions, are also based on recent real estate appraisals less estimated selling costs.
Real estate appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments made to real estate appraisals and other loan valuations are typically significant and result in a Level 3 classification of the inputs for determining fair value.
Assets measured at fair value on a non-recurring basis are summarized below as of March 31, 2025, and December 31, 2024.
Loans individually evaluated for credit losses:
3,602
5,992
3,465
1,181
Other real estate owned:
2,173
3,375
6,316
3,525
3,040
The Company did not record any liabilities for which the fair value was measured on a non-recurring basis at March 31, 2025, or December 31, 2024.
Valuations of individually evaluated loans and other real estate owned utilize third party appraisals or broker price opinions and were classified as Level 3 due to the significant judgment involved. Appraisals may include the utilization of unobservable inputs, subjective factors and utilize quantitative data to estimate fair market value.
The following table presents additional information about the unobservable inputs used in the fair value measurement of financial assets measured on a nonrecurring basis that were categorized with Level 3 of the fair value hierarchy as of March 31, 2025, and December 31, 2024.
ValuationTechnique
UnobservableInput
Range(weighted average) or Multiple of Earnings
Individually evaluated real estate loans
14,964
SalesComparisonApproach
Adjustments fordifferences betweencomparable sales
9% - 24% (16%)
Individually evaluated other real estate owned
2,198
3% - 13% (8%)
17,369
5% - 44% (24%)
41
Carrying amount and estimated fair values of financial instruments at period end were as follows for March 31, 2025, and December 31, 2024.
CarryingAmount
EstimatedFair Value
Financial assets:
913,660
Loans, net of allowance for credit losses
3,540,171
Derivative assets
Cash collateral held by derivative counterparty and netting adjustments
5,034,513
4,988,949
464,122
984,656
Financial liabilities:
4,402,227
Interest payable
7,559
Derivative liabilities
4,796,936
4,793,799
4,793,276
42
917,892
3,405,767
4,910,182
4,858,397
464,168
988,462
4,370,728
73,156
5,032
4,708,327
4,703,891
4,703,794
The fair value of off-balance-sheet items is not considered material.
NOTE 12 – COMMITMENTS AND CREDIT RISK
The Company extends credit for commercial real estate mortgages, residential mortgages, working capital financing and loans to businesses and consumers.
Commitments to Originate Loans and Available Lines of Credit
Commitments to originate loans and available lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments and lines of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments and lines of credit may expire without being drawn upon, the total commitment and lines of credit amounts do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Mortgage loans in the process of origination represent amounts that the Company plans to fund within a normal period of 60 to 90 days, and which are intended for sale to investors in the secondary market.
The contractual amounts of commitments to originate loans and available lines of credit as of March 31, 2025, and December 31, 2024, were as follows.
FixedRate
VariableRate
Commitments to make loans
26,395
323,230
28,758
389,370
Mortgage loans in the process of origination
4,534
4,547
1,345
2,252
Unused lines of credit
160,024
365,342
162,753
377,091
At March 31, 2025, the fixed rate loan commitments have interest rates ranging from 3.95% to 10.00% and maturities ranging from 1 month to 71 months.
Standby Letters of Credit
Standby letters of credit are irrevocable commitments issued by the Company to guarantee the performance of a customer to a third party once specified pre-conditions are met. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under non-financial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers.
The contractual amounts of standby letters of credit as of March 31, 2025, and December 31, 2024, were as follows.
Standby letters of credit
13,867
28,071
15,081
27,715
NOTE 13 – LEGAL MATTERS
The Company is party to various matters of litigation in the ordinary course of business. The Company periodically reviews all outstanding pending or threatened legal proceedings and determines if such matters will have an adverse effect on the business, financial condition, results of operations or cash flows. A loss contingency is recorded when the outcome is probable and reasonably able to be estimated. Any loss contingency described below has been identified by the Company as reasonably possible to result in an unfavorable outcome for the Company or the Bank.
Equity Bank is party to a lawsuit filed on January 28, 2022, in the Sedgwick County Kansas District Court on behalf of one of our customers, alleging improperly collected overdraft fees. The plaintiff seeks to have the case certified as a class action. The Company believes that the lawsuit is without merit, and it intends to vigorously defend against the claim asserted. At this time, the Company is unable to reasonably estimate the loss amount of this litigation.
Equity Bank is party to a lawsuit filed on February 2, 2022, in Jackson County, Missouri District Court against the Bank on behalf of one of our Missouri customers alleging improperly collected overdraft fees. The plaintiff seeks to have the case certified as a class action. The Company believes that the lawsuit is without merit, and it intends to vigorously defend against the claims now asserted. At this time, the Company is unable to reasonably estimate the loss amount of this litigation.
Equity Bank is party to a lawsuit filed on February 28, 2023, in Saline County, Missouri District Court against the Bank on behalf of one of our Missouri customers alleging improperly collected overdraft fees. The plaintiff seeks to have the case certified as a class action. The Company believes that the lawsuit is without merit, and it intends to vigorously defend against the claims now asserted. At this time, the Company is unable to reasonably estimate the loss amount of this litigation.
NOTE 14 – REVENUE RECOGNITION
The majority of the Company’s revenues come from interest income on financial instruments, including loans, leases, securities and derivatives, which are outside the scope of ASC 606. The Company’s services that fall within the scope of ASC 606 are presented with non-interest income and are recognized as revenue as the Company satisfies its obligation to the customer. Services within the scope of ASC 606 include service charges and fees on deposits, debit card income, investment referral income, insurance sales commissions and other non-interest income related to loans and deposits.
44
Except for gains or losses from the sale of other real estate owned, all of the Company’s revenue from contracts with customers within the scope of ASC 606 are recognized in non-interest income. The following table presents the Company’s sources of non-interest income for the three months ended March 31, 2025, and 2024.
Mortgage banking(a)
Increase in bank-owned life insurance(a)
Net gain (loss) on acquisitions(a)
1,239
Net gain (loss) from securities transactions(a)
Investment referral income
Trust income
319
Insurance sales commissions
Recovery on zero-basis purchased loans(a)
3,345
Income (loss) from equity method investments(a)
(56
Other non-interest income related to loans and deposits
1,371
Other non-interest income not related to loans and deposits(a)
635
Total other non-interest income
4,417
(a) Not within the scope of ASC 606.
NOTE 15 – BUSINESS COMBINATIONS AND BRANCH SALES
On April 2, 2025 the Company entered into an agreement and plan of reorganization with NBC Corp. of Oklahoma ("NBC"). Acquisition-related costs associated with the NBC transaction during the three months ended March 31, 2025 were $66 ($50 on an after-tax basis).
NOTE 16 – SEGMENT REPORTING
Equity Bancshares, Inc. is a financial holding company, whose principal activity is the ownership and management of its wholly-owned subsidiaries, including Equity Bank (“Equity Bank”). As a community-oriented financial institution, substantially all of the Company’s operations involve the delivery of loan and deposit products to customers. Management makes operating decisions and assesses performance based on an ongoing review of these banking operations, which constitute the Company’s only operating segment for financial reporting purposes.
The Company’s chief operating decision maker is comprised of the executive leadership team. For Equity Bancshares Inc., the executive leadership team uses gross profit and profit or loss from operations before interest and income taxes to allocate resources for in the annual budget and forecasting process. The chief operating decision maker considers budget-to-actual variances on a monthly basis for profit measures when making decisions about allocating capital and personnel to the operating segment. For Equity Bank, the executive leadership team uses net-interest income and non-interest income to allocate resources (including employees, financial, or capital resources) to that segment in the annual budget and forecasting process and uses that measure as a basis for evaluating lending terms for customer loans.
The following tables present information about reported segment revenue, measures of a segment’s profit or loss, significant segment expenses, and measure of a segment’s assets for the three months ended March 31, 2025, and 2024. The Company does not allocate all holding company expenses, income taxes or unusual items to the reportable segment. The following tables present the reconciliations of reportable segment revenues and measures of profit or loss and line item reconciliation to the Company’s consolidated financial statement totals.
Unallocated Holding
Company
Amounts
Eliminations
Three Months Ended March 31, 2025
74,623
22,522
52,101
(1,809
49,379
17,044
(17,044
(a)
19,896
58
1,330
197
Other real estate owned
3,160
434
Intersegment service charges
(375
37,984
1,066
21,725
14,169
4,440
Total segment profit/(loss)
17,285
14,800
(a) Elimination of equity in earnings of subsidiary
46
Three Months Ended March 31, 2024
71,590
25,662
1,923
45,928
(1,746
44,928
(251
16,303
(16,303
11,437
16,597
18,049
1,237
560
2,512
345
(345
36,025
1,127
20,340
13,724
4,171
(478
16,169
14,202
For the Three Months Ended March 31,
Administrative Adjustments
1,434
1,479
1,329
1,374
Amortization of operating lease right-of-use-asset
Purchase of long lived assets
1,464
5,464
47
March 31,
Assets
Total assets for reportable segments
5,430,194
5,316,222
Holding company administrative adjustments
729,101
703,685
Elimination of bank cash and intercompany receivable of subsidiaries
(104,137
(107,522
Elimination of investment in subsidiaries
(609,058
(580,338
Consolidated total assets
NOTE 17 – SUBSEQUENT EVENTS
On April 2, 2025, the Company entered into an agreement and plan of reorganization with NBC Corp. of Oklahoma ("NBC"). NBC Corp. of Oklahoma is the parent company of NBC Oklahoma, an Oklahoma state bank which has seven branch locations in Oklahoma City, Altus, Kingfisher, and Enid as well as a loan production office in Alva. In NBC Oklahoma's March 31, 2025, unaudited Consolidated Report of Condition, NBC Oklahoma reported total assets of $903,349, which included total loans of $690,012. At March 31, 2025, total liabilities of $832,998 were reported by NBC Oklahoma, which included deposits of $810,727. NBC Oklahoma reported $3,291 in net income before income taxes for the three months ended March 31, 2025. The Company anticipates there will core deposit intangible and goodwill recorded with this acquisition.
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K filed with the SEC on March 7, 2025, and our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. See “Cautionary Note Regarding Forward-Looking Statements.” Also, see the risk factors and other cautionary statements described under the heading “Item 1A: Risk Factors” included in the Annual Report on Form 10-K and in Item 1A of this Quarterly Report. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.
This discussion and analysis of our financial condition and results of operation includes the following sections:
(Dollars in thousands, except per share data)
September 30,2024
June 30,2024
Statement of Income Data (for the quarterly period ended)
74,979
74,965
75,132
25,506
28,934
28,656
49,473
46,031
46,476
98
1,183
831
Other non-interest income
10,318
8,818
8,280
8,925
10,448
618
2,287
Other non-interest expense
38,984
37,806
29,710
36,584
35,596
Income (loss) before income taxes
20,385
23,837
16,298
Provision for income taxes
3,399
3,986
4,582
Net income (loss)
16,986
19,851
11,716
1.06
1.30
0.77
1.04
1.28
0.76
Balance Sheet Data (at period end)
235,483
260,266
Securities available-for-sale
1,041,000
1,042,176
1,091,717
Securities held-to-maturity
5,408
2,205
901
1,959
1,311
Gross loans held for investment
3,600,925
3,454,407
3,482,163
43,490
43,487
Loans held for investment, net of allowance for credit losses
3,557,435
3,410,920
3,437,714
Goodwill and core deposit intangibles, net
67,025
68,070
69,130
69,737
70,955
Mortgage servicing asset, net
Naming rights, net
5,926
957
968
979
989
5,355,233
5,245,517
5,239,036
4,362,944
4,341,437
4,371,026
Borrowings
371,126
312,796
431,529
385,533
360,800
4,851,195
4,784,082
4,782,260
504,038
461,435
Tangible common equity*
544,373
523,891
433,940
390,694
384,782
Performance ratios
Return on average assets (ROAA) annualized
1.17
1.31
1.52
1.10
Return on average equity (ROAE) annualized
10.07
12.67
16.27
10.35
12.29
Return on average tangible common equity (ROATCE)* annualized
12.12
19.92
13.31
14.96
Yield on loans annualized
7.15
7.11
6.85
Cost of interest-bearing deposits annualized
2.44
2.57
2.85
2.78
2.77
Cost of total deposits
1.90
1.99
2.20
2.14
2.16
Net interest margin annualized
4.27
4.17
3.87
3.94
3.75
Efficiency ratio*
62.43
63.02
52.59
63.77
63.45
Non-interest expense to net interest income plus non-interest income
64.42
64.86
54.80
70.12
66.45
Non-interest income / average assets annualized
0.80
0.68
0.71
0.69
0.92
Non-interest expense / average assets annualized
3.04
2.91
2.32
3.01
2.90
Dividend payout ratio
17.81
11.74
15.79
Performance ratios - Core
Core earnings per diluted share*
1.32
1.05
0.96
Core return on average assets*
1.24
1.37
1.56
1.25
Core return on average equity*
10.69
13.29
16.73
14.25
13.11
Core return on average tangible common equity*
12.14
15.29
19.58
16.89
15.16
Core non-interest expense / average assets*
2.94
2.83
2.18
2.73
2.71
Capital Ratios
Tier 1 Leverage Ratio
9.55
9.14
9.10
Common Equity Tier 1 Capital Ratio
11.37
11.12
11.14
Tier 1 Risk Based Capital Ratio
11.94
11.70
11.73
Total Risk Based Capital Ratio
14.78
14.61
14.71
Total Stockholders equity / Total Assets
11.34
9.41
8.80
8.72
Tangible common equity to tangible assets*
10.13
9.95
8.21
7.55
7.45
Book value per share
35.23
34.04
32.97
30.36
29.80
Tangible common book value per share*
31.07
30.07
28.38
25.70
25.10
Tangible common book value per diluted share*
30.84
29.70
28.00
25.44
24.87
* The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures see “Non-GAAP Financial Measures” in this Item 2.
We are a financial holding company headquartered in Wichita, Kansas. Our wholly-owned banking subsidiary, Equity Bank, provides a broad range of financial services primarily to businesses and business owners as well as individuals through our network of 71 full-service banking sites located in Arkansas, Kansas, Missouri, and Oklahoma. As of March 31, 2025, we had consolidated total assets of $5.45 billion, total loans held for investment, net of allowance, of $3.59 billion, total deposits of $4.41 billion, and total stockholders’ equity of $617.3 million. During the three month period ended March 31, 2025, the Company had net income of $15.0 million. The Company had net income of $14.1 million for the three month period ended March 31, 2024.
Our significant accounting policies are integral to understanding the results reported. Our accounting policies are described in detail in Note 1 to the December 31, 2024, audited financial statements included in our Annual Report on Form 10-K filed with the SEC on March 7, 2025. The preparation of our financial statements in accordance with GAAP requires management to make a number of judgments and assumptions that affect our reported results and disclosures. Several of our accounting policies are inherently subject to valuation assumptions and other subjective assessments and are more critical than others in terms of their importance to results. Changes in any of the estimates and assumptions underlying critical accounting policies could have a material effect on our financial statements. Our accounting policies are described in “NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” in the Notes to Interim Consolidated Financial Statements.
The accounting policies that management believes are the most critical to an understanding of our financial condition and results of operations and require complex management judgment are described below.
Allowance for Credit Losses: The allowance for credit losses represents management’s estimate of all expected credit losses over the expected life of our loan portfolio. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management’s evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay a loan (including the timing of future payments), the estimated value of any underlying collateral, composition of the loan portfolio, industry and peer bank loan quality indications, and other pertinent factors, including regulatory recommendations. The level of the allowance for credit losses maintained by management is believed adequate to absorb all expected future losses inherent in the loan portfolio at the balance sheet date; however, determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. The actual realized facts and circumstances may be different than those currently estimated by management and may result in significant changes in the allowance for credit losses in future periods. The allowance for credit losses, as reported in our consolidated balance sheets, is adjusted by provision for credit losses, which is recognized in earnings and is reduced by the charge-off of loan amounts, net of recoveries.
The allowance represents management’s best estimate, but significant changes in circumstances relating to loan quality and economic conditions could result in significantly different results than what is reflected in the consolidated balance sheet as of March 31, 2025. Likewise, an improvement in loan quality or economic conditions may allow for a further reduction in the required allowance. Changing credit conditions would be expected to impact realized losses, driving variability in specifically assessed allowances, as well as calculated quantitative and more subjectively analyzed qualitative factors. Depending on the volatility in these conditions, material impacts could be realized within the Company’s operations. Significant changes in economic conditions, both positive and negative, could result in unexpected realization of provision or reversal of allowance for credit losses due to its impact on the quantitative and qualitative inputs to the Company’s calculation. Under the CECL methodology, the impact of these conditions has the potential to further exacerbate periodic differences due to its life of loan perspective. The life of loans calculated under the methodology is based in contractual duration, modified for prepayment expectations, making significant variation in periodic results possible due to changing contractual or adjusted duration of the assets within the calculation.
Goodwill: Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized and expensed in the period identified. Goodwill will be assessed more frequently if a triggering event occurs which indicates that the carrying value of the asset might be impaired. We have selected December 31 as the date to perform our annual goodwill impairment test. Goodwill is the only intangible asset with an indefinite useful life. For the quarter ended March 31, 2025, management conducted the quarterly qualitative assessment and has determined there was no evidence of a triggering event as of or during the period then ended. Based on this qualitative analysis and conclusion, it was determined that a more robust quantitative assessment was not necessary at our measurement date.
When performing quantitative goodwill impairment assessments, management is required to estimate the fair value of the Company’s equity in a change in control transaction. To complete this valuation, management is required to derive assumptions related to industry performance, reporting unit business performance, economic and market conditions, and various other assumptions, many of which require significant management judgment.
Although management believes that the judgments and estimates used are reasonable, actual results could differ and we may be exposed to losses or gains that could be material.
We generate our revenue from interest income and fees on loans, interest and dividends on investment securities, and non-interest income, such as service charges and fees, debit card income, trust and mortgage banking income. We incur interest expense on deposits and other borrowed funds and non-interest expense, such as salaries and employee benefits and occupancy expenses.
Changes in interest rates earned on interest-earning assets or incurred on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and non-interest-bearing liabilities and stockholders’ equity, are usually the largest drivers of periodic change in net interest income. Fluctuations in interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international circumstances and domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in Arkansas, Kansas, Missouri and Oklahoma, as well as developments affecting the consumer, commercial and real estate sectors within these markets.
Net Income
Three months ended March 31, 2025, compared with three months ended March 31, 2024: Net income allocable to common stockholders for the three months ended March 31, 2025, was $15.0 million, or $0.85 diluted earnings per share as compared to $14.1 million, or $0.90 diluted earnings per share for the three months ended March 31, 2024, an increase of $973 thousand. The increase was largely due to an increase in net interest income of $4.4 million, offset by a decrease of $1.40 million in other income and an increase in other non-interest expense of $1.90 million.
Net Interest Income and Net Interest Margin Analysis
Net interest income is the difference between interest income on interest-earning assets, including loans and securities, and interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds. To evaluate net interest income, management measures and monitors (1) yields on loans and other interest-earning assets, (2) the costs of deposits and other funding sources, (3) the net interest spread, and (4) net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as net interest income divided by average interest-earning assets. Because non-interest-bearing sources of funds, such as non-interest-bearing deposits and stockholders’ equity also fund interest-earning assets, net interest margin includes the benefit of these non-interest-bearing sources of funds. Net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as a “volume change,” and is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds, referred to as a “yield/rate change.”
Three months ended March 31, 2025, compared with three months ended March 31, 2024: The following table shows the average balance of each principal category of assets, liabilities, and stockholders’ equity and the average yields on interest-earning assets and average rates on interest-bearing liabilities for the three months ended March 31, 2025, and 2024. The yields and rates are calculated by dividing annualized income or annualized expense by the average daily balances of the associated assets or liabilities.
Average Balance Sheets and Net Interest Analysis
(Dollars in thousands)
AverageOutstandingBalance
InterestIncome/Expense
AverageYield/Rate(3)(4)
Interest-earning assets:
Loans(1)
690,124
14,322
8.42
634,638
12,412
7.87
1,424,110
24,591
1,449,177
24,601
6.83
Real estate construction
457,910
8,802
7.80
354,801
7,775
8.81
565,672
6,715
4.81
580,426
6,461
264,100
5,415
8.32
197,023
3,468
7.08
84,901
7.96
131,035
2,391
7.34
88,413
1,485
6.81
105,453
1,721
3,575,230
3,452,553
Taxable securities
937,021
1,011,466
3.93
Nontaxable securities
56,815
2.69
62,635
2.51
Total Securities
993,836
9,491
1,074,101
10,268
3.84
202,906
4.39
215,546
4.98
Total interest-earning assets
4,771,972
6.35
4,742,200
6.09
Non-interest-earning assets:
4,619
1,768
117,437
115,758
133,272
125,181
Goodwill, core deposit and other intangibles, net
72,389
62,203
Other non-interest-earning assets
112,728
105,804
5,212,417
5,152,914
Interest-bearing liabilities:
Interest-bearing demand deposits
1,061,195
5,580
2.13
1,082,620
7,447
Savings and money market
1,466,589
8,001
2.21
1,437,901
8,213
2.30
2,527,784
13,581
2,520,521
15,660
2.50
Certificates of deposit
693,346
5,796
3.39
799,386
7,195
3.62
3,221,130
3,319,907
FHLB term and line of credit advances
274,385
4.31
113,348
4.06
97,540
7.69
96,991
7.88
124,615
Other borrowings
46,213
55,212
2.37
Total interest-bearing liabilities
3,639,268
2.72
3,710,073
2.99
Non-interest-bearing liabilities and stockholders’ equity:
Non-interest-bearing checking accounts
922,021
934,976
Non-interest-bearing liabilities
45,211
47,621
Stockholders’ equity
605,917
460,244
Interest rate spread
3.63
3.10
Net interest margin(2)
Total cost of deposits, including non-interest bearing deposits
4,143,151
4,254,883
Average interest-earning assets to interest-bearing liabilities
131.12
127.82
Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest yields/rates. The following table analyzes the change in volume variances and yield/rate variances for the three month periods ended March 31, 2025, and 2024.
Analysis of Changes in Net Interest Income
Increase (Decrease) Due to:
TotalIncrease /
Volume(1)
Yield/Rate(1)
(Decrease)
Loans
1,124
786
1,910
(429
419
(1,037
1,027
(167
421
254
1,312
1,947
(894
(724
(286
(236
1,444
4,168
(725
(38
(763
Total securities
(777
(323
1,810
1,107
2,917
(1,722
(1,867
(374
(212
(2,096
(2,079
(910
(1,399
(893
(2,585
(3,478
1,709
1,772
(59
(48
(1,361
(584
(2,609
(3,193
Net Interest Income
2,394
3,716
6,110
Interest income increased $2.9 million for the quarter ended March 31, 2025, as compared to the quarter ended March 31, 2024. Of this increase, $1.8 million is attributable to increases in volume of average asset and $1.1 million is attributable to an increase in the rate/yield on interest earning assets. Realized rate/yield increases on loan were attributable to 22 basis point (bp) increase from non-accrual interest adjustment, a 12 bp increase from hedge accounting net settlements, 3 bp increase from the accretion of merger purchase accounting adjustments and a 2 bp increase from fee income partially offset by a 4 bp decrease from the amortization of loan origination fees and a 2 bp decrease from changes in coupon rates. Interest Income on securities decreased primarily due to a decrease in volume due to maturities and calls and to a lesser extent a decrease in the rate/yield. The decrease in the interest income on federal funds sold and other was primarily due to a decrease in the rate/yield as well as a decrease in volume. The increase in interest income from interest earning assets was primarily from an increase in the rate/yield that was complemented by higher earning asset volume, accounting for the remaining $1.8 million in period over period growth.
The decrease in interest expense of $3.2 million was due to the deposit portfolio repricing, the decrease in Federal Reserve bank borrowing offset by the increased utilization of our FHLB borrowing line.
During the quarter ended March 31, 2025, when compared to the quarter ended March 31, 2024, net interest margin increased 52 basis points and net interest spread increased by 53 basis points to 3.63% from 3.10%. The increase in net interest margin and net interest spread is primarily driven by the increase in loan interest income and the decrease in the cost of interest-bearing deposits.
Provision for Credit Losses
We maintain an allowance for credit losses for estimated losses in our loan portfolio. The allowance for credit losses is increased by a provision for credit losses, which is a charge to earnings, and subsequent recoveries of amounts previously charged-off, but is decreased by charge-offs when the collectability of a loan balance is unlikely. Management estimates the allowance balance required using past loan loss experience within the Company’s portfolio. This historical loss calculation is then modified to reflect quantitative economic circumstances based on evidenced economic conditions and regression formulas, which incorporate lag factors in identifying a sufficiently predictive adjusted-R square, as well as qualitative factors not inherently reflected in our historical loss or quantitative economic inputs. Included in our qualitative assessment is the consideration of prospective economic conditions over the next 12 months, considered the Company’s reasonable and supportable forecast period. As these factors change, the amount of the credit loss provision changes.
Three months ended March 31, 2025, compared with three months ended March 31, 2024: During the three months ended March 31, 2025 and 2024, there was a provision for credit losses of $2.7 million compared to a provision for credit losses of $1.0 million. The comparatively higher provision for the three months ended March 31, 2025 is primarily attributable to the loan growth as well as a general decline in the economic outlook for the recent volatility and potential stress created by the recent changes to the US trade policy. The Company continues to estimate the allowance for credit losses 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. Net charge-offs for the three months ended March 31, 2025 and 2024, were $165 thousand and $668 thousand, respectively. For the three months ended March 31, 2025, gross charge-offs were $1.1 million, offset by gross recoveries of $974 thousand. In comparison, gross charge-offs were $882 thousand for the three months ended March 31, 2024, offset by gross recoveries of $215 thousand.
Non-Interest Income
The primary sources of non-interest income are service charges and fees, debit card income, mortgage banking income, trust income and increases in the value of bank-owned life insurance. Non-interest income does not include loan origination or other loan fees, which are recognized as an adjustment to yield using the interest method.
Three months ended March 31, 2025, compared with three months ended March 31, 2024: The following table provides a comparison of the major components of non-interest income for the three months ended March 31, 2025, and 2024.
2025 vs. 2024
Change
(505
(19.7
)%
2.3
(82
(43.6
2,765
333.9
(14.5
43.3
2.8
Recovery on zero-basis purchased loans
(3,343
(99.9
Income (loss) from equity method investments
(100.0
1,437
803
126.7
Total other
(2,365
(53.6
(130
(1.2
Net gain (loss) on acquisition and branch sales
(1,240
100.0
(72.1
(1,401
(11.9
Total non-interest income decreased $1.4 million during the three months ended March 31, 2025, as compared to the same period in 2024. The decrease is largely attributable to a reduction in the recovery on zero basis loans and gain on acquisition offset by an increase in the value of bank owned life insurance. During the quarter, the Bank realized a death benefit on an insured under its bank owned life insurance program. This benefit drove the comparative increase noted above. The increase in other other non-interest income is comprised of a number of insignificant changes by other income categories.
55
Non-Interest Expense
Three months ended March 31, 2025, compared with three months ended March 31, 2024: For the three months ended March 31, 2025, non-interest expense totaled $39.1 million, an increase of $1.9 million, when compared to the three months ended March 31, 2024. Changes in the various components of non-interest expense for the three months ended March 31, 2025, and 2024, are discussed in more detail in the following table.
140
4.0
258
135
9.7
8.6
(68
(10.4
59
193
31.8
3.8
Amortization of core deposit intangible
16.2
18.3
(346.3
381
11.9
3,388
9.5
(1,490
(95.8
1,898
5.1
Salaries and employee benefits: There was an increase in salaries and employee benefits of $1.9 million for the period ended March 31, 2025, as compared to the same period in 2024. The increase in employee salaries and wages was primarily due to additional payroll costs as well as an increase in incentive compensation and stock related compensation expense, which is partially driven by the increase in staff from 2024 Rockhold and KansasLand mergers.
Data processing: There was an increase in data processing costs of $258 thousand for the period ended March 31, 2025, as compared to the same period in 2024. The increase is primarily due to the renewal of software licenses.
Amortization of core deposit intangible: Amortization of core deposit intangibles cost increased $146 thousand for the period ended March 31, 2025, as compared to the same period in 2024. The increase is due to additional amortization from the Rockhold and KansasLand mergers.
Other: Other non-interest expenses consists of subscriptions, memberships and dues, employee expenses, including travel, meals, entertainment and education, supplies, printing, insurance, account related losses, correspondent bank fees, customer program expenses, losses net of gains on the sale of fixed assets, losses net of gains on the sale of repossessed assets other than real estate, other operating expenses, such as settlement of claims, losses from limited partnerships entered into for tax credits and provision for unfunded commitments. The overall increase is comprised of a number of insignificant changes by expense categories noted above.
Merger expenses: The decrease is primarily due to the completion of the Rockhold merger in the prior period and the preliminary work for the recently announced NBC merger, which is expected to close in second quarter of 2025.
Efficiency Ratio
The efficiency ratio is a supplemental financial measure utilized in the internal evaluation of performance and is not defined under GAAP. For a reconciliation of non-GAAP financial measures see “Non-GAAP Financial Measures” in this Item 2. Our efficiency ratio is computed by dividing non-interest expense, excluding goodwill impairment, merger expenses and loss on debt extinguishment, by the sum of net interest income and non-interest income, excluding net gains on sales of and settlement of securities and gain on acquisition. Generally, an increase in the efficiency ratio indicates that more resources are being utilized to generate the same volume of income, while a decrease would indicate a more efficient allocation of resources.
The efficiency ratio was 62.43% for the three months ended March 31, 2025, compared with 63.45% for the three months ended March 31, 2024. The improvement was primarily due to the a greater percentage increase in interest and other income compared to the percentage increase in non-interest expenses.
Income Taxes
In general, the Company records income tax expense each quarter based on its estimate of the full year’s effective tax rate which includes, in addition to statutory rates, estimated amounts for tax-exempt interest income, non-taxable life insurance income, non-deductible executive compensation, valuation allowance on deferred assets, other non-deductible expense, and federal and state income tax credits anticipated to be available in proportion to anticipated annual income before income taxes. Certain items, however, are given discrete period treatment and the tax effects for such items are therefore reported in the quarter that an event arises. Events or items that may give rise to discrete recognition include excess tax benefits or shortfalls with respect to share-based compensation, changes in tax law, and non-deductible merger expense.
Three months ended March 31, 2025, compared with three months ended March 31, 2024: The effective income tax rate for the three month period ended March 31, 2025, was 20.2% as compared to 20.8% for the three month period ended March 31, 2024. The decrease in rate for the quarter ended March 31, 2025 is the result of increased tax benefits related to non-taxable bank owned life insurance, stock compensation, and a reduction in non-deductible transaction costs in the current quarter when compared to the quarter ended March 31, 2024 offset by a tax benefit related to a bargain purchase gain recognized in the quarter ended March 31, 2024.
Total assets increased $114.1 million from December 31, 2024, to $5.45 billion at March 31, 2025. This variance was primarily due to an increase in loans held for investment of $130.8 million, an increase of $47.6 million in cash and cash equivalents, partially offset by a decrease in available for sale securities of $54.0 million. Total liabilities increased $89.6 million to $4.83 billion at March 31, 2025. The change in total liabilities is mostly due to increases in total deposits of $30.6 million and Federal Home Loan bank advances of $58.7 million. Total stockholders’ equity increased $24.4 million from $592.9 million at December 31, 2024, to $617.3 million at March 31, 2025, principally due to net income for the three months ended March 31, 2025 and a decrease in unrealized losses on available for sale securities, net of tax.
Loan Portfolio
The following table summarizes our loan portfolio by type of loan as of the dates indicated.
Composition of Loan Portfolio
Percent
21.0
18.8
104,041
15.8
Real estate loans:
51.3
52.3
32,686
1.8
15.5
(2,812
(0.5
7.2
7.6
(6,565
(2.5
Total real estate loans
2,687,837
74.0
2,664,528
76.1
23,309
0.9
2.6
2.5
6,860
7.9
2.4
(3,398
(3.8
Total loans held for investment
130,812
3.7
Total loans held for sale
(175
(34.1
Total loans held for investment (net of allowances)
128,255
Our commercial loan portfolio consists of various types of loans, most of which are generally made to borrowers located in the Wichita, Kansas City, and Tulsa Metropolitan Statistical Areas (“MSAs”), as well as various community markets throughout Arkansas, Kansas, Missouri, and Oklahoma. The majority of our portfolio consists of commercial and industrial and commercial real estate loans, and a substantial portion of our borrowers’ ability to honor their obligations is dependent on local economies in which they operate.
At March 31, 2025, gross total loans, including loans held for sale, were 82.4% of deposits and 66.7% of total assets. At December 31, 2024, gross total loans, including loans held for sale, were 80.0% of deposits and 65.7% of total assets.
We provide commercial lines of credit, working capital loans, commercial real estate loans (including loans secured by owner-occupied commercial properties), term loans, equipment financing, aircraft financing, real property acquisition and development loans, borrowing base loans, real estate construction loans, homebuilder loans, SBA loans, agricultural and agricultural real estate loans, letters of credit and other loan products to national and regional companies, real estate developers, mortgage lenders, manufacturing and industrial companies and other businesses. The types of loans we make to consumers include residential real estate loans, home equity loans, home equity lines of credit, installment loans, unsecured and secured personal lines of credit, overdraft protection, and letters of credit.
Commercial and industrial: Commercial and industrial loans include loans used to purchase fixed assets, to provide working capital or meet other financing needs of the business.
Commercial real estate: Commercial real estate loans include all loans secured by non-farm nonresidential properties and multifamily residential properties, as well as 1-4 family investment-purpose real estate loans.
Residential real estate: Residential real estate loans include loans secured by primary or secondary personal residences. Pools of mortgages are occasionally purchased to expand our loan portfolio and provide additional loan income.
Agricultural real estate, Agricultural, Consumer and other: Agricultural real estate loans are loans related to farmland. Agricultural loans are primarily operating lines subject to annual farming revenues including productivity/yield of the agricultural commodities produced. Consumer loans are generally secured by consumer assets but may be unsecured.
The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with predetermined interest rates and floating rates in each maturity range as of March 31, 2025, are summarized in the following table.
Loan Maturity and Sensitivity to Changes in Interest Rates
As of March 31, 2025
One yearor less
After one yearthrough fiveyears
After fiveyears through fifteen years
After fifteen years
262,344
337,966
103,355
59,241
Real Estate:
463,227
1,092,193
236,669
71,111
2,341
10,864
121,485
429,264
93,878
112,102
25,846
28,857
Total real estate
559,446
1,215,159
384,000
529,232
51,251
25,137
5,157
12,654
33,094
43,210
8,388
1,994
906,135
1,621,472
500,900
603,121
Loans with a predetermined fixed interest rate
369,085
585,767
107,879
287,635
1,350,366
Loans with an adjustable/floating interest rate
537,050
1,035,705
393,021
315,486
2,281,262
The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with predetermined interest rates and floating rates in each maturity range as of December 31, 2024, are summarized in the following table.
As of December 31, 2024
253,375
309,996
92,880
2,614
484,450
1,019,023
231,122
95,919
2,375
11,344
124,983
428,064
100,169
93,430
34,720
38,929
586,994
1,123,797
390,825
562,912
59,213
21,373
3,270
3,483
32,498
45,352
10,234
2,000
932,080
1,500,518
497,209
571,009
405,335
544,767
115,887
261,080
1,327,069
526,745
955,751
381,322
309,929
2,173,747
We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information, current economic trends, and other factors. Loans are analyzed individually and classified based on credit risk. Consumer loans are considered pass credits unless downgraded due to payment status or reviewed as part of a larger credit relationship.
For additional information, see “NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES” in the Condensed Notes to Interim Consolidated Financial Statements.
Nonperforming Assets
The following table presents information regarding nonperforming assets at the dates indicated.
Non-accrual loans
Accruing loans 90 or more days past due
OREO acquired through foreclosure, net
2,323
2,632
Other repossessed assets
4,812
Total nonperforming assets
27,862
34,675
Ratios:
Nonperforming assets to total assets
0.51
0.65
Nonperforming assets to total loans plus OREO and repossessed assets
0.99
Generally, loans are designated as non-accrual when either principal or interest payments are 90 days or more past due based on contractual terms, unless the loan is well secured and in the process of collection. Consumer loans are typically charged off no later than 180 days past due. In all cases, loans are placed on non-accrual, or charged off, at an earlier date if collection of principal or interest is considered doubtful. When a loan is placed on non-accrual status, unpaid interest credited to income earned in the current year is reversed against income and unpaid interest earned in prior years is charged off. Future interest income may be recorded on a
cash basis after recovery of principal is reasonably assured. Non-accrual loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
The nonperforming loans at March 31, 2025, consisted of 310 separate credits and 257 separate borrowers. We had 3 nonperforming loan relationships, totaling $5.9 million, with an outstanding balance in excess of $1.0 million as of March 31, 2025.
There are several procedures in place to assist us in maintaining the overall quality of our loan portfolio. We have established underwriting guidelines to be followed by lenders and we also monitor delinquency levels for any negative or adverse trends. In accordance with applicable regulation, appraisals or evaluations are required to independently value real estate and are an important element to consider when underwriting loans secured in part or in whole by real estate. The value of real estate collateral provides additional support to the borrower’s credit capacity. There can be no assurance, however, that our loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions.
Potential Problem Loans
Potential problem loans consist of loans that are performing in accordance with contractual terms, but for which management has concerns about the borrower’s ability to comply with repayment terms because of the borrower’s potential financial difficulties. Potential problem loans are assigned a grade of special mention or substandard. At March 31, 2025, the Company had $33.1 million in potential problem loans which were not included in either non-accrual or 90 days past due categories, compared to $35.4 million at December 31, 2024.
With respect to potential problem loans, all monitored and under-performing loans are reviewed and evaluated to determine if they are impaired. If we determine that a loan is impaired, then we evaluate the borrower’s overall financial condition to determine the need, if any, for possible write downs or appropriate additions to the allowance for credit losses based on the unlikelihood of full repayment of principal and interest in accordance with the contractual terms or the net realizable value of the pledged collateral.
Allowance for Credit Losses
Please see “Critical Accounting Policies – Allowance for Credit Losses” for additional discussion of our allowance policy.
In connection with our review of the loan portfolio, risk elements attributable to particular loan types or categories are considered when assessing the quality of individual loans. Some of the risk elements include the following items.
The following table presents, as of and for the periods indicated, an analysis of the allowance for credit losses and other related data.
For the Quarters Ended,
Commercial Real Estate
Commercial and Industrial
Residential Real Estate
Agricultural Real Estate
Allowance for credit losses (ACL)
Total loans outstanding (1)
Net (charge-offs) recoveries QTD
Average loan balance QTD (1)
1,882,018
565,251
3,574,807
Non-accrual loan balance
Loans to total loans outstanding
ACL to total loans
2.0
0.4
2.1
1.3
Net charge-offs to average loans QTD
(0.6
Non-accrual loans to total loans
0.8
1.1
0.7
ACL to non-accrual loans
208.3
178.4
192.8
177.9
49.9
251.1
189.0
8,318
1,598
1,797,192
649,035
581,988
198,291
149,312
106,345
1,803,978
634,637
579,434
3,451,560
6,034
6,745
3,769
2,679
772
24,226
51.6
18.6
16.7
5.7
4.3
3.1
2.7
1.4
1.5
(0.1
0.3
0.6
225.1
261.7
220.7
39.9
60.2
207.0
183.5
Management believes that the allowance for credit losses at March 31, 2025, was adequate to cover current expected credit losses in the loan portfolio as of such date. There can be no assurance, however, that we will not sustain losses in future periods, which could be substantial in relation to the size of the allowance at March 31, 2025.
The allowance for credit losses on loans measured on a collective basis totaled $41.2 million, or 1.1% of the $3.60 billion in loans measured on a collective basis at March 31, 2025, compared to an allowance for credit losses of $38.4 million, or 1.1%, of the $3.50 billion in loans measured on a collective basis at December 31, 2024. The total reserve percentage to total loans was 1.3% at March 31, 2025, and 1.3% at December 31, 2024.
Securities
We use our securities portfolio to provide a source of liquidity, to provide an appropriate return on funds invested, to manage interest rate risk, to meet pledging requirements and to meet regulatory capital requirements. At March 31, 2025, securities represented 17.5% of total assets, slightly decreasing from 18.9% at December 31, 2024.
At the date of purchase, debt securities are classified into one of two categories: held-to-maturity or available-for-sale. We do not purchase securities for trading purposes. At each reporting date, the appropriateness of the classification is reassessed. Investments in debt securities that are classified as held-to-maturity are carried at cost, and adjusted for the amortization of premiums and the accretion of discounts, only if management has the positive intent and ability to hold those securities to maturity. Debt securities that are not classified as held-to-maturity are classified as available-for-sale and are measured at fair value in the financial statements with unrealized gains and losses reported, net of tax, as accumulated comprehensive income or loss until realized. Interest earned on securities is included in total interest and dividend income. Also included in total interest and dividend income are dividends received on stock investments in the Federal Reserve Bank of Kansas City and the FHLB of Topeka. These stock investments are stated at cost.
The following table summarizes the amortized cost and fair value by classification of available-for-sale securities as of the dates shown.
Available-For-Sale Securities
Total available-for-sale securities
Held-To-Maturity Securities
Total held-to-maturity securities
At March 31, 2025, and December 31, 2024, we did not own securities of any one issuer (other than the U.S. government and its agencies or sponsored entities) for which aggregate par value exceeded 10% of consolidated stockholders’ equity at the reporting dates noted.
The following tables summarize the contractual maturity of debt securities and their weighted average yields as of March 31, 2025, and December 31, 2024. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations, with or without call or prepayment penalties. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately. Available-for-sale securities are shown at fair value and held-to-maturity securities are shown at cost, adjusted for the amortization of premiums and the accretion of discounts.
Due in one yearor less
Due after oneyear throughfive years
Due after fiveyears through10 years
Due after 10years
CarryingValue
Yield
8,359
4.71
22,772
4.43
33,291
1.85
1,828
2.02
29,238
4.49
7,555
4.64
4.52
75,722
4.63
125,886
2.48
385,837
4.44
4.04
2.35
600
4.25
11,284
6.60
46,102
4.74
5.11
4,116
4.92
2.22
4.08
State and political subdivisions(1)
2,464
14,036
2.19
29,480
2.15
26,137
2.45
2.27
40,661
4.40
131,369
4.50
238,875
539,548
3.85
3.71
Held-to-maturity securities:
3,066
5.02
876
4.88
4.99
3.02
4.62
3,238
4.91
1,988
4.73
4.84
242,113
2.86
541,536
955,679
7,797
4.68
22,911
4.45
32,623
1,763
3.11
78,400
3.67
8,163
4.66
3.76
71,025
4.57
124,899
393,248
11,213
46,839
4.75
5.14
4,387
5.28
1,879
2,593
10,446
2.38
33,256
2.11
27,749
2.49
2.31
89,390
3.72
123,758
242,004
2.88
549,303
3.86
3.70
3,053
879
4.96
3,225
1,992
4.77
4.86
245,229
551,295
1,009,672
Mortgage-backed securities are securities that have been developed by pooling a number of real estate mortgages which are principally issued by federal agencies such as Ginnie Mae, Fannie Mae, and Freddie Mac. Unlike U.S. Treasury and U.S. government agency securities, which have a lump sum payment at maturity, mortgage-backed securities provide cash flows from regular principal and interest payments and principal prepayments throughout the lives of the securities. Premiums and discounts on mortgage-backed securities are amortized and accreted over the expected life of the security and may be impacted by prepayments. As such, mortgage-backed securities which are purchased at a premium will generally produce decreasing net yields as interest rates drop because homeowners tend to refinance their mortgages, resulting in prepayments and an acceleration of premium amortization. Securities
purchased at a discount will reflect higher net yields in a decreasing interest rate environment, as prepayments result in an acceleration of discount accretion.
The contractual maturity of mortgage-backed securities is not a reliable indicator of their expected lives because borrowers have the right to prepay their obligations at any time. Monthly pay downs on mortgage-backed securities cause the average lives of these securities to be much different than their stated lives. At March 31, 2025, and December 31, 2024, 71.4% and 72.3% of the residential mortgage-backed securities held by us had contractual final maturities of more than ten years, with a weighted average life of 4.7 years and 5.1 years and a modified duration of 3.9 years and 4.2 years.
Goodwill Impairment Assessment
At March 31, 2025, we performed an interim qualitative analysis and concluded there were no indications that goodwill was impaired. For additional information, see “Goodwill” under "Critical Accounting Policies" in the Management's Discussion and Analysis of Financial Condition and Results of Operation.
Our lending and investing activities are primarily funded by deposits. A variety of deposit accounts are offered with a wide range of interest rates and terms including demand, savings, money market, and time deposits. We rely primarily on competitive pricing policies, convenient locations, comprehensive marketing strategy, and personalized service to attract and retain these deposits.
The following table shows our composition of deposits at March 31, 2025, and December 31, 2024.
Composition of Deposits
Percentof Total
Non-interest-bearing demand
21.6
21.8
Interest-bearing demand
1,142,095
25.9
1,172,577
26.8
1,472,015
33.4
1,511,620
34.6
19.1
16.8
Total deposits at March 31, 2025, were $4.41 billion, an increase of $30.6 million, or 0.7%, compared to total deposits of $4.37 billion at December 31, 2024. Total deposits excluding brokered deposits of $265.1 million at March 31, 2025, and $125.1 million at December 31, 2024, decreased $109.4 million or 2.6%. The decrease in deposits was primarily driven by a $55.4 million or 4.7% decrease in interest-bearing demand deposits, a $54.7 million or 3.6% decrease in savings and money market deposits, partially offset by an increase of $5.0 million or 0.9% in time deposits.
The following tables show deposit acquired in 2024, as of the time of each acquisition.
Rockhold Acquisition
97,593
27.9
124,760
35.7
94,731
27.1
32,693
9.3
349,777
Kansasland Acquisition
6,439
15.2
5,011
11.8
14,314
33.7
16,654
39.3
42,418
Equity Bank participates in the Insured Cash Sweep (“ICS”) service that allows the Bank to break large non-time deposits into smaller amounts and place them in a network of other ICS banks to ensure FDIC insurance coverage on the entire deposit. These deposits are placed through ICS services but are Equity Bank’s customer relationships that management views as core funding. The Bank also participates in the Certificate of Deposit Account Registry Service (“CDARS”) program. CDARS allows the bank to break large time deposits into smaller amounts and place them in a network of other CDARS banks to ensure FDIC insurance coverage on the entire deposit. Reciprocal deposits are not considered brokered deposits as long as the aggregate balance is less than the lesser of 20% of total liabilities or $5.0 billion and Equity Bank is well capitalized and well rated. All non-reciprocal deposits and reciprocal deposits in excess of regulatory limits are considered brokered deposits.
The following table lists reciprocal and brokered deposits included in total deposits categorized by type at March 31, 2025, and December 31, 2024.
Reciprocal
355,528
469,551
Non-reciprocal brokered
100,006
75,115
Total interest-bearing demand
455,534
544,666
98,292
100,596
15,071
Total savings and money market
33,597
35,393
149,981
49,998
Total time
183,578
85,391
Total reciprocal and brokered deposits
737,404
730,653
The following table provides information on the maturity distribution of time deposits of $250 thousand or more as of March 31, 2025, and December 31, 2024.
3 months or less
101,954
69,637
32,317
46.4
Over 3 through 6 months
128,385
200,049
(71,664
(35.8
Over 6 through 12 months
50,386
13,799
36,587
265.1
Over 12 months
51,869
52,080
(211
(0.4
Total Time Deposits
332,594
335,565
(2,971
(0.9
Other Borrowed Funds
We utilize borrowings to supplement deposits to fund our lending and investing activities. Short-term borrowings and long-term borrowings include federal funds purchased and retail repurchase agreements, FHLB advances, Federal Reserve Bank borrowings, a bank stock loan, and subordinated debt. For additional information see “NOTE 7 – BORROWINGS” in the Condensed Notes to Interim Consolidated Financial Statement.
Liquidity
Market and public confidence in our financial strength and financial institutions in general will largely determine access to appropriate levels of liquidity. This confidence is significantly dependent on our ability to maintain sound asset quality and appropriate levels of capital reserves.
Liquidity is defined as the ability to meet anticipated customer demands for future funds under credit commitments and deposit withdrawals at a reasonable cost and on a timely basis. We measure our liquidity position by considering both on and off-balance sheet sources of and demands for funds on a daily, weekly, and monthly basis.
Liquidity risk involves the risk of being unable to fund assets with the appropriate duration and rate-based liabilities, as well as the risk of not being able to meet unexpected cash needs. Liquidity planning and management are necessary to ensure the ability to fund operations in a cost-effective manner and to meet current and future potential obligations such as loan commitments, lease obligations, and unexpected deposit outflows. In this process, we focus on both assets and liabilities, and the way they combine to provide adequate liquidity to meet our needs.
During the three months ended March 31, 2025, and 2024, our liquidity needs have primarily been met by core deposits, security and loan maturities, and amortizing security and loan portfolios. Other funding sources include federal funds purchased, brokered certificates of deposit, borrowings from the FHLB, and Federal Reserve Bank borrowings.
Our largest sources of funds are deposits and FHLB borrowings and our largest uses of funds are loan funding, securities purchases and debt servicing. Average loans were $3.58 billion for the three months ended March 31, 2025, an increase of 3.9% over the December 31, 2024, average balance. Excess deposits are primarily invested in our interest-bearing deposit account with the Federal Reserve Bank of Kansas City, investment securities, federal funds sold or other short-term liquid investments until the funds are needed to fund loan growth. Our securities portfolio has a weighted average life of 4.7 years and a modified duration of 3.9 years at March 31, 2025.
Cash and cash equivalents were $431.4 million at March 31, 2025, an increase of $47.6 million from the $383.8 million cash and cash equivalents at December 31, 2024. The increase in cash and cash equivalents is driven by $83.8 million net cash provided by financing activities and $21.7 million net cash provided by operating activities which was offset by $57.8 million net cash used in investing activities. The $83.8 million net change in cash provided by financing activities includes, $58.7 million in inflows from FHLB borrowings and $30.6 million increase in deposits. The $21.7 million cash provided by operations includes $15.0 million from net income, $4.4 million proceeds from loans held for sale, $3.7 million from other assets and $2.7 million from provision for credits losses, offset by $4.1 million outflow for origination of loans held for sale and $3.6 million from the increase in in the value of bank-owned life insurance. The $57.8 outflow from investing activity was primarily from $68.4 million change is loans held for investment, $62.0 million purchase of government guaranteed loans which was offset by $78.3 million inflow from the proceed from the call, paydowns and maturities of available-for-sale securities, $4.8 million from the proceeds from sale of foreclosed assets and $4.3 million from the proceeds from bank owned life insurance death benefits. Cash and cash equivalents at January 1, 2025, plus liquidity provided by operating activities, pay downs, sales, and maturities of investment securities and FHLB borrowings during the first three months of 2025 were primarily used to originate or purchase loans and to purchase investment securities. We believe that our daily
funding needs can be met through cash provided by operating activities, payments and maturities on loans and investment securities, the core deposit base and FHLB advances and other borrowing relationships.
Off-Balance-Sheet Items
In the normal course of business, we enter into various transactions, which, in accordance with GAAP, are not included in our consolidated balance sheets. We enter into these transactions to meet the financing needs of our customers. These transactions include commitments to extend credit and standby and commercial letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. Our exposure to credit loss is represented by the contractual amounts of these commitments. The same credit policies and procedures are used in making these commitments as for on-balance sheet instruments.
Standby and Performance Letters of Credit: For additional information see “NOTE 12 – COMMITMENTS AND CREDIT RISK” in the Condensed Notes to Interim Consolidated Financial Statement.
Commitments to Extend Credit: For additional information see “NOTE 12 – COMMITMENTS AND CREDIT RISK” in the Condensed Notes to Interim Consolidated Financial Statement.
Capital Resources
Capital management consists of providing equity to support our current and future operations. The federal bank regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies are required to maintain minimum capital relative to the amount and types of assets they hold. As a financial holding company and a state-chartered-Fed-member bank, the Company and Equity Bank are subject to regulatory capital requirements.
Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believes as of March 31, 2025, and December 31, 2024, the Company and Equity Bank meet all capital adequacy requirements to which they are subject.
Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized; although, these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as are asset growth and acquisitions, and capital restoration plans are required.
Failure to meet capital guidelines could subject the institution to a variety of enforcement remedies by federal bank regulatory agencies, including termination of deposit insurance by the FDIC, restrictions on certain business activities and appointment of the FDIC as conservator or receiver. As of March 31, 2025, the most recent notifications from the federal regulatory agencies categorized Equity Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, Equity Bank must maintain minimum Total capital, Tier 1 capital, Common Equity Tier 1 capital, and Tier 1 leverage ratios. For additional information, see “NOTE 9 – REGULATORY MATTERS” in the Condensed Notes to Interim Consolidated Financial Statements. There are no conditions or events since that notification that management believes have changed Equity Bank’s category.
We identify certain financial measures discussed in this Quarterly Report as being “non-GAAP financial measures.” In accordance with SEC’s rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP in our statements of income, balance sheet or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios, or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.
The non-GAAP financial measures that we discuss in this Quarterly Report should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the way we calculate the non-GAAP financial measures that we discuss in this Quarterly Report may differ from that of other companies reporting measures with similar names. You should understand how such other banking organizations calculate their financial measures similar
to, or with names like, the non-GAAP financial measures we have discussed in this Quarterly Report when comparing such non-GAAP financial measures.
Tangible Book Value Per Common Share and Tangible Book Value Per Diluted Common Share: Tangible book value is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) tangible common equity as total stockholders’ equity less preferred stock, goodwill, core deposit intangibles (net of accumulated amortization), and other intangible assets (net of accumulated amortization); (b) tangible book value per common share as tangible common equity (as described in clause (a)) divided by shares of common stock outstanding; and (c) tangible book value per diluted common share as tangible common equity (as described in clause (a)) divided by diluted shares of common stock outstanding. For tangible book value, the most directly comparable financial measure calculated in accordance with GAAP is book value.
Management believes that these measures are important to many investors interested in changes from period to period in book value per common share exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing total book value while not increasing our tangible book value.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity, tangible book value per common share, and tangible book value per diluted common share and compares these values with book value per common share.
As of the Period Ended
(53,101
(13,924
(14,969
(16,029
(16,636
(17,854
(5,926
(957
(968
(979
(989
Tangible common equity
Common shares issued at period end
17,522,994
17,419,858
15,288,309
15,200,194
15,327,799
Diluted common shares outstanding at period end
17,652,110
17,636,843
15,497,446
15,358,396
15,469,531
Book value per common share
Tangible book value per common share
Tangible book value per diluted common share
Tangible Common Equity to Tangible Assets: Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate (a) tangible common equity as total stockholders’ equity less preferred stock, goodwill, core deposit intangibles (net of accumulated amortization), and other intangible assets (net of accumulated amortization); (b) tangible assets as total assets less goodwill, core deposit intangibles (net of accumulated amortization), and other intangible assets (net of accumulated amortization); and (c) tangible common equity to tangible assets as tangible common equity (as described in clause (a)) divided by tangible assets (as described in clause (b)). For tangible common equity to tangible assets, the most directly comparable financial measure calculated in accordance with GAAP is total stockholders’ equity to total assets.
Management believes that this measure is important to many investors in the marketplace interested in the relative changes from period to period in common equity and total assets, each exclusive of changes in intangible assets. Goodwill and other intangible assets have the effect of increasing both total stockholders’ equity and total assets while not increasing tangible common equity or tangible assets.
The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets.
Tangible assets
5,373,149
5,263,020
5,285,135
5,174,776
5,167,042
Equity to assets
Tangible common equity to tangible assets
Core Return on Average 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: (a) average tangible common equity as total average stockholders’ equity less average intangible assets and preferred stock; (b) core net income allocable to common stockholders as net income allocable to common stockholders less net gain on acquisition, less gain(loss) on securities transactions, plus loss on debt extinguishment, plus merger expenses, plus BOLI tax expense, plus goodwill impairment, net of actual tax effect, plus amortization of intangible assets less estimated tax effect on adjustments (tax rates used in this calculation were 21% for 2025 and 2024) (c) core return on average equity as core net income allocable to common stockholders (as described in clause (b)) 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.
Return on Average Tangible Common Equity: Return on average tangible common equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate: (a) average tangible common equity as total average stockholders’ equity less average intangible assets and preferred stock; (b) core net income allocable to common stockholders as net income allocable to common stockholders plus goodwill impairment, net of actual tax effect, plus amortization of intangible assets less estimated tax effect on amortization of intangible assets (tax rates used in this calculation were 21% for 2025 and 2024) (c) return on average tangible common equity as core net income allocable to common stockholders (as described in clause (b)) divided by average tangible common equity (as described in clause (a)). For return on average tangible common equity, the most directly comparable financial measure calculated in accordance with GAAP is return on average equity.
Management believes that this measure is important to many investors in the marketplace because it measures the return on equity, exclusive of the effects of intangible assets on earnings and capital. Goodwill and other intangible assets have the effect of increasing average stockholders’ equity and, through amortization, decreasing net income allocable to common stockholders while not increasing average tangible common equity or decreasing core net income allocable to common stockholders.
The following table reconciles, as of the dates set forth below, total average stockholders’ equity to average equity and net income allocable to common stockholders to core net income allocable to common stockholders.
For the Three Months Ended
Total average stockholders’ equity
533,227
485,468
455,322
Average intangible assets
(72,389
(69,570
(70,824
(71,423
(62,203
Average tangible common equity
533,528
463,657
414,644
383,899
398,041
1,071
1,148
1,254
Net gain on acquisition
(831
Net (gain) loss on securities transactions
(206
BOLI tax expense
(252
(737
(254
Core net income allocable to common stockholders
15,987
17,834
20,427
16,217
15,022
Return on total average stockholders’ equity (ROAE) annualized
Core return on average equity
Return on average tangible common equity (ROATCE) annualized
Core return on average tangible common equity (CROATCE) annualized
Core income calculations: 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 Net Income and Earnings Per Share: Core net income and Core earnings per share are non-GAAP financial measures generally used to disclose core net income from the Company's operations and earnings per share. We calculated this by taking GAAP net income less non-core impacts to net income to arrive at core net income and core diluted earnings per share. These financial measures are used by financial statement users to evaluate the core financial performance of the Company. Management believes that these measures are important to many investors who are interested in changes from period to period in the Company's financial performance and quality of earnings.
70
The following table reconciles as of the dates set forth below, core net income and earnings per share and compares them to GAAP net income and earnings per share.
December 31
September 30,
June 30,
Tax effect of adjustments
(240
(241
(263
(196
Adjusted non-core items
15,945
17,832
20,758
12,707
14,807
Net gain on acquisitions
Gain (loss) from securities transactions
Merger expense
(58
BOLI tax adjustment
Adjusted operating net income
GAAP earnings (loss) per diluted share
Core earnings (loss) per diluted share
Total average assets
5,163,166
5,205,017
5,196,259
5,152,915
Total average stockholder's equity
Weighted average diluted common shares
17,666,834
16,262,965
15,451,545
15,377,980
Return on Average Assets (ROAA) annualized
Core Operating ROAA annualized
Efficiency Ratio: The efficiency ratio is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate the efficiency ratio by dividing non-interest expense, excluding goodwill impairment, merger expenses and loss on debt extinguishment, by the sum of net interest income and non-interest income, excluding net gains on the sale of available-for-sale securities and other securities transactions, and the net gain on acquisition. The GAAP-based efficiency ratio is non-interest expense less goodwill impairment, divided by net interest income plus non-interest income.
In management’s judgment, the adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess operating expenses in relation to operating revenue by removing merger expenses, loss on debt extinguishment, net gains on the sale of available-for-sale securities and other securities transactions, and the net gain on acquisition.
71
The following table reconciles, as of the dates set forth below, the efficiency ratio to the GAAP-based efficiency ratio.
30,328
38,871
(66
(618
(2,287
(1,556
Amortization of intangibles assets
(1,144
(1,071
(1,148
(1,254
(935
Non-interest expense, excluding merger expense
37,840
36,735
28,562
35,330
8,816
9,317
8,958
Non-interest income, excluding net gain (loss) from securities transactions and net gain on acquisition and branch sales
Net interest income plus non-interest income, excluding net gain on acquisition and branch sales and net gain (loss) from securities transactions
60,610
58,291
54,311
55,401
54,630
Total Average Assets
Core non-interest expense / Average assets
Item 3: Quantitative and Qualitative Disclosures about Market Risk
Our asset-liability policy provides guidelines for effective funds management and management has established a measurement system for monitoring net interest rate sensitivity position within established guidelines.
As a financial institution, the primary component of market risk is interest rate volatility. Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most assets and liabilities and the market value of all interest-earning assets and interest-bearing liabilities, other than those which have a short-term maturity. Interest rate risk is the potential of economic gains or losses due to future interest rate changes. These changes can be reflected in future net interest income and/or fair market values. The objective is to measure the effect on net interest income (“NII”) and economic value of equity (“EVE”) and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income.
We manage interest rate exposure by structuring the balance sheet in the ordinary course of business. We have the ability to enter into instruments such as leveraged derivatives, interest rate swaps, financial options, financial futures contracts or forward delivery contracts for the purpose of reducing interest rate risk. Currently, we do not have a material exposure to these instruments. We also have the ability to enter into interest rate swaps as an accommodation to our customers in connection with an interest rate swap program. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets.
Our exposure to interest rate risk is managed by the Asset Liability Committee (“ALCO”), which is composed of certain members of senior management, in accordance with policies approved by the Board of Directors. ALCO formulates strategies based on appropriate levels of interest rate risk. In determining the appropriate level of interest rate risk, ALCO considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business
strategies and other factors. ALCO meets monthly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, securities purchased and sale activities, commitments to originate loans and the maturities of investment securities and borrowings. Additionally, the ALCO reviews liquidity, projected cash flows, maturities of deposits and consumer and commercial deposit activity.
ALCO uses a simulation analysis to monitor and manage the pricing and maturity of assets and liabilities in order to diminish the potential adverse impact that changes in interest rates could have on net interest income. The simulation tests the sensitivity of NII and EVE. Contractual maturities and repricing opportunities of loans are incorporated in the simulation model as are prepayment assumptions, maturity data and call options within the investment securities portfolio. Assumptions based on past experience are incorporated into the model for non-maturity deposit accounts. All assumptions are as of the base period without consideration of preceding market rate changes and any lag in impact to NII. The depicted expectations are management's estimate exclusive of any non-contractual lagging impacts that have not yet been realized in income from preceding changes to interest rates. The assumptions used are inherently uncertain and, as a result, the model cannot precisely measure the future NII and EVE. Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various management strategies.
The change in the impact of net interest income from the base case for March 31, 2025, and December 31, 2024, was primarily driven by the rate and mix of variable and fixed rate financial instruments, the underlying duration of the financial instruments and the level of response to changes in the interest rate environment.
The decrease in the level of positive impact to net interest income in the up interest rate shock scenarios is due to the level of adjustable rate loans receivable that will reprice to higher interest rates, non-term deposits that will adjust to higher rates, the use of derivatives to hedge borrowing costs, and decreased levels of cash on the balance sheet compared to December 31, 2024. These factors result in an overall positive impact to net interest income at March 31, 2025, but at a reduced level from the December 31, 2024, simulation that are detailed in the table below. In the down interest rate shock scenario, the main drivers of the negative impact on net interest income are the downward pricing of variable rate loans receivable, the level of term deposit repricing and the assumed prepayment and scheduled repayment of existing fixed rate loans receivable and fixed rate investments.
The change in the economic value of equity from the base case for March 31, 2025, and December 31, 2024, is due to being in a liability sensitive position and the level of convexity in our pre-payable assets. Generally, with a liability sensitive position, as interest rates increase, the value of your assets decrease faster than the value of liabilities and, as interest rates decrease, the value of your assets increase at a faster rate than liabilities. Due to the level of convexity in our fixed rate pre-payable assets, we do not experience as significant a change in the value of assets in a down interest rate shock scenario, mitigating the impact of liability sensitive balance sheet on economic value of equity. The mix of interest-bearing deposit and non-interest-bearing deposits impact the level of deposit decay and the resulting benefit of discounting from the non-interest-bearing deposits. At March 31, 2025, non-interest-bearing deposits were approximately $4.3 million, or 0.01%, lower than that deposit type at December 31, 2024. Additionally, substantially all investments and approximately 37.0% of loans are pre-payable and fixed rate and as rates decrease the level of modeled prepayments increase. The prepaid principal is assumed to reprice at the assumed current rates, resulting in a smaller positive impact to the economic value of equity.
Management utilizes static balance sheet rate shocks to estimate the potential impact on various rate scenarios. This analysis estimates a percentage of change in the metric from the stable rate base scenario versus alternative scenarios of rising and falling market interest rates by instantaneously shocking a static balance sheet. The following table summarizes the simulated immediate change in net interest income for twelve months as of the dates indicated.
Market Risk
Impact on Net Interest Income
Change in prevailing interest rates
+300 basis points
11.5
+200 basis points
+100 basis points
3.9
0 basis points
-100 basis points
(2.0
(2.4
-200 basis points
(4.1
(4.9
-300 basis points
(6.8
(8.1
The following table summarizes the simulated immediate impact on economic value of equity as of the dates indicated.
Impact on Economic Valueof Equity
(8.7
(6.5
(5.8
(4.2
(3.0
0.1
(2.1
(1.5
(5.1
Item 4: Controls and Procedures
Evaluation of disclosure controls and procedures
An evaluation of the effectiveness of the design and operation of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q was performed under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and management was required to apply judgment in evaluating its controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC rules and forms.
Changes in internal control over financial reporting
There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1: Legal Proceedings
From time to time, we are a party to various litigation matters incidental to the conduct of our business. See “NOTE 13 – LEGAL MATTERS” of the Condensed Notes to Interim Consolidated Financial Statements under Item 1 to this Quarterly report for a complete discussion of litigation matters.
Item 1A: Risk Factors
There have been no material changes in the Company’s risk factors previously disclosed in our Annual Report on Form 10-K filed with the SEC on March 7, 2025.
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
Repurchase of Common Stock
On September 12, 2024, the Board of Directors of Equity Bancshares authorized the repurchase of up to 1,000,000 shares of outstanding common stock beginning on October 1, 2024 and concluding on September 30, 2025. The repurchase program does not obligate the Company to acquire a specific dollar amount or number of shares, and may be extended. modified or discontinued at any time without notice. Non-objection from the Federal Reserve Bank of Kansas City related to this repurchase plan was received on October 7, 2024.
Date
Total Number of Shares Purchased
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
January 1, 2025 through January 31, 2025
1,000,000
February 1, 2025 through February 28, 2025
March 1, 2025 through March 31, 2025
Item 3: Defaults Upon Senior Securities
None
Item 4: Mine Safety Disclosures
Not applicable.
Item 5: Other Information
During the three months ended March 31, 2025, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such defined in Item 408 of Regulation S-K of the Securities Act of 1933).
Item 6: Exhibits
Exhibit
No.
Description
10.1
Eighth Amendment to Loan and Security Agreement, dated February 10, 2025, by and between Equity Bancshares, Inc. and ServisFirst Bank (incorporated by reference to Exhibit 10.1 to Equity Bancshares, Inc.'s Current Report on Form 8-K, filed with the SEC on February 11, 2025.
31.1*
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
104*
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
* Filed herewith.
** These exhibits are furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.
† Represents a management contract or a compensatory plan or arrangement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
May 9, 2025
By:
/s/ Brad S. Elliott
Brad S. Elliott
Chairman and Chief Executive Officer
/s/ Chris M. Navratil
Chris M. Navratil
Executive Vice President and Chief Financial Officer