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On Thursday, Keefe, Bruyette & Woods maintained a Market Perform rating on Equity Bancshares (NYSE:EQBK) shares, with a steady price target of $48.00. Analyst Damon DelMonte provided insights into the company’s latest acquisition move. Equity Bancshares has announced its intention to purchase NBC Corp. of Oklahoma (NBC) in a deal combining stock and cash valued at approximately $86.9 million. This price suggests a valuation of 145% of tangible book value (TBV) and 13.0 times the projected earnings per share (EPS) for 2024, with a 4% premium on core deposits. The acquisition comes as Equity Bancshares demonstrates strong financial performance, with impressive revenue growth of 59.55% over the last twelve months. For deeper insights into EQBK’s valuation metrics and growth potential, investors can access comprehensive analysis through InvestingPro’s detailed research reports.
The acquisition aims to extend Equity Bancshares’ presence within Oklahoma, adding seven branches in Oklahoma City and over $900 million in assets. DelMonte highlighted the financial benefits of the deal, anticipating a low double-digit EPS increase by 2026, an estimated 5% TBV dilution, and a less than three-year period for earnings to offset the dilution.
The transaction is seen as a continuation of Equity Bancshares’ strategic growth through mergers and acquisitions, a practice it has employed since its inception in 2002. This latest deal represents the company’s 25th since its founding and the 13th since its initial public offering in 2015. DelMonte noted that the market is expected to react positively to the acquisition, given the reasonable valuation and the financially attractive pro forma outcomes that are anticipated.
In other recent news, Equity Bancshares, Inc. announced a definitive merger agreement with NBC Corp. of Oklahoma, which will expand its footprint by adding seven new locations and doubling its presence in Oklahoma. This merger, expected to close in the third quarter of 2025, is anticipated to be 12.5% accretive to Equity’s 2026 earnings per share, excluding one-time transaction expenses. Additionally, Equity Bancshares declared a quarterly cash dividend of $0.15 per share, maintaining its commitment to providing consistent returns to shareholders. The company also extended its credit line with ServisFirst Bank, pushing the maturity date to February 2026, signaling robust financial management. In terms of leadership changes, Gregory H. Kossover has been appointed as Executive Vice President of Capital Markets, bringing extensive experience to the role. Analysts at Stephens adjusted the price target for Equity Bancshares to $49, down from $52, but maintained an Overweight rating, citing confidence in the company’s strategic initiatives. Despite a lower price target, Equity’s fourth-quarter 2024 earnings per share surpassed expectations, coming in at $0.97 against a consensus estimate of $0.91. These developments underscore Equity Bancshares’ strategic focus on growth and financial stability.
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