Equity Bancshares' Q4 2024: Navigating Inflation Pressures, Rate Sensitivity, and Loan Growth Strategies

Net Interest Margin and Earnings Growth:
- Equity Bancshares reported a net interest margin of 4.17% in Q4 2024, up from 3.87% in the previous quarter.
- The margin expansion was driven by a decline in the cost of funds, which outpaced the decline in coupon yield on interest-earning assets, as well as one-time non-accrual benefits and loan fee expansion due to early payoffs

Loan and Deposit Growth:
- Average loans increased during the quarter at an annualized rate of 5.7%, while deposit balances excluding broker funding increased by $200 million.
- This growth was supported by strong loan production, strategic M&A, and seasonal inflows from municipality customers, along with the bank's focus on maintaining and deepening customer relationships

Capital Raise and M&A Strategy:
- Equity Bancshares raised $87 million in common equity during Q4 2024, which will be used for M&A growth and other organic growth.
- The capital raise is part of the company's ongoing dual-pronged strategy to drive organic growth and strategic M&A, taking advantage of increased M&A activity and conversations in the market

Credit Quality and Asset Management:
- Non-accrual loans decreased by 13.5% to $27 million in Q4, while nonperforming assets increased by $2.3 million.
- The decrease in non-accrual loans was attributed to the resolution of legacy credits, while the increase in nonperforming assets was primarily due to a Main Street lending loan, which partially offset the decline in non-performing assets