Equity Bancshares announced a major expansion into Iowa on Thursday, October 16, 2026, reporting record loan production in the third quarter and confirming its merger with Lincoln Bancorp, the Reinbeck-based holding company of Lincoln Savings Bank, is on track to close in the fourth quarter.
The Kansas-based bank holding company, which trades on the New York Stock Exchange under the ticker EQBK, reported net income of $26.8 million, or $1.29 per diluted share, with core earnings of $29 million, or $1.40 per share, according to its third quarter earnings call. The deal gives the bank a meaningful presence in the Des Moines and Waterloo Cedar Falls metro areas, where it plans to keep all 16 Lincoln Savings Bank branches open.
What the Lincoln Bancorp merger means for Iowa
Lincoln Savings Bank has served Iowa communities since 1902 and operates 16 locations across central and northeast Iowa. Equitey Bancshares Chairman and CEO Brad Elliott said the acquisition builds on a disciplined approach that has produced 15 prior transactions since 2015, and he sees the state as a long-term growth platform.
It also positions us for further bolt-on opportunities in the state, with more than 200 banks under $2 billion in assets chartered there, Elliott said on the call, according to a transcript published by The Motley Fool.
The combined company will hold approximately $9.1 billion in assets once the merger closes, up from the $7.6 billion Equity Bancshares reported at the end of the quarter. Elliott said the bank expects Lincoln to convert onto Equity systems in the second quarter of 2027, and that half of the deal's projected cost savings will be realized that year.
We do not plan to close or consolidate any branches, which protects the customer relationships that make this franchise so valuable, Elliott said.
Record loan production and organic growth
The bank reported $379.3 million in loan production during the third quarter, a company record and a 20.3% increase over the prior quarter. Loans in legacy markets grew at an annualized rate of 11.9%, and total loan balances rose $39.2 million to $5.44 billion, the first quarterly balance increase since the bank closed its recent acquisitions.
This quarter was about organic growth and the numbers show it, said Richard Sems, CEO of Equity Bank. Production across the bank reached a new high.
New loans came on the books at an average yield of 6.91%, above the total portfolio spot coupon of 6.48%. The bank's weighted pipeline stands at $534 million, up 27% from the second quarter. Management said it has hired 13 new bankers this year in Oklahoma City, Omaha, Lincoln, Wichita and Des Moines to build pipelines through 2027.
Deposits slipped as rates rose
Total deposits fell $136.4 million, or 2.2%, to $6.17 billion during the quarter. Sems attributed the decline largely to large rate-sensitive customers, including public funds, which pulled $102 million out of legacy markets.
Excluding public funds, deposits in legacy markets were effectively flat and up 3.6% from a year ago. The bank opened 6,269 new accounts in legacy markets during the quarter, up 22% from the same period last year, and digital active users reached nearly 79,000, a 10% year-over-year increase.
Net interest margin compressed 16 basis points to 4.20% as deposit costs rose faster than asset yields. Chief Financial Officer Chris Navratil said the margin should return to a range of 4.25% to 4.35% in the fourth quarter, and he noted that every 25 basis point rate increase from the Federal Reserve adds roughly 3 to 5 basis points to the margin.
Credit quality and capital strength
Provision for credit losses was $1.7 million, with the allowance held steady at 1.18% of total loans. Net charge-offs were $2.1 million, or 15 basis points annualized, up from 12 basis points in the prior quarter. Nonperforming assets stood at 0.99% of total assets, while classified assets to regulatory capital improved 140 basis points to 10.42%.
Capital ratios remain strong, with common equity tier 1 at 12.15% and total risk-based capital at 14.94%. The bank raised its dividend 22% to $0.22 per share and has repurchased 711,369 shares year-to-date at a weighted average price of $44.84. Buybacks are paused while the company finalizes the S-4 filing for the Lincoln transaction.
Iowa expansion fits a broader consolidation trend
Elliott told analysts that rising interest rates could sideline smaller banks by hurting their accumulated other comprehensive income, which may slow industry consolidation. But he said Equity Bancshares has four or five active acquisition conversations regardless of the rate environment.
Iowa has been on our list of places we wanted to be for the last four or five years, Elliott said, adding that the combined company will be much better than the two companies operating separately.
For Iowa customers and communities, the immediate impact is continuity. Local leadership and decision-making will remain in place at Lincoln Savings Bank, and no branches will close. The conversion to Equity systems in mid-2027 is when customers will notice account and platform changes.
Frequently asked questions
When will the Equity Bancshares and Lincoln Bancorp merger close?
The merger is expected to close in the fourth quarter of 2026, with systems conversion planned for the second quarter of 2027.
Will Lincoln Savings Bank branches in Iowa close after the merger?
No. Equity Bancshares CEO Brad Elliott said the company does not plan to close or consolidate any branches, in order to protect customer relationships.
How large will the combined company be?
The combined company will hold approximately $9.1 billion in assets following the close of the Lincoln Bancorp merger.