Equity Bancshares, Inc. Corporate presentation

Luke, please go ahead. Good morning, everyone, and thank you for joining us on today's Equity Bancshares conference call.

This call is being recorded and is also available live via webcast on our Investor Relations site, where you can also find the corresponding slide presentation. Before we begin, let me remind you that today's discussion will include forward-looking statements. These involve risks and uncertainties, and actual results may differ materially from those discussed. More detail on these risks is available in our SEC filings. Following our prepared remarks, we will open the line for questions and discussion. With that, it's my privilege to turn the call over to our Chairman and CEO, Brad Elliott.

Thank you, and good morning, everyone. I am glad to be with the Lincoln Savings Bank team this morning to share some big news together. We are announcing today that Equity Bancshares and Lincoln Bancorp have agreed to merge. This brings together two strong organizations that share a vision, a culture, and a commitment to serving communities. For Equity Bancshares, this partnership is more than a transaction. It is the next step in the strategic plan we have worked towards for many years. Iowa has long been a growth priority for us, and this merger lets us expand our presence there in a meaningful way. The combination adds locations in Des Moines, Waterloo, Cedar Falls, along with the surrounding communities in the Cedar Valley area that Lincoln has served since 1902. Each of these markets is unique.

Each has a strong customer base, and each gives us a platform for long-term growth. Des Moines is one of the top mid-sized metros in the country for economic development, with strong population and household income growth projected over the next five years. Waterloo, Cedar Valley is home to many major employers like John Deere, Tyson Foods, UnityPoint Health, and is consistently ranking in the top places to live in Iowa. The surrounding counties that make up Cedar Valley bring deep roots and longstanding customer relationships. Together, these markets create a network that is diverse and complementary to our legacy franchise. They connect well with our existing operations in Kansas, Missouri, Oklahoma, Nebraska, and Arkansas, while extending our reach into one of the most attractive regions in the Midwest. Beyond geography, what excites us most about this combination is the people and the culture we are joining with.

Lincoln Savings Bank was built on customer trust, community focus, and prudent growth. Under the leadership of Chair Sally Hollis, along with Sean Willett, Emily Giersch, and Andy Borrmann, Lincoln has grown into one of Iowa's largest private community banks, known for its strong customer service and its involvement in the communities it serves. This is exactly the kind of partner we look for. Values align, leadership is strong, and the future is built on doing what's right for customers, employees, and communities. I want to be clear, this transaction is not about changing Lincoln's model. It is about building on it. We will retain all of the branches of Lincoln, keep local leadership in place, and continue to empower local decision-making. Doug Anderson and Mike Cisney will continue to lead the Iowa markets, ensuring continuity, consistency, and a clear path forward.

They know these communities, and they have earned their trust. That will not change. At Equity, we believe the best combinations happen when cultures align, and we can grow together without imposing change from the outside. Lincoln's story is one of entrepreneurial spirit, long-term discipline, and deep ties to communities. That is also the story of Equity Bank. When you combine two organizations built the same way, the result is very powerful. Before I turn it over to Sally and Sean, I want to recognize Lincoln's entire team. They have built a bank that is respected in its markets and trusted by its customers. That does not happen by accident. It happens because of leadership, vision, and execution. We are honored to welcome Lincoln's employees, customers, and shareholders to Equity. With that, I will turn it over to Sally Hollis, Chair of Lincoln Bancorp.

Thank you, Brad. Today is truly a milestone for Lincoln Savings Bank. Since our founding in 1902, our goal has been simple, to build a bank that could serve customers with integrity, provide local decision-making, and foster strong relationships. Over the years, we've grown into one of Iowa's largest community banks, earned the trust of our communities, and built a balance sheet that reflects disciplined growth. We are proud of what our team has accomplished, and we are proud of the impact we've had on the communities we serve. As we looked to the future, we wanted to find a partner who shares our values and could help us scale while preserving our culture. In Equity, we found exactly that. Brad and his team believe in community banking, they believe in local leadership, and they believe in long-term growth. That makes this partnership a natural fit.

By joining with Equity, we gain access to additional resources, technology, and scale, all of which will benefit our customers and our employees, while at the same time, we maintain our commitment to the communities we serve. This is not the end of Lincoln's story. It's the beginning of a new chapter. I'm confident that our team will play a significant role in the growth and success of the combined company, and I'm excited about what lies ahead. Sean, let me turn it over to you.

Thank you, Sally. At Lincoln Savings Bank, our philosophy has always been that banking is about relationships. Customers trust us because they know the people they work with, and they know the decisions are made locally. Joining with Equity provides greater access to products and services for our customers, more career opportunities for our employees, and more support for the communities we serve. It also means the chance to build something larger together, a bank that combines the strengths of two great institutions while staying true to our roots. I'm excited to partner with our local leaders in Iowa as we integrate these two great organizations. Together, we will take what Lincoln Savings Bank has built and make it even stronger. Rick, let me turn it over to you.

Thank you, Sean. On behalf of all of us at Equity, I want to congratulate Lincoln on what you've built. This is a franchise with $1.7 billion in assets and 16 branches across Central and Northeast Iowa, fueled by organic growth and a reputation for excellence. This is a financially attractive and strategically important combination. The expanded footprint diversifies our markets, better leverages our balance sheet, and provides new growth opportunities, including a robust pipeline of potential bolt-on acquisitions with more than 200 banks with less than $2 billion in assets across Iowa. Importantly, we are not just adding branches. We are adding strong communities, talented employees, and a proven leadership team. We intend to retain all Lincoln branches and to invest further in Iowa as we grow together.

As part of our due diligence, we conducted a detailed credit review covering approximately 70% of total loans, 78% of the commercial portfolio, and 100% of all classified, non-performing, and watch credits. As we look to the pro forma portfolio, we are confident in the strength of the combined credit profile and do not foresee any concerns with concentrations of credit or levels of exposure, with non-owner-occupied and total CRE ratios remaining within internal limits and regulatory expectations. This transaction is about building on Lincoln's legacy, not replacing it. With retained leadership, an excellent deposit base, and exceptional markets in both the metro and community markets of Iowa, I'm confident that this market will be a source of strength and opportunity for years to come.

With the addition of Lincoln, we are strengthening our franchise with a talented team, an excellent customer base, and a shared operating approach that positions Equity for long-term growth and success. Chris, let me turn it over to you for the financial details.

Thank you, Rick. As the team has outlined, this is a strategic partnership built on culture and markets, but it is also a transaction that makes strong financial sense. We expect the merger to be approximately 5.1% accretive to earnings per share in 2027, 7.5% in 2028, and 10.1% in 2029. Tangible book value dilution at close is estimated at 3.8%, with an earn-back period of approximately 2.6 years. Lincoln shareholders will receive approximately 1.89 million shares of Equity stock, plus $29.5 million in cash consideration for a total deal value of approximately $123 million, or 1.05 times Lincoln's tangible book value. The resultant pay-to-trade ratio is approximately 70.3%. On a pro forma basis, Equity shareholders will own approximately 91.6% of the combined company, with Lincoln shareholders owning 8.4%.