Equity Bancshares in Wichita, Kansas, has struck its third deal to buy a bank in two years and is signaling that more acquisitions may lie ahead.
The
The deal is expected to close in the third quarter. NBC branches would rebrand under the Equity Bank name.
"We intend to retain all branches. We will provide the same excellent service NBC is known for while adding the services and capability of the larger combined franchise," Equity Chairman and CEO Brad Elliott said during a call with analysts Thursday after announcing the deal in a press release.
Oklahoma City has a steady growth trajectory, and Equity has been trying to get into the market for several years, Elliott said.
"We wanted to get in here with the right management team and the right opportunity, and we're very positive" about NBC, he said.
NBC had $908.9 million of total assets, including $681.5 million of loans, at the start of this year. It had $815.3 million of deposits. The combined bank would have 82 branches across four states, including 15 in Oklahoma. Equity also operates in Missouri and Arkansas.
The deal prices NBC at 145% of tangible book value, Equity said. It expects to earn back tangible book value dilution of 5% within three years, thanks in part to expected cost savings of 34.5% of NBC's noninterest expense base. Equity projects earnings per share accretion in 2026 of 12.5%.
The Mississippi lender said regulators have signed off sooner than expected on its $103.6 million acquisition of First Chatham Bank. The bank's CEO and deal advisers said the speedy approval bodes well for future M&A.
"Partnership with Equity Bank creates the capacity to support larger credits and will fuel new commercial growth, enhancing lending capabilities and retail services while expanding market reach," H. K. Hatcher, NBC's president and CEO, said in the release.
Hatcher and other local NBC executives expect to join Equity in management roles, according to the release. NBC Chairman Ken Fergeson would join Equity's board.
Following an $86.9 million capital raise in December, Equity "clearly stated it had earmarked a portion of the proceeds for acquisitions," and it "is following through on known intentions," said analyst Jeff Rulis of D.A. Davidson.
More M&A is likely for Equity, Elliott said Thursday.
After the NBC deal, Equity still holds "more than $67 million from the capital raise closed in December," Elliot said. "The market remains active and opportunities continue to arise. This excess capital positions us to execute if and when a strategic fit and transaction discipline aligned."
The NBC deal marked Equity's 13th bank acquisition since its initial public offering in 2015. Last year, it bought
"We think we can do two to three a year. And so we've got lots of conversations going on with other people that will continue," Elliot added. "So we don't think" the deal this week "precludes us from working on those things. We've been good at juggling multiple opportunities for years as we've announced multiple deals three different times in the history of the company. … So it really doesn't distract us from the other things that we are currently working on as well."
