Equity Bancshares seems to have a template for its mergers and acquisitions.
The Wichita, Kansas-based bank unveiled a plan Thursday to acquire Reinbeck, Iowa-based Lincoln Savings Bank for roughly $123.8 million.
The deal, expected to close by year’s end, would add 16 locations in central and northeast Iowa to Equity’s footprint and push its asset total to $9.1 billion.
The timing and size of the deal could be shaping into a well-worn formula: Equity acquired Frontier Holdings last year for an almost-identical $122.8 million, in a deal also announced at the start of September. The Frontier deal gave Equity an entry to Nebraska; this year, the Lincoln deal opens Equity to Iowa (beyond one pre-existing Des Moines-area location).
Brad Elliott, Equity Bancshares’ chair and CEO, called Thursday’s deal “an important step in our long-term strategy” for the Hawkeye State.
“This merger brings resources, scale and enhanced opportunities for the customers and communities we will have the privilege of continuing to serve,” Elliott said in a statement.
Lincoln Savings Bank executives, meanwhile, kept some emphasis on legacy.
“Lincoln Savings Bank has always been guided by the dedication of our people and the relationships we've built with our customers and communities over the past 124 years,” the bank’s CEO, Sean Willett, said Thursday. “This merger isn't a departure from that; it's a way to protect and expand it, while preserving what has always made us special: our people and our shared mission.”
The deal marks Equity’s 27th strategic transaction since its 2002 founding, by the bank’s own count.
Apart from giving Equity a notable presence in the Des Moines and Cedar Rapids markets, the transaction gives the Kansas bank access to Lincoln’s $1.7 billion in assets, $1.5 billion in deposits and $1.2 billion in loans.
Equity counted $7.7 billion in assets as of June 30, and said Thursday it would “reduce excess liquidity on the combined balance sheet” by about $300 million.
Equity expects the deal to be roughly 5.1% accretive to its 2027 earnings per share and 7.5% accretive to the 2028 figure, apart from one-time transaction expenses. The bank expects to earn back its estimated tangible book value per share dilution in less than three years.
Lincoln shareholders will receive roughly 77.5% of the deal’s value in Equity stock and the other 22.5% in cash, according to Thursday’s release. The $123.8 million figure is based on Equity’s stock price of $49.85 from Wednesday.
“What people value most about their community bank is what stays the same,” Rick Sems, president and CEO of Equity Bank, said Thursday. “This is about giving customers more of what they’ve always counted on from their community bank: local decisions, local people who know their customers by name, and a long-term commitment to the community.”
