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What changed in EQUITY BANCSHARES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of EQUITY BANCSHARES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+311 added−293 removedSource: 10-K (2026-03-06) vs 10-K (2025-03-07)

Top changes in EQUITY BANCSHARES INC's 2025 10-K

311 paragraphs added · 293 removed · 262 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

40 edited+3 added−2 removed259 unchanged
Biggest changeIn addition, our loan policies provide guidelines for personal guarantees; an environmental review; loans to employees, executive officers and directors; problem loan identification; maintenance of an adequate allowance for credit losses and other matters relating to lending practices. 8 Lending Limits . Our lending activities are subject to a variety of lending limits imposed by federal and state law.
Biggest changeSuch loan policies include maximum amortization schedules and loan terms for each category of loans collateralized by liens on real estate. 8 In addition, our loan policies provide guidelines for personal guarantees; an environmental review; loans to employees, executive officers and directors; problem loan identification; maintenance of an adequate allowance for credit losses and other matters relating to lending practices.
We believe our branch network is strategically split between growing metropolitan markets, such as Kansas City, Wichita and Tulsa, and stable community markets within Southeastern Kansas, Southwestern Kansas, Central Kansas, North Central Kansas, Western Kansas, Topeka, Western Missouri, North Central Missouri, Northern Arkansas, Northern Oklahoma and Western Oklahoma.
We believe our branch network is strategically split between growing metropolitan markets, such as Kansas City, Wichita, Oklahoma City and Tulsa, and stable community markets within Southeastern Kansas, Southwestern Kansas, Central Kansas, North Central Kansas, Western Kansas, Topeka, Western Missouri, North Central Missouri, Northern Arkansas, Northern Oklahoma and Western Oklahoma.
Our disciplined approach to acquisitions, consolidations and integrations includes the following: (i) selectively acquiring community banking franchises only at appropriate valuations, after taking into account risks that we perceive with respect to the targeted bank; (ii) completing comprehensive due diligence and developing an appropriate plan to address any legacy credit problems of the targeted institution; (iii) identifying an achievable cost savings estimate and holding our management accountable for achieving such estimates; (iv) executing definitive acquisition agreements that we believe provide adequate protections to us; (v) installing our credit procedures, audit and risk management policies and procedures and compliance standards upon consummation of the acquisition; (vi) collaborating with the target’s management team to execute on synergies and cost saving opportunities related to the acquisition; and (vii) involving a broader management team across multiple departments in order to help ensure the successful integration of all business functions.
Our disciplined approach to acquisitions, consolidations and integrations includes the following: (i) selectively acquiring community banking franchises only at appropriate valuations, after taking into account risks that we perceive with respect to the targeted bank; (ii) completing comprehensive due diligence and developing an appropriate plan to address any legacy credit problems of the targeted institution; (iii) identifying an achievable cost savings estimate and holding our management accountable for achieving such estimates; (iv) executing definitive acquisition agreements that we believe provide adequate protections to us; (v) installing our credit procedures, audit and risk management policies and procedures and compliance standards upon consummation of the acquisition; (vi) collaborating with the target’s management team to execute on synergies and cost saving opportunities related to the acquisition; and (vii) involving a broader management team across multiple departments in order to help ensure the 6 successful integration of all business functions.
While expanding our infrastructure, several departmental functions have been outsourced to gain the experience of outside professionals while at the same time achieving more favorable economics and cost-effective solutions. Such outsourced areas include specific internal audit 6 functions and select loan review. This outsourcing strategy has proven to control costs while adding enhanced controls and/or service levels.
While expanding our infrastructure, several departmental functions have been outsourced to gain the experience of outside professionals while at the same time achieving more favorable economics and cost-effective solutions. Such outsourced areas include specific internal audit functions and select loan review. This outsourcing strategy has proven to control costs while adding enhanced controls and/or service levels.
In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness or 10 personal bankruptcy. Furthermore, the application of various federal and state laws may limit the amount which can be recovered on such loans.
In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws may limit the amount which can be recovered on such loans.
Our strategy is to continue consolidating community banks within such markets and maintaining our organic growth, while preserving our asset quality through disciplined lending practices. 4 • Strategic Consolidation of Community Banks. We believe our strategy of selectively acquiring and integrating community banks has provided us with economies of scale and improved our overall franchise efficiency.
Our strategy is to continue consolidating community banks within such markets and maintaining our organic growth, while preserving our asset quality through disciplined lending practices. • Strategic Consolidation of Community Banks. We believe our strategy of selectively acquiring and integrating community banks has provided us with economies of scale and improved our overall franchise efficiency.
We understand the community banking needs 11 of the businesses and individuals within our markets and have focused on developing a commercial and personal banking platform to service such needs. Information Technology Systems We continue to make significant investments in our information technology systems and staff for our banking and lending operations and treasury management activities.
We understand the community banking needs of the businesses and individuals within our markets and have focused on developing a commercial and personal banking platform to service such needs. Information Technology Systems We continue to make significant investments in our information technology systems and staff for our banking and lending operations and treasury management activities.
For additional information concerning our loan portfolio, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Loan Portfolio.” Concentrations of Credit Risk . Most of our lending activity is conducted with businesses and individuals in metropolitan Kansas City, Tulsa and Wichita.
For additional information concerning our loan portfolio, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition – Loan Portfolio.” Concentrations of Credit Risk . Most of our lending activity is conducted with businesses and individuals in metropolitan Kansas City, Oklahoma City, Tulsa and Wichita.
The underwriting analysis also may include credit verification, reviews of appraisals, environmental hazards or reports, the borrower’s liquidity and leverage, management experience of the owners or principals, economic condition and industry trends. We also make loans to finance the construction of residential and non-residential properties.
The underwriting analysis also may include credit verification, reviews of appraisals, environmental hazards or reports, the borrower’s liquidity and leverage, management experience of the owners or principals, economic condition and industry trends. 9 We also make loans to finance the construction of residential and non-residential properties.
Our construction loans have terms that typically range from six months to two years depending on factors such as the type and size of the development and the financial strength of the borrower/guarantor. Loans are typically 9 structured with an interest only construction period.
Our construction loans have terms that typically range from six months to two years depending on factors such as the type and size of the development and the financial strength of the borrower/guarantor. Loans are typically structured with an interest only construction period.
Residential real estate loans consists primarily of loans secured by 1-4 family residential properties, including home equity lines of credit. The geographic concentration subjects the loan portfolio to the general economic conditions within Arkansas, Kansas, Missouri and Oklahoma.
Residential real estate loans consists primarily of loans secured by 1-4 family residential properties, including home equity lines of credit. The geographic 7 concentration subjects the loan portfolio to the general economic conditions within Arkansas, Kansas, Missouri and Oklahoma.
We 5 also seek to cross-sell our various banking products, including our deposit and treasury wealth management products, to our commercial loan customers, which we believe provides a basis for expanding our banking relationships as well as a stable, low-cost deposit base.
We also seek to cross-sell our various banking products, including our deposit and treasury wealth management products, to our commercial loan customers, which we believe provides a basis for expanding our banking relationships as well as a stable, low-cost deposit base.
Failure to meet capital guidelines could subject Equity Bank to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting brokered deposits and other restrictions on our business. As of December 31, 2024, Equity Bank exceeded the capital levels required to be deemed well capitalized.
Failure to meet capital guidelines could subject Equity Bank to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting brokered deposits and other restrictions on our business. As of December 31, 2025, Equity Bank exceeded the capital levels required to be deemed well capitalized.
Our markets also serve as the corporate headquarters for Koch Industries Inc., Hallmark Cards, Inc., H&R Block, Inc., American Century Investments, Garmin International, Inc., Cessna Aircraft Company, Seaboard Corporation, Cargill Meat Solutions, Spirit AeroSystems, Dairy Farmers of America, Quik Trip, ONEOK, Salina Vortex and Williams Companies and host a major presence for companies across a variety of industries, including Bombardier Learjet, Collective Brands, Inc., FedEx, Flexsteel, Hills Pet Nutrition, Inc., Textron Aviation Services, Phillips 66, Rib Crib, Honeywell, T-Mobile, Oracle, and Bayer Corporation.
Our markets also serve as the 11 corporate headquarters for Koch Industries Inc., Hallmark Cards, Inc., H&R Block, Inc., American Century Investments, Garmin International, Inc., Cessna Aircraft Company, Seaboard Corporation, Cargill Meat Solutions, The Boeing Company, Dairy Farmers of America, Quik Trip, ONEOK, Salina Vortex and Williams Companies and host a major presence for companies across a variety of industries, including Bombardier Learjet, Collective Brands, Inc., FedEx, Flexsteel, Hills Pet Nutrition, Inc., Textron Aviation Services, Phillips 66, Rib Crib, Honeywell, T-Mobile, Oracle, and Bayer Corporation.
As of December 31, 2024, Equity Bank exceeded the capital levels required to be deemed well capitalized. 15 Additionally, FDICIA requires bank regulators to take prompt corrective action to resolve problems associated with insured depository institutions.
As of December 31, 2025, Equity Bank exceeded the capital levels required to be deemed well capitalized. 15 Additionally, FDICIA requires bank regulators to take prompt corrective action to resolve problems associated with insured depository institutions.
The terms of consumer loans vary considerably based upon the loan type, nature of collateral and size of the loan.
The terms of consumer loans vary considerably based upon the loan 10 type, nature of collateral and size of the loan.
(3) Represents 57 locations outside of the Wichita, Kansas City and Tulsa MSAs. Our team of seasoned bankers represents an important driver of our organic growth by expanding banking relationships with current and potential customers. We expect to continue to make opportunistic hires of talented and entrepreneurial bankers, particularly in our metropolitan markets, to further augment our growth.
(3) Represents 62 locations outside of the Wichita, Kansas City, Oklahoma City and Tulsa MSAs. Our team of seasoned bankers represents an important driver of our organic growth by expanding banking relationships with current and potential customers. We expect to continue to make opportunistic hires of talented and entrepreneurial bankers, particularly in our metropolitan markets, to further augment our growth.
The following table shows our total deposits and loans in our community markets and our metropolitan markets as of December 31, 2024, which we believe illustrates our execution of this strategy.
The following table shows our total deposits and loans in our community markets and our metropolitan markets as of December 31, 2025, which we believe illustrates our execution of this strategy.
Item 1: B usiness Our Company We are a financial holding company headquartered in Wichita, Kansas. Our wholly-owned banking subsidiary, Equity Bank, provides a broad range of financial services primarily to businesses and business owners as well as individuals through our network of 71 branches located in Arkansas, Kansas, Missouri and Oklahoma, as of December 31, 2024.
Item 1: B usiness Our Company We are a financial holding company headquartered in Wichita, Kansas. Our wholly-owned banking subsidiary, Equity Bank, provides a broad range of financial services primarily to businesses and business owners as well as individuals through our network of 77 branches located in Arkansas, Kansas, Missouri and Oklahoma, as of December 31, 2025.
Additionally, the Company is committed to employee development through a combination of in-house and external training programs. Further, the Company has two staff development programs with formal in-house training programs for junior bankers including guidance from senior banking team members. As of December 31, 2024, the Company employed 810 full-time equivalent employees.
Additionally, the Company is committed to employee development through a combination of in-house and external training programs. Further, the Company has two staff development programs with formal in-house training programs for junior bankers including guidance from senior banking team members. As of December 31, 2025, the Company employed 909 full-time equivalent employees.
We offer insurance brokerage services primarily focused on crop coverage for agricultural customers throughout our footprint. Our Markets As of December 31, 2024, we conducted banking operations through our 71 bank locations in Arkansas, Kansas, Missouri and Oklahoma.
We offer insurance brokerage services primarily focused on crop coverage for agricultural customers throughout our footprint. Our Markets As of December 31, 2025, we conducted banking operations through our 77 bank locations in Arkansas, Kansas, Missouri and Oklahoma.
As a result of these strategic and organic growth efforts, we have expanded our team of full-time equivalent employees from 19 to 810 and our network of branches from 2 to 71 as of December 31, 2024.
As a result of these strategic and organic growth efforts, we have expanded our team of full-time equivalent employees from 19 to 909 and our network of branches from 2 to 77 as of December 31, 2025.
The Bank’s legal lending limit as of December 31, 2024, on loans to a single borrower was $151.9 million. However, we typically maintain an in-house limit of $25.0 million for loans to a single borrower.
The Bank’s legal lending limit as of December 31, 2025, on loans to a single borrower was $159.3 million. However, we typically maintain an in-house limit of $25.0 million for loans to a single borrower.
As measured by outstanding balances at December 31, 2024, commercial loans composed over 71.1% of our loan portfolio and within our commercial loan portfolio, 73.5% of such loans were commercial real estate loans and 26.5% were commercial and industrial loans.
As measured by outstanding balances at December 31, 2025, commercial loans composed over 72.5% of our loan portfolio and within our commercial loan portfolio, 73.2% of such loans were commercial real estate loans and 26.8% were commercial and industrial loans.
The acquisition increased our deposits by $42.4 million, our loans by $27.9 million and our total assets by $51.9 million. In conjunction with our strategic acquisition growth, we strive to reposition and improve the loan portfolio and deposit mix of the banks we acquire.
The acquisition increased our deposits by $806.0 million, our loans by $661.5 million and our total assets by $895.2 million. In conjunction with our strategic acquisition growth, we strive to reposition and improve the loan portfolio and deposit mix of the banks we acquire.
We have a growing presence in attractive commercial banking markets, such as Wichita, Kansas City and Tulsa, which we believe present significant opportunities to continue to increase our business banking activities. • Our Ability to Consolidate . Our branches are strategically located within metropolitan markets as well as stable community markets that present opportunities to expand our market share.
We have a growing presence in attractive commercial banking markets, such as Wichita, Kansas City, Oklahoma City and Tulsa, which we believe present significant opportunities to continue to increase our business banking activities. • Our Ability to Consolidate .
Our executive management team has identified significant acquisition and consolidation opportunities ranging from small to large community banking institutions. We believe our track record of strategic acquisitions and effective integrations, combined with our expertise in our markets and scalable platform, will allow us to capitalize on these growth opportunities. • Disciplined Acquisition Approach .
We believe our track record of strategic acquisitions and effective integrations, combined with our expertise in our markets and scalable platform, will allow us to capitalize on these growth opportunities. • Disciplined Acquisition Approach .
As of December 31, 2024, we had, on a consolidated basis, total assets of $5.33 billion, total deposits of $4.37 billion, total loans (net of allowances) of $3.46 billion and total stockholders’ equity of $592.9 million.
As of December 31, 2025, we had, on a consolidated basis, total assets of $6.37 billion, total deposits of $5.14 billion, total loans (net of allowances) of $4.15 billion and total stockholders’ equity of $732.1 million.
State $300M - $1B $1B - $2B Kansas 132 48 8 Missouri 113 60 18 Arkansas 30 28 9 Oklahoma 97 55 14 Nebraska 83 44 13 Iowa 137 70 16 Total 592 305 78 We believe many of these banks will continue to be burdened by new and more complex banking regulations, resource constraints, competitive limitations, rising technological and other business costs, management succession issues and liquidity concerns.
State $300M - $1B $1B - $2B Kansas 120 49 10 Missouri 100 64 18 Arkansas 28 28 10 Oklahoma 94 54 15 Nebraska 80 42 13 Iowa 132 70 15 Total 554 307 81 We believe many of these banks will continue to be burdened by new and more complex banking regulations, resource constraints, competitive limitations, rising technological and other business costs, management succession issues and liquidity concerns.
We believe that we are well positioned to continue to be a strategic consolidator of community banks while maintaining our history of attracting experienced and entrepreneurial bankers and organically growing our loans and deposits.
We believe that we are well positioned to continue to be a strategic consolidator of community banks while maintaining our history of attracting experienced and entrepreneurial bankers and organically growing our loans and deposits. 4 Our Strategies We believe we are a leading provider of commercial and personal banking services to businesses and business owners as well as individuals in our targeted Midwestern markets.
These underwriting standards are designed to determine the maximum loan amount that a borrower has the capacity to repay based upon the type of collateral securing the loan and the borrower’s income. Such loan policies include maximum amortization schedules and loan terms for each category of loans collateralized by liens on real estate.
These underwriting standards are designed to determine the maximum loan amount that a borrower has the capacity to repay based upon the type of collateral securing the loan and the borrower’s income.
Concentrations of commercial real estate exposures add a dimension of risk that compounds the risk inherent in individual loans. Interagency guidance on commercial real estate concentrations describe sound risk management practices which include board and management oversight, portfolio management, management information systems, market analysis, portfolio stress testing and sensitivity analysis, credit underwriting standards and credit risk review functions.
Interagency guidance on commercial real estate concentrations describe sound risk management practices which include board and management oversight, portfolio management, management information systems, market analysis, portfolio stress testing and sensitivity analysis, credit underwriting standards and credit risk review functions. Management believes these practices allow us to appropriately monitor concentrations in commercial real estate in our loan portfolio.
Our loan portfolio consists primarily of commercial real estate loans, which were $1.83 billion and constituted 52.3% of our total loans as of December 31, 2024, commercial and industrial loans, which were $658.9 million and constituted 18.8% of our total loans as of December 31, 2024, and residential real estate loans, which were $566.8 million and constituted 16.2% of our total loans as of December 31, 2024.
Our loan portfolio consists primarily of commercial real estate loans, which were $2.23 billion and constituted 53.0% of our total loans as of December 31, 2025, commercial and industrial loans, which were $816.9 million and constituted 19.5% of our total loans as of December 31, 2025, and residential real estate loans, which were $582.1 million and constituted 13.9% of our total loans as of December 31, 2025.
The risks created by such concentrations have been considered by management in the determination of the adequacy of the allowance for credit losses.
The risks created by such concentrations have been considered by management in the determination of the adequacy of the allowance for credit losses. Management believes the allowance for credit losses is adequate to cover expected losses in our loan portfolio as of December 31, 2025.
We believe that our enterprise risk management philosophy has been important in gaining and maintaining the confidence of our various constituencies and growing our business and footprint within our markets. We also believe our strong risk management practices are manifested in our asset quality statistics.
Our risk management practices are overseen by the Chairmen of our audit and risk committees and our Chief Risk Officer, who have many years of combined banking experience. We believe that our enterprise risk management philosophy has been important in gaining and maintaining the confidence of our various constituencies and growing our business and footprint within our markets.
Our Banking Services A general description of the range of commercial banking products and other services we offer follows. Lending Activities At December 31, 2024, we had total loans of $3.46 billion (net of allowances), representing 64.8% of our total assets.
We also believe our strong risk management practices are manifested in our asset quality statistics. Our Banking Services A general description of the range of commercial banking products and other services we offer follows. Lending Activities At December 31, 2025, we had total loans of $4.15 billion (net of allowances), representing 65.0% of our total assets.
In general, the Bank is subject to a legal lending limit on loans to a single borrower based on the Bank’s capital level. The dollar amounts of the Bank’s lending limit increases or decreases as the Bank’s capital increases or decreases.
Lending Limits . Our lending activities are subject to a variety of lending limits imposed by federal and state law. In general, the Bank is subject to a legal lending limit on loans to a single borrower based on the Bank’s capital level.
Management believes these practices allow us to appropriately monitor concentrations in commercial real estate in our loan portfolio. Large Credit Relationships . As of December 31, 2024, the aggregate amount of loans to our ten largest borrowers (including related entities) amounted to approximately $314.6 million, or 9.0% of total loans.
Large Credit Relationships . As of December 31, 2025, the aggregate amount of loans to our ten largest borrowers (including related entities) amounted to approximately $426.0 million, or 10.2% of total loans.
Deposits Loans Amount (1) Overall % Amount (1) Overall % Metropolitan markets (2) $ 1,596,394 36 % $ 2,366,878 68 % Community markets (3) $ 2,778,395 64 % $ 1,133,938 32 % 100 % 100 % (1) Amounts in thousands. (2) Represents 14 locations in the Wichita, Kansas City and Tulsa metropolitan statistical areas (“MSAs”).
Deposits Loans Amount (1) Overall % Amount (1) Overall % Metropolitan markets (2) $ 1,602,913 31 % $ 3,086,213 73 % Community markets (3) $ 3,535,350 69 % $ 1,120,131 27 % 100 % 100 % 5 (1) Amounts in thousands. (2) Represents 15 locations in the Wichita, Kansas City, Oklahoma City and Tulsa metropolitan statistical areas (“MSAs”).
Management believes the allowance for credit losses is adequate to cover expected losses in our loan portfolio as of December 31, 2024. 7 Sound risk management practices and appropriate levels of capital are essential elements of a sound commercial real estate lending program.
Sound risk management practices and appropriate levels of capital are essential elements of a sound commercial real estate lending program. Concentrations of commercial real estate exposures add a dimension of risk that compounds the risk inherent in individual loans.
Removed
Our Strategies We believe we are a leading provider of commercial and personal banking services to businesses and business owners as well as individuals in our targeted Midwestern markets.
Added
The acquisition increased our deposits by $42.4 million, our loans by $27.9 million and our total assets by $51.9 million. • July 2025 – Acquired NBC Corp. of Oklahoma ("NBC"), with seven branch locations in Oklahoma City, Altus, Kingfisher and Enid, as well as a loan production office in Alva.
Removed
Our risk management practices are overseen by the Chairmen of our audit and risk committees, who have many years of combined banking experience, and our Chief Risk Officer, who has more than 30 years of banking and financial services experience.
Added
Our branches are strategically located within metropolitan markets as well as stable community markets that present opportunities to expand our market share. Our executive management team has identified significant acquisition and consolidation opportunities ranging from small to large community banking institutions.
Added
The dollar amounts of the Bank’s lending limit increases or decreases as the Bank’s capital increases or decreases.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

70 edited+17 added−8 removed365 unchanged
Biggest changeThe occurrence of any failures or interruptions impacting our information systems could damage our reputation, result in a loss of customer business and expose us to additional regulatory scrutiny, civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations. 34 We use information technology in our operations and offer online banking services to our customers, and unauthorized access to our or our customers’ confidential or proprietary information as a result of a cyber-attack or otherwise could expose us to reputational harm and litigation and adversely affect our ability to attract and retain customers.
Biggest changeThe occurrence of any failures or interruptions impacting our information systems could damage our reputation, result in a loss of customer business and expose us to additional regulatory scrutiny, civil litigation and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations.
Summary of Risk Factors Our risk factors can be broadly summarized by the following categories: • Economic Risks • Credit and Interest Rate Risks • Strategic Risks • Risks Relating to the Regulation of Our Industry • Risks Relating to the Company’s Common Stock • General Risks While not an exhaustive list, the principal risks that we believe could adversely affect our business, financial condition or results of operations include: • a change in economic conditions or a return to recessionary conditions could result in increases in our level of nonperforming loans and/or reduced demand for our products and services; • the value of real estate collateral may fluctuate significantly resulting in an under-collateralized loan portfolio; • unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations; • external economic factors, such as changes in monetary policy and inflation and deflation as well as the possibility of U.S. tariffs and retaliatory tariffs, may have an adverse effect on our business, financial condition and results of operations; • inability to effectively manage or adequately measure credit risk; • we could suffer losses from a decline in the credit quality of the assets that we hold; • a significant portion of our loan portfolio is secured by real estate, and events that negatively impact the real estate market could negatively impact our business; • a large portion of our loan portfolio is comprised of commercial loans that are secured by accounts receivable, inventory, equipment or other asset-based collateral, and deterioration in the value of such collateral could increase our exposure to future probable losses; • our largest lending relationships currently make up a material percentage of our total loan portfolio; • our profitability is vulnerable to interest rate fluctuations; • market interest rates for loans, investments and deposits are highly sensitive to many factors beyond our control; • our financial instruments expose us to certain market risks and may increase the volatility of earnings and AOCI; • the outbreak of an epidemic, pandemic or highly contagious disease occurring in the United States or in the geographies in which we conduct operations; • our financial performance will be negatively impacted if we are unable to execute our growth strategy; • our strategy of pursuing acquisitions exposes us to financial, execution, compliance and operational risks; • acquisitions may disrupt our business, dilute stockholder value and be costly to integrate; • we rely heavily on our management team and could be adversely affected by the unexpected loss of key officers; • our business is concentrated in, and largely dependent upon, the continued growth and welfare of the general geographic markets in which we operate; • our ability to grow our loan portfolio may be limited; • we may suffer losses in our loan portfolio due to inadequate or faulty underwriting and loan collection practices; • our future profitability levels are dependent on our ability to grow and maintain deposits at competitive costs; • our ability to retain bankers and recruit additional successful bankers is critical to the success of our business strategy; • a lack of liquidity could adversely affect our financial condition and results of operations; • our financial projections are based upon numerous assumptions about future events and our actual financial performance may differ materially from our projections if our assumptions are inaccurate; • we continually encounter technological change and may have fewer resources than our competitors; • our information systems may experience a failure or interruption; • we use information technology in our operations and offer online banking services to our customers, and unauthorized access to our or our customers’ confidential or proprietary information as a result of a cyber-attack or otherwise; • we are dependent upon outside third parties for the processing and handling of our records and data; 22 • the development and use of AI presents risks and challenges that may adversely impact the Company's business; • if our enterprise risk management framework is not effective at mitigating risk and loss to us; • changes in accounting standards could materially impact our financial statements; • if the goodwill that we have recorded or may record in connection with a business acquisition becomes impaired, it could require charges to earnings, which would adversely affect our business, financial condition and results of operations; • we may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could harm liquidity, results of operations and financial condition; • increasing scrutiny and evolving expectations from customers, regulators, investors and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks; • we are subject to extensive regulations in the conduct of our business, which imposes additional costs on us; • changes in laws, government regulation and monetary policy may have a material effect on our results of operations; • significant changes to the size, structure, powers and operations of the federal government may cause economic disruptions that could, in turn, adversely impact our business, results of operations and financial conditions; • the company faces risks related to the adoption of future legislation and potential changes in federal regulatory agency leadership, policies, and priorities; • the CFPB has reshaped the consumer financial laws through rulemaking and enforcement of the prohibitions against unfair, deceptive and abusive business practices.
Summary of Risk Factors Our risk factors can be broadly summarized by the following categories: • Economic Risks • Credit and Interest Rate Risks • Strategic Risks • Risks Relating to the Regulation of Our Industry • Risks Relating to the Company’s Common Stock • General Risks While not an exhaustive list, the principal risks that we believe could adversely affect our business, financial condition or results of operations include: • a change in economic conditions or a return to recessionary conditions could result in increases in our level of nonperforming loans and/or reduced demand for our products and services; • the value of real estate collateral may fluctuate significantly resulting in an under-collateralized loan portfolio; • unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations; • external economic factors, such as changes in monetary policy and inflation and deflation as well as the possibility of U.S. tariffs and retaliatory tariffs, may have an adverse effect on our business, financial condition and results of operations; • inability to effectively manage or adequately measure credit risk; • we could suffer losses from a decline in the credit quality of the assets that we hold; • a significant portion of our loan portfolio is secured by real estate, and events that negatively impact the real estate market could negatively impact our business; • a large portion of our loan portfolio is comprised of commercial loans that are secured by accounts receivable, inventory, equipment or other asset-based collateral, and deterioration in the value of such collateral could increase our exposure to future probable losses; • our largest lending relationships currently make up a material percentage of our total loan portfolio; • our profitability is vulnerable to interest rate fluctuations; • market interest rates for loans, investments and deposits are highly sensitive to many factors beyond our control; • our financial instruments expose us to certain market risks and may increase the volatility of earnings and AOCI; • the outbreak of an epidemic, pandemic or highly contagious disease occurring in the United States or in the geographies in which we conduct operations; • our financial performance will be negatively impacted if we are unable to execute our growth strategy; • our strategy of pursuing acquisitions exposes us to financial, execution, compliance and operational risks; • acquisitions may disrupt our business, dilute stockholder value and be costly to integrate; • we rely heavily on our management team and could be adversely affected by the unexpected loss of key officers; • our business is concentrated in, and largely dependent upon, the continued growth and welfare of the general geographic markets in which we operate; • our ability to grow our loan portfolio may be limited; • we may suffer losses in our loan portfolio due to inadequate or faulty underwriting and loan collection practices; • our future profitability levels are dependent on our ability to grow and maintain deposits at competitive costs; • our ability to retain bankers and recruit additional successful bankers is critical to the success of our business strategy; • a lack of liquidity could adversely affect our financial condition and results of operations; • our financial projections are based upon numerous assumptions about future events and our actual financial performance may differ materially from our projections if our assumptions are inaccurate; • we continually encounter technological change and may have fewer resources than our competitors; • our information systems may experience a failure or interruption; • we use information technology in our operations and offer online banking services to our customers, and unauthorized access to our or our customers’ confidential or proprietary information as a result of a cyber-attack or otherwise; • we are dependent upon outside third parties for the processing and handling of our records and data; • the development and use of AI presents risks and challenges that may adversely impact the Company's business; • if our enterprise risk management framework is not effective at mitigating risk and loss to us; 22 • changes in accounting standards could materially impact our financial statements; • if the goodwill that we have recorded or may record in connection with a business acquisition becomes impaired, it could require charges to earnings, which would adversely affect our business, financial condition and results of operations; • we may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could harm liquidity, results of operations and financial condition; • increasing scrutiny and evolving expectations from customers, regulators, investors and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks; • we are subject to extensive regulations in the conduct of our business, which imposes additional costs on us; • changes in laws, government regulation and monetary policy may have a material effect on our results of operations; • significant changes to the size, structure, powers and operations of the federal government may cause economic disruptions that could, in turn, adversely impact our business, results of operations and financial conditions; • the company faces risks related to the adoption of future legislation and potential changes in federal regulatory agency leadership, policies, and priorities; • the CFPB has reshaped the consumer financial laws through rulemaking and enforcement of the prohibitions against unfair, deceptive and abusive business practices.
Cybersecurity risks for banking organizations have significantly increased in recent years and have been difficult to detect before they occur because, among other reasons: • the proliferation of new technologies and the use of the internet and telecommunications technologies to conduct financial transactions; • these threats arise from numerous sources, not all of which are in our control, including among others, human error, fraud or malice on the part of employees or third parties, accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, natural disasters or severe weather conditions, health emergencies or pandemics, or outbreaks of hostilities or terrorist acts; • the techniques used in cyber-attacks change frequently and may not be recognized until launched or until well after the breach has occurred; • the increased sophistication and activities of organized crime groups, hackers, terrorist organizations, hostile foreign governments, disgruntled employees or vendors, activists and other external parties, including those involved in corporate espionage; 35 • the vulnerability of systems to third parties seeking to gain access to such systems either directly or using equipment or security passwords belonging to employees, customers, third-party service providers or other users of our systems; and • our frequent transmission of sensitive information to, and storage of such information by, third parties, including our vendors and regulators, and possible weaknesses that go undetected in our data systems notwithstanding the testing we conduct of those systems.
Cybersecurity risks for banking organizations have significantly increased in recent years and have been difficult to detect before they occur because, among other reasons: • the proliferation of new technologies and the use of the internet and telecommunications technologies to conduct financial transactions; • these threats arise from numerous sources, not all of which are in our control, including among others, human error, fraud or malice on the part of employees or third parties, accidental technological failure, electrical or telecommunication outages, failures of computer servers or other damage to our property or assets, natural disasters or severe weather conditions, health emergencies or pandemics, or outbreaks of hostilities or terrorist acts; • the techniques used in cyber-attacks change frequently and may not be recognized until launched or until well after the breach has occurred; • the increased sophistication and activities of organized crime groups, hackers, terrorist organizations, hostile foreign governments, disgruntled employees or vendors, activists and other external parties, including those involved in corporate espionage; • the vulnerability of systems to third parties seeking to gain access to such systems either directly or using equipment or security passwords belonging to employees, customers, third-party service providers or other users of our systems; and • our frequent transmission of sensitive information to, and storage of such information by, third parties, including our vendors and regulators, and possible weaknesses that go undetected in our data systems notwithstanding the testing we conduct of those systems.
Compliance with such initiatives may impact the business operations of depository institutions offering consumer financial products or services, including the Company; • a protracted government shutdown may result in reduced loan originations and related gains on sales could negatively affect our financial condition and results of operations; • our banking subsidiary may be required to pay higher FDIC insurance premiums or special assessments; • we are subject to certain capital requirements by regulators; • we are subject to stringent capital requirements, which may adversely impact our return on equity or constrain us from paying dividends or repurchasing shares; • we may need to raise additional capital in the future and the capital may not be available when it is needed or may be dilutive to stockholders; • we are subject to the Bank Secrecy Act and other anti-money laundering statutes and regulations, and any deemed deficiency by us with respect to these laws could result in significant liability; • the laws that regulate our operations are designed for the protection of depositors and the public, not our stockholders; • as a bank holding company, the sources of funds available to us are limited; • recent negative developments affecting the banking industry, and resulting media coverage, may have eroded customer confidence in the banking system; • any regulatory examination scrutiny or new regulatory requirements arising from the recent events in the banking industry could increase the Company's expenses and affect the Company's operation; • climate change related legislative and regulatory initiatives, have the potential to disrupt our business and adversely impact the operations and creditworthiness of our customers • the market price of our Class A common stock may be subject to substantial fluctuations which may make it difficult for you to sell your shares at the volumes, prices and times desired; • the obligations associated with being a public company requires significant resources and management attention; • there is no guarantee that we will declare or pay cash dividends on our common stock; • securities analysts may not initiate or continue coverage on our Class A common stock, which could adversely affect the market for our Class A common stock; • use of our common stock for future acquisitions or to raise capital may be dilutive to existing stockholders; • a future issuance of stock could dilute the value of our Class A common stock; • we have significant institutional investors whose interests may differ from yours; • our directors and executive officers beneficially own a significant portion of our Class A common stock and have substantial influence over us; • shares of our Class A common stock are not insured deposits and may lose value; • we have the ability to incur debt and pledge our assets, including our stock in Equity Bank, to secure that debt, and holders of any such debt obligations will generally have priority over holders of our Class A common stock with respect to certain payment obligations; • if we fail to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud; • our board of directors may issue shares of preferred stock that would adversely affect the rights of our Class A common stockholders; • the return on your investment in our Class A common stock is uncertain; • we operate in a highly competitive industry and face significant competition from other banking organizations; • as a community bank, our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance; • we are subject to environmental risk in our lending activities; • we are subject to claims and litigation pertaining to intellectual property; 23 • we have pledged all of the stock of Equity Bank as collateral for a loan, and if the lender forecloses, you could lose your investment; and • we have outstanding subordinated debt obligations, and if the Company defaults on those obligations, the debt holders could lose their investment.
Compliance with such initiatives may impact the business operations of depository institutions offering consumer financial products or services, including the Company; • a protracted government shutdown may result in reduced loan originations and related gains on sales could negatively affect our financial condition and results of operations; • our banking subsidiary may be required to pay higher FDIC insurance premiums or special assessments; • we are subject to certain capital requirements by regulators; • we are subject to stringent capital requirements, which may adversely impact our return on equity or constrain us from paying dividends or repurchasing shares; • we may need to raise additional capital in the future and the capital may not be available when it is needed or may be dilutive to stockholders; • we are subject to the Bank Secrecy Act and other anti-money laundering statutes and regulations, and any deemed deficiency by us with respect to these laws could result in significant liability; • the laws that regulate our operations are designed for the protection of depositors and the public, not our stockholders; • as a bank holding company, the sources of funds available to us are limited; • negative developments affecting the banking industry, and resulting media coverage, may erode customer confidence in the banking system; • any regulatory examination scrutiny or new regulatory requirements arising from the recent events in the banking industry could increase the Company's expenses and affect the Company's operation; • climate change related legislative and regulatory initiatives, have the potential to disrupt our business and adversely impact the operations and creditworthiness of our customers • the market price of our Class A common stock may be subject to substantial fluctuations which may make it difficult for you to sell your shares at the volumes, prices and times desired; • the obligations associated with being a public company requires significant resources and management attention; • there is no guarantee that we will declare or pay cash dividends on our common stock; • securities analysts may not initiate or continue coverage on our Class A common stock, which could adversely affect the market for our Class A common stock; • use of our common stock for future acquisitions or to raise capital may be dilutive to existing stockholders; • a future issuance of stock could dilute the value of our Class A common stock; • we have significant institutional investors whose interests may differ from yours; • our directors and executive officers beneficially own a significant portion of our Class A common stock and have substantial influence over us; • shares of our Class A common stock are not insured deposits and may lose value; • we have the ability to incur debt and pledge our assets, including our stock in Equity Bank, to secure that debt, and holders of any such debt obligations will generally have priority over holders of our Class A common stock with respect to certain payment obligations; • if we fail to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud; • our board of directors may issue shares of preferred stock that would adversely affect the rights of our Class A common stockholders; • the return on your investment in our Class A common stock is uncertain; • we operate in a highly competitive industry and face significant competition from other banking organizations; • as a community bank, our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance; • we are subject to environmental risk in our lending activities; • we are subject to claims and litigation pertaining to intellectual property; • we have pledged all of the stock of Equity Bank as collateral for a loan, and if the lender forecloses, you could lose your investment; and 23 • we have outstanding subordinated debt obligations, and if the Company defaults on those obligations, the debt holders could lose their investment.
There are many factors that may impact the market price and trading volume of our Class A common stock, including: • actual or anticipated fluctuations in our operating results, financial condition or asset quality; • market conditions in the broader stock market in general or in our industry in particular; • publication of research reports about us, our competitors or the bank and non-bank financial services industries generally, or changes in, or failure to meet, securities analysts’ estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage; • future issuances of our Class A common stock or other securities; • significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us; • additions or departures of key personnel; • trades of large blocks of our Class A common stock; • economic and political conditions or events; • regulatory developments; and • other news, announcements or disclosures (whether by us or others) related to us, our competitors, our core markets or the bank and non-bank financial services industries.
There are many factors that may impact the market price and trading volume of our Class A common stock, including: • actual or anticipated fluctuations in our operating results, financial condition or asset quality; • market conditions in the broader stock market in general or in our industry in particular; • publication of research reports about us, our competitors or the bank and non-bank financial services industries generally, or changes in, or failure to meet, securities analysts’ estimates of our financial and operating performance, or lack of research reports by industry analysts or ceasing of coverage; • future issuances of our Class A common stock or other securities; 39 • significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us; • additions or departures of key personnel; • trades of large blocks of our Class A common stock; • economic and political conditions or events; • regulatory developments; and • other news, announcements or disclosures (whether by us or others) related to us, our competitors, our core markets or the bank and non-bank financial services industries.
As a public company, we are required to: • prepare and distribute periodic reports, proxy statements and other stockholder communications in compliance with the federal securities laws and rules; • expand the roles and duties of our board of directors and committees thereof; • maintain an enhanced internal audit function; • institute more comprehensive financial reporting and disclosure compliance procedures; • involve and retain to a greater degree outside counsel and accountants in the activities listed above; • enhance our investor relations function; • establish internal policies, including those relating to trading in our securities and disclosure controls and procedures; • retain additional personnel; 44 • comply with the New York Stock Exchange listing standards; and • comply with the Sarbanes-Oxley Act.
As a public company, we are required to: • prepare and distribute periodic reports, proxy statements and other stockholder communications in compliance with the federal securities laws and rules; • expand the roles and duties of our board of directors and committees thereof; • maintain an enhanced internal audit function; • institute more comprehensive financial reporting and disclosure compliance procedures; • involve and retain to a greater degree outside counsel and accountants in the activities listed above; • enhance our investor relations function; • establish internal policies, including those relating to trading in our securities and disclosure controls and procedures; • retain additional personnel; • comply with the New York Stock Exchange listing standards; and • comply with the Sarbanes-Oxley Act.
We cannot predict whether, or to what extent, damage that may be caused by future weather or man-made events will affect our operations or the economies in our current or future market areas, but such events could negatively impact economic conditions in these regions and result in a decline in local loan demand and loan originations, a decline in the value or destruction of properties securing our loans and an increase in delinquencies, foreclosures or credit losses.
We cannot predict whether, or to what extent, damage that may be caused by future weather or man-made events will affect our operations or the economies in our current or future market areas, but such events could negatively impact economic conditions in these regions and result in a decline in local loan demand and loan originations, a decline in the value or destruction of properties securing our loans and an increase in 43 delinquencies, foreclosures or credit losses.
Further, the Company may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which the Company may have limited visibility.
Further, the Company may rely on AI models developed by third parties, and, to that extent, would be dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of 33 the steps these third parties have taken to limit the risks associated with the output of their models, matters over which the Company may have limited visibility.
Subject to limitations imposed by law or our Articles of Incorporation, our board of directors is empowered to determine: • the designation of, and the number of, shares constituting each series of preferred stock; • the dividend rate for each series; • the terms and conditions of any voting, conversion and exchange rights for each series; • the amounts payable on each series on redemption or our liquidation, dissolution or winding-up; • the provisions of any sinking fund for the redemption or purchase of shares of any series; and 47 • the preferences and the relative rights among the series of preferred stock.
Subject to limitations imposed by law or our Articles of Incorporation, our board of directors is empowered to determine: • the designation of, and the number of, shares constituting each series of preferred stock; • the dividend rate for each series; • the terms and conditions of any voting, conversion and exchange rights for each series; • the amounts payable on each series on redemption or our liquidation, dissolution or winding-up; • the provisions of any sinking fund for the redemption or purchase of shares of any series; and • the preferences and the relative rights among the series of preferred stock.
Furthermore, we would have to make principal and interest payments on our indebtedness, which could reduce our profitability or result in net losses on a consolidated basis. If we fail to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
Furthermore, we would have to make principal and interest payments on our indebtedness, which could reduce our profitability or result in net losses on a consolidated basis. 41 If we fail to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
In addition, (i) any bank holding company or foreign bank with a U.S. presence is required to obtain the approval of the Federal Reserve under the Bank Holding Company Act to acquire or retain 5% or more of a class of our outstanding shares of voting stock, and (ii) any person other than a bank holding company may be required to obtain prior regulatory approval under the Change in Bank Control Act to acquire or retain 10% or more of our outstanding shares of voting stock.
In addition, (i) any bank holding company or foreign bank with a U.S. presence is required to obtain the approval of the Federal Reserve 37 under the Bank Holding Company Act to acquire or retain 5% or more of a class of our outstanding shares of voting stock, and (ii) any person other than a bank holding company may be required to obtain prior regulatory approval under the Change in Bank Control Act to acquire or retain 10% or more of our outstanding shares of voting stock.
Even if the loans are collateralized, the large increase in classified assets could harm our reputation with our regulators, investors and potential investors and inhibit our ability to execute our business plan. 26 We may not be able to adequately measure and limit the credit risk associated with our loan portfolio, which could adversely affect our profitability.
Even if the loans are collateralized, the large increase in classified assets could harm our reputation with our regulators, investors and potential investors and inhibit our ability to execute our business plan. We may not be able to adequately measure and limit the credit risk associated with our loan portfolio, which could adversely affect our profitability.
We may also be forced, as a result of any withdrawal of deposits, to rely more heavily on 31 other, potentially more expensive and less stable funding sources. Consequently, the occurrence of any of these events could have a material adverse effect on our business, results of operations, financial condition and future prospects.
We may also be forced, as a result of any withdrawal of deposits, to rely more heavily on other, potentially more expensive and less stable funding sources. Consequently, the occurrence of any of these events could have a material adverse effect on our business, results of operations, financial condition and future prospects.
Under the “source of strength” doctrine, the Federal Reserve may require a bank holding company to make capital injections into a troubled subsidiary bank at times when the bank holding company may not be inclined to do so and may charge the bank holding company with engaging in unsafe and unsound practices for failure to commit resources to such a subsidiary bank.
Under the “source of strength” doctrine, the Federal Reserve can require a bank holding company to make capital injections into a troubled subsidiary bank at times when the bank holding company may not be inclined to do so and may charge the bank holding company with engaging in unsafe and unsound practices for failure to commit resources to such a subsidiary bank.
Any such effect on customers or restrictions by our regulators could have a material adverse effect on our financial condition and results of operations. 40 We are subject to stringent capital requirements, which may adversely impact our return on equity or constrain us from paying dividends or repurchasing shares.
Any such effect on customers or restrictions by our regulators could have a material adverse effect on our financial condition and results of operations. We are subject to stringent capital requirements, which may adversely impact our return on equity or constrain us from paying dividends or repurchasing shares.
We may incur compliance, operating, maintenance and remediation costs. 43 Risks Relating to the Company’s Common Stock The market price of our Class A common stock may be subject to substantial fluctuations which may make it difficult for you to sell your shares at the volumes, prices and times desired.
We may incur compliance, operating, maintenance and remediation costs. Risks Relating to the Company’s Common Stock The market price of our Class A common stock may be subject to substantial fluctuations which may make it difficult for you to sell your shares at the volumes, prices and times desired.
Although our customers’ business and financial interests may extend well beyond these market areas, adverse conditions that affect these market 30 areas could reduce our growth rate, affect the ability of our customers to repay their loans, affect the value of collateral underlying loans, impact our ability to attract deposits and generally affect our financial conditions and results of operations.
Although our customers’ business and financial interests may extend well beyond these market areas, adverse conditions that affect these market areas could reduce our growth rate, affect the ability of our customers to repay their loans, affect the value of collateral underlying loans, impact our ability to attract deposits and generally affect our financial conditions and results of operations.
We face further risk that the originating broker or correspondent, if any, may not have financial capacity to perform remedies that otherwise may be available. Therefore, if a purchaser, guarantor or insurer enforces its remedies against us, we may not be able to recover losses from the originating broker or correspondent.
We face further risk that the originating broker or correspondent, if any, may not have financial capacity to perform remedies that otherwise may be available. Therefore, if a purchaser, guarantor or insurer enforces its remedies against us, we may not be able to 34 recover losses from the originating broker or correspondent.
This could have a material adverse effect on our provision for credit losses and our operating results and financial condition. 24 External economic factors, such as changes in monetary policy and inflation and deflation, may have an adverse effect on our business, financial condition and results of operations.
This could have a material adverse effect on our provision for credit losses and our operating results and financial condition. External economic factors, such as changes in monetary policy and inflation and deflation, may have an adverse effect on our business, financial condition and results of operations.
Our ability to compete in acquiring target institutions will depend on our available financial resources to fund the acquisitions, including the amount of cash and cash equivalents we have and the liquidity and market price of our Class A common stock.
Our ability to compete in acquiring target institutions will depend on our 27 available financial resources to fund the acquisitions, including the amount of cash and cash equivalents we have and the liquidity and market price of our Class A common stock.
If economic conditions negatively impact our markets generally, and small to medium-sized businesses are adversely affected, our financial condition and results of operations may be negatively affected. 32 A lack of liquidity could adversely affect our financial condition and results of operations. Liquidity is essential to our business.
If economic conditions negatively impact our markets generally, and small to medium-sized businesses are adversely affected, our financial condition and results of operations may be negatively affected. A lack of liquidity could adversely affect our financial condition and results of operations. Liquidity is essential to our business.
Given the lower trading volume of our Class A common stock, significant sales of our Class A common stock or the expectation of these sales, could cause the price of our Class A common stock to decline. 45 Use of our common stock for future acquisitions or to raise capital may be dilutive to existing stockholders.
Given the lower trading volume of our Class A common stock, significant sales of our Class A common stock or the expectation of these sales, could cause the price of our Class A common stock to decline. Use of our common stock for future acquisitions or to raise capital may be dilutive to existing stockholders.
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external 46 purposes in accordance with generally accepted accounting principles.
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
It is also difficult to project future commodity prices as they are dependent upon many different factors beyond our control. Credit and Interest Rate Risks Inability to effectively manage credit risk.
It is also difficult to project future commodity prices as they are dependent upon many different factors beyond our control. 24 Credit and Interest Rate Risks Inability to effectively manage credit risk.
A decline in the price of shares of our Class A common stock might impede our ability to raise capital through the issuance of additional shares of our Class A common stock or other equity securities and could result in a decline in the value of the shares of our Class A common stock.
A decline in the price of shares of our Class A common stock might impede our ability to raise capital 40 through the issuance of additional shares of our Class A common stock or other equity securities and could result in a decline in the value of the shares of our Class A common stock.
If repurchase and indemnity demands increase and such demands are valid claims and 37 are in excess of our provision for potential losses, our liquidity, results of operations and financial condition may be adversely affected.
If repurchase and indemnity demands increase and such demands are valid claims and are in excess of our provision for potential losses, our liquidity, results of operations and financial condition may be adversely affected.
As cyber threats continue to evolve, we may be required to spend significant capital and other resources to protect against these threats or to alleviate or investigate problems caused by such threats.
As cyber threats continue to evolve, we may be required to spend significant capital and 32 other resources to protect against these threats or to alleviate or investigate problems caused by such threats.
Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of the holding company’s general unsecured creditors, including the holders of any note obligations. 42 The laws that regulate our operations are designed for the protection of depositors and the public, not our stockholders.
Moreover, bankruptcy law provides that claims based on 38 any such commitment will be entitled to a priority of payment over the claims of the holding company’s general unsecured creditors, including the holders of any note obligations. The laws that regulate our operations are designed for the protection of depositors and the public, not our stockholders.
We have pledged all of the stock of Equity Bank as collateral for a loan, and if the lender forecloses, you could lose your investment. We have pledged all of the stock of Equity Bank as collateral for a third-party loan, which had no balance as of December 31, 2024. This loan has a maximum lending commitment of $25.0 million.
We have pledged all of the stock of Equity Bank as collateral for a loan, and if the lender forecloses, you could lose your investment. We have pledged all of the stock of Equity Bank as collateral for a third-party loan, which had no balance as of December 31, 2025. This loan has a maximum lending commitment of $25.0 million.
In the event of default, the Company’s senior debt holders will be entitled to receive payment in full prior to payment of subordinated debt holders. If the company’s distributable assets in the event of default can only repay the senior debt holders the subordinated debt holders could lose their investment. 50 Item 1B: Unresolve d Staff Comments None
In the event of default, the Company’s senior debt holders will be entitled to receive payment in full prior to payment of subordinated debt holders. If the company’s distributable assets in the event of default can only repay the senior debt holders the subordinated debt holders could lose their investment. 44 Item 1B: Unresolve d Staff Comments None
This allocation of resources, as well as any failure to comply with applicable requirements, may negatively impact our financial condition and results of operations. 38 Changes in laws, government regulation and monetary policy may have a material effect on our results of operations.
This allocation of resources, as well as any failure to comply with applicable requirements, may negatively impact our financial condition and results of operations. 35 Changes in laws, government regulation and monetary policy may have a material effect on our results of operations.
We anticipate that the integration of businesses that we may acquire in the future will be a time-consuming and expensive process, even if the integration process is effectively planned and implemented. 29 In addition, our acquisition activities could be material to our business and involve a number of significant risks, including the following: • incurring time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions, resulting in our attention being diverted from the operation of our existing business; • using inaccurate estimates and judgments to evaluate credit, operations, management and market risks with respect to the target company or the assets and liabilities that we seek to acquire; • exposure to potential asset quality issues of the target company; • intense competition from other banking organizations and other potential acquirers, many of which have substantially greater resources than we do; • potential exposure to unknown or contingent liabilities of banks and businesses we acquire, including, without limitation, liabilities for regulatory and compliance issues; • inability to realize the expected revenue increases, cost savings, increases in geographic or product presence and other projected benefits of the acquisition; • incurring time and expense required to integrate the operations and personnel of the combined businesses; • inconsistencies in standards, procedures and policies that would adversely affect our ability to maintain relationships with customers and employees; • experiencing higher operating expenses relative to operating income from the new operations; • creating an adverse short-term effect on our results of operations; • losing key employees and customers; • significant problems relating to the conversion of the financial and customer data of the entity; • integration of acquired customers into our financial and customer product systems; • potential changes in banking or tax laws or regulations that may affect the target company; or • risks of impairment to goodwill.
In addition, our acquisition activities could be material to our business and involve a number of significant risks, including the following: • incurring time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions, resulting in our attention being diverted from the operation of our existing business; • using inaccurate estimates and judgments to evaluate credit, operations, management and market risks with respect to the target company or the assets and liabilities that we seek to acquire; • exposure to potential asset quality issues of the target company; • intense competition from other banking organizations and other potential acquirers, many of which have substantially greater resources than we do; • potential exposure to unknown or contingent liabilities of banks and businesses we acquire, including, without limitation, liabilities for regulatory and compliance issues; • inability to realize the expected revenue increases, cost savings, increases in geographic or product presence and other projected benefits of the acquisition; • incurring time and expense required to integrate the operations and personnel of the combined businesses; • inconsistencies in standards, procedures and policies that would adversely affect our ability to maintain relationships with customers and employees; • experiencing higher operating expenses relative to operating income from the new operations; • creating an adverse short-term effect on our results of operations; • losing key employees and customers; • significant problems relating to the conversion of the financial and customer data of the entity; • integration of acquired customers into our financial and customer product systems; • potential changes in banking or tax laws or regulations that may affect the target company; or • risks of impairment to goodwill.
Our authorized capital stock includes 10,000,000 shares of preferred stock of which none were issued and outstanding as of March 7, 2025. Our board of directors, in its sole discretion, may designate and issue one or more series of preferred stock from the authorized and unissued shares of preferred stock.
Our authorized capital stock includes 10,000,000 shares of preferred stock of which none were issued and outstanding as of March 6, 2026. Our board of directors, in its sole discretion, may designate and issue one or more series of preferred stock from the authorized and unissued shares of preferred stock.
Our market areas contain not only a large number of community and regional banks, but also a significant presence of the country’s largest commercial banks. We compete with other state and national financial institutions, as well as savings and loan associations, savings banks and credit unions, for deposits and loans.
Consumer and commercial banking are highly competitive industries. Our market areas contain not only a large number of community and regional banks, but also a significant presence of the country’s largest commercial banks. We compete with other state and national financial institutions, as well as savings and loan associations, savings banks and credit unions, for deposits and loans.
In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information furnished to us by or on behalf of customers and counterparties, including financial statements and other financial information.
We depend on the accuracy and completeness of information about customers and counterparties. In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information furnished to us by or on behalf of customers and counterparties, including financial statements and other financial information.
At December 31, 2024, we had a net unrealized loss of $56.8 million, net of tax, on our available for-sale investment securities portfolio. As a community banking institution, we have lower lending limits and different lending risks than certain of our larger, more diversified competitors.
At December 31, 2025, we had a net unrealized gain of $6.1 million, net of tax, on our available for-sale investment securities portfolio. As a community banking institution, we have lower lending limits and different lending risks than certain of our larger, more diversified competitors.
The plaintiffs in these actions frequently seek injunctions and substantial damages. 49 Regardless of the scope or validity of such patents or other intellectual property rights, or the merits of any claims by potential or actual litigants, we may have to engage in litigation that could be expensive, time-consuming, disruptive to our operations and distracting to management.
Regardless of the scope or validity of such patents or other intellectual property rights, or the merits of any claims by potential or actual litigants, we may have to engage in litigation that could be expensive, time-consuming, disruptive to our operations and distracting to management.
Competitors of our vendors, or other individuals or companies, have from time to time claimed to hold intellectual property sold to us by its vendors. Such claims may increase in the future as the financial services sector becomes more reliant on information technology vendors.
Competitors of our vendors, or other individuals or companies, have from time to time claimed to hold intellectual property sold to us by its vendors. Such claims may increase in the future as the financial services sector becomes more reliant on information technology vendors. The plaintiffs in these actions frequently seek injunctions and substantial damages.
Additionally, to the extent that any component of our strategic plan requires regulatory approval, if we are unable to obtain necessary approval, we will be unable to completely implement our strategy, which may adversely affect our actual financial results.
Additionally, to the extent that any component of our strategic plan requires regulatory approval, if we are unable to obtain necessary approval, we will be unable to completely implement our strategy, which may adversely affect our actual financial results. Our inability to successfully implement our strategic plan could adversely affect the price of our Class A common stock.
Net interest income is the difference between the interest earned on assets (such as loans and securities held in our investment portfolio) and the interest paid for liabilities (such as interest paid on savings and money market accounts and time deposits).
Our profitability is vulnerable to interest rate fluctuations. Our profitability depends substantially upon our net interest income. Net interest income is the difference between the interest earned on assets (such as loans and securities held in our investment portfolio) and the interest paid for liabilities (such as interest paid on savings and money market accounts and time deposits).
Nonetheless, we may incur a temporary disruption in our ability to conduct business or process transactions, or incur damage to our reputation, if the third-party vendor fails to adequately maintain internal controls or institute necessary changes to systems.
Nonetheless, we may incur a temporary disruption in our ability to conduct business or process transactions, or incur damage to our reputation, if the third-party vendor fails to adequately maintain internal controls or institute necessary changes to systems. Such a disruption or breach of security may have a material adverse effect on our business.
If we are able to identify attractive acquisition opportunities, we must generally satisfy a number of conditions prior to completing any such transaction, including certain bank regulatory approval, which has become substantially more difficult, time-consuming and unpredictable as a result of the recent financial crisis.
If we are able to identify attractive acquisition opportunities, we must generally satisfy a number of conditions prior to completing any such transaction, including certain bank regulatory approval, which has become substantially more difficult, time-consuming and unpredictable as a result of the recent financial crisis. Additionally, any future acquisitions may not produce the revenue, earnings or synergies that we anticipated.
This narrowing of interest rate spreads could adversely affect our financial condition and results of operations. In addition, we cannot predict whether interest rates will continue to remain at present levels. Changes in interest rates may cause significant changes, up or down, in our net interest income.
This narrowing of interest rate spreads could adversely affect our financial condition and results of operations. In addition, we cannot predict whether interest rates will continue to remain at present levels.
This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers and associates.
As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers and associates.
Equity Bank's level of uninsured deposits as a percentage of non-brokered deposits was 46.3% at December 31, 2024, and 35.2% at December 31, 2023.
Equity Bank's level of uninsured deposits as a percentage of non-brokered deposits was 32.9% at December 31, 2025, and 46.3% at December 31, 2024.
Of these uninsured balances at December 31, 2024, $809.2 million or 41.1 % and at December 31, 2023, $528.2 million or 38.0%, are fully collateralized by either investments held by the Company or letters of credit from the FHLB.
Of these uninsured balances at December 31, 2025, $857.6 million or 51.5 % and at December 31, 2024, $809.2 million or 41.1%, are fully collateralized by either investments held by the Company or letters of credit from the FHLB.
Many factors can lead to a finding of acting in concert, including where: (i) the stockholders are commonly controlled or managed; (ii) the stockholders are parties to an oral or written agreement or understanding regarding the acquisition, voting or transfer of control of voting securities of a bank or bank holding company; (iii) the stockholders are immediate family members; or (iv) both a stockholder and a controlling stockholder, partner, trustee or management official of such stockholder own equity in the bank or bank holding company. 41 We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.
Many factors can lead to a finding of acting in concert, including where: (i) the stockholders are commonly controlled or managed; (ii) the stockholders are parties to an oral or written agreement or understanding regarding the acquisition, voting or transfer of control of voting securities of a bank or bank holding company; (iii) the stockholders are immediate family members; or (iv) both a stockholder and a controlling stockholder, partner, trustee or management official of such stockholder own equity in the bank or bank holding company.
Additionally, any future acquisitions may not produce the revenue, earnings or synergies that we anticipated. 28 Our strategy of pursuing acquisitions exposes us to financial, execution, compliance and operational risks that could have a material adverse effect on our business, financial condition, results of operations and growth prospects. We intend to continue pursuing a strategy that includes acquisitions.
Our strategy of pursuing acquisitions exposes us to financial, execution, compliance and operational risks that could have a material adverse effect on our business, financial condition, results of operations and growth prospects. We intend to continue pursuing a strategy that includes acquisitions.
Operational Risks We rely heavily on our management team and could be adversely affected by the unexpected loss of key officers. We are led by an experienced management team with substantial experience in the markets that we serve and the financial products that we offer. Our operating strategy focuses on providing products and services through long-term relationship managers.
We are led by an experienced management team with substantial experience in the markets that we serve and the financial products that we offer. Our operating strategy focuses on providing products and services through long-term relationship managers.
In addition, we believe that some borrowers may decide not to proceed with their home purchase and not close on their loans, which would result in a permanent loss of the related non-interest income.
Some of the loans we originate are sold directly to government agencies, and some of these sales may be unable to be consummated during a shutdown. In addition, we believe that some borrowers may decide not to proceed with their home purchase and not close on their loans, which would result in a permanent loss of the related non-interest income.
As of December 31, 2024, our ten largest loan relationships totaled over $314.6 million in loan exposure, or 9.0% of the total loan portfolio.
As of December 31, 2025, our ten largest loan relationships totaled over $426.0 million in loan exposure, or 10.2% of the total loan portfolio.
Failure to successfully integrate businesses that we acquire could have an adverse effect on our profitability, return on equity, return on assets or our ability to implement our strategy, any of which in turn could have a material adverse effect on our business, financial condition and results of operations.
Failure to successfully integrate businesses that we acquire could have an adverse effect on our profitability, return on equity, return on assets or our ability to implement our strategy, any of which in turn could have a material adverse effect on our business, financial condition and results of operations. 28 Operational Risks We rely heavily on our management team and could be adversely affected by the unexpected loss of key officers.
In particular, we face credit quality risks presented by past, current and potential economic and real estate market conditions. 25 A significant portion of our loan portfolio is secured by real estate, and events that negatively impact the real estate market could negatively impact our business. There are significant risks associated with real estate-based lending.
A significant portion of our loan portfolio is secured by real estate, and events that negatively impact the real estate market could negatively impact our business. There are significant risks associated with real estate-based lending.
Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses or to fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.
Our access to funding sources could also be affected by a decrease in the level of our business activity as a result of a downturn in our markets or by one or more adverse regulatory actions against us. 30 Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses or to fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.
Such a disruption or breach of security may have a material adverse effect on our business. 36 We are subject to losses due to the errors or fraudulent behavior of employees or third parties. We are exposed to many types of operational risk, including the risk of fraud by employees and outsiders, clerical record-keeping errors and transactional errors.
We are subject to losses due to the errors or fraudulent behavior of employees or third parties. We are exposed to many types of operational risk, including the risk of fraud by employees and outsiders, clerical record-keeping errors and transactional errors.
Further, as a result of the uncertainty and risks associated with our operations, many of which are described in this “Item 1A—Risk Factors” section, it is possible that an investor could lose his or her entire investment.
Further, as a result of the uncertainty and risks associated with our operations, many of which are described in this “Item 1A—Risk Factors” section, it is possible that an investor could lose his or her entire investment. 42 General Risks We operate in a highly competitive industry and face significant competition from other financial institutions and financial services providers that could decrease our growth or profits.
As of December 31, 2024, our ten largest non-brokered depositors accounted for $438.7 million in deposits, or approximately 10.0% of our total deposits. Further, our non-brokered deposit account balance was $4.2 billion, or approximately 97.1% of our total deposits, as of December 31, 2024.
As of December 31, 2025, our ten largest non-brokered depositors accounted for 615.0 million in deposits, or approximately 12.0% of our total deposits. Further, our non-brokered deposit account balance was $5.07 billion, or approximately 98.6% of our total deposits, as of December 31, 2025.
Withdrawals of deposits by any one of our largest depositors or by one of our related customer groups could force us to rely more heavily on borrowings and other sources of funding for our business and withdrawal demands, adversely affecting our net interest margin and results of operations.
Several of our large depositors have business, family or other relationships with each other, which creates a risk that any one customer’s withdrawal of its deposit could lead to a loss of other deposits from customers within the relationship. 29 Withdrawals of deposits by any one of our largest depositors or by one of our related customer groups could force us to rely more heavily on borrowings and other sources of funding for our business and withdrawal demands, adversely affecting our net interest margin and results of operations.
Fair value can be affected by a variety of factors, many of which are beyond our control, including our credit position, interest rate volatility, capital markets volatility, and other economic factors.
Therefore, any increases or decreases in the fair value of these financial instruments have a corresponding impact on reported earnings or AOCI. Fair value can be affected by a variety of factors, many of which are beyond our control, including our credit position, interest rate volatility, capital markets volatility, and other economic factors.
Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could harm our business, financial condition and results of operations. 48 As a community bank, our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance.
Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could harm our business, financial condition and results of operations.
The CFPB has initiated enforcement actions against a variety of bank and non-bank market participants with respect to a number of consumer financial products and services that have resulted in those participants expending significant time, money and resources to adjust to the initiatives being pursued by the CFPB. 39 The CFPB pursued a more aggressive enforcement policy with respect to a range of regulatory compliance matters under the Biden Administration, specifically including fair lending, credit reporting, loan servicing, financial institution sales and marketing practices, and financial institution consumer fee and account management practices.
The CFPB has initiated enforcement actions against a variety of bank and non-bank market participants with respect to a number of consumer financial products and services that have resulted in those participants expending significant time, money and resources to adjust to the initiatives being pursued by the CFPB.
We attempt to minimize the adverse effects of changes in interest rates by structuring our asset-liability composition in order to obtain the maximum spread between interest income and interest expense. However, there can be no assurance that we will be successful in minimizing the adverse effects of changes in interest rates.
Changes in interest rates may cause significant changes, up or down, in our net interest income. 26 We attempt to minimize the adverse effects of changes in interest rates by structuring our asset-liability composition in order to obtain the maximum spread between interest income and interest expense.
These policies and procedures, however, may not prevent unexpected losses that could have a material adverse effect on our financial condition and results of operations.
These policies and procedures, however, may not prevent unexpected losses that could have a material adverse effect on our financial condition and results of operations. In particular, we face credit quality risks presented by past, current and potential economic and real estate market conditions.
A portion of our loan portfolio is comprised of participation and syndicated transaction interests, which could have an adverse effect on our ability to monitor the lending relationships and lead to an increased risk of loss.
If the appraisal does not reflect the amount that may be obtained upon any sale or foreclosure of the property, we may not realize an amount equal to the indebtedness secured by the property. 25 A portion of our loan portfolio is comprised of participation and syndicated transaction interests, which could have an adverse effect on our ability to monitor the lending relationships and lead to an increased risk of loss.
For those financial instruments measured at fair value, we are required to recognize the changes in the fair value of such instruments in earnings or accumulated other comprehensive income (“AOCI”) each quarter. Therefore, any increases or decreases in the fair value of these financial instruments have a corresponding impact on reported earnings or AOCI.
Our financial instruments expose us to certain market risks and may increase the volatility of earnings and AOCI. We hold certain financial instruments measured at fair value. For those financial instruments measured at fair value, we are required to recognize the changes in the fair value of such instruments in earnings or accumulated other comprehensive income (“AOCI”) each quarter.
The extent and timing of any such changes and any resulting impact on our business and financial results cannot be predicted at this time. A protracted government shutdown may result in reduced loan originations and related gains on sales and could negatively affect our financial condition and results of operations.
The extent and timing of any such changes and any resulting impact on our business and financial results cannot be predicted at this time.
During any protracted federal government shutdown, we may not be able to close certain loans and we may not be able to recognize non-interest income on the sale of loans. Some of the loans we originate are sold directly to government agencies, and some of these sales may be unable to be consummated during a shutdown.
A protracted government shutdown may result in reduced loan originations and related gains on sales and could negatively affect our financial condition and results of operations. 36 During any protracted federal government shutdown, we may not be able to close certain loans and we may not be able to recognize non-interest income on the sale of loans.
We are a community bank and our reputation is one of the most valuable components of our business. As such, we strive to conduct our business in a manner that enhances our reputation.
As a community bank, our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance. We are a community bank and our reputation is one of the most valuable components of our business.
Depending on our portfolio of loans and investments, our financial condition and results of operations may be adversely affected by changes in interest rates. 27 Our financial instruments expose us to certain market risks and may increase the volatility of earnings and AOCI. We hold certain financial instruments measured at fair value.
However, there can be no assurance that we will be successful in minimizing the adverse effects of changes in interest rates. Depending on our portfolio of loans and investments, our financial condition and results of operations may be adversely affected by changes in interest rates.
In addition, we may fail to realize some or all of the anticipated benefits of completed acquisitions.
In addition, we may fail to realize some or all of the anticipated benefits of completed acquisitions. We anticipate that the integration of businesses that we may acquire in the future will be a time-consuming and expensive process, even if the integration process is effectively planned and implemented.
Removed
If the appraisal does not reflect the amount that may be obtained upon any sale or foreclosure of the property, we may not realize an amount equal to the indebtedness secured by the property.
Added
Negative developments affecting the banking industry, "contagion effects," and resulting media coverage have eroded customer confidence in the banking system.
Removed
We could be adversely affected by the soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty or other relationships. We have exposure to many different industries and counterparties, and routinely execute transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks and other institutional clients.
Added
Any future bank failures or similar events adversely affecting the banking industry may negatively impact customer confidence in the safety and soundness of regional banks and may generate market volatility among publicly traded bank holding companies and, in particular, regional banks like us.
Removed
Many of these transactions expose us to credit risk in the event of a default by a counterparty or client. In addition, our credit risk may be exacerbated when our collateral cannot be foreclosed upon or is liquidated at prices not sufficient to recover the full amount of the credit or derivative exposure due.
Added
As a result, customers may choose to maintain deposits with larger financial institutions or invest in higher yielding short-term fixed income securities, all of which could materially adversely impact our liquidity, loan funding capacity, net interest margin, capital and results of operations.
Removed
Any such losses could adversely affect our business, financial condition and results of operations. Our profitability is vulnerable to interest rate fluctuations. Our profitability depends substantially upon our net interest income.
Added
While the Department of the Treasury, the Federal Reserve, and the FDIC historically have taken action to ensure that depositors of failed banks had access to their deposits, including uninsured deposit accounts, there is no guarantee that regional bank failures or bank runs will not occur in the future and, if they were to occur, they may have a material and adverse impact on customer and investor confidence in regional banks negatively impacting our liquidity, capital, results of operations and stock price.
Removed
Several of our large depositors have business, family or other relationships with each other, which creates a risk that any one customer’s withdrawal of its deposit could lead to a loss of other deposits from customers within the relationship.
Added
Certain of our investment advisory and wealth management contracts are subject to termination on short notice, and termination of a significant number of investment advisory contracts could have a material adverse impact on our revenue.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Board and the Risk Management Committee also receive prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed.
Biggest changeThe Board and the Risk Management Committee also receive prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed. On an annual basis, the Board and the Risk Management Committee discuss the Company’s approach to cybersecurity risk management with the Company’s CIO.
For more information on the Company's cybersecurity-related risks, see "Item 1A - Risk Factors - We use information technology in our operations and offer online banking services to our customers, and unauthorized access to our or our customers' confidential or proprietary information as a result of a cyber-attack or otherwise could expose us to reputational harm and litigation and adversely affect our ability to attract and retain customers." Management’s Role in Assessing and Managing Risks from Cybersecurity Threats The CISO, in coordination with our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Chief Information Officer (“CIO”) and Chief Legal Officer (“CLO”), works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
For more information on the Company's cybersecurity-related risks, see "Item 1A - Risk Factors - We use information technology in our operations and offer online banking services to our customers, and unauthorized access to our or our customers' confidential or proprietary information as a result of a cyber-attack or otherwise could expose us to reputational harm and litigation and adversely affect our ability to attract and retain customers." Management’s Role in Assessing and Managing Risks from Cybersecurity Threats The Information Security Officer ("ISO"), in coordination with our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), Chief Information Officer (“CIO”) and Chief Legal Officer (“CLO”), works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
The results of such assessments, audits and reviews are reviewed by the Cybersecurity team and the Company adjusts its cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews. 51 Governance Board Oversight of Risks from Cybersecurity Threats The Board, in coordination with the Risk Management Committee, oversees the Company’s ERM process, including the management of risks arising from cybersecurity threats.
The results of such assessments, audits and reviews are reviewed by the Cybersecurity team and the Company adjusts its cybersecurity policies, standards, processes and practices as necessary based on the information provided by these assessments, audits and reviews. 45 Governance Board Oversight of Risks from Cybersecurity Threats The Board, in coordination with the Risk Management Committee, oversees the Company’s ERM process, including the management of risks arising from cybersecurity threats.
During the fiscal year of this Report, the Company has not identified risks from cybersecurity threats, including as a result of prior cybersecurity incidents, that individually or in the aggregate have materially affected or are reasonably anticipated to materially affect the organization. Nevertheless, the Company recognizes cybersecurity threats are ongoing and evolving, and we continue to remain vigilant.
During the fiscal year of this Report, the Company has not identified risks from cybersecurity threats, including as a result of prior cybersecurity incidents, that individually or in the aggregate have materially affected or are reasonably anti cipated to materially affect the organization. Nevertheless, the Company recognizes cybersecurity threats are ongoing and evolving, and we continue to remain vigilant.
The CIO holds an undergraduate degree in Business Finance and has served in various roles in information technology for over 30 years, including serving as either the Chief Information Security Officer or Chief Information Officer of two public companie s.
The CIO holds an undergraduate degree in Business Finance and has served in various roles in information technology for over 30 years, including serving as either the Chief Information Security Officer or Chief Information Officer of two public companies.
Through ongoing communications with these teams, the CISO and CIO monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time, and report such threats and incidents to the Risk Management Committee when appropriate.
Through ongoing communications with these teams, the ISO and CIO monitor the prevention, detection, mitigation and remediation of cybersecurity threats and incidents in real time, and report such threats and incidents to the Risk Management Committee when appropriate. The ISO has over 20 years of experience in the banking industry.
Removed
On an annual basis, the Board and the Risk Management Committee discuss the Company’s approach to cybersecurity risk management with the Company’s CISO and CIO.
Added
He has served in senior technology and information security leadership roles, including Vice President of Technology and Information Security Officer. His background includes education in Computer Science and Business Management, and he is a graduate of the Bank Technology Security School at the Graduate School of Banking in Madison, Wisconsin.
Removed
The CISO has served in various roles in information technology and information security for over 15 years, including serving as the Chief Information Security Officer of two large public companies. The CISO holds an undergraduate degree in Information Networking and Telecommunications, a graduate degree in Cybersecuri ty, and has attained the professional certification of Certified Information Systems Security Professional.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
Biggest changeIncluding our principal executive offices, as of December 31, 2024, we operated a total of 71 branches, consisting of seven branches in the Wichita, Kansas metropolitan area, six branches in the Kansas City metropolitan area, two branches in Topeka, Kansas, eleven branches in Western Missouri, eight branches in North Central Missouri, seven branches in Western Kansas, four branches in Southeast Kansas, seven branches in Southwest Kansas, five branches in Central Kansas, two branches in North Central Kansas, five branches in Northern Arkansas, one branch in the Tulsa, Oklahoma metropolitan area, four branches in Northern Oklahoma and two branches in Western Oklahoma.
Biggest changeIncluding our principal executive offices, as of December 31, 2025, we operated a total of 77 branches, consisting of seven branches in the Wichita, Kansas metropolitan area, six branches in the Kansas City metropolitan area, two branches in Topeka, Kansas, eleven branches in Western Missouri, eight branches in North Central Missouri, seven branches in Western Kansas, four branches in Southeast Kansas, seven branches in Southwest Kansas, five branches in Central Kansas, two branches in North Central Kansas, five branches in Northern Arkansas, one branch in the Tulsa, Oklahoma metropolitan area, six branches in Oklahoma City, Oklahoma metropolitan area, four branches in northern Oklahoma and two branches in Western Oklahoma.
The following table summarizes pertinent details of our principal executive offices and branches, as of December 31, 2024. 52 Address Owned/Leased Principal Executive Office and Wichita Branch: 7701 East Kellogg Drive Wichita, Kansas 67207 Owned Branches as of December 31, 2024 Owned 63 Leased (1) 8 (1) Included in this category is one branch in which the building is owned but the land is on a long-term lease expiring in January 2030.
The following table summarizes pertinent details of our principal executive offices and branches, as of December 31, 2025. 46 Address Owned/Leased Principal Executive Office and Wichita Branch: 7701 East Kellogg Drive Wichita, Kansas 67207 Owned Branches as of December 31, 2025 Owned 69 Leased (1) 8 (1) Included in this category is one branch in which the building is owned but the land is on a long-term lease expiring in January 2030.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 4: Mine Saf ety Disclosures Not applicable. 53 Part II
Biggest changeItem 4: Mine Saf ety Disclosures Not applicable. 47 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

38 edited+5 added−3 removed54 unchanged
Biggest changeAverage Balance Sheets and Net Interest Analysis December 31, 2024 December 31, 2023 December 31, 2022 (Dollars in thousands) Average Outstanding Balance Interest Income/ Expense Average Yield/ Rate (3)(4) 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 $ 635,881 $ 51,188 8.05 % $ 580,451 $ 42,901 7.39 % $ 583,295 $ 32,258 5.53 % Commercial real estate 1,400,661 99,316 7.09 % 1,302,568 83,441 6.41 % 1,259,257 65,122 5.17 % Real estate construction 416,296 36,004 8.65 % 447,516 33,764 7.54 % 363,902 18,269 5.02 % Residential real estate 563,176 26,505 4.71 % 565,711 23,799 4.21 % 597,196 22,004 3.68 % Agricultural real estate 227,341 16,848 7.41 % 201,326 13,820 6.86 % 201,295 11,399 5.66 % Agricultural 96,877 9,103 9.40 % 100,394 6,966 6.94 % 125,342 6,697 5.34 % Consumer 100,995 6,851 6.78 % 106,542 6,522 6.12 % 102,185 5,110 5.00 % Total loans 3,441,227 245,815 7.14 % 3,304,508 211,213 6.39 % 3,232,472 160,859 4.98 % Taxable securities 979,926 39,091 3.99 % 1,027,726 23,873 2.32 % 1,185,750 22,713 1.92 % Nontaxable securities 59,597 1,579 2.65 % 74,917 1,960 2.62 % 106,955 2,698 2.52 % Federal funds sold and other 195,378 10,358 5.30 % 193,941 9,666 4.98 % 107,298 1,978 1.84 % Total interest-earning assets 4,676,128 296,843 6.35 % 4,601,092 246,712 5.36 % 4,632,475 188,248 4.06 % Non-interest-earning assets Other real estate owned, net 2,332 3,991 10,144 Premises and equipment, net 115,892 107,297 102,165 Bank-owned life insurance 129,232 123,665 121,741 Goodwill and other intangibles, net 68,190 63,064 67,747 Other non-interest-earning assets 84,165 100,296 88,840 Total assets $ 5,075,939 $ 4,999,405 $ 5,023,112 Interest-bearing liabilities Interest-bearing demand deposits $ 1,028,114 27,587 2.68 % $ 1,002,543 22,681 2.26 % $ 1,124,828 7,248 0.64 % Savings and money market 1,425,025 33,931 2.38 % 1,359,822 23,525 1.73 % 1,308,536 3,549 0.27 % Demand savings and money market 2,453,139 61,518 2.51 % 2,362,365 46,206 1.96 % 2,433,364 10,797 0.44 % Certificates of deposit 770,772 28,891 3.75 % 827,652 24,267 2.93 % 663,790 5,524 0.83 % Total interest-bearing deposits 3,223,911 90,409 2.80 % 3,190,017 70,473 2.21 % 3,097,154 16,321 0.53 % FHLB term and line of credit advances 216,012 10,180 4.71 % 98,380 3,944 4.01 % 79,775 2,094 2.63 % Federal Reserve Bank discount window 30,986 1,361 4.39 % 108,551 4,755 4.38 % 3 — 0.25 % Subordinated borrowings 97,194 7,580 7.80 % 96,651 7,591 7.85 % 96,133 6,771 7.04 % Other borrowings 47,336 1,151 2.43 % 49,464 931 1.88 % 55,036 232 0.42 % Total interest-bearing liabilities 3,615,439 110,681 3.06 % 3,543,063 87,694 2.48 % 3,328,101 25,418 0.76 % Non-interest-bearing liabilities and stockholders’ equity Non-interest-bearing checking accounts 931,860 979,410 1,203,167 Non-interest-bearing liabilities 45,666 53,210 50,962 Stockholders’ equity 482,974 423,722 440,882 Total liabilities and stockholders’ equity $ 5,075,939 $ 4,999,405 $ 5,023,112 Net interest income $ 186,162 $ 159,018 $ 162,830 Interest rate spread 3.29 % 2.88 % 3.30 % Net interest margin (2) 3.98 % 3.46 % 3.51 % Total cost of deposits, including non-interest bearing deposits $ 4,155,771 $ 90,409 2.18 % $ 4,169,427 $ 70,473 1.69 % $ 4,300,321 $ 16,321 0.38 % Average interest-earning assets to interest-bearing liabilities 129.34 % 129.86 % 139.19 % (1) Average loan balances include non-accrual loans, hedge fair value adjustments and merger fair value adjustments.
Biggest changeAverage Balance Sheets and Net Interest Analysis December 31, 2025 December 31, 2024 December 31, 2023 (Dollars in thousands) Average Outstanding Balance Interest Income/ Expense Average Yield/ Rate (3)(4) 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 $ 803,779 $ 61,397 7.64 % $ 635,881 $ 51,188 8.05 % $ 580,451 $ 42,901 7.39 % Commercial real estate 1,583,020 113,277 7.16 % 1,400,661 99,316 7.09 % 1,302,568 83,441 6.41 % Real estate construction 493,428 38,242 7.75 % 416,296 36,004 8.65 % 447,516 33,764 7.54 % Residential real estate 573,952 27,517 4.79 % 563,176 26,505 4.71 % 565,711 23,799 4.21 % Agricultural real estate 260,219 20,026 7.70 % 227,341 16,848 7.41 % 201,326 13,820 6.86 % Agricultural 123,553 9,982 8.08 % 96,877 9,103 9.40 % 100,394 6,966 6.94 % Consumer 100,409 6,697 6.67 % 100,995 6,851 6.78 % 106,542 6,522 6.12 % Total loans 3,938,360 277,138 7.04 % 3,441,227 245,815 7.14 % 3,304,508 211,213 6.39 % Taxable securities 909,082 38,801 4.27 % 980,664 39,091 3.99 % 1,027,726 23,873 2.32 % Nontaxable securities 42,973 1,221 2.84 % 59,597 1,579 2.65 % 74,917 1,960 2.62 % Federal funds sold and other 328,753 13,675 4.16 % 195,378 10,358 5.30 % 193,941 9,666 4.98 % Total interest-earning assets 5,219,168 330,835 6.34 % 4,676,866 296,843 6.35 % 4,601,092 246,712 5.36 % Non-interest-earning assets Other real estate owned, net 4,189 2,332 3,991 Premises and equipment, net 126,596 115,892 107,297 Bank-owned life insurance 139,914 129,232 123,665 Goodwill and other intangibles, net 87,276 68,190 63,064 Other non-interest-earning assets 113,566 83,427 100,296 Total assets $ 5,690,709 $ 5,075,939 $ 4,999,405 Interest-bearing liabilities Interest-bearing demand deposits $ 1,113,376 22,901 2.06 % $ 1,028,114 27,587 2.68 % $ 1,002,543 22,681 2.26 % Savings and money market 1,588,459 35,171 2.21 % 1,425,025 33,931 2.38 % 1,359,822 23,525 1.73 % Demand savings and money market 2,701,835 58,072 2.15 % 2,453,139 61,518 2.51 % 2,362,365 46,206 1.96 % Certificates of deposit 877,296 30,383 3.46 % 770,772 28,891 3.75 % 827,652 24,267 2.93 % Total interest-bearing deposits 3,579,131 88,455 2.47 % 3,223,911 90,409 2.80 % 3,190,017 70,473 2.21 % FHLB term and line of credit advances 195,434 8,208 4.20 % 216,012 10,180 4.71 % 98,380 3,944 4.01 % Federal Reserve Bank discount window 8 — 4.25 % 30,986 1,361 4.39 % 108,551 4,755 4.38 % Subordinated borrowings 94,509 7,155 7.57 % 97,194 7,580 7.80 % 96,651 7,591 7.85 % Other borrowings 46,154 936 2.03 % 47,336 1,151 2.43 % 49,464 931 1.88 % Total interest-bearing liabilities 3,915,236 104,754 2.68 % 3,615,439 110,681 3.06 % 3,543,063 87,694 2.48 % Non-interest-bearing liabilities and stockholders’ equity Non-interest-bearing checking accounts 1,049,240 931,860 979,410 Non-interest-bearing liabilities 55,463 45,666 53,210 Stockholders’ equity 670,770 482,974 423,722 Total liabilities and stockholders’ equity $ 5,690,709 $ 5,075,939 $ 4,999,405 Net interest income $ 226,081 $ 186,162 $ 159,018 Interest rate spread 3.66 % 3.29 % 2.88 % Net interest margin (2) 4.33 % 3.98 % 3.46 % Total cost of deposits, including non-interest bearing deposits $ 4,628,371 $ 88,455 1.91 % $ 4,155,771 $ 90,409 2.18 % $ 4,169,427 $ 70,473 1.69 % Average interest-earning assets to interest-bearing liabilities 133.30 % 129.36 % 129.86 % (1) Average loan balances include non-accrual loans, hedge fair value adjustments and merger fair value adjustments.
We believe our geographic footprint, which is strategically split between growing metropolitan markets, such as Kansas City, Tulsa and Wichita, and stable community markets within Southeastern Kansas, Southwestern Kansas, Central Kansas, North Central Kansas, Western Kansas, Topeka, Western Missouri, North Central Missouri, Northern Arkansas, Northern Oklahoma and Western Oklahoma, provides us with access to low cost stable core deposits in community markets that we can use to fund commercial loan growth in our metropolitan markets.
We believe our geographic footprint, which is strategically split between growing metropolitan markets, such as Kansas City, Tulsa, Oklahoma City and Wichita, and stable community markets within Southeastern Kansas, Southwestern Kansas, Central Kansas, North Central Kansas, Western Kansas, Topeka, Western Missouri, North Central Missouri, Northern Arkansas, Northern Oklahoma and Western Oklahoma, provides us with access to low cost stable core deposits in community markets that we can use to fund commercial loan growth in our metropolitan markets.
The average change in control premium, number of shares and our current trading price is used to estimate the market value of our equity, which is compared to our book value of equity. In addition to estimating equity market value, we evaluate the qualitative considerations contained in current accounting guidance to identify any evidence of goodwill impairment.
The average change in control premium, number of shares and our current trading price is used to estimate the market value of our equity, which is compared to our book value of equity. In addition to estimating equity market value, we evaluate the qualitative 57 considerations contained in current accounting guidance to identify any evidence of goodwill impairment.
Our qualitative analysis process consists of using recent bank merger transactions, for companies that are 63 similar to the Company based on financial performance, to calculate the average change in control premium from the merger data.
Our qualitative analysis process consists of using recent bank merger transactions, for companies that are similar to the Company based on financial performance, to calculate the average change in control premium from the merger data.
The allowance represents management’s best estimate, but significant changes in circumstances relating to loan quality and economic conditions could result in significantly different results than what is reflected in the consolidated balance sheet as of December 31, 2024. Likewise, an improvement in loan quality or economic conditions may allow for a further reduction in the required allowance.
The allowance represents management’s best estimate, but significant changes in circumstances relating to loan quality and economic conditions could result in significantly different results than what is reflected in the consolidated balance sheet as of December 31, 2025. Likewise, an improvement in loan quality or economic conditions may allow for a further reduction in the required allowance.
For information comparing our results of operations for the year ended December 31, 2023, to year ended December 31, 2022, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on March 7, 2024.
For information comparing our results of operations for the year ended December 31, 2024, to year ended December 31, 2023, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on March 7, 2025.
Please see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures” for reconciliation to the most directly comparable GAAP measure. 61 Overview We are a financial holding company headquartered in Wichita, Kansas.
Please see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures” for reconciliation to the most directly comparable GAAP measure. 55 Overview We are a financial holding company headquartered in Wichita, Kansas.
Our wholly-owned banking subsidiary, Equity Bank, provides a broad range of financial services primarily to businesses and business owners as well as individuals through our network of 71 full-service branches located in Arkansas, Kansas, Missouri and Oklahoma.
Our wholly-owned banking subsidiary, Equity Bank, provides a broad range of financial services primarily to businesses and business owners as well as individuals through our network of 77 full-service branches located in Arkansas, Kansas, Missouri and Oklahoma.
The performance graph assumes $100 is invested on December 31, 2019, in the Company’s common stock, the NASDAQ Bank Index and the S&P 500 Index. Historical stock price performance is not necessarily indicative of future stock price performance.
The performance graph assumes $100 is invested on December 31, 2020, in the Company’s common stock, the NASDAQ Bank Index and the S&P 500 Index. Historical stock price performance is not necessarily indicative of future stock price performance.
Net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as “volume change,” and it is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds, referred to as “yield/rate change.” The following table shows the average balance of each principal category of assets, liabilities, and stockholders’ equity and the average yields on interest-earning assets and average rates on interest-bearing liabilities for the years ended December 31, 2024, 2023, 64 and 2022.
Net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as “volume change,” and it is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds, referred to as “yield/rate change.” The following table shows the average balance of each principal category of assets, liabilities, and stockholders’ equity and the average yields on interest-earning assets and average rates on interest-bearing liabilities for the years ended December 31, 2025, 2024, 58 and 2023.
For the year ended December 31, 2024, management performed a qualitative analysis and has determined that there was not evidence of a triggering event during the period then ended.
For the year ended December 31, 2025, management performed a qualitative analysis and has determined that there was not evidence of a triggering event during the period then ended.
Recent Sales of Unregistered Equity Securities None Purchases of Equity Securities by the Issuer and Affiliated Purchasers Repurchase of Common Stock On October 7, 2024, the Federal Reserve Bank of Kansas City advised the Company that it had no objection to the Company’s authorization of its repurchase of up to an additional 1,000,000 shares of the Company’s Class A Voting common stock, par value $0.01 per share, from time to time, beginning October 1, 2024, and concluding September 30, 2025. 56 The following table presents shares that were repurchased under the repurchase program during the fourth quarter of 2024.
Recent Sales of Unregistered Equity Securities None Purchases of Equity Securities by the Issuer and Affiliated Purchasers Repurchase of Common Stock On September 23, 2025, the Federal Reserve Bank of Kansas City advised the Company that it had no objection to the Company’s authorization of its repurchase of up to an additional 1,000,000 shares of the Company’s Class A Voting common stock, par value $0.01 per share, from time to time, beginning October 1, 2025, and concluding September 30, 2026. 50 The following table presents shares that were repurchased under the repurchase program during the fourth quarter of 2025.
Net income for the year ended December 31, 2024, was $62.6 million, compared to net income of $7.8 million for the year ended December 31, 2023. History and Background From 2003 through 2024, we completed a series of 22 acquisitions, two charter consolidations and two branch dispositions.
Net income for the year ended December 31, 2025, was $22.7 million, compared to net income of $62.6 million for the year ended December 31, 2024. History and Background From 2003 through 2025, we completed a series of 23 acquisitions, two charter consolidations and two branch dispositions.
Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts. 65 The following table analyzes the change in volume variances and yield/rate variances for the year ended December 31, 2024, as compared to the year ended December 31, 2023, and the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts. 59 The following table analyzes the change in volume variances and yield/rate variances for the year ended December 31, 2025, as compared to the year ended December 31, 2024, and the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Year ended December 31, 2024, compared with year ended December 31, 2023 There was a $2.5 million provision for credit losses for the year ended December 31, 2024, compared to a provision for credit losses of $1.9 million for the year ended December 31, 2023.
Year ended December 31, 2025, compared with year ended December 31, 2024 There was a $9.0 million provision for credit losses for the year ended December 31, 2025, compared to a provision for credit losses of $2.5 million for the year ended December 31, 2024.
This discussion and analysis of our financial condition and results of operation includes the following sections: • Table containing selected financial data and ratios for the periods; • Overview; • Critical Accounting Policies – a discussion of accounting policies that require critical estimates and assumptions; • Results of Operations – an analysis of our operating results, including disclosures about the sustainability of our earnings; • Financial Condition – an analysis of our financial position; • Liquidity and Capital Resources – an analysis of our cash flows and capital position; and • Non-GAAP Financial Measures – reconciliation of non-GAAP measures. 59 Years Ended December 31, (Dollars in thousands, except per share data) 2024 2023 2022 2021 2020 Statement of Income Data Interest and dividend income $ 296,843 $ 246,712 $ 188,248 $ 157,368 $ 155,561 Interest expense 110,681 87,694 25,418 14,789 22,909 Net interest income 186,162 159,018 162,830 142,579 132,652 Provision (reversal) for credit losses 2,546 1,873 125 (8,480 ) 24,255 Net gain on acquisition 2,131 — 962 585 2,145 Net gain (loss) from securities transactions 220 (51,909 ) 5 406 11 Other non-interest income 36,471 32,780 34,990 31,851 23,867 Merger expense 4,461 297 594 9,189 299 Goodwill impairment — — — — 104,831 Loss on extinguishment of debt — — — 372 — Other non-interest expense 139,696 135,304 127,786 109,904 103,860 Income (loss) before income taxes 78,281 2,415 70,282 64,436 (74,570 ) Provision for income taxes 15,660 (5,406 ) 12,594 11,956 400 Net income (loss) 62,621 7,821 57,688 52,480 (74,970 ) Net income (loss) allocable to common stockholders 62,621 7,821 57,688 52,480 (74,970 ) Basic earnings (loss) per share 4.04 0.50 3.56 3.49 (4.97 ) Diluted earnings (loss) per share 4.00 0.50 3.51 3.43 (4.97 ) Balance Sheet Data (at period end) Cash and cash equivalents $ 383,747 $ 379,099 $ 104,428 $ 259,954 $ 280,698 Securities available-for-sale 1,004,455 919,648 1,184,390 1,327,442 871,827 Securities held-to-maturity 5,217 2,209 1,948 — — Loans held for sale 513 476 349 4,214 12,394 Gross loans held for investment 3,500,816 3,332,901 3,311,548 3,155,627 2,591,696 Allowance for credit losses 43,267 43,520 45,847 48,365 33,709 Loans held for investment, net of allowance for credit losses 3,457,549 3,289,381 3,265,701 3,107,262 2,557,987 Goodwill and core deposit intangibles, net 68,070 60,323 63,697 69,344 47,658 Mortgage servicing asset, net — 75 176 276 — Naming rights, net 957 1,000 1,044 1,087 1,130 Total assets 5,332,047 5,034,592 4,981,651 5,137,631 4,013,356 Total deposits 4,374,789 4,145,455 4,241,807 4,420,004 3,447,590 Borrowings 312,796 380,503 281,734 151,891 133,857 Total liabilities 4,739,129 4,581,732 4,571,593 4,637,000 3,605,707 Total stockholders’ equity 592,918 452,860 410,058 500,631 407,649 Tangible common equity * 523,891 391,462 345,141 429,924 358,861 Performance ratios Return on average assets (ROAA) 1.23 % 0.16 % 1.15 % 1.18 % (1.87 )% Return on average equity (ROAE) 12.97 % 1.85 % 13.08 % 11.75 % (16.14 )% Return on average tangible common equity (ROATCE) * 15.94 % 2.94 % 16.35 % 14.10 % 8.27 % Yield on loans 7.14 % 6.39 % 4.98 % 4.77 % 5.00 % Cost of interest-bearing deposits 2.80 % 2.21 % 0.53 % 0.30 % 0.66 % Net interest margin 3.98 % 3.46 % 3.51 % 3.44 % 3.63 % Efficiency ratio * 60.77 % 68.71 % 62.48 % 60.58 % 63.87 % Non-interest expense to net interest income plus non-interest income* 64.07 % 96.93 % 64.58 % 68.10 % 65.64 % Non-interest income / average assets 0.76 % (0.38 )% 0.72 % 0.74 % 0.65 % Non-interest expense / average assets 2.84 % 2.71 % 2.56 % 2.70 % 5.23 % Dividend payout ratio 13.91 % 88.35 % 10.26 % 4.84 % 0.00 % Performance ratios - Core Core earnings per diluted share* $ 4.43 $ 3.31 $ 3.69 $ 4.09 $ 0.62 Core return on average assets* 1.37 % 1.03 % 1.21 % 1.41 % 0.23 % Core return on average equity* 14.29 % 11.63 % 13.72 % 13.85 % 1.87 % Core non-interest expense / average assets* 2.67 % 2.64 % 2.46 % 2.38 % 2.50 % Capital Ratios Tier 1 Leverage Ratio 11.67 % 9.46 % 9.61 % 9.09 % 9.30 % Common Equity Tier 1 Capital Ratio 14.51 % 11.74 % 12.26 % 12.03 % 12.82 % Tier 1 Risk Based Capital Ratio 15.11 % 12.36 % 12.88 % 12.67 % 13.37 % Total Risk Based Capital Ratio 18.07 % 15.48 % 16.08 % 15.96 % 17.35 % Total Stockholders equity / Total Assets 11.12 % 8.99 % 8.23 % 9.74 % 10.16 % Tangible common equity to tangible assets * 9.95 % 7.87 % 7.02 % 8.48 % 9.05 % 60 Book value per share $ 34.04 $ 29.35 $ 25.74 $ 29.87 $ 28.04 Tangible book value per common share * $ 30.07 $ 25.37 $ 21.67 $ 25.65 $ 24.68 Tangible book value per diluted common share * $ 29.70 $ 25.05 $ 21.35 $ 25.22 $ 24.68 * Indicates non-GAAP financial measure.
This discussion and analysis of our financial condition and results of operation includes the following sections: • Table containing selected financial data and ratios for the periods; • Overview; • Critical Accounting Policies – a discussion of accounting policies that require critical estimates and assumptions; • Results of Operations – an analysis of our operating results, including disclosures about the sustainability of our earnings; • Financial Condition – an analysis of our financial position; • Liquidity and Capital Resources – an analysis of our cash flows and capital position; and • Non-GAAP Financial Measures – reconciliation of non-GAAP measures. 53 Years Ended December 31, (Dollars in thousands, except per share data) 2025 2024 2023 2022 2021 Statement of Income Data Interest and dividend income $ 330,835 $ 296,843 $ 246,712 $ 188,248 $ 157,368 Interest expense 104,754 110,681 87,694 25,418 14,789 Net interest income 226,081 186,162 159,018 162,830 142,579 Provision (reversal) for credit losses 8,953 2,546 1,873 125 (8,480 ) Net gain on acquisition — 2,131 — 962 585 Net gain (loss) from securities transactions (53,174 ) 220 (51,909 ) 5 406 Other non-interest income 37,146 36,471 32,780 34,990 31,851 Merger expense 8,065 4,461 297 594 9,189 Goodwill impairment — — — — — Loss on extinguishment of debt 1,361 — — — 372 Other non-interest expense 165,294 139,696 135,304 127,786 109,904 Income (loss) before income taxes 26,380 78,281 2,415 70,282 64,436 Provision for income taxes 3,654 15,660 (5,406 ) 12,594 11,956 Net income (loss) 22,726 62,621 7,821 57,688 52,480 Net income (loss) allocable to common stockholders 22,726 62,621 7,821 57,688 52,480 Basic earnings (loss) per share 1.24 4.04 0.50 3.56 3.49 Diluted earnings (loss) per share 1.23 4.00 0.50 3.51 3.43 Balance Sheet Data (at period end) Cash and cash equivalents $ 607,817 $ 383,747 $ 379,099 $ 104,428 $ 259,954 Securities available-for-sale 1,030,568 1,004,455 919,648 1,184,390 1,327,442 Securities held-to-maturity 5,248 5,217 2,209 1,948 — Loans held for sale 1,392 513 476 349 4,214 Gross loans held for investment 4,198,180 3,500,816 3,332,901 3,311,548 3,155,627 Allowance for credit losses 52,756 43,267 43,520 45,847 48,365 Loans held for investment, net of allowance for credit losses 4,145,424 3,457,549 3,289,381 3,265,701 3,107,262 Goodwill and core deposit intangibles, net 103,735 68,070 60,323 63,697 69,344 Mortgage servicing asset, net — — 75 176 276 Naming rights, net 5,703 957 1,000 1,044 1,087 Total assets 6,373,172 5,332,047 5,034,592 4,981,651 5,137,631 Total deposits 5,138,264 4,374,789 4,145,455 4,241,807 4,420,004 Borrowings 438,009 312,796 380,503 281,734 151,891 Total liabilities 5,641,118 4,739,129 4,581,732 4,571,593 4,637,000 Total stockholders’ equity 732,054 592,918 452,860 410,058 500,631 Tangible common equity * 622,616 523,891 391,462 345,141 429,924 Performance ratios Return on average assets (ROAA) 0.40 % 1.23 % 0.16 % 1.15 % 1.18 % Return on average equity (ROAE) 3.39 % 12.97 % 1.85 % 13.08 % 11.75 % Return on average tangible common equity (ROATCE) * 4.57 % 15.94 % 2.94 % 16.35 % 14.10 % Yield on loans 7.04 % 7.14 % 6.39 % 4.98 % 4.77 % Cost of interest-bearing deposits 2.47 % 2.80 % 2.21 % 0.53 % 0.30 % Net interest margin 4.33 % 3.98 % 3.46 % 3.51 % 3.44 % Efficiency ratio * 60.90 % 60.77 % 68.71 % 62.48 % 60.58 % Non-interest expense to net interest income plus non-interest income* 83.18 % 64.07 % 96.93 % 64.58 % 68.10 % Non-interest income / average assets (0.28 )% 0.76 % (0.38 )% 0.72 % 0.74 % Non-interest expense / average assets 3.07 % 2.84 % 2.71 % 2.56 % 2.70 % Dividend payout ratio 54.20 % 13.91 % 88.35 % 10.26 % 4.84 % Performance ratios - Core Core earnings per diluted share* $ 4.39 $ 4.43 $ 3.31 $ 3.69 $ 4.09 Core return on average assets* 1.42 % 1.37 % 1.03 % 1.21 % 1.41 % Core return on average equity* 11.58 % 14.29 % 11.63 % 13.72 % 13.85 % Core non-interest expense / average assets* 2.82 % 2.67 % 2.64 % 2.46 % 2.38 % Capital Ratios Tier 1 Leverage Ratio 10.64 % 11.67 % 9.46 % 9.61 % 9.09 % Common Equity Tier 1 Capital Ratio 13.08 % 14.51 % 11.74 % 12.26 % 12.03 % Tier 1 Risk Based Capital Ratio 13.59 % 15.11 % 12.36 % 12.88 % 12.67 % Total Risk Based Capital Ratio 16.31 % 18.07 % 15.48 % 16.08 % 15.96 % Total Stockholders equity / Total Assets 11.49 % 11.12 % 8.99 % 8.23 % 9.74 % Tangible common equity to tangible assets * 9.94 % 9.95 % 7.87 % 7.02 % 8.48 % 54 Book value per share $ 38.64 $ 34.04 $ 29.35 $ 25.74 $ 29.87 Tangible book value per common share * $ 32.86 $ 30.07 $ 25.37 $ 21.67 $ 25.65 Tangible book value per diluted common share * $ 32.43 $ 29.70 $ 25.05 $ 21.35 $ 25.22 * Indicates non-GAAP financial measure.
Year ended December 31, 2024, compared with year ended December 31, 2023 The increase in net interest income is primarily due to a 99 basis point increase in yields on interest-earning assets offset by a 58 basis point increase in the average cost of interest bearing liabilities.
Year ended December 31, 2025, compared with year ended December 31, 2024 The increase in net interest income is primarily due to a 1 basis point decrease in yields on interest-earning assets offset by a 38 basis point decrease in the average cost of interest bearing liabilities.
At December 31, 2024, there were 322,181 shares available under the employee stock purchase plan for future issuance . 55 Performance Graph The following performance graph compares total stockholders’ return on the Company’s common stock for the period beginning at the close of trading December 31, 2019, to December 31, 2024, with the cumulative total return of the S&P 500 Index, NASDAQ Composite Index and the NASDAQ Bank Index for the same period.
At December 31, 2025, there were 295,320 shares available under the employee stock purchase plan for future issuance . 49 Performance Graph The following performance graph compares total stockholders’ return on the Company’s common stock for the period beginning at the close of trading December 31, 2020, to December 31, 2025, with the cumulative total return of the S&P 500 Index and the NASDAQ Bank Index for the same period.
For more information, see “Item 7 – Supervision and Regulation – Banking Regulation – Standards for Safety and Soundness.” Securities Authorized for Issuance Under Equity Compensation Plans The following table presents shares of our common stock that may be issued with respect to compensation plans at December 31, 2024. 54 Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) (c) Equity compensation plans - stock options 495,180 $ 30.07 * Equity compensation plans - restricted stock awards and restricted stock units 285,331 * Equity compensation plans - available 780,511 1,050,525 Equity compensation plans - employee stock purchase plan — — 322,181 Equity compensation plans 780,511 1,372,706 Equity compensation plans not approved by security holders — — — Total 780,511 $ — 1,372,706 * All securities remaining available for future issuance were available under our 2022 Omnibus Equity Plan as of December 31, 2024.
For more information, see “Item 7 – Supervision and Regulation – Banking Regulation – Standards for Safety and Soundness.” Securities Authorized for Issuance Under Equity Compensation Plans The following table presents shares of our common stock that may be issued with respect to compensation plans at December 31, 2025. 48 Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) (c) Equity compensation plans - stock options 458,133 $ 30.07 * Equity compensation plans - restricted stock awards and restricted stock units 345,611 * Equity compensation plans - available 803,744 744,974 Equity compensation plans - employee stock purchase plan — — 295,320 Equity compensation plans 803,744 1,040,294 Equity compensation plans not approved by security holders — — — Total 803,744 $ — 1,040,294 * All securities remaining available for future issuance were available under our 2022 Omnibus Equity Plan as of December 31, 2025.
As of December 31, 2024, we had, on a consolidated basis, total assets of $5.33 billion, total deposits of $4.37 billion, total loans held for investment, net of allowances, of $3.46 billion and total stockholders’ equity of $592.9 million.
As of December 31, 2025, we had, on a consolidated basis, total assets of $6.37 billion, total deposits of $5.14 billion, total loans held for investment, net of allowances, of $4.15 billion and total stockholders’ equity of $732.1 million.
Provision for Credit Losses We maintain an allowance for credit losses for estimated losses in our loan portfolio. The allowance for credit losses is increased by a provision for credit losses, which is a charge to earnings, and subsequent recoveries of amounts previously charged-off, but is decreased by charge-offs when the collectability of a loan balance is unlikely.
The allowance for credit losses is increased by a provision for credit losses, which is a charge to earnings, and subsequent recoveries of amounts previously charged-off, but is decreased by charge-offs when the collectability of a loan balance is unlikely. Management estimates the allowance balance required using past loan loss experience within the Company’s portfolio.
On April 26, 2022, the Company's shareholders approved the Company’s 2022 Omnibus Equity Plan (the Plan) to reserve 760,000 shares for the grant of non-qualified stock options, restricted stock units, restricted stock and unrestricted stock to its employees and directors. The Plan replaced the Amended and Restated 2013 Stock Incentive Plan (2013 Plan).
On April 26, 2022, the Company's shareholders approved the Company’s 2022 Omnibus Equity Plan (the Plan) to reserve 760,000 shares for the grant of non-qualified stock options, restricted stock units, restricted stock and unrestricted stock to its employees and directors. On May 3, 2024, the Company reserved an additional 1,000,000 shares under this plan.
Net Income Year ended December 31, 2024, compared with year ended December 31, 2023 For the year ended December 31, 2024, there was net income allocable to common stockholders of $62.6 million, compared to net income allocable to common stockholders of $7.8 million for the year ended December 31, 2023, an increase of $54.8 million.
Net Income Year ended December 31, 2025, compared with year ended December 31, 2024 For the year ended December 31, 2025, there was net income allocable to common stockholders of $22.7 million, compared to net income allocable to common stockholders of $62.6 million for the year ended December 31, 2024, a decrease of $39.9 million.
This change was primarily driven by a $27.1 increase in net interest income, a $58.0 million increase in non interest income offset by a $8.6 million increase in non interest expense and an increase in provision for taxes of $21.1 million.
This change was primarily driven by a $54.9 million decrease in non interest income, a $30.6 million increase in non interest expense offset by a $39.9 million increase in net interest income and a decrease in provision for taxes of $12.0 million.
There were pour over shares available in the new plan from the previous plan due to forfeiture, cancellation, and expiration after the effective date. For the year ended December 31, 2024, there were pour over shares of 22,731 from our Amended and Restated 2013 Stock Incentive Plan, which are included in the available RSU balance at December 31, 2024.
For the year ended December 31, 2025, there were pour over shares of 1,625 from our Amended and Restated 2013 Stock Incentive Plan, which are included in the available RSU balance at December 31, 2025.
The changes in the components of net income are discussed in more detail below in the following sections of “Results of Operations.” Net Interest Income and Net Interest Margin Analysis Net interest income is the difference between interest income on interest-earning assets, including loans and securities, and interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds.
Net Interest Income and Net Interest Margin Analysis Net interest income is the difference between interest income on interest-earning assets, including loans and securities, and interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds.
Plan beginning October 1, 2024, to September 30, 2025 Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Repurchase Plan Maximum Number of Shares That May Yet Be Purchased Under the Plan (1) October 1, 2024 through October 31, 2024 — $ — — 1,000,000 November 1, 2024 through November 30, 2024 — — — 1,000,000 December 1, 2024 through December 31, 2024 — — — 1,000,000 Total — $ — — 1,000,000 (1)Represents shares that may be repurchased under the 2024 repurchase plan 57 Item 6 : Reserved 58 Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations .
Plan beginning October 1, 2025, to September 30, 2026 Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Repurchase Plan Maximum Number of Shares That May Yet Be Purchased Under the Plan (1) October 1, 2025 through October 31, 2025 34,672 $ 39.72 34,672 965,328 November 1, 2025 through November 30, 2025 125,581 41.91 125,581 839,747 December 1, 2025 through December 31, 2025 12,085 45.00 12,085 827,662 Total 172,338 $ 41.69 172,338 827,662 (1)Represents shares that may be repurchased under the 2025 repurchase plan 51 Item 6 : Reserved 52 Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations .
At February 28, 2025, there were 17,508,740 shares of our Class A common stock, outstanding and 216 stockholders of record for the Company’s Class A common stock. At February 28, 2025, no shares of our Class B common stock were outstanding.
At February 27, 2026, there were 20,992,139 shares of our Class A common stock, outstanding and 209 stockholders of record for the Company’s Class A common stock. At February 27, 2026, no shares of our Class B common stock were outstanding.
Net interest spread increased from 2.88% at December 31, 2023 to 3.29% at December 31, 2024 primarily due to the increase in both the volume and yield of interest-earning assets out-pacing the increase in the cost and change in volume in interest-bearing liabilities.
Net interest spread increased from 3.29% at December 31, 2024 to 3.66% at December 31, 2025 primarily due to the increase in volume of loans relative to total earning assets and the realization of a greater decline in cost of interest-bearing liabilities as compared to interest-earning assets.
Several of our accounting policies are inherently subject to valuation assumptions and other subjective assessments and are more critical than others in terms of their importance to results. Changes in any of the estimates and assumptions underlying critical accounting policies could have a material effect on our financial statements.
Critical Accounting Policies The preparation of our financial statements in accordance with GAAP requires management to make a number of judgments and assumptions that affect our reported results and disclosures. Several of our accounting policies are inherently subject to valuation assumptions and other subjective assessments and are more critical than others in terms of their importance to results.
Analysis of Changes in Net Interest Income 2024 vs. 2023 2023 vs. 2022 Increase (Decrease) Due to: Increase (Decrease) Due to: (Dollars in thousands) Volume (1) Yield/Rate (1) Total Volume (1) Yield/Rate (1) Total Interest-earning assets Loans Commercial and industrial $ 4,286 $ 4,001 $ 8,287 $ (158 ) $ 10,801 $ 10,643 Commercial real estate 6,561 9,314 15,875 2,307 16,012 18,319 Real estate construction (2,467 ) 4,707 2,240 4,860 10,635 15,495 Residential real estate (107 ) 2,813 2,706 (1,205 ) 3,000 1,795 Agricultural real estate 1,874 1,154 3,028 2 2,419 2,421 Agricultural (252 ) 2,389 2,137 (1,492 ) 1,761 269 Consumer (352 ) 681 329 226 1,186 1,412 Total loans 9,543 25,059 34,602 4,540 45,814 50,354 Taxable securities (1,159 ) 16,377 15,218 (3,275 ) 4,435 1,160 Nontaxable securities (406 ) 25 (381 ) (835 ) 97 (738 ) Federal funds sold and other 72 620 692 2,473 5,215 7,688 Total interest-earning assets $ 8,050 $ 42,081 $ 50,131 $ 2,903 $ 55,561 $ 58,464 Interest-bearing liabilities Demand savings and money market $ 1,766 $ 13,546 $ 15,312 $ (726 ) $ 36,135 $ 35,409 Certificates of deposit (1,759 ) 6,383 4,624 1,670 17,073 18,743 Total interest-bearing deposits 7 19,929 19,936 944 53,208 54,152 FHLB term and line of credit advances 5,438 798 6,236 567 1,283 1,850 Federal Reserve Bank discount window (3,407 ) 13 (3,394 ) 4,753 2 4,755 Subordinated borrowings 43 (54 ) (11 ) 37 783 820 Other borrowings (42 ) 262 220 (26 ) 725 699 Total interest-bearing liabilities 2,039 20,948 22,987 6,275 56,001 62,276 Net Interest Income $ 6,011 $ 21,133 $ 27,144 $ (3,372 ) $ (440 ) $ (3,812 ) (1) The effect of changes in volume is determined by multiplying the change in volume by the previous year’s average rate.
Analysis of Changes in Net Interest Income 2025 vs. 2024 2024 vs. 2023 Increase (Decrease) Due to: Increase (Decrease) Due to: (Dollars in thousands) Volume (1) Yield/Rate (1) Total Volume (1) Yield/Rate (1) Total Interest-earning assets Loans Commercial and industrial $ 12,937 $ (2,728 ) $ 10,209 $ 4,286 $ 4,001 $ 8,287 Commercial real estate 13,041 920 13,961 6,561 9,314 15,875 Real estate construction 6,227 (3,989 ) 2,238 (2,467 ) 4,707 2,240 Residential real estate 512 500 1,012 (107 ) 2,813 2,706 Agricultural real estate 2,511 667 3,178 1,874 1,154 3,028 Agricultural 2,274 (1,395 ) 879 (252 ) 2,389 2,137 Consumer (39 ) (115 ) (154 ) (352 ) 681 329 Total loans 37,463 (6,140 ) 31,323 9,543 25,059 34,602 Taxable securities (2,956 ) 2,666 (290 ) (1,159 ) 16,377 15,218 Nontaxable securities (466 ) 108 (358 ) (406 ) 25 (381 ) Federal funds sold and other 5,913 (2,596 ) 3,317 72 620 692 Total interest-earning assets $ 39,954 $ (5,962 ) $ 33,992 $ 8,050 $ 42,081 $ 50,131 Interest-bearing liabilities Demand savings and money market $ 5,870 $ (9,316 ) $ (3,446 ) $ 1,766 $ 13,546 $ 15,312 Certificates of deposit 3,797 (2,305 ) 1,492 (1,759 ) 6,383 4,624 Total interest-bearing deposits 9,667 (11,621 ) (1,954 ) 7 19,929 19,936 FHLB term and line of credit advances (921 ) (1,051 ) (1,972 ) 5,438 798 6,236 Federal Reserve Bank discount window (1,318 ) (43 ) (1,361 ) (3,407 ) 13 (3,394 ) Subordinated borrowings (206 ) (219 ) (425 ) 43 (54 ) (11 ) Other borrowings (28 ) (187 ) (215 ) (42 ) 262 220 Total interest-bearing liabilities 7,194 (13,121 ) (5,927 ) 2,039 20,948 22,987 Net Interest Income $ 32,760 $ 7,159 $ 39,919 $ 6,011 $ 21,133 $ 27,144 (1) The effect of changes in volume is determined by multiplying the change in volume by the previous year’s average rate.
In the final four months of 2024, the FOMC reduced short-term interest rates by 100 basis points across three meetings. Due to their timing, the cuts did not have a material impact on operating results for 2024.
In the final four months of 2025 and 2024, the FOMC reduced short-term interest rates by a combined 175 basis points across three meetings. The rate cuts, to date, have had a more significant impact on the interest bearing liabilities than interest earning assets in operating results.
Allowance for Credit Losses: The allowance for credit losses for loans represents management’s estimate of all expected credit losses over the expected contractual life of our loan portfolio. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance.
This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance.
Highlights for the Year Ended December 31, 2024 • Net income of $62.6 million, or $4.00 diluted earnings per share, for the year ended December 31, 2024. • Dividends declared of $8.7 million, or $0.54 per share, for the year ended December 31, 2024, compared to $6.9 million, or $0.44 per share, for the year ended December 31, 2023, an increase of 26.0% • Total loans held for investment increased to $3.50 billion at December 31, 2024, compared to $3.33 billion at December 31, 2023, an increase of 5.0%. • Completed two mergers during the year ended December 31, 2024.
Highlights for the Year Ended December 31, 2025 • Net income of $22.7 million, or $1.23 diluted earnings per share, for the year ended December 31, 2025. • Dividends declared of $12.3 million, or $0.66 per share, for the year ended December 31, 2025, compared to $8.7 million, or $0.54 per share, for the year ended December 31, 2024, an increase of 41.2% • Net interest margin increased 35 basis points from 3.98% at December 31, 2024 to 4.33% at December 31, 2025. • Total loans held for investment increased to $4.20 billion at December 31, 2025, compared to $3.50 billion at December 31, 2024, an increase of 19.9%. • Completed the acquisition of NBC Corp. of Oklahoma during the year ended December 31, 2025, adding $806.0 million in deposits, seven banking locations and new territory to the Equity Bank footprint.
Our accounting policies are described in “NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” in the Notes to Consolidated Financial Statements. 62 The accounting policies that management believes are the most critical to an understanding of our financial condition and results of operations and require complex management judgment are described below.
Changes in any of the estimates and assumptions underlying critical accounting policies could have a material effect on our financial statements. Our accounting policies are described in “NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” in the Notes to Consolidated Financial Statements.
The provision for credit losses recorded during the period ended December 31, 2024, is the result of an increase in the loan portfolio, slower prepayment rates, and net charge-offs during the period which were offset by decreases in projected future loss rates and specific reserves on loans individually evaluated for credit loss. For additional detail see “
The provision for credit losses recorded during the period ended December 31, 2025, is primarily the result of an increase in the loan portfolio from the merger with NBC. For additional detail see “
The increase in net interest margin was driven by the additive yield from re-positioning of the investment portfolio, production of new earning assets and the acquisition of earning assets in the current environment outpacing the continued, lagged re-pricing of liabilities used in funding.
The increase in net interest margin was driven by the additive yield from re-positioning of the investment portfolio, the re-pricing of liabilities outpacing the re-pricing of assets and the increasing contribution of non-interest bearing deposits and capital to the funding mix. 60 Provision for Credit Losses We maintain an allowance for credit losses for estimated losses in our loan portfolio.
The change in yields and costs were driven, primarily, by a continued higher rate environment within the marketplace creating continued lag re-pricing of both the asset and liability portfolios throughout 2024. The asset yield was also positively impacted by the re-positioning of a portion of our investment portfolio in December of 2023.
The change in yields and costs were driven, primarily, by three FOMC rate decreases creating continued lag re-pricing on long term interest earning assets and short term repricing opportunity on the liability portfolios throughout 2025.
Removed
The first, Rockhold BanCorp, adding $349.8 million in deposits, eight banking locations and new territory to the Equity Bank footprint. The second, Kanasland Bancshares, Inc., adding $42.4 million in deposits and two banking locations. • The Company completed a common stock capital raise, issuing 2,067,240 shares at a public offering price of $44.50 per share.
Added
The Plan replaced the Amended and Restated 2013 Stock Incentive Plan (2013 Plan). There were pour over shares available in the new plan from the previous plan due to forfeiture, cancellation, and expiration after the effective date.
Removed
After expense capital impact totaled $86.9 million. Critical Accounting Policies The preparation of our financial statements in accordance with GAAP requires management to make a number of judgments and assumptions that affect our reported results and disclosures.
Added
The accounting policies that management believes are the most critical to an understanding of our financial condition and results of operations and require complex management judgment are described below. 56 Allowance for Credit Losses: The allowance for credit losses for loans represents management’s estimate of all expected credit losses over the expected contractual life of our loan portfolio.
Removed
Management estimates the allowance balance 66 required using past loan loss experience within the Company’s portfolio.
Added
The changes in the components of net income are discussed in more detail below in the following sections of “Results of Operations.” The year ended December 31, 2025 was meaningfully impacted by the repositioning of the Company’s investment portfolio during the third quarter as well as the costs associated with facilitating merger transactions.
Added
Realized losses on securities during the year were $53.2 million and merger expenses were $8.1 million. Excluding realized gains or losses on securities and merger expenses from pre-tax income in both periods resulted in pre-tax earnings of $87.6 million in 2025 compared to $82.7 million in 2024.
Added
The asset yield was also positively impacted the volume of interest earning assets and an increase in the yield on taxable securities by the re-positioning of a portion of our investment portfolio in fiscal year 2025, as well as the completion of our merger with NBC which added asset purchase accounting accretion.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data 90 Report of Independent Registered Public Accounting Firm F- 1 Consolidated Balance Sheets F- 4 Consolidated Statements of Income F- 5 Consolidated Statements of Comprehensive Income F- 6 Consolidated Statements of Stockholders’ Equity F- 7 Consolidated Statements of Cash Flows F- 8 Notes to Consolidated Financial Statements F- 10
Biggest changeFinancial Statements and Supplementary Data 84 Report of Independent Registered Public Accounting Firm F- 1 Consolidated Balance Sheets F- 4 Consolidated Statements of Income F- 5 Consolidated Statements of Comprehensive Income F- 7 Consolidated Statements of Stockholders’ Equity F- 8 Consolidated Statements of Cash Flows F- 9 Notes to Consolidated Financial Statements F- 11
Item 6. Reserved 58 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 59 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 87 Item 8.
Item 6. Reserved 52 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 81 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

92 edited+20 added−14 removed74 unchanged
Biggest changeAllowance for Credit Losses (Dollars in thousands) December 31, 2024 Commercial Real Estate Commercial and Industrial Residential Real Estate Agricultural Real Estate Agricultural Consumer Total Allowance for credit losses $ 14,948 $ 14,005 $ 8,553 $ 3,504 $ 439 $ 1,818 $ 43,267 Total loans outstanding (1) 1,830,514 658,865 566,766 267,248 87,339 90,084 3,500,816 Net charge-offs 53 2,787 139 8 3 809 3,799 Average loan balance (1) 1,816,957 635,881 561,914 227,341 96,877 100,993 3,439,963 Non-accrual loan balance 7,458 7,798 4,670 5,751 592 781 27,050 Loans to total loans outstanding 52.3 % 18.8 % 16.2 % 7.6 % 2.5 % 2.6 % 100.0 % ACL to total loans 0.8 % 2.1 % 1.5 % 1.3 % 0.5 % 2.0 % 1.2 % Net charge-offs to average loans — % 0.4 % — % — % — % 0.8 % 0.1 % Non-accrual loans to total loans 0.4 % 1.2 % 0.8 % 2.2 % 0.7 % 0.9 % 0.8 % ACL to non-accrual loans 200.4 % 179.6 % 183.1 % 60.9 % 74.2 % 232.8 % 160.0 % December 31, 2023 Commercial Real Estate Commercial and Industrial Residential Real Estate Agricultural Real Estate Agricultural Consumer Total Allowance for credit losses $ 13,476 $ 17,954 $ 7,784 $ 1,718 $ 995 $ 1,593 $ 43,520 Total loans outstanding (1) 1,759,855 598,327 556,328 196,114 118,587 103,690 3,332,901 Net charge-offs (75 ) 3,700 18 46 (47 ) 558 4,200 Average loan balance (1) 1,750,084 580,451 564,728 201,326 100,394 106,542 3,303,525 Non-accrual loan balance 5,447 5,041 7,251 4,214 2,470 603 25,026 Loans to total loans outstanding 52.8 % 18.0 % 16.7 % 5.9 % 3.6 % 3.1 % 100.0 % ACL to total loans 0.8 % 3.0 % 1.4 % 0.9 % 0.8 % 1.5 % 1.3 % Net charge-offs to average loans — % 0.6 % — % — % — % 0.5 % 0.1 % Non-accrual loans to total loans 0.3 % 0.8 % 1.3 % 2.1 % 2.1 % 0.6 % 0.8 % ACL to non-accrual loans 247.4 % 356.2 % 107.4 % 40.8 % 40.3 % 264.2 % 173.9 % December 31, 2022 Commercial Real Estate Commercial and Industrial Residential Real Estate Agricultural Real Estate Agricultural Consumer Total Allowance for loan losses $ 16,731 $ 14,951 $ 8,608 $ 819 $ 2,457 $ 2,281 $ 45,847 Total loans outstanding (1) 1,721,268 594,863 570,550 199,189 120,003 105,675 3,311,548 Net charge-offs 1,193 590 56 27 35 742 2,643 Average loan balance (1) 1,623,159 583,295 595,494 201,295 125,342 102,186 3,230,771 Non-accrual loan balance 2,689 5,838 3,206 2,052 3,468 348 17,601 Loans to total loans outstanding 52.0 % 18.0 % 17.2 % 6.0 % 3.6 % 3.2 % 100.0 % ACL to total loans 1.0 % 2.5 % 1.5 % 0.4 % 2.0 % 2.2 % 1.4 % Net charge-offs to average loans 0.1 % 0.1 % — % — % — % 0.7 % 0.1 % Non-accrual loans to total loans 0.2 % 1.0 % 0.6 % 1.0 % 2.9 % 0.3 % 0.5 % ACL to non-accrual loans 622.2 % 256.1 % 268.5 % 39.9 % 70.8 % 655.5 % 260.5 % (1) Excluding loans held for sale.
Biggest changeAllowance for Credit Losses (Dollars in thousands) December 31, 2025 Commercial Real Estate Commercial and Industrial Residential Real Estate Agricultural Real Estate Agricultural Consumer Total Allowance for credit losses $ 20,037 $ 17,830 $ 8,068 $ 4,669 $ 337 $ 1,815 $ 52,756 Total loans outstanding (1) 2,226,348 816,885 582,145 278,927 188,475 105,400 4,198,180 Net charge-offs (140 ) 1,333 (11 ) (35 ) 70 1,323 2,540 Average loan balance (1) 2,076,448 803,779 573,120 260,219 123,553 100,409 3,937,528 Non-accrual loan balance 10,492 21,527 4,256 1,167 2,153 681 40,276 Loans to total loans outstanding 53.0 % 19.5 % 13.9 % 6.6 % 4.5 % 2.5 % 100.0 % ACL to total loans 0.9 % 2.2 % 1.4 % 1.7 % 0.2 % 1.7 % 1.3 % Net charge-offs to average loans — % 0.2 % — % — % 0.1 % 1.3 % 0.1 % Non-accrual loans to total loans 0.5 % 2.6 % 0.7 % 0.4 % 1.1 % 0.6 % 1.0 % ACL to non-accrual loans 191.0 % 82.8 % 189.6 % 400.1 % 15.7 % 266.5 % 131.0 % December 31, 2024 Commercial Real Estate Commercial and Industrial Residential Real Estate Agricultural Real Estate Agricultural Consumer Total Allowance for credit losses $ 14,948 $ 14,005 $ 8,553 $ 3,504 $ 439 $ 1,818 $ 43,267 Total loans outstanding (1) 1,830,514 658,865 566,766 267,248 87,339 90,084 3,500,816 Net charge-offs 53 2,787 139 8 3 809 3,799 Average loan balance (1) 1,816,957 635,881 561,914 227,341 96,877 100,993 3,439,963 Non-accrual loan balance 7,458 7,798 4,670 5,751 592 781 27,050 Loans to total loans outstanding 52.3 % 18.8 % 16.2 % 7.6 % 2.5 % 2.6 % 100.0 % ACL to total loans 0.8 % 2.1 % 1.5 % 1.3 % 0.5 % 2.0 % 1.2 % Net charge-offs to average loans — % 0.4 % — % — % — % 0.8 % 0.1 % Non-accrual loans to total loans 0.4 % 1.2 % 0.8 % 2.2 % 0.7 % 0.9 % 0.8 % ACL to non-accrual loans 200.4 % 179.6 % 183.1 % 60.9 % 74.2 % 232.8 % 160.0 % December 31, 2023 Commercial Real Estate Commercial and Industrial Residential Real Estate Agricultural Real Estate Agricultural Consumer Total Allowance for loan losses $ 13,476 $ 17,954 $ 7,784 $ 1,718 $ 995 $ 1,593 $ 43,520 Total loans outstanding (1) 1,759,855 598,327 556,328 196,114 118,587 103,690 3,332,901 Net charge-offs (75 ) 3,700 18 46 (47 ) 558 4,200 Average loan balance (1) 1,750,084 580,451 564,728 201,326 100,394 106,542 3,303,525 Non-accrual loan balance 5,447 5,041 7,251 4,214 2,470 603 25,026 Loans to total loans outstanding 52.8 % 18.0 % 16.7 % 5.9 % 3.6 % 3.1 % 100.0 % ACL to total loans 0.8 % 3.0 % 1.4 % 0.9 % 0.8 % 1.5 % 1.3 % Net charge-offs to average loans — % 0.6 % — % — % — % 0.5 % 0.1 % Non-accrual loans to total loans 0.3 % 0.8 % 1.3 % 2.1 % 2.1 % 0.6 % 0.8 % ACL to non-accrual loans 247.4 % 356.2 % 107.4 % 40.8 % 40.3 % 264.2 % 173.9 % (1) Excluding loans held for sale. 68 Management believes that the allowance for credit losses at December 31, 2025, is adequate to cover current expected losses in the loan portfolio as of such date.
Loan Portfolio Our loan portfolio consists of various types of loans, most of which are made to borrowers located in the Wichita, Kansas City and Tulsa MSAs, as well as various community markets throughout Arkansas, Kansas, Missouri and Oklahoma.
Loan Portfolio Our loan portfolio consists of various types of loans, most of which are made to borrowers located in the Wichita, Kansas City, Oklahoma City and Tulsa MSAs, as well as various community markets throughout Arkansas, Kansas, Missouri and Oklahoma.
Other: Other non-interest expenses consists of subscriptions, memberships and dues, employee expenses including travel, meals, entertainment and education, supplies, printing, insurance, account related losses, correspondent bank fees, customer program expenses, losses net of gains on the sale of fixed assets, losses net of gains on the sale of repossessed assets other than real estate, other operating expenses, such as settlement of claims, limited partnership tax credits and provision for unfunded commitments.
Other: Other non-interest expenses consists of subscriptions, memberships and dues, employee expenses including travel, meals, entertainment and education, supplies, printing, insurance, account related losses, correspondent bank fees, customer program expenses, losses net of gains on the sale of fixed assets, losses net of gains on the sale of repossessed assets other than real estate, other 62 operating expenses, such as settlement of claims, limited partnership tax credits and provision for unfunded commitments.
Debt securities not classified as held-to-maturity are classified as available-for-sale and measured at fair value in the 75 financial statements with unrealized gains and losses reported, net of deferred income tax, as accumulated comprehensive income or loss until realized. Interest earned on securities is included in total interest and dividend income.
Debt securities not classified as held-to-maturity are classified as available-for-sale and measured at fair value in the financial statements with unrealized gains and losses reported, net of deferred income tax, as accumulated comprehensive income or loss until realized. Interest earned on securities is included in total interest and dividend income.
These loans are considered unclassified. Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of our credit position at some future date. These loans are considered classified.
Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of our credit position at some future date. These loans are considered classified.
Allowance for Credit Losses Please see “Critical Accounting Policies – Allowance for Credit Losses” for additional discussion of our allowance policy. In connection with our review of the loan portfolio, risk elements attributable to particular loan types or categories are considered when assessing the quality of individual loans.
Allowance for Credit Losses Please see “Critical Accounting Policies – Allowance for Credit Losses” for additional discussion of our allowance policy. 67 In connection with our review of the loan portfolio, risk elements attributable to particular loan types or categories are considered when assessing the quality of individual loans.
For additional information about the Company’s capital see "NOTE 12 – STOCKHOLDERS' EQUITY", “NOTE 14 – REGULATORY MATTERS” and "NOTE 17 – SHARE-BASED PAYMENTS" in Notes to Consolidated Financial Statements.
For 76 additional information about the Company’s capital see "NOTE 12 – STOCKHOLDERS' EQUITY", “NOTE 14 – REGULATORY MATTERS” and "NOTE 17 – SHARE-BASED PAYMENTS" in Notes to Consolidated Financial Statements.
We calculate: (a) average tangible common equity as total average stockholders’ equity less average intangible assets and preferred stock; (b) core net income allocable to common stockholders as net income allocable to common stockholders plus goodwill impairment, net of actual tax effect, plus amortization of intangible assets less estimated tax effect on amortization of intangible assets (tax rates used in this calculation were 21% for 2024, 2023, 2022, 2021 and 2020) (c) return on average tangible common equity as core net income allocable to common stockholders (as described in clause (b)) divided by average tangible common equity (as described in clause (a)).
We calculate: (a) average tangible common equity as total average stockholders’ equity less average intangible assets and preferred stock; (b) core net income allocable to common stockholders as net income allocable to common stockholders plus goodwill impairment, net of actual tax effect, plus amortization of intangible assets less estimated tax effect on amortization of intangible assets (tax rates used in this calculation were 21% for 2025, 2024, 2023, 2022 and 2021) (c) return on average tangible common equity as core net income allocable to common stockholders (as described in clause (b)) divided by average tangible common equity (as described in clause (a)).
In management’s judgment, the adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess operating expenses in relation to operating revenue by removing merger expenses, loss on debt extinguishment, net gains on the sale of available-for-sale securities and other securities transactions, and the net gain on acquisition. 86 The following table reconciles, as of the dates set forth below, the efficiency ratio to the GAAP-based efficiency ratio.
In management’s judgment, the adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess operating expenses in relation to operating revenue by removing merger expenses, loss on debt extinguishment, net gains on the sale of available-for-sale securities and other securities transactions, and the net gain on acquisition. 80 The following table reconciles, as of the dates set forth below, the efficiency ratio to the GAAP-based efficiency ratio.
For detailed information, see “NOTE 10 – BORROWINGS” in the Notes to Consolidated Financial Statements. 80 Subordinated debentures: In conjunction with the 2012 acquisition of First Community, we assumed certain subordinated debentures owed to special purpose unconsolidated subsidiaries that are controlled by us, FCB Capital Trust II and FCB Capital Trust III, (“CTII” and “CTIII,” respectively).
For detailed information, see “NOTE 10 – BORROWINGS” in the Notes to Consolidated Financial Statements. 73 Subordinated debentures: In conjunction with the 2012 acquisition of First Community, we assumed certain subordinated debentures owed to special purpose unconsolidated subsidiaries that are controlled by us, FCB Capital Trust II and FCB Capital Trust III, (“CTII” and “CTIII,” respectively).
In this process, we focus on both assets and liabilities and on the manner in which they combine to provide adequate liquidity to meet our needs. During the years ended December 31, 2024, 2023, and 2022, our liquidity needs have primarily been met by core deposits, securities and loan maturities, as well as amortizing payment from investment securities and loans.
In this process, we focus on both assets and liabilities and on the manner in which they combine to provide adequate liquidity to meet our needs. During the years ended December 31, 2025, 2024, and 2023, our liquidity needs have primarily been met by core deposits, securities and loan maturities, as well as amortizing payment from investment securities and loans.
Management believes, as of December 31, 2024, and December 31, 2023, the Company and Equity Bank meet all capital adequacy requirements to which they are subject. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition.
Management believes, as of December 31, 2025, and December 31, 2024, the Company and Equity Bank meet all capital adequacy requirements to which they are subject. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition.
Securities purchased at a discount will reflect higher net yields in a decreasing interest rate environment as prepayments result in an acceleration of discount accretion. 77 The contractual maturity of mortgage-backed securities is not a reliable indicator of their expected lives because borrowers have the right to prepay their obligations at any time.
Securities purchased at a discount will reflect higher net yields in a decreasing interest rate environment as prepayments result in an acceleration of discount accretion. 70 The contractual maturity of mortgage-backed securities is not a reliable indicator of their expected lives because borrowers have the right to prepay their obligations at any time.
As of December 31, 2024, the most recent notifications from the federal regulatory agencies categorized Equity Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, Equity Bank must maintain minimum total capital, Tier 1 capital, Common Equity Tier 1 capital and Tier 1 leverage ratios.
As of December 31, 2025, the most recent notifications from the federal regulatory agencies categorized Equity Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, Equity Bank must maintain minimum total capital, Tier 1 capital, Common Equity Tier 1 capital and Tier 1 leverage ratios.
There were no material amounts to report for interest or penalties incurred in 2024, 2023, or 2022. 69 Impact of Inflation Our consolidated financial statements and related notes included elsewhere in this annual report have been prepared in accordance with GAAP.
There were no material amounts to report for interest or penalties incurred in 2024 or 2023. Impact of Inflation Our consolidated financial statements and related notes included elsewhere in this annual report have been prepared in accordance with GAAP.
The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with predetermined interest rates and floating rates in each maturity range as of December 31, 2024, and December 31, 2023, are summarized in the following tables.
The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with predetermined interest rates and floating rates in each maturity range as of December 31, 2025, and December 31, 2024, are summarized in the following tables.
Goodwill and other intangible assets have the effect of 84 increasing average stockholders’ equity and, through amortization, decreasing net income allocable to common stockholders while not increasing average tangible common equity or decreasing core net income allocable to common stockholders.
Goodwill and other intangible assets have the effect of 78 increasing average stockholders’ equity and, through amortization, decreasing net income allocable to common stockholders while not increasing average tangible common equity or decreasing core net income allocable to common stockholders.
Securities We use our securities portfolio to provide a source of liquidity, to provide an appropriate return on funds invested, to manage interest rate risk, to meet pledging requirements and to meet regulatory capital requirements. At December 31, 2024, securities represented 18.9% of total assets compared with 18.3% at December 31, 2023.
Securities We use our securities portfolio to provide a source of liquidity, to provide an appropriate return on funds invested, to manage interest rate risk, to meet pledging requirements and to meet regulatory capital requirements. At December 31, 2025, securities represented 16.3% of total assets compared with 18.9% at December 31, 2024.
December 31, 2023 Due in one year or less Due after one year through five years Due after five years through ten years Due after 10 years Total Carrying Value Yield Carrying Value Yield Carrying Value Yield Carrying Value Yield Carrying Value Yield (Dollars in thousands) Available-for-sale securities: U.S.
December 31, 2025 Due in one year or less Due after one year through five years Due after five years through ten years Due after 10 years Total Carrying Value Yield Carrying Value Yield Carrying Value Yield Carrying Value Yield Carrying Value Yield (Dollars in thousands) Available-for-sale securities: U.S.
We calculate: (a) average tangible common equity as total average stockholders’ equity less average intangible assets and preferred stock; (b) core net income allocable to common stockholders as net income allocable to common stockholders less net gain on acquisition, less gain(loss) on securities transactions, plus loss on debt extinguishment, plus merger expenses, plus BOLI tax expense, plus goodwill impairment, net of actual tax effect, plus amortization of intangible assets less estimated tax effect on adjustments (tax rates used in this calculation were 21% for 2024, 2023, 2022, 2021 and 2020) (c) core return on average equity as core net income allocable to common stockholders (as described in clause (b)) divided by a simple average of net income and core net income plus average stockholders' equity.
We calculate: (a) average tangible common equity as total average stockholders’ equity less average intangible assets and preferred stock; (b) core net income allocable to common stockholders as net income allocable to common stockholders less net gain on acquisition, less gain (loss) on securities transactions, plus loss on debt extinguishment, plus Day 2 Merger provision expense, plus merger expenses, plus BOLI tax expense, plus goodwill impairment, net of actual tax effect, plus amortization of intangible assets less estimated tax effect on adjustments (tax rates used in this calculation were 21% for 2025, 2024, 2023, 2022 and 2021) (c) core return on average equity as core net income allocable to common stockholders (as described in clause (b)) divided by a simple average of net income and core net income plus average stockholders' equity.
Excess deposits are primarily invested in our interest-bearing deposit account with the Federal Reserve Bank of Kansas City, investment securities, federal funds sold or other short-term liquid investments until the funds are needed to fund loan growth. Our investment securities portfolio has a weighted average life of 4.8 years and a modified duration of 4.0 years at December 31, 2024.
Excess deposits are primarily invested in our interest-bearing deposit account with the Federal Reserve Bank of Kansas City, investment securities, federal funds sold or other short-term liquid investments until the funds are needed to fund loan growth. Our investment securities portfolio has a weighted average life of 4.9 years and a modified duration of 4.0 years at December 31, 2025.
For additional information about the risk category by class of loans see “NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES” in the Notes to Consolidated Financial Statements. At December 31, 2024, loans considered unclassified were 98.1% of total loans compared to 98.8% of total loans at December 31, 2023.
For additional information about the risk category by class of loans see “NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES” in the Notes to Consolidated Financial Statements. At December 31, 2025, loans considered unclassified were 98.1% of total loans compared to 98.1% of total loans at December 31, 2024.
For information related to cash flow during 2022, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on March 9, 2023.
For information related to cash flow during 2022, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on March 7, 2024.
Non-Interest Income The following table provides a comparison of the major components of non-interest income for the years ended December 31, 2024, 2023, and 2022.
Non-Interest Income The following table provides a comparison of the major components of non-interest income for the years ended December 31, 2025, 2024, and 2023.
The following table provides information on the maturity distribution of time deposits of $250,000 or more as of December 31, 2024, and December 31, 2023.
The following table provides information on the maturity distribution of time deposits of $250,000 or more as of December 31, 2025, and December 31, 2024.
Included in time deposits are Certificate of Deposit Account Registry Service (“CDARS”) program balances of $35.4 million, $21.8 million, and $11.8 million at December 31, 2024, 2023, and 2022. CDARS allows Equity Bank to break large deposits into smaller amounts and place them in a network of other CDARS banks to ensure FDIC insurance coverage on the entire deposit.
Included in time deposits are Certificate of Deposit Account Registry Service (“CDARS”) program balances of $51.7 million, $35.4 million, and $21.8 million at December 31, 2025, 2024, and 2023. CDARS allows Equity Bank to break large deposits into smaller amounts and place them in a network of other CDARS banks to ensure FDIC insurance coverage on the entire deposit.
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations – Allowance for Credit Losses.” Net charge-offs for the year ended December 31, 2024, were $3.8 million as compared to net charge-offs of $4.2 million for the year ended December 31, 2023.
Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations – Allowance for Credit Losses.” Net charge-offs for the year ended December 31, 2025, were $2.5 million as compared to net charge-offs of $3.8 million for the year ended December 31, 2024.
The allowance for credit losses calculation on loans collectively evaluated at December 31, 2024, totaled $38.4 million, or 1.1%, of the $3.5 billion in loans collectively evaluated, compared to an allowance for credit losses of $38.8 million, or 1.2%, of the $3.3 billion in loans collectively evaluated at December 31, 2023.
The allowance for credit losses calculation on loans collectively evaluated at December 31, 2025, totaled $46.2 million, or 1.1%, of the $4.1 billion in loans collectively evaluated, compared to an allowance for credit losses of $38.4 million, or 1.1%, of the $3.5 billion in loans collectively evaluated at December 31, 2024.
At December 31, 2024, and 2023, 72.3% and 73.2% of the mortgage-backed securities held by us had contractual final maturities of more than ten years with a weighted average life of 5.1 years and 5.3 years and a modified duration of 4.2 years and 4.4 years. Deposits Our lending and investing activities are primarily funded by deposits.
At December 31, 2025, and 2024, 90.8% and 72.3% of the mortgage-backed securities held by us had contractual final maturities of more than ten years with a weighted average life of 5.0 years and 5.1 years and a modified duration of 4.1 years and 4.2 years. Deposits Our lending and investing activities are primarily funded by deposits.
The following table shows our composition of deposits at December 31, 2024, 2023, and 2022.
The following table shows our composition of deposits at December 31, 2025, 2024, and 2023.
For the year ended December 31, 2024, gross charge-offs were $4.6 million offset by gross recoveries of $817 thousand. In comparison, gross charge-offs were $5.0 million for the year ended December 31, 2023, offset by gross recoveries of $754 thousand.
For the year ended December 31, 2025, gross charge-offs were $5.0 million offset by gross recoveries of $2.5 million. In comparison, gross charge-offs were $4.6 million for the year ended December 31, 2024, offset by gross recoveries of $817 thousand.
Year ended December 31, 2024, compared with year ended December 31, 2023 The effective income tax rate for the year ended December 31, 2024, was 20.0% as compared to the U.S. statutory rate of 21.0%.
Year ended December 31, 2025, compared with year ended December 31, 2024 The effective income tax rate for the year ended December 31, 2025, was 13.9% as compared to the U.S. statutory rate of 21.0%. The effective income tax rate for the year ended December 31, 2024, was 20.0% as compared to the U.S. statutory rate of 21.0%.
Loans are analyzed individually and classified based on credit risk. Consumer loans are considered pass credits unless downgraded due to payment status or reviewed as part of a larger credit relationship. We use the following definitions for risk ratings: Pass: Loans classified as pass include all loans that do not fall under one of the three following categories.
Consumer loans are considered pass credits unless downgraded due to payment status or reviewed as part of a larger credit relationship. We use the following definitions for risk ratings: Pass: Loans classified as pass include all loans that do not fall under one of the three following categories. These loans are considered unclassified.
For additional information see “NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” in the Notes to Consolidated Financial Statements. Analysis of allowance for credit losses: At December 31, 2024, the allowance for credit losses totaled $43.3 million, or 1.24% of total loans.
For additional information see “NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” in the Notes to Consolidated Financial Statements. Analysis of allowance for credit losses: At December 31, 2025, the allowance for credit losses totaled $52.8 million, or 1.3% of total loans.
At December 31, 2024, gross total loans were 80.0% of deposits and 65.7% of total assets. At December 31, 2023, gross total loans were 80.4% of deposits and 66.2% of total assets. The organic, or non-acquired, growth in our loan portfolio is attributable to our ability to attract new customers from other financial institutions and overall growth in our markets.
At December 31, 2025, gross total loans were 81.7% of deposits and 65.9% of total assets. At December 31, 2024, gross total loans were 80.0% of deposits and 65.7% of total assets. The organic, or non-acquired, growth in our loan portfolio is attributable to our ability to attract new customers from other financial institutions and overall growth in our markets.
As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation.
As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services.
Treasury securities 78,400 3.67 % 8,163 4.66 % — — % — — % 86,563 3.76 % Mortgage-backed securities Government-sponsored residential mortgage-backed securities — — % 71,025 4.57 % 124,899 2.57 % 393,248 4.45 % 589,172 4.06 % Private label residential mortgage-backed securities — — % — — % — — % 124,664 2.35 % 124,664 2.35 % Corporate 600 4.25 % 11,213 6.81 % 46,839 4.75 % — — % 58,652 5.14 % Small Business Administration loan pools — — % — — % 4,387 5.28 % 1,879 2.19 % 6,266 2.35 % State and political subdivisions (1) 2,593 2.37 % 10,446 2.38 % 33,256 2.11 % 27,749 2.49 % 74,044 2.31 % Total available-for-sale securities 89,390 3.72 % 123,758 4.57 % 242,004 2.88 % 549,303 3.86 % 1,004,455 3.70 % Held-to-maturity securities: Mortgage-backed securities Government-sponsored residential mortgage-backed securities — — % — — % 3,053 5.02 % 879 4.96 % 3,932 5.00 % State and political subdivisions (1) — — % — — % 172 3.02 % 1,113 4.62 % 1,285 4.40 % Total held-to-maturity securities — — % — — % 3,225 4.91 % 1,992 4.77 % 5,217 4.86 % Total debt securities $ 89,390 3.72 % $ 123,758 4.57 % $ 245,229 2.91 % $ 551,295 3.86 % $ 1,009,672 3.70 % (1) The calculated yield is not calculated on a tax equivalent basis.
Treasury securities 78,400 3.67 % 8,163 4.66 % — — % — — % 86,563 3.76 % Mortgage-backed securities Government-sponsored residential mortgage-backed securities — — % 71,025 4.57 % 117,832 2.41 % 376,653 4.39 % 565,510 4.00 % Private label residential mortgage-backed securities — — % — — % — — % 124,664 2.35 % 124,664 2.35 % Corporate 600 4.25 % 11,213 6.81 % 46,839 4.75 % — — % 58,652 5.14 % Small Business Administration loan pools — — % — — % 11,454 5.28 % 18,474 5.29 % 29,928 5.29 % State and political subdivisions (1) 2,593 2.37 % 10,446 2.38 % 33,256 2.11 % 27,749 2.49 % 74,044 2.31 % Total available-for-sale securities 89,390 3.72 % 123,758 4.57 % 242,004 2.88 % 549,303 3.86 % 1,004,455 3.70 % Held-to-maturity securities: Mortgage-backed securities Government-sponsored residential mortgage-backed securities — — % — — % 3,053 5.02 % 879 4.96 % 3,932 5.00 % State and political subdivisions (1) — — % — — % 172 3.02 % 1,113 4.62 % 1,285 4.40 % Total held-to-maturity securities — — % — — % 3,225 4.91 % 1,992 4.77 % 5,217 4.86 % Total debt securities $ 89,390 3.72 % $ 123,758 4.57 % $ 245,229 2.91 % $ 551,295 3.86 % $ 1,009,672 3.70 % (1) The calculated yield is not calculated on a tax equivalent basis.
Also included in savings and money market deposits at December 31, 2024, 2023, and 2022, are ICS reciprocal money-market deposit balances of $100.6 million, $230.8 million, and $17.7 million.
Also included in savings and money market deposits at December 31, 2025, 2024, and 2023, are ICS reciprocal money-market deposit balances of $100.2 million, $100.6 million, and $230.8 million.
The following table reconciles as of the dates set forth below, core net income and earnings per share and compares them to GAAP net income and earnings per share. 85 December 31, 2024 2023 2022 2021 2020 (Dollars in thousands, except per share data) Net income (loss) allocable to common stockholders $ 62,621 $ 7,821 $ 57,688 $ 52,480 $ (74,970 ) Core net income (loss) allocable to common stockholders $ 69,500 $ 51,843 $ 60,700 $ 62,601 $ 9,459 Total average assets $ 5,075,939 $ 4,999,405 $ 5,023,112 $ 4,431,802 $ 3,999,709 Total average stockholders' equity $ 482,974 $ 423,722 $ 440,884 $ 446,795 $ 464,608 Weighted average common shares outstanding 15,489,370 15,535,772 16,214,049 15,019,221 15,098,512 Weighted average diluted common shares 15,671,674 15,648,842 16,437,906 15,306,431 15,238,499 Earnings Per Share $ 4.04 $ 0.50 $ 3.56 $ 3.49 $ (4.97 ) Diluted earnings (loss) per share $ 4.00 $ 0.50 $ 3.51 $ 3.43 $ (4.97 ) Core earnings per diluted share $ 4.43 $ 3.31 $ 3.69 $ 4.09 $ 0.62 Return on average assets (ROAA) annualized 1.23 % 0.16 % 1.15 % 1.18 % (1.87 )% Core return on average assets 1.37 % 1.03 % 1.21 % 1.41 % 0.23 % Return on average equity 12.97 % 1.85 % 13.08 % 11.75 % (16.14 )% Efficiency Ratio : The efficiency ratio is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions.
The following table reconciles as of the dates set forth below, core net income and earnings per share and compares them to GAAP net income and earnings per share. 79 December 31, 2025 2024 2023 2022 2021 (Dollars in thousands, except per share data) Net income (loss) allocable to common stockholders $ 22,726 $ 62,621 $ 7,821 $ 57,688 $ 52,480 Core net income (loss) allocable to common stockholders $ 81,043 $ 69,500 $ 51,843 $ 60,700 $ 62,601 Total average assets $ 5,690,709 $ 5,075,939 $ 4,999,405 $ 5,023,112 $ 4,431,802 Total average stockholders' equity $ 670,770 $ 482,974 $ 423,722 $ 440,884 $ 446,795 Weighted average common shares outstanding 18,296,090 15,489,370 15,535,772 16,214,049 15,019,221 Weighted average diluted common shares 18,456,676 15,671,674 15,648,842 16,437,906 15,306,431 Earnings Per Share $ 1.24 $ 4.04 $ 0.50 $ 3.56 $ 3.49 Diluted earnings (loss) per share $ 1.23 $ 4.00 $ 0.50 $ 3.51 $ 3.43 Core earnings per diluted share $ 4.39 $ 4.43 $ 3.31 $ 3.69 $ 4.09 Return on average assets (ROAA) annualized 0.40 % 1.23 % 0.16 % 1.15 % 1.18 % Core return on average assets 1.42 % 1.37 % 1.03 % 1.21 % 1.41 % Return on average equity 3.39 % 12.97 % 1.85 % 13.08 % 11.75 % Efficiency Ratio : The efficiency ratio is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions.
Agricultural loans are primarily operating lines subject to annual farming revenues including productivity/yield of the agricultural commodities produced. Consumer loans are generally secured by consumer assets but may be unsecured.
Agricultural real estate, Agricultural, Consumer and other: Agricultural real estate loans are loans related to farmland. Agricultural loans are primarily operating lines subject to annual farming revenues including productivity/yield of the agricultural commodities produced. Consumer loans are generally secured by consumer assets but may be unsecured.
Included in interest-bearing demand deposit are brokered deposit balances totaling $75.1 million, $1 thousand, $1 thousand at December 31, 2024, 2023 and 2022. Also included in time deposits are brokered deposit balances totaling $50.0 million, $200.0 million and $251.8 million at December 31, 2024, 2023, and 2022.
Included in interest-bearing demand deposit are brokered deposit balances totaling $0, $75.1 million, $1 thousand at December 31, 2025, 2024 and 2023. Also included in time deposits are brokered deposit balances totaling $70.2 million, $50.0 million and $200.0 million at December 31, 2025, 2024, and 2023.
At December 31, 2024, the Company had $35.4 million in potential problem loans which were not included in either non-accrual or 90 days past due categories, compared to $11.1 million at December 31, 2023.
At December 31, 2025, the Company had $24.6 66 million in potential problem loans which were not included in either non-accrual or 90 days past due categories, compared to $35.4 million at December 31, 2024.
Lending activities originate from the efforts of our lenders with an emphasis on lending to individuals, professionals, small to medium-sized businesses and commercial companies located in the Wichita, Kansas City and Tulsa MSAs, as well as community markets in Arkansas, Kansas, Missouri and Oklahoma. 70 The following table summarizes our loan portfolio by type of loan as of the dates indicated.
Lending activities originate from the efforts of our lenders with an emphasis on lending to individuals, professionals, small to medium-sized businesses and commercial companies located in the Wichita, Kansas City, Oklahoma City and Tulsa MSAs, as well as community markets in Arkansas, Kansas, Missouri and Oklahoma.
December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Total stockholders’ equity $ 592,918 $ 452,860 $ 410,058 $ 500,631 $ 407,649 Goodwill (53,101 ) (53,101 ) (53,101 ) (54,465 ) (31,601 ) Core deposit intangibles, net (14,969 ) (7,222 ) (10,596 ) (14,879 ) (16,057 ) Mortgage servicing asset, net — (75 ) (176 ) (276 ) — Naming rights, net (957 ) (1,000 ) (1,044 ) (1,087 ) (1,130 ) Tangible common equity $ 523,891 $ 391,462 $ 345,141 $ 429,924 $ 358,861 Total assets $ 5,332,047 $ 5,034,592 $ 4,981,651 $ 5,137,631 $ 4,013,356 Goodwill (53,101 ) (53,101 ) (53,101 ) (54,465 ) (31,601 ) Core deposit intangibles, net (14,969 ) (7,222 ) (10,596 ) (14,879 ) (16,057 ) Mortgage servicing asset, net — (75 ) (176 ) (276 ) — Naming rights, net (957 ) (1,000 ) (1,044 ) (1,087 ) (1,130 ) Tangible assets $ 5,263,020 $ 4,973,194 $ 4,916,734 $ 5,066,924 $ 3,964,568 Equity / assets 11.12 % 8.99 % 8.23 % 9.74 % 10.16 % Tangible common equity to tangible assets 9.95 % 7.87 % 7.02 % 8.48 % 9.05 % Core Return on Average Equity: Core return on average equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions.
December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Total stockholders’ equity $ 732,054 $ 592,918 $ 452,860 $ 410,058 $ 500,631 Goodwill (82,101 ) (53,101 ) (53,101 ) (53,101 ) (54,465 ) Core deposit intangibles, net (21,634 ) (14,969 ) (7,222 ) (10,596 ) (14,879 ) Mortgage servicing asset, net — — (75 ) (176 ) (276 ) Naming rights, net (5,703 ) (957 ) (1,000 ) (1,044 ) (1,087 ) Tangible common equity $ 622,616 $ 523,891 $ 391,462 $ 345,141 $ 429,924 Total assets $ 6,373,172 $ 5,332,047 $ 5,034,592 $ 4,981,651 $ 5,137,631 Goodwill (82,101 ) (53,101 ) (53,101 ) (53,101 ) (54,465 ) Core deposit intangibles, net (21,634 ) (14,969 ) (7,222 ) (10,596 ) (14,879 ) Mortgage servicing asset, net — — (75 ) (176 ) (276 ) Naming rights, net (5,703 ) (957 ) (1,000 ) (1,044 ) (1,087 ) Tangible assets $ 6,263,734 $ 5,263,020 $ 4,973,194 $ 4,916,734 $ 5,066,924 Equity / assets 11.49 % 11.12 % 8.99 % 8.23 % 9.74 % Tangible common equity to tangible assets 9.94 % 9.95 % 7.87 % 7.02 % 8.48 % Core Return on Average Equity: Core return on average equity is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions.
December 31, 2024 2023 2022 2021 2020 (Dollars in thousands, except share data) Total stockholders’ equity $ 592,918 $ 452,860 $ 410,058 $ 500,631 $ 407,649 Goodwill (53,101 ) (53,101 ) (53,101 ) (54,465 ) (31,601 ) Core deposit intangibles, net (14,969 ) (7,222 ) (10,596 ) (14,879 ) (16,057 ) Mortgage servicing asset, net — (75 ) (176 ) (276 ) — Naming rights, net (957 ) (1,000 ) (1,044 ) (1,087 ) (1,130 ) Tangible common equity $ 523,891 $ 391,462 $ 345,141 $ 429,924 $ 358,861 Common shares outstanding at period end 17,419,858 15,428,251 15,930,112 16,760,115 14,540,556 Diluted common shares outstanding at period end 17,636,843 15,629,185 16,163,253 17,050,115 14,540,556 Book value per common share $ 34.04 $ 29.35 $ 25.74 $ 29.87 $ 28.04 Tangible book value per common share $ 30.07 $ 25.37 $ 21.67 $ 25.65 $ 24.68 Tangible book value per diluted common share $ 29.70 $ 25.05 $ 21.35 $ 25.22 $ 24.68 83 Tangible Common Equity to Tangible Assets: Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions.
December 31, 2025 2024 2023 2022 2021 (Dollars in thousands, except share data) Total stockholders’ equity $ 732,054 $ 592,918 $ 452,860 $ 410,058 $ 500,631 Goodwill (82,101 ) (53,101 ) (53,101 ) (53,101 ) (54,465 ) Core deposit intangibles, net (21,634 ) (14,969 ) (7,222 ) (10,596 ) (14,879 ) Mortgage servicing asset, net — — (75 ) (176 ) (276 ) Naming rights, net (5,703 ) (957 ) (1,000 ) (1,044 ) (1,087 ) Tangible common equity $ 622,616 $ 523,891 $ 391,462 $ 345,141 $ 429,924 Common shares outstanding at period end 18,944,987 17,419,858 15,428,251 15,930,112 16,760,115 Diluted common shares outstanding at period end 19,196,160 17,636,843 15,629,185 16,163,253 17,050,115 Book value per common share $ 38.64 $ 34.04 $ 29.35 $ 25.74 $ 29.87 Tangible book value per common share $ 32.86 $ 30.07 $ 25.37 $ 21.67 $ 25.65 Tangible book value per diluted common share $ 32.43 $ 29.70 $ 25.05 $ 21.35 $ 25.22 77 Tangible Common Equity to Tangible Assets: Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions.
December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Total average stockholders’ equity $ 482,974 $ 423,722 $ 440,882 $ 446,795 $ 464,608 Average intangible assets (68,190 ) (63,064 ) (67,746 ) (50,831 ) (130,329 ) Average tangible common equity $ 414,784 $ 360,658 $ 373,136 $ 395,964 $ 334,279 Net income (loss) allocable to common stockholders $ 62,621 $ 7,821 $ 57,688 $ 52,480 $ (74,970 ) Amortization of intangible assets 4,408 3,518 4,186 4,242 3,898 Goodwill impairment, net of actual tax effect — — — — 99,526 Tax effect of adjustments (926 ) (739 ) (879 ) (891 ) (819 ) Adjusted net income (loss) allocable to common stockholders $ 66,103 $ 10,600 $ 60,995 $ 55,831 $ 27,635 Net gain on acquisition (2,131 ) — (962 ) (585 ) (2,145 ) Net (gain) loss on securities transactions (220 ) 51,909 (5 ) (406 ) (11 ) Loss on extinguishment of debt — — — 372 — Merger expenses 4,461 297 594 9,189 299 BOLI tax expense 1,730 — — — — Tax effect of adjustments (443 ) (10,963 ) 78 (1,800 ) 390 Core net income (loss) allocable to common stockholders $ 69,500 $ 51,843 $ 60,700 $ 62,601 $ 26,168 Return on average equity (ROAE) 12.97 % 1.85 % 13.08 % 11.75 % (16.14 )% Core return on average equity 14.29 % 11.63 % 13.72 % 13.85 % 1.87 % Return on average tangible common equity (ROATCE) 15.94 % 2.94 % 16.35 % 14.10 % 8.27 % Core income calculations: 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.
December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Total average stockholders’ equity $ 670,770 $ 482,974 $ 423,722 $ 440,882 $ 446,795 Average intangible assets (87,276 ) (68,190 ) (63,064 ) (67,746 ) (50,831 ) Average tangible common equity $ 583,494 $ 414,784 $ 360,658 $ 373,136 $ 395,964 Net income (loss) allocable to common stockholders $ 22,726 $ 62,621 $ 7,821 $ 57,688 $ 52,480 Amortization of intangible assets 4,991 4,408 3,518 4,186 4,242 Tax effect of adjustments (1,048 ) (926 ) (739 ) (879 ) (891 ) Adjusted net income (loss) allocable to common stockholders $ 26,669 $ 66,103 $ 10,600 $ 60,995 $ 55,831 Net gain on acquisition — (2,131 ) — (962 ) (585 ) Net (gain) loss on securities transactions 53,174 (220 ) 51,909 (5 ) (406 ) Loss on extinguishment of debt 1,361 — — — 372 Merger expenses 8,065 4,461 297 594 9,189 Day 2 Merger provision 6,228 — — — — BOLI tax expense — 1,730 — — — Tax effect of adjustments (14,454 ) (443 ) (10,963 ) 78 (1,800 ) Core net income (loss) allocable to common stockholders $ 81,043 $ 69,500 $ 51,843 $ 60,700 $ 62,601 Return on average equity (ROAE) 3.39 % 12.97 % 1.85 % 13.08 % 11.75 % Core return on average equity 11.58 % 14.29 % 11.63 % 13.72 % 13.85 % Return on average tangible common equity (ROATCE) 4.57 % 15.94 % 2.94 % 16.35 % 14.10 % Core income calculations: 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.
In addition to competition, the overall increase in deposits is due to merger activity, offset by a general decrease in excess liquidity in the market due to the impacts of elevated inflation and the effects of monetary policy, in the form of higher interest rates, on both consumer and business customers.
The overall increase in deposits is due to merger activity partially offset by a general decrease in excess liquidity in the market due to the impacts of elevated inflation and the effects of trade and fiscal policy, in the form of higher interest rates limiting additional growth in both consumer and business customers.
Commercial real estate: Commercial real estate loans include all loans secured by nonfarm, nonresidential properties and multifamily residential properties, as well as 1-4 family investment-purpose real estate loans. Residential real estate: Residential real estate loans include loans secured by primary or secondary personal residences. Agricultural real estate, Agricultural, Consumer and other: Agricultural real estate loans are loans related to farmland.
Commercial real estate: Commercial real estate loans include all loans secured by nonfarm, nonresidential properties and multifamily residential properties, as well as 1-4 family investment-purpose real estate loans. 64 Residential real estate: Residential real estate loans include loans secured by primary or secondary personal residences.
Merger expenses: Merger expenses of $4.5 million include legal, advisory and accounting fees associated with services to facilitate the acquisition of two banks in 2024. Merger expenses also include data processing conversion costs and costs associated with the integration of personnel, processes, facilities and employee bonuses.
Merger expenses: Merger expenses of $8.1 million include legal, advisory and accounting fees associated with services to facilitate the acquisition activity in 2025. Merger expenses also include data processing conversion costs and costs associated with the integration of personnel, processes, facilities and employee bonuses.
Salaries and wages increased by $5.3 million which includes a $2.1 million related to additional staff from merger activity for the year ended December 31, 2024, as compared to the year ended December 31, 2023. Additionally, for the year ended December 31, 2024, there was an increase in incentives compensation of $2.2 million.
Salaries and wages increased by $7.8 million which includes a $3.7 million related to additional staff from merger activity for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Additionally, for the year ended December 31, 2025, there was an increase in employee insurance of $1.9 million.
December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Non-interest expense $ 144,157 $ 135,601 $ 128,380 $ 119,465 $ 208,990 Goodwill impairment — — — — (104,831 ) Merger expenses (4,461 ) (297 ) (594 ) (9,189 ) (299 ) Loss on debt extinguishment — — — (372 ) — Non-interest expense, excluding merger expenses and loss on debt extinguishment $ 139,696 $ 135,304 $ 127,786 $ 109,904 $ 103,860 Amortization of intangibles $ (4,408 ) $ (3,518 ) $ (4,186 ) $ (4,242 ) $ (3,898 ) Core Non-interest expense, excluding merger expenses, amortization of intangibles and loss on debt extinguishment $ 135,288 $ 131,786 $ 123,600 $ 105,662 $ 99,962 Net interest income $ 186,162 $ 159,018 $ 162,830 $ 142,579 $ 132,652 Non-interest income $ 38,822 $ (19,129 ) $ 35,957 $ 32,842 $ 26,023 Gain on acquisition and branch sales (2,131 ) — (962 ) (585 ) (2,145 ) Net (gains) losses from securities transactions (220 ) 51,909 (5 ) (406 ) (11 ) Non-interest income, excluding net gains (losses) from security transactions and gain on acquisition $ 36,471 $ 32,780 $ 34,990 $ 31,851 $ 23,867 Non-interest expense to net interest income plus non-interest income 64.07 % 96.93 % 64.58 % 68.10 % 65.64 % Efficiency Ratio 60.77 % 68.71 % 62.48 % 60.58 % 63.87 % Total average assets $ 5,075,939 $ 4,999,405 $ 5,023,112 $ 4,431,802 $ 3,999,709 Core non-interest expense, less goodwill impairment / Average assets 2.67 % 2.64 % 2.46 % 2.38 % 2.50 %
December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Non-interest expense $ 174,720 $ 144,157 $ 135,601 $ 128,380 $ 119,465 Merger expenses (8,065 ) (4,461 ) (297 ) (594 ) (9,189 ) Loss on debt extinguishment (1,361 ) — — — (372 ) Non-interest expense, excluding merger expenses and loss on debt extinguishment $ 165,294 $ 139,696 $ 135,304 $ 127,786 $ 109,904 Amortization of intangibles $ (4,991 ) $ (4,408 ) $ (3,518 ) $ (4,186 ) $ (4,242 ) Core Non-interest expense, excluding merger expenses, amortization of intangibles and loss on debt extinguishment $ 160,303 $ 135,288 $ 131,786 $ 123,600 $ 105,662 Net interest income $ 226,081 $ 186,162 $ 159,018 $ 162,830 $ 142,579 Non-interest income $ (16,028 ) $ 38,822 $ (19,129 ) $ 35,957 $ 32,842 Gain on acquisition and branch sales — (2,131 ) — (962 ) (585 ) Net (gains) losses from securities transactions 53,174 (220 ) 51,909 (5 ) (406 ) Non-interest income, excluding net gains (losses) from security transactions and gain on acquisition $ 37,146 $ 36,471 $ 32,780 $ 34,990 $ 31,851 Non-interest expense to net interest income plus non-interest income 83.18 % 64.07 % 96.93 % 64.58 % 68.10 % Efficiency Ratio 60.90 % 60.77 % 68.71 % 62.48 % 60.58 % Total average assets $ 5,690,709 $ 5,075,939 $ 4,999,405 $ 5,023,112 $ 4,431,802 Core non-interest expense, less goodwill impairment / Average assets 2.82 % 2.67 % 2.64 % 2.46 % 2.38 %
Nonperforming Assets As of December 31, 2024 2023 2022 (Dollars in thousands) Non-accrual loans $ 27,050 $ 25,026 $ 17,601 Accruing loans 90 or more days past due 181 279 — OREO acquired through foreclosure, net 2,632 772 600 Other repossessed assets 4,812 380 47 Total nonperforming assets $ 34,675 $ 26,457 $ 18,248 Ratios: Nonperforming assets to total assets 0.65 % 0.53 % 0.37 % Nonperforming assets to total loans plus OREO 0.99 % 0.79 % 0.55 % Nonperforming assets (“NPAs”) include loans on non-accrual status, accruing loans 90 or more days past due, restructured loans, other real estate acquired through foreclosure and other repossessed assets.
Nonperforming Assets As of December 31, 2025 2024 2023 (Dollars in thousands) Non-accrual loans $ 40,276 $ 27,050 $ 25,026 Accruing loans 90 or more days past due 2,610 181 279 OREO acquired through foreclosure, net 3,245 2,632 772 Other repossessed assets 579 4,812 380 Total nonperforming assets $ 46,710 $ 34,675 $ 26,457 Ratios: Nonperforming assets to total assets 0.73 % 0.65 % 0.53 % Nonperforming assets to total loans plus OREO 1.11 % 0.99 % 0.79 % Nonperforming assets (“NPAs”) include loans on non-accrual status, accruing loans 90 or more days past due, restructured loans, other real estate acquired through foreclosure and other repossessed assets.
During 2023, the Company incurred merger expenses of $297 thousand related to the Rockhold BanCorp acquisition. Efficiency Ratio The efficiency ratio is a supplemental financial measure utilized in the internal evaluation of our performance and is not defined under GAAP.
During 2024, the Company incurred merger expenses of $4.5 million related to the Rockhold BanCorp and Kansasland acquisitions. Efficiency Ratio The efficiency ratio is a supplemental financial measure utilized in the internal evaluation of our performance and is not defined under GAAP.
Overall, deposits have increased $229.3 million from December 31, 2023 to December 31, 2024 and deposits excluding brokered deposits have increased $104.2 million for the same time period. During 2024 there has been significant competition for deposits and continued pricing pressure which has caused deposit migration to higher earning deposit account types.
Overall, deposits have increased $763.5 million from December 31, 2024 to December 31, 2025 and deposits excluding brokered deposits and current year acquisition deposits, have increased $10.8 million for the same time period. During 2025 there has been significant competition for deposits and continued pricing pressure which has caused deposit migration to higher earning deposit account types.
Held-To-Maturity Securities December 31, 2024 2023 Amortized Cost Fair Value Amortized Cost Fair Value (Dollars in thousands) Mortgage-backed securities Government-sponsored residential mortgage-backed securities $ 3,932 $ 3,909 $ 1,094 $ 1,097 State and local subdivisions 1,285 1,305 1,115 1,153 Total held-to-maturity securities $ 5,217 $ 5,214 $ 2,209 $ 2,250 76 The following tables summarize the contractual maturity of debt securities and their weighted average yields as of December 31, 2024, and December 31, 2023.
Held-To-Maturity Securities December 31, 2025 2024 Amortized Cost Fair Value Amortized Cost Fair Value (Dollars in thousands) Mortgage-backed securities Government-sponsored residential mortgage-backed securities $ 3,967 $ 4,098 $ 3,932 $ 3,909 State and local subdivisions 1,281 1,311 1,285 1,305 Total held-to-maturity securities $ 5,248 $ 5,409 $ 5,217 $ 5,214 69 The following tables summarize the contractual maturity of debt securities and their weighted average yields as of December 31, 2025, and December 31, 2024.
A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position will be sustained in a tax examination, with a tax examination being presumed to occur.
A tax position is recognized as a benefit only if it is “more likely than not” that the tax position will be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is more likely than not to be realized on examination.
There are several procedures in place to assist us in maintaining the overall quality of our loan portfolio. We have established underwriting guidelines to be followed by lenders and we also monitor delinquency levels for any negative or adverse trends.
We had two nonperforming loan relationships each with outstanding balances exceeding $1.0 million as of December 31, 2025. There are several procedures in place to assist us in maintaining the overall quality of our loan portfolio. We have established underwriting guidelines to be followed by lenders and we also monitor delinquency levels for any negative or adverse trends.
Available-For-Sale Securities December 31, 2024 2023 Amortized Cost Fair Value Amortized Cost Fair Value (Dollars in thousands) U.S. Government-sponsored entities $ 71,173 $ 65,094 $ 39,103 $ 33,087 U.S.
Available-For-Sale Securities December 31, 2025 2024 Amortized Cost Fair Value Amortized Cost Fair Value (Dollars in thousands) U.S. Government-sponsored entities $ 25,960 $ 26,298 $ 71,173 $ 65,094 U.S.
Non-Interest Income For the Years Ended December 31, 2024 vs. 2023 2023 vs. 2022 (Dollars in thousands) 2024 2023 2022 Change % Change % Service charges and fees $ 9,830 $ 10,187 $ 10,632 $ (357 ) (3.5 )% $ (445 ) (4.2 )% Debit card income 10,246 10,322 10,677 (76 ) (0.7 )% (355 ) (3.3 )% Mortgage banking 861 652 1,416 209 32.1 % (764 ) (54.0 )% Increase in value of bank-owned life insurance 4,966 4,059 3,113 907 22.3 % 946 30.4 % Other Investment referral income 500 424 539 76 17.9 % (115 ) (21.3 )% Trust income 1,624 1,123 1,036 501 44.6 % 87 8.4 % Insurance sales commissions 555 582 566 (27 ) (4.6 )% 16 2.8 % Recovery on zero-basis purchased loans 4,380 517 249 3,863 747.2 % 268 107.6 % Income (loss) from equity method investments (87 ) (222 ) (222 ) 135 (60.8 )% — — % Other non-interest income 3,596 5,136 6,984 (1,540 ) (30.0 )% (1,848 ) (26.5 )% Total other 10,568 7,560 9,152 3,008 39.8 % (1,592 ) (17.4 )% Subtotal 36,471 32,780 34,990 3,691 11.3 % (2,210 ) (6.3 )% Gain on acquisition 2,131 — 962 2,131 100.0 % (962 ) (100.0 )% Net gain (loss) from securities transactions 220 (51,909 ) 5 52,129 (100.0 )% (51,914 ) (100.0 )% Total non-interest income $ 38,822 $ (19,129 ) $ 35,957 $ 57,951 (302.9 )% $ (55,086 ) (153.2 )% Year ended December 31, 2024, compared with year ended December 31, 2023 Non-interest income, before gain on acquisition and gain or loss on sale of securities, increased 11.3%.
Non-Interest Income For the Years Ended December 31, 2025 vs. 2024 2024 vs. 2023 (Dollars in thousands) 2025 2024 2023 Change % Change % Service charges and fees $ 9,321 $ 9,830 $ 10,187 $ (509 ) (5.2 )% $ (357 ) (3.5 )% Debit card income 11,414 10,246 10,322 1,168 11.4 % (76 ) (0.7 )% Mortgage banking 567 861 652 (294 ) (34.1 )% 209 32.1 % Increase in value of bank-owned life insurance 7,717 4,966 4,059 2,751 55.4 % 907 22.3 % Other Investment referral income 676 500 424 176 35.2 % 76 17.9 % Trust income 1,947 1,624 1,123 323 19.9 % 501 44.6 % Insurance sales commissions 537 555 582 (18 ) (3.2 )% (27 ) (4.6 )% Recovery on zero-basis purchased loans 7 4,380 517 (4,373 ) (99.8 )% 3,863 747.2 % Income (loss) from equity method investments - (87 ) (222 ) 87 (100.0 )% 135 (60.8 )% Other non-interest income 4,960 3,596 5,136 1,364 37.9 % (1,540 ) (30.0 )% Total other 8,127 10,568 7,560 (2,441 ) (23.1 )% 3,008 39.8 % Subtotal 37,146 36,471 32,780 675 1.9 % 3,691 11.3 % Gain on acquisition — 2,131 — (2,131 ) (100.0 )% 2,131 (100.0 )% Net gain (loss) from securities transactions (53,174 ) 220 (51,909 ) (53,394 ) (100.0 )% 52,129 (100.0 )% Total non-interest income $ (16,028 ) $ 38,822 $ (19,129 ) $ (54,850 ) (141.3 )% $ 57,951 (302.9 )% Year ended December 31, 2025, compared with year ended December 31, 2024 Non-interest income, before gain on acquisition and gain or loss on sale of securities, increased 1.9%.
Average loans were $3.44 billion for the year ended December 31, 2024, an increase of 4.2% over average loans of $3.30 billion for the year ended December 31, 2023.
Average loans were $3.94 billion for the year ended December 31, 2025, an increase of 14.5% over average loans of $3.44 billion for the year ended December 31, 2024.
There are no conditions or events since that notification that management believes have changed Equity Bank’s category. 82 The total increase in stockholders’ equity of $140.1 million was principally attributable to increases in additional paid-in-capital of $95.2 million and retained earnings of $53.9 million, partially offset by a increase in treasury stock of $11.9 million.
There are no conditions or events since that notification that management believes have changed Equity Bank’s category. The total increase in stockholders’ equity of $139.1 million was principally attributable to increases in additional paid-in-capital of $80.5 million, an increase in AOCI of $62.2 million, partially offset by an increase in treasury stock of $14.0 million.
Average Deposit Balances and Average Rate Paid December 31, 2024 2023 2022 Average Balance Average Rate Paid Average Balance Average Rate Paid Average Balance Average Rate Paid (Dollars in thousands) Non-interest-bearing demand $ 931,860 — % $ 979,410 — % $ 1,203,167 — % Interest-bearing demand 1,028,114 2.68 % 1,002,543 2.26 % 1,124,828 0.64 % Savings and money market 1,425,025 2.38 % 1,359,822 1.73 % 1,308,536 0.27 % Time 770,772 3.75 % 827,652 2.93 % 663,790 0.83 % Total deposits $ 4,155,771 $ 4,169,427 $ 4,300,321 79 Included in interest-bearing demand deposits are Insured Cash Sweep (“ICS”) reciprocal demand deposit balances of $469.5 million at December 31, 2024, and $382.6 million at December 31, 2023, and $282.7 million at December 31, 2022.
Average Deposit Balances and Average Rate Paid December 31, 2025 2024 2023 Average Balance Average Rate Paid Average Balance Average Rate Paid Average Balance Average Rate Paid (Dollars in thousands) Non-interest-bearing demand $ 1,049,240 — % $ 931,860 — % $ 979,410 — % Interest-bearing demand 1,113,376 2.06 % 1,028,114 2.68 % 1,002,543 2.26 % Savings and money market 1,588,459 2.21 % 1,425,025 2.38 % 1,359,822 1.73 % Time 877,296 3.46 % 770,772 3.75 % 827,652 2.93 % Total deposits $ 4,628,371 $ 4,155,771 $ 4,169,427 72 Included in interest-bearing demand deposits are Insured Cash Sweep (“ICS”) reciprocal demand deposit balances of $572.0 million, $469.5 million and $382.6 million at December 31, 2025, 2024 and 2023.
December 31, 2024 2023 (Dollars in thousands) 3 months or less $ 69,637 $ 65,449 Over 3 through 6 months 200,049 94,459 Over 6 through 12 months 13,799 18,082 Over 12 months 52,080 18,777 Total Time Deposits $ 335,565 $ 196,767 Other Borrowed Funds We utilize borrowings to supplement deposits to fund our lending and investing activities.
December 31, 2025 2024 (Dollars in thousands) 3 months or less $ 136,661 $ 69,637 Over 3 through 6 months 206,748 200,049 Over 6 through 12 months 67,260 13,799 Over 12 months 69,857 52,080 Total Time Deposits $ 480,526 $ 335,565 Other Borrowed Funds We utilize borrowings to supplement deposits to fund our lending and investing activities.
Composition of Deposits December 31, 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Amount Percent of Total Amount Percent of Total Amount Percent of Total Change % Change % (Dollars in thousands) Non-interest-bearing demand $ 954,065 21.8 % $ 898,129 21.7 % $ 1,097,899 25.9 % $ 55,936 6.2 % $ (199,770 ) (18.2 )% Interest-bearing demand 1,172,577 26.8 % 998,822 24.1 % 1,061,264 25.0 % 173,755 17.4 % (62,442 ) (5.9 )% Savings and money market 1,511,620 34.6 % 1,484,985 35.8 % 1,268,320 29.9 % 26,635 1.8 % 216,665 17.1 % Time 736,527 16.8 % 763,519 18.4 % 814,324 19.2 % (26,992 ) (3.5 )% (50,805 ) (6.2 )% Total deposits $ 4,374,789 100.0 % $ 4,145,455 100.0 % $ 4,241,807 100.0 % $ 229,334 5.5 % $ (96,352 ) (2.3 )% The following tables show deposits acquired in 2024, as of the time of each acquisition.
Composition of Deposits December 31, 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Amount Percent of Total Amount Percent of Total Amount Percent of Total Change % Change % (Dollars in thousands) Non-interest-bearing demand $ 1,148,409 22.3 % $ 954,065 21.8 % $ 898,129 21.7 % $ 194,344 20.4 % $ 55,936 6.2 % Interest-bearing demand 1,268,307 24.7 % 1,172,577 26.8 % 998,822 24.1 % 95,730 8.2 % 173,755 17.4 % Savings and money market 1,736,680 33.8 % 1,511,620 34.6 % 1,484,985 35.8 % 225,060 14.9 % 26,635 1.8 % Time 984,868 19.2 % 736,527 16.8 % 763,519 18.4 % 248,341 33.7 % (26,992 ) (3.5 )% Total deposits $ 5,138,264 100.0 % $ 4,374,789 100.0 % $ 4,145,455 100.0 % $ 763,475 17.5 % $ 229,334 5.5 % The following tables show deposits acquired in 2025, as of the time of each acquisition.
Composition of Loan Portfolio December 31, 2024 2023 2022 Amount Percent Amount Percent Amount Percent (Dollars in thousands) Commercial and industrial $ 658,865 18.8 % $ 598,327 17.9 % $ 594,863 18.0 % Real estate loans: Commercial real estate 1,830,514 52.3 % 1,759,855 52.8 % 1,721,268 52.0 % Residential real estate 566,766 16.2 % 556,328 16.7 % 570,550 17.2 % Agricultural real estate 267,248 7.6 % 196,114 5.9 % 199,189 6.0 % Total real estate loans 2,664,528 76.1 % 2,512,297 75.4 % 2,491,007 75.2 % Agricultural 87,339 2.5 % 118,587 3.6 % 120,003 3.6 % Consumer 90,084 2.6 % 103,690 3.1 % 105,675 3.2 % Total loans held for investment $ 3,500,816 100.0 % $ 3,332,901 100.0 % $ 3,311,548 100.0 % Total loans held for sale $ 513 100.0 % $ 476 100.0 % $ 349 100.0 % Total loans held for investment (net of allowances) $ 3,457,549 100.0 % $ 3,289,381 100.0 % $ 3,265,701 100.0 % Commercial and industrial: Commercial and industrial loans include loans used to purchase fixed assets, to provide working capital or meet other financing needs of the business.
Composition of Loan Portfolio December 31, 2025 2024 2023 Amount Percent Amount Percent Amount Percent (Dollars in thousands) Commercial and industrial $ 816,885 19.5 % $ 658,865 15.7 % $ 598,327 17.0 % Real estate loans: Commercial real estate 2,226,348 53.0 % 1,830,514 43.6 % 1,759,855 50.3 % Residential real estate 582,145 13.9 % 566,766 13.5 % 556,328 15.9 % Agricultural real estate 278,927 6.6 % 267,248 6.4 % 196,114 5.6 % Total real estate loans 3,087,420 73.5 % 2,664,528 63.5 % 2,512,297 71.8 % Agricultural 188,475 4.5 % 87,339 2.1 % 118,587 3.4 % Consumer 105,400 2.5 % 90,084 2.1 % 103,690 3.0 % Total loans held for investment $ 4,198,180 100.0 % $ 3,500,816 83.4 % $ 3,332,901 95.2 % Total loans held for sale $ 1,392 100.0 % $ 513 100.0 % $ 476 100.0 % Total loans held for investment (net of allowances) $ 4,145,424 100.0 % $ 3,457,549 100.0 % $ 3,289,381 100.0 % Commercial and industrial: Commercial and industrial loans include loans used to purchase fixed assets, to provide working capital or meet other financing needs of the business.
Our total stockholders’ equity increased $140.1 million, or 30.9%, from $452.9 million at December 31, 2023 to $592.9 million at December 31, 2024.
Our total stockholders’ equity increased $139.1 million, or 23.5%, from $592.9 million at December 31, 2024 to $732.1 million at December 31, 2025.
Management believes that the allowance for credit losses at December 31, 2024, is adequate to cover current expected losses in the loan portfolio as of such date. There can be no assurance, however, that we will not sustain losses in future periods that could be substantial in relation to the size of the allowance at December 31, 2024.
There can be no assurance, however, that we will not sustain losses in future periods that could be substantial in relation to the size of the allowance at December 31, 2025.
Non-Interest Expense For the Year Ended December 31, 2024 vs. 2023 2023 vs. 2022 (Dollars in thousands) 2024 2023 2022 Change % Change % Salaries and employee benefits $ 72,786 $ 64,384 $ 62,006 $ 8,402 13.0 % $ 2,378 3.8 % Net occupancy and equipment 14,371 12,325 12,223 2,046 16.6 % 102 0.8 % Data processing 20,004 17,433 15,883 2,571 14.7 % 1,550 9.8 % Professional fees 6,503 5,754 4,951 749 13.0 % 803 16.2 % Advertising and business development 5,366 5,425 5,042 (59 ) (1.1 )% 383 7.6 % Telecommunications 2,501 1,963 1,916 538 27.4 % 47 2.5 % FDIC insurance 2,483 2,195 1,140 288 13.1 % 1,055 92.5 % Courier and postage 2,599 2,046 1,881 553 27.0 % 165 8.8 % Free nationwide ATM expense 2,127 2,073 2,103 54 2.6 % (30 ) (1.4 )% Amortization of core deposit intangibles 4,289 3,374 4,042 915 27.1 % (668 ) (16.5 )% Loan expense 601 540 828 61 11.3 % (288 ) (34.8 )% Other real estate owned and repossessed assets, net (7,525 ) 617 247 (8,142 ) (1319.6 )% 370 149.8 % Other 13,591 17,175 15,524 (3,584 ) (20.9 )% 1,651 10.6 % Subtotal 139,696 135,304 127,786 4,392 3.2 % 7,518 5.9 % Merger expenses 4,461 297 594 4,164 1402.0 % (297 ) (50.0 )% Total non-interest expense $ 144,157 $ 135,601 $ 128,380 $ 8,556 6.3 % $ 7,221 5.6 % Year ended December 31, 2024, compared with year ended December 31, 2023 The increase in non-interest expense was primarily due to increases in salaries and employee benefits of $8.4 million, data processing expense of $2.6 million, net occupancy and equipment expense of $2.0 million, offset by a decrease in Other real estate owned of $8.1 million and Other expenses of $3.6 million.
Non-Interest Expense For the Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 (Dollars in thousands) 2025 2024 2023 Change % Change % Salaries and employee benefits $ 84,786 $ 72,786 $ 64,384 $ 12,000 16.5 % $ 8,402 13.0 % Net occupancy and equipment 15,801 14,371 12,325 1,430 10.0 % 2,046 16.6 % Data processing 20,279 20,004 17,433 275 1.4 % 2,571 14.7 % Professional fees 6,467 6,503 5,754 (36 ) (0.6 )% 749 13.0 % Advertising and business development 5,228 5,366 5,425 (138 ) (2.6 )% (59 ) (1.1 )% Telecommunications 2,462 2,501 1,963 (39 ) (1.6 )% 538 27.4 % FDIC insurance 2,579 2,483 2,195 96 3.9 % 288 13.1 % Courier and postage 3,235 2,599 2,046 636 24.5 % 553 27.0 % Free nationwide ATM expense 2,204 2,127 2,073 77 3.6 % 54 2.6 % Amortization of core deposit intangibles 4,503 4,289 3,374 214 5.0 % 915 27.1 % Loan expense 890 601 540 289 48.1 % 61 11.3 % Other real estate owned and repossessed assets, net 1,029 (7,525 ) 617 8,554 (113.7 )% (8,142 ) (1319.6 )% Loss on debt extinguishment 1,361 — — 1,361 — % — — % Other 15,831 13,591 17,175 2,240 16.5 % (3,584 ) (20.9 )% Subtotal 166,655 139,696 135,304 26,959 19.3 % 4,392 3.2 % Merger expenses 8,065 4,461 297 3,604 80.8 % 4,164 1,402.0 % Total non-interest expense $ 174,720 $ 144,157 $ 135,601 $ 30,563 21.2 % $ 8,556 6.3 % Year ended December 31, 2025, compared with year ended December 31, 2024 The increase in non-interest expense was primarily due to increases in salaries and employee benefits of $12.0 million, net occupancy and equipment expense of $1.4 million, loss on extinguishment of debt of $1.4 million and Other expenses of $2.4 million.
Included in other repossessed assets is the gross collateral of a Main Street Lending loan valued at $4.7 million which the Company owns five percent of the collateral. The change in NPAs is due to the Main Street Lending of specific circumstances on specific borrower relationships and not considered indicative of broad declining credit quality as of the reporting date.
The changes in non-accrual loans and accruing loans 90 or more days past due was due to specific circumstances on specific borrower relationships and not considered indicative of broad declining credit quality as of the reporting date. Included in other repossessed assets as of December 31, 2024 was the gross collateral of a Main Street Lending loan valued at $4.7.
Rockhold Acquisition Amount Percent of Total (Dollars in thousands) Non-interest-bearing demand $ 97,593 27.9 % Interest-bearing demand 124,760 35.7 % Savings and money market 94,731 27.1 % Time 32,693 9.3 % Total deposits $ 349,777 100.0 % Kansasland Acquisition Amount Percent of Total (Dollars in thousands) Non-interest-bearing demand $ 6,439 15.2 % Interest-bearing demand 5,011 11.8 % Savings and money market 14,314 33.7 % Time 16,654 39.3 % Total deposits $ 42,418 100.0 % 78 The following tables show deposits sold in 2022 branch dispositions, as of the time of such dispositions.
NBC Acquisition Amount Percent of Total (Dollars in thousands) Non-interest-bearing demand $ 236,124 29.3 % Interest-bearing demand 203,324 25.2 % Savings and money market 213,050 26.4 % Time 153,509 19.1 % Total deposits $ 806,007 100.0 % The following tables show deposits acquired in 2024, as of the time of each acquisition. 71 Rockhold Acquisition Amount Percent of Total (Dollars in thousands) Non-interest-bearing demand $ 97,593 27.9 % Interest-bearing demand 124,760 35.7 % Savings and money market 94,731 27.1 % Time 32,693 9.3 % Total deposits $ 349,777 100.0 % Kansasland Acquisition Amount Percent of Total (Dollars in thousands) Non-interest-bearing demand $ 6,439 15.2 % Interest-bearing demand 5,011 11.8 % Savings and money market 14,314 33.7 % Time 16,654 39.3 % Total deposits $ 42,418 100.0 % The following table shows the average deposit balance and average rate paid on deposits for the year ended December 31, 2025, 2024, and 2023.
There can be no assurance, however, that our loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions. 72 Regulatory Loan Classification We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors.
Regulatory Loan Classification We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. Loans are analyzed individually and classified based on credit risk.
Net losses as a percentage of average loans was 0.11% for the twelve months ended December 31, 2024, as compared to 0.13% for the twelve months ended December 31, 2023, and 0.08% for the twelve months ended December 31, 2022. 74 The following table presents, as of and for the periods indicated, an analysis of the allowance for credit losses and other related data.
Net losses as a percentage of average loans was 0.06% for the twelve months ended December 31, 2025, as compared to 0.11% for the twelve months ended December 31, 2024, and 0.13% for the twelve months ended December 31, 2023.
There was a $3.6 million decrease in other non-interest expense for the year ended December 31, 2024, as compared to the year ended December 31, 2023. This decrease was primarily due to a reduction of $3.6 million in write-offs of tax credit investments.
There was a $2.2 million increase in other non-interest expense for the year ended December 31, 2025, as compared to the year ended December 31, 2024. This increase was primarily due to a $1.2 million in miscellaneous expenses.
Risk Category of Loans by Class As of December 31, 2024 Unclassified Classified Total (Dollars in thousands) Commercial and industrial $ 626,519 $ 32,346 $ 658,865 Real estate: Commercial real estate 1,813,778 16,736 1,830,514 Residential real estate 561,198 5,568 566,766 Agricultural real estate 258,353 8,895 267,248 Total real estate 2,633,329 31,199 2,664,528 Agricultural 86,201 1,138 87,339 Consumer 89,300 784 90,084 Total $ 3,435,349 $ 65,467 $ 3,500,816 As of December 31, 2023 Unclassified Classified Total (Dollars in thousands) Commercial and industrial $ 586,629 $ 11,698 $ 598,327 Real estate: Commercial real estate 1,748,878 10,977 1,759,855 Residential real estate 549,014 7,314 556,328 Agricultural real estate 190,659 5,455 196,114 Total real estate 2,488,551 23,746 2,512,297 Agricultural 115,284 3,303 118,587 Consumer 103,066 624 103,690 Total $ 3,293,530 $ 39,371 $ 3,332,901 73 For additional information see “NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES” in the Notes to Consolidated Financial Statements.
Risk Category of Loans by Class As of December 31, 2025 Unclassified Classified Total (Dollars in thousands) Commercial and industrial $ 769,789 $ 47,096 $ 816,885 Real estate: Commercial real estate 2,204,813 21,535 2,226,348 Residential real estate 577,233 4,912 582,145 Agricultural real estate 275,064 3,863 278,927 Total real estate 3,057,110 30,310 3,087,420 Agricultural 186,980 1,495 188,475 Consumer 104,720 680 105,400 Total $ 4,118,599 $ 79,581 $ 4,198,180 As of December 31, 2024 Unclassified Classified Total (Dollars in thousands) Commercial and industrial $ 626,519 $ 32,346 $ 658,865 Real estate: Commercial real estate 1,813,778 16,736 1,830,514 Residential real estate 561,198 5,568 566,766 Agricultural real estate 258,353 8,895 267,248 Total real estate 2,633,329 31,199 2,664,528 Agricultural 86,201 1,138 87,339 Consumer 89,300 784 90,084 Total $ 3,435,349 $ 65,467 $ 3,500,816 For additional information see “NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES” in the Notes to Consolidated Financial Statements.
Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities and are computed using enacted tax rates.
Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities and are computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.
These items and other changes in the various components of non-interest expense are discussed in more detail below. Salaries and employee benefits: There was a $8.4 million increase in salaries and benefits for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Salaries and employee benefits: There was a $12.0 million increase in salaries and benefits for the year ended December 31, 2025, as compared to the year ended December 31, 2024.
Loan Maturity and Sensitivity to Changes in Interest Rates As of December 31, 2024 One year or less After one year through five years After five years through fifteen years After fifteen years Total (Dollars in thousands) Commercial and industrial $ 253,375 $ 309,996 $ 92,880 $ 2,614 $ 658,865 Real Estate: Commercial real estate 484,450 1,019,023 231,122 95,919 1,830,514 Residential real estate 2,375 11,344 124,983 428,064 566,766 Agricultural real estate 100,169 93,430 34,720 38,929 267,248 Total real estate 586,994 1,123,797 390,825 562,912 2,664,528 Agricultural 59,213 21,373 3,270 3,483 87,339 Consumer 32,498 45,352 10,234 2,000 90,084 Total $ 932,080 $ 1,500,518 $ 497,209 $ 571,009 $ 3,500,816 Loans with a predetermined fixed interest rate $ 405,335 $ 544,767 $ 115,887 $ 261,080 $ 1,327,069 Loans with an adjustable/floating interest rate 526,745 955,751 381,322 309,929 2,173,747 Total $ 932,080 $ 1,500,518 $ 497,209 $ 571,009 $ 3,500,816 71 As of December 31, 2023 One year or less After one year through five years After five years through fifteen years After fifteen years Total (Dollars in thousands) Commercial and industrial $ 171,879 $ 345,693 $ 77,886 $ 2,869 $ 598,327 Real Estate: Commercial real estate 369,311 1,063,226 247,300 80,018 1,759,855 Residential real estate 1,447 10,091 128,077 416,713 556,328 Agricultural real estate 73,882 84,802 27,559 9,871 196,114 Total real estate 444,640 1,158,119 402,936 506,602 2,512,297 Agricultural 80,659 30,948 2,851 4,129 118,587 Consumer 31,832 50,779 19,077 2,002 103,690 Total $ 729,010 $ 1,585,539 $ 502,750 $ 515,602 $ 3,332,901 Loans with a predetermined fixed interest rate $ 289,816 $ 685,903 $ 127,602 $ 273,488 $ 1,376,809 Loans with an adjustable/floating interest rate 439,194 899,636 375,148 242,114 1,956,092 Total $ 729,010 $ 1,585,539 $ 502,750 $ 515,602 $ 3,332,901 Nonperforming Assets The following table presents information regarding nonperforming assets at the dates indicated.
Loan Maturity and Sensitivity to Changes in Interest Rates As of December 31, 2025 One year or less After one year through five years After five years through fifteen years After fifteen years Total (Dollars in thousands) Commercial and industrial $ 289,631 $ 350,270 $ 112,600 $ 64,384 $ 816,885 Real Estate: Commercial real estate 531,763 1,268,127 325,353 101,105 2,226,348 Residential real estate 5,267 11,996 111,555 453,327 582,145 Agricultural real estate 74,354 131,536 36,836 36,201 278,927 Total real estate 611,384 1,411,659 473,744 590,633 3,087,420 Agricultural 133,092 38,040 5,663 11,680 188,475 Consumer 52,119 44,205 7,021 2,055 105,400 Total $ 1,086,226 $ 1,844,174 $ 599,028 $ 668,752 $ 4,198,180 Loans with a predetermined fixed interest rate $ 412,708 $ 653,731 $ 109,432 $ 269,857 $ 1,445,728 Loans with an adjustable/floating interest rate 673,518 1,190,443 489,596 398,895 2,752,452 Total $ 1,086,226 $ 1,844,174 $ 599,028 $ 668,752 $ 4,198,180 As of December 31, 2024 One year or less After one year through five years After five years through fifteen years After fifteen years Total (Dollars in thousands) Commercial and industrial $ 253,375 $ 309,996 $ 92,880 $ 2,614 $ 658,865 Real Estate: Commercial real estate 484,450 1,019,023 231,122 95,919 1,830,514 Residential real estate 2,375 11,344 124,983 428,064 566,766 Agricultural real estate 100,169 93,430 34,720 38,929 267,248 Total real estate 586,994 1,123,797 390,825 562,912 2,664,528 Agricultural 59,213 21,373 3,270 3,483 87,339 Consumer 32,498 45,352 10,234 2,000 90,084 Total $ 932,080 $ 1,500,518 $ 497,209 $ 571,009 $ 3,500,816 Loans with a predetermined fixed interest rate $ 405,335 $ 544,767 $ 115,887 $ 261,080 $ 1,327,069 Loans with an adjustable/floating interest rate 526,745 955,751 381,322 309,929 2,173,747 Total $ 932,080 $ 1,500,518 $ 497,209 $ 571,009 $ 3,500,816 65 Nonperforming Assets The following table presents information regarding nonperforming assets at the dates indicated.
The amount recognized is the largest amount of tax benefit that is more likely than not to be realized on examination . The Company recognizes interest and/or penalties related to income tax matters in income tax expense.
The Company recognizes interest and/or penalties related to income tax matters in income tax expense.
Included in salaries and employee benefits is share-based compensation expense of $3.5 million for the year ended December 31, 2024, and $2.5 million for the year ended December 31, 2023. Data processing: The $2.6 million increase was principally due to increased software license expenses of $2.7 million.
Included in salaries and employee benefits is share-based compensation expense of $4.8 million for the year ended December 31, 2025, and $3.5 million for the year ended December 31, 2024. Net occupancy and equipment: The $1.4 million increase was primarily due to the additional expense of $723 thousand related to properties acquired through merger activity.
The ratio defined under GAAP that is most comparable to the efficiency ratio is non-interest expense to net interest income plus non-interest income which is discussed in “Results of Operations – Non-GAAP Financial Measures.” The Company’s efficiency ratio improved in 2024 as compared to 2023 due to the increase in net interest income excluding the net gain on securities transactions and gain on acquisition outpacing the change in non-interest expense, excluding goodwill impairment and merger expenses, as discussed in “Results of Operations – Net Interest Income and Net Interest Margin Analysis” and “Results of Operations – Non-Interest Income.” Income Taxes The amount of income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income, the amount of non-deductible expenses and available tax credits.
The ratio defined under GAAP that is most comparable to the efficiency ratio is non-interest expense to net interest income plus non-interest income which is discussed in “Results of Operations – Non-GAAP Financial Measures.” The Company’s efficiency ratio remained largely unchanged in 2025 as compared to 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+3 added−2 removed17 unchanged
Biggest changeDecember 31, 2023, Analysis The increase in the level of positive impact to net interest income in the up interest rate shock scenarios is due to the decrease in fixed rate investments, increase in interest earning cash balances and overall increase in the level of adjustable rate loans, which were partially offset by the decreases in non-interest bearing deposits and savings accounts, which are low beta deposit products, and increases in money market and ICS deposits, which are high beta deposit produces.
Biggest changeDecember 31, 2025, Analysis The continuing positive impact to net interest income in the up interest rate shock scenarios is due to the proportional decrease in fixed rate investments and fixed rate loans compared to the increase of interest earning cash balances and adjustable rate loans.
Generally, with a liability sensitive position, as interest rates increase, the value of your assets decrease faster than the value of liabilities and, as interest rates decrease, the value of your assets increase at a faster rate than liabilities.
Generally, with a liability sensitive position, as interest rates increase, the value of your assets decrease faster than the value of liabilities and, as interest rates decrease, the value of your assets increase at a faster rate than liabilities.
Substantially all investments and approximately 37.8% of loans are prepayable and fixed rate and as rates decrease the level of modeled prepayments increase. The prepaid principal is assumed to reprice at the assumed current rates, resulting in a smaller positive impact to the economic value of equity.
Substantially all investments and approximately 37.8% of loans are prepayable and fixed rate and as rates decrease the level of modeled prepayments 82 increase. The prepaid principal is assumed to reprice at the assumed current rates, resulting in a smaller positive impact to the economic value of equity.
Additionally, the ALCO reviews liquidity; projected cash flows; maturities of deposits; and consumer and commercial deposit activity. 87 ALCO uses a simulation analysis to monitor and manage the pricing and maturity of assets and liabilities in order to diminish the potential adverse impact that changes in interest rates could have on net interest income.
Additionally, the ALCO reviews liquidity; projected cash flows; maturities of deposits; and consumer and commercial deposit activity. 81 ALCO uses a simulation analysis to monitor and manage the pricing and maturity of assets and liabilities in order to diminish the potential adverse impact that changes in interest rates could have on net interest income.
The change in the impact of net interest income from the base case for December 31, 2024, and 2023 was primarily driven by the rate and mix of variable and fixed rate financial instruments, the underlying duration of the financial instruments, and the level of response to changes in the interest rate environment.
The change in the impact of net interest income from the base case for December 31, 2025, and 2024 was primarily driven by the rate and mix of variable and fixed rate financial instruments, the underlying duration of the financial instruments, and the level of response to changes in the interest rate environment.
Market Risk Impact on Net Interest Income December 31, Change in prevailing interest rates 2024 2023 +300 basis points 11.9 % 10.3 % +200 basis points 7.9 % 6.8 % +100 basis points 3.9 % 3.3 % 0 basis points — % — % -100 basis points (2.4 )% (2.1 )% -200 basis points (4.9 )% (4.3 )% -300 basis points (8.1 )% (7.3 )% Impact on Economic Value of Equity December 31, Change in prevailing interest rates 2024 2023 +300 basis points (6.5 )% (7.4 )% +200 basis points (4.2 )% (4.3 )% +100 basis points (2.4 )% (2.2 )% 0 basis points — % — % -100 basis points 0.3 % 0.3 % -200 basis points (1.5 )% (1.5 )% -300 basis points (5.1 )% (5.3 )% 89
Market Risk Impact on Net Interest Income December 31, December 31, Change in prevailing interest rates 2025 2024 +300 basis points 11.3 % 11.9 % +200 basis points 7.5 % 7.9 % +100 basis points 3.6 % 3.9 % 0 basis points — % — % -100 basis points (1.4 )% (2.4 )% -200 basis points (2.9 )% (4.9 )% -300 basis points (5.3 )% (8.1 )% Impact on Economic Value of Equity December 31, December 31, Change in prevailing interest rates 2025 2024 +300 basis points (8.0 )% (6.5 )% +200 basis points (5.3 )% (4.2 )% +100 basis points (2.8 )% (2.4 )% 0 basis points — % — % -100 basis points 0.2 % 0.3 % -200 basis points (2.0 )% (1.5 )% -300 basis points (6.8 )% (5.1 )% 83
The prepaid principal is assumed to reprice at the assumed current rates, resulting in a smaller positive impact to the economic value of equity. 88 The following table summarizes the simulated immediate change in net interest income for twelve months and impact on economic value of equity as of the dates indicated.
The following table summarizes the simulated immediate change in net interest income for twelve months and impact on economic value of equity as of the dates indicated.
The change in the economic value of equity from the base case for December 31, 2023, is due to us being in a liability sensitive position and the level of convexity in our prepayable assets.
While improved year-over-year, these factors result in the negative impact to net interest income in the down interest rate shock scenario. The change in the economic value of equity from the base case for December 31, 2025, is due to us being in a liability sensitive position and the level of convexity in our prepayable assets.
In the down interest rate shock scenario, the main drivers of the negative impact on net interest income are the downward pricing of variable rate loans receivable, increase in interest-earning cash balances and the decrease in fixed rate investments. These factors result in the negative impact to net interest income in the down interest rate shock scenario.
In the down interest rate shock scenario, the main drivers of the negative impact on net interest income are the downward pricing of variable rate loans receivable and interest earning cash, while partially offset by the downward repricing of short term borrowings, short term time deposits, and beta-sensitive non-maturity deposits.
Due to the level of convexity in our fixed rate prepayable assets, we do not experience a similar change in the value of assets in a down interest rate shock scenario; however, due to the current level of convexity in our fixed rate prepayable assets becoming less negative and positive, in some cases, on a portion of our portfolio has resulted in the overall value of assets increasing more than liabilities.
Second, due to the level of convexity in our fixed rate prepayable assets, we do not experience a similar change in the value of assets in a down interest rate shock scenario. As rates decrease, the level of modeled prepayments increase for fixed rate prepayable assets, and as rates increase, the level of modeled prepayments decrease.
In addition, the mix of interest-bearing deposit and non-interest-bearing deposits impact the level of deposit decay and the resulting benefit of discounting from the non-interest-bearing deposits. At December 31, 2023, non-interest-bearing deposits were approximately $898.1 million, or 18.2%, lower than that deposit type at December 31, 2022.
First, the mix of interest-bearing deposit and non-interest-bearing deposits impact the level of deposit decay and the resulting benefit of discounting from the non-interest-bearing deposits. Non-interest-bearing and other low beta interest bearing deposits were proportionally lower, while beta sensitive deposits were proportionally higher year-over-year, negatively impacting up and down rate results.
Removed
These factors result in the positive impacts to net interest income in the up interest rate shock scenarios that are detailed in the table below.
Added
The offsetting negative impact in the up interest rate shocks are mainly caused by the increase in short term borrowings, short term time deposits, and beta-sensitive non-maturity deposits (i.e. money market deposits).
Removed
Substantially all investments and approximately 41.3% of loans are prepayable and fixed rate and as rates decrease the level of modeled prepayments increase.
Added
In rates down, the EVE values have more negative impact year-over-year, mainly due to the proportionally lower amount of fixed rate assets which also have higher prepay ability due to having higher current coupons, creating the additional incentive to prepay as rates fall.
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Inversely, this is also why the rates up has a negative impact as well, since the prepayment speeds on these assets can significantly slow from current speeds and consequently extend the average lives of the assets, preventing meaningful repricing as rates rise.

Other EQBK 10-K year-over-year comparisons