Equity Bancshares in Wichita, Kan., has agreed to buy Frontier Holdings in Omaha, Neb.
The $6.4 billion-asset Equity said in a press release that it will pay $122.8 million in cash and stock for the parent of the $1.4 billion-asset Frontier Bank. The deal, which is expected to close in the fourth quarter, priced Frontier at 123% of its tangible book value.
Separately, Equity said it sold about $358.8 million of securities at a $31.6 million after-tax loss in a transaction that should be neutral to tangible common equity. Proceeds will be reinvested in higher-yield securities and loans. Equity said the move should contribute additional annual interest income of about $7.4 million and produce 27 cents of earnings per share accretion next year.
Frontier has seven branches, $1.3 billion of loans and $1.1 billion of deposits. It will mark Equity’s entry into Nebraska.
“Frontier has built a strong reputation for serving its communities with integrity and personal service, values that align perfectly with ours,” Brad Elliott, Equity’s chairman and CEO, said in the release. “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.”
“Joining with Equity Bank allows us to enhance the way we serve our customers and communities by providing access to advanced technology, increased lending capacity, and the strength of a larger organization,” said Doug R. Ayer, President of Frontier Bank. “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.”
The deal is expected to be about 7.7% accretive to Equity’s 2026 earnings per share, excluding merger-related expenses. It should take Equity less than three years to earn back any dilution to its tangible book value.
Equity plans to cut nearly a quarter of Frontier’s annual noninterest expense. It expects to incur $10.9 million of merger-related expenses.
Equity was advised by Stephens and Norton Rose Fulbright US; it received a fairness opinion from Janney Montgomery Scott. Frontier was advised by D.A. Davidson and Fenimore Kay Harrison.