Equity Bancshares, Inc. First Quarter Results Include Net Interest Margin Expansion and Annualized Loan Growth of 15.2%

Published: 2025-04-15 16:33:04 ET EQBK

Reports Net Interest Margin of 4.27%, Closes the Quarter with a Tangible Common Equity Ratio of 10.1%

Equity Bancshares, Inc. (NYSE: EQBK), (“Equity”, “the Company,” “we,” “us,” “our”), the Wichita-based holding company of Equity Bank, reported net income of $15.0 million or $0.85 earnings per diluted share for the quarter ended March 31, 2025.

“Our Company is off to an excellent start to the year as we realized expansion in customer relationships driving balance sheet growth, while also announcing an anticipated expansion of our footprint in our partnership with NBC Corp. of Oklahoma," said Brad S. Elliott, Chairman and CEO of Equity. “We came into the year well positioned to execute on our dual pronged strategy of organic and acquisitive balance sheet growth, and we are executing on our measured and strategic plan."

"With the earmarked dollars from our capital raise, continued positive operating results and the benefit of time as it relates to our investment portfolio our Company is well positioned to support growth in all its forms and as we continue to execute on our strategy throughout 2025 and beyond," Mr. Elliott continued. "Our teams are aligned and motivated as we look to build the premier community bank in our operating markets."

Notable Items:

Financial Results for the Quarter Ended March 31, 2025

Net income allocable to common stockholders was $15.0 million, or $0.85 per diluted share as compared to $17.0 million, or $1.04 per diluted share in the prior quarter. The drivers of the periodic change are discussed in detail in the following sections.

Net Interest Income

Net interest income was $50.3 million for the period, as compared to $49.5 million for the previous quarter. Adjusting the stated number for non-recurring nonaccrual reversals and excess prepayment fee realization of $2.3 million in the current quarter and $1.5 million in the prior quarter, net interest income was $48.0 million for each quarter. The flat result quarter over quarter is primarily the impact of day count offsetting an increase in net interest margin for the period of 3 basis points, adjusted to exclude the non-recurring items noted above in both periods.

Average interest bearing liabilities as a percentage of average interest earning assets declined to 76.3%, while total average interest earning assets increased $55.7 million, or 1.18%, as compared to the three months ending December 31, 2024. Coupon yield on interest earning assets decreased by 4 basis points along with a reduction of 8 basis points in the cost of interest bearing liabilities created a modest margin expansion, while the non-recurring nonaccrual reversals further contributed 20 basis points to the stated margin result of 4.27% for the quarter.

Provision for Credit Losses

During the quarter, there was a provision of $2.7 million compared to $98 thousand in the previous quarter, while the bank realized net charge-offs of $165 thousand as compared to $322 thousand. The comparatively higher provision was driven by loan growth during the period as well as a general decline in the economic outlook to account for the volatility and potential stress created by the recent changes to US trade policy. At the close of the quarter, the ratio of allowance for credit losses to gross loans held for investment was 1.3%, up 3 basis points from the linked quarter.

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

Non-Interest Income

Total non-interest income was $10.3 million for the quarter, as compared to $8.8 million linked quarter. The current quarter includes a $1.7 million comparative improvement in benefit from Bank Owned Life Insurance as we realized a death benefit during the period. Excluding this periodic change, non-interest income was down $200 thousand in the quarter attributable to seasonally consistent soft results in service charges, mortgage and insurance revenues.

Non-Interest Expense

Total non-interest expense for the quarter was $39.1 million as compared to $37.8 million for the previous quarter. The comparative increase during the period was driven by beginning of the year payroll dynamics as well as comparatively higher incentive accruals to account for positive earnings during the period. Excluding these items, non-interest expense was effectively flat quarter-over-quarter.

Income Tax Expense

At March 31, 2025, the effective tax rate for the quarter was 20.2% as compared to a rate of 16.7% for the quarter ended December 31, 2024. The increase in the quarter over quarter tax rate was the result of tax reductions related to tax credit structures entered in the prior year that reduced the rate for the 2024 fourth quarter when compared to the current quarter. There have been no new investments in tax credit structures in the first quarter of 2025, however, the Company is actively assessing investment opportunities and has capacity for investments in 2025 which would positively impact the Company’s tax rate. Additionally, there was an increase in state tax expense in the current quarter as compared to the prior quarter as a result of increased apportionment and the remeasurement of deferred tax assets at a lower state tax rate. These increases in the quarter over quarter tax rate were partially offset by non-taxable bank owned life insurance that was received in the quarter ended March 31, 2025.

Loans, Total Assets and Funding

Loans held for investment were $3.6 billion at period end, increasing $130.8 million during the quarter. Total assets were $5.4 billion, increasing $114.1 million during the quarter.

Total deposits were $4.4 billion as of the end of the period, increasing $30.6 million from the previous quarter end. Of the total deposit balance, non-interest-bearing accounts comprise approximately 21.6%. Total Federal Home Loan Bank borrowings were $236.7 million as of the end of the quarter, up $58.7 million from previous quarter end.

Asset Quality

Nonperforming assets were $27.9 million, or 0.5% of total assets, compared to $34.7 million as of the end of the previous quarter, or 0.7% of total assets. The decrease was driven by one Main Street Lending Program loan which was foreclosed and held in Other Real Estate Owned at its gross balance as of the end of the previous period which was fully resolved during the quarter. Non-accrual loans were $24.2 million, as compared to $27.1 million at the end of the previous quarter. Total classified assets, including loans rated special mention or worse, other real estate owned, excluding previous branch locations, and other repossessed assets were $63.5 million, or 10.2% of regulatory capital, down from $72.9 million, or 12.0% of regulatory capital as of the end of the previous quarter.

Capital

Quarter over quarter, book capital increased $24.4 million to $617.3 million. Tangible book value and Tangible book value per share closed the quarter at $544.4 million and $31.07, up from $30.07 linked quarter. The increase in capital is primarily due to earnings and an improvement in the unrealized loss position on our bond portfolio as accumulated other comprehensive income improved $10.2 million.

The Company’s ratio of common equity tier 1 capital to risk-weighted assets was 14.7%, the total capital to risk-weighted assets was 18.3% and the total leverage ratio was 11.8% at March 31, 2025. At December 31, 2024, the Company’s common equity tier 1 capital to risk-weighted assets ratio was 14.5%, the total capital to risk-weighted assets ratio was 18.1% and the total leverage ratio was 11.7%.

Equity Bank's ratio of common equity tier 1 capital to risk-weighted assets was 14.4%, total capital to risk-weighted assets was 15.6% and the total leverage ratio was 11.1% at March 31, 2025. At December 31, 2024, Equity Bank’s ratio of common equity tier 1 capital to risk-weighted assets was 14.2%, the ratio of total capital to risk-weighted assets was 15.3% and the total leverage ratio was 10.9%.

Non-GAAP Financial Measures

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

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

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

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

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

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

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

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

Conference Call and Webcast

Equity’s Chairman and Chief Executive Officer, Brad Elliott, and Chief Financial Officer, Chris Navratil, will hold a conference call and webcast to discuss first quarter results on Wednesday, April 16, 2025, at 10 a.m. eastern time or 9 a.m. central time.

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

United States (Local): +1 404 975 4839 United States (Toll-Free): +1 833 470 1428 Global Dial-In Numbers Access Code: 107245

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

A replay of the call and webcast will be available two hours following the close of the call until April 23, 2025, accessible at investor.equitybank.com. Webcast URL: https://events.q4inc.com/attendee/633039320

About Equity Bancshares, Inc.

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

Special Note Concerning Forward-Looking Statements

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

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

Unaudited Financial Tables

TABLE 1. QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share data)

As of and for the three months ended

March 31, 2025

December 31, 2024

September 30, 2024

June 30, 2024

March 31, 2024

Interest and dividend income

Loans, including fees

62,997

63,379

62,089

61,518

58,829

Securities, taxable

9,114

9,229

9,809

10,176

9,877

Securities, nontaxable

377

387

400

401

391

Federal funds sold and other

2,196

1,984

2,667

3,037

2,670

Total interest and dividend income

74,684

74,979

74,965

75,132

71,767

Interest expense

Deposits

19,377

21,213

23,679

22,662

22,855

Federal funds purchased and retail repurchase agreements

248

258

261

306

326

Federal Home Loan Bank advances

2,916

2,158

3,089

3,789

1,144

Federal Reserve Bank borrowings

—

1,361

Subordinated debt

1,851

1,877

1,905

1,899

Total interest expense

24,392

25,506

28,934

28,656

27,585

Net interest income

50,292

49,473

46,031

46,476

44,182

Provision (reversal) for credit losses

2,722

1,183

265

1,000

Net interest income after provision (reversal) for credit losses

47,570

49,375

44,848

46,211

43,182

Non-interest income

Service charges and fees

2,064

2,296

2,424

2,541

2,569

Debit card income

2,504

2,513

2,665

2,621

2,447

Mortgage banking

106

141

287

245

188

Increase in value of bank-owned life insurance

3,593

1,883

1,344

911

828

Net gain on acquisition and branch sales

—

831

1,240

Net gains (losses) from securities transactions

)

206

(27

)

Other

2,051

1,985

1,560

2,607

4,416

Total non-interest income

10,330

8,816

9,317

8,958

11,731

Non-interest expense

Salaries and employee benefits

19,954

18,368

18,494

17,827

18,097

Net occupancy and equipment

3,675

3,571

3,478

3,787

3,535

Data processing

5,086

4,988

5,152

5,036

4,828

Professional fees

1,527

1,846

1,487

1,778

1,392

Advertising and business development

1,344

1,469

1,368

1,291

1,238

Telecommunications

587

614

660

572

655

FDIC insurance

630

662

660

590

571

Courier and postage

799

687

686

620

606

Free nationwide ATM cost

513

558

544

531

494

Amortization of core deposit intangibles

1,045

1,060

1,112

1,218

899

Loan expense

129

154

143

195

109

Other real estate owned and repossessed assets, net

101

133

(7,667

)

(41

)

Merger expenses

—

618

2,287

1,556

Other

3,594

3,696

3,593

3,089

3,213

Total non-interest expense

39,050

37,806

30,328

38,871

37,152

Income (loss) before income tax

18,850

20,385

23,837

16,298

17,761

Provision for income taxes (benefit)

3,809

3,399

3,986

4,582

3,693

Net income (loss) and net income (loss) allocable to common stockholders

15,041

16,986

19,851

11,716

14,068

Basic earnings (loss) per share

0.86

1.06

1.30

0.77

0.91

Diluted earnings (loss) per share

0.85

1.04

1.28

0.76

0.90

Weighted average common shares

17,490,062

16,020,938

15,258,822

15,248,703

15,425,709

Weighted average diluted common shares

17,666,834

16,262,965

15,451,545

15,377,980

15,569,225

TABLE 2. CONSOLIDATED BALANCE SHEETS (Unaudited)

(Dollars in thousands)

March 31, 2025

December 31, 2024

September 30, 2024

June 30, 2024

March 31, 2024

ASSETS

Cash and due from banks

431,131

383,503

217,681

244,321

217,611

Federal funds sold

251

244

17,802

15,945

17,407

Cash and cash equivalents

431,382

383,747

235,483

260,266

235,018

Available-for-sale securities

950,453

1,004,455

1,041,000

1,042,176

1,091,717

Held-to-maturity securities

5,226

5,217

5,408

5,226

2,205

Loans held for sale

338

513

901

1,959

1,311

Loans, net of allowance for credit losses(1)

3,585,804

3,457,549

3,557,435

3,410,920

3,437,714

Other real estate owned, net

4,464

4,773

2,786

2,989

1,465

Premises and equipment, net

117,041

117,132

117,013

114,264

116,792

Bank-owned life insurance

132,317

133,032

131,670

130,326

125,693

Federal Reserve Bank and Federal Home Loan Bank stock

31,960

27,875

34,429

33,171

27,009

Interest receivable

26,791

28,913

28,398

27,381

27,082

Goodwill

53,101

Core deposit intangibles, net

13,924

14,969

16,029

16,636

17,854

Other

93,299

100,771

131,580

147,102

102,075

Total assets

5,446,100

5,332,047

5,355,233

5,245,517

5,239,036

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits

Demand

949,791

954,065

967,858

984,872

981,623

Total non-interest-bearing deposits

949,791

954,065

967,858

984,872

981,623

Demand, savings and money market

2,614,110

2,684,197

2,468,956

2,560,091

2,574,871

Time

841,463

736,527

926,130

796,474

814,532

Total interest-bearing deposits

3,455,573

3,420,724

3,395,086

3,356,565

3,389,403

Total deposits

4,405,364

4,374,789

4,362,944

4,341,437

4,371,026

Federal funds purchased and retail repurchase agreements

36,772

37,246

38,196

38,031

43,811

Federal Home Loan Bank advances and Federal Reserve Bank borrowings

236,734

178,073

295,997

250,306

219,931

Subordinated debt

97,620

97,477

97,336

97,196

97,058

Contractual obligations

9,398

12,067

19,683

23,770

18,493

Interest payable and other liabilities

42,888

39,477

37,039

33,342

31,941

Total liabilities

4,828,776

4,739,129

4,851,195

4,784,082

4,782,260

Commitments and contingent liabilities

Stockholders’ equity

Common stock

231

230

209

208

Additional paid-in capital

586,251

584,424

494,763

491,709

490,533

Retained earnings

207,282

194,920

180,588

163,068

153,201

Accumulated other comprehensive income (loss), net of tax

(44,965

)

(55,181

)

(40,012

)

(62,005

)

(60,788

)

Treasury stock

(131,475

)

(131,475

)

(131,510

)

(131,545

)

(126,378

)

Total stockholders’ equity

617,324

592,918

504,038

461,435

456,776

Total liabilities and stockholders’ equity

5,446,100

5,332,047

5,355,233

5,245,517

5,239,036

(1) Allowance for credit losses

45,824

43,267

43,490

43,487

44,449

TABLE 3. SELECTED FINANCIAL HIGHLIGHTS (Unaudited)

(Dollars in thousands, except per share data)

As of and for the three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

Loans Held For Investment by Type

Commercial real estate

1,863,200

1,830,514

1,916,863

1,793,544

1,797,192

Commercial and industrial

762,906

658,865

670,665

663,718

649,035

Residential real estate

563,954

566,766

567,063

572,523

581,988

Agricultural real estate

260,683

267,248

259,587

219,226

198,291

Agricultural

94,199

87,339

89,529

104,342

149,312

Consumer

86,686

90,084

97,218

101,054

106,345

Total loans held-for-investment

3,631,628

3,500,816

3,600,925

3,454,407

3,482,163

Allowance for credit losses

(45,824

)

(43,267

)

(43,490

)

(43,487

)

(44,449

)

Net loans held for investment

3,585,804

3,457,549

3,557,435

3,410,920

3,437,714

Asset Quality Ratios

Allowance for credit losses on loans to total loans

1.26

1.24

1.21

1.26

1.28

Past due or nonaccrual loans to total loans

1.17

1.14

1.17

1.15

1.10

Nonperforming assets to total assets

0.51

0.65

0.60

0.52

0.49

Nonperforming assets to total loans plus other real estate owned

0.77

0.99

0.90

0.79

0.73

Classified assets to bank total regulatory capital

10.24

12.00

8.32

8.47

6.85

Selected Average Balance Sheet Data (QTD Average)

Investment securities

993,836

1,012,698

1,055,833

1,065,979

1,074,101

Total gross loans receivable

3,575,230

3,525,765

3,475,885

3,459,476

3,452,553

Interest-earning assets

4,771,972

4,716,295

4,731,927

4,745,713

4,742,200

Total assets

5,212,417

5,163,166

5,205,017

5,196,259

5,152,915

Interest-bearing deposits

3,221,130

3,280,592

3,309,202

3,275,765

3,319,907

Borrowings

418,138

340,042

395,190

450,178

390,166

Total interest-bearing liabilities

3,639,268

3,620,634

3,704,392

3,725,943

3,710,073

Total deposits

4,143,151

4,243,159

4,275,424

4,250,843

4,254,883

Total liabilities

4,606,500

4,629,939

4,719,549

4,740,937

4,692,671

Total stockholders' equity

605,917

533,227

485,468

455,322

460,244

Tangible common equity*

533,528

463,657

414,644

383,899

398,041

Performance ratios

Return on average assets (ROAA) annualized

1.17

1.31

1.52

0.91

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

15.30

19.92

13.31

14.96

Core return on average tangible common equity*

12.14

15.29

19.58

16.89

15.16

Yield on loans annualized

7.15

7.11

7.15

6.85

Cost of interest-bearing deposits annualized

2.44

2.57

2.85

2.78

2.77

Cost of total deposits annualized

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 income / average assets

0.80

0.68

0.71

0.69

0.92

Non-interest expense / average assets

3.04

2.91

2.32

3.01

2.90

Dividend payout ratio

17.81

15.62

11.74

15.79

13.31

Performance ratios - Core

Core earnings per diluted share*

0.90

1.10

1.32

1.05

0.96

Core return on average assets*

1.24

1.37

1.56

1.25

1.17

Core return on average equity*

10.69

13.29

16.73

14.25

13.11

Core non-interest expense / average assets*

2.94

2.83

2.18

2.73

2.71

Capital Ratios

Tier 1 Leverage Ratio

11.76

11.67

9.55

9.14

9.10

Common Equity Tier 1 Capital Ratio

14.70

14.51

11.37

11.12

11.14

Tier 1 Risk Based Capital Ratio

15.30

15.11

11.94

11.70

11.73

Total Risk Based Capital Ratio

18.32

18.07

14.78

14.61

14.71

Total stockholders' equity to total assets

11.34

11.12

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 common share

35.23

34.04

32.97

30.36

29.80

Tangible book value per common share*

31.07

30.07

28.38

25.70

25.10

Tangible book value per diluted common share*

30.80

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 Table 8. Non-GAAP Financial Measures.

TABLE 4. QUARTER-TO-DATE NET INTEREST INCOME ANALYSIS (Unaudited)

(Dollars in thousands)

For the three months ended

March 31, 2025

March 31, 2024

Average Outstanding Balance

Interest Income/ Expense

Average Yield/Rate(3)(4)

Average Outstanding Balance

Interest Income/ Expense

Average Yield/Rate(3)(4)

Interest-earning assets

Loans (1)

Commercial and industrial

690,124

14,322

8.42

634,637

12,412

7.87

Commercial real estate

1,424,110

24,591

7.00

1,449,177

24,601

6.83

Real estate construction

457,910

8,802

7.80

354,801

7,775

8.81

Residential real estate

565,672

6,715

4.81

580,426

6,461

4.48

Agricultural real estate

264,100

5,415

8.32

197,023

3,468

7.08

Agricultural

84,901

1,667

7.96

131,035

2,391

7.34

Consumer

88,413

1,485

6.81

105,454

1,721

6.56

Total loans

3,575,230

62,997

7.15

3,452,553

58,829

6.85

Securities

Taxable securities

937,021

9,114

3.94

1,011,466

9,877

3.93

Nontaxable securities

56,815

377

2.69

62,635

391

2.51

Total securities

993,836

9,491

3.87

1,074,101

10,268

3.84

Federal funds sold and other

202,906

2,196

4.39

215,546

2,670

4.98

Total interest-earning assets

4,771,972

74,684

6.35

4,742,200

71,767

6.09

Interest-bearing liabilities

Demand, savings and money market deposits

2,527,784

13,581

2.18

2,520,521

15,660

2.50

Time deposits

693,346

5,796

3.39

799,386

7,195

3.62

Total interest-bearing deposits

3,221,130

19,377

2.44

3,319,907

22,855

2.77

FHLB advances

274,385

2,916

4.31

113,348

1,144

4.06

Other borrowings

143,753

2,099

5.92

276,818

3,586

5.21

Total interest-bearing liabilities

3,639,268

24,392

2.72

3,710,073

27,585

2.99

Net interest income

50,292

44,182

Interest rate spread

3.63

3.10

Net interest margin (2)

4.27

3.75

(1) Average loan balances include nonaccrual loans.

(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.

(3) Tax exempt income is not included in the above table on a tax-equivalent basis.

(4) Actual unrounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts.

TABLE 5. QUARTER-OVER-QUARTER NET INTEREST INCOME ANALYSIS (Unaudited)

(Dollars in thousands)

For the three months ended

March 31, 2025

December 31, 2024

Average Outstanding Balance

Interest Income/ Expense

Average Yield/Rate(3)(4)

Average Outstanding Balance

Interest Income/ Expense

Average Yield/Rate(3)(4)

Interest-earning assets

Loans (1)

Commercial and industrial

690,124

14,322

8.42

651,733

12,780

7.80

Commercial real estate

1,424,110

24,591

7.00

1,402,966

25,978

7.37

Real estate construction

457,910

8,802

7.80

463,885

9,654

8.28

Residential real estate

565,672

6,715

4.81

567,123

6,571

4.61

Agricultural real estate

264,100

5,415

8.32

262,529

5,071

7.68

Agricultural

84,901

1,667

7.96

82,986

1,705

8.17

Consumer

88,413

1,485

6.81

94,543

1,620

6.82

Total loans

3,575,230

62,997

7.15

3,525,765

63,379

7.15

Securities

Taxable securities

937,021

9,114

3.94

953,627

9,229

3.85

Nontaxable securities

56,815

377

2.69

59,071

387

2.61

Total securities

993,836

9,491

3.87

1,012,698

9,616

3.78

Federal funds sold and other

202,906

2,196

4.39

177,832

1,984

4.44

Total interest-earning assets

4,771,972

74,684

6.35

4,716,295

74,979

6.32

Interest-bearing liabilities

Demand savings and money market deposits

2,527,784

13,581

2.18

2,448,539

13,429

2.18

Time deposits

693,346

5,796

3.39

832,053

7,784

3.72

Total interest-bearing deposits

3,221,130

19,377

2.44

3,280,592

21,213

2.57

FHLB advances

274,385

2,916

4.31

194,914

2,158

4.41

Other borrowings

143,753

2,099

5.92

145,128

2,135

5.86

Total interest-bearing liabilities

3,639,268

24,392

2.72

3,620,634

25,506

2.80

Net interest income

50,292

49,473

Interest rate spread

3.63

3.52

Net interest margin (2)

4.27

4.17

(1) Average loan balances include nonaccrual loans.

(2) Net interest margin is calculated by dividing annualized net interest income by average interest-earning assets for the period.

(3) Tax exempt income is not included in the above table on a tax-equivalent basis.

TABLE 6. NON-GAAP FINANCIAL MEASURES (Unaudited)

(Dollars in thousands, except per share data)

As of and for the three months ended

March 31,

December 31,

September 30,

June 30,

March 31,

2025

2024

Total stockholders' equity

617,324

592,918

504,038

461,435

456,776

Goodwill

(53,101

)

(53,101

)

(53,101

)

(53,101

)

(53,101

)

Core deposit intangibles, net

(13,924

)

(14,969

)

(16,029

)

(16,636

)

(17,854

)

Mortgage servicing rights, net

—

(25

)

(50

)

Naming rights, net

(5,926

)

(957

)

(968

)

(979

)

(989

)

Tangible common equity

544,373

523,891

433,940

390,694

384,782

Common shares outstanding 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

17,673,132

17,636,843

15,497,466

15,358,396

15,469,531

Book value per common share

35.23

34.04

32.97

30.36

29.80

Tangible book value per common share

31.07

30.07

28.38

25.70

25.10

Tangible book value per diluted common share

30.80

29.70

28.00

25.44

24.87

Total assets

5,446,100

5,332,047

5,355,233

5,245,517

5,239,036

Goodwill

(53,101

)

(53,101

)

(53,101

)

(53,101

)

(53,101

)

Core deposit intangibles, net

(13,924

)

(14,969

)

(16,029

)

(16,636

)

(17,854

)

Mortgage servicing rights, net

—

(25

)

(50

)

Naming rights, net

(5,926

)

(957

)

(968

)

(979

)

(989

)

Tangible assets

5,373,149

5,263,020

5,285,135

5,174,776

5,167,042

Total stockholders' equity to total assets

11.34

11.12

9.41

8.80

8.72

Tangible common equity to tangible assets

10.13

9.95

8.21

7.55

7.45

Total average stockholders' equity

605,917

533,227

485,468

455,322

460,244

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

Net income (loss) allocable to common stockholders

15,041

16,986

19,851

11,716

14,068

Net gain on acquisition

—

(831

)

(60

)

(1,240

)

Net gain (loss) on securities transactions

(12

)

(206

)

(43

)

Merger expenses

—

618

2,287

1,556

BOLI tax expense

—

1,730

—

Amortization of intangible assets

1,144

1,071

1,148

1,254

935

Tax effect of adjustments

(252

)

(225

)

(153

)

(737

)

(254

)

Core net income (loss) allocable to common stockholders

15,987

17,834

20,427

16,217

15,022

Return on total average stockholders' equity (ROAE) annualized

10.07

12.67

16.27

10.35

12.29

Average tangible common equity

533,528

463,657

414,644

383,899

398,041

Average impact from core earnings adjustments

473

424

288

2,251

477

Core average tangible common equity

534,001

464,081

414,932

386,150

398,518

Return on average tangible common equity (ROATCE) annualized

12.12

15.30

19.92

13.31

14.96

Core return on average tangible common equity (CROATCE) annualized

12.14

15.29

19.58

16.89

15.16

Non-interest expense

39,050

37,806

30,328

38,871

37,152

Merger expense

(66

)

—

(618

)

(2,287

)

(1,556

)

Amortization of intangible assets

(1,144

)

(1,071

)

(1,148

)

(1,254

)

(935

)

Adjusted non-interest expense

37,840

36,735

28,562

35,330

34,661

Net interest income

50,292

49,473

46,031

46,476

44,182

Non-interest income

10,330

8,816

9,317

8,958

11,731

Net gain on acquisition and branch sales

—

(831

)

(60

)

(1,240

)

Net gains (losses) from securities transactions

(12

)

(206

)

(43

)

Adjusted non-interest income

10,318

8,818

8,280

8,925

10,448

Net interest income plus adjusted non-interest income

60,610

58,291

54,311

55,401

54,630

Non-interest expense to net interest income plus non-interest income

64.42

64.86

54.80

70.12

66.45

Efficiency ratio

62.43

63.02

52.59

63.77

63.45

Average assets

5,212,417

5,163,166

5,205,017

5,196,259

5,152,915

Core non-interest expense to average assets

2.94

2.83

2.18

2.73

2.71

Net income (loss) allocable to common stockholders

15,041

16,986

19,851

11,716

14,068

Amortization of intangible assets

1,144

1,071

1,148

1,254

935

Tax effect of adjustments

(240

)

(225

)

(241

)

(263

)

(196

)

Adjusted net income allocable to common stockholders

15,945

17,832

20,758

12,707

14,807

Net gain on acquisition

—

(831

)

(60

)

(1,240

)

Net gain (loss) on securities transactions

(12

)

(206

)

(43

)

Merger expenses

—

618

2,287

1,556

BOLI tax expense

—

1,730

—

Tax effect of adjustments

(12

)

—

(474

)

(58

)

Core net income (loss) allocable to common stockholders

15,987

17,834

20,427

16,217

15,022

Total average assets

5,212,417

5,163,166

5,205,017

5,196,259

5,152,915

Total average stockholders' equity

605,917

533,227

485,468

455,322

460,244

Weighted average diluted common shares

17,666,834

16,262,965

15,451,545

15,377,980

15,569,225

Diluted earnings (loss) per share

0.85

1.04

1.28

0.76

0.90

Core earnings per diluted share

0.90

1.10

1.32

1.05

0.96

Return on average assets (ROAA) annualized

1.17

1.31

1.52

0.91

1.10

Core return on average assets

1.24

1.37

1.56

1.25

1.17

Return on average equity

10.07

12.67

16.27

10.35

12.29

Core return on average equity

10.69

13.29

16.73

14.25

13.11

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