Equity Bancshares Q2 2026 Earnings Call - Core Profitability and Efficiency Surge Post-Merger as AI and Record Loan Production Fuel Organic Growth

Operator: Hello, everyone. Thank you for joining us, and welcome to the Equity Bancshares second quarter 2026 earnings conference call. After today’s prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Luke Pfeiffer. Luke, please go ahead.

Luke Pfeiffer, Investor Relations, Equity Bancshares: Welcome, everyone. Thank you for joining the Equity Bancshares second quarter earnings call. A quick note before we begin. Today’s call is being recorded and is available via webcast at investor.equitybank.com, along with our earnings release and presentation materials. Today’s presentation contains forward-looking statements, which are subject to certain risks, uncertainties, and other factors that could cause actual results to differ materially from those discussed. After the presentation, we’ll open the floor up for questions and discussion. A conversation we look forward to. Let me turn the call over to our Chairman and CEO, Brad Elliott.

Brad Elliott, Chairman and CEO, Equity Bancshares: Good morning, everyone. Thank you for joining us. Today’s results are what we’ve been working towards since we announced the NBC and Frontier transactions. We knew what the numbers would look like once the merger noise was muted, and we could see the earnings power of the combined companies with Equity Bank. Our teams worked hard to get the Frontier transaction closed on January 1st and merged in the first quarter. A desire to keep as much of the M&A noise in the first quarter to let everyone see a more normalized number this quarter. For the first time since closing, we are clearly showing investors what this franchise earns without the noise of merger charges, day 2 provisions, and integration costs overshadowing the combined earnings of Equity. GAAP EPS was $1.27 per diluted share, and ROATCE was 16.6%. Core EPS was $1.41, and ROATCE was 17.2%.

Our efficiency ratio for the quarter was 53.4%. Those are exciting numbers that we want to talk about today. When you have worked hard to negotiate and structure these transactions, you can see firsthand the power of what happens when two complementary companies come together, or in this case, three, it means something special. It is exciting to see that the hard work shows up in the operating metrics. Margin was 4.36%, up three basis points from last quarter, driven by a more favorable earning asset mix we talked about on previous calls and a higher bond discount accretion. I said, the core conversion is complete and behind us. Our teams are locked in on what we have been focused on, that is organic growth. We have exciting things to talk about in this area.

It always looks muted as we work to reset portfolios, but organic growth is our priority. Let me take a moment on a topic I’m genuinely excited about and one that Equity Bank is leaning into aggressively. AI and automation. This is not new for us. It has been core to how we built this company. When you build an organization around entrepreneurship, it naturally adapts to new technologies and new ways of thinking as they come along. We have always believed the banks that win will be the ones that grow the balance sheet and deepen relationships without growing the cost structure at the same pace. Technology is exactly how we do that. We are not talking about this. We’re actually doing it. Today, 15% of our staff are actively using Anthropic AI products, and 75% have Microsoft Copilot installed.

I want to be clear, we do not plan to reach 100% with Copilot or Anthropic in our organization, as some roles in our company can’t use it or benefit from it. We’re not adding the expense. We currently have six bots running in production, and AI is actively supporting functions like loan review and M&A due diligence, along with many other practical improvements across the bank. We have moved from theory or it being cool to the implementation phase. We are putting these tools to work across our operations, streamlining back-office processes, speeding up onboarding and credit workflows, and giving time back to our bankers so they can spend it with what matters most, our customers. We have not yet fully tapped the expense reduction opportunity, and that is intentional. Phase 1 is implementation, stabilization, and proof of concept.

Phase 2 is where the efficiency gains show up in the numbers. Honestly, this area excites me more than anything I’ve seen in my career since the adoption of personal computers. That era took us from assets per employee from under $1 million per employee to around $5 million per employee in a few short years. I believe we are on the front end of a similar shift, and Equity Bank is positioned to lead it. Let me turn it over to Rick, our bank CEO, to walk you through the bank operations. Rick?

Rick, Bank CEO, Equity Bancshares: Thanks, Brad. Our transformative year continued in the second quarter as we worked with intention to position our teams across both the Oklahoma City and Nebraska footprints to best serve our customers and grow our franchise. In the quarter, we added a team in Lincoln, led by Russ Seebeck, and saw immediate benefit. We also added experienced bankers in each of our new metro footprints, individuals with large bank and complex customer backgrounds to position each market for growth. Notably, our Omaha team, under the leadership of Kevin McGoogan and Travis Flodin, has already begun optimizing the inherited portfolio and attracting new customers. As we look to the back half of the year, I’m excited about the contributions each of our markets is now positioned to make to our organic growth efforts.

The former NBC markets should approach an inflection point over the next two quarters. While the Frontier portfolio will likely experience continued pruning, the addition of the Lincoln and Omaha teams should help us absorb some of that attrition. During the quarter, loan and deposit balances in total continued to face headwinds from normal runoff and optimization efforts surrounding the acquired portfolios. Importantly, our legacy markets absorbed the majority of that loan pressure, resulting in effectively flat balances period over period. Production, however, began to reflect the scale of our now larger franchise. We closed $315 million in loans, our largest quarterly production level ever, at an average rate of 6.56%. That represents $119 million or 60% increase compared to the same period in 2025. Key contributors were Kansas City, Des Moines, and western Kansas.

I want to specifically recognize the work Levi Goetz, our Western Market President, has done. That team has demonstrated the power of a disciplined, customer-focused calling culture. Levi will now be expanding his oversight to include central Kansas as well. Loan balances in non-acquired markets grew at an annualized rate exceeding 10% and are up 3% compared to Q2 2025. The underlying sales discipline, customer experience prioritization, and operational strength are clearly there. Our current pipeline, which stands at $1.6 billion, a 23% increase over last quarter, and our 75% pipeline, which is now at $475 million, show the trajectory that we are on. As the more pronounced J-curve from our recent acquisitions work through the balance sheet, we will be well-positioned to accelerate growth. Throughout the balance sheet transition, we have maintained discipline on pricing and structure.

New originations continue to come on at a level accretive to coupon loan yields. We have not chased production that would erode margin or diminish returns on deployed capital. Total deposits were flat for the quarter, while non-brokered balances declined modestly. Q2 is a seasonal period of outflows as customers meet tax obligations and service debt. This quarter was no exception. The decline in core balances were concentrated in existing customer relations, which we view as transitory rather than structural. Cost of deposits declined modestly as utilization of lower-cost accounts offset continued optimization of higher-cost acquired funds. Looking forward, the groundwork being laid by our retail team will position the bank to deepen existing relationships and expand our customer base. Our legacy markets never lost focus during the M&A activity. That discipline shows.

On a same-store basis, we generated checking accounts at our highest level ever, up 24% versus Q2 2025. We achieved net checking account growth in legacy markets at a rate this company has not previously seen. The second half of 2026 is about expanding existing relationships and winning new ones. This team is well-positioned to do exactly that. In addition, our focus on customer service in the branches is taking hold as our customer satisfaction scores continue to rise. Within fee income, we continue to see momentum. Trust and wealth management is growing revenue, mortgage banking is benefiting from the addition of the Nebraska footprint. Debit and credit card results are expanding with added value. Investments in our treasury functions will enhance our ability to fully serve commercial customers across the comprehensive product suite.

To that end, we have brought in Melissa Morin to lead that strategic initiative to grow treasury management, mirroring our commercial lending expertise with a full product suite designed to meet the complete scope of our customers’ banking needs. On credit quality, non-performing assets moved from 76 basis points to 86 basis points of total assets. A portion of that increase is attributed to credits inherited from Frontier, which we are actively working through. Net charge-offs were $1.7 million or 12 basis points annualized. Classified assets to regulatory capital improved modestly at 11.9%. We remain comfortable with the overall credit posture of this portfolio. We now operate in six states and seven major metros, all growing markets. Behind the merger-driven noise, our organic growth engine is evident and strong.

Our leaders understand our value proposition. I look forward to what they will accomplish through the remainder of 2026 and beyond. I’ll turn it to Chris to cover the financials in detail.

Chris, Chief Financial Officer, Equity Bancshares: Thanks, Rick. Good morning. Net income for the quarter was $26.4 million, or $1.27 per share. Excluding M&A expenses, intangible amortization, and losses on securities, core net income was $29.4 million or $1.41 per share. Pre-tax, pre-provision net revenue adjusted for merger expenses and losses on securities was $36.4 million, up $2.4 million quarter-over-quarter. Net interest income was $73.9 million. This reflects declining purchase accounting accretion and lower average earning assets offset by higher security yields and a lower cost of funds. Net interest margin expanded three basis points to 4.36%. Loan purchase accounting accretion contributed $2.9 million or approximately 17 basis points in line with our expectations. For the second half of 2026, the margin may decrease modestly as we look for expansion of average earning assets to $6.85 billion-$6.95 billion. The compression reflects the expected mix shift and continued accretion burn down.

Non-interest income was $8.1 million, excluding $2.2 million in losses realized on securities and the write-down of a fund investment. Core non-interest income was $10.3 million, up $0.7 million linked quarter. We are encouraged by the growth in fee income from debit and credit card activity, mortgage, and trust and wealth management. We are guiding to non-interest income of $18 million-$22 million for the second half. Non-interest expense was $46.9 million, down from $55 million in the previous quarter. Excluding merger costs in both periods, expenses declined $2.5 million to $46.8 million. Non-interest expense also benefited from gain on sale of assets of $850,000 in the quarter. The efficiency ratio improved to 53.4%, an improvement of over 10 percentage points compared to the same quarter last year. Our second-half guidance for non-interest expense is $94 million-$98 million.

As Brad and Rick have noted, we remain committed to delivering on operational efficiency. Capital remains strong. TCE closed the quarter at 9.07%, CET1 was 11.84%, and total risk-based capital was 14.66%. Tangible book value per share grew to $33.45 from $32.58. We returned capital to shareholders through a $0.18 per share dividend and the repurchase of an additional 211,000 shares of our stock. Total shares repurchased year to date are 711,000 shares at $44.84 per share. I will turn it back to Brad for closing remarks.

Brad Elliott, Chairman and CEO, Equity Bancshares: Thank you, Chris. We are proud of the progress this quarter and the trajectory of the Equity Bank franchise. A year and a half ago, we told you we were building something. You trusted us by investing new capital in Equity so that we could execute on what we saw in the marketplace, accretive M&A targets. We thank you for the trust. We are now $7.7 billion in assets, reflecting a 19.4% total compounded annual growth rate since 2010, and a franchise that is generating returns that are among the best in our peer group. Our core ROATCE of 17.2% is evidence that the strategy is working. The second half of 2026 is about executing on what is right in front of us. Organic growth, deepening relationships across Kansas, Missouri, Oklahoma, Nebraska, Iowa, and Arkansas, driving efficiency across the franchise, and continuing to build tangible book value for our shareholders.

That is where the majority of our energy and attention is concentrated. We are seeing real momentum on all fronts. This team has done that every single year. We plan to keep doing it. That said, M&A has always been part of how we have built this company. That has not changed. We remained active in evaluating opportunities. Our pipeline reflects that. When something fits our strategy, meets our return standards, and genuinely makes Equity a better company, we move on it. When it does not clear the bar, we stay disciplined and keep our attention on the growth we are already generating. We are not chasing deals for the sake of activity. We are focused on the right deals. Right now, we like what we are seeing in the marketplace and the opportunities in front of us.

I want to thank you for joining our call today. We are happy to take any questions at this time.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Damon DelMonte with KBW. Your line is open. Please go ahead.

Damon DelMonte, Analyst, KBW: Hey, good morning, guys. Hope everybody’s doing well. First question, just on loan growth. Good to hear the color on the pipeline and the trend in the legacy portfolio. As we think about the ongoing attrition and right-sizing of the acquired portfolios, how do we think about

Net growth for the next few quarters until you work through that. Do you think it’s flattish, or do you think there’s, on a net basis, it could be low single digits?

Rick, Bank CEO, Equity Bancshares: Yeah. Hey, Daron. Thanks. This is Rick. Yeah, we think we’re going to have-

Damon DelMonte, Analyst, KBW: Hey, Rick

loan growth in total. How are you? We’re believing and seeing that we will have loan growth with what’s happening in the legacy markets. Strong pipeline, strong growth there. You just start having that flowing as you get into a year past NBC. We think we’re getting close to that, and then same thing as we get later into the Frontier deal. We’re looking at low single digits or mid-single digits growth for the second half of the year.

Got it. Okay. That’s helpful. Are there any industries where you’re seeing a good flow of opportunities, or is it broad-based?

Rick, Bank CEO, Equity Bancshares: Yeah, I think it’s more broad-based. I don’t think we’re seeing.

Brad Elliott, Chairman and CEO, Equity Bancshares: We’re honestly seeing really good originations out of everywhere. Places we haven’t gotten it before. One of our better credits, C&I credits, last quarter was booked out of Southeast Kansas. $10 million-plus credit. We’ve never had a $10 million-plus credit out of that area. We’ve got the right banker down there doing the right things. We’re seeing credits across the footprint. Rick’s done a really good job of building out the team, encouraging his people. Our regional CEOs are doing a good job on getting their people doing the right things, and we’re getting the business out of that. It’s coming from Western Kansas, Oklahoma, Nebraska. Kansas City’s doing great. Wichita team is doing really well. It’s across the entire footprint.

Damon DelMonte, Analyst, KBW: Got it. Okay, great. I appreciate the guidance on the margin, Chris, and the outlook there. How would you characterize the positioning of the margin, given a higher-for-longer interest rate environment and potentially a rate hike either later this year or in the early part of, or sometime in 2027?

Chris, Chief Financial Officer, Equity Bancshares: Damon, what I’d point to in terms of a rising interest rate environment is really the last cycle we went through. The balance sheet hasn’t changed meaningfully from a posturing perspective for rising interest rates. I think we’re positioned to do well in that world. There’s always the caveat of what happens in liability pricing and how everybody behaves through that environment. In an upward rate scenario, I think we’re well positioned to execute similarly to the last iteration.

Damon DelMonte, Analyst, KBW: Okay, great. That’s all that I had. Thank you.

Operator: Your next question comes from the line of Brendan Nosal with Hovde Group. Your line is open. Please go ahead.

Brendan Nosal, Analyst, Hovde Group: Hey, good morning, folks. Hope you’re doing well.

Rick, Bank CEO, Equity Bancshares: Hey, good morning.

Maybe just starting off. Hey, good morning. Just starting off here on expenses. Nice to see the run rate come down so much this quarter, as well as the improved guide for the back half of the year. Just curious, is there anything specific that’s driving that improvement? Whether it be some of the AI automation initiatives you spoke to, or cost savings from Frontier? Is it more just blocking and tackling as you work through 2026?

Chris, Chief Financial Officer, Equity Bancshares: It’s heavily the back two there, Brendan. The first thing, and we emphasized it on the prepared comments, is it was really important to us to get Frontier closed and converted in Q1 so we could create some of this visibility to where expenses really should be. A lot of the benefit is coming from getting through that conversion process, realizing the reduction in their technological costs, the people cost associated with managing those systems, et cetera. That’s a lot of where you’re seeing the benefit. There’s obviously still a focus internally on where we can find other opportunities to reduce costs over time. You’re seeing a little bit of that come through. As you think about AI technology automation, as Brad mentioned, we’re leaning into it. We’re working hard on figuring out how it moves the needle for us over time.

There’s not tangible benefit to it today where we’d say, as you look at expenses this quarter versus last, it’s due to X artificial intelligence benefit. That is still too early stage, but we’re excited about where it can go.

Brendan Nosal, Analyst, Hovde Group: Awesome. Okay. That’s helpful color. Maybe circling back to the margin for a moment. Can you just talk about the puts and takes in that back-half margin outlook that would get you toward either the high end or the low end of the range as you look ahead?

Chris, Chief Financial Officer, Equity Bancshares: The high-end execution to me really lives in the liability side of the balance sheet. To the extent that we can maintain and decline liability costs over time, and we’ve talked about in the past the Frontier accounts that came on board, relatively high cost. There is some tailwind there. If we can execute on declining that liability position, our opportunity on the asset side that we’ve talked about, Rick talking about loans. We can hit the high end of that margin. On the low end, it’s really the alternative, right? If liability costs creep up, we’ve talked about yield curve kind of moving the other direction on us at the moment. That’s the potential to deteriorate a little bit margin over time. It’s really that, Brendan.

Brendan Nosal, Analyst, Hovde Group: Okay. Thanks, Chris. I appreciate you taking my questions.

Operator: Your next question comes from the line of Nathan Race with Piper Sandler. Your line is open. Please go ahead.

Nathan Race, Analyst, Piper Sandler: Hey, guys. Good morning. Thanks for taking the questions. Curious maybe, Rick, if you can speak to what you’re seeing in terms of pricing on new loan production relative to roughly the 650 kind of core loan portfolio yield. Curious if you’re seeing any kind of degradation in new loan yield productions, just given that you guys seem to be going up

market in terms of client holding phase to some degree?

Rick, Bank CEO, Equity Bancshares: Yeah. I think on the loan pricing, we’re continuing to see it stay fairly strong. We’re really disciplined on that. As a result, that is something that the team takes to heart and goes after. I’d actually say that maybe we’re seeing a little bit of stress there in certain markets. Every once in a while you get an irrational player. In those markets, we choose not to play at that level and decide to go wider. We’re not really seeing a lot of downward movement in that. I look at every exception that we have as we run it through the pricing model, and those are not accelerating. It tends to be that we’re about the same as we’ve been over the last two years in those types of exceptions. I think pricing’s continued for us to hold firm.

Nathan Race, Analyst, Piper Sandler: Okay, great. That’s really helpful. Changing gears, I believe you guys have just over 100,000 shares left on the remaining buyback authorization. Just curious if you can speak to the aptitude, just given the valuation relative to peers these days, which seems quite low to that end. Just considering you guys are building capital at pretty strong clips and even have existing excess capital currently to maybe pursue some additional acquisition opportunities as well.

Brad Elliott, Chairman and CEO, Equity Bancshares: Yeah. We always balance the use of capital between share buyback, making sure we have enough for M&A transactions. We are in conversations with people on the M&A side. We always want to have enough there to be able to perform those transactions. We use a model very similar to what we use on the acquisition side for the buybacks. When we’re in range to do buybacks, we think those are no-brainers. There’s no integration risk, we’ll deploy the capital to do buybacks. It all just depends on what’s the earn back on that and does that fit our model or we’ll hold the capital looking for M&A opportunities, and we balance those three things at the board meeting. We talk about it at every board meeting, set our target price.

We’ll always be active in the buyback when it makes sense, and we’ll be out of it just like we are in the M&A side when it doesn’t make sense. I hope I answered that question vaguely, because we can’t really figure it out.

Nathan Race, Analyst, Piper Sandler: Yeah. No. I appreciate the various dynamics there, Brad. If I could just follow up. It sounds like we shouldn’t be surprised if there’s an increased authorization at some point, maybe later this year, or?

Brad Elliott, Chairman and CEO, Equity Bancshares: Yeah. I think we already have an authorization.

Chris, Chief Financial Officer, Equity Bancshares: The board’s authorized it. We’re waiting on formal approval through the.

Brad Elliott, Chairman and CEO, Equity Bancshares: Yeah

Chris, Chief Financial Officer, Equity Bancshares: Regulatory bodies, we plan to maintain.

Brad Elliott, Chairman and CEO, Equity Bancshares: We always plan to maintain a buyback approval from the board. The board’s actually already approved that, we’re just waiting for standard regulatory approval to up that. We haven’t been in a big rush for that because we still have shares available to buy back.

Nathan Race, Analyst, Piper Sandler: Great. I appreciate all the color. Thanks, guys.

Operator: As a reminder, if you would like to ask a question, please press star one to raise your hand. Your next question comes from the line of Matt Olney with Stephens. Your line is open. Please go ahead.

Matt Olney, Analyst, Stephens: Thanks, guys. Appreciate you taking the question. Want to circle back on the loan growth discussion. With the pay-downs we’ve seen so far this year, it sounds like most of this is from the recent acquisitions. Any color you can provide as far as customer retention, employee retention from those deals and how that compared to your internal expectations?

Brad Elliott, Chairman and CEO, Equity Bancshares: I think when we look at both of these transactions, my expectation is it’s exactly what happened. In Nebraska, it’s actually better than did a great job of pre-hiring for that market. We already had opened an LPO office there, so we already had boots on the ground. Also we had a lot of color on other people in the marketplace that we might want to talk to. I would say that the Nebraska market is in better shape than actually when we acquired it by quite a bit. The team that we have in Lincoln is very exciting. They all came from larger institutions, and are excited to be back with a company like ours that’s big enough to do the deals that they like to do without the complication of working for a $30 billion bank.

We’re really excited about the team in Omaha and Lincoln, Nebraska, and how that team is shaping out. We’ve kept a core group in Omaha with us, and we’ve added to that. We probably started with 18 bankers on acquisition day, and we are up to 22 bankers. From an ability to produce, we actually have lots of ability to produce in that market, which is what attracted us to that market to begin with. I think it’s playing out exactly as we anticipated. Oklahoma City is the same way, where

Continue to hire bankers in Oklahoma City. The reason to enter these markets, which is what I wanted to do with acquisitions, is it gives us a really core base to build off of. There’s core customers there we can expand, and it gives us a footprint then to go hire people into. People don’t want to work for a loan production office because they don’t know if you’re truly committed to that market or not. It’s hard to get people to work for you in those environments long-term without having something to build around. Man, we’ve got scale in both of those markets now, great reputations in both of those markets. Hiring people into those is an exciting venture. I’m as excited about our organic growth piece as possible.

Even more so because of the legacy markets are, I don’t know, 25%, 30% better than they were a year ago today. You add these new markets on top of it with the acquisitions is great. I’ll turn it over to Rick.

Rick, Bank CEO, Equity Bancshares: Yeah, I was just going to add, Matt, on the customer side of it, one of the things you find in these is there’s always these really good core blue-chip customers. What we’re able to do is really expand with them. You don’t see that quarter one, quarter two. That happens over time. You’ve got some really good customers. We spend a lot of time with them. Those are the ones that allow you to expand from. They’ve got stuff at numerous other banks. Those are the ones we really are able to go after and you see that in year two and year three as that expansion really comes into play. Both of these banks, both NBC and Frontier, had some really good core customers that we’re looking for significant expansion over time with.

Brad Elliott, Chairman and CEO, Equity Bancshares: The retention piece of that on the core customers is really strong.

Matt Olney, Analyst, Stephens: Okay, great. I appreciate the color on that topic. I guess switching back towards the margin outlook, Chris, you’ve already provided some great color for us for the back half of the year. Any more color on when you think those near-term headwinds are going to moderate? As we think about the margin for 2027, any puts and takes we should be mindful of for that? Thanks.

Chris, Chief Financial Officer, Equity Bancshares: Near-term headwinds moderating. I think there’s puts and takes on both sides where I’d say we have both tailwinds and headwinds operating right now to where that range 425 to 435 is reasonable, and I think you could hit either end. I’m more optimistic about the 435 side of it. I don’t know that there’s a specific kind of indicator of challenge today that I’m worried about alleviating. As we look into 2027, as we get this organic growth engine going, I think you’re going to see, over time, maintenance of where we are on a larger earning asset base. I’m optimistic we’ll be able to accomplish that as we look out further into 2027 and 2028 and beyond.

Matt Olney, Analyst, Stephens: Okay. Thanks, guys.

Operator: Your next question comes from the line of Brett Verpraton with StoneX Group. Your line is open. Please go ahead.

Brett Verpraton, Analyst, StoneX Group: Hey, guys. Good morning. Wanted to ask on the fee income guidance. I know at the Investor Day, you seemed pretty excited about despite where rates are, that mortgage banking could be a bigger contributor. Can we talk maybe about the low end or the high end of the fee income guide and just what drives it to the high end? Could that be mortgage? Would that be other things like trust, wealth? Any thoughts on that?

Chris, Chief Financial Officer, Equity Bancshares: Yeah. Good question, Brett. The high end of that’s driven by continued growth in really all the business lines. Right? As we look to continue to integrate Frontier customers, NBC customers, and looking to at the call it sale cycle on the commercial and C&I side, looking at treasury opportunities, there’s going to be means by which we continue to expand that particular line item. Mortgage banking, Frontier brought a good practice in that world. The interest rates are a challenge today. Brett, as you noted, with the rising yield curves becoming the challenge of that, the opportunity for us to expand versus stay is a little bit muted. Trust and wealth management continues to grow and provide opportunities. Debit card and credit card income are expanding as we continue to deepen relationships with those customers.

The high end of that range is just continued trajectory of what we’ve been doing. The low end is a function of, it could be seasonality, it could be mortgage banking going down somewhat with the changing interest rate environment. That’s what I would point to. I don’t know, Rick, if you have anything else.

Rick, Bank CEO, Equity Bancshares: No, I think that’s right. I mean, we’ve added the people, we’ve added the strategy on there. We’re seeing on the TM side, for instance, there’s just a lot more calls and a lot more opportunities for winning TM business. There’s just a sort of change in attitude. We’re looking at things like waivers and stuff like this. I think that piece will be coming. Chris is absolutely right on the mortgage side. We’ve got a bigger mortgage production team than we did before, but again, that’s one obviously heavily rate-driven.

Brett Verpraton, Analyst, StoneX Group: Okay. That’s helpful. Then Brad, you seem really excited about AI and deploying technology. I’m looking at slide 16 specifically. Wanted just to hear maybe what inning you think you’re in in adopting AI in terms of what it can do, then just aside from, I think there’s obvious benefits on loan review, getting things done faster and credit review. Kind of maybe some of the other things that might be coming down the road in terms of efficiency from that perspective.

Brad Elliott, Chairman and CEO, Equity Bancshares: I think anybody that says we’re not in the first inning or even at bat doesn’t realize how much this is going to change the world. I think anybody that says they’re on second base probably doesn’t realize what the power of this technology trend or change is going to be. I look at this as, I said it in some of my prepared comments, I think it has a lot to do with when I started banking, the bank I started at, we had one PC in the whole institution. It had two floppy drives in it. Within four years, everyone had one on their desk, they were all connected through Novell NetWare. You could communicate with one another and share files. All of a sudden, we dropped from $800,000 or $900,000 per employee to a couple million dollars per employee.

To within five, six years, it was $5 million per employee. Now we’re at $10 million per employee is kind of the benchmark. I think we’re in a trend where we’re going to be doing the same thing over the next three to five years. I think we’re all in the beginning phases. I think you’re going to see costs coming out of all organizations because of this trend. As a growth company, it’s very exciting to me because we’ve got great people that work for us. It allows us to continue to leverage their abilities as we continue to grow. It probably means we don’t need to add as many people as we continue to grow as an organization, and our efficiency ratio continues to get better and better as we continue to grow.

I think we listed some things that we actually are using today because they’re easy to use on the loan review side, M&A review, headhunter placements, those types of things. I think we’re all in the very beginning phases.

Brett Verpraton, Analyst, StoneX Group: Okay. That’s great cover. Thanks so much, guys.

Operator: Your next question comes from the line of Jeff Rulis with D.A. Davidson. Your line is open. Please go ahead.

Jeff Rulis, Analyst, D.A. Davidson: Thanks. Good morning. Wanted to ask about the added non-accrual loans from Frontier. I guess just a question of why weren’t those added at the jump in 1Q? Just kind of speaking to more of the migration, and Rick, I think you talked about the Nebraska optimization of loans there. Just trying to track anything that developed when you closed and from then until now of just pointing to that migration piece.

Brad Elliott, Chairman and CEO, Equity Bancshares: Yeah. What happens, Jeff, is there are credits that are paying as agreed. We tell the customer we’re not going to renew under the current terms. There’s a little battleground that starts with that. We use that as leverage to start working them out of the bank. Sometimes that flips them to non-accrual during that process of getting them out of the bank. We have them appropriately marked as part of the acquisition, but they come across as accrual because they are making payments and accruing. When we don’t renew them, then they’re not current any longer. It just is something that happens regularly as we work through portfolios and collect things. It’s a modest uptick. There’s nothing systemic in it. There’s a house under construction that we don’t think is going the right direction.

We want them to find another bank, find another opportunity, or if we’re going to work out a thing. I mean, there’s a whole host of things-

Jeff Rulis, Analyst, D.A. Davidson: Appreciate it. Yeah

Brad Elliott, Chairman and CEO, Equity Bancshares: through that process. There’s a divorce on.

Jeff Rulis, Analyst, D.A. Davidson: Okay. Yeah

Brad Elliott, Chairman and CEO, Equity Bancshares: ag deal that causes a problem, there’s a whole host of issues that happen in the lending business, that’s what we do.

Jeff Rulis, Analyst, D.A. Davidson: Yeah. You kind of answered the follow-up. It’s that those were marked at least on the Frontier side, appreciate it, sounds like the loss content in the forward guide on provisioning unimpacted. Just a quick follow-up is on, it sounds like the opportunity on the Frontier side to decrease some of those deposit costs. Is there further there? Has that largely been worked through? Just wanted to get an update on how that’s progressed.

Chris, Chief Financial Officer, Equity Bancshares: Yeah. There’ll continue to be some opportunity there, Jeff, over time. Frontier had a healthy level of maturing deposits that had laddered maturity. We’ll continue to see some of that over the next two, three, four quarters. It’s there. A lot of it has been worked through, there is still some opportunity.

Jeff Rulis, Analyst, D.A. Davidson: Okay. I appreciate it. Thanks.

Operator: We have reached the end of the question and answer session. This concludes today’s call. Thank you for attending. You may now disconnect.