[Management View]
Equity Bancshares emphasized core margin expansion and adjusted earnings growth during Q2 2025. Management reiterated a disciplined M&A approach, citing a high rate of market conversations, expanding target size, and an ongoing focus on value realization without near-term regulatory hurdles being the main driver for sellers entering the market.

[Outlook]
Management expects core margin to maintain its current level with continued lagged loan repricing projected into 2026. The company highlighted a rising loan pipeline, sustained production, and improved new loan yields as signals of optimism for loan growth and net interest margin in the coming quarters.

[Financial Performance]
Net income: $15.3 million, or $0.86 per diluted share (GAAP) in Q2 2025; adjusted to $16.6 million, or $0.94 per diluted share, excluding M&A and debt extinguishment costs.
Net interest income: $49.8 million in Q2 2025, with a core net interest margin of 4.17%, representing a 10 basis point sequential improvement.
Noninterest income: $8.6 million in Q2 2025, rising $500,000 over the previous quarter after adjusting for a prior BOLI benefit of $2.2 million.
Noninterest expense: $40 million (GAAP) in Q2 2025; excluding debt extinguishment and M&A charges, noninterest expenses were $38.3 million.
Provision for credit loss: $19,000 (GAAP provision for credit loss) in Q2 2025.
Tangible common equity (TCE) ratio: Ended the quarter at 10.63%, up 41% from Q2 2024.
Tangible book value per share: $32.17, up 25% from Q2 2024.
Loan growth: Year-to-date, loan balances increased $100 million through the first two quarters of 2025.
Loan pipeline: Measured at 75%, or $481 million, up $119 million, or 33%, from Q1.
Loan production: $197 million in Q2 2025, matching prior period levels and doubling Q2 2024's volume.
New loan yields: 7.17% yield for new loan production in Q2 2025, up from 6.73% in the prior quarter.
Deposit trends: Excluding brokerage funds, balances declined by $43 million during the quarter.
Nonaccrual loans: $42.6 million at period end, up $18.3 million, almost entirely due to a single QSR relationship.
Total classified assets: $71 million, or 11.4% of total bank regulatory capital.
Delinquency (over 30 days): Declined to $16.8 million.
Net charge-offs (annualized): Six basis points during the quarter; year-to-date, four basis points through Q2 2025.
Allowance for credit losses to loans: Coverage stood at 1.26%.

[Q&A Highlights]
Question 1: Could you talk about plans for the MVC Bank bond portfolio and overall thoughts on managing the securities portfolio in the second half of the year?
Answer: The MVC management team effected the sale of their bond portfolio prior to our acquisition, monetizing it into cash balances. The cash will be deployed for securities portfolio needs, funding loan growth, and other alternatives. The bond portfolio is a mechanism to deploy cash with improved returns, balancing liquidity and pledging requirements.

Question 2: Are you seeing any stress within the QSR portfolio outside of the one relationship discussed previously?
Answer: We see softer operating numbers in the QSR sector from other borrowers, with one small relationship classified outside of the large one mentioned. The portfolio has granularity and diversification across different QSR concepts, brands, geography, and borrowers.

Question 3: Is the step down in noninterest expenses in Q4 relative to Q3 all cost savings from the MVC deal?
Answer: The reduction is predominantly due to MVC savings, with a slight downward trend in salaries and employee benefits line items.

Question 4: What triggered the move to nonaccrual for the larger QSR credit, and can the nonaccrual amount reduce before fully resolving the relationship?
Answer: The nonaccrual treatment was appropriate from an accounting standpoint due to past-due payments. The plan involves exiting unprofitable stores, with the remaining locations performing well. The process may take several quarters, potentially upgrading to accrual status once cash flow stabilizes.

Question 5: Has regulatory approval speed changed the tone with sellers in M&A conversations?
Answer: The high rate of M&A conversations is driven by the age of ownership and management, not regulatory approval speed. Ownership teams have windows for liquidity, and management teams are older than desired when discussing selling the institution.

Question 6: What is the outlook for loan growth in the second half of the year, and what is driving optimism?
Answer: Pipelines are at the highest levels, with more activity in C&I and treasury sides. The production engine has been strong, and with fewer payoffs, growth is expected.

Question 7: Was the lower line utilization this quarter seasonally driven or a shift in customer operating approach?
Answer: It was due to specific situations where wealthy customers received money and paid down lines, which are expected to be drawn again later in the year.

Question 8: Do you have numbers around expected loan repricing in the back half of the year?
Answer: Lag repricing will maintain the core margin around 4.17%, with additional repricing on both sides of the balance sheet into 2026.

Question 9: What is the environment in Wichita, and are there opportunities in aircraft lending?
Answer: Less than 10% of the company is based in Wichita, with minimal direct exposure to aircraft lending. Demand for jobs remains high, and the workforce is intact.

Question 10: Can deposit costs be lowered further, and what is the outlook for deposit growth?
Answer: There is limited potential for further deposit cost reduction, with competition affecting new deposit rates. Growing commercial relationships and DDA accounts can create incremental value.

Question 11: Is the size range for M&A targets increasing?
Answer: Opportunities have been increasing in size, focusing on institutions between $150 million and $1.5 billion.

[Sentiment Analysis]
Analysts and management maintained a positive tone, emphasizing optimism for loan growth, margin maintenance, and strategic M&A opportunities. Management's disciplined approach to M&A and focus on value realization were well-received.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | Change (%) |
|-------------------------------|-----------------|-----------------|------------------|
| Net Income (GAAP) | $15.3 million | N/A | N/A |
| Adjusted Net Income | $16.6 million | N/A | N/A |
| Net Interest Income | $49.8 million | N/A | N/A |
| Core Net Interest Margin | 4.17% | N/A | N/A |
| Noninterest Income | $8.6 million | N/A | N/A |
| Noninterest Expense (GAAP) | $40 million | N/A | N/A |
| Adjusted Noninterest Expense | $38.3 million | N/A | N/A |
| Provision for Credit Loss | $19,000 | N/A | N/A |
| TCE Ratio | 10.63% | 7.54% | +41% |
| Tangible Book Value per Share | $32.17 | $25.74 | +25% |
| Loan Growth | $100 million | N/A | N/A |
| Loan Pipeline | $481 million | N/A | N/A |
| Loan Production | $197 million | $98.5 million | +100% |
| New Loan Yields | 7.17% | N/A | N/A |
| Deposit Trends | -$43 million | N/A | N/A |
| Nonaccrual Loans | $42.6 million | N/A | N/A |
| Total Classified Assets | $71 million | N/A | N/A |
| Delinquency (over 30 days) | $16.8 million | N/A | N/A |
| Net Charge-offs (annualized) | 6 basis points | N/A | N/A |
| Allowance for Credit Losses | 1.26% | N/A | N/A |

[Risks and Concerns]
Nonaccrual loans rose notably due to a single large QSR relationship undergoing restructuring. The company remains engaged with the borrower to pursue a full resolution. The broader economy presents some uncertainty, but credit quality trends remain stable.

[Final Takeaway]
Equity Bancshares demonstrated strong financial performance in Q2 2025, with core margin expansion and adjusted earnings growth. Management's disciplined M&A approach and focus on value realization were emphasized, alongside optimism for loan growth and net interest margin in the coming quarters. Despite some concerns in the QSR sector, the company's credit quality trends remain stable, positioning it well for future growth.