Wichita, Kan.-based Equity Bancshares, Inc., is acquiring Rockhold Bancorp and its north-central Missouri-based subsidiary Bank of Kirksville for $44.3 million in cash.
The deal, expected to close in the first quarter of next year, adds eight locations to Equity Bank’s current network. By acquiring the $406 million Bank of Kirksville, Equity Bancshares will grow to include 74 branches, including 23 in Missouri, and $5.4 billion in assets.
Equity Bank has completed 22 combined whole-bank, deposit or branch acquisitions since 2002, including 10 whole-bank deals since the company’s IPO eight years ago. Equity first entered Missouri in 2007 by acquiring a bank charter in Sarcoxie and has acquired multiple banks headquartered in the state over the past 16 years. In 2021, Equity Bank acquired three branches in St. Joseph, Mo., from Security Bank of Kansas City.
“Our teams continue to work diligently to add customers, colleagues and market locations within our four-state footprint, and we’re pleased to enter Kirksville and serve a vibrant customer base,” said CEO and Chair Brad Elliott.
Equity Bancshares expects the merger to be 12 percent accretive to diluted earnings per share next year, before rising to 14.3 percent accretive to earnings per share in 2025. The company expects a tangible book value earn back of approximately 1.3 years.
“Each bank has roots in community values, and dedication to Missouri customers,” added Bank of Kirksville CEO Norman Belitz, whom will join Equity Bank as regional market president.
Equity Bancshares was advised by and received a fairness opinion from Little Rock, Ark.-based financial services firm Stephens Inc. Law firm Norton Rose Fulbright US LLP served as legal counsel to Equity. Bank of Kirksville was advised by and received a fairness opinion from Greenville, S.C.-based The Capital Corp. Stinson LLP provided legal counsel to the company.
Equity also recently sold approximately $442 million of available-for-sale investment securities — treasury, agency and mortgage-backed securities with a weighted average yield of 1.33 percent. According to the company, the sale generated $38.2 million in after-tax loss.
The proceeds will be re-deployed in cash, investment and loan assets with a more than 5 percent expected yield. Equity expects the repositioning will contribute $16.2 million in additional annual interest income.
“We’re pleased to be able to reposition our bond portfolio, which we anticipate will provide significant earnings benefit in 2024,” Elliott said. “Our bankers have worked hard to build a strong capital base allowing the company to optimize our balance sheet, driving improved earnings while maintaining capital strength and enhancing liquidity.”