Dive Brief:

• Wichita, Kansas-based Equity Bancshares will merge with Omaha-based Frontier Holdings in a $122.8 million cash-and-stock deal that will expand Equity into Nebraska for the first time, the banks said Tuesday.
• The transaction, set to close in the fourth quarter, will add seven locations to Equity’s footprint and bolster the Kansas lender with $1.4 billion in new assets, $1.3 billion in loans and $1.1 billion in deposits.
• Concurrently, Equity announced it would sell roughly $358.8 million in investment securities, at a one-time loss of roughly $31.6 million. Proceeds from the sale will be re-deployed in cash, investment and loan assets with an expected yield in excess of 4.75%, the bank said. Equity said it expects the repositioning will add roughly $7.4 million in annual interest income.

Dive Insight:

The Frontier deal, combined with a plan to open a loan production office in West Des Moines, Iowa, this year, means Equity will push its territory to six states.

“Reaching six states is a milestone that reflects our team’s strategic decision-making and the trust of our customers,” Equity Bank CEO Rick Sems said in a statement Tuesday. “Equity Bank will continue to seek smart opportunities that align with our vision and values to expand our footprint and bring community banking to even more people.”

The Wichita lender is frequently acquisitive. Equity completed a merger with NBC Oklahoma in July, and the Frontier deal stands to stretch the bank’s asset total to $7.9 billion. Equity has made 26 “strategic transactions” since 2002, including 14 whole-bank acquisitions over the past decade, it said.

“Frontier has built a strong reputation for serving its communities with integrity and personal service, values that align perfectly with ours,” Equity Chair Brad Elliott said in a statement. “This acquisition allows us to expand our regional presence while continuing our commitment to relationship banking, local leadership and delivering the resources of a larger institution with the heart of a community bank.”

For Frontier, the crux of the deal is “long-term growth and strength in Nebraska,” the bank’s executive chair, David Rogers, said in a statement.

“Equity’s resources and scale, combined with our deep community relationships, create a powerful platform for expansion and innovation,” Rogers said. “Together, we can deliver greater opportunities for our customers, invest in our markets, and continue building on the legacy our team has established.”

Frontier CEO Doug Ayer noted the Equity deal would “provid[e] access to advanced technology, increased lending capacity, and the strength of a larger organization.”

“Just as important, our institutions share a common philosophy of community-focused lending, ensuring that our customers will continue to receive the same level of personal service, now supported by greater resources.”

Frontier will receive roughly 75% of its consideration in Equity stock and the rest in cash. Equity expects the transaction to be about 7.7% accretive to the bank’s 2026 earnings per share, excluding one-time transaction expenses. The bank expects to earn back its tangible book value per share in less than three years.

Equity’s upcoming sale of mostly treasury, agency and mortgage-backed securities, meanwhile, aims to boost the efficiency of the bank’s balance sheet.

“We remain focused on delivering value to our shareholders through consistent performance, while upholding strong credit quality and prudent risk management as the foundation of our business,” Elliott said. “Looking ahead, we will continue to evaluate opportunities like those we are announcing today that align with our strategy and create sustainable value.”