EQUITY BANCSHARES INC (EQBK)

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K filed with the SEC on March 6, 2026, and our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. See “Cautionary Note Regarding Forward-Looking Statements.” Also, see the risk factors and other cautionary statements described under the heading “Item 1A: Risk Factors” included in the Annual Report on Form 10-K and in Item 1A of this Quarterly Report. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.

This discussion and analysis of our financial condition and results of operation includes the following sections:

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Table containing selected financial data and ratios for the periods;

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Overview – a general description of our business and financial highlights;

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Critical Accounting Policies – a discussion of accounting policies that require critical estimates and assumptions;

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Results of Operations – an analysis of our operating results, including disclosures about the sustainability of our earnings;

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Financial Condition – an analysis of our financial position;

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Liquidity and Capital Resources – an analysis of our cash flows and capital position; and

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Non-GAAP Financial Measures – a reconciliation of non-GAAP measures.

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* The value noted is considered a Non-GAAP financial measure. For a reconciliation of Non-GAAP financial measures see “Non-GAAP Financial Measures” in this Item 2.

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Overview

We are a financial holding company headquartered in Wichita, Kansas. Our wholly-owned banking subsidiary, Equity Bank, provides a broad range of financial services primarily to businesses and business owners as well as individuals through our network of 84 full-service banking sites located in Arkansas, Kansas, Missouri, Nebraska and Oklahoma. As of March 31, 2026, we had consolidated total assets of $7.67 billion, total loans held for investment, net of allowance, of $5.36 billion, total deposits of $6.30 billion, and total stockholders’ equity of $817.6 million. During the three month period ended March 31, 2026, the Company had net income of $17.0 million. The Company had net income of $15.0 million for the three month period ended March 31, 2025.

Critical Accounting Policies

Our significant accounting policies are integral to understanding the results reported. Our accounting policies are described in detail in Note 1 to the December 31, 2025, audited financial statements included in our Annual Report on Form 10-K filed with the SEC on March 6, 2026. The preparation of our financial statements in accordance with GAAP requires management to make a number of judgments and assumptions that affect our reported results and disclosures. Several of our accounting policies are inherently subject to valuation assumptions and other subjective assessments and are more critical than others in terms of their importance to results. Changes in any of the estimates and assumptions underlying critical accounting policies could have a material effect on our financial statements. Our accounting policies are described in “NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” in the Notes to Interim Consolidated Financial Statements.

The accounting policies that management believes are the most critical to an understanding of our financial condition and results of operations and require complex management judgment are described below.

Allowance for Credit Losses: The allowance for credit losses represents management’s estimate of all expected credit losses over the expected life of our loan portfolio. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management’s evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio

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Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. See “Cautionary Statement Regarding Forward-Looking Statements.” Also, see the risk factors and other cautionary statements described under the heading “Item 1A – Risk Factors” included in Item 1A of this Annual Report on Form 10-K. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.

This discussion and analysis of our financial condition and results of operation includes the following sections:

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Table containing selected financial data and ratios for the periods;

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Overview;

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Critical Accounting Policies – a discussion of accounting policies that require critical estimates and assumptions;

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Results of Operations – an analysis of our operating results, including disclosures about the sustainability of our earnings;

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Financial Condition – an analysis of our financial position;

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Liquidity and Capital Resources – an analysis of our cash flows and capital position; and

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Non-GAAP Financial Measures – reconciliation of non-GAAP measures.

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* Indicates non-GAAP financial measure. Please see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures” for reconciliation to the most directly comparable GAAP measure.

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Overview

We are a financial holding company headquartered in Wichita, Kansas. Our wholly-owned banking subsidiary, Equity Bank, provides a broad range of financial services primarily to businesses and business owners as well as individuals through our network of 77 full-service branches located in Arkansas, Kansas, Missouri and Oklahoma. As of December 31, 2025, we had, on a consolidated basis, total assets of $6.37 billion, total deposits of $5.14 billion, total loans held for investment, net of allowances, of $4.15 billion and total stockholders’ equity of $732.1 million. Net income for the year ended December 31, 2025, was $22.7 million, compared to net income of $62.6 million for the year ended December 31, 2024.

History and Background

From 2003 through 2025, we completed a series of 23 acquisitions, two charter consolidations and two branch dispositions. We seek to integrate the banks we acquire into our existing operational platform and enhance stockholder value through the creation of efficiencies within the combined operations. In conjunction with our strategic acquisition growth, we strive to reposition and improve the loan portfolio and deposit mix of the banks we acquire. Following our acquisitions, we focus on identifying and disposing of problematic loans and replacing them with higher quality loans generated organically. In addition, we concentrate on growth in our commercial loan portfolio, which we believe generally offers higher return opportunities than our consumer loan portfolio, primarily by hiring additional talented bankers, particularly in our metropolitan markets, and incentivizing our bankers to expand their commercial banking relationships. We also seek to increase our most attractive deposit accounts primarily by growing deposits in our community markets and cross selling our depository products to our loan customers.

Our principal objective is to continually increase stockholder value and generate consistent earnings growth by expanding our commercial banking franchise both organically and through strategic acquisitions. We believe our strategy of selectively acquiring and integrating community banks has provided us with economies of scale and improved our overall franchise efficiency. We expect to continue to pursue strategic acquisitions and believe our targeted market areas present us with many and varied acquisition opportunities. We are also focused on continuing to grow organically and believe the markets in which we operate currently provide meaningful opportunities to expand our commercial customer base and increase our current market share. We believe our geographic footprint, which is strategically split between growing metropolitan markets, such as Kansas City, Tulsa, Oklahoma City and Wichita, and stable community markets within Southeastern Kansas, Southwestern Kansas, Central Kansas, North Central Kansas, Western Kansas, Topeka, Western Missouri, North Central Missouri, Northern Arkansas, Northern Oklahoma and Western Oklahoma, provides us with access to low cost stable core deposits in community markets that we can use to fund commercial loan growth in our metropolitan markets. We strive to provide an enhanced banking experience for our customers by providing them with a comprehensive suite of sophisticated banking products and services tailored to meet their needs, while delivering the high-quality relationship-based customer service of a community bank.

Highlights for the Year Ended December 31, 2025

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Net income of $22.7 million, or $1.23 diluted earnings per share, for the year ended December 31, 2025.

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Dividends declared of $12.3 million, or $0.66 per share, for the year ended December 31, 2025, compared to $8.7 million, or $0.54 per share, for the year ended December 31, 2024, an increase of 41.2%

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Net interest margin increased 35 basis points from 3.98% at December 31, 2024 to 4.33% at December 31, 2025.

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Total loans held for investment increased to $4.20 billion at December 31, 2025, compared to $3.50 billion at December 31, 2024, an increase of 19.9%.

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Completed the acquisition of NBC Corp. of Oklahoma during the year ended December 31, 2025, adding $806.0 million in deposits, seven banking locations and new territory to the Equity Bank footprint.

Critical Accounting Policies

The preparation of our financial statements in accordance with GAAP requires management to make a number of judgments and assumptions that affect our reported results and disclosures. Several of our accounting policies are inherently subject to valuation assumptions and other subjective assessments and are more critical than others in terms of their importance to results. Changes in any of the estimates and assumptions underlying critical accounting policies could have a material effect on our financial statements. Our accounting policies are described in “NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” in the Notes to Consolidated Financial Statements.

The accounting policies that management believes are the most critical to an understanding of our financial condition and results of operations and require complex management judgment are described below.

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Allowance for Credit Losses: The allowance for credit losses for loans represents management’s estimate of all expected credit losses over the expected contractual life of our loan portfolio. This assessment includes procedures to estimate the allowance and test the adequacy and appropriateness of the resulting balance. The level of the allowance is based upon management’s evaluation of historical default and loss experience, current and projected economic conditions, asset quality trends, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay a loan (including the timing of future payments), the estimated value of any underlying collateral, composition of the loan portfolio, industry and peer bank loan quality indications and other pertinent factors, including regulatory recommendations. The level of the allowance for credit losses maintained by management is believed adequate to absorb all expected future losses inherent in the loan portfolio at the balance sheet date; however, determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. The actual realized facts and circumstances may be different than those currently estimated by management and may result in significant changes in the allowance for credit losses in future periods. The allowance for credit losses for loans, as reported in our consolidated balance sheets, is adjusted by provision for credit losses, which is recognized in earnings and is reduced by the charge-off amounts, net of recoveries.

The Company utilizes primarily two methods for estimating the allowance for credit losses and the method used depends on the status of the underlying loans. Non-performing loans primarily utilize a collateral specific fair value impairment method and performing loans primarily utilize a historical loss method. The performing loan method utilizes a probability of default (PD) and loss given default (LGD) modeling approach for historical loss coupled with a macroeconomic factor analysis derived from a statistical regression of loss experience correlated to changes in economic factors for all commercial banks operating within our geographical footprint. The macroeconomic regression is based on a multivariate approach and includes key indicators that provide the highest cumulative adjusted R-square figure. Economic factors include, but are not limited to, national unemployment, gross domestic product, market interest rates and property pricing indices. To arrive at the most predictive calculation, a lag factor was applied to these inputs, resulting in current and historic economic inputs driving the projection of loss over our reasonable and supportable forecast period, which management has defined as 12 months for all portfolio segments. Following the reasonable and supportable forecast period, loss experience immediately reverts to the current historical loss experience of the Company. The estimated loan losses for all loan segments are adjusted for changes in qualitative factors not inherently considered in the quantitative analyses. The qualitative categories and the measurements used to quantify the risks within each of these categories are subjectively selected by management but measured by objective measurements period over period. The current period measurements are evaluated and assigned a factor commensurate with the current level of risk relative to past measurements over time. The resulting qualitative adjustments are applied to the relevant collectively evaluated loan portfolios. These adjustments are based upon quarterly trend assessments in projected economic sentiment, portfolio concentrations, policy exceptions, personnel retention, independent loan review results, collateral considerations, risk ratings and competition. The qualitative allowance allocation, as determined by the processes noted above, is increased or decreased for each loan segment based on the assessment of these various qualitative factors. The resultant loss rates are applied to the estimated future exposure at default (EAD), as determined based on contractual amortization terms through an average default month and estimated prepayment experience in arriving at the quantitative reserve within our allowance for credit losses.

The allowance represents management’s best estimate, but significant changes in circumstances relating to loan quality and economic conditions could result in significantly different results than what is reflected in the consolidated balance sheet as of December 31, 2025. Likewise, an improvement in loan quality or economic conditions may allow for a further reduction in the required allowance. Changing credit conditions would be expected to impact realized losses driving variability in specifically assessed allowances, as well as calculated quantitative and more subjectively analyzed qualitative factors. Depending on the volatility in these conditions, material impacts could be realized within the Company’s operations. Likewise, changing economic conditions, both positive and negative, to the extent significant could result in unexpected realization of provision or reversal of allowance for credit losses due to its impact on the quantitative and qualitative inputs to the Company’s calculation. Under the CECL methodology, the impact of these conditions has the potential to further exacerbate periodic differences due to its life of loan perspective. The life of loans calculated under the methodology is based in contractual duration and modified for prepayment expectations, making significant variation in periodic results possible due to changing contractual or adjusted duration of the assets within the calculation.

Goodwill: Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized and expensed in the period identified. Goodwill will be assessed more frequently if a triggering event occurs which indicates that the carrying value of the asset might be impaired. We have selected December 31 as the date to perform our annual goodwill impairment test. Goodwill is the only intangible asset with an indefinite useful life. For the year ended December 31, 2025, management performed a qualitative analysis and has determined that there was not evidence of a triggering event during the period then ended. Our qualitative analysis process consists of using recent bank merger transactions, for companies that are similar to the Company based on financial performance, to calculate the average change in control premium from the merger data. The average change in control premium, number of shares and our current trading price is used to estimate the market value of our equity, which is compared to our book value of equity. In addition to estimating equity market value, we evaluate the qualitative

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considerations contained in current accounting guidance to identify any evidence of goodwill impairment. Based on this qualitative analysis and conclusion, it was determined that a more robust quantitative assessment was not necessary at our measurement date.

For additional information see “NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” and “NOTE 7 – GOODWILL AND CORE DEPOSIT INTANGIBLES” in the Notes to Consolidated Financial Statements.

Results of Operations

We generate most of our revenue from interest income and fees on loans, interest and dividends on investment securities and non-interest income, such as service charges and fees, debit card income and mortgage banking income. We incur interest expense on deposits and other borrowed funds and non-interest expense, such as salaries and employee benefits and occupancy expenses.

Changes in interest rates earned on interest-earning assets or incurred on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and non-interest-bearing liabilities and stockholders’ equity, are usually the largest drivers of periodic change in net interest income. Fluctuations in interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international circumstances and domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in Arkansas, Kansas, Missouri and Oklahoma, as well as developments affecting the consumer, commercial and real estate sectors within these markets.

For information comparing our results of operations for the year ended December 31, 2024, to year ended December 31, 2023, see “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on March 7, 2025.

Net Income

Year ended December 31, 2025, compared with year ended December 31, 2024

For the year ended December 31, 2025, there was net income allocable to common stockholders of $22.7 million, compared to net income allocable to common stockholders of $62.6 million for the year ended December 31, 2024, a decrease of $39.9 million. This change was primarily driven by a $54.9 million decrease in non interest income, a $30.6 million increase in non interest expense offset by a $39.9 million increase in net interest income and a decrease in provision for taxes of $12.0 million. The changes in the components of net income are discussed in more detail below in the following sections of “Results of Operations.”

The year ended December 31, 2025 was meaningfully impacted by the repositioning of the Company’s investment portfolio during the third quarter as well as the costs associated with facilitating merger transactions. Realized losses on securities during the year were $53.2 million and merger expenses were $8.1 million. Excluding realized gains or losses on securities and merger expenses from pre-tax income in both periods resulted in pre-tax earnings of $87.6 million in 2025 compared to $82.7 million in 2024.

Net Interest Income and Net Interest Margin Analysis

Net interest income is the difference between interest income on interest-earning assets, including loans and securities, and interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds. To evaluate net interest income, management measures and monitors (1) yields on loans and other interest-earning assets, (2) the costs of deposits and other funding sources, (3) the net interest spread and (4) net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as net interest income divided by average interest-earning assets. Because non-interest-bearing sources of funds, such as non-interest-bearing deposits and stockholders’ equity also fund interest-earning assets, net interest margin includes the benefit of these non-interest-bearing sources of funds. Net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, referred to as “volume change,” and it is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds, referred to as “yield/rate change.”

The following table shows the average balance of each principal category of assets, liabilities, and stockholders’ equity and the average yields on interest-earning assets and average rates on interest-bearing liabilities for the years ended December 31, 2025, 2024,

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and 2023. The yields and rates are calculated by dividing income or expense by the average daily balances of the associated assets or liabilities.

Average Balance Sheets and Net Interest Analysis

(1)Average loan balances include non-accrual loans, hedge fair value adjustments and merger fair value adjustments.

(2)Net interest margin is calculated by dividing net interest income by average interest-earning assets for the period.

(3)Tax exempt income is not included in the above table on a tax equivalent basis.

(4)Actual un-rounded values are used to calculate the reported yield or rate disclosed. Accordingly, recalculations using the amounts in thousands as disclosed in this report may not produce the same amounts.

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The following table analyzes the change in volume variances and yield/rate variances for the year ended December 31, 2025, as compared to the year ended December 31, 2024, and the year ended December 31, 2024, as compared to the year ended December 31, 2023.

Analysis of Changes in Net Interest Income

(1)The effect of changes in volume is determined by multiplying the change in volume by the previous year’s average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the prior year’s volume. The changes attributable to both volume and rate, which cannot be segregated, have been allocated to the volume variance and the rate variance in proportion to the relationship of the absolute dollar amount of the change in each.

Year ended December 31, 2025, compared with year ended December 31, 2024

The increase in net interest income is primarily due to a 1 basis point decrease in yields on interest-earning assets offset by a 38 basis point decrease in the average cost of interest bearing liabilities. The change in yields and costs were driven, primarily, by three FOMC rate decreases creating continued lag re-pricing on long term interest earning assets and short term repricing opportunity on the liability portfolios throughout 2025. The asset yield was also positively impacted the volume of interest earning assets and an increase in the yield on taxable securities by the re-positioning of a portion of our investment portfolio in fiscal year 2025, as well as the completion of our merger with NBC which added asset purchase accounting accretion. In the final four months of 2025 and 2024, the FOMC reduced short-term interest rates by a combined 175 basis points across three meetings. The rate cuts, to date, have had a more significant impact on the interest bearing liabilities than interest earning assets in operating results.

Net interest spread increased from 3.29% at December 31, 2024 to 3.66% at December 31, 2025 primarily due to the increase in volume of loans relative to total earning assets and the realization of a greater decline in cost of interest-bearing liabilities as compared to interest-earning assets. The increase in net interest margin was driven by the additive yield from re-positioning of the investment portfolio, the re-pricing of liabilities outpacing the re-pricing of assets and the increasing contribution of non-interest bearing deposits and capital to the funding mix.

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Provision for Credit Losses

We maintain an allowance for credit losses for estimated losses in our loan portfolio. The allowance for credit losses is increased by a provision for credit losses, which is a charge to earnings, and subsequent recoveries of amounts previously charged-off, but is decreased by charge-offs when the collectability of a loan balance is unlikely. Management estimates the allowance balance required using past loan loss experience within the Company’s portfolio. This historical loss calculation is then modified to reflect quantitative economic circumstances based on evidenced economic conditions and regression formulas which incorporate lag factors in identifying a sufficiently predictive adjusted-R square as well as qualitative factors not inherently reflected in our historical loss or quantitative economic inputs. Included in our qualitative assessment is the consideration of prospective economic conditions over the next 12 months, considered the Company’s reasonable and supportable forecast period. As these factors change, the amount of the credit loss provision changes.

Year ended December 31, 2025, compared with year ended December 31, 2024

There was a $9.0 million provision for credit losses for the year ended December 31, 2025, compared to a provision for credit losses of $2.5 million for the year ended December 31, 2024. The provision for credit losses recorded during the period ended December 31, 2025, is primarily the result of an increase in the loan portfolio from the merger with NBC.

For additional detail see “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations – Allowance for Credit Losses.” Net charge-offs for the year ended December 31, 2025, were $2.5 million as compared to net charge-offs of $3.8 million for the year ended December 31, 2024. For the year ended December 31, 2025, gross charge-offs were $5.0 million offset by gross recoveries of $2.5 million. In comparison, gross charge-offs were $4.6 million for the year ended December 31, 2024, offset by gross recoveries of $817 thousand.

Non-Interest Income

The following table provides a comparison of the major components of non-interest income for the years ended December 31, 2025, 2024, and 2023.

Non-Interest Income

For the Years Ended December 31,

Year ended December 31, 2025, compared with year ended December 31, 2024

Non-interest income, before gain on acquisition and gain or loss on sale of securities, increased 1.9%. The increase was driven by the yield on bank-owned life insurance, the increase in Debit card income and Other non-interest income partially offset by the

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recovery on zero-basis purchased loans. The decrease in gain/loss on securities transaction was due to the re-positioning of a portion of our investment portfolio in fiscal year 2025.

Non-Interest Expense

The following table provides a comparison of the major components of non-interest expense for the years ended December 31, 2025, 2024, and 2023.

Non-Interest Expense

For the Year Ended December 31,

Year ended December 31, 2025, compared with year ended December 31, 2024

The increase in non-interest expense was primarily due to increases in salaries and employee benefits of $12.0 million, net occupancy and equipment expense of $1.4 million, loss on extinguishment of debt of $1.4 million and Other expenses of $2.4 million. The change in Other real estate owned and repossessed asset was the result of gain on the disposition of a repossessed asset and is not expected to reoccur. These items and other changes in the various components of non-interest expense are discussed in more detail below.

Salaries and employee benefits: There was a $12.0 million increase in salaries and benefits for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Salaries and wages increased by $7.8 million which includes a $3.7 million related to additional staff from merger activity for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Additionally, for the year ended December 31, 2025, there was an increase in employee insurance of $1.9 million. Included in salaries and employee benefits is share-based compensation expense of $4.8 million for the year ended December 31, 2025, and $3.5 million for the year ended December 31, 2024.

Net occupancy and equipment: The $1.4 million increase was primarily due to the additional expense of $723 thousand related to properties acquired through merger activity.

Other real-estate owned: Other real-estate owned increased $8.6 million primarily due to the realized a gain on disposition of repossessed assets of $8.5 million during 2024, which is not expected to reoccur. Excluding the $8.5 million gain in the prior year, other real estate expense would have increased $54 thousand.

Other: Other non-interest expenses consists of subscriptions, memberships and dues, employee expenses including travel, meals, entertainment and education, supplies, printing, insurance, account related losses, correspondent bank fees, customer program expenses, losses net of gains on the sale of fixed assets, losses net of gains on the sale of repossessed assets other than real estate, other

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operating expenses, such as settlement of claims, limited partnership tax credits and provision for unfunded commitments. There was a $2.2 million increase in other non-interest expense for the year ended December 31, 2025, as compared to the year ended December 31, 2024. This increase was primarily due to a $1.2 million in miscellaneous expenses.

Merger expenses: Merger expenses of $8.1 million include legal, advisory and accounting fees associated with services to facilitate the acquisition activity in 2025. Merger expenses also include data processing conversion costs and costs associated with the integration of personnel, processes, facilities and employee bonuses. During 2024, the Company incurred merger expenses of $4.5 million related to the Rockhold BanCorp and Kansasland acquisitions.

Efficiency Ratio

The efficiency ratio is a supplemental financial measure utilized in the internal evaluation of our performance and is not defined under GAAP. Our efficiency ratio is computed by dividing non-interest expense, excluding goodwill impairment, merger expenses and loss on debt extinguishment, by the sum of net interest income and non-interest income, excluding net gains on sales of and settlement of securities and gain on acquisition. Generally, an increase in the efficiency ratio indicates that more resources are being utilized to generate the same volume of income, while a decrease would indicate a more efficient allocation of resources. The ratio defined under GAAP that is most comparable to the efficiency ratio is non-interest expense to net interest income plus non-interest income which is discussed in “Results of Operations – Non-GAAP Financial Measures.” The Company’s efficiency ratio remained largely unchanged in 2025 as compared to 2024.

Income Taxes

The amount of income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income, the amount of non-deductible expenses and available tax credits.

Year ended December 31, 2025, compared with year ended December 31, 2024

The effective income tax rate for the year ended December 31, 2025, was 13.9% as compared to the U.S. statutory rate of 21.0%. The effective income tax rate for the year ended December 31, 2024, was 20.0% as compared to the U.S. statutory rate of 21.0%. The reduction in the tax rate year over year was the result of gains recognized on the surrender of BOLI and related penalties offset by tax planning benefits in the prior year, both of which did not recur in the current year, in conjunction with interest income related to federal refunds and other permanent tax benefits in the current year that were amplified by the year over year reduction in pre-tax income due to the current year sale of securities. As detailed in “NOTE 13 – INCOME TAXES” in the Notes to Consolidated Financial Statements, the income tax rates differed from the U.S. statutory rates primarily due to non-taxable income, non-deductible expenses, and tax credits. The Company made investments in solar tax credits during the years ended December 31, 2025 and December 31, 2024 which impacted the effective income tax rate for each period.

Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities and are computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position will be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is more likely than not to be realized on examination. The Company recognizes interest and/or penalties related to income tax matters in income tax expense. During the tax year ended December 31, 2024, a Corporate Application for Tentative Refund was filed to carry back excess general business credits from 2023 to 2020, 2021 and 2022 tax years resulting in related interest income net of federal tax expense of $631 which was recorded to income tax expense as a benefit for 2025. There were no material amounts to report for interest or penalties incurred in 2024 or 2023.

Impact of Inflation

Our consolidated financial statements and related notes included elsewhere in this annual report have been prepared in accordance with GAAP. These require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative value of money over time due to inflation or recession.

Unlike many industrial companies, substantially all our assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation.

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Financial Condition

Overview

Our total assets increased $1.04 billion, or 19.5%, from $5.33 billion at December 31, 2024, to $6.37 billion at December 31, 2025. The increase in total assets was primarily from increases in loans, net of allowance for credit losses of $687.9 million, cash and due from banks of $224.1 million, goodwill of $29.0 million, available for sale securities of $26.1 million, core deposit intangible of $6.7 million and premises and equipment of $19.6 million. Our total liabilities increased $902.0 million, or 19.0%, from $4.74 billion at December 31, 2024, to $5.64 billion at December 31, 2025. The increase in total liabilities was from increases in total deposits of $763.5 million, FHLB advances of $121.9 million and interest payable and other liabilities of $15.2 million. Our total stockholders’ equity increased $139.1 million, or 23.5%, from $592.9 million at December 31, 2024 to $732.1 million at December 31, 2025. The increase in stockholders equity was primarily driven increases in paid in capital of $80.5 million and accumulated other comprehensive income of $62.2 million, partially offset by an increase in treasury stock of $14.0 million for the year ended December 31, 2025.

Loan Portfolio

Our loan portfolio consists of various types of loans, most of which are made to borrowers located in the Wichita, Kansas City, Oklahoma City and Tulsa MSAs, as well as various community markets throughout Arkansas, Kansas, Missouri and Oklahoma. Although the portfolio is diversified and generally secured by various types of collateral, the majority of our loan portfolio consists of commercial and industrial and commercial real estate loans and a substantial portion of our borrowers’ ability to honor their obligations is dependent on local economic conditions in Arkansas, Kansas, Missouri and Oklahoma.

At December 31, 2025, gross total loans were 81.7% of deposits and 65.9% of total assets. At December 31, 2024, gross total loans were 80.0% of deposits and 65.7% of total assets.

The organic, or non-acquired, growth in our loan portfolio is attributable to our ability to attract new customers from other financial institutions and overall growth in our markets. Our lending staff has been successful in building banking relationships with new customers. New lenders have been hired in our markets and these employees have been successful in transitioning their former clients and attracting new clients. Lending activities originate from the efforts of our lenders with an emphasis on lending to individuals, professionals, small to medium-sized businesses and commercial companies located in the Wichita, Kansas City, Oklahoma City and Tulsa MSAs, as well as community markets in Arkansas, Kansas, Missouri and Oklahoma.

The following table summarizes our loan portfolio by type of loan as of the dates indicated.

Composition of Loan Portfolio

Commercial and industrial: Commercial and industrial loans include loans used to purchase fixed assets, to provide working capital or meet other financing needs of the business.

Commercial real estate: Commercial real estate loans include all loans secured by nonfarm, nonresidential properties and multifamily residential properties, as well as 1-4 family investment-purpose real estate loans.

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Residential real estate: Residential real estate loans include loans secured by primary or secondary personal residences.

Agricultural real estate, Agricultural, Consumer and other: Agricultural real estate loans are loans related to farmland. Agricultural loans are primarily operating lines subject to annual farming revenues including productivity/yield of the agricultural commodities produced. Consumer loans are generally secured by consumer assets but may be unsecured.

The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with predetermined interest rates and floating rates in each maturity range as of December 31, 2025, and December 31, 2024, are summarized in the following tables.

Loan Maturity and Sensitivity to Changes in Interest Rates