Earnings call transcript: Equity Bancshares Q2 2025 misses forecasts, stock drops

Equity Bancshares Inc. (EQBK) reported its second-quarter 2025 earnings, revealing a miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $0.86, falling short of the forecasted $0.888, while revenue reached $58.39 million, below the expected $60.46 million. The market reacted negatively, with shares dropping 4.74% to $40.11 in premarket trading, continuing a downward trend with an 8.97% decline in after-hours trading. According to InvestingPro analysis, the company currently appears undervalued, with a "GOOD" overall financial health score of 2.72 out of 5.

Key Takeaways

• Equity Bancshares missed EPS and revenue forecasts for Q2 2025.
• Stock price fell by 4.74% post-earnings announcement.
• The company completed a merger with NBC Bank, contributing to loan production growth.
• Net interest income increased quarter-over-quarter.
• The company maintains a positive outlook for credit conditions in 2025.

Company Performance

Equity Bancshares demonstrated growth in several areas despite missing earnings forecasts. The company reported a net income of $15.3 million, or $0.86 per diluted share, with adjusted earnings at $16.6 million, or $0.94 per diluted share. The recent merger with NBC Bank and increased loan production helped bolster the company’s performance. Loan balances grew by $100 million year-to-date, and the net interest margin improved to 4.17%, up 10 basis points from the previous quarter.

Financial Highlights

• Revenue: $58.39 million, below the forecast of $60.46 million
• Earnings per share: $0.86, below the forecast of $0.888
• Net interest income: $49.8 million, up $1.8 million quarter-over-quarter
• Non-interest income: $8.6 million, up $500,000 from Q1
• Non-interest expenses: $40 million

Earnings vs. Forecast

Equity Bancshares’ actual EPS of $0.86 missed the forecast of $0.888, marking a negative surprise of 3.15%. Revenue similarly missed expectations, coming in at $58.39 million against a forecast of $60.46 million, a shortfall of 3.42%. This miss contrasts with previous quarters where the company met or exceeded projections, contributing to the stock’s negative market reaction.

Market Reaction

Following the earnings announcement, Equity Bancshares’ stock price fell by 4.74% to $40.11 in premarket trading. This decline extended to an 8.97% drop in after-hours trading, reflecting investor disappointment with the earnings miss. The stock is now trading closer to its 52-week low of $32.95, significantly below its high of $50.85. Despite recent volatility, InvestingPro data shows the stock has delivered strong returns over both the last month and three months, with a P/E ratio of 10.55x and a price-to-book ratio of 1.31x.

Outlook & Guidance

Despite the current quarter’s challenges, Equity Bancshares maintains a positive outlook, expecting loan balance growth and stable margins in its legacy portfolio. Future earnings per share are forecasted at $1.0 for Q3 2025 and $1.05 for Q4 2025, with annual projections of $3.74 for FY2025 and $4.43 for FY2026. InvestingPro analysis confirms these positive expectations, with two key ProTips highlighting the company’s consistent dividend growth over four consecutive years and projected profitability for the current year. For comprehensive analysis of EQBK and 1,400+ other stocks, including detailed Pro Research Reports, consider an InvestingPro subscription. The company anticipates continued strong performance in existing markets and expansion into Oklahoma City.

Executive Commentary

CEO Brad Elliott expressed optimism about the company’s strategic direction, stating, "It is a very exciting time for everyone associated with equity." He highlighted ongoing merger and acquisition (M&A) discussions, noting, "M&A conversations continue at a very high rate." Bank CEO Rick Sims added, "We’re seeing more activity in the C and I side as well, and our Cherry side remains strong."

Risks and Challenges

• The company faces potential integration challenges following its merger with NBC Bank.
• Interest rate fluctuations could impact net interest margin and loan production rates.
• Increased competition in the banking sector may pressure margins and market share.
• Economic uncertainties could affect credit quality and loan growth.
• Regulatory changes could impose additional compliance costs.

Q&A

During the earnings call, analysts inquired about the company’s loan growth expectations and deposit cost optimization. Management indicated that loan growth is expected to improve in the second half of 2025, with deposit costs largely optimized. The company also addressed concerns about its QSR portfolio, noting one challenging relationship that is being actively managed.

Full transcript - Equity Bancshares Inc (EQBK) Q2 2025:

Carla, Call Coordinator: Hello, everyone, and welcome to the Equity Bancshares Inc.

Twenty twenty five Q2 Earnings Call. My name is Carla, and I will be coordinating your call today. I would now like to hand you over to your host, Brian Katze, Vice President, Director of Corporate Development and Investor Relations to begin. Please go ahead when you’re ready.

Brian Katze, Vice President, Director of Corporate Development and Investor Relations, Equity Bancshares: Good morning. You for joining us today for Equity Bancshares’ second quarter earnings call. Before we begin, let me remind you that today’s call is being recorded and is available via webcast at investor.equitybank.com along with our earnings release and presentation materials. Today’s presentation contains forward looking statements, are subject to certain risks, uncertainties and other factors that could cause actual results to differ materially from those discussed. Following the presentation, we will allow time for questions and further discussion.

Thank you all for joining us. With that, I’d like to turn the call over to our Chairman and CEO, Brad Elliott.

Brad Elliott, Chairman and CEO, Equity Bancshares: Good morning, and thank you for joining Equity Bancshares’ earnings call. Joining me today are Rick Sims, our bank CEO Chris Navertau, our CFO and Christoph Slutkowski, our chief credit officer. We are excited to share our company’s sustained strong beginning to 2025. In the second quarter, we achieved strong earnings, core margin expansion, and successfully closed our merger with NBC Bank on July 2. Limiting time between announcement and closure of our transaction has been a core competency of equity.

Our work to receive all required approvals on this transaction within sixty days of announcement provides confidence to a seller and value to our shareholders. We are proud of our teams for putting us in a position to continue to excel in this space. We couldn’t be more excited to welcome the leadership and team members of NBC Bank, HK Hatcher, Glenn Floresca, Jeff Greenleigh, Dennis Demer, and Scott Bixler. That team coupled with Ken Ferguson joining our board are excellent additions to Equity Bank franchise. I look forward to all they can and will accomplish as we continue to expand our presence in the state of Oklahoma.

While executing on our m and a strategy, our team has also remained hyper focused on serving the communities in which we operate. I’m very proud of all that Rick has accomplished as he and Jonathan Ruth have worked to reset and retool our retail staff and philosophy. He has also made a lot of progress with our commercial teams. Originations are growing as our commercial product sales. Loan balances year to date are up a $100,000,000, while deposits excluding seasonal public funds have held their ground.

Our teams are motivated and armed with tools to meet the needs of our communities, and we look forward to continued execution on our mission. We closed the quarter with a TCE ratio of 10.63% and a tangible book value per share of $32.17. Compared to second quarter twenty twenty four, our TCE ratio is up 41% and our tangible book value per share is up 25%. Providing top notch products and services through exceptional bankers continues to be our guiding principle as we aim to grow Equity Bank. We started the year with a strong balance sheet, motivated bankers, and a solid capital stack to execute on our dual strategy of organic growth and strategic m and a.

We have executed through the first half of the year and look forward to maintaining this momentum throughout the year. I’ll now hand it over to Chris to walk you through our financial results.

Chris Navertau, CFO, Equity Bancshares: Thank you, Brad. Last night, we reported net income of $15,300,000 or $0.86 per diluted share. Adjusting for costs incurred on m and a and the extinguishment of debt, earnings were $16,600,000 or $0.94 per diluted share. Net interest income for the period was $49,800,000 up $1,800,000 linked quarter when adjusting for $2,300,000 in non accrual benefits realized in the prior period. Margin for the quarter was 4.17%, an improvement of 10 basis points when compared to core margin of 4.07% linked quarter.

We continue to be optimistic about our opportunities to maintain spread and improve earnings through repositioning of earning assets throughout 2025. More to come on margin dynamics later in this call. Non interest income for the quarter was $8,600,000 up $500,000 from Q1 when excluding the $2,200,000 BOLI benefit realized in that quarter. The increase was driven by improvement in customer service charge line items, including deposit services, treasury, debit and credit card, mortgage and trust and wealth. Non interest expenses for the quarter were $40,000,000 Adjusted to exclude loss on debt extinguishment and M and A charges, non interest expenses were $38,300,000 down modestly in the quarter and in line with outlook.

Debt extinguishment charges of $1,400,000 were realized during the quarter as the company chose to redeem our outstanding subordinated debt issue following its first capital and interest rate reset period. The plan is to refinance within the month. As we have discussed in past calls, we are in an opportunity rich environment, and maintaining this source of capital provides continued flexibility while resetting allows for capital maintenance and a better coupon. Our GAAP net income included a provision for credit loss of $19,000 The provision is the result of realized charge offs partially offset by a moderate decline in ending loan balances. We continue to hold reserves for any economic challenges that could arise.

To date, we have not seen concerns in our operating markets that would indicate these challenges are on the horizon. The ending coverage of ACLs alone is 1.26%. As Brad mentioned, our TCE ratio for the quarter remained above 10%, closing at 10.63%. The funds from the cap rates in Q4 continue to be maintained at the holding company with no current intention of pushing into the bank. At the bank level, the TCE ratio closed at 10.11%, benefited both by earnings and improvement in the unrealized loss position on securities portfolio.

I’ll stop here for a moment and let Christophe talk through our asset quality for the quarter.

Christophe Slutkowski, Chief Credit Officer, Equity Bancshares: Thanks, Chris. During the quarter, non accrual and non performing loans moved up as we saw migration of the QSR relationship we have discussed on previous calls. Non accrual loans closed the quarter at $42,600,000 up $18,300,000 from the previous quarter. The increase is almost entirely driven by that same QSR relationship. The customer has a good path to exiting the underperforming locations over the next several quarters.

We remain engaged with the borrower in a collaborative effort to pursue a full resolution through multiple avenues. Until resolution of the challenged stores is realized, classification as a nonaccrual asset is an appropriate step. Total classified assets closed the quarter at $71,000,000 or 11.4% of total bank regulatory capital. Importantly, classified assets levels remain well below our historical averages and continue to be actively monitored and managed. Delinquency in excess of thirty days moved down during the quarter to 16,800,000.0 Net charge offs annualized were six basis points for the quarter, while year to date charge offs annualized were four basis points.

Recognized charge offs continue to reflect specific circumstances on individual credits and do not signal systemic issues within our markets. Looking ahead, we remain positive on the credit environment and the outlook for the remainder of 2025. Despite some uncertainty in the broader economy, credit quality trends across our portfolio remain stable and below historic levels. Our disciplined underwriting, strong capital and reserve levels position us well to navigate any potential headwinds. We believe this practice and a measured approach will support continued sound credit performance while allowing us to respond quickly if conditions change.

Chris?

Chris Navertau, CFO, Equity Bancshares: Thanks, Christophe. As I previously mentioned, margin adjusted for one time items in Q1 improved 10 basis points in the quarter. The improvement during the period was driven by remixing of balance sheet and loans comprised 76% of average earning assets as compared to 75% in the previous quarter. Yield expansion on the loan portfolio driven by increasing coupon results and a reduction in both the level and cost of interest bearing liabilities. Average loans increased during the quarter at an annualized rate of 6.2%, while average interest earning assets increased 1.7%.

The increase in margin and earning assets, coupled with an additional day in the period led to core net interest income growth of $1,800,000 As we look to the remainder of the year, we are optimistic about margin maintenance on the legacy portfolio as we see loan balance growth and continued lagged repricing on our asset portfolio. In addition to our legacy portfolio, following the July 2 closing of NBT, we will begin to realize the benefits of that transaction. While we are continuing to work through fair valuation estimates, we expect to realize margin improvement from the addition of the underlying assets and liabilities. Refer to our outlook slide for additional detail on second half earnings expectations reflecting current estimates of the impact of MVC. As a reminder, we do not include future rate changes, though our forecast continues to include the effects of lagging repricing in both our loan and deposit portfolios.

Our provision is forecasted to be 12 basis points to average loans on an annualized basis. Rick?

Rick Sims, Bank CEO, Equity Bancshares: Our production teams have had an excellent start to the year as we realized loan growth of more than $100,000,000 through the first two quarters while also maintaining deposit balance exclusive of anticipated municipality outflows. As we look to layer in the NBC footprint and their exceptional leadership team, I’m excited to see what the equity team can accomplish in the second half of twenty twenty five. Production in the quarter totaled $197,000,000 in line with prior period organic production and twice as much as Q2 twenty twenty four. Rates on new production were 7.17% compared to 6.73% in Q1, continuing to provide accretive value compared to

: current yields.

Rick Sims, Bank CEO, Equity Bancshares: While originations kept pace, decreasing line utilization and increasing level of payoffs during the period resulted in a decline in ending balance sheet as compared to prior quarter end. Higher payoffs resulted during the period were related to positive outcomes for borrowers, asset sales or upstream takeouts. We anticipate additional opportunities to bank these borrowers in the future. As we close the quarter, our 75% pipeline is four eighty one million dollars up $119,000,000 or 33% from quarter one. The team continues to focus on growing relationships, deepening wallet share and pricing for the value provided, which will benefit Equity Bank in the future.

Our retail teams entered the year with aligned direction and a framework designed to drive success throughout our footprint. The first half of the year showed positive trends in gross and net production levels, including net positive DDA account production. Though we have a long way to go to meet the aggressive goals we have set, I look forward to assisting this group in realizing success throughout 2025 and beyond. Deposit balance, excluding brokerage funds declined $43,000,000 Loss balances were primarily accounts due to normal outflow activities. The accounts remain open and active.

With the closing of NBC, equity adds Oklahoma City, a growing metro market with opportunities to leverage a larger balance sheet and franchise, while the many Oklahoma communities added continue to align with the Equity Bank mission. With great cost over in HK Hatcher and all of our market leaders driving our franchise forward, we can accomplish a lot. Brad?

Brad Elliott, Chairman and CEO, Equity Bancshares: It is a very exciting time for everyone associated with equity. Our employee base has opportunities to grow and learn. Our board is incredibly engaged and focused on what creates long term shareholder value. The communities we serve to continue to get the scale of a larger company with a small town feel, and our shareholders benefit by continued EPS growth, market and deposit base expansion, all leading to compounding tangible book value. We’re in a great position in our markets with our organic sales team.

Our management team is ready for the challenge and relishes the opportunity ahead of us. Our board has done a great job navigating a strategic path that allows us to grow both organically and through m and a. M and a conversations continue at a very high rate. Equity will remain disciplined in our approach to assessing these opportunities, emphasizing value while controlling dilution in the earn back timeline. I look forward to the rest of the year and beyond.

Thank you for joining our call today, and we’re now happy to take any questions you might have.

Carla, Call Coordinator: Thank you. We will now begin the question and answer session. Session. And our first question comes from Terry McBoy with Stephens.

Terry McBoy, Analyst, Stephens: Hi. Good morning, everybody. Start with a question for Chris. Could you just help Chris, could you talk about plans for the NBC Bank bond, the bond portfolio at NBC Bank and just overall thoughts on managing the securities portfolio in the second half of the year?

Chris Navertau, CFO, Equity Bancshares: Yeah. Good question, Terry. Under the so under the terms of the MVC agreement, the the MVC management team actually affected sale of their bond portfolio prior to our acquisition of the bank. So coming over to our balance sheet, effectively, those have been monetized into cash balances, and there’s a very small level of securities being brought over that have just, been retained for the purposes of managing pledging positions. So those that cash will come into our environment with the opportunity to deploy both for securities portfolio needs as well as funding loan growth and and funding other alternatives on the balance sheet.

So no specific actions needing to be taken by us at this point as it relates to their bond portfolio, just based on what’s actually coming over to us. In terms of managing the rest of the way, you know, the bond portfolio for us is, is a mechanism by which to deploy cash with, you know, an improved return potentially. But really, the balances fluctuate dependent on need on both liquidity and pledging as well as, you know, cash balances relative to deposits. So we saw in the quarter some average balance decline. We we had some purchases into the end of the quarter, which is gonna grow that balance for average balance purposes going in as we begin q three.

But that it’s it’s a balancing function in that securities portfolio where we’re maintaining to, you know, kind of best leverage our cash position while also having the liquidity and the pledging required for municipality deposits.

Terry McBoy, Analyst, Stephens: Constantly

Brad Elliott, Chairman and CEO, Equity Bancshares: Yeah. We constantly are looking Terry at, you know, is there an opportunistic time to, rebalance that portfolio also. So if there’s a thought process that we’ll we come up with to to do a a structured trade or rebalance that portfolio, we’ll we’ll we’ll move forward with that as well.

Terry McBoy, Analyst, Stephens: And a question for Christophe. Are you seeing any stress within that QSR portfolio outside of the one relationship that we’ve talked about for the past couple of quarters?

Christophe Slutkowski, Chief Credit Officer, Equity Bancshares: Yes. So and I’ve discussed this on previous calls. We do have we do see softer operating numbers from in that sector from our other borrowers. When it comes to classified numbers, we have have one small relationship in that space outside of this large one that we that I mentioned. But outside of that, you know, we have a lot of granularity in this, in this portfolio.

We have diversification between, the different QSR concepts, different brands. We have diversification diversification when it comes to geography, and borrowers. So there’s a lot of granularity over there and, you know, this is this is definitely the the one we just downgraded is definitely, the the, you know, the largest concern.

Terry McBoy, Analyst, Stephens: Thank you for that. And maybe just one last quick one back to Chris. That step down in the fourth quarter as it relates to noninterest expenses relative to the third quarter, Is that all cost savings from the deal? Or is there anything else baked into that decline in 4Q?

Chris Navertau, CFO, Equity Bancshares: Yes. It’s predominantly the impact of MBC. I think we always have a little bit of a downward trend through the year in terms of NIE, primarily in the salaries and employee benefit line items, but most of that reduction is the MVC savings.

Terry McBoy, Analyst, Stephens: Great. Thanks for taking my questions.

Carla, Call Coordinator: Thank you. And the next question comes from Jeff Ross with D. A. Davidson.

Jeff Ross, Analyst, D.A. Davidson: Thanks. Good morning. Maybe a couple of questions larger on QSR credit. The first is what triggered the move to non accrual? Is it just sort of a time, I suppose, is sort of the first part?

And then second piece is Christophe, you mentioned the expectation for a path of exiting some of the better locations. And I guess if there’s properties that are sold, would you anticipate that that can, I guess, reduce the non accrual amount before you kind of fully resolve the whole relationship? In other words, can we see that balance trickle down as you have progress in some of those other locations? Thanks.

Christophe Slutkowski, Chief Credit Officer, Equity Bancshares: Yeah. So your first question on the non accrual treatment, the we just got to a point of time where where it was appropriate set from accounting standpoint. The loans were tasked to do, from a payment perspective. When it comes to exiting the stores, I I talked about exiting the unprofitable stores. They have a market that is, that is unprofitable for them.

All of the stores in the markets, are underperforming, dragging their cash flow down. So, we’re working on a or we have a plan in place that, they they’re executing or, we’re we’re we’re we’re going to execute, to exit these stores. And then and then the rest of the locations are performing very well. They’re they’re able to carry the debt load that we have. So, we’re not exactly sure how long this, this process is going to take.

We, we think it’s going to be, the next several quarters, at least three three quarters, to execute on this plan and then stabilize stabilize cash flow. So, the hope is that once that’s executed and and we’re in the, we’re in the, in a better cash flow situation, later in next year, you know, we could potentially, talk about upgrading this to accrual status.

Jeff Ross, Analyst, D.A. Davidson: Okay. Appreciate it. And Brad, it sounds fairly positive on the M and A front. Are you interested in the sellers, the conversation there as they view seeing regulatory approval for deals accelerating. Is that changing the tone or bringing more folks to the table?

Or has it just been a pretty steady state of the folks that you talked to in terms of partnerships? Wondering if that REG approval speed is changing the tone with sellers at all.

Brad Elliott, Chairman and CEO, Equity Bancshares: Yeah. Let me finish on the the the QSR restaurant. There’s there’s several paths to resolution there. One is that they closed down the eight restaurants that are underperforming, and then the other the other restaurants are currently cash flowing positive today. So they actually actually have a really good business of their others 33 stores.

And so if they can’t execute on getting things done fast enough, we’re gonna ask them to sell the whole package and force them into that that process. So there’s several avenues to liquidation here from our standpoint. On the m and a front, I I don’t think it’s driven by regulatory. I think it’s driven by you know, we’re on a tail end of a four year or five year period where you couldn’t sell your financial institution because four years ago, you were in COVID. Two years ago, we had a really low interest rate environment, which has, you know, taken some time for people to realize what their new tangible book value really is.

And so now that we have kind of passed those two windows, I think the age of ownership and age of management is driving those decisions. And and so, you know, ownership teams have windows on when they they wanna have liquidity. A lot of them are past that window from two to five years. And so that’s really what’s driving, this. Or the management team is three to five years older than they, wanted to be when they had talked to their owners about selling the institution.

And so it’s really age of ownership and age management that’s driving every conversation that we have. And that’s, you know, hasn’t changed, and I don’t think it will change. I think there’s the reason why there’s so much activity is I think there’s been so much, put off of timing, from the from the past several years.

Jeff Ross, Analyst, D.A. Davidson: Appreciate it. Thanks, Brad.

Carla, Call Coordinator: Thank you. The next question comes from Damon DelMonte with Keefe, Brier and Woods.

Damon DelMonte, Analyst, Keefe, Bruyette & Woods: Hey, good morning guys. Thanks for taking my questions. First one maybe for Rick on the outlook here in the second half of the year for loan growth. It seems like clearly explained what led to the end of period decline this quarter. Could you just talk a little bit about kind of the optimism here in the back half of the year and kind of what’s driving that both from a geographic standpoint and asset class?

: Sure. Yeah. We’re we’re definitely seeing continued pipelines building. I mean, our pipelines are at the highest levels they’ve been at. So that’s a lot of where the optimism comes.

It’s it’s, we’re seeing more, more activity in in the C and I side as well, and and our Cherry side, remains strong as well. So we’ve got a lot of deals coming in, and and and and you get these waves of payoffs.

Rick Sims, Bank CEO, Equity Bancshares: And the reality is we

: you know, you get typically one quarter a year, you get a lot of it seems like you get a lot of payoffs. And so reality is in the last year, trailing four four quarters, we’ve had two months with with larger payoffs. So I think there’s some aspects of that slowing down as well with the production engine that we have. And our the last four quarters of production has been really good. And so if we just continue on that path with a little bit less pass, you’re going to see that growth.

So that’s really why we have the optimism for the second half of the year.

Damon DelMonte, Analyst, Keefe, Bruyette & Woods: Got it. And the the lower line utilization this quarter, was that something that was kinda seasonally driven? Or is that maybe a shift in your customer operating approach?

: No. I think there’s a couple of there’s actually a couple of specific things with, with a a large it’s it’s actually a situation where a couple of our of our wealthy customers have some lines. They receive some money up and had lines and paid them down. It’s it’s sort of a unique situation that happened. Those lines remain in place.

We expect those to, you know, probably be drawn again on again as as we get later in the year as well. So, that that had a sort of a disproportional amount. I think also some of it’s in the in some of the ag lines as well, those come back. So, you know, we’re we’re again, we’re optimistic that this was just sort of a a one time thing.

Brad Elliott, Chairman and CEO, Equity Bancshares: It it actually affected our deposit balances and our loan balances because they, were carrying them in different entities on the deposit side, then distributed those funds to several principals, and then those principals paid down their their lines of credit. So we got we got hit twice from the same customer base. But that’s actually a positive result from the standpoint customers doing extremely well, and they’ll draw those lines back up again.

Damon DelMonte, Analyst, Keefe, Bruyette & Woods: Got it. Appreciate that color. And then, just lastly, Chris, on the on the margin outlook, I think you mentioned that there’s some repricing that’s going to be occurring over the next few months for loans. Do you have some numbers around kind of what you expect in total loans to be repricing in the back half of the year?

Chris Navertau, CFO, Equity Bancshares: Yes. We continue to have kind of lag repricing in there, Damon, really on both sides. There’s some up, there’s some down. I would look at our core margin as kind of maintaining right where we realized it this quarter. So that lag reprice had the effect of maintaining around that 4.17 as you consider both liabilities and the loans.

And then as we look forward into 2026, there continues to be some runway there of additional repricing, again, on both sides of the balance sheet, some time structured deposits and some longer dated loans that we’ll continue to see move up.

Damon DelMonte, Analyst, Keefe, Bruyette & Woods: Okay. Great. That’s all that I had. Thank you very much.

Carla, Call Coordinator: Our next question comes from Brett Rabatin with Hofth Group.

Brian Katze, Vice President, Director of Corporate Development and Investor Relations, Equity Bancshares0: Hey, guys. Good morning. Wanted to just start on Wichita and just with the environment of more defense spending and you know, Wichita having a a bit of an aviation and military backdrop. Just wanted to hear, you know, what was going on in Wichita. And then I know you guys have have have gotten away from aircraft lending and that kind of thing, but just wanted to see if that might be an opportunity for you and get maybe get a little bit of color on how Wichita is doing with the sub trend.

Brad Elliott, Chairman and CEO, Equity Bancshares: Yes. So if you look at our portfolio, it’s less than 10% of our company now is based in Wichita. So it’s not a big factor for us on an overall basis, macro basis. But on a micro basis, we have less than $5,000,000 I think outstanding to suppliers in the aircraft industry from a direct exposure. That’s down from 100 plus million five years ago.

So we really we’re not in that space any longer. It’s not affecting our community, what’s going on with Boeing in particular very much because, Cessna, Beechcraft, and Learjet doing so well that there’s so much demand for the jobs. And Spirit isn’t laying people off. Spirit Boeing are not laying people off yet, and haven’t made any announcements that they’re going to. So there’s still a lot of demand for jobs here, and the workforce is very intact.

You know, their biggest issue in that workforce is, I think, SESA has somewhere between five hundred and seven hundred and fifty retirees annually

Terry McBoy, Analyst, Stephens: out of

Brad Elliott, Chairman and CEO, Equity Bancshares: their workforce. So making sure that they can replace them with skilled workers is is important. And I’m sure all the subcontractors are the same way. So the demand for talent here is still very, high, and we’re we’re not seeing any effects of the Boeing Spirit relationship on the marketplace yet today. I can look out my window and I can see a 190 fuselages on the ground out there for Spirit on delivery.

Brian Katze, Vice President, Director of Corporate Development and Investor Relations, Equity Bancshares0: Okay. And then just a question for Chris. Back on the margin, know, it would it would seem like you’re you’re implying that you can’t get much more out of the deposit betas or get deposit costs lower, from here absent Fed cuts. Any any thoughts on how you’re modeling that and just what you guys think, deposit growth takes at this point?

Chris Navertau, CFO, Equity Bancshares: Yes. So a couple of things on that. In terms of the actual deposit betas as it applies to our base today, so call it a no growth base position, there’s a little bit of potential continued repricing as we have some time to buy the maturities. But, you know, as you saw over the past few quarters, as rates started to come down, we, like the industry, took you know, we’re we’re strategic in that. We move forward quickly.

We’re able to get those costs out relatively quickly. So the opportunity set for working decline went down. That said, we continue to have some that are, what I’ll call, at market today. I think depending on how competition behaves, there’s always gonna be a little bit of continued opportunity there. Now the offset to that is this competition stays irrational or moves to a more irrational position.

It could go the other direction on us. So I think that’s the risk. What I’d tell you is new deposits today, to the extent they’re interest bearing, you know, the market’s competitive out there. So seeing numbers that are meaningfully accretive to where our current cost of deposit is on an interest bearing basis It’s a challenge right now in a relative to cost of funds basis, so there’s still some value there. But where we can pursue commercial relationships, we grow the loan balances and with them drive, commercial deposit relationships and where, you know, John Roop and and Rick Sense can find success in in driving consumer relationships and and DDA accounts.

All those incrementally create value. So as we see traction there, there’s opportunity for us. But on a cost static basis, Brett, the majority of those costs have come out at this point.

Brian Katze, Vice President, Director of Corporate Development and Investor Relations, Equity Bancshares0: Okay. And then maybe just one last one for me. You know, Brad, I think you’re, you know, you’re still optimistic about m and a and the possibilities. Is the size range for you guys from a target perspective increasing or or any color on how you’re thinking about, you know, the the typical target from here?

Brad Elliott, Chairman and CEO, Equity Bancshares: Yeah. The opportunities have been increasing on size for us, but I think their size range, you know, the set that we have is $1,500,000,000 and below. And so I think you could think we’re gonna spend our energy on $250,000,000, institutions to 1 and a half billion, and kinda anything in between there that fits our geographic footprint is kinda what we’re focused on.

Brian Katze, Vice President, Director of Corporate Development and Investor Relations, Equity Bancshares0: Okay. Great. Appreciate all the color, guys.

Carla, Call Coordinator: Thank you. So just as a final reminder, if you would like to ask a question, it’s star one on your telephone keypad.

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