Jeff Riley

Jeff Riley from D.A. Davidson & Co. sought clarification on whether the linked-quarter increase in deposit costs was primarily due to the NBC Oklahoma acquisition or broader market competition. He also questioned Equity Bancshares' mid-single-digit loan growth expectation for 2026 over 2025, specifically asking about anticipated changes in payoff activity and the contribution from production and pipelines. Additionally, Mr. Riley inquired about any specific areas of strain or potential issues within Equity Bancshares' loan portfolio, despite overall encouraging credit quality trends.

Answer

CFO Chris Navratil confirmed that the increase in deposit costs was entirely attributable to liabilities acquired through the NBC Oklahoma transaction. Bank CEO Rick Sems detailed that the loan growth confidence stems from consistent, higher production levels, the addition of new markets (Oklahoma City and Omaha), and an expectation for payoff activity to normalize from 23% annualized to the historical upper teens (18-20%). Chairman and CEO Brett Elliott stated that while all areas are closely monitored, no significant strain is observed. He highlighted watching QSRs (despite low exposure), the consumer (indirect exposure, tightening), and agriculture (low loan-to-leverage, good crops but weak prices), emphasizing inflation as a key economic factor.

Jeff Riley asked about potential areas of strain within Equity Bancshares' loan portfolio, given broader economic uncertainties, despite encouraging trends in core legacy problem loans.

Answer

Brett Elliott, Chairman and CEO, stated that all areas are closely monitored with no significant strain observed. He specifically mentioned watching QSRs due to tight food industry conditions, the consumer sector due to increasing financial pressure, and agriculture, despite good crops, due to price concerns. Elliott emphasized inflation as a broader economic concern.