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On Monday, Keefe, Bruyette & Woods adjusted the price target for Equity Bancshares (NYSE:EQBK), reducing it to $44.00 from the previous $46.00. Despite the price target adjustment, the firm maintained a Market Perform rating on the company’s shares.
The revision follows an announcement earlier in the week that Equity Bancshares had agreed to acquire NBC Corp. of Oklahoma (NBC) in a transaction combining stock and cash, valued at approximately $86.9 million. The deal terms indicate that Equity Bancshares is paying roughly 145% of tangible book value (TBV) and 13 times the projected earnings per share (EPS) for 2024, with a 4% premium on core deposits. For context, Equity Bancshares currently trades at a P/E ratio of 9.87x and has demonstrated strong revenue growth of 59.55% over the last twelve months.
The acquisition will add seven branches and around $900 million in assets to Equity Bancshares’ portfolio. NBC is based in Oklahoma City, which Keefe, Bruyette & Woods views as a strategic market for expansion. The financial details of the deal appear to be advantageous, with expectations of low-double digit EPS accretion and a modest 5% TBV dilution, alongside a reasonable period for earning back the initial investment.
The research firm has updated its earnings estimates for Equity Bancshares for the years 2025 and 2026, taking into account the anticipated closing of the acquisition in early Q3 2025. Despite the revised earnings outlook and the positive perspective on the acquisition, the firm’s stance on Equity Bancshares’ stock remains at Market Perform.
The price target adjustment reflects the analyst’s updated valuation following the recent acquisition news and the expected impact on Equity Bancshares’ future financial performance.
In other recent news, Equity Bancshares announced a definitive merger agreement with NBC Corp. of Oklahoma, aiming to expand its presence in the region. This strategic acquisition, expected to close in the third quarter of 2025, will add seven locations to Equity Bancshares’ network and significantly increase its footprint in Oklahoma. The deal is valued at approximately $86.9 million and is anticipated to be 12.5% accretive to Equity’s earnings per share by 2026. Piper Sandler reaffirmed its Overweight rating with a $46.00 price target, noting the acquisition would elevate Equity Bancshares’ deposit market rank within Oklahoma. Meanwhile, DA Davidson maintained a Neutral rating and a $43.00 price target, focusing on the bank’s strategic expansion efforts. Keefe, Bruyette & Woods also held a Market Perform rating with a $48.00 price target, highlighting the financial benefits of the acquisition. Additionally, Equity Bancshares declared a quarterly dividend of $0.15 per share, continuing its practice of returning value to shareholders. The company’s Board of Directors approved the dividend, payable on April 15, 2025, to shareholders on record by March 31, 2025.
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