Executive Summary

Q1 2025 delivered margin expansion and solid earnings: diluted EPS $0.85, net interest margin 4.27% (4.08% core), aided by $2.3M nonaccrual reversals and day-count dynamics; non-interest income benefited from a $1.7M BOLI death benefit .
Versus Wall Street: EPS modestly beat consensus ($0.85 vs $0.83*) and revenue beat ($58.1M* vs $56.7M*), driven by lower deposit costs and one-time items; provision rose with loan growth and macro uncertainty (tariffs) .
Guidance: Management raised Q2 NIM guidance to 4.05–4.10% from Q1’s 3.95–4.05%, and maintained full-year ranges pending the NBC Oklahoma merger close and integration .
Strategic catalyst: Announced definitive agreement to merge with NBC Oklahoma (≈$909M assets), expanding Oklahoma footprint; expected EPS accretion (~$0.18 back-half 2025; ~$0.50 in 2026, per management) and sub-3-year TBVPS earn-back .
Balance sheet growth continues: loans +$131M QoQ (15.2% annualized), TCE/TA 10.13%, TBVPS +$1.00 QoQ; deposit mix shifting with seasonal municipal flows; loan-to-deposit ratio 82.4% .

What Went Well and What Went Wrong

What Went Well

Margin and earnings resilience: NIM rose to 4.27% (core 4.08%) as funding costs fell 8 bps vs 4 bps decline in asset yields; nonaccrual reversals added ~19–20 bps .
“We achieved strong earnings, margin expansion and built up our reserves to strengthen our balance sheet for whatever comes next.” – CEO Brad Elliott .
Strong loan production and growth: loans +$130.8M QoQ; organic originations $197M (+64% QoQ), plus $57M of guaranteed loans purchased; yields on originations held at 7.41% despite rate cuts .
Capital and book value improvement: TCE/TA 10.13%; TBVPS $31.07 (+3.3% QoQ); CET1 14.70% at HoldCo; asset quality improved with NPAs down to 0.51% of assets and nonaccruals down to $24.2M .

What Went Wrong

Higher provision for credit losses: provision $2.7M vs $0.1M in Q4, reflecting loan growth and added macro uncertainty (trade policy/tariffs) .
Seasonal deposit outflows (ex-brokered): core deposits -$109.4M due to municipal/commercial seasonality; total deposits held at $4.4B with brokered balances, indicating reliance on wholesale funding mix near-term .
OpEx uptick: non-interest expense rose to $39.1M (from $37.8M), driven by payroll timing and higher incentive accruals; efficiency ratio elevated vs Q3’s unusually low level .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Diluted EPS ($)	$1.28	$1.04	$0.85
Net Interest Income ($MM)	$46.031	$49.473	$50.292
Total Non-Interest Income ($MM)	$9.317	$8.816	$10.330
Net Interest Margin (%)	3.87%	4.17%	4.27%
Provision for Credit Losses ($MM)	$1.183	$0.098	$2.722
Efficiency Ratio (%)	52.59%	63.02%	62.43%
ROAA (%)	1.52%	1.31%	1.17%

Loans HFI by Type ($MM)	Q3 2024	Q4 2024	Q1 2025
Commercial Real Estate	$1,916.9	$1,830.5	$1,863.2
Commercial & Industrial	$670.7	$658.9	$762.9
Residential Real Estate	$567.1	$566.8	$564.0
Agricultural Real Estate	$259.6	$267.2	$260.7
Agricultural	$89.5	$87.3	$94.2
Consumer	$97.2	$90.1	$86.7
Total Loans HFI	$3,600.9	$3,500.8	$3,631.6

KPIs	Q3 2024	Q4 2024	Q1 2025
Total Assets ($B)	$5.355	$5.332	$5.446
Total Deposits ($B)	$4.363	$4.375	$4.405
Loans HFI ($B)	$3.601	$3.501	$3.632
Loan-to-Deposit Ratio (%)	82.5%	80.0%	82.4%
TCE/TA (%)	8.21%	9.95%	10.13%
Book Value per Share ($)	$32.97	$34.04	$35.23
Tangible Book Value per Share ($)	$28.38	$30.07	$31.07
NPAs / Assets (%)	0.60%	0.65%	0.51%
Nonaccrual Loans ($MM)	$31.2	$27.1	$24.2
ACL / Loans (%)	1.21%	1.24%	1.26%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin (%)	Q2 2025	3.95–4.05% (Q1 2025 guide)	4.05–4.10%	Raised
Avg. Earning Assets ($B)	Q2 2025	N/A	$4.80–$4.90	Initiated
Provision for Credit Losses ($MM)	Q2 2025	N/A	$0.5–$1.5	Initiated
Non-Interest Income ($MM)	Q2 2025	N/A	$8–$9	Initiated
Core Non-Interest Expense ($MM)	Q2 2025	N/A	$36–$39	Initiated
Effective Tax Rate (%)	Q2 2025	N/A	20–22	Initiated
Net Interest Margin (%)	FY 2025	N/A (retained prior ranges)	3.95–4.05	Maintained
Avg. Earning Assets ($B)	FY 2025	N/A	$4.85–$5.05	Maintained
Provision for Credit Losses ($MM)	FY 2025	N/A	$2–$6	Maintained
Non-Interest Income ($MM)	FY 2025	N/A	$32–$36	Maintained
Core Non-Interest Expense ($MM)	FY 2025	N/A	$147–$153	Maintained
Effective Tax Rate (%)	FY 2025	N/A	20–22	Maintained

Note: Management stated full-year estimates were retained and would be updated post-NBC integration .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 & Q4)	Current Period (Q1 2025)	Trend
Margin trajectory & rate sensitivity	Liability sensitivity drove Q4 NIM to 4.17%; normalized core NIM ~4.06%; positioned neutral to moderate cuts .	Q1 NIM 4.27% (core ~4.08%); Q2 guide 4.05–4.10%; defend margin with lagged repricing; modest upside if cuts are moderate .	Improving/Stable
Deposit costs & mix	Deposit costs fell with Fed cuts; municipal inflows seasonally lifted Q4; strategy to reprice high-cost deposits .	Seasonality drove core outflows; expect inflows later in year; more rational competition, mirror Fed moves .	Seasonal/Stable
Loan growth & pipeline	Q3 originations strong; pipeline robust into Q4 and 2025 .	Loans +$131M QoQ; organic originations $197M; C&I growth a highlight; community markets opportunity developing .	Improving
Asset quality & QSR exposure	Granular QSR risk <3% of loans; rising classification tied to one operator; SBA-related nonaccrual noted .	NPAs and nonaccruals declined; delinquency uptick at quarter-end was administrative and resolved; classification ~10.24% of capital .	Mixed but improving
Tariffs/macro uncertainty	Neutral positioning; ability to neutralize moderate rate moves .	Added reserve for tariff risk; customers have pass-through clauses; watch macro impact .	Cautious

Management Commentary

“We started the year with a strong balance sheet, motivated bankers and a solid capital stack to execute our dual strategy of organic growth and strategic M&A.” – CEO Brad Elliott .
“Cost of funds declined 8 bps while coupon yields fell 4 bps; nonaccrual benefits added ~19 bps to NIM.” – CFO Chris Navratil .
“Organic originations totaled $197M, up 64% QoQ, with 7.41% yields despite a downward rate environment.” – Bank CEO Rick Sems .
“We added reserve for economic uncertainty related to tariffs, though we’re not seeing slowdown in our markets.” – CEO Brad Elliott .
“Year 2 accretion from NBC is about $0.50; we’ll quantify back-half 2025 later.” – CFO Chris Navratil .

Q&A Highlights

Tariffs/macro: Customers often have contractual pass-throughs; bank added reserve proactively; no current slowdown observed .
Margin outlook: Core NIM ~4.08% in Q1; management expects to maintain in Q2; defend margin with lagged repricing; modest upside possible with rational cuts .
Loan purchases: $57M guaranteed loan purchase was a one-time opportunity; not a recurring strategy .
Deposit strategy: More rational competition emerging; mirror Fed moves; selective exceptions to protect relationships .
NBC accretion: Expected ~$0.18 EPS in back-half 2025 and ~$0.50 in 2026; details to follow .

Estimates Context

Metric	Q1 2025 Consensus	Q1 2025 Actual	Surprise
EPS ($)	$0.83*	$0.85	+$0.02
Revenue ($MM)	$56.68*	$58.05*	+$1.37*

Values retrieved from S&P Global. Note: “Revenue” for banks may differ by provider definitions; company-reported components were NII $50.3M and total non-interest income $10.3M in Q1 .

Why the beat:

Lower funding costs vs asset yields (-8 bps vs -4 bps) and ~$2.3M nonaccrual reversals lifted NIM and NII .
$1.7M BOLI death benefit boosted non-interest income; core fees were seasonally soft .
Provision increased on loan growth and macro uncertainty but remained manageable; asset quality metrics improved .

Key Takeaways for Investors

NIM durability: With Q2 NIM guided to 4.05–4.10%, EQBK appears positioned to defend margins despite further rate cuts; core NIM ~4.08% provides baseline .
Growth engine is reaccelerating: Strong C&I-led loan growth and early traction in treasury/fee lines should support NII and diversify revenues through 2025 .
Credit normalizing but contained: ACL/loans at 1.26% with improving NPAs/nonaccrual balances; classification uptick tied to known credits; reserve build prudent for macro risks .
Capital optionality: TCE/TA 10.13% and CET1 14.70% enable organic growth and strategic M&A; dividends maintained at $0.15 .
NBC Oklahoma merger is a near-term catalyst: footprint expansion and expected accretion (back-half 2025/2026) plus cross-sell via Q2 treasury platform .
Watch seasonality and funding mix: Municipal deposit seasonality and brokered balances influenced total deposits; expect inflows later in the year; funding optimization remains a lever .
Near-term trading: One-time items aided Q1; core run-rate suggests modest upside if rate path remains rational; estimate revisions likely to reflect raised Q2 NIM, higher loan growth, and NBC accretion later in 2025 .

EQUITY BANCSHARES INC (EQBK)·Q1 2025 Earnings Summary