S-4
Table of Contents

As filed with the Securities and Exchange Commission on February 8, 2018

Registration No. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

EQUITY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Kansas   6022   72-1532188

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

7701 East Kellogg Drive, Suite 300

Wichita, Kansas 67207

(316) 612-6000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Brad S. Elliott

Chairman and Chief Executive Officer

Equity Bancshares, Inc.

Wichita, Kansas 67207

(316) 612-6000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Michael G. Keeley, Esq.

Norton Rose Fulbright US LLP

2200 Ross Avenue, Suite 3600

Dallas, Texas 75201-7932

(214) 855-3906

 

C. Robert Monroe, Esq.

Stinson Leonard Street LLP

1201 Walnut Street, Suite 2900

Kansas City, Missouri 64106

(816) 691-3351

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective and all other conditions to the proposed merger described herein have been satisfied or waived.

If the securities being registered on this form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer   ☐  (Do not check if a smaller reporting company)    Smaller reporting company  
Emerging Growth Company       

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☒

If applicable, place an ☒ in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

 

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of

securities to be registered

 

Amount

to be

registered(1)

 

Proposed

maximum

offering price

per share

 

Proposed

maximum

aggregate

offering price(2)

 

Amount of

registration fee(3)

Class A Common Stock, par value $0.01 per share

  344,132   N/A   $6,414,302   $799

 

 

(1) Represents the maximum number of shares of the Registrant’s common stock that could be issued in connection with the merger described herein. The number of shares included in the registration fee table does not include the additional shares of common stock that could be issued, upon the Registrant’s election, to avoid the termination of the merger agreement by Adams Dairy Bancshares, Inc. due to a decrease below certain specified thresholds of the volume weighted average price of the Registrant’s common stock over a specified period of time, pursuant to the merger agreement and described in more detail elsewhere in this proxy statement/prospectus. The shares that could be issued in that context cannot be determined at this time.
(2) Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act of 1933, as amended (the “Securities Act”), and computed pursuant to Rule 457(f)(2) and (f)(3) under the Securities Act, by multiplying the book value of Adams Dairy Bancshares, Inc.’s common stock of $14.44 per share as of September 30, 2017, the latest practicable date prior to the date of filing this registration statement, by 718,287, the maximum number of shares of Adams Dairy Bancshares, Inc.’s common stock to be cancelled in the merger described herein, less the estimated aggregate cash consideration to be paid in the merger of $3,957,762.
(3) Determined in accordance with Section 6(b) of the Securities Act at a rate equal to $124.50 per $1,000,000 of the proposed maximum aggregate offering price.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this proxy statement/prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/prospectus is not an offer to sell these securities, and it is not soliciting to buy these securities, in any state where the offer or sale is not permitted.

 

PRELIMINARY—SUBJECT TO COMPLETION, DATED FEBRUARY 8, 2018

PROXY STATEMENT/PROSPECTUS

 

LOGO   LOGO
Prospectus of Equity Bancshares, Inc.   Proxy Statement of Adams Dairy Bancshares, Inc.

PROPOSED MERGER—YOUR VOTE IS VERY IMPORTANT

 

 

To Shareholders of Adams Dairy Bancshares, Inc.:

On December 16, 2017, Equity Bancshares, Inc., a Kansas corporation (which we refer to in this proxy statement/prospectus as “Equity”), Abe Merger Sub, Inc., a Kansas corporation and wholly-owned subsidiary of Equity (which we refer to in this proxy statement/prospectus as “Merger Sub”), and Adams Dairy Bancshares, Inc., a Missouri corporation (which we refer to in this proxy statement/prospectus as “Adams”), entered into an Agreement and Plan of Reorganization (which we refer to in this proxy statement/prospectus as the “merger agreement”). Subject to its terms and conditions, the merger agreement provides that Merger Sub will merge with and into Adams (which we refer to in this proxy statement/prospectus as the “merger”), with Adams continuing as the surviving corporation and a wholly-owned subsidiary of Equity. Immediately following, and in connection with, the merger, Equity will cause Adams to be merged with and into Equity, with Equity surviving the merger (which we refer to in this proxy statement/prospectus as the “second merger”).

At the effective time of the merger (which we refer to in this proxy statement/prospectus as the “effective time”), each outstanding share of Adams common stock will be converted into the right to receive (i) 0.4791 shares of Class A common stock, par value of $0.01 per share, of Equity (which we refer to in this proxy statement/prospectus as “Equity common stock”), and (ii) $5.51, in cash, subject to a possible downward adjustment of the cash consideration based upon Adams’s consolidated capital, surplus and retained earnings accounts less all intangible assets and Adams merger costs (which we refer to in this proxy statement/prospectus as the “Adams adjusted shareholders’ equity”) prior to the closing of the merger (which we refer to in this proxy statement/prospectus as the “Closing”) as provided in the merger agreement. The Equity common stock is listed on the Nasdaq Global Select Market (which we refer to in this proxy statement/prospectus as the “Nasdaq”) under the symbol “EQBK.” The market value of the shares of Equity common stock to be paid as consideration will fluctuate with the market price of Equity common stock; therefore, the market value of the shares of Equity common stock at Closing will not be known at the time the Adams shareholders vote on the merger.

Based on (i) the closing price of $35.10 for Equity common stock on Nasdaq on December 15, 2017, the last trading day before public announcement of the merger, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $16.82, and, together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $22.33 per share of Adams common stock, and (ii) the closing price of $36.10 for Equity’s common stock on the Nasdaq on February 5, 2018, the latest practicable trading day before the initial filing of this proxy statement/prospectus, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $17.30 and together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $22.81 per share of Adams common stock and (iii) the closing price of $[        ] for Equity’s common stock on Nasdaq on [        ], 2018, the latest practicable trading day before the printing of this proxy statement/prospectus, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $[        ] and together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $[        ] per share of Adams common stock. Each of the foregoing examples in the preceding sentence assumes there is no downward adjustment to the cash component of the merger consideration.

Adams is required to deliver $9,666,000 of Adams adjusted shareholders’ equity in connection with the closing of the merger. If the Adams adjusted shareholders’ equity is less than $9,666,000, as of the close of business on the calculation date, which will be the fifth business day before the closing of the merger or such other mutually agreed date, then the aggregate cash consideration to be paid to holders of Adams common stock will be reduced by $1.64 for each dollar that the Adams adjusted shareholders’ equity is less than $9,666,000, and the per share cash amount to be paid to each holder of Adams common stock will be correspondingly reduced pro rata. In the event that the Adams adjusted shareholders’ equity is less than $7,253,653, then the holders of Adams common stock would receive no cash consideration. As of September 30, 2017, Adams’s shareholders’ equity was approximately $10,370,000. Adams estimates that it will earn approximately $610,000 prior to the anticipated closing of the merger in the second quarter of 2018. As of January 31, 2018, Adams estimated that the Adams Merger Costs (as defined in the merger agreement) would be approximately $1,310,000. Based on the foregoing estimates, Adams expects that the Adams shareholders will receive $5.51 in cash per share of Adams common stock.

We urge you to obtain current market quotations for Equity common stock. There are no current market quotations for Adams common stock because Adams is a privately owned corporation and its common stock is not traded on any established public trading market.

Adams will hold a special meeting (which we refer to in this proxy statement/prospectus as the “Adams special meeting”) of its shareholders in connection with the merger. Adams shareholders will be asked to vote to approve the merger agreement and related matters as described in this proxy statement/prospectus.

Adams’s board of directors unanimously recommends that Adams shareholders vote “FOR” the approval of the merger agreement and “FOR” the other matters to be considered at the Adams special meeting.

This proxy statement/prospectus describes the Adams special meeting, the merger, the issuance of the Equity common stock in connection with the merger, the documents related to the merger and other related matters. Please carefully read this entire proxy statement/prospectus, including “Risk Factors,” beginning on page 24, for a discussion of the risks relating to the proposed merger. You also can obtain information about Equity from documents that it has filed with the Securities and Exchange Commission (which we refer to in this proxy statement/prospectus as the “SEC”).

 

LOGO    LOGO

Brad S. Elliott

Chairman and Chief Executive Officer

Equity Bancshares, Inc.

  

David Charles Chinnery

Chairman and Chief Executive Officer

Adams Dairy Bancshares, Inc.

 

 

Neither the SEC nor any state securities commission has approved or disapproved of the securities to be issued in the merger or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The securities to be issued in the merger are not savings or deposit accounts or other obligations of any bank or non-bank subsidiary of either Equity or Adams, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

The date of this proxy statement/prospectus is [        ], 2018, and it is first being mailed or otherwise delivered to the shareholders of Adams on or about [        ], 2018.


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LOGO

ADAMS DAIRY BANCSHARES, INC.

651 NE Coronado Drive

Blue Springs, Missouri 64014

 

 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

 

 

To the Shareholders of Adams Dairy Bancshares, Inc.:

Notice is hereby given that Adams Dairy Bancshares, Inc. (“Adams”) will hold the Adams special meeting at Adams Pointe Conference Center, 1400 NE Coronado Drive, Blue Springs, Missouri 64014, on [    ], 2018, at 8:00 a.m., local time, to consider and vote upon the following matters:

 

    a proposal to approve the Agreement and Plan of Reorganization (the “merger agreement”), dated December 16, 2017, by and among Equity Bancshares, Inc. (“Equity”), Abe Merger Sub, Inc. (“Merger Sub”) and Adams, pursuant to which Merger Sub will merge with and into Adams (the “merger”), with Adams surviving as a wholly-owned subsidiary of Equity, as more fully described in this proxy statement/prospectus (which we refer to in this proxy statement/prospectus as the “Merger Proposal”); and

 

    a proposal to adjourn the Adams special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Merger Proposal (which we refer to in this proxy statement/prospectus as the “Adjournment Proposal”).

Adams has fixed the close of business on [    ], 2018 as the record date for the Adams special meeting (the “Adams record date”). Only Adams shareholders of record at that time are entitled to notice of, and to vote at, the Adams special meeting, or any adjournment or postponement of the Adams special meeting. Approval of the Merger Proposal requires the affirmative vote of holders of two-thirds of the outstanding shares of Adams common stock. The Adjournment Proposal will be approved if a majority of the shares entitled to vote on the subject matter and represented in person or by proxy at the Adams special meeting are voted in favor of such proposal.

Adams shareholders have the right to demand appraisal of their shares of Adams common stock and obtain payment in cash of the appraised fair value of their shares of Adams common stock under applicable provisions of the Missouri Revised Statutes (the “RSMo”). In order for an Adams shareholder to perfect his or her appraisal rights, such Adams shareholder must carefully follow the procedures set forth in the RSMo. A copy of the applicable statutory provisions of the RSMo is included as Annex E to this proxy statement/prospectus and a summary of the provisions can be found under the section of this proxy statement/prospectus entitled “The Merger—Appraisal Rights in the Merger.”

Adams’s board of directors has approved the merger agreement, has determined that the merger agreement and the transactions contemplated thereby, including the merger, are advisable and in the best interests of Adams and its shareholders, and unanimously recommends that Adams shareholders vote “FOR” the Merger Proposal and “FOR” the Adjournment Proposal.

Your vote is very important. Equity and Adams cannot complete the merger unless Adams’s shareholders approve the Merger Proposal. Regardless of whether you plan to attend the Adams special meeting, please vote as soon as possible. If you hold stock in your name as a shareholder of record of Adams, please complete, sign, date and return the accompanying proxy card in the enclosed postage-paid return envelope. If you hold your stock in “street name” through a bank or broker, please follow the instructions on the voting instruction card furnished by the record holder.

This proxy statement/prospectus provides a detailed description of the Adams special meeting, the Merger Proposal and the documents related to the merger and other related matters. You are urged to read this proxy statement/prospectus, including any documents they refer you to, and its annexes carefully and in their entirety. We look forward with pleasure to seeing and visiting with you at the Adams special meeting.

By Order of the Board of Directors,

 

 

LOGO

David Charles Chinnery

Chairman and Chief Executive Officer


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ADDITIONAL INFORMATION

This proxy statement/prospectus references important business and financial information about Equity and Adams from other documents that are not included in or delivered with this proxy statement/prospectus. This information is available to you without charge upon your written or oral request. You can obtain those documents incorporated by reference in this proxy statement/prospectus by accessing the SEC’s website maintained at http://www.sec.gov, for documents regarding Equity, or by requesting copies in writing or by telephone from the appropriate company, as set forth below, for documents regarding either Equity or Adams:

 

Equity Bancshares, Inc.

7701 East Kellogg Drive, Suite 300

Wichita, Kansas 67207

Attention: Investor Relations

Telephone: (316) 612-6000

  

Adams Dairy Bancshares, Inc.

651 NE Coronado Drive

Blue Springs, Missouri 64014

Attention: David Charles Chinnery

Telephone: (816) 655-3333

You will not be charged for any of these documents that you request. To receive timely delivery of these documents in advance of the special meeting, you must make your request no later than [    ], 2018.

ABOUT THIS DOCUMENT

This document, which forms part of a registration statement on Form S-4 filed with the Securities and Exchange Commission (which we refer to in this proxy statement/prospectus as the “SEC”) by Equity (File No. 333-[    ]), constitutes a prospectus of Equity under Section 5 of the Securities Act of 1933, as amended (which we refer to in this proxy statement/prospectus as the “Securities Act”), with respect to the shares of Equity common stock to be issued to Adams shareholders pursuant to the terms of the merger agreement. This document also constitutes a proxy statement for Adams. It also constitutes a notice of special meeting with respect to the Adams special meeting.

You should rely only on the information contained in, or incorporated by reference into, this document. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this document. This document is dated [    ], 2018, and you should assume that the information in this document is accurate only as of such date. You should assume that the information incorporated by reference into this document is accurate as of the date of such document. Neither the mailing of this document to Adams shareholders nor the issuance by Equity of shares of Equity common stock in connection with the merger will create any implication to the contrary.

This document does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Except where the context otherwise indicates, information contained in this document regarding Equity has been provided by Equity and information contained in this document regarding Adams has been provided by Adams.

For more details, see the section of this proxy statement/prospectus entitled “Where You Can Find More Information” beginning on page 98.


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TABLE OF CONTENTS

 

     Page  

QUESTIONS AND ANSWERS

     1  

SUMMARY

     9  

RECENT DEVELOPMENTS

     17  

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF EQUITY

     19  

RISK FACTORS

     24  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     31  

THE ADAMS SPECIAL MEETING

     33  

Date, Time and Place of the Adams Special Meeting

     33  

Matters to Be Considered

     33  

Recommendation of the Adams Board

     33  

Adams Record Date and Quorum

     33  

Required Vote; Treatment of Abstentions; Broker Non-Votes and Failure to Vote

     34  

Voting on Proxies; Incomplete Proxies

     34  

Shares Held in “Street Name”; Broker Non-Votes

     34  

Revocability of Proxies and Changes to an Adams Shareholder’s Vote

     35  

Solicitation of Proxies

     35  

Attending the Adams Special Meeting

     35  

Assistance

     35  

ADAMS PROPOSALS

     36  

Proposal No. 1 Merger Proposal

     36  

Proposal No. 2 Adjournment Proposal

     36  

THE MERGER

     37  

Terms of the Merger

     37  

Background of the Merger

     37  

Adams’s Reasons for the Merger; Recommendation of the Adams Board

     40  

Opinion of Adams’s Financial Advisor

     42  

Equity’s Reasons for the Merger

     51  

Interests of Adams’s Directors and Executive Officers in the Merger

     52  

Public Trading Markets

     53  

Equity’s Dividend Policy

     53  

Restrictions on Resale of Equity Common Stock

     53  

Appraisal Rights in the Merger

     54  

Regulatory Approvals Required for the Merger

     56  

THE MERGER AGREEMENT

     57  

Structure of the Merger

     57  

Merger Consideration

     57  

Fractional Shares

     59  

Governing Documents; Directors and Officers; Governance Matters

     59  

Closing and Effective Time

     59  

Conversion of Shares; Exchange of Certificates

     60  

Representations and Warranties

     61  

Covenants and Agreements

     63  

Shareholder Meeting and Recommendation of Adams’s Boards of Directors

     67  

Agreement Not to Solicit Other Offers

     67  

Conditions to Complete the Merger

     68  

Termination of the Merger Agreement

     70  

Effect of Termination

     71  

Termination Fee

     72  

Expenses and Fees

     72  

 

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     Page  

Amendment, Waiver and Extension of the Merger Agreement

     72  

Adams Director Support Agreements

     73  

Adams Voting Agreement

     73  

ACCOUNTING TREATMENT

     74  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

     75  

ADAMS SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSHIP

     80  

INFORMATION ABOUT ADAMS

     81  

Information About Adams’s Business

     81  

Information About Adams’s Properties

     82  

Legal Proceedings

     82  

DESCRIPTION OF CAPITAL STOCK OF EQUITY

     83  

Overview

     83  

Equity Common Stock

     83  

Preferred Stock

     84  

COMPARISON OF SHAREHOLDERS’ RIGHTS

     85  

COMPARATIVE MARKET PRICES AND DIVIDENDS

     95  

Equity

     95  

Adams

     96  

LEGAL MATTERS

     97  

EXPERTS

     97  

Equity

     97  

Eastman National Bancshares, Inc.

     97  

Cache Holdings, Inc.

     97  

Community First Bancshares, Inc.

     97  

WHERE YOU CAN FIND MORE INFORMATION

     98  

 

         Page  

Annex A

 

Agreement and Plan of Reorganization

     A-1  

Annex B

 

Form of Adams Director Support Agreement

     B-1  

Annex C

 

Form of Voting Agreement

     C-1  

Annex D

 

Opinion of The Capital Corporation

     D-1  

Annex E

 

Missouri Revised Statutes Appraisal Rights

     E-1  

 

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QUESTIONS AND ANSWERS

The following are some questions that you, as an Adams shareholder, may have about the merger and the Adams special meeting, and brief answers to those questions. You are urged to read the remainder of this proxy statement/prospectus carefully because the information in this section does not provide all of the information that might be important to you with respect to the merger, the Adams special meeting or the proposals presented at that meeting. Additional important information is also contained in the annexes to this proxy statement/prospectus. For details about where you can find additional important information, please see the section of this proxy statement/prospectus entitled “Where You Can Find More Information.”

Unless the context otherwise requires, references in this proxy statement/prospectus to “Equity” refer to Equity Bancshares, Inc., a Kansas corporation, and its affiliates, including Equity Bank, a Kansas state bank and a wholly-owned subsidiary of Equity (which we refer to in this proxy statement/prospectus as “Equity Bank”). Additionally, unless the context otherwise requires, references in this proxy statement/prospectus to “Adams” refer to Adams Dairy Bancshares, Inc., a Missouri corporation, and its affiliates, including Adams Dairy Bank, a Missouri state bank and a wholly-owned subsidiary of Adams (which we refer to in this proxy statement/prospectus as “Adams Dairy Bank”).

 

Q: What is the merger?

 

A: Equity, Merger Sub and Adams entered into the merger agreement on December 16, 2017. Under the merger agreement, Merger Sub will merge with and into Adams, with Adams surviving the merger as a wholly-owned subsidiary of Equity. Immediately following, and in connection with the merger, Equity will cause Adams to merge with and into Equity, with Equity surviving the second merger (we refer to the merger and second merger collectively in this proxy statement/prospectus as the “integrated mergers”). Immediately following the integrated mergers (or at such later time as Equity may determine in its sole discretion), Equity will cause Adams Dairy Bank to merge with and into Equity Bank (which we refer to in this proxy statement/prospectus as the “bank merger”), with Equity Bank surviving the bank merger.

A copy of the merger agreement is included in this proxy statement/prospectus as Annex A.

The merger cannot be completed unless, among other things, the Adams shareholders approve the Merger Proposal.

 

Q: Why am I receiving this proxy statement/prospectus?

 

A: Adams is delivering this document to you because it is a proxy statement being used by Adams’s board of directors (which we refer to in this proxy statement/prospectus as the “Adams Board”) to solicit proxies of its shareholders entitled to vote on the matters in connection with the approval of the Merger Proposal.

Adams has called a special meeting of its shareholders to approve the Merger Proposal. This document serves as a proxy statement for the Adams special meeting and describes the proposals to be presented at the Adams special meeting. It also constitutes a notice of special meeting with respect to the Adams special meeting.

In addition, this document is also a prospectus that is being delivered to Adams shareholders because Equity is offering shares of Equity common stock to Adams shareholders in connection with the merger.

This proxy statement/prospectus contains important information about the Merger Proposal and the other proposal being voted on at the Adams special meeting and important information to consider in connection with an investment in Equity common stock. You should read it carefully and in its entirety. The enclosed materials allow you to have your shares of common stock voted by proxy without attending the Adams special meeting. Your vote is important, and you are encouraged to submit your proxy as soon as possible.



 

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Q: What are Adams shareholders being asked to vote on at the Adams special meeting?

 

A: Adams is soliciting proxies from its shareholders with respect to the following proposals:

 

    a proposal to approve the merger agreement, pursuant to which Merger Sub will merge with and into Adams, with Adams surviving as a wholly-owned subsidiary of Equity, as more fully described in this proxy statement/prospectus (which we refer to in this proxy statement/prospectus as the “Merger Proposal”); and

 

    a proposal to adjourn the Adams special meeting, if necessary or appropriate, to solicit additional proxies in favor of the Merger Proposal (which we refer to as the “Adjournment Proposal”). Completion of the merger is not conditioned upon approval of the Adjournment Proposal.

 

Q: What will Adams shareholders be entitled to receive in the merger?

 

A: If the merger is completed, each share of Adams common stock issued and outstanding immediately prior to the Effective Time (other than shares of Adams common stock held by Adams, Equity or any Adams shareholder who has perfected such shareholder’s appraisal rights under applicable law including the terms and provisions of Section 351.455 of the RSMo (which we refer to in this proxy statement/prospectus as a “dissenting shareholder”)) will be converted into the right to receive (i) 0.4791 shares of Equity common stock, and (ii) $5.51, in cash, subject to a possible downward adjustment of the cash consideration based upon the amount of Adams adjusted shareholders’ equity (as defined below) prior to Closing. For a discussion of the possible downward adjustment to the cash component of the merger consideration, the Adams shareholders’ equity as of a recent date and Adams’s estimate of the Adams Merger Costs, see “Questions and Answers—Will the value of the merger consideration change between the date of this proxy statement/prospectus and the time the merger is completed?” beginning on page 2 and “The Merger Agreement—Merger Consideration” beginning on page 57.

Equity will not issue any fractional shares of Equity common stock in the merger. Adams shareholders who would otherwise be entitled to a fraction of a share of Equity common stock upon the completion of the merger will instead receive, for the fraction of a share, an amount in cash (rounded to the nearest cent), determined by multiplying the fractional share by $34.49. Shares of Adams common stock following the merger held by dissenting shareholders of Adams will not be converted into the merger consideration.

As a result of the foregoing, based on the number of shares of Equity common stock and Adams common stock outstanding as of [    ], 2018, the last date before the date of this proxy statement/prospectus for which it was practicable to obtain this information, approximately [    ]% of outstanding Equity common stock following the merger, and approximately [    ]% of outstanding Equity common stock following the merger and the KBC Merger (as defined below), will be held by shareholders who were holders of Equity common stock immediately prior to the effectiveness of the merger and approximately [    ]% of outstanding Equity common stock following the merger and [    ]% of outstanding Equity common stock following the merger and the KBC Merger will be held by shareholders who were holders of Adams common stock immediately prior to the effectiveness of the merger.

 

Q: Will the value of the merger consideration change between the date of this proxy statement/prospectus and the time the merger is completed?

 

A: The value of the merger consideration will fluctuate between the date of this proxy statement/prospectus and the completion of the merger based upon the market value for Equity common stock. Any fluctuation in the market price of Equity common stock after the date of this proxy statement/prospectus will change the value of the shares of Equity common stock that Adams shareholders will be entitled to receive.


 

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The table below sets forth the implied value of the merger consideration based on the closing price of Equity common stock as quoted by Nasdaq on the specified dates:

 

Date

   Closing
price of
Equity
common
stock
    Implied value
of stock
consideration
per share of
Adams
common
stock
    Cash
consideration
per share of
Adams
common
stock(4)
     Implied value
of merger
consideration
per share of
Adams
common
stock
    Aggregate
stock
consideration
    Aggregate
cash
consideration(4)
    Aggregate
total
consideration
 

December 15, 2017 (1)

   $ 35.10     $ 16.82     $ 5.51      $ 22.33     $ 12,081,587     $ 3,957,762     $ 16,039,349  

February 5, 2018(2)

   $ 36.10     $ 17.30     $ 5.51      $ 22.81     $ 12,426,365     $ 3,957,762     $ 16,384,126  

[    ], 2018(3)

   $ [       $ [       $ 5.51      $ [       $ [       $ [       $ [    

 

(1) The last trading day before public announcement of the merger.
(2) The latest practicable trading day before the initial filing of this proxy statement/prospectus.
(3) The latest practicable trading day before the printing of this proxy statement/prospectus.
(4) Assumes there is no downward adjustment to the cash component of the merger consideration. For a discussion of the possible downward adjustment to the cash component of the merger consideration, see “The Merger Agreement—Merger Consideration” beginning on page 57.

Based on (i) the closing price of $35.10 for Equity common stock on Nasdaq on December 15, 2017, the last trading day before public announcement of the merger, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $16.82, and, together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $22.33 per share of Adams common stock, (ii) the closing price of $36.10 for Equity common stock on Nasdaq on February 5, 2018, the latest practicable trading day before the initial filing of this proxy statement/prospectus, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $17.30 and together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $22.81 per share of Adams common stock, and (iii) the closing price of $[    ] for Equity common stock on Nasdaq on [    ], 2018, the latest practicable trading day before the printing of this proxy statement/prospectus, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $[    ], and together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $[    ] per share of Adams common stock.

The cash component of the merger consideration is subject to downward adjustment based upon the Adams adjusted shareholders’ equity. If the Adams adjusted shareholders’ equity is less than $9,666,000, then the aggregate cash consideration to be paid to each holder of Adams common stock will be reduced by $1.64 for each dollar that the Adams adjusted shareholders’ equity is less than $9,666,000, and the per share cash consideration to be paid to each holder of Adams common stock will be correspondingly reduced pro rata. In the event that the Adams adjusted shareholders’ equity is less than $7,253,653, then the holders of Adams common stock would receive no cash consideration. As of January 31, 2018, the most recent practicable date before the initial filing of this proxy statement/prospectus, the Adams adjusted shareholders’ equity would have been $9,670,000, based upon Adams’s shareholders’ equity as of September 30, 2017 of $10,370,000, Adam’s estimated earnings between October 1, 2017 and the anticipated calculation date of $610,000 and the estimated Adams Merger Costs as of January 31, 2018 of $1,310,000, each of which dates are the most recent practicable dates for such numbers before the initial filing of this proxy statement/prospectus.



 

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The “Adams Merger Costs” are the costs and expenses that Adams will incur in connection with the merger that are not reflected in Adams’s shareholders’ equity as of the calculation date, which will be the fifth business day before the closing of the merger or such other mutually agreed date. The Adams Merger Costs will be subtracted from Adams’s shareholders’ equity as of the calculation date to calculate the Adams adjusted shareholders’ equity. The Adams Merger Costs is defined in the merger agreement and it includes, among other costs and expenses:

 

    contract termination costs, including employment-related agreements and obligations;

 

    all transaction costs and legal, accounting and financial advisory fees of Adams associated with the merger;

 

    the payment of severance, stay-pay, certain bonuses and change-in-control payments to employees of Adams;

 

    certain tax obligations;

 

    any unrealized gains or any unrealized losses (as the case may be) in Adams’s securities portfolio due to mark-to-market adjustments required by generally accepted accounting principles, or GAAP; and

 

    the cost of settling or otherwise resolving certain litigation.

The following table presents the effect of the estimated Adams Merger Costs on the per share cash consideration to be received by the Adams shareholders. As of January 31, 2018, the most recent practicable date before the initial filing of this proxy statement/prospectus, Adams estimates that the Adams Merger Costs would be approximately $1,310,000. The table also presents up to $100,000 of additional Adams Merger Costs in increments of $25,000. For a discussion of the risks and assumptions associated with the estimates and forecasts included in this table, see “Risk Factors—Risks Relating to the Merger—The sum of Adams’s consolidated capital, surplus and retained earnings accounts less all intangible assets prior to the closing of the merger could be an amount that results in the reduction of the amount of the cash portion of the merger consideration that Adams shareholders would be entitled to receive.”

 

Estimated Adams

shareholders’ equity

on the calculation date(1)

   Estimated Adams
Merger Costs(2)
     Estimated Adams
adjusted shareholders’
equity
     Per share reduction in
the cash consideration
payable to Adams
shareholders
     Cash consideration per
share of Adams
common stock
 

$10,980,000

   $ 1,310,000      $ 9,670,000      $ 0.00      $ 5.51  

$10,980,000

   $ 1,335,000      $ 9,645,000      $ 0.05      $ 5.46  

$10,980,000

   $ 1,360,000      $ 9,620,000      $ 0.11      $ 5.40  

$10,980,000

   $ 1,385,000      $ 9,595,000      $ 0.16      $ 5.35  

$10,980,000

   $ 1,410,000      $ 9,570,000      $ 0.22      $ 5.29  

 

  (1) This number reflects the Adams shareholders’ equity at September 30, 2017 of approximately $10,370,000, plus Adams’s estimated earnings from October 1, 2017 through the anticipated calculation date of approximately $610,000. The calculation date is the fifth business day before the closing of the merger or such other mutually agreed date. The closing of the merger is expected to occur in the second quarter of 2018. The estimated earnings of Adams are based on the financial and operating forecast provided by Adams’s management.
  (2) Reflects Adams’s estimate as of January 31, 2018 of the Adams Merger Costs and additional Adams Merger Costs in increments of $25,000.


 

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Q: How does the Adams Board recommend that I vote at the Adams special meeting?

 

A: The Adams Board unanimously recommends that you vote “FOR” the Merger Proposal and “FOR” the Adjournment Proposal.

 

Q: When and where is the special meeting?

 

A: The Adams special meeting will be held at Adams Pointe Conference Center, 1400 NE Coronado Drive, Blue Springs, Missouri 64014, on [    ], 2018, at 8:00 a.m., local time.

 

Q: What do I need to do now?

 

A: After you have carefully read this proxy statement/prospectus and have decided how you wish to vote your shares, please vote your shares promptly so that your shares are represented and voted at your special meeting. If you hold your shares in your name as a shareholder of record, you must complete, sign, date and mail your proxy card in the enclosed postage-paid return envelope as soon as possible. If you hold your shares in “street name” through a bank or broker, you must direct your bank or broker how to vote in accordance with the instructions you have received from your bank or broker. “Street name” shareholders who wish to vote in person at the Adams special meeting will need to obtain a legal proxy from the institution that holds their shares.

 

Q: What is the difference between a shareholder of record and a “street name” holder?

 

A: If you are an Adams shareholder and if your shares of Adams common stock are registered directly in your name, you are considered the shareholder of record with respect to those shares of Adams common stock. On the Adams record date, Adams had [    ] holders of record.

If your shares of Adams common stock are held in a stock brokerage account or by a bank or other nominee, the nominee is considered the record holder of those shares. You are considered the beneficial owner of these shares, and your shares are held in “street name.” This proxy statement/prospectus and the Adams proxy card have been forwarded to you by your nominee. As the beneficial owner, you have the right to direct your nominee concerning how to vote your shares by using the voting instructions it included in the mailing or by following its instructions for voting.

 

Q: If my shares of Adams common stock are held in “street name” by my bank or broker, will my bank or broker automatically vote my shares for me?

 

A: No. Your bank or broker cannot vote your shares without instructions from you. You should instruct your bank or broker how to vote your shares in accordance with the instructions provided to you. Please check the voting form used by your bank or broker.

 

Q: What is a broker non-vote?

 

A: A broker non-vote occurs when a broker or nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner.

If you are an Adams shareholder, your broker does not have discretionary authority to vote your shares with respect to the Merger Proposal, but your broker does have discretionary authority to vote your shares with respect to the Adjournment Proposal.



 

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Q: How are broker non-votes and abstentions treated?

 

A: Brokers, as holders of record, are permitted to vote on certain routine matters, but not on non-routine matters. A broker non-vote occurs when a broker does not have discretionary authority to vote the shares and has not received voting instructions from the beneficial owner of the shares. The only routine matter to be presented at the Adams special meeting is the Adjournment Proposal. If you hold shares in “street name” and do not provide voting instructions to your broker, those shares will be counted as broker non-votes for all non-routine matters. Abstentions and broker non-votes will be counted for purposes of determining the presence or absence of a quorum.

Abstentions and broker non-votes by Adams shareholders will have the effect of a vote against the Merger Proposal because Missouri law requires the Merger Proposal to be approved by two-thirds of the outstanding Adams common stock.

Abstentions and broker non-votes will not have the effect of a vote against the Adjournment Proposal. As the Adjournment Proposal is considered a routine matter and a broker or other nominee may generally vote on routine matters, no broker non-votes are expected to occur in connection with this proposal.

 

Q: What constitutes a quorum for the Adams special meeting?

 

A: The presence (in person or by proxy) of holders of at least a majority of the outstanding shares of Adams common stock entitled to be voted at the Adams special meeting constitutes a quorum for transacting business at the Adams special meeting. All shares of Adams common stock present in person or represented by proxy, including abstentions and broker non-votes, if any, will be treated as present for purposes of determining the presence or absence of a quorum for all matters voted on at the Adams special meeting.

 

Q: What is the vote required to approve each proposal at the Adams special meeting?

 

A: Merger Proposal: The affirmative vote of at least two-thirds of the outstanding shares of Adams common stock is required to approve the Merger Proposal. If you mark “ABSTAIN” on your proxy card, fail to submit a proxy card, fail to vote in person at the Adams special meeting or fail to instruct your bank or broker how to vote with respect to the Merger Proposal, it will have the effect of a vote against the Merger Proposal.

Adjournment Proposal: The affirmative vote of a majority of shares entitled to vote on the subject matter and represented in person or by proxy at the Adams special meeting is required to approve the Adjournment Proposal. If you mark “ABSTAIN” on your proxy card, fail to submit a proxy card or vote in person at the Adams special meeting or fail to instruct your bank or broker how to vote with respect to the Adjournment Proposal, it will have no effect on the proposal.

 

Q: Why is my vote important?

 

A: If you do not vote, it will be more difficult for Adams to obtain the necessary quorum to hold the Adams special meeting and to obtain approval of the proposals to be voted upon at the special meeting. In addition, your failure to vote will have the effect of a vote against the Merger Proposal. The Adams Board unanimously recommends that you, as an Adams shareholder, vote “FOR” the Merger Proposal.

 

Q: Can I attend the meeting and vote my shares in person?

 

A:

Yes. All shareholders of Adams, including shareholders of record and shareholders who hold their shares in “street name” through banks, brokers, nominees or any other holder of record, are invited to attend the Adams special meeting. Holders of record of Adams common stock can vote in person at the Adams special



 

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  meeting. If you are not a shareholder of record, you must obtain a proxy card, executed in your favor, from the record holder of your shares, such as a broker, bank or other nominee, to be able to vote in person at the Adams special meeting. If you plan to attend the Adams special meeting, you must hold your shares in your own name or have a letter from the record holder of your shares confirming your ownership. In addition, you must bring a form of personal photo identification with you in order to be admitted. Adams reserves the right to refuse admittance to anyone without proper proof of share ownership or without proper photo identification. The use of cameras, sound recording equipment, communications devices or any similar equipment during the Adams special meeting is prohibited without Adams’s express written consent.

 

Q: Can I change my vote?

 

A: Yes. If you are a holder of record of Adams common stock, you may change your vote or revoke any proxy at any time before it is voted by (1) attending and voting in person at the Adams special meeting; (2) giving notice of revocation of the proxy at the Adams special meeting; or (3) delivering to the Secretary of Adams (i) a written notice of revocation or (ii) a duly executed proxy card relating to the same shares, bearing a date later than the proxy card previously executed. Attendance at the Adams special meeting by itself will not automatically revoke your proxy. A revocation or later-dated proxy received by Adams after the vote will not affect the vote. Adams’s corporate secretary’s mailing address is: 651 NE Coronado Drive, Blue Springs, Missouri 64014.

If you hold your shares of Adams common stock in “street name” through a bank or broker, you should contact your bank or broker to change your vote or revoke your proxy.

 

Q: What are the expected U.S. federal income tax consequences to a holder of Adams common stock as a result of the transactions contemplated by the merger agreement?

 

A: Equity and Adams intend that the integrated mergers shall together be treated as an integrated transaction that will qualify for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). If the integrated mergers qualify as a reorganization under Section 368(a) of the Code, a U.S. holder (as defined in the section titled “Material U.S. Federal Income Tax Consequences of the Integrated Mergers” beginning on page 75) of Adams common stock who exchanges Adams common stock for a combination of Equity common stock and cash should recognize gain (but not loss) in the exchange equal to the lesser of the cash received by such holder and the amount, if any, by which the cash plus the fair market value of Equity common stock received by such holder exceeds the tax basis of such holder’s Adams common stock surrendered in exchange therefor (in each case excluding cash received in lieu of a fractional share of Equity common stock). Further, a U.S. holder of Adams common stock generally will recognize gain or loss with respect to cash received in lieu of fractional shares of Equity common stock that the U.S. holder would otherwise be entitled to receive.

For further information, please see “Material U.S. Federal Income Tax Consequences of the Integrated Mergers” beginning on page 75.

The U.S. federal income tax consequences described above may not apply to all holders of Adams common stock. Your tax consequences will depend on your individual situation. Accordingly, you are strongly urged to consult your tax advisor for a full understanding of the particular tax consequences of the integrated mergers to you.



 

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Q: Are Adams shareholders entitled to appraisal rights?

 

A: Yes, Adams shareholders may assert appraisal rights. For further information, see “The Merger—Appraisal Rights in the Merger” beginning on page 54, which discussion is qualified by that description and by the text of the provisions of the Missouri Revised Statutes (which we refer to in this proxy statement/prospectus as the “RSMo”) relating to appraisal rights set forth in Annex E hereto.

 

Q: If I am an Adams shareholder, should I send in my Adams stock certificates now?

 

A: No. Please do not send in your Adams stock certificates with your proxy. Following the closing of the merger, Equity’s transfer agent, Continental Stock Transfer and Trust Company (which we refer to in this proxy statement/prospectus as “Continental”), will send you a letter of transmittal and instructions for exchanging Adams stock certificates for the merger consideration. See “The Merger Agreement—Conversion of Shares; Exchange of Certificates” beginning on page 60.

 

Q: Whom may I contact if I cannot locate my Adams stock certificate(s)?

 

A: If you are unable to locate your original Adams stock certificate(s), you should contact David Charles Chinnery, Adams’s Chairman and Chief Executive Officer, at (816) 655-3333.

 

Q: What should I do if I receive more than one set of voting materials?

 

A: Adams shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold shares of Adams common stock in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold such shares. If you are a holder of record of Adams common stock and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive or otherwise follow the voting instructions set forth in this proxy statement/prospectus to ensure that you vote every share of Adams common stock that you own.

 

Q: When do you expect to complete the merger?

 

A: Equity and Adams currently expect to complete the merger in the second calendar quarter of 2018. However, neither Equity nor Adams can assure you of when or if the merger will be completed. Before the merger is completed, Adams must obtain the approval of Adams shareholders for the Merger Proposal, the necessary regulatory approvals must be obtained and certain other closing conditions must be satisfied.

 

Q: What happens if the merger is not completed?

 

A: If the merger is not completed, holders of Adams common stock will not receive any consideration for their shares in connection with the merger. Instead, Adams will remain an independent company. In addition, if the merger agreement is terminated in certain circumstances, a termination fee may be required to be paid by Adams. See the section of this proxy statement/prospectus entitled “The Merger Agreement—Termination Fee” beginning on page 72 for a complete discussion of the circumstances under which termination fees will be required to be paid.

 

Q: Whom should I call with questions?

 

A: If you have any questions concerning the merger or this proxy statement/prospectus, would like additional copies of this proxy statement/prospectus or need help voting your shares of Adams common stock, please contact David Charles Chinnery, at (816) 655-3333.


 

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SUMMARY

This summary highlights selected information from this proxy statement/prospectus. It may not contain all of the information that is important to you. You are urged to read the entire proxy statement/prospectus carefully, including the annexes, and the other documents to which they refer in order to fully understand the merger. A copy of the merger agreement is attached as Annex A. For more information about Equity, see “Where You Can Find More Information” beginning on page 98. Each item in this summary refers to the page of this proxy statement/prospectus on which that subject is discussed in more detail.

Information about the companies (pages 81 and 98)

Equity Bancshares, Inc.

7701 East Kellogg Drive, Suite 300

Wichita, Kansas 67207

(316) 612-6000

Equity is a Kansas corporation and bank holding company headquartered in Wichita, Kansas. Equity’s wholly-owned banking subsidiary, Equity Bank, provides a broad range of financial services primarily to businesses and business owners as well as individuals through Equity’s network of 42 full-service branches located in Kansas, Missouri, Arkansas and Oklahoma. As of September 30, 2017, on a pro forma basis after giving effect to Equity’s mergers with Cache Holdings, Inc. and Eastman National Bancshares, Inc., Equity had consolidated total assets of $3.01 billion, total loans held for investment of $1.99 billion (net of allowances), total deposits of $2.37 billion and total stockholders’ equity of $367.73 million. Equity’s stock is traded on Nasdaq under the symbol “EQBK.” For more information about Equity’s mergers with Cache Holdings, Inc. and Eastman National Bancshares, Inc., see “Recent Developments” beginning on page 17.

Equity Bank is a Kansas state-chartered bank and member of the Federal Reserve (jointly supervised by both the Federal Reserve Bank of Kansas City and the Office of the Kansas State Bank Commissioner), and its deposits are insured by the FDIC. Equity Bank conducts a complete range of commercial and personal banking activities. Equity Bank operates a total of 42 branches, consisting of four branches in the Wichita, Kansas metropolitan area, six branches in the Kansas City metropolitan area, three branches in Topeka, Kansas, ten branches in Western Missouri, five branches in Western Kansas, four branches in Southeast Kansas, five branches in Arkansas, and five branches in Oklahoma.

Equity’s principal office is located at 7701 East Kellogg Drive, Suite 300, Wichita, Kansas 67207, and its telephone number at that location is (316) 612-6000. Additional information about Equity and its subsidiaries is included in documents referred to in the section of this proxy statement/prospectus entitled “Where You Can Find More Information,” beginning on page 98.

Adams Dairy Bancshares, Inc.

651 NE Coronado Drive

Blue Springs, Missouri 64014

(816) 655-3333

Adams is a Missouri corporation and bank holding company headquartered in Blue Springs, Missouri. Adams’s wholly-owned banking subsidiary, Adams Dairy Bank, provides consumer and commercial banking services. As of September 30, 2017, Adams had consolidated total assets of $126.7 million, total loans of $89.9 million (net of allowances), total deposits of $102.2 million and total shareholders’ equity of $10.37 million. Adams does not file reports with the SEC.



 

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Adams Dairy Bank is a Missouri state-chartered bank and its state regulator is the Missouri Division of Finance and its primary federal regulator is the Federal Deposit Insurance Corporation. Adams conducts banking business through one full-service location in Blue Springs, Missouri.

Adams’s office is located at 651 NE Coronado Drive, Blue Springs, Missouri 64014, and its telephone number is (816) 655-3333. For additional information about Adams and Adams Dairy Bank, see the section of this proxy statement/prospectus entitled “Where You Can Find More Information” beginning on page 98.

In the merger, Adams shareholders will be entitled to receive shares of Equity common stock and cash (pages 37 and 57)

Equity and Adams are proposing a strategic merger. If the merger is completed, each share of Adams common stock (other than any shares of Adams common stock held by Adams, Equity or any dissenting shareholder) will be converted into the right to receive (i) 0.4791 shares of Equity common stock, and (ii) $5.51, in cash, subject to a possible downward adjustment of the cash consideration based upon the amount of Adams adjusted shareholders’ equity prior to Closing. Equity will not issue any fractional shares of Equity common stock in the merger. Adams shareholders who would otherwise be entitled to a fraction of a share of Equity common stock upon the completion of the merger will instead receive, for the fraction of a share, an amount in cash (rounded to the nearest cent), determined by multiplying the fractional share by $34.49.

The Equity common stock is listed on Nasdaq under the symbol “EQBK.” The market value of the shares of Equity common stock to be paid as consideration will fluctuate with the market price of Equity common stock and will not be known at the time the Adams shareholders vote on the merger.

Based on (i) the closing price of $35.10 for Equity’s common stock on Nasdaq on December 15, 2017, the last trading day before public announcement of the merger, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $16.82, and, together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $22.33 per share of Adams common stock, (ii) the closing price of $36.10 for Equity’s common stock on Nasdaq on February 5, 2018, the latest practicable trading day before the initial filing of this proxy statement/prospectus, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $17.30 and, together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $22.81 per share of Adams common stock and (iii) the closing price of $[    ] for Equity’s common stock on Nasdaq on [    ], 2018, the latest practicable trading day before the printing of this proxy statement/prospectus, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $[    ] and, together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $[    ] per share of Adams common stock.



 

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The table below sets forth the implied value of the merger consideration based on the closing price of Equity common stock as quoted by Nasdaq on the specified dates:

 

Date

   Closing
price of
Equity
common
stock
    Implied value
of stock
consideration
per share of
Adams
common
stock
    Cash
consideration
per share of
Adams
common
stock(4)
     Implied
value of
merger
consideration
per share of
Adams
common
stock
    Aggregate
stock
consideration
    Aggregate
cash
consideration(4)
    Aggregate
total
consideration
 

December 15, 2017 (1)

   $ 35.10     $ 16.82     $ 5.51      $ 22.33     $ 12,081,587     $ 3,957,762     $ 16,039,349  

February 5, 2018(2)

   $ 36.10     $ 17.30     $ 5.51      $ 22.81     $ 12,426,365     $ 3,957,762     $ 16,384,126  

[    ], 2018(3)

   $ [       $ [       $ 5.51      $ [       $ [       $ [       $ [    
(1) The last trading day before public announcement of the merger.
(2) The latest practicable trading day before the initial filing of this proxy statement/prospectus.
(3) The latest practicable trading day before the printing of this proxy statement/prospectus.
(4) Assumes there is no downward adjustment to the cash component of the merger consideration. For a discussion of the possible downward adjustment to the cash component of the merger consideration, see “The Merger Agreement—Merger Consideration” beginning on page 57.

The merger agreement governs the merger. The merger agreement is included in this proxy statement/prospectus as Annex A. All descriptions in this summary and elsewhere in this proxy statement/prospectus of the terms and conditions of the merger are qualified by reference to the merger agreement. Please read the merger agreement carefully for a more complete understanding of the merger.

The Adams Board unanimously recommends that Adams shareholders Vote “FOR” the Merger Proposal and the Adjournment Proposal (page 33)

The Adams Board has determined that the merger, the merger agreement and the transactions contemplated by the merger agreement are advisable and in the best interests of Adams and its shareholders and has approved the merger agreement. The Adams Board unanimously recommends that Adams shareholders vote “FOR” the Merger Proposal and “FOR” the Adjournment Proposal. For the factors considered by the Adams Board in reaching its decision to approve the merger agreement, see “The Merger—Adams’s Reasons for the Merger; Recommendation of the Adams Board.”

Certain executive officers, directors, affiliates, founders and their family members, and holders of 5% or more of the voting equity securities of Adams have entered into a voting agreement with Equity, solely in their capacity as shareholders of Adams, pursuant to which they have agreed to vote in favor of the Merger Proposal and in favor of any other matter required to be approved by the shareholders of Adams to facilitate the transactions contemplated by the merger agreement. The parties to the voting agreement control approximately 62% of the outstanding shares of common stock of Adams and have agreed to vote such shares in favor of the Merger Proposal. For more information regarding the support agreements, see “The Merger Agreement—Director Support Agreements” and “The Merger Agreement—Voting Agreement.”

Opinion of Adams’s financial advisor (page 42 and Annex D)

In connection with the merger, Adams’s financial advisor, Country Club Financial Services, Inc. dba The Capital Corporation (which we refer to in this proxy statement/prospectus as “Capital”), delivered an oral opinion on December 15, 2017, which was subsequently confirmed in a written opinion dated December 20, 2017, to the Adams Board as to the fairness, from a financial point of view and as of the date of the opinion, to the holders of



 

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Adams common stock of the merger consideration in the merger. The full text of the opinion, which describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Capital in preparing the opinion, is attached as Annex D to this document. The opinion was for the information of, and was directed to, the Adams Board (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion did not address the underlying business decision of Adams to engage in the merger or enter into the merger agreement or constitute a recommendation to the Adams Board in connection with the merger, and it does not constitute a recommendation to any holder of Adams common stock or any shareholder of any other entity as to how to vote in connection with the merger or any other matter. For further information, please see the section entitled “The Merger—Opinion of Adams’s Financial Advisor” on page 42.

 

Adams will hold the Adams special meeting on [    ], 2018 (page 33)

The Adams special meeting will be held on [    ], 2018 at 8:00 a.m., local time, at Adams Pointe Conference Center, 1400 NE Coronado Drive, Blue Springs, Missouri 64014. At the Adams special meeting, Adams shareholders will be asked to approve the Merger Proposal and to approve the Adjournment Proposal.

Only holders of record of Adams common stock at the close of business on [    ], 2018, the Adams record date, will be entitled to notice of and to vote at the Adams special meeting. Each share of Adams common stock is entitled to one vote on each proposal to be considered at the Adams special meeting. As of the Adams record date, there were [    ] shares of Adams common stock entitled to vote at the Adams special meeting. As of the Adams record date, the directors and executive officers of Adams and their affiliates beneficially owned and were entitled to vote, in the aggregate, [    ] shares of Adams common stock representing approximately [    ]% of the shares of Adams common stock outstanding on that date.

The Merger Proposal will be approved if at least two-thirds of the outstanding shares of Adams common stock are voted in favor of such proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy, fail to vote in person at the Adams special meeting or fail to instruct your bank or broker how to vote with respect to the Merger Proposal, it will have the effect of a vote against the Merger Proposal.

The Adjournment Proposal will be approved if a majority of the shares entitled to vote on the subject matter and represented in person or by proxy at the Adams special meeting are voted in favor of such proposal. If you mark “ABSTAIN” on your proxy, fail to submit a proxy or vote in person at the Adams special meeting or fail to instruct your bank or broker how to vote with respect to the Adjournment Proposal, it will have no effect on the proposal.

Material U.S. federal income tax consequences of the integrated mergers (page 75)

The obligations of Equity and Adams to complete the integrated mergers are conditioned on, among other things, the receipt by Equity and Adams of a tax opinions from Norton Rose Fulbright US LLP and Stinson Leonard Street LLP, respectively, dated as of the closing date of the integrated mergers, to the effect that, on the basis of facts, representations and assumptions described in such opinions, the integrated mergers shall together be treated as an integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the Code.

Assuming that the integrated mergers taken together qualify as a reorganization within the meaning of Section 368(a) of the Code, it is anticipated that a U.S. holder (as defined in the section titled “Material U.S. Federal Income Tax Consequences of the Integrated Mergers” beginning on page 75) of Adams common stock who exchanges Adams common stock for a combination of Equity common stock and cash should recognize gain (but not loss) in the exchange equal to the lesser of the cash received by such holder and the amount, if any,



 

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by which the cash plus the fair market value of Equity common stock received by such holder exceeds the tax basis of such holder’s Adams common stock surrendered in exchange therefor (in each case excluding cash received in lieu of a fractional share of Equity common stock). Further, a U.S. holder of Adams common stock generally will recognize gain or loss with respect to cash received in lieu of fractional shares of Equity common stock that the U.S. holder would otherwise be entitled to receive.

For further information, please see “Material U.S. Federal Income Tax Consequences of the Integrated Mergers” beginning on page 75.

The U.S. federal income tax consequences described above may not apply to all holders of Adams common stock. Your tax consequences will depend on your individual situation. Accordingly, you are strongly urged to consult your tax advisor for a full understanding of the particular tax consequences of the integrated mergers to you.

Interests of Adams directors and executive officers in the merger (page 52)

In considering the recommendation of the Adams Board with respect to the merger agreement, you should be aware that some of Adams’s directors and executive officers may have interests in the merger that are different from, or in addition to, the interests of the Adams shareholders generally. Interests of directors and executive officers that may be different from or in addition to the interests of the Adams shareholders include:

 

    Indemnification and Insurance. Equity has agreed to indemnify the directors and officers of Adams against certain liabilities arising before the effective time of the merger and to provide certain “tail” insurance for the benefit of the directors and officers of Adams.

 

    Employee Benefit Plans. On or as soon as reasonably practicable following the merger, employees of Adams who continue on as employees of Equity will be entitled to participate in the Equity health and welfare benefit and similar plans on the same terms and conditions as employees of Equity. Subject to certain exceptions, these employees will receive credit for their years of service to Adams or Adams Dairy Bank for participation, vesting and benefit accrual purposes.

 

    Employee Severance Benefits. Equity has agreed to provide certain severance benefits to Adams’s employees whose employment is terminated under the circumstances specified in the merger agreement.

 

    Chinnery Change in Control Payment. Upon the closing of the merger, Mr. Chinnery, Adams’s Chairman and Chief Executive Officer, will be paid a $350,000 change in control payment by Adams pursuant to the terms of his employment agreement. The change in control payments will reduce the Adams adjusted shareholders’ equity.

 

    Retention Bonuses. Adams has entered into retention agreements with certain of its employees. Such employees will be entitled payment of a retention bonus if he remains employed by Equity upon the closing of the merger. Pursuant to their respective retention agreements, Mr. Chinnery, Mr. Weisenborn and Mr. Vogt will be entitled to retention bonuses of $200,000, $350,000 and $30,000, respectively, if they remain employed by Adams as of the Closing. The retention bonus payments will reduce the Adams adjusted shareholders’ equity.

 

   

Wray Interest in Capital Fee. Pursuant to the Capital engagement agreement, Adams agreed to pay Capital a total cash fee currently expected to be equal to 2.50% of the first $10,000,000 in aggregate merger consideration plus 1.25% of the aggregate merger consideration in excess of $10,000,000, which will payable to Capital upon the closing of the merger. Adams also agreed to reimburse Capital for reasonable out-of-pocket expenses and disbursements incurred in connection with its retention and



 

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to indemnify Capital against certain liabilities relating to or arising out of Capital’s engagement or Capital’s role in connection therewith. Mr. Wray is a managing director and member of Capital and will be entitled to a portion of the fee paid to Capital. The fee paid to Capital will reduce the Adams adjusted shareholders’ equity.

Certain of the above payments are transaction expenses borne by Adams shareholders. These interests are discussed in more detail in the section of this proxy statement/prospectus entitled “The Merger—Interests of Adams’s Directors and Executive Officers in the Merger” beginning on page 52. The Adams Board was aware of these interests and considered them, among other matters, in approving the merger agreement.

Adams shareholders are entitled to demand appraisal rights (page 54 and Annex E)

Adams shareholders have the right to demand an appraisal of their shares of Adams common stock and obtain payment in cash of the fair value of their shares of Adams common stock under Section 351.455 of the RSMo. In order for an Adams shareholder to perfect such Adams shareholder’s appraisal rights, such Adams shareholder must carefully follow the procedure set forth in the applicable provisions of the RSMo. A copy of the applicable statutory provisions of the RSMo is included as Annex E to this proxy statement/prospectus and a summary of the provisions can be found under the section of this proxy statement/prospectus entitled “The Merger—Appraisal Rights in the Merger” beginning on page 54.

Conditions that must be satisfied or waived for the merger to occur (page 68)

Currently, Adams and Equity expect to complete the merger in the second calendar quarter of 2018. As more fully described in this proxy statement/prospectus and in the merger agreement, the completion of the merger depends on a number of conditions being satisfied or, where legally permissible, waived. Each party’s obligations under the merger agreement are conditioned upon (1) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (2) the performance in all material respects by the other party of its obligations under the merger agreement, (3) approval of the merger agreement by Adams’s shareholders, (4) receipt of required regulatory and other third-party consents or approvals, (5) no action having been taken and the absence of any statute, rule, regulation or order prohibiting the consummation of the merger, (6) the receipt of required closing documents from the other party, (7) the absence of any material adverse change with respect to the other party since September 30, 2017, and (8) the effectiveness of the registration statement of which this proxy statement/prospectus is a part.

Adams’s obligation to complete the merger is also subject to (1) the shares of Equity common stock to be issued pursuant to the merger agreement being approved for listing on Nasdaq, (2) Equity obtaining a six-year tail insurance coverage policy in accordance with the merger agreement, and (3) receipt of an opinion from Stinson Leonard Street LLP to the effect that the integrated mergers shall together be treated as an integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the Code.

Equity’s obligation to complete the merger is also subject to (1) receipt of releases from directors and certain officers of Adams, (2) the termination of certain employee benefit plans of Adams, (3) holders of not more than 5% of the outstanding shares of Adams common stock having duly exercised their dissenters’ rights under the RSMo, (4) the Adams adjusted shareholders’ equity being at least $5,709,750, (5) receipt from Adams of a notice to the Internal Revenue Service (“IRS”) conforming to the requirements of Treasury Regulation Section 1.897-2(h)(2) and a Statement of Non-U.S. Real Property Holding Corporation Status Pursuant to Treasury Regulation Sections 1.1445-2(c)(3) and 1.897-2(h) and Certificate of Non-Foreign Status, and (6) receipt of an opinion from Norton Rose Fulbright US LLP to the effect that the integrated mergers shall together be treated as an integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the Code.



 

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Neither Adams nor Equity can be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.

Termination of the merger agreement (page 70)

The merger agreement can be terminated at any time prior to completion of the merger in the following circumstances:

 

    by the mutual written consent of Equity and Adams;

 

    by either Adams or Equity (as long as the terminating party is not in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement) if the conditions precedent to such party’s obligations to close have not been met or waived by June 30, 2018; provided, however, that such date may be extended to such later date as agreed upon by Adams and Equity;

 

    by either Equity or Adams if any of the transactions contemplated by the merger agreement are disapproved by any federal or state governmental or regulatory agency or authority whose approval is required to complete such transactions or if any court of competent jurisdiction in the United States or other federal or state governmental body has issued an order, decree or ruling or taken any other action restraining, enjoining, invalidating or otherwise prohibiting the merger agreement or the transactions contemplated by the merger agreement and such disapproval, order, decree, ruling or other action is final and nonappealable; provided, however, that the party seeking to terminate the merger agreement pursuant to this provision is required to use its commercially reasonable efforts to contest, appeal and remove such order, decree, ruling or other action;

 

    by either Equity or Adams if there has been any material adverse change with respect to the other party;

 

    subject to certain cure rights, by Equity or Adams, if there shall have been a breach of any of the covenants or agreements or any of the representations or warranties (or any such representation or warranty shall cease to be true and correct) set forth in the merger agreement or any other agreement contemplated in the merger agreement on the part of the other party to the merger agreement, which breach or failure to be true and correct, either individually or in the aggregate with all other breaches (or inaccuracies of such representations and warranties), would constitute, if occurring or continuing on the Closing, the failure of a closing condition; provided, however, that the right to terminate the merger agreement under this provision shall not be available to a party if it is then in material breach of any of its representations, warranties, covenants or agreements set forth in the merger agreement;

 

    by Equity or Adams, if Adams does not receive the required shareholder approval at the Adams special meeting or any adjournment or postponement thereof; provided, however, that Adams may not terminate the merger agreement pursuant to this provision if Adams has breached in any material respect any of its obligations under the merger agreement, in each case in a manner that caused the failure to obtain the approval of the shareholders at the Adams special meeting, or at any adjournment or postponement thereof;

 

    by Adams prior to obtaining the approval of the Adams shareholders at the Adams special meeting, and subject to the terms and conditions set forth in the merger agreement, in order to accept an alternative acquisition proposal;

 

    by Equity if the Adams Board, prior to obtaining the approval of the Adams shareholders and in compliance with the procedures set forth in the merger agreement, approves, endorses or recommends an alternative acquisition proposal or enters into a definitive agreement with respect to an alternative acquisition proposal or modifies or amends its recommendation in a manner adverse to Equity or withdraws its recommendation;


 

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    by Equity or Adams if the other party or its respective banking subsidiary enters into any formal or informal administrative action with any court, arbitrator, federal or state governmental agency or other authority or any such action is threatened by any such entity; or

 

    by Adams, within two business days of the calculation date, which will be the fifth business day before the closing of the merger or such other mutually agreed date, if both (i) the volume weighted average closing price of Equity common stock during the twenty trading day period ending on the close of business on the day prior to the calculation date is less than $27.592, and (ii) Equity’s common stock underperforms the KBW Nasdaq Regional Banking Index (KRX) by more than 20%; provided, however, that Equity has a right to cure by adjusting the exchange ratio or increasing the per share cash amount as provided in the merger agreement.

Termination fee (page 72)

If the merger agreement is terminated under certain circumstances, including circumstances involving an alternative acquisition proposal and changes in the recommendation of the Adams Board, Adams may be required to pay to Equity a termination fee equal to $850,000. This termination fee could discourage other companies from seeking to acquire or merge with Adams. Termination fees are discussed in more detail in the section of this proxy statement/prospectus entitled “The Merger Agreement—Termination Fee” beginning on page 72.

Regulatory approvals required for the merger (page 56)

Subject to the terms of the merger agreement, both Adams and Equity have agreed to cooperate with each other and use their commercially reasonable efforts to obtain all regulatory approvals necessary or advisable to complete the transactions contemplated by the merger agreement. These approvals include approvals from, among others, the Federal Reserve Board, the Office of the State Bank Commissioner of Kansas (“OSBC”) and the Missouri Division of Finance. Equity has submitted applications and notifications to obtain regulatory approvals from, or provide prior notice to, each required governmental authority.

Although neither Adams nor Equity knows of any reason why it cannot obtain these regulatory approvals in a timely manner, Adams and Equity cannot be certain when or if they will be obtained.

The rights of Adams shareholders will change as a result of the merger (page 85)

The rights of Adams shareholders will change as a result of the merger due to differences in Equity’s and Adams’s governing documents. See “Comparison of Shareholders’ Rights” for a description of the material differences in shareholders’ rights under each of the Equity and Adams governing documents.

Risk factors (page 24)

You should consider all the information contained in this proxy statement/prospectus in deciding how to vote for the proposals presented in this proxy statement/prospectus. In particular, you should consider the factors described under the section of this proxy statement/prospectus entitled “Risk Factors” beginning on page 24.



 

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RECENT DEVELOPMENTS

Closing of Mergers with Cache Holdings, Inc. and Eastman National Bancshares, Inc.

On November 10, 2017, Equity completed its merger (which we refer to in this proxy statement/prospectus as the “Cache Merger”) with Cache Holdings, Inc., an Oklahoma corporation (which we refer to in this proxy statement/prospectus as “Cache”), pursuant to the terms of the Agreement and Plan of Reorganization, dated July 14, 2017, by and between Equity and Cache. As of September 30, 2017, Cache reported, on a consolidated basis, total assets of $329.92 million, total loans of $305.24 million, total deposits of $277.53 million and total stockholders’ equity of $36.26 million. Pursuant to the terms of the definitive agreement governing the Cache Merger, Equity issued approximately 1,195,952 shares of common stock and paid approximately $12,877,537 in cash to the existing shareholders of Cache.

Also on November 10, 2017, Equity completed its merger (which we refer to in this proxy statement/prospectus as the “Eastman Merger”) with Eastman National Bancshares, Inc., an Oklahoma corporation (which we refer to in this proxy statement/prospectus as “Eastman”), pursuant to the terms of the Agreement and Plan of Reorganization, dated July 14, 2017, by and among Equity, ENB Merger Sub, Inc., an Oklahoma corporation and wholly-owned subsidiary of Equity, and Eastman. As of September 30, 2017, Eastman reported, on a consolidated basis, total assets of $257.52, total loans of $182.74 million, total deposits of $219.85 million and total stockholders’ equity of $26.47 million. Pursuant to the terms of the definitive agreement governing the Eastman Merger, Equity issued approximately 1,179,793 shares of common stock and paid approximately $9,399,671 in cash to the existing shareholders of Eastman.

As of September 30, 2017, on a pro forma basis after giving effect to the Cache Merger and Eastman Merger, Equity had total assets of $3.01 billion, total loans of $1.99 billion, and total stockholders’ equity of $367.73 million. Additional information regarding the Cache Merger and Eastman Merger, including the full unaudited pro forma combined consolidated balance sheet as of September 30, 2017, and the unaudited pro forma combined consolidated statements of income for the nine months ended September 30, 2017, and the year ended December 31, 2016, including certain assumptions and adjustments described in the notes thereto, giving effect to the closing of the Cache Merger and Eastman Merger, may be found in Equity’s current report on Form 8-K filed with the SEC on February 7, 2018.

Kansas Bank Corporation Acquisition

On December 16, 2017, Equity entered into an Agreement and Plan of Reorganization (the “KBC Agreement”), by and among Equity, Oz Merger Sub, a Kansas corporation and a wholly-owned subsidiary of Equity, and Kansas Bank Corporation, a Kansas corporation (“KBC”).

Subject to the terms and conditions set forth in the KBC Agreement, Oz Merger Sub will merge with and into KBC (the “KBC Merger”), with KBC continuing as the surviving corporation and a wholly-owned subsidiary of Equity. Following the KBC Merger, Equity will cause KBC to merge with and into Equity, with Equity surviving (the “Second Step KBC Merger”). Following the Second Step KBC Merger, or at such later time as Equity may determine, The First National Bank of Liberal, a national association and wholly-owned subsidiary of KBC, will merge with and into Equity Bank, a Kansas state bank and wholly-owned subsidiary of Equity, with Equity Bank surviving.

Subject to the terms and conditions set forth in the KBC Agreement, at the effective time of the KBC Merger, each outstanding share of common stock, par value $20.00 per share, of KBC (“KBC Common Stock”) will be converted into the right to receive their proportionate share of the merger consideration. The merger consideration has an aggregate value of approximately $45,084,038 under the terms of the KBC Agreement and



 

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will be paid in a combination of Equity common stock and cash. Stockholders of KBC will have the right to elect the portion of cash and stock that they would prefer to receive as consideration. The amount of cash and stock that the stockholders of KBC will receive is subject to proration in accordance with the terms of the KBC Agreement, which provides that in the aggregate, before making any possible adjustments to the merger consideration, the aggregate cash portion of the merger consideration will be approximately $16,771,050, or 37.2% of the total merger consideration, and the stock portion of the merger consideration will be approximately $28,312,988, or 62.8% of the total consideration. The merger consideration is subject to downward adjustment based upon KBC’s consolidated capital, surplus and retained earnings accounts less all intangible assets, and adjusted to reflect certain merger costs and other specified items (“KBC Equity”), calculated prior to the closing.

The KBC Agreement contains customary representations and warranties from both Equity and KBC, and each party has agreed to customary covenants, including, among others, covenants relating to the conduct of its business during the interim period between the execution of the KBC Agreement and the closing of the KBC merger, KBC’s obligation to recommend that its stockholders approve the KBC Agreement and the transactions contemplated thereby, and KBC’s non-solicitation obligations relating to alternative acquisition proposals.

Completion of the KBC Merger is subject to certain customary conditions, including, among others, (1) approval of the KBC Agreement by KBC’s stockholders, (2) receipt of required regulatory and other third-party consents or approvals, (3) the absence of any statute, rule, regulation, order, injunction or other action prohibiting the consummation of the KBC Merger, (4) the Registration Statement on Form S-4 (the “KBC Registration Statement”) becoming effective under the Securities Act, and (5) authorization for listing on the Nasdaq of the shares of Equity common stock to be issued in the KBC Merger. Each party’s obligation to complete the KBC Merger is also subject to certain additional customary conditions, including (i) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (ii) performance in all material respects by the other party of its obligations under the KBC Agreement, and (iii) the delivery of required closing documents by the other party. Equity’s obligation to complete the KBC Merger is also subject to (A) the KBC Equity, after adjusting for the items specified in the KBC Agreement, being at least $12,522,253, (B) holders of not more than 5% of the outstanding shares of KBC Common Stock having duly exercised their dissenters’ rights, and (C) Equity’s receipt of an opinion from its counsel to the effect that the KBC Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.

The KBC Agreement provides certain termination rights for both Equity and KBC and further provides that upon termination of the KBC Agreement under certain circumstances, a termination fee of $1,500,000 will be payable by KBC to Equity. The KBC Agreement also provides that KBC may terminate the KBC Agreement if, subject to the terms of the KBC Agreement, both (i) the volume weighted average closing price of Equity Class A Stock during the twenty trading day period ending on the close of business on the day prior to the fifth business day preceding the closing date is less than $27.592 and (ii) the Equity Class A Stock underperforms the KBW NASDAQ Regional Banking Index (KRX) by more than 20% (the “KBC VWAP Termination Right”). If KBC exercises the KBC VWAP Termination Right, it would not receive any termination fee or any other amounts from Equity.

Additional information on Equity’s acquisition of KBC may be found in Equity’s reports filed with the SEC, including the Form 8-K filed with the SEC on December 18, 2017 and Form S-4 filed with the SEC on February 8, 2018.



 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF EQUITY

The following table sets forth selected historical consolidated financial and other data (i) as of and for the nine months ended September 30, 2017 and 2016 and (ii) as of and for the years ended December 31, 2016, 2015 and 2014. Selected consolidated financial data as of and for the years ended December 31, 2016, 2015 and 2014 have been derived from Equity’s audited financial statements which are incorporated by reference in this proxy statement/prospectus. Selected financial data as of and for the nine months ended September 30, 2017 and 2016 have been derived from Equity’s unaudited financial statements incorporated by reference in this proxy statement/prospectus and have not been audited but, in the opinion of Equity’s management, contain all adjustments (consisting of only normal or recurring adjustments) necessary to present fairly Equity’s financial position and results of operations for such periods in accordance with GAAP. Equity’s historical results are not necessarily indicative of any future period. The performance, asset quality and capital ratios are unaudited and derived from Equity’s audited and unaudited financial statements as of and for the periods presented. Average balances have been calculated using daily averages, unless otherwise denoted.

The table does not take into account the completion on November 10, 2017 of Equity’s mergers with Cache and Eastman. Pro forma information giving effect to the closing of such mergers and historical financial statements of Cache and Eastman may be found in Equity’s Current Report on Form 8-K filed with the SEC on February 7, 2018. For more information on developments occurring subsequent to September 30, 2017, see “Recent Developments” beginning on page 17.

 

(Dollars in thousands, except per share data)    As of and for the nine
months ended
September 30,
     As of and for the years ended
December 31,
 
   2017      2016      2016     2015     2014  

Statement of Income Data

            

Interest and dividend income

   $ 24,588      $ 14,250      $ 61,799     $ 53,028     $ 46,794  

Interest expense

     4,267        2,268        9,202       6,766       5,433  

Net interest income

     20,321        11,982        52,597       46,262       41,361  

Provision for loan losses

     727        104        2,119       3,047       1,200  

Net gain on acquisition

     —          —          —         682       —    

Net gain from securities transactions

     175        —          479       756       986  

Other non-interest income

     3,860        2,527        9,987       8,364       7,688  

Merger expense

     1,023        237        5,294       1,691       —    

Loss on debt extinguishment

     —          —          58       316       —    

Other non-interest expense

     15,365        10,497        41,723       36,568       35,645  

Income before income taxes

     7,241        3,671        13,869       14,442       13,190  

Provision for income taxes

     2,084        1,000        4,495       4,142       4,203  

Net income

     5,157        2,671        9,374       10,300       8,987  

Dividends and discount accretion on preferred stock

     —          —          (1     (177     (708

Net income allocable to common stockholders

     5,157        2,671        9,373       10,123       8,279  

Basic earnings per share

     0.42        0.32        1.09       1.55       1.31  

Diluted earnings per share

     0.41        0.32        1.07       1.54       1.30  


 

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(Dollars in thousands, except per share data)    As of and for the nine
months ended
September 30,
    As of and for the years ended
December 31,
 
   2017     2016     2016     2015     2014  

Balance Sheet Data (at period end)

          

Cash and cash equivalents

   $ 27,465     $ 21,847     $ 35,095     $ 56,829     $ 31,707  

Available-for-sale securities

     81,116       102,391       95,732       130,810       52,985  

Held-to-maturity securities

     528,944       349,915       465,709       310,539       261,017  

Loans held for sale

     4,283       3,071       4,830       3,504       897  

Gross loans held for investment

     1,540,761       956,070       1,383,605       960,355       725,876  

Allowance for loan losses

     7,969       6,080       6,432       5,506       5,963  

Loans held for investment, net of allowance for loan losses

     1,532,792       949,990       1,377,173       954,849       719,913  

Goodwill and core deposit intangibles, net

     70,063       19,419       63,589       19,679       19,237  

Other intangible assets

     1,290       25       23       29       —    

Total assets

     2,405,426       1,557,082       2,192,192       1,585,727       1,174,515  

Total deposits

     1,868,493       1,177,732       1,630,451       1,215,914       981,177  

Borrowings

     235,098       203,569       293,909       194,064       70,370  

Total liabilities

     2,113,591       1,395,834       1,934,228       1,418,494       1,056,786  

Total stockholders’ equity

     291,835       161,248       257,964       167,233       117,729  

Tangible common equity*

     220,482       141,804       194,352       131,153       82,133  

Performance ratios

          

Return on average assets (ROAA) annualized

     0.85     0.64     0.55     0.75     0.78

Return on average equity (ROAE) annualized

     7.08     6.65     5.55     8.19     7.30

Return on average tangible common equity (ROATCE) annualized*

     9.71     7.94     6.75     9.66     9.99

Yield on loans annualized

     5.30     4.72     4.98     5.31     5.63

Cost of interest-bearing deposits annualized

     0.82     0.66     0.65     0.55     0.49

Net interest margin annualized

     3.68     3.06     3.30     3.65     3.92

Efficiency ratio*

     63.54     72.35     66.67     66.94     72.67

Non-interest income / average assets annualized

     0.67     0.60     0.61     0.71     0.75

Non-interest expense / average assets annualized

     2.71     2.56     2.74     2.81     3.08

Capital Ratios

          

Tier 1 Leverage Ratio

     10.32     9.42     11.81     9.47     9.62

Common Equity Tier 1 Capital Ratio

     13.33     13.57     13.34     12.35     N/A  

Tier 1 Risk Based Capital Ratio

     14.15     14.45     14.25     13.85     13.16

Total Risk Based Capital Ratio

     14.62     15.02     14.67     14.35     13.86

Equity / Assets

     12.13     10.36     11.77     10.55     10.02

Tangible common equity to tangible assets*

     9.45     9.22     9.13     8.37     7.11

Book value per share

   $ 23.86     $ 19.62     $ 22.09     $ 18.37     $ 16.71  

Tangible book value per share*

   $ 18.03     $ 17.25     $ 16.64     $ 15.97     $ 13.54  

Tangible common book value per diluted share*

   $ 17.64     $ 16.95     $ 16.37     $ 15.74     $ 13.07  

 

* Indicates non-GAAP financial measure. Please refer to explanation below.


 

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Non-GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures

Some of the financial measures included in Equity’s selected historical consolidated financial and other data are not measures of financial performance recognized by GAAP. These non-GAAP financial measures include tangible common equity, return on average tangible common equity, efficiency ratio, tangible book value per share, and tangible common equity to tangible assets. Equity’s management uses the non-GAAP financial measures set forth below in its analysis of Equity’s performance.

 

    “Tangible common equity” is total stockholders’ equity less goodwill, other intangible assets and preferred stock.

 

    “Tangible book value per share” is defined as tangible common equity divided by total common shares outstanding. This measure is important to investors interested in changes from period-to-period in book value per share exclusive of changes in intangible assets.

 

    “Tangible common equity to tangible assets” is defined as the ratio of stockholders’ equity less goodwill, other intangible assets and preferred stock, divided by total assets less goodwill and other intangible assets.

 

    “Average tangible common equity” is defined as the average of Equity’s tangible common equity for the applicable period.

 

    “Return on average tangible common equity,” or ROATCE, is defined as net income available to common shareholders divided by average tangible common equity.

 

    “Efficiency ratio” is defined as noninterest expense not including loss on extinguishment of debt, divided by Equity’s operating revenue (which is equal to net interest income plus noninterest income) excluding gains and losses on sales of securities. This ratio measures Equity’s efficiency by the amount of revenue generated for each dollar spent.

Equity believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to Equity’s financial condition, results of operations and cash flows computed in accordance with GAAP. However, Equity acknowledge that its non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. The following reconciliation table provides a more detailed analysis of these non-GAAP financial measures.



 

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Non-GAAP Financial Measures

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity, tangible book value per common share, and diluted tangible book value per common share and compares these values with book value per common share (dollars in thousands, except per share data):

 

     September 30,
2017
     September 30,
2016
     December 31,
2016
     December 31,
2015
     December 31,
2014
 

Total stockholders’ equity

   $ 291,835      $ 161,248      $ 257,964      $ 167,233      $ 117,729  

Less: preferred stock

     —          —          —          16,372        16,359  

Less: goodwill

     64,587        18,130        58,874        18,130        18,130  

Less: core deposit intangibles, net

     5,476        1,289        4,715        1,549        1,107  

Less: mortgage servicing asset, net

     19        25        23        29        —    

Less: naming rights, net

     1,271        —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible common equity

   $ 220,482      $ 141,804      $ 194,352      $ 131,153      $ 82,133  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Common shares outstanding at period end

     12,230,319        8,219,415        11,680,308        8,211,727        6,067,511  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Diluted common shares outstanding at period end

     12,501,484        8,365,283        11,873,480        8,332,762        6,285,628  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Book value per common share

   $ 23.86      $ 19.62      $ 22.09      $ 18.37      $ 16.71  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible book value per common share

   $ 18.03      $ 17.25      $ 16.64      $ 15.97      $ 13.54  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Tangible book value per diluted common share

   $ 17.64      $ 16.95      $ 16.37      $ 15.74      $ 13.07  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The following table reconciles, as of the dates set forth below, total stockholders’ equity to tangible common equity and total assets to tangible assets (dollars in thousands):

 

     September 30,
2017
    September 30,
2016
    December 31,
2016
    December 31,
2015
    December 31,
2014
 

Total stockholders’ equity

   $ 291,835     $ 161,248     $ 257,964     $ 167,233     $ 117,729  

Less: preferred stock

     —         —         —         16,372       16,359  

Less: goodwill

     64,587       18,130       58,874       18,130       18,130  

Less: core deposit intangibles, net

     5,476       1,289       4,715       1,549       1,107  

Less: mortgage servicing asset, net

     19       25       23       29       —    

Less: naming rights, net

     1,271       —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common equity

   $ 220,482     $ 141,804     $ 194,352     $ 131,153     $ 82,133  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 2,405,426     $ 1,557,082     $ 2,192,192     $ 1,585,727     $ 1,174,515  

Less: goodwill

     64,587       18,130       58,874       18,130       18,130  

Less: core deposit intangibles, net

     5,476       1,289       4,715       1,549       1,107  

Less: mortgage servicing asset, net

     19       25       23       29       —    

Less: naming rights, net

     1,271       —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible assets

   $ 2,334,073     $ 1,537,638     $ 2,128,580     $ 1,566,019     $ 1,155,278  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity / assets

     12.13     10.36     11.77     10.55     10.02
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Tangible common equity to tangible assets

     9.45     9.22     9.13     8.37     7.11
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


 

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The following table reconciles, as of the dates set forth below, total average stockholders’ equity to average tangible common equity and net income allocable to common stockholders to adjusted net income allocable to common stockholders (dollars in thousands):

 

     As of and for the nine months
ended September 30,
    As of and for the years
ended December 31,
 
             2017                     2016             2016     2015     2014  

Total average stockholders’ equity

   $ 289,007     $ 159,887     $ 168,823     $ 125,808     $ 123,181  

Less: average intangible assets and preferred stock

     71,465       23,116       25,883       19,165       37,924  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Average tangible common equity

   $ 217,542     $ 136,771     $ 142,940     $ 106,643     $ 85,257  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income allocable to common stockholders

   $ 5,157     $ 2,671     $ 9,373     $ 10,123     $ 8,279  

Amortization of core deposit intangible

     256       88       419       275       363  

Less: Tax effect of core deposit intangible amortization

     90       31       147       96       127  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted net income allocable to common stockholders

   $ 5,323     $ 2,728     $ 9,645     $ 10,302     $ 8,515  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average equity (ROAE) annualized

     7.08     6.65     5.55     8.19     7.30
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Return on average tangible common equity (ROATCE) annualized

     9.71     7.94     6.75     9.66     9.99
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The following table reconciles, as of the dates set forth below, the efficiency ratio to the GAAP-based efficiency ratio (dollars in thousands):

 

     As of and for the nine months
ended September 30,
    As of and for the years
ended December 31,
 
             2017                     2016             2016     2015     2014  

Non-interest expense

   $ 16,388     $ 10,734     $ 47,075     $ 38,575     $ 35,645  

Less: merger expenses

     1,023       237       5,294       1,691       —    

Less: loss on debt extinguishment

     —         —         58       316       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest expense, excluding merger expenses and loss on debt extinguishment

   $ 15,365     $ 10,497     $ 41,723     $ 36,568     $ 35,645  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

   $ 20,321     $ 11,982     $ 52,597     $ 46,262     $ 41,361  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest income

   $ 4,035     $ 2,527     $ 10,466     $ 9,802     $ 8,674  

Less: net gain from securities transactions

     175       —         479       756       986  

Less: net gain on acquisition

     —         —         —         682       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest income, excluding net gains on security transactions and on acquisition

   $ 3,860     $ 2,527     $ 9,987     $ 8,364     $ 7,688  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest expense to net interest income plus non-interest income

     67.29     73.98     74.65     68.81     71.24
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Efficiency Ratio

     63.54     72.35     66.67     66.94     72.67
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


 

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RISK FACTORS

In addition to general investment risks and the other information contained in this proxy statement/prospectus, including the matters addressed under the section of this proxy statement/prospectus entitled “Cautionary Statement Regarding Forward-Looking Statements,” beginning on page 31 and the matters discussed under the caption “Risk Factors” in the Annual Report on Form 10-K filed by Equity for the fiscal year ended December 31, 2016, as updated by subsequent Form 10-Q filings and other reports filed with the SEC, you should carefully consider the following risk factors in deciding how to vote for the proposals presented in this proxy statement/prospectus. You should also consider the other information in this proxy statement/prospectus.

Unless the context otherwise requires, references in this proxy statement/prospectus to “Equity” refer to Equity Bancshares, Inc., a Kansas corporation, and its affiliates, including Equity Bank.

Risks Relating to the Merger

The merger may not be completed.

Completion of the merger is subject to regulatory approval. Equity may not receive the required regulatory approvals. If Equity does not obtain the required regulatory approvals, the merger will not be completed. If such regulatory approvals are received, they may impose conditions that would result in certain closing conditions of the merger not being satisfied or may not be received timely.

The consummation of the merger is also subject to other conditions precedent described in the merger agreement. If a condition of either party is not satisfied, such party may be able to terminate the merger agreement and, in such case, the merger would not be consummated. If all of the conditions precedent in the merger agreement are not satisfied, the merger may not be completed.

The sum of Adams’s consolidated capital, surplus and retained earnings accounts less all intangible assets prior to the closing of the merger could be an amount that results in the reduction of the amount of the cash portion of the merger consideration that Adams shareholders would be entitled to receive.

The aggregate amount of the cash portion of the merger consideration that Adams shareholders would be entitled to receive in the merger will be reduced by $1.64 for each dollar that the Adams adjusted shareholders’ equity is less than $9,666,000, and the per share cash consideration to be paid to each holder of Adams common stock will be correspondingly reduced pro rata. Adams’s adjusted shareholders’ equity will depend in part on the results of Adams’s business operations and the management of merger-related expenses by Adams prior to the closing of the merger. If Adams’s earnings are less than it expects or if the Adams Merger Costs are greater than Adams expects, the Adams adjusted shareholders’ equity may be less than $9,666,000. Preparing for integration of the merger may have a negative impact on Adams’s results of operations, and the merger-related expenses for which Adams will be liable are difficult to predict. As of [    ], 2018, the most recent practicable date before the printing of this proxy statement/prospectus, Adams shareholders’ equity was $[    ]. For a discussion of the possible downward adjustment to the cash component of the merger consideration, see “The Merger Agreement—Merger Consideration” beginning on page 57. Accordingly, at the time Adams shareholders vote with respect to the Merger Proposal, they will not know the exact value of the aggregate cash portion of the merger consideration they will be entitled to receive in the merger.

Preparing for the merger may negatively impact Adams’s operating results and, as a result, the amount of the cash portion of the merger consideration that Adams shareholders would be entitled to receive.

Adams is taking various actions, as required by the merger agreement, to prepare for the merger and expects to continue to do so prior to the closing of the merger. These actions include participating in preparing regulatory

 

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filings for the merger, meeting with customers and employees to discuss the merger, and preparing for systems conversion related to the merger. These items may distract Adams’s management from pursuing the business strategy that Adams has historically employed. In addition, the merger agreement places certain restrictions on the ability of Adams to engage in certain transactions without Adams obtaining the consent of Equity prior to taking certain actions. Finally, Adams will be liable for certain merger-related expenses prior to the closing of the merger. Additional discussion of Adams’s covenants made in connection with the merger agreement are discussed more fully in “The Merger Agreement—Covenants and Agreements,” beginning on page 63. These factors may impact Adams’s profitability and these one-time expenses could result in Adams’s non-interest expenses being higher than historical levels prior to the consummation of the merger. Accordingly, the results of Adams’s operations prior to Adams’s entry into the merger agreement may not have any predictive value relating to, or be representative of, Adams’s operating results and profitability following its entry into the merger agreement. Lower profits and higher expenses may adversely affect Adams’s capital, surplus, and retained earnings prior to the consummation of the merger, which may limit how much cash, if any, will be paid to Adams’s shareholders as merger consideration.

Because the market price of Equity common stock will fluctuate, Adams shareholders cannot be certain of the market value of the merger consideration they will receive.

Upon completion of the merger, each outstanding share of Adams common stock (except for dissenting shares (as defined in the merger agreement) and shares of Adams common stock held by Adams, Equity or their respective subsidiaries (other than (i) shares of Adams common stock held, directly or indirectly, in trust accounts, managed accounts and the like or otherwise held in a fiduciary capacity that are beneficially owned by third parties and (ii) shares of Adams common stock held in respect of a debt previously contracted)) will be converted into the right to receive 0.4791 shares of Equity common stock and $5.51, in cash, subject to adjustment based upon the sum of Adams’s consolidated capital, surplus and retained earnings accounts less all intangible assets prior to the closing of the merger, after adjusting for items specified in the merger agreement. The market value of the equity portion of the merger consideration will vary from the closing price of Equity common stock on the date Equity and Adams announced the merger, on the date that this proxy statement/prospectus is mailed to Adams shareholders, on the date of the Adams special meeting and on the date the merger is completed and thereafter. Any change in the market price of Equity common stock prior to the completion of the merger will affect the market value of the equity portion of the merger consideration that Adams shareholders will be entitled to receive upon completion of the merger, and there will be no adjustment to the merger consideration for changes in the market price of shares of Equity common stock. Stock price changes may result from a variety of factors that are beyond the control of Equity, including, but not limited to, general market and economic conditions, changes in Equity’s business, operations and prospects and regulatory considerations.

Therefore, at the time of the Adams special meeting you will not know the precise market value of the merger consideration you will be entitled to receive at the effective time. You should obtain current market quotations for shares of Equity common stock. There are no current market quotations for Adams common stock because Adams is a privately owned corporation and its common stock is not traded on any established public trading market.

The market price of Equity common stock after the merger may be affected by factors different from those affecting the shares of Adams or Equity currently.

Upon completion of the merger, holders of Adams common stock will become holders of Equity common stock. Equity’s business differs in important respects from that of Adams, and, accordingly, the results of operations of the combined company and the market price of Equity common stock after the completion of the merger may be affected by factors different from those currently affecting the independent results of operations of each of Equity and Adams. For a discussion of the business of Adams and of some important factors to consider in connection with its business, see “Information About Adams” beginning on page 81.

 

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Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the merger.

Before the merger and the bank merger may be completed, Equity must obtain approvals from the Board of Governors of the Federal Reserve System, the OSBC and the Missouri Division of Finance. Other approvals, waivers or consents from regulators may also be required. In determining whether to grant these approvals, waivers or consents, the regulators consider a variety of factors, including the regulatory standing of each party and the factors described under “The Merger—Regulatory Approvals Required for the Merger” beginning on page 56. An adverse development in either party’s regulatory standing or these factors could result in an inability to obtain approvals, waivers or consents, or delay their receipt. These regulators may impose conditions on the completion of the merger or the bank merger or require changes to the terms of the merger or the bank merger. Such conditions or changes could have the effect of delaying or preventing completion of the merger or the bank merger or imposing additional costs on or limiting the revenues of the combined company following the merger and the bank merger, any of which might have an adverse effect on the combined company following the merger. See “The Merger—Regulatory Approvals Required for the Merger” beginning on page 56.

Combining the two companies, including the retention of key employees, may be more difficult, costly or time consuming than expected and the anticipated benefits and cost savings of the merger may not be realized.

Equity and Adams have operated and, until the completion of the merger, will continue to operate, independently and may not begin the actual integration process. The success of the merger, including anticipated benefits and cost savings, will depend, in part, on Equity’s ability to successfully combine and integrate the businesses of Equity and Adams in a manner that permits growth opportunities and does not materially disrupt the existing customer relations nor result in decreased revenues due to loss of customers. It is possible that the integration process could result in the loss of key employees, the disruption of either company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the merger. The loss of key employees could adversely affect Equity’s ability to successfully conduct its business, which could have an adverse effect on Equity’s financial results and the value of its common stock. If Equity experiences difficulties with the integration process, the anticipated benefits of the merger may not be realized fully or at all, or may take longer to realize than expected. As with any merger of financial institutions, there also may be business disruptions that can cause Equity and/or Adams to lose customers or cause customers to remove their accounts from Equity and/or Adams and move their business to competing financial institutions. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of Adams and Equity during this transition period and for an undetermined period after completion of the merger on the combined company. In addition, the actual cost savings of the merger could be less than anticipated.

Certain of Adams’s directors and executive officers may have interests in the merger that may differ from the interests of Adams’s shareholders.

Adams’s shareholders should be aware that some of Adams’s directors and executive officers may have interests in the merger and have arrangements that are different from, or in addition to, those of Adams’s shareholders generally. The Adams Board was aware of these interests and considered these interests, among other matters, when making its decision to approve the merger agreement, and in recommending that Adams’s shareholders vote in favor of approving the merger agreement.

 

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These interests include the following:

 

    Indemnification and Insurance. Equity has agreed to indemnify the directors and officers of Adams against certain liabilities arising before the effective time of the merger and to provide certain “tail” insurance for the benefit of the directors and officers of Adams.

 

    Employee Benefit Plans. On or as soon as reasonably practicable following the merger, employees of Adams who continue on as employees of Equity will be entitled to participate in the Equity health and welfare benefit and similar plans on the same terms and conditions as employees of Equity. Subject to certain exceptions, these employees will receive credit for their years of service to Adams or Adams Dairy Bank for participation, vesting and benefit accrual purposes.

 

    Employee Severance Benefits. Equity has agreed to provide certain severance benefits to Adams’s employees whose employment is terminated under the circumstances specified in the merger agreement.

 

    Chinnery Change in Control Payment. Upon the closing of the merger, Mr. Chinnery, Adams’s Chairman and Chief Executive Officer, will be paid a $350,000 change in control payment by Adams pursuant to the terms of his employment agreement. The change in control payments will reduce the Adams adjusted shareholders’ equity.

 

    Retention Bonuses. Adams has entered into retention agreements with certain of its employees. Such employees will be entitled payment of a retention bonus if he remains employed by Equity upon the closing of the merger. Pursuant to their respective retention agreements, Mr. Chinnery, Mr. Weisenborn and Mr. Vogt will be entitled to retention bonuses of $200,000, $350,000 and $30,000, respectively, if they remain employed by Adams as of the Closing. The retention bonus payments will reduce the Adams adjusted shareholders’ equity.

 

    Wray Interest in Capital Fee. Pursuant to the Capital engagement agreement, Adams agreed to pay Capital a total cash fee currently expected to be equal to 2.50% of the first $10,000,000 in aggregate merger consideration plus 1.25% of the aggregate merger consideration in excess of $10,000,000, which will payable to Capital upon the closing of the merger. Adams also agreed to reimburse Capital for reasonable out-of-pocket expenses and disbursements incurred in connection with its retention and to indemnify Capital against certain liabilities relating to or arising out of Capital’s engagement or Capital’s role in connection therewith. Mr. Wray is a managing director and member of Capital and will be entitled to a portion of the fee paid to Capital. The fee paid to Capital will reduce the Adams adjusted shareholders’ equity.

Certain of the above payments are transaction expenses borne by Adams shareholders. For a more complete description of these interests, see “The Merger—Interests of Adams’s Directors and Executive Officers in the Merger” beginning on page 52.

Adams’s financial advisor and its owners may have interests in the merger that are different from, or in addition to or in conflict with, the interests of Adams and its shareholders.

Adams hired Capital to render an opinion regarding the fairness of the consideration to be received by the Adams shareholders in the proposed merger. Mr. Wray is director and shareholder of Adams. Mr. Wray is also a managing director and member of Capital and will be entitled to a portion of the fee paid to Capital. Mr. Wray recused himself from the preparation of the fairness opinion delivered by Capital. Because of these relationships, Capital may have interests in the merger that are different from, or in addition to or in conflict with, those of the Adams and its shareholders. Adams believes that these interests and this relationship did not present conflicts of interest that affected the judgment of Capital in rendering its fairness opinion.

 

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Termination of the merger agreement could negatively impact both Adams and Equity.

If the merger agreement is terminated, there may be various consequences. For example, Adams’s or Equity’s businesses may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. Additionally, if the merger agreement is terminated, the market price of Equity’s common stock could decline to the extent that the current market prices reflect a market assumption that the merger will be completed. If the merger agreement is terminated under certain circumstances, Adams may be required to pay to Equity a termination fee of $850,000.

Adams and Equity will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainty about the effect of the merger on employees and customers may have an adverse effect on Adams or Equity. These uncertainties may impair Adams’s or Equity’s ability to attract, retain and motivate key personnel until the merger is completed, and could cause customers and others that deal with Adams or Equity to seek to change existing business relationships with Adams or Equity. Retention of certain employees by Adams or Equity may be challenging while the merger is pending, as certain employees may experience uncertainty about their future roles with Adams or Equity. If key employees depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with Adams or Equity, Adams’s business or Equity’s business could be harmed. In addition, subject to certain exceptions, Adams and Equity have each agreed to operate its business in the ordinary course prior to Closing and agreed to certain restrictive covenants. See “The Merger Agreement—Covenants and Agreements” beginning on page 63 for a description of the restrictive covenants applicable to Adams and Equity.

If the merger is not completed, Equity and Adams will have incurred substantial expenses without realizing the expected benefits of the merger.

Each of Equity and Adams has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement, as well as the costs and expenses of filing, printing and mailing this proxy statement/prospectus and all filing and other fees paid to the SEC in connection with the merger. If the merger is not completed, Equity and Adams would have to recognize these expenses without realizing the expected benefits of the merger.

The merger agreement limits Adams’s ability to pursue acquisition proposals and requires Adams to pay a termination fee of $850,000 under limited circumstances, including circumstances relating to acquisition proposals for Adams.

The merger agreement prohibits Adams from initiating, soliciting or knowingly encouraging certain third-party acquisition proposals. See “The Merger Agreement—Agreement Not to Solicit Other Offers” beginning on page 67. The merger agreement also provides that Adams must pay a termination fee in the amount of $850,000 in the event that the merger agreement is terminated under certain circumstances, including a change of recommendation of the Adams Board in connection with a third-party acquisition proposal. These provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Adams from considering or proposing such an acquisition. See the section of this proxy statement/prospectus entitled “The Merger Agreement—Termination Fee” beginning on page 72.

The shares of Equity common stock to be received by Adams shareholders as a result of the merger will have different rights from the shares of Adams common stock.

Upon completion of the merger, Adams shareholders will become Equity shareholders and their rights as Equity shareholders will be governed by the Kansas Statutes Annotated (“K.S.A.”), Equity’s Second Amended

 

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and Restated Articles of Incorporation (which we refer to in this proxy statement/prospectus as the “Equity articles”) and Equity’s Amended and Restated Bylaws (which we refer to in this proxy statement/prospectus as the “Equity bylaws”). The rights associated with Adams common stock are different from the rights associated with Equity common stock. Please see “Comparison of Shareholders’ Rights” beginning on page 85 for a discussion of the different rights associated with Equity common stock.

Holders of Adams and Equity common stock will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

Holders of Adams common stock and Equity common stock currently have the right to vote in the election of the board and on other matters affecting Adams and Equity, respectively. Upon the completion of the merger, each Adams shareholder who receives shares of Equity common stock will become a shareholder of Equity with a percentage ownership of Equity that is smaller than the shareholder’s percentage ownership of Adams. As of the date of this proxy statement/prospectus, it is currently expected that the former shareholders of Adams as a group will receive shares in the merger constituting approximately [    ]% of the outstanding shares of Equity common stock immediately after the merger and approximately [    ]% of the outstanding shares of Equity common stock after the merger and the KBC Merger. As a result, current holders of Equity common stock as a group will own approximately [    ]% of the outstanding shares of Equity common stock immediately after the merger and approximately [    ]% of the outstanding shares of Equity common stock after the merger and the KBC Merger. Because of this, Adams shareholders may have less influence on the management and policies of Equity than they now have on the management and policies of Adams and current Equity shareholders may have less influence than they now have on the management and policies of Equity.

The appraisal rights process is uncertain.

Adams shareholders may or may not be entitled to receive more than the amount provided for in the merger agreement for their shares of Adams common stock if they elect to exercise their appraisal rights with respect to the proposed merger, depending on the appraisal of the fair value of the Adams common stock pursuant to the appraisal procedures under the RSMo. See “The Merger—Appraisal Rights in the Merger” beginning on page 54 and Annex E. For this reason, the amount of cash that you might be entitled to receive should you elect to exercise your appraisal rights with respect to the merger may be more or less than the value of the merger consideration to be paid pursuant to the merger agreement. In addition, it is a closing condition of the merger agreement that the holders of not more than 5% of the outstanding shares of Adams common stock shall have exercised their statutory appraisal rights under the RSMo. The number of shares of Adams common stock that will exercise appraisal rights under the RSMo is not known and therefore we do not know whether this closing condition will be satisfied.

The opinion of Adams’s financial advisor received by the Adams Board prior to the signing of the merger agreement does not reflect changes in circumstances since the date of such opinion.

The opinion of Adams’s financial advisor received by the Adams Board was delivered orally on December 15, 2017, and subsequently confirmed in writing on December 20, 2017. Changes in the operations and prospects of Equity or Adams, general market and economic conditions and other factors that may be beyond the control of Equity or Adams may significantly alter the value of Adams or the price of Equity common stock by the time the merger is completed. The opinion does not speak as of the date of this proxy statement/prospectus, the time the merger will be completed or any date other than the date of such opinion.

Litigation may be filed against Adams, Equity or their respective boards of directors or officers, which could prevent or delay the completion of the merger or result in the payment of damages following completion of the merger.

Lawsuits may be filed against Adams, Equity or their respective boards of directors or officers in connection with the merger, which could prevent or delay completion of the merger and result in substantial costs to Adams

 

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and Equity, including any costs associated with indemnification. The defense or settlement of any lawsuit or claim that remains unresolved at the time the merger is completed may adversely affect Equity’s business, financial condition, results of operations and cash flows following completion of the merger.

Equity’s historical and pro forma combined condensed consolidated financial information may not be representative of its results as a combined company.

The pro forma combined condensed consolidated financial information included and incorporated by reference in this proxy statement/prospectus is constructed from the consolidated historical financial statements of Equity, Cache and Eastman, and does not purport to be indicative of the future results of operations of the combined companies. Therefore, Equity’s pro forma combined condensed consolidated financial information included and incorporated by reference in this proxy statement/prospectus may not be representative of Equity’s results as a combined company. The pro forma combined condensed consolidated financial information included and incorporated by reference in this proxy statement/prospectus is also based in part on certain assumptions regarding the Cache Merger and Eastman Merger and the transactions relating thereto that Equity believes are reasonable. Equity cannot assure you, however, that its assumptions will prove to be accurate. Accordingly, the historical and pro forma combined condensed consolidated financial information included and incorporated by reference in this proxy statement/prospectus may not be indicative of what its results of operations and financial condition would have been had Equity been a consolidated entity during the periods presented, or what Equity’s results of operations and financial conditions will be in the future. The challenge of integrating previously independent businesses makes evaluating Equity’s business and its future financial prospects difficult. Equity’s potential for future business success and operating profitability must be considered in light of the risks, uncertainties, expenses and difficulties typically encountered by recently combined companies.

Future sales or the possibility of future sales of a substantial amount of Equity common stock may depress the price of shares of Equity common stock.

Future sales or the availability for sale of substantial amounts of Equity common stock in the public market, or the perception that these sales could occur, could adversely affect the prevailing market price of Equity common stock and could impair Equity’s ability to raise capital through future sales of equity securities.

Equity’s certificate of formation authorizes us to issue up to 45,000,000 shares of Class A common stock and up to 5,000,000 shares of Class B common stock. Immediately after the completion of this merger, Equity expects that approximately 14,949,739 shares of Class A common stock and no shares of Class B common stock will be outstanding, excluding the approximately 820,904 shares of Class A common stock expected to be issued in connection with Equity’s merger with KBC pursuant to that certain Agreement and Plan of Reorganization, dated December 16, 2017, by and among Equity, KBC and Oz Merger Sub, Inc. Sales of a substantial number of shares of Equity common stock, or the perception that such sales may occur, may adversely impact the price of Equity common stock.

Equity may issue shares of Equity common stock or other securities from time to time as consideration for future acquisitions and investments and pursuant to compensation and incentive plans. If any such acquisition or investment is significant, the number of shares of Equity common stock, or the number or aggregate principal amount, as the case may be, of other securities that Equity may issue may in turn be substantial. Equity may also grant registration rights covering those shares of Equity common stock or other securities in connection with any such acquisitions and investments.

Equity cannot predict the size of future issuances of Equity common stock or the effect, if any, that future issuances and sales of Equity common stock will have on the market price of Equity common stock. Sales of substantial amounts of Equity common stock (including shares of Equity common stock issued in connection with an acquisition or under a compensation or incentive plan), or the perception that such sales could occur, may adversely affect prevailing market prices for Equity common stock and could impair Equity’s ability to raise capital through future sales of Equity securities.

 

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The information presented herein and in other documents filed with or furnished to the SEC, in press releases or other public shareholder communications, or in oral statements made with the approval of an authorized executive officer contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Equity’s and Adams’s current views with respect to, among other things, future events and Equity’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about Equity’s and Adams’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond Equity’s and Adams’s control. Accordingly, Equity and Adams caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Equity and Adams believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described in “Risk Factors” section of this proxy statement/prospectus.

There are or will be important factors that could cause Equity’s and Adams’s actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the following:

 

    an economic downturn, especially one affecting Equity’s or Adams’s core market areas;

 

    the occurrence of various events that negatively impact the real estate market, since a significant portion of Equity’s and Adams’s loan portfolio is secured by real estate;

 

    difficult or unfavorable conditions in the market for financial products and services generally;

 

    interest rate fluctuations, which could have an adverse effect on Equity’s and Adams’s profitability;

 

    the effects of the Tax Cuts and Jobs Act of 2017;

 

    external economic and/or market factors, such as changes in monetary and fiscal policies and laws, including the interest rate policies of the Board of Governors of the Federal Reserve System, inflation or deflation, changes in the demand for loans, and fluctuations in consumer spending, borrowing and savings habits, which may have an adverse impact on Equity’s and Adams’s financial condition;

 

    continued or increasing competition from other financial institutions, credit unions, and non-bank financial services companies, many of which are subject to different regulations than Equity and Adams;

 

    costs arising from the environmental risks associated with making loans secured by real estate;

 

    losses resulting from a decline in the credit quality of the assets that Equity and Adams hold;

 

    inadequacies in Equity’s and Adams’s allowance for loan losses, which could require Equity or Adams to take a charge to earnings and thereby adversely affect Equity’s or Adams’s financial condition;

 

    inaccuracies or changes in the appraised value of real estate securing the loans that Equity or Adams originate, which could lead to losses if the real estate collateral is later foreclosed upon and sold at a price lower than the appraised value;

 

    the costs of integrating the businesses Equity acquires, including the costs of integrating Adams or KBC, which may be greater than expected;

 

    challenges arising from unsuccessful attempts to expand into new geographic markets, products, or services;

 

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    a lack of liquidity resulting from decreased loan repayment rates, lower deposit balances, or other factors;

 

    restraints on the ability of banks to pay dividends to bank holding companies, which could limit liquidity;

 

    the loss of large loan and depositor relationships;

 

    limitations on Equity’s and Adams’s ability to lend and to mitigate the risks associated with Equity’s and Adams’s lending activities as a result of Equity’s and Adams’s size and capital position;

 

    additional regulatory requirements and restrictions on our business, which could impose additional costs;

 

    increased capital requirements imposed by banking regulators, which may require raising capital at a time when capital is not available on favorable terms or at all;

 

    a failure in the internal controls Equity and Adams have implemented to address the risks inherent to the business of banking;

 

    inaccuracies in assumptions about future events, which could result in material differences between financial projections and actual financial performance;

 

    the departure of key members of Equity or Adams management personnel or the inability to hire qualified management personnel;

 

    the disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, information technology systems;

 

    unauthorized access to nonpublic personal information of customers, which could expose Equity or Adams to litigation or reputational harm;

 

    disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of Equity’s or Adams’s critical processing functions;

 

    the occurrence of adverse weather or manmade events, which could negatively affect Equity’s and Adams’s core markets or disrupt Equity’s or Adams’s operations;

 

    an increase in FDIC deposit insurance assessments, which could adversely affect Equity’s and Adams’s earnings;

 

    an inability to keep pace with the rate of technological advances due to a lack of resources to invest in new technologies; and

 

    other factors that are discussed in “Risk Factors.”

The foregoing factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in this proxy statement/prospectus. If one or more events related to these or other risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, actual results may differ materially from what Equity and Adams anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and Equity and Adams do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible to predict those events or how they may affect it. In addition, Equity and Adams cannot assess the impact of each factor on Equity’s and Adams’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements, expressed or implied, included in this proxy statement/prospectus are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that Equity and Adams or persons acting on Equity’s or Adams’s behalf may issue.

 

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THE ADAMS SPECIAL MEETING

This section contains information for Adams shareholders about the Adams special meeting that Adams has called to allow its shareholders to consider and vote on the Merger Proposal. Adams is mailing this proxy statement/prospectus to you, as an Adams shareholder, on or about [        ], 2018. This proxy statement/prospectus is accompanied by a notice of the Adams special meeting and a form of proxy card that the Adams Board is soliciting for use at the Adams special meeting and at any adjournments or postponements of the Adams special meeting.

Date, Time and Place of the Adams Special Meeting

The Adams special meeting will be held at Adams Pointe Conference Center, at 8:00 a.m., local time, on [        ], 2018. On or about [        ], 2018, Adams commenced mailing this document and the enclosed form of proxy card to its shareholders entitled to vote at the Adams special meeting.

Matters to Be Considered

At the Adams special meeting, you, as an Adams shareholder, will be asked to consider and vote upon the following matters:

 

    the Merger Proposal; and

 

    the Adjournment Proposal.

Completion of the merger is conditioned on, among other things, Adams shareholder approval of the Merger Proposal. No other business may be conducted at the Adams special meeting.

Recommendation of the Adams Board

On December 16, 2017, the Adams Board approved the merger agreement and the transactions contemplated thereby. Based on Adams’s reasons for the merger described in the section of this proxy statement/prospectus entitled “The Merger—Adams’s Reasons for the Merger; Recommendation of the Adams Board” beginning on page 40, the Adams Board believes that the merger is in the best interests of the Adams shareholders.

Accordingly, the Adams Board recommends that you vote “FOR” the Merger Proposal and “FOR” the Adjournment Proposal.

Adams Record Date and Quorum

The Adams Board has fixed the close of business on [        ], 2018 as the Adams record date for determining the holders of Adams common stock entitled to receive notice of and to vote at the Adams special meeting.

As of the Adams record date, there were [        ] shares of Adams common stock outstanding and entitled to notice of, and to vote at, the Adams special meeting or any adjournment thereof, and such outstanding shares of Adams common stock were held by [        ] holders of record. Each share of Adams common stock entitles the holder to one vote at the Adams special meeting on each proposal to be considered at the Adams special meeting.

No business may be transacted at the Adams special meeting unless a quorum is present. The presence (in person or by proxy) of holders of at least a majority of the outstanding shares of Adams common stock entitled to be voted at the Adams special meeting constitutes a quorum for transacting business at the Adams special

 

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meeting. All shares of Adams common stock present in person or represented by proxy, including abstentions and broker-non votes, if any, will be treated as present for purposes of determining the presence or absence of a quorum for all matters voted on at the Adams special meeting.

As of the Adams record date, the directors and executive officers of Adams and their affiliates beneficially owned and were entitled to vote, in the aggregate, [        ] shares of Adams common stock, representing approximately [    ]% of the shares of Adams common stock outstanding on that date. As of the Adams record date, Equity beneficially held no shares of Adams common stock.

Required Vote; Treatment of Abstentions; Broker Non-Votes and Failure to Vote

Merger Proposal: The affirmative vote of the holders of at least two-thirds of the outstanding shares of Adams common stock is required to approve the Merger Proposal. If you mark “ABSTAIN” on your proxy card, fail to submit a proxy card or vote in person at the Adams special meeting or fail to instruct your bank or broker how to vote with respect to the Merger Proposal, it will have the effect of a vote against the proposal.

Adjournment Proposal: The affirmative vote of a majority of shares entitled to vote on the subject matter and represented in person or by proxy at the Adams special meeting is required to approve the Adjournment Proposal. If you mark “ABSTAIN” on your proxy card, fail to submit a proxy card or vote in person at the Adams special meeting or fail to instruct your bank or broker how to vote with respect to the Adjournment Proposal, it will have no effect on the proposal.

Voting on Proxies; Incomplete Proxies

An Adams shareholder of record as of the Adams record date may vote by proxy or in person at the Adams special meeting. If you hold your shares of Adams common stock in your name as of the Adams record date, we ask that you complete and return the proxy card in the enclosed envelope. The envelope requires no additional postage if mailed in the United States.

Adams requests that Adams shareholders vote by completing and signing the accompanying proxy card and returning it to Adams as soon as possible in the enclosed postage-paid envelope. When the accompanying proxy card is returned properly executed, the shares of Adams common stock represented by it will be voted at the Adams special meeting in accordance with the instructions contained on the proxy card. If any proxy card is returned without indication as to how to vote, the shares of Adams common stock represented by the proxy card will be voted as recommended by the Adams Board.

If you hold your stock in “street name” through a bank or broker, you must direct your bank or broker how to vote in accordance with the instructions you have received from your bank or broker.

Every Adams shareholder’s vote is important. Accordingly, each Adams shareholder should sign, date and return the enclosed proxy card whether or not you plan to attend the Adams special meeting in person. Sending in your proxy card will not prevent you from voting your shares personally at the Adams special meeting, since you may revoke your proxy at any time before it is voted.

Shares Held in “Street Name”; Broker Non-Votes

Banks, brokers and other nominees who hold shares of Adams common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, banks, brokers and other nominees are not allowed to exercise their voting discretion with respect to the approval of matters determined to be “non-routine,” without specific instructions from the beneficial owner. Broker non-votes are shares held by a broker, bank or other nominee that are represented at the Adams special meeting, but with respect to which the

 

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broker or nominee is not instructed by the beneficial owner of such shares to vote on the particular proposal and the broker does not have discretionary voting power on such proposal. If your broker, bank or other nominee holds your shares of Adams common stock in “street name,” your broker, bank or other nominee will vote your shares of Adams common stock only if you provide instructions on how to vote by filling out the voter instruction form sent to you by your broker, bank or other nominee with this proxy statement/prospectus.

Revocability of Proxies and Changes to an Adams Shareholder’s Vote

You have the power to change your vote at any time before your shares of Adams common stock are voted at the Adams special meeting by:

 

    attending and voting in person at the Adams special meeting;

 

    giving notice of revocation of the proxy at the Adams special meeting; or

 

    delivering to the Secretary of Adams at 651 NE Coronado Drive, Blue Springs, Missouri 64014 (i) a written notice of revocation or (ii) a duly executed proxy card relating to the same shares, bearing a date later than the proxy card previously executed.

Attendance at the Adams special meeting will not in and of itself constitute a revocation of a proxy.

If you choose to send a completed proxy card bearing a later date than your original proxy card, the new proxy card must be received before the beginning of the Adams special meeting.

If your shares are held in “street name” by a bank or broker, you should follow the instructions of your bank or broker regarding the revocation of proxies.

Solicitation of Proxies

In addition to solicitation by mail, Adams’s proxy solicitor and/or directors, officers, and employees of Adams may solicit proxies by personal interview, telephone, or electronic mail. Adams reimburses brokerage houses, custodians, nominees, and fiduciaries for their expenses in forwarding proxies and proxy material to their principals. Adams will bear the entire cost of soliciting proxies from you.

Attending the Adams Special Meeting

All Adams shareholders, including holders of record as of the Adams record date and shareholders who hold their shares through banks, brokers, nominees or any other holder of record, are invited to attend the Adams special meeting. Only Adams shareholders of record as of the Adams record date can vote in person at the Adams special meeting. If you are an Adams shareholder of record as of the Adams record date and you wish to attend the Adams special meeting, please bring your proxy card and evidence of your stock ownership, such as your most recent account statement, to the Adams special meeting. You should also bring valid picture identification.

An Adams shareholder who holds shares in “street name” through a broker, bank, trustee or other nominee (which we refer to in this proxy statement/prospectus as a “beneficial owner”) who desires to attend the Adams special meeting in person must bring proof of beneficial ownership as of the record date, such as a letter from the broker, bank, trustee or other nominee that is the record owner of such beneficial owner’s shares, a brokerage account statement or the voting instruction form provided by the broker.

Assistance

If you need assistance in completing your proxy card, have questions regarding Adams’s special meeting or would like additional copies of this proxy statement/prospectus, please contact David Charles Chinnery at (816) 655-3333.

 

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ADAMS PROPOSALS

Proposal No. 1 Merger Proposal

Adams is asking its shareholders to approve the Merger Proposal. Holders of Adams common stock should read this proxy statement/prospectus carefully and in its entirety, including the annexes, for more detailed information concerning the merger agreement and the merger. A copy of the merger agreement is attached to this proxy statement/prospectus as Annex A.

After careful consideration, the Adams Board approved the merger agreement and declared the merger agreement and the transactions contemplated thereby, including the merger, to be advisable and in the best interest of Adams and the shareholders of Adams. See “The Merger—Adams’s Reasons for the Merger; Recommendation of the Adams Board” beginning on page 40 of this proxy statement/prospectus for a more detailed discussion of the Adams Board’s recommendation.

The Adams Board recommends a vote “FOR” the Merger Proposal.

Proposal No. 2 Adjournment Proposal

The Adams special meeting may be adjourned to another time or place, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Adams special meeting to approve the Merger Proposal.

If, at the Adams special meeting, the number of shares of Adams common stock present or represented and voting in favor of the Merger Proposal is insufficient to approve the Merger Proposal, Adams intends to move to adjourn the Adams special meeting in order to enable the Adams Board to solicit additional proxies for approval of the Merger Proposal. In that event, Adams will ask its shareholders to vote upon the Adjournment Proposal, but not the Merger Proposal.

In this proposal, Adams is asking its shareholders to authorize the holder of any proxy solicited by the Adams Board on a discretionary basis to vote in favor of adjourning the Adams special meeting to another time and place for the purpose of soliciting additional proxies, including the solicitation of proxies from Adams shareholders who have previously voted.

The Adams Board recommends a vote “FOR” the Adjournment Proposal.

 

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THE MERGER

The following discussion contains certain information about the merger. The discussion is subject, and qualified in its entirety by reference, to the merger agreement attached as Annex A to this proxy statement/prospectus and incorporated herein by reference. You are urged to read this entire proxy statement/prospectus carefully, including the merger agreement attached as Annex A, for a more complete understanding of the merger.

Terms of the Merger

Each of the board of directors of Equity (which we refer to in this proxy statement/prospectus as the “Equity Board”) and the Adams Board has approved the merger agreement. To consummate the merger, Merger Sub will merge with and into Adams, with Adams surviving the merger as a wholly-owned subsidiary of Equity. Immediately following, and in connection with the merger, Equity will cause Adams to merge with and into Equity, with Equity surviving the second merger. Immediately following the integrated mergers (or at such later time as Equity may determine in its sole discretion), Equity will cause Adams Dairy Bank, a Missouri state bank with its principal offices in Blue Springs, Missouri, and the banking subsidiary of Adams, to merge with and into Equity Bank, the banking subsidiary of Equity, with Equity Bank surviving the bank merger.

If the merger is completed, each share of Adams common stock (other than shares of Adams common stock held by Adams, Equity or any dissenting shareholder) will be converted into the right to receive (i) 0.4791 shares of Equity common stock, and (ii) $5.51, in cash, subject to a possible downward adjustment of the cash consideration based upon the amount of the Adams adjusted shareholders’ equity prior to Closing. Equity will not issue any fractional shares of Equity common stock in the merger. Adams shareholders who would otherwise be entitled to a fraction of a share of Equity common stock upon the completion of the merger will instead receive, for the fraction of a share, an amount in cash (rounded to the nearest cent), determined by multiplying the fractional share by $34.49.

Adams’s shareholders are being asked to approve the Merger Proposal. See the section of this proxy statement/prospectus entitled “The Merger Agreement” beginning on page 57 for additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to the completion of the merger and the provisions for terminating or amending the merger agreement.

Background of the Merger

As a regular part of their duties over time, executive management and directors of Adams have considered various strategic alternatives to enhance and maximize shareholder value. These strategic alternatives have included continuing as an independent institution, acquiring other banks, adding bank branches, or a sale or merger of Adams.

At the request of Adams’s and Adams Dairy Bank’s Chairman and Chief Executive Officer, David Chinnery (“Chinnery”), Bob Wray (“Wray”), then a principal of The Capital Corporation, LLC, a financial advisory firm experienced in advising financial institutions regarding strategic alternatives, joined the Adams Board in May 2015 as a way of remaining current with the banking market in and around the Midwest.

On a regular basis the Adams Board devoted a portion of their monthly board meetings for discussions of the bank merger and acquisition market.

In December 2016, at a strategic planning session, the Adams Board seriously discussed the sale of Adams Dairy Bank. Adams Dairy Bank management prepared five (5)-year projections of Adams Dairy Bank as an independent institution and compared the estimated future value of Adams with the potential value of Adams in the current market environment. Significant discussion occurred regarding the impact of a future recession, dependence on a small number of management personnel and shareholder liquidity.

 

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In the first quarter of 2017, the Adams Board continued discussions at each of their board meetings regarding a potential sale evaluating the estimated current and future value and desire for shareholder liquidity.

Original investors in Adams (Adams Dairy Bank at that time) made their investments in 2008 and anticipated a conversion of their investment in Adams to publicly traded Capitol Bancorp stock after the first three years of operation.

During the first quarter of 2017, the Adams Board also consulted with legal counsel as to the potential conflict with Capital, the successor to The Capital Corporation, LLC, due to Wray serving as both a director of Adams and Managing Director of Capital. Adams’s legal counsel advised the Board that, under the Adams Bylaws (which we refer to in this proxy statement/prospectus as the “Adams bylaws”), if Wray recused himself, the remaining members of the Adams Board could approve Adams’s engagement of Capital so long as the material facts as to Wray’s interest in Capital were disclosed to the Adams Board and those members of the Adams Board in good faith authorized the engagement.

On March 6, 2017, Adams entered into an agreement with Capital to act as an advisor in an effort to evaluate the opportunities available for the merger and/or sale of Adams.

In April 2017, Capital proceeded with an auction process to solicit indications of interests from prospective buyers. Capital contacted forty-two (42) prospective buyers, including Equity. Twenty (20) prospective buyers executed confidentiality agreements and were provided with a Confidential Memorandum regarding Adams. Seven (7) of the contacted parties, including Equity, submitted acquisition or merger proposals, each with differing cash and stock considerations.

After review of the proposals received, the Adams Board and executive management team met with Equity and with another prospect (“Prospect B”) over a span of two months. Equity offered a fixed aggregate value for Adams based on a required capital base. Their offer provided a range of Equity stock of 60% to 85% of the aggregate value with the remainder in cash.

Prospect B also offered a range of value for Adams with a required capital base. However, Prospect B’s proposal also included an all-cash option which appealed to the Adams Board.

Additionally, Chinnery and Wray made onsite visits to both Equity and Prospect B to meet with their executive management teams and discuss a potential transaction. Results of these meetings were relayed to the Adams Board following the meetings.

Although the range of value provided was slightly lower than Equity’s offer, based on concerns of market risk and a desire for an all-cash transaction, the Adams Board allowed Prospect B to conduct a limited due diligence which would allow it to eliminate the range and develop a firm offer.

After a limited due diligence, Prospect B issued an updated Letter of Intent at the bottom of its original range, and eliminated the all-cash option, providing for a transaction including 45% stock and 55% cash.

On September 28, 2017, the Adams Board voted to move forward with Equity, to request an updated Letter of Intent from Equity and to allow Equity to begin conducting due diligence. The market risk of exchanging Adams stock for either potential buyer’s stock was debated at length by the Adams Board, but the Adams Board believed that it was still in the Adams shareholders’ best interest to effect the Equity transaction.

The decision to move forward with Equity was based on several items, including the overall value being the highest value offered and the fact that if both offers contained a stock component, the Equity stock offered a much larger trading volume which would allow Adams shareholders the ability to liquidate their stock quicker if so desired. Additionally, the Adams Board discussed the elimination of the all-cash offer of Prospect B along with the concern that it raised of future changes and execution risk by proceeding with Prospect B.

 

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On September 29, 2017, Capital had a conversation with the executive management team of Equity indicating the Adams Board’s desire to move forward with Equity. Capital also had a telephone conversation with the investment banker for Prospect B informing him of the Adams Board’s decision to move forward with a different party based, in part, on the elimination of the all-cash offer.

On October 2, 2017, Adams received an updated Letter of Intent from Equity at the same valuation contained in its original May 2017 Letter of Intent. Due diligence was started immediately with Equity, but Adams did not execute the Letter of Intent.

On October 5, 2017, Adams received a revised Letter of Intent from Prospect B providing for either a part cash and part stock transaction or an all-cash transaction.

At its October 2017 board meeting, the Adams Board discussed the ongoing due diligence by Equity as well as the revised Letter of Intent from Prospect B. After discussion the Adams Board determined that it was in the Adams shareholders’ best interest to continue to pursue a transaction with Equity.

This was based, in part, on the higher purchase price valuation from Equity and the continued concern that Prospect B may again eliminate the all-cash option in the definitive agreement. There was also concern that if Adams pulled back from Equity that it would be unlikely that Equity would remain interested in Adams at a later date, which would necessitate starting the process over if a deal could not be reached with Prospect B.

Following due diligence, on November 20, 2017, Equity delivered to Capital an updated Letter of Intent with an aggregate valuation of $16,840,000 ($23.45 per share) paid as 75% registered stock of Equity and 25% in cash at closing based on a required amount of capital at closing. This updated Letter of Intent was forwarded to the Adams Board.

On December 1, 2017, the Adams Board met to discuss the updated Letter of Intent from Equity. Adams’s legal counsel was present and started the meeting with a discussion and memorandum regarding the directors’ fiduciary responsibility to the shareholders when discussing the Equity offer. After substantial discussion regarding the market risk and discussion of remaining independent, the Adams Board agreed that it was in the Adams shareholders’ best interest to continue to pursue discussions with Equity.

Late on the evening of December 1, 2017, Equity delivered a draft of a merger agreement to Adams. During the week of December 4, 2017, the Adams Board reviewed the draft merger agreement and discussed it with Adams’s advisors. The parties and their respective legal counsel held numerous discussions and negotiations regarding the merger agreement over the next two weeks in order to finalize the agreements.

On December 7, 2017, the Adams Board held a telephonic board meeting including Adam’s legal counsel to discuss the draft merger agreement. Legal counsel outlined the legal issues and terms, while Capital outlined the financial terms of the draft merger agreement. Lengthy discussion was held on the Adams transaction expenses in the contract along with how those expenses would impact the estimated capital at closing, and ultimately the purchase price.

The Adams Board agreed to continue discussions and negotiations with Equity in anticipation of having a clear estimate of the transaction expenses, the estimated capital at closing and a more refined agreement prior to the regularly scheduled Adams Board meeting on December 9, 2017.

The Adams Board held a telephonic board meeting on December 8, 2017 for Capital and executive management of Adams Dairy Bank to provide the Adams Board a more refined estimate of the transaction expenses and capital at closing. Based on transactional expenses, Capital estimated that the purchase price at closing under the draft merger agreement would drop to approximately $22.37.

 

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On December 8, 2017, Equity provided the Director Support Agreement, Director Release Agreement, Officer Release Agreement and Voting Agreement to Adams. The parties and their respective legal counsel held numerous discussions and negotiations regarding the ancillary agreements over the next few days in order to finalize the agreements.

Discussions and negotiations occurred during the day of December 9, 2017 between representatives of Adams and Equity to finalize the transaction expenses, closing capital and purchase price. On the evening of December 9, 2017, the Adams Board met in conjunction with a regularly scheduled Adams Dairy Bank board meeting to discuss the revised draft merger agreement and final purchase price. Capital estimated that the purchase price in the contract would be approximately $22.00 per share based on estimated capital at closing. The Adams Board approved the draft merger agreement and purchase price.

The Adams Board recommended to each of the directors that they review the new ancillary documents which would be required of the directors and seek independent legal advice if necessary.

On December 15, 2017, the directors of Adams reviewed with their counsel and advisors, the final merger document. Based upon Adams’s review and discussion of the merger agreement, the analyses and opinion of Capital, and other relevant factors (described below in “Adams’s Reasons for the Merger; Recommendation of the Adams Board,” beginning on page 40), the Adams Board approved the merger with Equity and authorized Chinnery to execute the merger agreement.

On December 15, 2017, Capital delivered its oral opinion to the Adams Board and subsequently confirmed in a written opinion, dated December 20, 2017 that, as of that date and based upon and subject to the assumptions and qualifications stated in its written opinion, the $15,825,000 cash and stock consideration to be exchanged by Equity for the outstanding common stock of Adams in the merger was fair, from a financial point of view, to the Adams shareholders.

After Adams received a favorable fairness opinion from Capital, the merger agreement and related documents were executed and delivered by the parties on December 16, 2017. The companies issued a joint press release announcing the signing of the merger agreement on the morning of December 18, 2017.

Adams’s Reasons for the Merger; Recommendation of the Adams Board

The Adams Board has approved the merger agreement and unanimously recommends that the Adams shareholders vote “FOR” approval of the Merger Proposal.

In reaching its decision to approve the merger agreement and to recommend approval to the Adams shareholders, the Adams Board evaluated the merger and the merger agreement in consultation with its executive management, Capital, Adams’s outside financial advisor and Adams’s legal counsel. In arriving at its recommendation, the Adams Board considered a number of factors, including the following:

 

    the Adams Board’s familiarity with and review of information concerning the business, results of operations, financial condition, competitive position and future prospects of Adams;

 

    the value of the consideration to be received by Adams’s shareholders relative to the book value and earnings per share of Adams common stock, including particularly the relationship between the consideration and Adams’s tangible book value;

 

    the financial terms of recent business combinations in the financial services industry and a comparison of the multiples of selected combinations with the terms of the proposed transaction with Equity;

 

    the current and prospective environment in which Adams operates, including overall local and regional economic conditions, the competitive environment for banks and other financial institutions, the increased regulatory burdens on financial institutions and the trend toward consolidation in the banking industry;

 

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    the results that Adams could expect to achieve operating independently, and the likely risks and benefits to shareholders of that course of action, as compared with the value of the merger consideration;

 

    the opportunities and prospects of Adams for future organic growth and/or future growth through acquisitions;

 

    the resources required to keep pace with technology and cybersecurity risks;

 

    the resources required to keep pace with anticipated asset growth and provide shareholder liquidity as needed;

 

    that a merger with a larger bank holding company could provide the opportunity to realize economies of scale, increase efficiencies of operations and enhance customer products and services;

 

    the belief of the Adams Board that Equity emphasizes many of the same values embraced by Adams in the conduct of its business, such as, excellent customer service, employee development and delivering value to shareholders;

The Adams Board also considered the risks and potential negative factors outlined below, but concluded that the anticipated benefits of combining with Equity were likely to outweigh substantially these risks and factors. The risk factors included:

 

    the lack of control of the Adams Board and Adams’s shareholders over the future operations and strategy of the combined company;

 

    the requirement that Adams conduct its business in the ordinary course and the other restrictions on the conduct of Adams’s business before completion of the merger, which could delay or prevent Adams from undertaking business opportunities that may arise before completion of the merger;

 

    the fact that certain benefits of the merger are reliant on the successful operation of Equity in the future as opposed to selling Adams entirely for cash, which would deliver all value to Adams shareholders upon closing of such a sale;

 

    the limited liquidity of Equity common stock, even though it is quoted on Nasdaq; and

 

    that under the merger agreement, Adams may not solicit competing proposals for the acquisition of Adams.

The reasons set out above for the merger are not intended to be exhaustive but are believed to include all material factors considered by the Adams Board in approving the merger. In reaching its determination, the Adams Board did not assign any relative or specific weights to different factors, and individual directors may have given different weights to different factors.

The Adams Board conducted an overall analysis of the factors described above as a whole. Based on the reasons stated, the Adams Board believed that the merger was in the best interest of Adams’s shareholders and approved the merger agreement and the merger.

The foregoing explanation of the Adams Board’s reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements,” beginning on page 31.

The Adams Board determined that the merger and the merger agreement are in the best interests of Adams and its shareholders.

Accordingly, the Adams Board approved the merger and the merger agreement and unanimously recommends that Adams shareholders vote “FOR” approval of the Merger Proposal and “FOR” the Adjournment Proposal.

 

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Opinion of Adams’s Financial Advisor

Adams engaged Capital to render financial advisory and investment banking services to Adams, including an opinion to the Adams Board as to the fairness, from a financial point of view, to the holders of Adams common stock of the merger consideration to be received by such shareholders in the merger.

Adams selected Capital in connection with any business combination transaction involving Adams because Capital is a regionally recognized investment banking firm with substantial experience in transactions similar to the merger and is familiar with Adams and its operations. Over the past 20 years, Capital has directly represented financial institutions in over 250 transactions. As part of its bank advisory business Capital is continually engaged in the valuation of banks and bank holding companies and their securities in connection, among other things, mergers and acquisitions.

As part of its engagement, a representative of Capital attended the December 15, 2017 telephonic meeting of the Adams Board at which the Adams Board evaluated the merger. At this meeting, Capital reviewed the financial aspects of the merger and rendered to the Adams Board an oral opinion to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Capital as set forth in its opinion, the merger consideration in the merger was fair, from a financial point of view, to the holders of Adams common stock. The Adams Board approved the merger agreement at this meeting.

The description of the opinion set forth herein is qualified in its entirety by reference to the full text of the opinion, which is attached as Annex D to this proxy statement/prospectus and is incorporated herein by reference, and describes the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Capital in preparing the opinion.

Capital’s opinion speaks only as of the date of the opinion. The opinion was for the information of, and was directed to, the Adams Board (in its capacity as such) in connection with its consideration of the financial terms of the merger. The opinion addressed only the fairness, from a financial point of view, of the merger consideration in the merger to the holders of Adams common stock. It did not address the underlying business decision of Adams to engage in the merger or enter into the merger agreement or constitute a recommendation to the Adams Board in connection with the merger, and it does not constitute a recommendation to any holder of Adams common stock or any shareholder of any other entity as to how to vote in connection with the merger or any other matter, nor does it constitute a recommendation regarding whether or not any such shareholder should enter into a voting, shareholders’ or affiliates’ agreement with respect to the merger or exercise any dissenters’ or appraisal rights that may be available to such shareholder.

In connection with the opinion, Capital reviewed, analyzed and relied upon matters that it believed had a bearing upon the merger and a material bearing upon the financial and operating condition of Adams and Equity, including, among other things:

 

    a draft of the merger agreement dated December 15, 2017 (the most recent draft then made available to Capital);

 

    the unaudited financial statements for the three fiscal years ended December 31, 2016 of Adams;

 

    the unaudited quarterly financial statements for the fiscal quarter ended September, 30, 2017 of Adams;

 

    the audited financial statements and the Annual Reports on Form 10-K for the three fiscal years ended December 31, 2016 of Equity;

 

    the unaudited quarterly financial statements and the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2017 of Equity;

 

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    certain regulatory filings of Adams, Equity and their respective subsidiaries, including (as applicable) the semi-annual reports on Form FR Y-9SP and quarterly reports on Form FR Y-9C and quarterly call reports required to be filed with respect to each semi-annual period and quarter (as the case may be) during the three-year period ended December 31, 2016 and the quarter ended September 30, 2017;

 

    certain other interim reports and other communications of Adams and Equity to their respective shareholders; and

 

    other financial information concerning the businesses and operations of Adams and Equity that was furnished to Capital by Adams and Equity or which Capital was otherwise directed to use for purposes of Capital’s analyses.

Capital’s consideration of financial information and other factors that it deemed appropriate under the circumstances or relevant to its analysis included, among others, the following:

 

    the historical and current financial position and results of operations of Adams and Equity;

 

    the assets and liabilities of Adams and Equity;

 

    the nature and terms of certain other merger transactions and business combinations in the banking industry;

 

    a comparison of certain financial information for Adams and certain financial and stock market information for Equity, along with similar information for certain other companies the securities of which were publicly traded;

 

    financial and operating forecasts and projections of Adams as a stand-alone institution that were prepared by, and provided to Capital and discussed with Capital by, Adams management and that were used and relied upon by Capital at the direction of Adams management and with the consent of the Adams Board; and

 

    publicly available consensus “street estimates” of Equity that were discussed with Capital by Adams management and used and relied upon by Capital based on such discussions, at the direction of Adams management and with the consent of the Adams Board.

Capital also performed such other studies and analyses as it considered appropriate and took into account its assessment of general economic, market and financial conditions and its experience in other transactions, as well as its experience in securities valuation and knowledge of the banking industry generally. Capital also participated in discussions that were held with the respective managements of Adams and Equity regarding the past and current business operations, regulatory relations, financial condition and future prospects of their respective companies and such other matters as Capital deemed relevant to its inquiry.

In conducting its review and arriving at its opinion, Capital relied upon and assumed the accuracy and completeness of all of the financial and other information that was provided to it or that was publicly available and did not independently verify the accuracy or completeness of any such information or assume any responsibility or liability for such verification, accuracy or completeness.

Capital relied upon the management of Adams as to the reasonableness and achievability of the financial and operating forecasts and projections of Adams referred to above (and the assumptions and bases therefor), and Capital assumed that such forecasts and projections were reasonably prepared and represented the best currently available estimates and judgments of Adams management and that such forecasts and projections would be realized in the amounts and in the time periods estimated by such management.

Capital further relied, with the consent of Adams, upon Equity’s management as to the reasonableness and achievability of the publicly available consensus “street estimates” of Equity and Capital assumed that such estimates were consistent with, the best currently available estimates and judgments of Equity management and that the forecasts, projections and estimates reflected in such information would be realized in the amounts and in the time periods estimated.

 

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It is understood that the portion of the foregoing financial information of Adams and Equity that was provided to Capital was not prepared with the expectation of public disclosure, that all of the foregoing financial information, including the publicly available consensus “street estimates” of Equity, was based on numerous variables and assumptions that are inherently uncertain, including, without limitation, factors related to general economic and competitive conditions, and that, accordingly, actual results could vary significantly from those set forth in such information. Capital assumed, based on discussions with the respective managements of Adams and Equity, and with the consent of the Adams Board, that all such information provided a reasonable basis upon which Capital could form its opinion. Capital expressed no view as to any such information or the assumptions or bases therefor. Capital relied on all such information without independent verification or analysis and did not in any respect assume any responsibility or liability for the accuracy or completeness thereof.

Capital also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of either Adams or Equity since the date of the last financial statements of each such entity that were made available to Capital. Capital further assumed that the unaudited financial statements for Adams contemplated to be delivered to Equity following the date of its opinion would not reflect any such material changes or other information or facts material to Capital’s analyses. Capital is not an expert in the independent verification of the adequacy of allowances for loan and lease losses. Capital assumed, without independent verification and with Adams’s consent, that the aggregate allowances for loan and lease losses for Adams and Equity are adequate to cover such losses. In rendering its opinion, Capital did not make or obtain any evaluations or appraisals or physical inspection of the property, assets or liabilities (contingent or otherwise) of Adams or Equity, the collateral securing any of such assets or liabilities, or the collectability of any such assets, nor did Capital examine any individual loan or credit files, nor did it evaluate the solvency, financial capability or fair value of Adams or Equity under any state or federal laws, including those relating to bankruptcy, insolvency or other matters. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Because such estimates are inherently subject to uncertainty, Capital assumed no responsibility or liability for their accuracy.

Capital assumed, in all respects material to its analyses:

 

    that the integrated mergers and any related transactions (including the bank merger) would be completed substantially in accordance with the terms set forth in the merger agreement (the final terms of which Capital assumed would not differ in any respect material to Capital’s analyses from the draft reviewed by Capital and referred to above) with no additional payments or adjustments to the merger consideration (including the allocation between cash and stock);

 

    that the representations and warranties of each party in the merger agreement and in all related documents and instruments referred to in the merger agreement were true and correct;

 

    that each party to the merger agreement and all related documents would perform all of the covenants and agreements required to be performed by such party under such documents;

 

    that there were no factors that would delay, or subject to any adverse conditions, any necessary regulatory or governmental approval for the integrated mergers or any related transaction (including the bank merger) and that all conditions to the completion of the integrated mergers and any related transaction would be satisfied without any waivers or modifications to the merger agreement or any of the related documents; and

 

    that in the course of obtaining the necessary regulatory, contractual or other consents or approvals for the integrated mergers and any related transaction (including the bank merger), no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, would be imposed that would have a material adverse effect on the future results of operations or financial condition of Adams, Equity or the pro forma entity, or the contemplated benefits of the integrated mergers, including without limitation the cost savings and related expenses expected to result or be derived from the integrated mergers.

 

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Capital assumed that the integrated mergers would be consummated in a manner that complies with the applicable provisions of the Securities Act, the Securities Exchange Act of 1934, as amended (which we refer to in this proxy statement/prospectus as the “Exchange Act”) and all other applicable federal and state statutes, rules and regulations.

Capital was further advised by representatives of Adams that Adams relied upon advice from its advisors (other than Capital) or other appropriate sources as to all legal, financial reporting, tax, accounting and regulatory matters with respect to Adams, Equity, Merger Sub, the integrated mergers and any related transaction (including the bank merger), and the merger agreement. Capital did not provide advice with respect to any such matters.

Capital’s opinion addressed only the fairness, from a financial point of view, as of the date of the opinion, to the holders of Adams common stock of the merger consideration to be received by such holders in the merger, without regard to the individual circumstances of specific holders which may distinguish such holders, including, without limitation, as parties to the existing shareholders agreement between Adams and certain of its shareholders. Capital expressed no view or opinion as to any other terms or aspects of the integrated mergers or any term or aspect of any related transaction (including the bank merger), including without limitation, the form or structure of the integrated mergers (including the form of merger consideration or the allocation thereof between cash and stock) or any such related transaction, any consequences of the integrated mergers or any such related transaction to Adams, its shareholders, creditors or otherwise, or any terms, aspects, merits or implications of any employment, consulting, voting, support, shareholder or other agreements, arrangements or understandings contemplated or entered into in connection with the integrated mergers or otherwise. Capital’s opinion was necessarily based upon conditions as they existed and could be evaluated on the date of such opinion in addition to the information made available to Capital through such date. Developments subsequent to the date of Capital’s opinion may have affected, and may affect, the conclusion reached in Capital’s opinion. Capital did not and does not have an obligation to update, revise or reaffirm its opinion. For purposes of its analyses, Capital did not incorporate recently announced changes to United States tax laws regarding corporate tax rates.

Capital’s opinion did not address, and Capital expressed no view or opinion with respect to:

 

    the underlying business decision of Adams to engage in the integrated mergers or enter into the merger agreement;

 

    the relative merits of the merger as compared to any strategic alternatives that are, have been or may be available to or contemplated by Adams or the Adams Board;

 

    the fairness of the amount or nature of any compensation to any of Adams’s officers, directors or employees, or any class of such persons, relative to the compensation to the holders of Adams common stock;

 

    the effect of the integrated mergers or any related transaction on, or the fairness of the consideration to be received by, holders of any class of securities of Adams common stock or holders of any class of securities of Equity or any other party to any transaction contemplated by the merger agreement;

 

    any adjustment (as provided in the merger agreement) to the merger consideration (including to the cash or stock components thereof) assumed to be paid in the merger for purposes of Capital’s opinion;

 

    whether Equity has sufficient cash, available lines of credit or other sources of funds to enable it to pay the aggregate cash consideration to the holders of Adams common stock at the closing of the merger;

 

    the actual value of Equity common stock to be issued in the merger;

 

    the prices, trading range or volume at which Equity common stock would trade following the public announcement of the merger or following the consummation of the merger;

 

    any advice or opinions provided by any other advisor to any of the parties to the merger or any other transaction contemplated by the merger agreement; or

 

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    any legal, regulatory, accounting, tax or similar matters relating to Adams, Equity, Merger Sub or their respective shareholders, or relating to or arising out of or as a consequence of the integrated mergers or any related transaction (including the bank merger), including whether or not the integrated mergers would qualify as a tax-free reorganization for United States federal income tax purposes.

In performing its analyses, Capital made numerous assumptions with respect to industry performance, general business, economic, market and financial conditions and other matters, which are beyond the control of Capital, Adams and Equity. Any estimates contained in the analyses performed by Capital are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by these analyses. Additionally, estimates of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. Accordingly, these analyses and estimates are inherently subject to substantial uncertainty.

In addition, the Capital opinion was among several factors taken into consideration by the Adams Board in making its determination to approve the merger agreement and the merger. Consequently, the analyses described below should not be viewed as determinative of the decision of the Adams Board with respect to the fairness of the merger consideration. The type and amount of consideration payable in the merger were determined through negotiation between Adams and Equity and the decision of Adams to enter into the merger agreement was solely that of the Adams Board.

The following is a summary of the material financial analyses presented by Capital to the Adams Board in connection with its opinion. The summary is not a complete description of the financial analyses underlying the opinion or the presentation made by Capital to the Adams Board, but summarizes the material analyses performed and presented in connection with such opinion. The financial analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the financial analyses.

The preparation of a fairness opinion is a complex analytic process involving various determinations as to appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, a fairness opinion is not readily susceptible to partial analysis or summary description. In arriving at its opinion, Capital did not attribute any particular weight to any analysis or factor that it considered, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Capital believes that its analyses and the summary of its analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on the information presented below in tabular format, without considering all analyses and factors or the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the process underlying its analyses and opinion.

For purposes of the financial analyses described below, Capital utilized an implied transaction value for the proposed merger of $22.03 per outstanding share of Adams common stock, or approximately $15.825 million in the aggregate, consisting of the sum of (i) the implied value of the stock consideration of 0.4791 shares of Equity common stock, based on the 20-day volume weighted average price of Equity common stock on and (ii) the cash consideration of $5.51.

Market Value Analysis

Based on total merger consideration of $15,825,000 and the required Adams adjusted shareholders’ equity at Closing, the acquisition price results in the following pricing ratios:

 

Purchase Price

   $ 15,825,000  

Required Capital at Closing

   $ 9,666,000  

2017 Earnings

   $ 1,000,000  

Multiple of Equity

     164

Multiple of Earnings

     15.83  

 

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Adams Selected Companies Analyses

Using publicly available information, Capital compared the financial performance and financial condition of Adams to ten (10) selected banks that had total assets between $100 million and $150 million and were based in Missouri or Kansas.

The selected companies were as follows:

Bank of St. Elizabeth

Bank of Crocker

Community Point Bank

Bank Northwest

Valley State Bank

Citizens-Farmers Bank of Cole Camp

Vintage Bank Kansas

Lawson Bank

F&M Bank and Trust Company

Valley State Bank

To perform this analysis, Capital used profitability and other financial information as of or for the latest 12-month period available (which in the case of Adams was the period ended September 30, 2017). Subsidiary bank-level data was utilized to calculate ratios for Adams. Certain financial data prepared by Capital may not correspond to the data presented in Adams’s historical financial statements as a result of the different periods, assumptions and methods used by Capital to compute the financial data presented.

 

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Capital’s analysis showed the following concerning the financial performance of Adams and the selected companies:

 

KEY FINANCIAL RATIOS

 

Balance Sheet (%)

      Bank     Peer     Diff  

Earning Asset Ratio

  LOGO     92.12       94.22       (2.10

Loan/ Asset Ratio

  LOGO     70.90       64.66       6.24  

Deposits/ Total Assets

  LOGO     80.63       83.89       (3.26

Equity Capital Ratio

  LOGO     9.23       11.37       (2.14

Liquid Assets/ Liabilities

  LOGO     14.04       23.26       (9.22

 

Growth Rates (%)

      Bank     Peer     Diff  

Asset Growth

  LOGO     17.60       3.75       13.86  

Loan Growth

  LOGO     17.69       5.79       11.90  

Deposit Growth

  LOGO     20.13       2.90       17.23  

Income Growth

  LOGO     14.77       12.40       2.37  

 

Performance (%)

      Bank     Peer     Diff  

Return On Equity

  LOGO     9.32       10.02       (0.70

Return On Assets

  LOGO     0.85       1.09       (0.24

S Corp ROA Adj.

  LOGO     0.85       0.92       (0.07

Net Interest Margin (TE)

  LOGO     3.74       3.88       (0.14

Net Overhead

  LOGO     1.96       2.17       0.21  

Loan Loss Provision

  LOGO     0.19       0.16       (0.03

 

Efficiency (%)

      Bank     Peer     Diff  

Efficiency Ratio

  LOGO     62.39       64.86       2.47  

Loans+Deposits/Employee ($000)

  LOGO     13,784       6,424       7,360  

AS OF 2017Q3

 

LOGO

 

LOGO

 

 

STRENGTHS & OPPORTUNITIES    AS OF 2017Q3

 

Ratios (%)

       Bank      Peer      Diff  

Return on Assets

  LOGO      0.85        1.09        (0.24

S Corp ROA Adj.

  LOGO      0.85        0.92        (0.07

Net Interest Income

  LOGO      3.42        3.55        (0.13

Loan Loss Prov.

  LOGO      0.19        0.16        (0.03

Total NonInt. Inc.

  LOGO      0.51        0.60        (0.09

Total NonInt. Exp.

  LOGO      2.47        2.77        0.30  

Realized G/L on Sec.

  N/A      0.00        0.01        (0.01

Income Taxes

  LOGO      0.42        0.14        (0.28

LOGO

 

 

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CLOSEST PEERS BASED ON ASSET SIZE    as of 2017Q3

 

Performance Ratio (% Avg
Assets)

  Adams
Dairy
Bank
    Bank of
St.

Elizabeth
    Bank of
Crocker
    Community
Point Bank
    Bank
Northwest
    Valley
State
Bank
    Citizens-
Farmers
Bank of
Cole
Camp
    Vintage
Bank
Kansas
    Lawson
Bank
    F&M
Bank and
Trust

Company
    Valley
State
Bank
 

Total Interest Income

    4.04       4.78       3.41       3.69       4.59       5.05       3.80       3.94       3.28       3.60       4.07  

Total Interest Expense

    0.63       0.32       0.42       0.91       0.52       0.90       0.51       0.31       0.15       0.50       0.49  

Net Interest Income

    3.42       4.46       3.00       2.78       4.07       4.15       3.29       3.62       3.13       3.11       3.58  

Prov for Loan and Lease Losses

    0.19       0.00       0.22       0.16       0.14       0.10       0.24       0.16       0.00       0.00       0.16  

Trust Income

    0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00  

Service Charges on the dep acts

    0.07       0.37       0.16       0.04       0.41       0.20       0.37       0.17       0.28       0.25       0.21  

All other non Interest Income

    0.44       0.46       0.05       0.14       0.05       0.49       0.13       0.19       0.34       0.38       0.09  

Total Non Interest Income

    0.51       0.82       0.21       0.18       0.46       0.69       0.50       0.36       0.62       0.63       0.29  

Salaries and employee expenses

    1.23       1.88       1.59       1.06       1.29       1.89       1.11       1.46       1.42       1.59       1.74  

Premises & fixed asset expenses

    0.22       0.35       0.33       0.25       0.45       0.41       0.29       0.29       0.43       0.30       0.37  

Other noninterest expense

    1.02       0.89       0.79       0.70       0.52       0.90       0.42       0.64       0.90       0.89       0.64  

Total noninterest expense

    2.47       3.11       2.71       2.00       2.26       3.20       1.82       2.54       2.74       2.78       2.75  

Total realized G/L, tax, & extra

    0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       0.00       (0.00

Op Inc. bef. Sec. G/L, tax & extra

    1.27       2.17       0.27       0.80       2.13       1.54       1.73       1.28       1.01       0.95       0.96  

Income Taxes

    0.42       0.00       0.00       0.00       0.00       0.06       0.00       0.07       0.02       0.33       0.29  

Return on Average Assets— Net Income

    0.85       2.17       0.27       0.80       2.13       1.48       1.73       1.22       0.99       0.62       0.68  

No company used as a comparison in the above selected companies analysis is identical to Adams. Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Selected Transactions Analysis

Capital reviewed publicly available information related to 24 selected Midwest U.S. bank transactions announced since January 1, 2017, with target assets of $50,000,000 to $200,000,000. Terminated transactions were excluded from the selected transactions.

 

     This
Transaction
   Peer
Transactions

Median Deal Value/Tangible Common Equity

   163.72%    148.11%

Median Deal Value/Earnings

   16.7x    36.9x

Median Tangible Book Premium/Core Deposits

   7.4%    3.28%

 

(1) Price per common share to tangible book value per share of the acquired company (in the case of selected transactions involving a private acquired company) was calculated as total transaction consideration divided by total tangible common equity.
(2) Tangible equity premium to core deposits (total deposits less time deposits greater than $100,000) of the acquired company, is referred to as core deposit premium.

The above transaction statistics for the selected transactions were compared with the corresponding transaction statistics for the merger based on the implied transaction value for the merger of $22.03 per share of Adams common stock and using historical financial information for Adams as of or for the 12-month period ended September 30, 2017.

 

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No company or transaction used as a comparison in the above selected transaction analysis is identical to Adams or the merger.

Accordingly, an analysis of these results is not mathematical. Rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies involved.

Other Considerations

Equity is a healthy and profitable institution which has a track record of successfully completing whole bank acquisitions and is in good standing with its regulators.

Capital also reviewed and presented to the Adams Board the historical Equity stock price and trading volume.

 

 

LOGO

Miscellaneous

Capital acted as financial advisor to Adams and not as an advisor to or agent of any other person. As part of its investment banking business, Capital is continually engaged in the valuation of bank and bank holding company securities in connection with acquisitions and valuations for various other purposes.

As specialists in the securities of banking companies, Capital has experience in, and knowledge of, the valuation of banking enterprises.

Pursuant to the Capital engagement agreement, Adams agreed to pay Capital a total cash fee currently expected to be equal to 2.50% of the first $10,000,000 in aggregate merger consideration plus 1.25% of the aggregate merger consideration in excess of $10,000,000, which will payable to Capital upon the closing of the

 

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merger. Adams also agreed to reimburse Capital for reasonable out-of-pocket expenses and disbursements incurred in connection with its retention and to indemnify Capital against certain liabilities relating to or arising out of Capital’s engagement or Capital’s role in connection therewith.

Other than in connection with this present engagement, during the two years preceding the date of its opinion, Capital has not provided investment banking and financial advisory services to Adams. Capital may in the future provide investment banking and financial advisory services to Adams or Equity and receive compensation for such services.

Mr. Wray is a managing director and member of Capital and will be entitled to a portion of the fee paid to Capital. Mr. Wray is also a director and shareholder of Adams. Adams believes that these interests and relationship Adams did not present conflicts of interest that affected the judgment of Capital in rendering its fairness opinion.

Equity’s Reasons for the Merger

After careful consideration, the Equity board of directors (which we refer to in this proxy statement/prospectus as the “Equity Board”), at a meeting held on December 14, 2017, unanimously determined that the merger agreement and the issuance of the Equity common stock is in the best interests of Equity and its shareholders. Accordingly, the Equity Board approved the merger agreement.

In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Equity Board consulted with Equity’s management and legal and financial advisors and, in reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Equity Board considered a number of factors, including the following material factors:

 

    each of Equity’s, Adams’s, and the combined company’s business, operations, financial condition, asset quality, earnings, and prospects. In reviewing these factors, the Equity Board considered its view that Adams’s financial condition and asset quality are sound, that Adams’s business and operations complement those of Equity, and that the merger and the other transactions contemplated by the merger agreement would result in a combined company with a larger market presence and more diversified loan portfolio as well as a more attractive funding base, including core deposit funding, than Equity on a standalone basis. The Equity Board further considered that Adams’s earnings and prospects, and the synergies potentially available in the proposed merger, create the opportunity for the combined company to have superior future earnings and prospects compared to Equity’s earnings and prospects on a standalone basis. In particular, the Equity Board considered the following:

 

    the strategic rationale for the merger, given its potential for enhancing the Equity banking franchise;

 

    potential growth opportunities through the further expansion into attractive markets including the Kansas City metropolitan area;

 

    the complementary nature of the cultures of the two companies, which management believes should facilitate integration and implementation of the transaction;

 

    the expanded possibilities, including organic growth and future acquisitions, that would be available to the combined company, given its larger size, asset base, capital, and footprint;

 

    the anticipated pro forma impact of the merger on the combined company, including the expected positive impact on financial metrics including earnings, funding sources, and capital;

 

    its understanding of the current and prospective environment in which Equity and Adams operate, including national and local economic conditions, the interest rate environment, increasing operating costs resulting from regulatory initiatives and compliance mandates, the competitive environment for financial institutions generally, and the likely effect of these factors on Equity both with and without the merger;

 

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    its review and discussions with Equity’s management concerning the due diligence examination of Adams’s business;

 

    Equity management’s expectation that Equity will retain its capital position and asset quality upon completion of the transaction;

 

    the expectation of annual cost savings resulting from the transaction, enhancing efficiencies;

 

    the terms of the merger agreement, including the expected tax treatment and deal protection and termination fee provisions, which it reviewed with Equity’s management and legal advisor; and

 

    Equity’s past record of integrating acquisitions and of realizing projected financial goals and benefits of acquisitions.

The Equity Board also considered the potential risks related to the merger but concluded that the anticipated benefits of the merger were likely to outweigh these risks. These potential risks include:

 

    the possibility of encountering difficulties in achieving anticipated cost synergies and savings in the amounts estimated or in the time frame contemplated;

 

    the possibility of encountering difficulties in successfully integrating Adams’s business, operations, and workforce with those of Equity;

 

    certain anticipated merger related costs;

 

    the diversion of management attention and resources from the operation of Equity’s business towards the completion of the merger;

 

    the regulatory and other approvals required in connection with the merger and the bank merger and the risk that such regulatory approvals will not be received in a timely manner or may impose unacceptable conditions; and

 

    the merger’s effect on Equity’s regulatory capital levels.

The foregoing discussion of the factors considered by the Equity Board is not intended to be exhaustive, but, rather, includes the material factors considered by the Equity Board. In reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, the Equity Board did not quantify or assign any relative weights to the factors considered, and individual directors may have given different weights to different factors. The Equity Board considered all of these factors as a whole and overall considered the factors to be favorable to, and to support, its determination. It should be noted that this explanation of the Equity Board’s reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 31.

Interests of Adams’s Directors and Executive Officers in the Merger

In considering the recommendation of the Adams Board that Adams shareholders vote in favor of the Merger Proposal, Adams shareholders should be aware that Adams’s directors and executive officers may have interests in the merger that differ from, or are in addition to, their interests as shareholders of Adams. The Adams Board was aware of these interests and took them into account in its decision to approve the merger agreement and the merger. Such interests include the following items.

Indemnification and Insurance. Equity has agreed to indemnify the directors and officers of Adams against certain liabilities arising before the effective time of the merger. Equity has also agreed to purchase a six-year “tail” prepaid policy, on the same terms as Adams’s existing directors’ and officers’ liability insurance, for the current directors and officers of Adams, subject to a cap on the cost of such policy equal to 200% of Adams’s current annual premium (which is approximately $22,000).

 

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Employee Benefit Plans. On or as soon as reasonably practicable following the merger, employees of Adams who continue on as employees of Equity will be entitled to participate in the Equity health and welfare benefit and similar plans on the same terms and conditions as employees of Equity. Subject to certain exceptions, these employees will receive credit for their years of service to Adams or Adams Dairy Bank for participation, vesting and benefit accrual purposes.

Employee Severance Benefits. Equity has agreed to provide certain severance benefits to Adams’s employees whose employment is terminated under the circumstances specified in the merger agreement.

Chinnery Change in Control Payment. Upon the closing of the merger, Mr. Chinnery, Adams’s Chairman and Chief Executive Officer, will be paid a $350,000 change in control payment by Adams pursuant to the terms of his employment agreement. The change in control payments will reduce the Adams adjusted shareholders’ equity.

Retention Bonuses. Adams has entered into retention agreements with certain of its employees. Such employees will be entitled payment of a retention bonus if he remains employed by Equity upon the closing of the merger. Pursuant to their respective retention agreements, Mr. Chinnery, Mr. Weisenborn and Mr. Vogt will be entitled to retention bonuses of $200,000, $350,000 and $30,000, respectively, if they remain employed by Adams as of the Closing. The retention bonus payments will reduce the Adams adjusted shareholders’ equity.

Wray Interest in Capital Fee. Pursuant to the Capital engagement agreement, Adams agreed to pay Capital a total cash fee currently expected to be equal to 2.50% of the first $10,000,000 in aggregate merger consideration plus 1.25% of the aggregate merger consideration in excess of $10,000,000, which will payable to Capital upon the closing of the merger. Adams also agreed to reimburse Capital for reasonable out-of-pocket expenses and disbursements incurred in connection with its retention and to indemnify Capital against certain liabilities relating to or arising out of Capital’s engagement or Capital’s role in connection therewith. Mr. Wray is a managing director and member of Capital and will be entitled to a portion of the fee paid to Capital. The fee paid to Capital will reduce the Adams adjusted shareholders’ equity.

Public Trading Markets

Equity common stock is listed for trading on Nasdaq under the symbol “EQBK.” Following the merger, shares of Equity common stock will continue to be traded on Nasdaq under the symbol “EQBK.” Under the merger agreement, Equity will cause the shares of Equity common stock to be issued in the merger to be approved for listing on Nasdaq, subject to notice of issuance, and the merger agreement provides that neither Equity nor Adams will be required to complete the merger if such shares are not authorized for listing on Nasdaq, subject to notice of issuance.

Equity’s Dividend Policy

Equity has not historically declared or paid cash dividends on its common stock and it does not expect to pay dividends on Equity’s common stock for the foreseeable future. Instead, Equity anticipates that all of its future earnings will be retained to support its operations and to finance the growth and development of Equity’s business. In addition, the payment of dividends by bank holding companies is generally subject to legal and regulatory limitations. For further information, see “Comparative Market Prices and Dividends” beginning on page 95.

Restrictions on Resale of Equity Common Stock

The shares of Equity common stock to be issued in connection with the merger will be registered under the Securities Act, and will be freely transferable, except for shares issued to any shareholder who may be deemed to be an “affiliate” of Equity for purposes of Rule 144 under the Securities Act. Persons who may be deemed to be

 

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affiliates of Equity include individuals or entities that control, are controlled by, or are under common control with Equity and may include the executive officers, directors and significant shareholders of Equity.

Appraisal Rights in the Merger

Introductory Information

General. Dissenters’ rights with respect to Adams common stock are governed by the RSMo. Adams shareholders have the right to dissent from the merger and to obtain payment of the “fair value” of their shares in cash (as specified in the RSMo) in the event the merger is consummated. Strict compliance with the dissent procedures is required to exercise and perfect dissenters’ rights under the RSMo. Subject to the terms of the merger agreement, the Adams Board could elect to terminate the merger agreement even if it is approved by Adams’s shareholders, thus cancelling dissenters’ rights.

Adams urges any Adams shareholder who contemplates exercising his right to dissent to read carefully the provisions of Section 351.455 of the RSMo, which are attached to this proxy statement/prospectus as Annex E. The statute describes the steps that each Adams shareholder must take to exercise his right to dissent. Each Adams shareholder who wishes to dissent should read both the summary and the full text of the law. Adams cannot give any Adams shareholder legal advice. To completely understand this law, each Adams shareholder may want, and Adams encourages any Adams shareholder seeking to dissent, to consult with his legal advisor. Any Adams shareholder who wishes to dissent should not send in a signed proxy unless he marks his proxy to vote against the merger or such shareholder will lose the right to dissent.

Address for Notices. Send or deliver any written notice or demand concerning any Adams shareholder’s exercise of his dissenters’ rights to Adams Dairy Bancshares, Inc., 651 NE Coronado Drive, Blue Springs, Missouri 64014, Attention: David Charles Chinnery, Telephone: (816) 655-3333.

Act Carefully. Adams urges any Adams shareholder who wishes to dissent to act carefully. Adams cannot and does not accept the risk of late or undelivered notices or demands. A dissenting Adams shareholder may call Adams at (816) 655-3333 and ask for Adams’s Chairman and Chief Executive Officer, David Charles Chinnery, to receive confirmation that his notice or demand has been received. If his notice or demand is not timely received by Adams, then such shareholder will not be entitled to exercise his dissenters’ rights. Adams’s shareholders bear the risk of non-delivery and of untimely delivery.

If any Adams shareholder intends to dissent, or thinks that dissenting might be in his best interests, such shareholder should read Annex E carefully.

Summary of Section 351.455 of the RSMo—Dissenters’ Rights

The following is a summary of Section 351.455 of the RSMo and the procedures that an Adams shareholder must follow to dissent from the merger agreement and to perfect his appraisal rights and receive cash rather than the merger consideration (including Equity common stock), if the merger agreement is approved and the merger is completed. This summary is qualified in its entirety by reference to Section 351.455 of the RSMo, which is reprinted in full as part of Annex E to this proxy statement/prospectus. Annex E should be reviewed carefully by any shareholder who wishes to perfect his dissenters’ rights. Failure to strictly comply with the procedures set forth in Section 351.455 of the RSMo will, by law, result in the loss of dissenters’ rights. It may be prudent for a person considering whether to dissent to obtain professional counsel.

If the merger is completed, any Adams shareholder who has properly perfected his statutory dissenters’ rights in accordance with Section 351.455 of the RSMo has the right to obtain payment of the fair value of such shareholder’s shares of Adams common stock. The appraised fair value may be more or less than the value of the merger consideration to be received in the merger.

 

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Under Section 351.455 of the RSMo, each Adams shareholder who demands an appraisal in connection with the merger and who complies with the various procedural requirements of Section 351.455 of the RSMo is entitled to “appraisal rights,” pursuant to which the Adams shareholder will receive payment for the fair value of his shares of Adams common stock. The value as determined by a Missouri court may be more or less than the value such shareholder is entitled to under the merger agreement. Investment banker opinions as to the fairness from a financial point of view of the consideration payable in a transaction such as the merger are not opinions as to, and do not in any way address, fair value under the RSMo.

To exercise and perfect appraisal rights under Section 351.455 of the RSMo, an Adams shareholder must do all of the following:

 

    own Adams common stock as of the close of business on [        ], 2018, the record date for the Adams special meeting;

 

    file with Adams, before a shareholder vote is taken at the Adams special meeting, a written objection to the merger agreement. The written objection must reasonably inform Adams of the identity of the shareholder and that such shareholder intends thereby to demand appraisal of the shares of the shareholder. Neither a proxy nor vote against the merger will satisfy the requirement of such written objection;

 

    not vote in favor of the merger agreement (note that a vote, in person or by proxy, against the merger agreement will not satisfy the statutory requirement that a shareholder make a written demand for an appraisal of his shares);

 

    continue to hold his shares of Adams common stock through the effective time of the merger; and

 

    make a written demand on Equity, the surviving corporation in the merger, within 20 days after the merger is effected for payment of the fair value of his or her shares as of the day before the date on which the vote was taken approving the merger.

An Adams shareholder of record who fails to satisfy these requirements is not entitled to payment for his, her or its shares of Adams common stock under Section 351.455 of the RSMo. In addition, any shareholder who returns a signed proxy but fails to provide instructions as to the manner in which the shares covered by such proxy are to be voted will be deemed to have voted in favor of approving and adopting the Adams Merger Proposal and will not be entitled to assert dissenters’ rights.

If, within 30 days after the effective time of the merger, the value of the dissenting shareholder’s shares of Adams common stock is agreed upon between the dissenting Adams shareholder and Equity, then payment for such shares must be made by Equity within 90 days after the effective time of the merger, upon surrender of such dissenting shareholder’s certificates representing such shareholders shares of Adams common stock. Upon payment of the agreed value, the dissenting shareholder ceases to have any interest in the shares or in Equity.

If, within 30 days after the effective date of the merger, there is no such agreement as to the fair value of the dissenting shareholder’s shares of Adams common stock between the dissenting shareholder and Equity, then the dissenting shareholder may, within 60 days after the expiration of the 30-day period, file a petition in any court of competent jurisdiction within the county in which the registered office of the surviving corporation is situated, asking for a finding and determination of the fair value of such shareholder’s shares. The dissenting shareholder will be entitled to judgment against Equity for an amount equal to the fair value of such shareholder’s shares measured as of the day prior to the date on which the merger agreement is approved, together with interest thereon to the date of the judgment.

The judgment will only be payable upon and simultaneously with the surrender to Equity of the certificates representing the shares of Adams common stock owned by the dissenting shareholder. Upon payment of the judgment, such shareholder will cease to have any interest in the shares or in Equity. Further, unless the dissenting shareholder files the petition with the court within the 60-day time limit described above, such

 

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shareholder and all persons claiming under such shareholder shall be conclusively presumed to have approved or ratified the merger agreement and shall be bound by the terms thereof. The right of a dissenting shareholder to be paid the fair value of such shareholder’s shares as provided above ceases if and when Adams abandons the merger.

The shares for which a dissenting shareholder has properly exercised and perfected appraisal rights and followed the required procedures in the RSMo will not be converted into, or represent, the right to receive Equity common stock and cash as provided under the merger agreement. None of these shares will, after the effective time of the merger, be entitled to vote for any purpose or receive any dividends or other distributions. If, however, the holder of such shares fails to properly perfect, effectively withdraws, waives or loses, or otherwise becomes ineligible to exercise appraisal rights under the RSMo, then at that time shares held by such holder will be converted into Equity common stock and cash as provided in the merger agreement.

The foregoing discussion does not purport to be a complete statement of the procedures for exercising and perfecting appraisal rights under the RSMo and is qualified in its entirety by reference to the full text of Section 351.455 of the RSMo, a copy of which is attached as Annex E to this proxy statement/prospectus.

If any Adams shareholder intends to dissent, or if such shareholder believes that dissenting might be in his best interest, such shareholder should read Annex E carefully.

Regulatory Approvals Required for the Merger

The completion of the merger and the bank merger are subject to prior receipt of certain approvals and consents required to be obtained from applicable governmental and regulatory authorities. These approvals include approvals from, among others, the Federal Reserve, the OSBC and the Missouri Division of Finance. Subject to the terms of the merger agreement, both Adams and Equity have agreed to cooperate with each other and use their commercially reasonable efforts to obtain all regulatory approvals necessary or advisable to complete the transactions contemplated by the merger agreement.

On January 19, 2018, Equity filed the required application with the Federal Reserve Bank of Kansas City to request the Federal Reserve’s approval under the BHC Act.

In addition, the bank merger of Adams Dairy Bank with and into Equity Bank requires the approval of the Federal Reserve, the OSBC and the Missouri Division of Finance. On January 19, 2018, Equity Bank filed the required application with the Federal Reserve Bank of Kansas City and the OSBC. Although neither Adams nor Equity knows of any reason why it cannot obtain these regulatory approvals in a timely manner, Adams and Equity cannot be certain when or if they will be obtained.

The U.S. Department of Justice has between 15 and 30 days following approval by the Federal Reserve Board to challenge the approval on antitrust grounds. While Equity and Adams do not know of any reason that the Department of Justice would challenge regulatory approval by the Federal Reserve Board and believe that the likelihood of such action is remote, there can be no assurance that the Department of Justice will not initiate such a proceeding, or if such a proceeding is initiated, as to the result of any such challenge.

The approval of any notice or application merely implies satisfaction of regulatory criteria for approval, and does not include review of the merger from the standpoint of the adequacy of the consideration to be received by, or fairness to, shareholders. Regulatory approval does not constitute an endorsement or recommendation of the proposed transaction.

Equity and Adams are not aware of any material governmental approvals or actions that are required prior to the parties’ completion of the merger other than those described in this proxy statement/prospectus. If any additional governmental approvals or actions are required, the parties presently intend to seek those approvals or actions. However, the parties cannot assure you that any of these additional approvals or actions will be obtained.

 

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THE MERGER AGREEMENT

The following describes certain aspects of the merger, including certain material provisions of the merger agreement. The following description of the merger agreement is subject to, and qualified in its entirety by reference to, the merger agreement, which is attached to this proxy statement/prospectus as Annex A and is incorporated by reference into this proxy statement/prospectus. We urge you to read the merger agreement carefully and in its entirety, as it is the legal document governing the merger.

Structure of the Merger

Each of Equity’s and Adams’s respective boards of directors has approved the merger agreement. Under the merger agreement, Merger Sub will merge with and into Adams, with Adams surviving the merger as a wholly-owned subsidiary of Equity. Immediately following, and in connection with, the merger, Equity will cause Adams to merge with and into Equity, with Equity surviving the second merger. Immediately following the integrated mergers (or at such later time as Equity may determine in its sole discretion), Equity will cause Adams Dairy Bank to merge with and into Equity Bank, with Equity Bank surviving the merger.

Merger Consideration

At the effective time, each share of Adams common stock issued and outstanding (other than shares of Adams common stock held by Adams, Equity or any dissenting shareholder) will be converted into the right to receive (i) 0.4791 shares of Equity common stock, and (ii) $5.51, in cash, subject to a possible downward adjustment of the cash consideration.

The cash component of the merger consideration is subject to downward adjustment based upon the Adams adjusted shareholders’ equity. If the Adams adjusted shareholders’ equity is less than $9,666,000, then the aggregate cash consideration to be paid to holders of Adams common stock will be reduced by $1.64 for each dollar that the Adams adjusted shareholders’ equity is less than $9,666,000, and the per share cash consideration to be paid to each holder of Adams common stock will be correspondingly reduced pro rata. In the event that the Adams adjusted shareholders’ equity is less than $7,253,653, then the holders of Adams common stock would receive no cash consideration. As of [        ], 2018, the most recent practicable date before the printing of this proxy statement/prospectus, Adams adjusted shareholders’ equity would have been estimated to be $[        ].

The Adams Merger Costs are the costs and expenses that Adams will incur in connection with the merger that are not reflected in Adams’s shareholders’ equity as of the calculation date, which will be the fifth business day before the closing of the merger or such other mutually agreed date. The Adams Merger Costs will be subtracted from Adams’s shareholders’ equity as of the calculation date to calculate the Adams adjusted shareholders’ equity. The Adams Merger Costs is defined in the merger agreement and it includes, among other costs and expenses:

 

    contract termination costs, including employment related agreements and obligations;

 

    all transaction costs and legal, accounting and financial advisory fees of Adams associated with the merger;

 

    the payment of severance, stay-pay, certain bonuses and change-in-control payments to employees of Adams;

 

    certain tax obligations;

 

    any unrealized gains or any unrealized losses (as the case may be) in Adams’s securities portfolio due to mark-to-market adjustments required by generally accepted accounting principles, or GAAP; and

 

    the cost of settling or otherwise resolving certain litigation.

 

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The following table presents the effect of the estimated Adams Merger Costs on the per share cash consideration to be received by the Adams shareholders. As of January 31, 2018, the most recent practicable date before the initial filing of this proxy statement/prospectus, Adams estimates that the Adams Merger Costs would be approximately $1,310,000. The table also presents up to $100,000 of additional Adams Merger Costs in increments of $25,000. For a discussion of the risks and assumptions associated with the estimates and forecasts included in this table, see “Risk Factors—Risks Relating to the Merger—The sum of Adams’s consolidated capital, surplus and retained earnings accounts less all intangible assets prior to the closing of the merger could be an amount that results in the reduction of the amount of the cash portion of the merger consideration that Adams shareholders would be entitled to receive.”

 

Estimated Adams

shareholders’ equity
on the calculation

               date(1)              

   Estimated
Adams
Merger
Costs(2)
     Estimated
Adams
adjusted
shareholders’
equity
     Per share
reduction in
the cash
consideration
payable to
Adams
shareholders
     Cash
consideration
per share of
Adams
common
stock
 

$10,980,000

   $ 1,310,000      $ 9,670,000      $ 0.00      $ 5.51  

$10,980,000

   $ 1,335,000      $ 9,645,000      $ 0.05      $ 5.46  

$10,980,000

   $ 1,360,000      $ 9,620,000      $ 0.11      $ 5.40  

$10,980,000

   $ 1,385,000      $ 9,595,000      $ 0.16      $ 5.35  

$10,980,000

   $ 1,410,000      $ 9,570,000      $ 0.22      $ 5.29  

 

(1) This number reflects the Adams shareholders’ equity at September 30, 2017 of approximately $10,370,000, plus Adams’s estimated earnings from October 1, 2017 through the anticipated calculation date of approximately $610,000. The calculation date is the fifth business day before the closing of the merger or such other mutually agreed date. The closing of the merger is expected to occur in the second quarter of 2018. The estimated earnings of Adams are based on the financial and operating forecast provided by Adams’s management.
(2) Reflects Adams’s estimate as of January 31, 2018 of the Adams Merger Costs and additional Adams Merger Costs in increments of $25,000.

If, between the date of the merger agreement and the effective time, the outstanding shares of Equity common stock increase, decrease, change into or are exchanged for a different number or kind of shares or securities as a result of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar change in capitalization (but not as a result of another merger transaction or other issuances by Equity), then the exchange ratio set forth in the merger agreement will be appropriately and proportionately adjusted.

The table below sets forth the implied value of the merger consideration based on the closing price of Equity common stock as quoted by Nasdaq on the specified dates:

 

Date

   Closing
price of
Equity
common
stock
    Implied
value of
stock
consideration
per share of
Adams
common
stock
    Cash
consideration
per share of
Adams
common
stock(4)
     Implied
value of
merger
consideration
per share of
Adams
common
stock
    Aggregate
stock
consideration
    Aggregate
cash
consideration(4)
    Aggregate
total
consideration
 

December 15, 2017 (1)

   $ 35.10     $ 16.82     $ 5.51      $ 22.33     $ 12,079,009     $ 3,957,762     $ 16,036,771  

February 5, 2018(2)

   $ 36.10     $ 17.30     $ 5.51      $ 22.81     $ 12,426,365     $ 3,957,762     $ 16,384,126  

[            ], 2018(3)

   $ [           $ [           $ 5.51      $ [           $ [           $ [           $ [        

 

(1) The last trading day before public announcement of the merger.

 

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(2) The latest practicable trading day before the initial filing of this proxy statement/prospectus.
(3) The latest practicable trading day before the printing of this proxy statement/prospectus.
(4) Assumes there is no downward adjustment to the cash component of the merger consideration. For a discussion of the possible downward adjustment to the cash component of the merger consideration, see “The Merger Agreement—Merger Consideration” beginning on page 57.

Based on (i) the closing price of $35.10 for Equity common stock on Nasdaq on December 15, 2017, the last trading day before public announcement of the merger, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $16.82, and, together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $22.33 per share of Adams common stock, (ii) the closing price of $36.10 for Equity’s common stock on Nasdaq on February 5, 2018, the latest practicable trading day before the initial filing of this proxy statement/prospectus, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $17.30, and together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $22.81 per share of Adams common stock and (iii) the closing price of $[        ] for Equity’s common stock on Nasdaq on [        ], 2018, the latest practicable trading day before the printing of this proxy statement/prospectus, the implied value of the stock component of the merger consideration per share of Adams common stock would be approximately $[        ] and together with the maximum $5.51 per share to be paid in cash (subject to a possible downward adjustment of the cash consideration), the total merger consideration would be approximately $[        ] per share of Adams common stock.

Fractional Shares

Equity will not issue any fractional shares of Equity common stock in the merger. Adams shareholders who would otherwise be entitled to a fraction of a share of Equity common stock upon the completion of the merger will instead receive, for the fraction of a share, an amount in cash (rounded to the nearest cent), determined by multiplying the fractional share by $34.49.

Governing Documents; Directors and Officers; Governance Matters

At completion of the integrated mergers, the Equity articles and the Equity bylaws, as in effect immediately before the effective time, will be the articles of incorporation and bylaws of the surviving corporation, Equity, until thereafter changed or amended as provided by law.

The directors and officers, respectively, of Equity at the effective time will remain the directors and officers of the surviving corporation and will hold office from the effective time until their respective successors are duly elected or appointed and qualified in the manner provided in the articles of incorporation and bylaws of the surviving corporation or as otherwise provided by law.

Closing and Effective Time

The merger will be completed only if all conditions to the merger discussed in this proxy statement/prospectus and set forth in the merger agreement are either satisfied or waived. See “—Conditions to Complete the Merger.” Following satisfaction or waiver of all the conditions to the merger, on a date mutually acceptable to Equity and Adams within thirty (30) days, the parties will execute such documents and instruments as may be necessary or appropriate in order to effect the merger and the other transactions contemplated by the merger agreement.

The merger and other transactions contemplated by the merger agreement will become effective on the date and at the time specified in the certificate of merger, reflecting the merger, filed with the Secretary of State of the

 

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State of Missouri in accordance with the RSMo. It currently is anticipated that the completion of the merger will occur in the second calendar quarter of 2018, subject to the receipt of regulatory approvals and the satisfaction of other closing conditions set forth in the merger agreement, but neither Adams nor Equity can guarantee when or if the merger will be completed.

Conversion of Shares; Exchange of Certificates

The conversion of Adams common stock into the right to receive the merger consideration will occur automatically at the effective time. After completion of the merger, the exchange agent will exchange certificates representing shares of Adams common stock for the merger consideration to be received pursuant to the terms of the merger agreement.

Letter of Transmittal

As promptly as practicable, but no later than ten (10) days after the effective time, and subject to the receipt by the exchange agent of a list of Adams’s shareholders in a format that is reasonably acceptable to the exchange agent, Equity will cause the exchange agent to mail to each holder of record of Adams common stock (i) a letter of transmittal and (ii) instructions for use in surrendering each certificate representing shares of Adams common stock in exchange for the merger consideration, any cash in lieu of a fractional share and any dividends or distributions to which such holder is entitled pursuant to the terms of the merger agreement.

Adams’s shareholders will be entitled to receive their respective merger consideration only after receipt by the exchange agent of a properly completed letter of transmittal including delivery of certificates representing shares of Adams common stock. No interest will be paid on the merger consideration.

If a certificate for Adams common stock has been lost, stolen or destroyed, the exchange agent will issue the merger consideration upon receipt of (i) an affidavit of that fact by the claimant and (ii) if required by Equity or the exchange agent, the posting of a bond in an amount as Equity may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such certificate.

After completion of the merger, there will be no further transfers on the stock transfer books of Adams of shares of Adams common stock that were issued and outstanding immediately prior to the effective time.

Withholding

Equity and the exchange agent, as the case may be, will be entitled to deduct and withhold, if necessary, from any consideration otherwise payable pursuant to the merger agreement to any person such amounts as Equity or the exchange agent, as the case may be, is required to deduct and withhold under the Code, or any provision of state, local or foreign tax law, with respect to the making of such payment. To the extent that amounts are so withheld by Equity or the exchange agent, as the case may be, and remitted to the appropriate governmental entity, such withheld amounts will be treated for all purposes of the merger agreement as having been paid to such person in respect of which such deduction and withholding was made by Equity or the exchange agent, as the case may be.

Dividends and Distributions

No dividends or other distributions with respect to Equity common stock will be paid to the holder of any unsurrendered certificates of Adams common stock with respect to the shares of Equity common stock represented thereby, until the holder of the Adams common stock surrenders the certificates representing the shares of Adams common stock in accordance with the terms of the merger agreement. Following surrender of any such certificate in accordance with the terms of the merger agreement, the record holder thereof will be entitled to receive any such dividends or other distributions, without any interest, which had previously become payable with respect to the whole shares of Equity common stock which the shares of Adams common stock represented by such certificate have been converted into the right to receive under the merger agreement.

 

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Representations and Warranties

The merger agreement and this summary of the representations and warranties in this section are included to provide you with information regarding the terms of the merger agreement. Factual disclosures about Equity and Adams contained in this proxy statement/prospectus or in the public reports of Equity filed with the SEC may supplement, update or modify the factual disclosures about Equity and Adams contained in the merger agreement. The merger agreement contains representations and warranties of Equity and Adams that may be subject to limitations, qualifications or exceptions agreed upon by the parties, including being qualified by confidential disclosures, and may be subject to a contractual standard of materiality that differs from the materiality standard that applies to reports and documents filed with the SEC. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purpose of establishing circumstances in which a party to the merger agreement may have the right not to consummate the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement. The representations and warranties, other provisions of the merger agreement or any description of these provisions should not be read alone, but instead should be read only in conjunction with the information provided elsewhere in this proxy statement/prospectus, the documents incorporated by reference into this proxy statement/prospectus and the other reports, statements and filings that Equity publicly files with the SEC. See “Where You Can Find More Information.”

The merger agreement contains customary representations and warranties of each of Equity and Adams relating to their respective businesses. The representations and warranties in the merger agreement do not survive the effective time.

The merger agreement contains representations and warranties made by Adams relating to a number of matters, including the following:

 

    corporate matters, including due organization and qualification and subsidiaries;

 

    authority relative to execution and delivery of the merger agreement;

 

    capitalization;

 

    compliance with laws; and the absence of conflicts with, or violations of, organizational documents or other obligations as a result of the merger;

 

    financial statements;

 

    the absence of undisclosed liabilities;

 

    legal proceedings;

 

    consents and approvals, required governmental and other regulatory filings in connection with the merger;

 

    title to assets;

 

    the absence of certain changes or events;

 

    certain contracts;

 

    certain tax matters;

 

    insurance matters;

 

    the absence of any material adverse change;

 

    intellectual property;

 

    related party transactions;

 

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    indebtedness of Adams;

 

    condition of assets;

 

    environmental matters;

 

    regulatory compliance;

 

    absence of certain business practices;

 

    books and records;

 

    forms of instruments;

 

    fiduciary responsibilities;

 

    guaranties;

 

    voting agreements and shareholders’ agreements;

 

    employment matters;

 

    employee benefits;

 

    certain obligations to employees;

 

    interest rate risk management;

 

    internal controls;

 

    compliance with the various specified statutes, rules and regulations;

 

    certain matters concerning the trading of Adams’s securities;

 

    the accuracy of information supplied for inclusion in this proxy statement/prospectus and other similar documents;

 

    intercompany agreements;

 

    the nature of the representations in the merger agreement;

 

    inapplicability of takeover statutes; and

 

    receipt by the Adams Board of an opinion from Adams’s financial advisor.

The merger agreement contains representations and warranties made by Equity relating to a more limited number of matters, including the following:

 

    corporate matters, including due organization and qualification and subsidiaries;

 

    authority relative to execution and delivery of the merger agreement;

 

    capitalization;

 

    filings with the SEC, certain compliance matters and financial statements;

 

    compliance with laws; and the absence of conflicts with, or violations of, organizational documents or other obligations as a result of the merger;

 

    the absence of undisclosed liabilities;

 

    legal proceedings;

 

    consents and approvals, required governmental and other regulatory filings in connection with the merger;

 

    regulatory compliance;

 

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    the accuracy of information supplied for inclusion in this proxy statement/prospectus and other similar documents;

 

    the absence of certain changes or events;

 

    disclosure controls and procedures;

 

    sufficient funds to pay the cash component of the merger consideration; and

 

    the nature of the representations in the merger agreement.

Certain representations and warranties of Equity and Adams are qualified as to “materiality” or “material adverse change.” For purposes of the merger agreement, a “material adverse change,” means, with respect to either Equity or Adams, any material adverse change in the business, results of operations, condition (financial or otherwise), assets, properties, liabilities (absolute, accrued, contingent or otherwise) or reserves of such party and its subsidiaries, taken as a whole, has occurred, but excluding any change with respect to, or effect on, such party resulting from or in connection with any of the following, by itself or by themselves, either alone or in combination, to constitute or contribute to: (i) any changes in laws or interpretations thereof that are generally applicable to the banking or savings industries; (ii) changes in GAAP that are generally applicable to the banking or savings industries; (iii) the execution and delivery of the merger agreement, the announcement thereof, or the performance of the transactions contemplated by the merger agreement, including any expenses which are reasonably incurred in connection with the merger agreement or the transactions contemplated by the merger agreement; (iv) changes in global, national or regional political conditions or general economic or market conditions in the United States or the State of Kansas or the State of Missouri, including changes in prevailing interest rates, credit availability and liquidity, currency exchange rates, and price levels or trading volumes in the United States or foreign securities markets affecting other companies in the financial services industry; (v) general changes in the credit markets or general downgrades in the credit markets; (vi) actions or omissions of a party taken as required by the merger agreement or with the prior informed written consent of the other party or parties in contemplation of the transactions contemplated by the merger agreement; (vii) any natural or man-made disaster or acts of God; (viii) outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism; or (ix) any litigation relating to the merger agreement or the transactions contemplated by the merger agreement; provided, that, in the case of clauses (i), (ii), (iv) (v), (vii) or (viii), such party is not affected to a greater extent than other persons, bank holding companies or insured depository institutions in the industry in which such party operates.

Covenants and Agreements

Conduct of Businesses Prior to the Completion of the Merger

Adams has agreed that, prior to the effective time, it will, and will cause its subsidiaries to, unless otherwise permitted in writing by Equity:

 

    operate (including the making of, or agreeing to make, any loans or other extensions of credit) only in the ordinary course of business and consistent with past practices and safe and sound banking principles;

 

    except as required by prudent business practices, use all commercially reasonable efforts to preserve its business organization intact and to retain its present directors, officers, employees, key personnel and customers, depositors and goodwill and to maintain all assets owned, leased or used by it (whether under its control or the control of others), in good operating condition and repair, ordinary wear and tear excepted and unavoidable casualty;

 

    perform all of its obligations under any material contracts, leases and documents relating to or affecting its assets, properties and business, except such obligations as Adams or any of its subsidiaries may in good faith reasonably dispute;

 

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    except as required by prudent business practices, use all commercially reasonable efforts to maintain in full force and effect all insurance policies now in effect or renewals thereof and give all notices and present all claims under all insurance policies in due and timely fashion;

 

    timely file, subject to extensions, all reports required to be filed with governmental authorities and observe and conform, in all material respects, to all applicable laws, except those being contested in good faith by appropriate proceedings;

 

    timely file, subject to extensions, all tax returns required to be filed by it and promptly pay all taxes, assessments, governmental charges, duties, penalties, interest and fines that become due and payable, except those being contested in good faith by appropriate proceedings;

 

    withhold from each payment made to each of its employees, independent contractors, creditors and other third parties the amount of all taxes required to be withheld therefrom and pay the same to the proper tax receiving officers;

 

    account for all transactions and prepare all financial statements in accordance with GAAP;

 

    promptly classify and charge off loans and make appropriate adjustments to loss reserves in accordance with the instructions to the Reports of Condition and Income (“Call Report”) and the Uniform Retail Credit Classification and Account Management Policy;

 

    maintain the allowance for loan losses account in accordance with GAAP and in an amount reasonably estimated to be adequate in all material respects to provide for all losses, net of recoveries relating to loans previously charged off, on all outstanding loans and in compliance with applicable regulatory requirements, and not reduce the amount of the Adam Dairy Bank’s allowance for loan losses; provided, further, that such allowance for loan losses shall be an amount not less than 1.15% of aggregate loans (excluding loans held for sale) and shall include the estimated cost of carrying and disposing of non-performing loans and other real estate owned including any specific reserve required for the ownership or sale of such other real estate owned;

 

    pay or accrue all costs, expenses and other charges to be incurred in connection with the merger, including, but not limited to, all legal fees, accounting fees, consulting fees and brokerage fees, prior to the calculation date; and

 

    ensure that all accruals for taxes are accounted for in the ordinary course of business, consistent with past practices and in accordance with GAAP.

Additionally, prior to the effective time, subject to specified exceptions, Adams will not, and will not permit any of its subsidiaries to, without the prior written consent of Equity, undertake the following actions:

 

    merge into, consolidate with or sell any assets to any other person or entity, change Adams’s or any of its subsidiaries’ articles of incorporation or bylaws, increase the number of shares of Adams common stock or any of its subsidiaries’ stock outstanding or increase the amount of the Adams Dairy Bank’s surplus (as calculated in accordance with the instructions to the Call Report);

 

    except as explicitly permitted under the merger agreement or in accordance with applicable law or pursuant to a contract existing as of the date of the merger agreement, engage in any transaction with any affiliated person or allow such persons to acquire any assets from Adams or any of its subsidiaries, except (i) in the form of wages, salaries, fees for services, reimbursement of expenses and benefits already granted or accrued under Adams’s employee benefit plans currently in effect, or (ii) any deposit (in any amount) made by an officer, director or employee;

 

    declare, set aside or make any payment of dividends or make any other distribution to its shareholders whether in cash, shares or other property, provided, that Adams Dairy Bank may pay cash dividends to Adams to fund Adam’s payment of its merger costs;

 

    obligate itself to purchase, retire or redeem any of its capital shares or other securities;

 

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    discharge or satisfy any material lien or pay any material obligation or liability, whether absolute or contingent, due or to become due, except in the ordinary course of business consistent with past practices and except for liabilities incurred in connection with the transactions contemplated by the merger agreement;

 

    issue, reserve for issuance, grant, sell or authorize the issuance of any shares of its capital stock or other securities or subscriptions, options, warrants, calls, rights or commitments of any kind relating to the issuance thereto;

 

    accelerate the vesting of pension or other benefits in favor of employees of Adams or any of its subsidiaries except according to an Adams employee benefit plan or as otherwise contemplated by the merger agreement or as required by applicable law;

 

    acquire any capital stock or other equity securities or acquire any equity or ownership interest in any bank, corporation, partnership or other entity (except (i) through settlement of indebtedness, foreclosure or the exercise of creditors’ remedies or (ii) in a fiduciary capacity, the ownership of which does not expose it to any material liability from the business, operations or liabilities of such person);

 

    mortgage, pledge or subject to lien any of its property, business or assets, tangible or intangible, except (i) certain permitted encumbrances and (ii) pledges of assets to secure public funds deposits;

 

    enter into any employment or consulting contract (other than as contemplated by the terms of an Adams employee benefit plan or the merger agreement) or other agreement with any current or proposed director, officer or employee or adopt, amend in any material respect or terminate any pension, employee welfare, retirement, stock purchase, stock option, phantom stock, stock appreciation rights, termination, severance, income protection, golden parachute, savings or profit-sharing plan (including trust agreements and insurance contracts embodying such plans), any deferred compensation, or collective bargaining agreement, any group insurance contract or any other incentive, welfare or employee benefit plan or agreement for the benefit of its directors, employees or former employees, except as required by applicable law or by the merger agreement;

 

    make any capital expenditures or capital additions or betterments, except for such capital expenditures or capital additions that are set forth in writing in the budget provided to Equity or that are reasonably necessary to prevent deterioration of the condition of a property;

 

    sell or dispose of, or otherwise divest itself of the ownership, possession, custody or control, of any corporate books or records of any nature that, in accordance with sound business practice, normally are retained for a period of time after their use, creation or receipt, except at the end of the normal retention period;

 

    except as required by applicable regulatory agency or applicable law, make any, or acquiesce with any, (i) material change in any credit underwriting standards or practices, including loan loss reserves, (ii) material change in any asset liability management techniques, (iii) change in any accounting methods, principles or material practices, or (iv) tax election, change in taxable year, material amendment of a tax return, settlement of any tax claim or assessment relating to Adams or any of its subsidiaries, or surrender any claim to a tax refund;

 

    sell (but payment at maturity is not a sale) or purchase any investment securities, other than purchases of obligations of the U.S. Treasury (or any agency thereof) with a duration of four (4) years or less and an AA rating by at least one nationally recognized ratings agency;

 

    renew, extend the maturity of, or alter any of the terms of any loan classified by Adams as “special mention,” “substandard,” or “impaired” or other words of similar import; or

 

    enter into any acquisitions or leases of real property, including new leases and lease extensions, other than in the ordinary course of business consistent with past practice or through settlement of indebtedness, foreclosure or the exercise of creditors’ remedies.

 

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Resolution of Certain Litigation

In the event that the litigation between Adams Dairy Bank and WingGate Travel is not resolved prior to the calculation date, Adams shall deposit, or cause to be deposited, into an escrow account with an escrow agent reasonably acceptable to Equity an amount equal to 150% of all alleged liabilities, obligations, losses, costs, fees and expenses associated and expected to be incurred with such litigation. The total amount of damages sought in such litigation is $201,609, plus interest accruing from October 18, 2012 through present. For the purposes of the calculation of the Adams adjusted shareholders’ equity, the amount deposited into the escrow account shall be deemed an Adams merger cost and shall reduce the amount of the Adams adjusted shareholders’ equity. Such funds shall remain in escrow until such litigation is finally and definitively resolved. Following resolution of such litigation and after paying all settlements, liabilities, obligations, losses, costs, fees and expenses associated with such litigation, including, without limitation, any attorneys’ fees, any remaining funds shall be distributed in accordance with the terms of the merger agreement.

Regulatory Matters

Equity and Adams have agreed to use their commercially reasonable efforts to promptly prepare and file or cause to be filed, within 30 days of the date of the merger agreement, applications for all regulatory approvals required to be obtained by each of the parties in connection with the merger agreement and the transactions contemplated thereby.

Employee Matters

Equity has agreed to consult with the President of Adams with respect to the termination of any employees of Adams in connection with the Closing. Subject to the terms of the merger agreement, employees of Adams whose employment is terminated in connection with the merger will be eligible to receive certain severance payments under specified circumstances.

Subject to the right of subsequent amendment, modification, replacement or termination in the sole discretion of Equity, each continuing employee will be entitled, as an employee of Equity or its subsidiaries, to participate in the employee benefit plans of Equity provided to similarly situated employees of Equity or its subsidiaries, if such continuing employee will be eligible and, if required by the terms of such plans, selected for participation therein under the terms thereof and makes any required contributions. The provisions of the merger agreement are not intended to give any continuing employee any rights or privileges superior to those of other similarly situated employees of Equity or its subsidiaries or to provide duplication of similar benefits but, subject to that qualification, Equity will, for purposes of vesting and any age or period of service requirements for commencement of participation with respect to any employee benefit plans in which a continuing employee may participate (excluding any defined benefit pension plan), credit each continuing employee with his or her term of service with Adams or any of its subsidiaries.

Director and Officer Indemnification and Insurance

The merger agreement provides that after the completion of the merger, Equity and the surviving corporation will indemnify the directors, officers, employees and agents of Adams to the extent that such person would have been entitled to indemnification under the certificate of incorporation, bylaws or any existing indemnification agreements of Adams prior to the merger.

Prior to Closing, Equity and Equity Bank will obtain, at the expense of Equity, a six-year tail insurance coverage policy relating to the policies of directors’ and officers’ liability insurance currently maintained by Adams and Adams Dairy Bank as of the date of the merger agreement with respect to claims arising from facts or events that occurred on or prior to the effective time (including the transactions contemplated by the merger agreement) as currently maintained by Adams, on terms no less advantageous than those contained in Adams’s existing directors’ and officers’ and company’s liability insurance policy; provided, however, Equity is not

 

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obligated to expend, on an annual basis, an amount in excess of 200% of the current annual premium paid as of the date of the merger agreement by Adams for such insurance.

Shareholder Meeting and Recommendation of Adams’s Board of Directors

Adams has agreed to (i) duly call, give notice of, convene and hold the Adams special meeting of its shareholders as soon as practicable after the registration statement of which this proxy statement/prospectus is a part becomes effective with the SEC for the purpose of approving the Merger Proposal; (ii) require no greater than the minimum vote of the capital stock of Adams required by applicable law in order to approve the Merger Proposal; (iii) include in this proxy statement/prospectus the recommendation of the Adams Board that the Adams shareholders vote in favor of the approval of the Merger Proposal; and (iv) cause this proxy statement/prospectus to be mailed to the Adams shareholders as soon as practicable after it becomes effective with the SEC, and use its commercially reasonable efforts to obtain the approval of the Merger Proposal.

Agreement Not to Solicit Other Offers

Adams has agreed that it will not, and will cause its subsidiaries not to, and will cause Adams’s and its subsidiaries’ respective officers, directors, employees, affiliates, agents and representatives not to, directly or indirectly, (i) initiate or solicit or knowingly encourage any inquiries with respect to, or the making of, any acquisition proposal or (ii) except as otherwise permitted by the merger agreement, (A) engage in negotiations or discussions with or provide any information or data to, any person relating to an acquisition proposal, (B) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any acquisition proposal, or (C) execute or enter into any letter of intent, agreement in principle, merger agreement, acquisition agreement or other similar agreement relating to any acquisition proposal.

Adams further agreed that it will, and will cause each of its officers, directors, employees, affiliates, agents and representatives to, (i) immediately cease any solicitations, discussions or negotiations with any person (other than Equity) conducted prior to the signing of the merger agreement with respect to any acquisition proposal and promptly request return or destruction of confidential information related thereto, (ii) not terminate, waive, amend, release or modify any provision of any confidentiality or standstill agreement relating to any acquisition proposal to which it or any of its officers, directors, employees, affiliates, agents and representatives is a party, and (iii) use its commercially reasonable efforts to enforce any confidentiality or similar agreement relating to any acquisition proposal. Notwithstanding the foregoing, at any time prior to obtaining the approval of the its shareholders, in the event that Adams receives a bona fide acquisition proposal that complies with the terms of the merger agreement, Adams and its board of directors may participate in discussions or negotiations with, or furnish any information to, any person making such acquisition proposal and its agents and representatives or potential sources of debt financing that need to be involved in such discussion if the Adams Board determines in good faith, after consultation with its counsel and financial advisor, that such person is reasonably likely to submit to Adams a proposal deemed to be superior to Equity’s proposal (as determined in accordance with the terms of the merger agreement) and that failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties.

In connection with the receipt and negotiation of any acquisition proposal by Adams, Adams is required to comply with the terms, conditions and procedures set forth in the merger agreement, which require, among other things, Adams to enter into a confidentiality agreement with the person making an acquisition proposal, providing certain notices and information to Equity and allowing Equity to make counteroffers that Adams will consider in good faith.

The Adams Board may, at any time prior to obtaining the approval of Adams’s shareholders, (i) approve, endorse or recommend a proposal deemed to be superior to Equity’s proposal (as determined in accordance with the terms of the merger agreement) or enter into a definitive agreement with respect to such superior proposal or (ii) modify or amend in a manner adverse to Equity or withdraw its recommendation in favor of approval of the

 

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merger agreement, provided that (x) prior to such change in recommendation, the Adams Board will determine, in good faith (after consultation with its counsel), that the failure to take such action would be inconsistent with the directors’ fiduciary duties under applicable law and (y) such change in recommendation is in connection with a superior proposal or an intervening event and such superior proposal has been made and has not been withdrawn and continues to be a superior proposal after taking into account any action taken by Equity.

Conditions to Complete the Merger

Adams’s obligations to complete the merger are subject to the satisfaction or waiver of the following conditions:

 

    subject to certain materiality and material adverse change exceptions, each of the representations and warranties of Equity set forth in the merger agreement will be true and correct in all respects at and as of the date of the merger agreement and at and as of the closing date as though made at and as of the closing date (unless any such representation or warranty is made only as of a specific date, in which case as of such specific date);

 

    Equity and Merger Sub have, or have caused to be, performed or observed, in all material respects, all obligations and agreements required to be performed or observed by Equity and Merger Sub under the merger agreement on or prior to the closing date;

 

    the Merger Proposal having been approved by the requisite vote of its shareholders;

 

    Adams and Equity having received approvals, acquiescences or consents of the transactions contemplated by the merger agreement from all necessary governmental entities and certain third parties and all applicable waiting periods having expired. Further, the approvals and the transactions contemplated by the merger agreement not having been contested or threatened to be contested by any federal or state governmental entity or by any other third party by formal proceedings;

 

    no action having been taken, and no statute, rule, regulation or order being promulgated, enacted, entered, enforced or deemed applicable to the merger agreement or the transactions contemplated thereby by any federal, state or foreign government or governmental entity or by any court, including the entry of a preliminary or permanent injunction, which, if successful, would (i) make the merger agreement or any other agreement contemplated thereby, or the transactions contemplated thereby illegal, invalid or unenforceable, (ii) impose material limits on the ability of any party to the merger agreement to complete the merger agreement or any other agreement contemplated thereby, or the transactions contemplated thereby, or (iii) if the merger agreement or any other agreement contemplated thereby, or the transactions contemplated thereby are completed, subject Adams or any officer, director, shareholder or employee of Adams to criminal or civil liability. Further, no action or proceeding before any court or governmental entity, by any government or governmental entity or by any other person is threatened, instituted or pending that would reasonably be expected to result in any of the consequences described above;

 

    Adams will have received all documents required to be received from Equity on or prior to the closing date all in form and substance reasonably satisfactory to Adams;

 

    there having been no material adverse change with respect to Equity since September 30, 2017;

 

    the registration statement of which this proxy statement/prospectus is a part, including any amendments or supplements thereto, will be effective under the Securities Act and no stop order suspending the effectiveness of the registration statement will be in effect or proceedings for such purpose pending before or threatened by the SEC. All state securities permits or approvals required by applicable state securities laws to consummate the transactions contemplated by the merger agreement will have been received and remain in effect;

 

    the shares of Equity common stock to be issued pursuant to the merger agreement will have been approved for listing on Nasdaq;

 

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    Equity will have procured a tail insurance coverage policy relating to the policies of directors’ and officers’ liability insurance in accordance with the terms and subject to the conditions the merger agreement; and

 

    Adams shall have received the written opinion of Stinson Leonard Street LLP, in form and substance reasonably satisfactory to Adams, dated as of the closing date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, that are consistent with the state of facts existing at the effective time, that the integrated mergers shall together be treated as an integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a)(1)(A) of the Code.

Equity’s obligations to complete the merger are subject to the satisfaction or waiver of the following conditions:

 

    subject to certain materiality and material adverse change exceptions, each of the representations and warranties of Adams set forth in the merger agreement will be true and correct in all respects at and as of the date of the merger agreement and at and as of the closing date as though made at and as of the closing date (unless any such representation or warranty is made only as of a specific date, in which case as of such specific date);

 

    Adams has, or has caused to be, performed or observed, in all material respects, all obligations and agreements required to be performed or observed by Adams under the merger agreement on or prior to the closing date;

 

    the Merger Proposal having been approved by the requisite vote of Adams’s shareholders;

 

    Equity having received approvals, acquiescences or consents of the transactions contemplated by the merger agreement from all necessary governmental entities and certain the third parties, and all applicable waiting periods having expired. Further, the approvals and the transactions contemplated thereby not having been contested or threatened to be contested by any federal or state governmental entity or by any other third party by formal proceedings;

 

    no action having been taken, and no statute, rule, regulation or order being promulgated, enacted, entered, enforced or deemed applicable to the merger agreement or the transactions contemplated thereby by any federal, state or foreign government or governmental entity or by any court, including the entry of a preliminary or permanent injunction, which, if successful, would (i) make the merger agreement or any other agreement contemplated thereby, or the transactions contemplated thereby illegal, invalid or unenforceable, (ii) require the divestiture of a material portion of the assets of Equity or its subsidiaries, or (iii) impose material limits on the ability of any party to the merger agreement to complete the merger agreement or any other agreement contemplated thereby, or the transactions contemplated thereby, or (iv) if the merger agreement or any other agreement contemplated thereby, or the transactions contemplated thereby are completed, subject Equity or any officer, director, shareholder or employee of Equity to criminal or civil liability. Further, no action or proceeding before any court or governmental entity, by any government or governmental entity or by any other person is threatened, instituted or pending that would reasonably be expected to result in any of the consequences described above;

 

    Equity having received from each of the directors of Adams an instrument dated as of the closing date releasing Adams, its subsidiaries and each of its affiliates, successors and assigns, from any and all claims of such directors (except to certain matters described therein). Further, Equity having received from each of the specified officers of Adams an instrument dated as of the closing date releasing Adams, its subsidiaries and each of its affiliates, successors and assigns, from any and all claims of such officers;

 

    there will have been no material adverse change to Adams since September 30, 2017;

 

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    Equity having received evidence reasonably satisfactory to Equity that, as of the effective time, all employee benefit plans of Adams (other than such plans Equity elects not to terminate) have been terminated in accordance with the terms of such employee benefit plans of Adams, the Code, the Employee Retirement Income Security Act of 1974, as amended (which we refer to in this proxy statement/prospectus as “ERISA”), and all other applicable laws on a basis satisfactory to Equity in its reasonable discretion and that, to the extent required by the employee benefit plans of or applicable law, affected participants have been notified of such terminations and/or integrations;

 

    the registration statement of which this proxy statement/prospectus is a part, including any amendments or supplements thereto, will be effective under the Securities Act and no stop order suspending the effectiveness of the registration statement will be in effect or proceedings for such purpose pending before or threatened by the SEC. All state securities permits or approvals required by applicable state securities laws to consummate the transactions contemplated by the merger agreement will have been received and remain in effect;

 

    holders of not more than 5% of the outstanding shares of Adams common stock having duly exercised their appraisal rights under the RSMo;

 

    Equity will have received all documents required to be received from Adams on or prior to the closing date, all in form and substance reasonably satisfactory to Equity;

 

    Adams’s adjusted shareholders’ equity shall be equal to or greater than $5,709,750;

 

    Equity shall have received an opinion of Norton Rose Fulbright US LLP, in form and substance reasonably satisfactory to Equity, dated as of the closing date and based on facts, representations and assumptions described in such opinion, to the effect that the integrated mergers shall together be treated as an integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a)(1)(A) of the Code; and

 

    Equity will have received from Adams certain tax documents in form and substance satisfactory to Equity, dated as of the closing date and executed by Adams.

Neither Adams nor Equity can provide assurance as to when or if all of the conditions to the merger can or will be satisfied or waived by the appropriate party, or that the merger will be completed.

Termination of the Merger Agreement

The merger agreement can be terminated at any time prior to completion of the merger in the following circumstances:

 

    by the mutual written consent of Equity and Adams;

 

    by either Adams or Equity (as long as the terminating party is not in material breach of any representation, warranty, covenant or other agreement contained therein) if the conditions precedent to such party’s obligations to close have not been met or waived by June 30, 2018; provided, however, that such date may be extended to such later date as agreed upon by Adams and Equity;

 

    by either Equity or Adams if any of the transactions contemplated by the merger agreement are disapproved by any federal or state governmental or regulatory agency or authority whose approval is required to complete such transactions or if any court of competent jurisdiction in the United States or other federal or state governmental body has issued an order, decree or ruling or taken any other action restraining, enjoining, invalidating or otherwise prohibiting the merger agreement or the transactions contemplated by the merger agreement and such disapproval, order, decree, ruling or other action is final and nonappealable; provided, however, that the party seeking to terminate merger agreement pursuant to this provisions is required to use its commercially reasonable efforts to contest, appeal and remove such order, decree, ruling or other action but such obligation will not apply to Adams’s termination right in the event of disapproval by any federal or state governmental or regulatory agency;

 

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    by either Equity or Adams if there has been any material adverse change with respect to the other party;

 

    subject to certain cure rights, by Equity or Adams, if there will have been a breach of any of the covenants or agreements or any of the representations or warranties (or any such representation or warranty will cease to be true and correct) set forth in the merger agreement on the part of the other party to the merger agreement or any other agreement contemplated thereby, which breach or failure to be true and correct, either individually or in the aggregate with all other breaches (or failures of such representations and warranties to be true and correct), would constitute, if occurring or continuing on the Closing, the failure of a closing condition; provided, however, that the right to terminate merger agreement under this provision will not be available to a party if it is then in material breach of any of its representations, warranties, covenants or agreements set forth in merger agreement;

 

    by Equity or Adams, if Adams does not receive the required shareholder approval at the Adams special meeting or any adjournment or postponement thereof; provided, however, that Adams may not terminate the merger agreement pursuant to the corresponding provision in the merger agreement if Adams has breached in any material respect any of its obligations under the merger agreement in a manner that caused the failure to obtain the approval of the shareholders at the Adams special meeting, or at any adjournment or postponement thereof;

 

    by Adams prior to obtaining the approval of the Adams shareholders at the Adams special meeting, and subject to the terms and conditions set forth in merger agreement, in order to accept an alternative acquisition proposal;

 

    by Equity if the Adams Board, prior to obtaining the approval of the Adams shareholders and in compliance with the procedures set forth in merger agreement, approves, endorses or recommends an alternative acquisition proposal or enters into a definitive agreement with respect to an alternative acquisition proposal or modifies or amends its recommendation in a manner adverse to Equity or withdraws its recommendation;

 

    by Equity or Adams if the other party or its respective banking subsidiary enter into any formal or informal administrative action with any court, arbitrator, federal or state governmental agency or other authority or any such action is threatened by any such entity; or

 

    by Adams, within two business days of the calculation date, which will be the fifth business day before the closing of the merger, if both (i) the volume weighted average closing price of Equity common stock during the twenty trading day period ending on the close of business on the calculation date is less than $27.592 and (ii) Equity’s common stock underperforms the KBW Nasdaq Regional Banking Index (KRX) by more than 20%; provided, however, that Equity has a right to cure by adjusting the exchange ratio or increasing the per share cash amount as provided in the merger agreement.

Effect of Termination

If the merger agreement is terminated, then neither Equity nor Adams will have any further liability or obligation under the merger agreement; provided, however, that (i) no such termination will relieve any party of any liability or damages resulting from any willful breach of the merger agreement or actual fraud; (ii) provisions of the merger agreement concerning termination fees and certain other specified provisions will survive any such termination; and (iii) the confidentiality agreement between Equity and Adams will survive any such termination in accordance with its terms.

 

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Termination Fee

Adams will pay Equity a termination fee if the merger agreement is terminated under the following circumstances:

 

    by Equity or Adams if the Merger Proposal is not approved by the required vote of shareholders of Adams, then Adams will pay to Equity a termination fee equal to $850,000, within two (2) business days;

 

    by Adams prior to obtaining the approval of the Adams shareholders at the Adams special meeting, in order to accept an acquisition proposal, then Adams will pay to Equity a termination fee equal to $850,000, within two (2) business days;

 

    by Equity if the Adams Board approves, endorses or recommends an acquisition proposal or enters into a definitive agreement with respect to an acquisition proposal or modifies or amends its recommendation in a manner adverse to Equity or withdraws its recommendation, then Adams will pay to Equity a termination fee equal to $850,000, within two (2) business days of receipt of such written notice of termination from Equity; and

 

    if prior to the termination of the merger agreement, a bona fide acquisition proposal shall have been made known to senior management of Adams, the Adams Board or directly to Adams’s shareholders generally or any person shall have publicly announced (and not withdrawn) an acquisition proposal with respect to Adams and (A) thereafter (I) the merger agreement is terminated by either Equity or Adams after June 30, 2018 and Adams shall have failed to obtain the requisite vote of its shareholders in favor of the Merger Proposal, or (II) the merger agreement is terminated by Equity in connection with a breach of a covenant or agreement by Adams pursuant to the terms of the merger agreement, and (B) prior to the date that is twelve (12) months after the date of such termination, Adams enters into a definitive agreement or consummates a transaction with respect to an acquisition proposal, then Adams shall, on the earlier of the date it enters into such definitive agreement and the date of consummation of such transaction, pay to Equity a termination equal to $850,000.

If Adams fails to pay in a timely manner any termination fee due to Equity, then Adams (i) will pay to Equity the reasonable costs and expenses of Equity (including its reasonable attorneys’ fees and expenses) incurred or accrued in connection Equity’s efforts to obtain payment of any amounts due to Equity and (ii) will pay all interest accrued on any amount due to Equity, which will accrue at the prime lending rate prevailing during such period as published in The Wall Street Journal. Any interest payable hereunder will be calculated on a daily basis from the date such amounts were required to be paid until (but excluding) the date of actual payment, and on the basis of a 360-day year.

Expenses and Fees

Except (i) with respect to certain costs and expenses in connection with the filing of proxy statement/prospectus with the SEC, which will be borne by Equity, (ii) as otherwise provided in the termination provision, all fees and expenses incurred in connection with the merger agreement and the transactions contemplated thereby will be paid by the party incurring such fees or expenses, whether or not the merger is consummated.

Amendment, Waiver and Extension of the Merger Agreement

Subject to compliance with applicable law, the merger agreement may be amended, modified or supplemented only by an instrument in writing executed by each of the parties to the merger agreement. At any time prior to the Closing, the parties may (i) extend the time for the performance of any of the obligations or other acts of the other parties to the merger agreement, (ii) waive any inaccuracies in the representations and warranties contained in the merger agreement or in any document, certificate or writing delivered pursuant to the merger agreement, or (iii) waive compliance with any of the agreements, covenants or conditions contained in the merger agreement, in each case, in accordance with the terms of the merger agreement.

 

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Adams Director Support Agreements

In connection with entering into the merger agreement, each of the directors of Adams have entered into a Director Support Agreement with Equity (which we refer to in this proxy statement/prospectus as the “Adams director support agreements”) pursuant to which they agree to refrain from harming the goodwill of Equity, Adams or any of their respective subsidiaries and their respective customer, client and vendor relationships. Each director also agreed to certain additional restrictive covenants. A copy of the form of the Adams director support agreements is included in this proxy statement/prospectus as Annex B.

Adams Voting Agreement

In connection with entering into the merger agreement, Equity entered into a Voting Agreement with Adams, Brad S. Elliott, as proxy, and certain shareholders of Adams (which we refer to in this proxy statement/prospectus as the “Adams voting agreement”). The shareholders that are party to the Adams voting agreement beneficially own in the aggregate approximately 62% of the outstanding shares of Adams common stock. The Adams voting agreement requires, among other things, that the shareholders party thereto vote all of their shares of Adams common stock in favor of the merger and the other transactions contemplated by the merger agreement and against alternative transactions and generally prohibits them from transferring their shares of Adams common stock prior to the termination of the Adams voting agreement. The Adams voting agreement will terminate upon the earlier of the termination of the merger agreement in accordance with its terms or the completion of the transactions contemplated by the merger agreement. A copy of the form of the Adams voting agreement is included in this proxy statement/prospectus as Annex C.

 

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ACCOUNTING TREATMENT

The accounting principles applicable to this transaction as described in FASB ASC 805 provide transactions that represent business combinations are to be accounted for under the acquisition method. The acquisition method requires all of the following steps: (1) identifying the acquirer; (2) determining the acquisition date; (3) recognizing and measuring the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; and (4) recognizing and measuring goodwill or a gain from a bargain purchase.

The appropriate accounting treatment for this transaction is as a business combination under the acquisition method. On the acquisition date, as defined by ASC 805, Equity (the acquirer) will record at fair value the identifiable assets acquired and liabilities assumed, any noncontrolling interest, and goodwill (or a gain from a bargain purchase). The results of operations for the combined company will be reported prospectively subsequent to the acquisition date.

 

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE INTEGRATED MERGERS

The following discussion addresses the material U.S. federal income tax consequences of the integrated mergers to U.S. holders (as defined below) of Adams common stock. This discussion is based on the Code, Treasury regulations, administrative rulings and judicial decisions, all as in effect as of the effective date of this proxy statement/prospectus and all of which are subject to change (possibly with retroactive effect) and to differing interpretations. Accordingly, the U.S. federal income tax consequences of the integrated mergers to holders of Adams common stock could differ from those described below.

This discussion applies only to U.S. holders that hold their Adams common stock, and will hold the Equity common stock received in exchange for their Adams common stock, as a capital asset within the meaning of Section 1221 of the Code (generally assets held for investment). Further, this discussion does not address all aspects of U.S. federal taxation that may be relevant to a particular U.S. holder in light of such holder’s personal circumstances or to a U.S. holder that is subject to special treatment under U.S. federal income tax laws, including, without limitation:

 

    financial institutions or mutual funds,

 

    tax-exempt organizations,

 

    insurance companies,

 

    dealers in securities or foreign currency,

 

    traders in securities who elect to apply a mark-to-market method of accounting,

 

    partnerships and other pass-through entities and investors in such entities,

 

    controlled foreign corporations or passive foreign investment companies,

 

    regulated investment companies and real estate investment trusts,

 

    broker-dealers,

 

    holders liable for the alternative minimum tax,

 

    holders that have a functional currency other than the U.S. dollar,

 

    holders who received, or have a right to receive, their Adams common stock through the exercise of employee stock options, through a tax-qualified retirement plan, deferred stock award or otherwise as compensation,

 

    holders who hold Adams common stock as part of a hedge, straddle, constructive sale, conversion transaction or other integrated investment, and

 

    U.S. expatriates or certain former citizens or long-term residents of the United States.

In addition, this discussion does not address any state, local or foreign tax consequences of the integrated mergers, or any tax consequences of the integrated mergers under any U.S. federal tax laws other than those pertaining to income tax.

For purposes of this discussion, a U.S. holder is a beneficial owner of Adams common stock who is, for U.S. federal income tax purposes: (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or any other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States or any state thereof or the District of Columbia; (iii) an estate that is subject to U.S. federal income tax on its income regardless of its source; or (iv) a trust (A) if a U.S. court is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust or (B) that was in existence on August 20, 1996, and has made a valid election to be treated as a United States person for U.S. federal income tax purposes. Holders of Adams common

 

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stock who are not U.S. holders may have different tax consequences than those described below and are urged to consult their own tax advisors regarding the tax treatment of the integrated mergers under United States and non-United States tax laws.

If a partnership (or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of Adams common stock, the U.S. federal income tax treatment of a partner in such partnership generally will depend upon the status of the partner and the activities of the partnership. Equity and Adams urge such partners and partnerships to consult their own tax advisors regarding the particular tax consequences of the integrated mergers to them.

Determining the actual U.S. federal income tax consequences of the integrated mergers to a U.S. holder may be complex and will depend, in part, on the holder’s particular circumstances. Equity and Adams urge each U.S. holder of Adams common stock to consult his or her tax advisor with respect to the particular tax consequences of the integrated mergers to such holder.

U.S. Federal Income Tax Consequences of the Integrated Mergers Generally

The obligations of Equity and Adams to complete the integrated mergers are conditioned on, among other things, the receipt by Equity and Adams of tax opinions from Norton Rose Fulbright US LLP and Stinson Leonard Street LLP, respectively, dated as of the closing date of the integrated mergers, to the effect that, on the basis of facts, representations and assumptions described in such opinions, the integrated mergers shall together be treated as an integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the Code.

These opinions will be subject to customary qualifications and assumptions, including assumptions regarding the absence of changes in existing facts and the completion of the integrated mergers strictly in accordance with the merger agreement and the registration statement. In rendering their opinions, Norton Rose Fulbright US LLP and Stinson Leonard Street LLP will rely upon representations and covenants, including those contained in certificates of officers of Equity and Adams. If any of the assumptions, representations or covenants upon which these opinions are based are incorrect or inaccurate in any way, these opinions and the U.S. federal income tax consequences of the integrated mergers could be adversely affected. The opinions represents Norton Rose Fulbright US LLP’s and Stinson Leonard Street LLP’s best legal judgment, but does not bind the courts and does not preclude the IRS from adopting a position contrary to the ones expressed in the opinions. Additionally, the IRS has not issued (and is not expected to issue) any ruling as to the qualification of the integrated mergers as a reorganization under Section 368(a) of the Code. Accordingly, there can be no assurance that the IRS will not assert, and a court will not sustain, a position contrary to the position addressed below or in the opinions of Norton Rose Fulbright US LLP and Stinson Leonard Street LLP. The following discussion regarding the U.S. federal income tax consequences of the integrated mergers assumes that the integrated mergers shall together be treated as an integrated transaction that qualifies as a “reorganization” within the meaning of Section 368(a) of the Code.

Exchange for Equity Common Stock and Cash. A U.S. holder who receives both Equity common stock and cash in the exchange for such holder’s Adams common stock will recognize gain (but not loss) equal to the lesser of: (1) the amount by which the sum of the fair market value of the Equity common stock and cash received by such holder of Adams common stock exceeds such holder’s adjusted tax basis in its Adams common stock; and (2) the amount of cash received by such holder of Adams common stock (in each case excluding cash received in lieu of a fractional share of Equity common stock, the U.S. federal income tax treatment of which is discussed below). Except to the extent any cash received is treated as a dividend as discussed below, any gain recognized by the U.S. holder generally will be long-term capital gain if, as of the effective date of the integrated mergers, such holder’s holding period with respect to the Adams common stock surrendered exceeds one year.

 

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If Adams common stock was acquired by a U.S. holder at different times or different prices, such holder should consult the holder’s tax advisor regarding the manner in which gain or loss should be determined for each identifiable block of Adams common stock surrendered in the exchange.

The aggregate tax basis of the shares of Equity common stock received (including any fractional share of Equity common stock deemed received and redeemed for cash as described below) by a U.S. holder will be equal to such holder’s aggregate tax basis in the shares of Adams common stock surrendered in exchange for the shares of Equity common stock reduced by the amount of tax basis allocated to any fractional share deemed received and redeemed, and then increased by any taxable gain recognized in the integrated mergers by such holder (excluding any gain recognized as a result of cash received in lieu of a fractional share of Equity common stock) regardless of whether such gain is classified as capital gain or dividend income, and minus any cash received (other than cash received in lieu of a fractional share of Equity common stock) by such holder in the integrated mergers. The holding period for shares of Equity common stock received in the integrated mergers (including any fractional share of Equity common stock deemed received and redeemed for cash as described below) by a U.S. holder will include such holder’s holding period for the Adams common stock surrendered in exchange for the Equity common stock. If Adams common stock was purchased or acquired by a U.S. holder on different dates or at different prices, such holder should consult such holder’s tax advisor for purposes of determining the basis and holding period of the Equity common stock received in the integrated mergers.

Cash Received in Lieu of a Fractional Share. A U.S. holder who receives cash in lieu of a fractional share of Equity common stock will be treated as having received the fractional share in the integrated mergers and then as having exchanged the fractional share for cash in redemption by Equity. As a result and except to the extent that the cash received is treated as a dividend as discussed below, the U.S. holder will generally recognize gain or loss equal to the difference between the amount of cash received and such holder’s tax basis allocable to the fractional share. The gain or loss will be capital gain or loss and will be long-term capital gain or loss if the U.S. holder has held the fractional share exchanged (including the holding period for the Adams common stock exchanged therefor) for more than one year as of the effective date of the integrated mergers. The deductibility of capital losses is subject to limitations.

Potential Characterization of Gain as a Dividend. In general, the determination of whether gain recognized by a U.S. holder in the exchange will be treated as capital gain or as a dividend will depend on whether, and to what extent, the integrated mergers reduces such holder’s deemed percentage ownership of Equity common stock. For purposes of this determination, the U.S. holder will be treated as if such holder first exchanged such holder’s Adams common stock solely for Equity common stock and then Equity immediately redeemed a portion of such holder’s Equity common stock in the exchange for cash received in the integrated mergers by such holder. The gain recognized by the U.S. holder in the exchange followed by a deemed redemption will be capital gain if, with respect to such holder, the deemed redemption is “substantially disproportionate” or “not essentially equivalent to a dividend.”

In general, the deemed redemption will be “substantially disproportionate” with respect to a U.S. holder if the percentage described in clause (2) below is less than 80% of the percentage described in clause (1) below. In general, such determination requires a comparison of (1) the percentage of outstanding voting stock of Equity that the U.S. holder is deemed actually and constructively to have owned immediately before the deemed redemption by Equity and (2) the percentage of outstanding voting stock of Equity actually and constructively owned by such holder immediately after the deemed redemption by Equity. In applying the foregoing test, the U.S. holder may, under constructive ownership rules, be deemed to own stock in addition to stock actually owned by such holder, including stock owned by certain other persons and stock subject to an option held by such holder or by certain other persons. Because the constructive ownership rules are complex, each U.S. holder should consult such holder’s tax advisor as to the applicability of these rules. Whether the deemed redemption is “not essentially equivalent to a dividend” with respect to a U.S. holder will depend on such holder’s particular circumstances. In order for the deemed redemption to be “not essentially equivalent to a dividend,” the reduction must result in a “meaningful reduction” in the U.S. holder’s deemed percentage ownership of Equity common

 

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stock. The IRS has indicated that a minority shareholder in a publicly traded corporation whose relative stock interest is minimal and who exercises no control with respect to corporate affairs is considered to have a meaningful reduction if that shareholder has any reduction in his or her percentage stock ownership under the foregoing analysis.

These rules are complex and dependent upon the specific facts of a particular U.S. holder. Consequently, Equity and Adams urge each U.S. holder that may be subject to these rules to consult such holder’s tax advisor as to the application of these rules to the particular facts relevant to such holder.

Dissenters. Upon the proper exercise of dissenters’ rights, a U.S. holder will exchange all of the shares of Adams common stock actually owned by such holder solely for cash and will recognize gain or loss equal to the difference between the amount of cash received, and such holder’s tax basis in the shares of Adams common stock surrendered. The gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period with respect to the Adams common stock surrendered is more than one year. The deductibility of capital losses is subject to limitations. In some cases, if the U.S. holder owns shares of Equity common stock actually or constructively after the integrated mergers, the cash received could be treated as a dividend, in which case such holder may recognize dividend income up to the amount of cash received. Because the possibility of dividend treatment depends upon each U.S. holder’s particular circumstances, including the application of constructive ownership rules, U.S. holders of Adams common stock are urged to consult their tax advisors regarding the application of the foregoing rules to their particular circumstances

Medicare Tax. If a U.S. holder that is an individual has modified gross income for the taxable year over a certain threshold (between $125,000 and $250,000 depending upon the individual’s U.S. federal income tax filing status), such an individual is subject to a 3.8% tax (the “Medicare Tax”) on the lesser of: (i) his or her “net investment income” for the relevant taxable year; or (ii) the excess of his or her modified gross income for the taxable year over his or her applicable threshold (between $125,000 and $250,000 depending upon the individual’s U.S. federal income tax filing status). In the case of an estate or trust, the Medicare Tax will be imposed on the lesser of: (i) undistributed net investment income, or (ii) the excess of its adjusted gross income over the dollar amount at which the highest income tax bracket applicable to an estate or trust begins for the relevant taxable year. Net investment income generally would include any capital gain incurred in connection with the integrated mergers (including gain treated as dividend income), as well as other items of interest, dividends, capital gains, and rental or royalty income.

Information Reporting and Backup Withholding

Payments of cash to a U.S. holder pursuant to the integrated mergers may under certain circumstances be subject to information reporting and backup withholding. Generally, backup withholding will not apply if a U.S. holder:

 

    furnishes a correct taxpayer identification number to the exchange agent and certifies that such holder is not subject to backup withholding on the substitute Form W-9 or successor form included in the letter of transmittal received and otherwise complies with applicable requirements of the backup withholding rules; or

 

    is otherwise exempt from backup withholding.

Any amounts withheld under the backup withholding rules are not an additional tax and will generally be allowed as a refund or credit against a U.S. holder’s U.S. federal income tax liability, provided such holder furnishes the required information to the IRS.

Reporting Requirements

A U.S. holder who receives shares of Equity common stock upon completion of the integrated mergers and who is considered a “significant holder” will be required to retain records pertaining to the integrated mergers

 

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and to file with such holder’s U.S. federal income tax return for the year in which the integrated mergers takes place a statement setting forth certain facts relating to the integrated mergers. For this purpose, a U.S. holder is a significant holder if the person owns at least 1% by vote or value of Adams’s outstanding shares or has a tax basis of $1,000,000 or more in such holder’s Adams common stock and securities. Such statement must include the U.S. holder’s tax basis in and fair market value of such holder’s Adams common stock and securities surrendered in the integrated mergers.

Tax Treatment of Entities

No gain or loss should be recognized by Equity or Adams for U.S. federal income tax purposes as a result of the integrated mergers.

Tax Legislation

On December 22, 2017, Public Law No. 115-97 was enacted, commonly referred to as the Tax Cuts and Jobs Act, effective for tax years beginning after December 31, 2017. Neither Equity nor Adams anticipate that the Tax Cuts and Jobs Act will affect the U.S. federal income tax treatment of the integrated mergers described above. Equity and Adams urge holders of Adams common stock to consult their own tax advisors regarding the any impact that the Tax Cuts and Jobs Act may have on them.

This discussion of certain material U.S. federal income tax consequences is for general information only and is not tax advice. Equity and Adams urge holders of Adams common stock to consult their tax advisors with respect to the application of U.S. federal income tax laws to their particular situations as well as any tax consequences arising under the U.S. federal estate or gift tax rules, and under the laws of any applicable state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.

 

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ADAMS SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERSHIP

The following table sets forth certain information regarding the beneficial ownership of Adams common stock as of the record date by (i) each director, the chief executive officer, the chief financial officer and the next other most-highly compensated executive officer of Adams, (ii) each person who is known by Adams to own beneficially 5% or more of the Adams common stock, and (iii) all directors and executive officers as a group. Unless otherwise indicated, based on information furnished by such shareholders, management of Adams believes that each person has sole voting and dispositive power over the shares indicated as owned by such person.

 

     Shares Beneficially Owned  

Name of Beneficial Owner

   Number(1)      Percentage(2)  

5% Shareholders:

     

Carroll County Trust

     175,633        24.5

Burton Sexton

     47,862        6.7

Directors and Named Executive Officers:

     

David Charles Chinnery

     56,345        7.8

Lester Ham

     0        *  

Cathy Lincoln

     14,102        2.0

Young Sexton

     152,465        21.2

Kevin Vogt

     1,500        *  

Duston Weisenborn

     1,000        *  

Robert Wray

     729        *  
  

 

 

    

 

 

 

Directors and Executive Officers as a Group (7 Persons)

     226,141        31.3

 

* Indicates less than 1%
(1) Except as otherwise noted, may include shares held by or with such person’s spouse and minor children; shares held by any other relative of such person who has the same home; shares held by a family trust as to which such person is a trustee with sole voting and investment power (or shared with a spouse); or shares held in an individual retirement account or pension as to which such person has pass-through voting rights and investment powers.
(2) The percentages are based on 718,287 shares of Adams common stock outstanding.

 

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INFORMATION ABOUT ADAMS

Adams is a Missouri corporation that owns all of the outstanding shares of common stock of Adams Dairy Bank, a Missouri bank, in Blue Springs, Missouri. Adams Dairy Bank offers consumer and commercial banking services to customers in or near Jackson County, Missouri.

Adams’s office is located at 651 NE Coronado Drive, Blue Springs, MO 64014 and its telephone number is (816) 655-3333. Additional information about Adams and Adams Dairy Bank may be requested from Adams. See “Where You Can Find More Information,” beginning on page 98.

Information About Adams’s Business

General. Adams was incorporated as a Missouri corporation in 2013 to serve as a bank holding company for Adams Dairy Bank. Adams does not, as an entity, engage in separate business activities of a material nature apart from the activities it performs for Adams Dairy Bank. Its primary activities are to provide assistance in the management and coordination of Adams Dairy Bank’s financial resources. Adams’s principal asset is the outstanding common stock of Adams Dairy Bank. Adams derives its revenues primarily from the operations of Adams Dairy Bank in the form of dividends received from Adams Dairy Bank.

Adams Dairy Bank is a Missouri state-chartered bank and is not a member of the Federal Reserve System. Adams Dairy Bank was chartered in 2008, and has served since that time as a relationship based financial institution with operations in Jackson County, Missouri.

As a bank holding company, Adams is subject to supervision and regulation by the Federal Reserve, in accordance with the requirements set forth in the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and by the rules and regulations issued by the Federal Reserve.

As of September 30, 2017, Adams had consolidated total assets of $126.7 million, total loans of $89.9 million (net of allowances), total deposits of $102.2 million and total shareholders’ equity of $10.37 million. Adams does not file reports with the SEC.

Products and Services. Adams Dairy Bank is a traditional commercial bank offering a variety of consumer and commercial banking services in Jackson County, Missouri. Adams Dairy Bank offers a range of lending services, including commercial loans to small and mid-sized businesses which are located in or near Jackson, County, Missouri, and consumer loans to individuals. Real estate loans offered by Adams Dairy Bank are primarily secured by first real estate mortgages on the subject collateral. A small portion of the commercial loans offered include loans to small and mid-sized businesses for the purpose of purchasing equipment, inventory, and facilities or for working capital. Consumer loans offered by Adams Dairy Bank include loans for the purpose of purchasing automobiles and providing a home equity line of credit.

Adams Dairy Bank offers depository services and various checking account services. Adams Dairy Bank also offers debit card services, wire transfer services, cashier’s checks, internet banking, direct deposit and automatic transfers between accounts.

 

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Competition. The table below lists Adams Dairy Bank’s deposit market share as of June 30, 2017 (the most recent date as of which the relevant data is available from the FDIC), for the Jackson County, Missouri banking market served by Adams Dairy Bank.

 

Market Area    Market Rank      Branch Count      Deposits In Market
(in thousands)
     Market Share (%)  

Jackson County, Missouri

     15        1      $ 104,592        0.44

Each activity in which Adams Dairy Bank is engaged involves competition with other banks, as well as with nonbanking financial institutions and nonfinancial enterprises. In addition to competing with other commercial banks within and outside its primary service area, Adams Dairy Bank competes with other financial institutions engaged in the business of making loans or accepting deposits, such as savings and loan associations, credit unions, industrial loan associations, insurance companies, small loan companies, financial companies, mortgage companies, real estate investment trusts, certain governmental agencies, credit card organizations and other enterprises. Banks and other financial institutions with which Adams Dairy Bank competes may have capital resources and legal loan limits substantially higher than those maintained by Adams Dairy Bank.

Employees. As of September 30, 2017, Adams had 14 full-time employees and 1 part-time employee, none of whom are covered by a collective bargaining agreement.

Information About Adams’s Properties

Adams Dairy Bank owns, through a wholly-owned subsidiary, the real property located at 605-651 NE Coronado Drive, Blue Springs, Missouri 64014. The majority of the property is leased to third parties. Adams’s principal offices are located at 651 NE Coronado Drive, Blue Springs, Missouri 64014.

Legal Proceedings

Various legal claims arise from time to time in the normal course of business. Adams Dairy Bank is a defendant in a dispute with Young Sexton/WingGate Travel regarding certain Automated Clearinghouse Transfers, and the total amount of damages sought is $201,609, plus interest accruing from October 18, 2012 through present.

 

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DESCRIPTION OF CAPITAL STOCK OF EQUITY

As a result of the merger, Adams shareholders who receive shares of Equity common stock in the merger will become shareholders of Equity. Your rights as a shareholder of Equity will be governed by Kansas law and the Equity articles and the Equity bylaws. The following briefly summarizes the material terms of Equity common stock. This discussion does not purport to be a complete description of these rights and may not contain all of the information regarding Equity’s capital stock that is important to you. These rights can be determined in full only by reference to federal and state banking laws and regulations, the RSMo and the Equity articles and Equity bylaws, copies of which are filed with the SEC as exhibits to the registration statement of which this prospectus is a part, and applicable law, which you are urged to read. Copies of Equity’s governing documents have been filed with the SEC. To find out where copies of these documents can be obtained, as well as the copies of Adams’s governing documents, see “Where You Can Find More Information.”

Overview

Equity’s authorized capital stock consists of 50,000,000 shares of common stock, par value of $0.01 per share, of which 45,000,000 are designated as Equity common stock and 5,000,000 are designated as Class B common stock, and 10,000,000 shares of preferred stock. As of the date of this proxy statement/prospectus, no shares of preferred stock are outstanding.

As of February 8, 2018, there were 14,605,607 shares of Equity common stock issued and outstanding and no shares of Equity’s Class B common stock issued and outstanding. All issued and outstanding shares at that date were, and the shares of Equity common stock to be issued upon completion of this offering will be, fully paid and nonassessable. Immediately following the completion of the merger, Equity expects to have approximately 14,949,739 shares of Equity common stock outstanding, excluding the 820,904 shares of Equity common stock expected to be issued in connection with the KBC Merger, and no shares of Class B common stock outstanding. Also, as of [    ], options to purchase [    ] shares of Equity common stock held by Equity’s employees, officers and directors under Equity’s Amended and Restated 2013 Stock Incentive Plan were outstanding.

Equity Common Stock

Class A common stock

Voting Rights. Each holder of Equity common stock is entitled to one vote for each share of Equity common stock held on all matters to be voted on by Equity’s shareholders. Holders of Equity common stock elect Equity Board members and act on other matters as are required to be presented to them under Kansas law or as are otherwise presented to them by the Equity Board. Each holder of Equity common stock is entitled to one vote per share and does not have any right to cumulate votes in the election of directors. If Equity issues preferred stock, holders of Equity’s preferred stock may also possess voting rights. When a quorum is present at any meeting, the vote of the holders of a majority of Equity common stock present in person or by proxy will decide any matter before such meeting, unless the matter is one requiring a different vote by applicable law or the Equity articles.

Dividends. To the extent permitted under the Kansas General Corporation Code, which we refer to in this proxy statement/prospectus as the “KGCC,” and subject to the rights of holders of any outstanding shares of Equity’s preferred stock, holders of Equity common stock are entitled to participate ratably on a per share basis with holders of Equity’s Class B common stock in the payment of dividends, when, as and if declared thereon by the Equity Board. For a discussion of Equity’s dividend policy and dividend history, see “Equity Dividend Policy.” If Equity issues preferred stock, the holders of the preferred stock may have a priority over the holders of Equity’s common stock with respect to dividends.

Liquidation Rights. Subject to the provisions of any outstanding series of preferred stock and after payment of all of Equity’s debts and other liabilities, the holders of Equity common stock are entitled to participate ratably on a per share basis in all distributions to the holders of Equity’s common stock in any liquidation, dissolution or winding up of Equity.

 

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Preemptive Rights; Other. Holders of Equity common stock are not entitled to preemptive rights with respect to any shares that may be issued. The Equity common stock is not entitled to the benefits of any redemption or sinking fund provision.

Class B Common Stock

Voting Rights. The holders of Class B common stock have no voting rights except as may be provided for under Kansas law.

Dividends. To the extent permitted under the KGCC and subject to the rights of holders of any outstanding shares of Equity’s preferred stock, holders of Equity’s Class B common stock are entitled to participate ratably on a per share basis with holders of Equity common stock in the payment of dividends, when, as and if declared thereon by the Equity Board. For a discussion of Equity’s dividend policy and dividend history, see “Equity Dividend Policy.” If Equity issues preferred stock, the holders of the preferred stock may have a priority over the holders of Equity’s common stock with respect to dividends.

Liquidation Rights. Subject to the provisions of any outstanding series of preferred stock and after payment of all of Equity’s debts and other liabilities, the holders of Equity’s Class B common stock are entitled to participate ratably on a per share basis in all distributions to the holders of Equity’s common stock in any liquidation, dissolution or winding up of Equity.

Preemptive Rights; Other. Holders of Equity’s Class B common stock are not entitled to preemptive rights with respect to any shares that may be issued. The Class B common stock is not entitled to the benefits of any redemption or sinking fund provision.

Preferred Stock

Upon authorization of the Equity Board, Equity may issue shares of one or more series of Equity’s preferred stock from time to time. The Equity Board may, without any action by holders of common stock and subject to the provisions of any outstanding series of preferred stock, adopt resolutions to designate and establish a new series of preferred stock. Upon establishing such a series of preferred stock, the board will determine the number of shares of preferred stock of that series that may be issued and the rights and preferences of that series of preferred stock. The rights of any series of preferred stock may include, among others, any:

 

    general or special voting rights;

 

    preferential liquidation or preemptive rights;

 

    preferential cumulative or noncumulative dividend rights;

 

    redemption or put rights; and

 

    conversion or exchange rights.

Equity may issue shares of, or rights to purchase shares of, one or more series of Equity’s preferred stock that have been or may be designated from time to time, the terms of which might:

 

    adversely affect voting or other rights evidenced by, or amounts otherwise payable with respect to, Equity’s common stock or other series of preferred stock;

 

    discourage an unsolicited proposal to acquire Equity; or

 

    facilitate a particular business combination involving Equity.

Any of these actions could have an anti-takeover effect and discourage a transaction that some or a majority of Equity’s shareholders might believe to be in their best interests or in which Equity’s shareholders might receive a premium for their stock over Equity’s then market price.

 

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COMPARISON OF SHAREHOLDERS’ RIGHTS

If the merger is completed, holders of Adams common stock will be entitled to receive shares of Equity common stock in exchange for their shares of Adams common stock. Equity and Adams are organized under the laws of the states of Kansas and Missouri, respectively. The following is a summary of the material differences between (1) the current rights of Adams shareholders under the RSMo, the Adams articles of incorporation (the “Adams articles”) and the Adams bylaws and (2) the current rights of Equity shareholders under the KGCC, the Equity articles and the Equity bylaws.

Equity and Adams believe that this summary describes the material differences between the rights of the holders of Equity common stock as of the date of this proxy statement/prospectus and the rights of the holders of Adams common stock as of the date of this proxy statement/prospectus; however, it does not purport to be a complete description of those differences. Copies of Equity’s governing documents have been filed with the SEC. Copies of the Adams articles and the Adams bylaws are available upon written request from Adams. To find out where copies of these documents can be obtained, see “Where You Can Find More Information.”

 

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AUTHORIZED CAPITAL STOCK
The Equity articles authorize it to issue up to (i) 50,000,000 shares of common stock, par value $0.01 per share, of which 45,000,000 shall be designated as Equity common stock and 5,000,000 shall be designated as Class B common stock, and (ii) 10,000,000 shares of preferred stock.    The Adams articles authorize Adams to issue up to 10,000,000 shares of common stock, par value $0.01 per share.
PREEMPTIVE RIGHTS
Holders of Equity common stock are not entitled to preemptive rights with respect to any shares that may be issued.    Holders of Adams common stock are not entitled to preemptive rights with respect to any shares that may be issued.
VOTING LIMITATIONS
The Equity articles expressly elect for Equity to be governed by Sections 17-1286 et seq. of the KGCC. Under Section 17-1286 et seq., control shares (shares that would have voting power with respect to shares of Equity that would entitle that person immediately after acquisition of the shares to exercise 20% or more of all the voting power in the election of directors) acquired in a control share acquisition have voting rights only to the extent they are granted by resolution approved by the Equity shareholders, with certain exceptions as provided in Sections 17-1286 et seq. To be approved under Section 17-1294 of the KGCC, such resolution must be approved by (i) the affirmative vote of a majority of all outstanding shares entitled to vote in the election of directors by class if required by the terms of the shares, and (ii) the affirmative vote of a majority of all outstanding shares entitled to vote in the election of directors by class if required by the terms of the shares, excluding all interested shares (generally defined as all   

To the extent applicable, Adams is subject to Section 351.407 of the RSMo, which provides for certain limitations on voting rights of control shares of an issuing public corporation acquired in a control share acquisition.

 

Holders of Adams common stock are entitled to cumulative voting with respect to the election of directors to the Adams Board.

 

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shares owned by the acquiring person or group, Equity’s directors who are also its employees, and Equity’s officers). Under certain circumstances, Equity has redemption rights with respect to shares acquired in a control share acquisition. In addition, Equity shareholders have appraisal rights under certain circumstances if the control shares acquired in a control share acquisition are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of all voting power.

 

The Equity articles expressly prohibit cumulative voting of shares, except as otherwise required by law and subject to the provisions of the Equity preferred stock. Holders of shares of Class B common stock shall have no right to vote on matters which are voted upon by the Equity shareholders.

  
SIZE OF BOARD OF DIRECTORS
The Equity articles currently provide that the Equity Board will consist of no less than three directors and no more than 25 directors, and, subject to the rights of the holders of any preferred stock then outstanding, the specific number of directors between three and 25 shall be authorized from time to time by, and only by, resolution duly adopted by a majority of the total number of directors then constituting the entire board. The Equity Board currently has 15 members.    The Adams bylaws provide that the number of directors shall be fixed from time to time by resolution adopted by a majority of the full Adams Board. The Adams Board currently has five members.
CLASSES OF DIRECTORS
The Equity Board is divided into three classes, with each class of directors serving for successive three-year terms so that each year the term of only one class of directors expires. The current classification and terms of the board consists of Class III directors whose term will expire in 2020, Class I directors whose term will expire in 2019 and Class II directors whose term will expire in 2018.    The Adams Board is not divided into classes.
REMOVAL OF DIRECTORS
Subject to the rights of the holders of any preferred stock then outstanding, (i) any Equity director or the entire Equity Board may be removed from office at any time by the affirmative vote of the holders of record of outstanding shares representing at least 66 2/3% of the voting power of all the shares of capital stock of Equity then entitled to vote generally in the election of directors, voting together as a single class, and (ii) to the extent permitted by law, any director may be removed from office at any time, but only for cause, by the   

Under the Adams bylaws, any Adams director or the entire Adams Board may be removed, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote at an election of directors. If less than the entire Adams Board is to be removed, no one of the directors may be removed if the votes cast against such director’s removal would be sufficient to elect such person if then cumulatively voted at an election of the entire Adams Board.

 

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affirmative vote of a majority of the entire Equity Board.    entire Adams Board if the director to be removed shall, at the time of removal, fail to meet the qualifications (if any) stated in the Adams articles or bylaws for election as a director or shall be in breach of any agreement between such director and Adams relating to such director’s services as a director or employee of Adams.
FILLING VACANCIES ON THE BOARD OF DIRECTORS
Subject to the rights of the holders of any preferred stock then outstanding, any vacancy occurring on the Equity Board for any reason, including any vacancy created by reason of an increase in the number of directors, shall be filled only by the affirmative vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and the term of any director elected to fill a vacancy shall expire upon the expiration of the term of office of the class of directors in which such vacancy occurred. If there are no directors in office, then an election of directors may be held in the manner provided by applicable law.    Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, although less than a quorum, or by the sole remaining director, unless it is otherwise provided under applicable law, and the directors so chosen shall hold office until the next shareholders meeting.
SPECIAL MEETING OF SHAREHOLDERS
Except as otherwise required by law and subject to the right of holders of preferred stock then outstanding, special meetings of shareholders may be called by the president of Equity or by or at the direction of a majority of the Equity Board, and shall be called by the chairman of the Equity Board, the president or the secretary upon the written request of the holders of not less than 20% of all outstanding shares of capital stock of Equity entitled to vote at such special meeting. The business transacted at a special meeting of shareholders shall be limited to that stated in the notice of such meeting or in a duly executed waiver thereof.    Special meetings of the shareholders may be called by the Adams Board, or by the holders of, or by any officer or shareholder upon the written request of the holders of, not less than a majority of the outstanding Adams common stock entitled to vote at such meeting, and shall be called by any officer directed to do so by the Adams Board or requested to do so in writing by a majority of the Adams Board.
QUORUM
Under the Equity bylaws, except as otherwise required by law or the Equity articles, one-half of the stock issued and outstanding and entitled to vote at any meeting, represented in person or by proxy, shall constitute a quorum at all meetings of shareholders for the transaction of business. If a quorum fails to attend any meeting, the shareholders entitled to vote at any meeting, present in person or represented by proxy, may adjourn the meeting from time to time.    The holders of a majority of the outstanding shares of Adams stock entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of any business, except as otherwise provided by law. In all matters other than the election of directors, the affirmative vote of a majority in amount of stock of such quorum shall be valid as a corporate act, except in those specific instances in which a larger vote is required by law or the Adams bylaws. Directors shall be elected by a plurality of the votes present in person or by proxy at a meeting

 

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   at which a quorum is present and entitled to vote on the election of directors.
NOTICE OF SHAREHOLDER MEETINGS

The Equity bylaws provide that written notice of each meeting of shareholders stating the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, must be delivered or given to each shareholder entitled to vote at such meeting not less than 10 days nor more than 60 days before the date of the meeting. If a shareholders’ meeting is adjourned for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

 

If mailed, notice shall be deemed to have been given when deposited in the United States mail, postage prepaid, directed to the shareholder at his address as it appears on the Equity records. Attendance of a shareholder at a meeting shall constitute a waiver of notice of such meeting, except when the shareholder attends a meeting for the express and exclusive purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened.

 

An affidavit of the secretary or assistant secretary or of the transfer agent of Equity that notice has been given shall be prima facie evidence of the facts stated therein in the absence of fraud.

  

Notice of shareholder meetings setting forth the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, must be delivered or given to each shareholder entitled to vote at such meeting not less than 10 days nor more than 70 days before the date of the meeting. If a shareholders’ meeting is adjourned for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting must be delivered or given to each shareholder of record entitled to vote at the meeting.

 

If mailed, notice shall be deemed to have been given when deposited in the United States mail, postage prepaid, addressed to the shareholder at his address as it appears on Adams’s records. To the extent provided by law, attendance of a shareholder at a meeting shall constitute a waiver of notice of such meeting, except when the shareholder attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened.

ADVANCE NOTICE OF SHAREHOLDER PROPOSALS

The Equity bylaws establish an advance notice procedure with regard to nominations of directors and other business proposals to be brought before Equity’s annual meeting by a shareholder of record of Equity.

 

Except as may otherwise be require by applicable law or regulation, or be expressly authorized by the entire Equity Board, a shareholder may make a nomination or nominations for directors of Equity at an annual meeting of shareholders or may bring up any other matter for consideration and action by the shareholders at an annual meeting of shareholders, only if the following provisions shall have been satisfied:

 

(1) such shareholder must be a shareholder of record on the record date for such annual meeting, must continue to be a shareholder of record at the time of such meeting and must be entitled to vote on such matter so presented;

   No nomination procedures are set forth in the Adams bylaws.

 

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(2) such shareholder must deliver or cause to be delivered a written notice to the Equity secretary. The notice must be received by the secretary no less than 120 days prior to the day corresponding to the date on which Equity released its proxy statement in connection with the previous year’s annual meeting; provided, however, that if the date of the annual meeting has been changed by more than 30 days from the date of the previous year’s annual meeting, such notice must be received by the secretary a reasonable time prior to the time at which notice of such meeting is delivered to the shareholders. The notice shall specify (i) the name and address of the shareholder as they appear on the books of Equity, (ii) the class and number of shares of Equity which are beneficially owned by the shareholder, (iii) any material interest of the shareholder in the proposed business described in then notice, (iv) if such business is a nomination for director, each nomination sought to be made, together with the reasons for each nomination, a description of the qualifications and business or professional experience of each proposed nominee and a statement signed by each nominee indicating his or her willingness to serve if elected, and disclosing the information about such shareholder that would be required by the Exchange Act, and the rules and regulations promulgated thereunder, to be disclosed in the proxy materials for the meeting involved if such shareholder were a nominee of Equity for election as one of its directors, (v) if such business is other than a nomination for director, the nature of the business, the reasons why it is sought to be raised and submitted for a vote of the shareholders and if and why it is deemed by such shareholder to be beneficial to Equity, and (vi) if so requested by Equity, all other information that would be required to be filed with the SEC if, with respect to the business proposed to be brought before the meeting, the person proposing such business was a participant in a solicitation subject to Section 14 of the Exchange Act;

 

(3) notwithstanding satisfaction of provisions (1) and (2) above, the proposed business described in the notice may be deemed not to be properly brought before the meeting if, pursuant to state law or any rule or regulation of the SEC, it was offered as a shareholder proposal and was omitted, or had it been so offered, it could have been omitted, from the notice of, and proxy material for, the meeting (or any supplement thereto) authorized by the Equity Board; and

 

(4) in the event such notice is timely given pursuant to provision (2) and the business described therein is not disqualified pursuant to provision (3), such business

  

 

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may be presented by, and only by, the shareholder who shall have given the notice required by provision (1) or a representative of such shareholder.

 

If the above provisions shall not have been satisfied, any nomination sought to be made or other business sought to be presented by such shareholder for consideration and action by the shareholders at such a meeting shall be deemed not properly brought before the meeting, shall be ruled by the chairman of the Equity Board to be out of order and shall not be presented or acted upon at the meeting.

  
ANTI-TAKEOVER PROVISIONS AND OTHER SHAREHOLDER PROTECTIONS

Sections 17-12,100 et seq. of the KGCC restrict certain business combinations between Equity and an interested shareholder for three years following the date that such shareholder became an interested shareholder. An interested shareholder is any person, other than Equity and any direct or indirect majority-owned subsidiary of Equity, that is the owner of 15% or more of the outstanding voting stock of Equity, or an affiliate or associate of Equity and was the owner of 15% or more of the outstanding voting stock of Equity at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an interested shareholder and the affiliates and associates of such person. Certain other persons are excluded from the definition of interested shareholder as provided in Section 17-12,100 of the KGCC.

 

The restrictions in Sections 17-12,100 et seq. of the KGCC do not apply if (i) prior to such date the Equity Board approved either the business combination or the transaction which resulted in the shareholder becoming an interested shareholder, (ii) upon consummation of the transaction which resulted in the shareholder becoming an interested shareholder, the interested shareholder owned at least 85% of the voting stock of Equity outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or (iii) on or after such date the business combination is approved by the Equity Board and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least

  

Section 351.459 of RSMo restricts certain business combinations between certain corporations and interested shareholders. Adams is not governed by these provisions because Adams does not have a class of voting stock that is registered with the SEC pursuant to Section 12 of the Exchange Act.

 

Neither the Adams articles nor the Adams bylaws include restrictions similar to those of Section 351.459 of the RSMo.

 

However, Adams and certain shareholders of Adams are parties to a Shareholders’ Agreement that provides for, among other things, certain restrictions on transfer of shares of Adams common stock. In addition, under the RSMo, certain transactions by Adams (such as a merger and a sale of all or substantially all assets) are subject to the approval of the affirmative vote of the holders of at least two-thirds of the outstanding shares of Adams common stock.

 

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66 2/3% of the outstanding voting stock which is not owned by the interested shareholder.

 

Although a Kansas corporation may elect not to be governed by Sections 17-12,100 et seq. of the KGCC, Equity has expressly elected to be governed by Sections 17-12,100 et seq. of the KGCC.

 

For a discussion of Sections 17-1286 et seq. of the KGCC, which are also anti-takeover provisions, see “Voting Limitations” above.

  
LIMITATION OF PERSONAL LIABILITY OF OFFICERS AND DIRECTORS
The Equity articles provide that no Equity director shall be liable to Equity or its shareholders for monetary damages for a breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the KGCC as presently in effect or as the same may be amended. Any repeal or modification of the provision limiting personal liability of directors shall not adversely affect any right or protection of an Equity director existing at the time of such repeal or modification.    The Adams bylaws provide that no person shall be liable to Adams or its shareholders for any loss, damage, liability or expense suffered by Adams on account of any action taken or omitted to be taken by such person as a director or officer of Adams, if such person (i) acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Adams, or (ii) took or omitted to take such action in reliance upon advice of counsel for Adams, or upon statements made or information furnished by directors, officers, employees or agents of Adams, which advice, statements or information such person had no reasonable grounds to disbelieve.
INDEMNIFICATION OF DIRECTORS AND OFFICERS AND INSURANCE

In addition to and without limiting the rights to indemnification and advancement of expenses specifically provided for in the Equity bylaws, Equity shall indemnify and advance expenses to each person who is or was an officer or director of Equity, or who is or was serving at the request of Equity as a director, officer, employee, partner, trustee or agent of any other enterprise, to the fullest extent permitted by the laws of the State of Kansas as then in effect.

 

The Equity bylaws provide that Equity shall indemnify each person who has been or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of Equity), by reason of the fact that such person is or was an officer or director of Equity or is or was serving at the request of Equity as a director, officer, employee, partner, trustee or agent of any other enterprise, against all liabilities and expenses, including, without limitation, judgments, amounts paid in settlement, attorneys’ fees, excise taxes under ERISA, or penalties, fines and other expenses actually and

  

The Adams bylaws provide that Adams shall indemnify and advance expenses to each person who is or was a director or officer of Adams, to the full extent permitted by the laws of the State of Missouri and applicable federal law applicable to bank holding companies.

 

Adams shall indemnify each person who has been or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, investigative or appellate, other than an action by or in the right of Adams, by reason of the fact that such person is or was a director or officer of Adams, against all liabilities and expenses, including, without limitation, judgments, fines, amounts paid in settlement, attorneys’ fees, excise taxes or penalties under ERISA, and other expenses actually and reasonably incurred by such person in connection with such action, suit or proceeding (including, without limitation, the investigation, defense, settlement or appeal of such action, suit or proceeding) if such person acted in good faith and in

 

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reasonably incurred by such person in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Equity and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; provided, however, that Equity shall not be required to indemnify or advance expenses to any person in connection with an action, suit or proceeding initiated by such person (other than an action, suit or proceeding initiated by such person to enforce his right to indemnification and advancement of expenses pursuant to this section) unless the initiation of such action, suit or proceeding was authorized in advance by the Equity Board.

 

Equity shall indemnify each person who has been or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of Equity to procure a judgment in its favor by reason of the fact that the person is or was a director or officer of Equity or is or was serving at the request of Equity as a director, officer, employee, partner, trustee or agent of any other enterprise, against all liabilities and expenses, including, without limitation, amounts paid in settlement, attorneys’ fees and other expenses actually and reasonably incurred by such person in connection with such action or suit, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Equity, except that no indemnification shall be made in respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to Equity unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses that the court shall deem proper.

 

Indemnification of a person referred to in the above paragraphs is mandatory if such person has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in the above paragraphs, or in defense of any claim, issue or matter therein. For all other situations, and unless indemnification is ordered by a court, any indemnification by Equity shall be made only as authorized in the specific case upon a determination that indemnification of the person is proper in the circumstances because the person has met the applicable standard of conduct set forth in the above paragraphs.

  

a manner such person reasonably believed to be in or not opposed to the best interests of Adams, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful; provided, however, that Adams shall not be required to indemnify or advance expenses to any such person or persons seeking indemnification or advancement of expenses (i) in connection with an action, suit or proceeding initiated by such person or persons (including, without limitation, any cross claim or counterclaim initiated by such person or persons) unless the initiation of such action, suit or proceeding was authorized by the Adams Board, or (ii) when prohibited by the requirements of applicable Missouri and/or federal law or by a state or federal bank regulatory agency.

 

Adams shall indemnify each person who has been or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding by or in the right of Adams to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of Adams against all expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action, suit or proceeding (including, without limitation, the investigation, defense, settlement or appeal of such action, suit or proceeding) if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of Adams, except that no such indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to Adams unless and only to the extent that the court in which the action, suit or proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

 

To the extent a person who is or was serving as a director or officer of Adams has been successful on the merits or otherwise in defense of any action, suit or proceeding referred above (including the dismissal of any such action, suit or proceeding without prejudice), or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

 

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Equity

  

Adams

Such determination shall be made (i) by the Equity Board by a majority vote of a quorum consisting of directors who were not parties to such action or proceeding, or (ii) if such a quorum is not attainable, or even if attainable, should a quorum of disinterested directors so direct, by independent legal counsel in a written opinion, or (iii) by the Equity shareholders. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or under a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that such person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of Equity and, with respect to any criminal action or proceeding, had reasonable cause to believe his conduct was unlawful.

 

Expenses actually and reasonably incurred by a person entitled to indemnification under the Equity bylaws shall be paid by Equity in advance of the final disposition of the action, suit or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by Equity. The Equity Board may, in each individual case, impose any additional terms and conditions as they shall deem appropriate. The indemnification and advancement of expenses provided by, or granted pursuant to, the Equity bylaws shall continue as to any person who has ceased to hold any position with Equity or any other enterprise, and shall inure to the benefit of the heirs, executors, administrators and estate of such person.

 

Upon resolution passed by the Equity Board, Equity may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of Equity or is or was serving at the request of Equity as a director, officer, employee, partner, trustee or agent of any other enterprise, against any liability asserted against him and incurred by him in such capacity, or arising out of his status as such, whether or not Equity would have the power to indemnify him against such liability under the Equity bylaws.

 

Notwithstanding any other provision of the Equity bylaws, in no event shall Equity indemnify any person against liabilities, penalties or expenses incurred in connection with an administrative proceeding or action instituted by a bank regulatory agency, which proceeding or action results in a final order assessing civil money penalties or requiring affirmative action by such person or persons in the form of payments to Equity or any other enterprise.

  

Expenses (including attorneys’ fees) actually and reasonably incurred by a person who may be entitled to indemnification hereunder in defending an action, suit or proceeding, whether civil, criminal, administrative, investigative or appellate, shall be paid by Adams in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall ultimately be determined that such person is not entitled to indemnification by Adams.

 

The indemnification obligations described above also apply to persons serving at the request of Adams as a director or officer of another entity.

 

Adams may purchase and maintain insurance on behalf of any person who is or was a director or officer of Adams against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not Adams would have the power to indemnify such person against such liability.

 

The right to indemnification and advancement of expenses provided by, or are granted pursuant to, the Adams bylaws not be exclusive or any other right to which those seeking indemnification or advancement of expenses may be entitled under any statute, provision of Adams’ Articles of Incorporation, other written agreement, vote of shareholders or disinterested directors, policy of insurance, or otherwise.

 

The right to indemnification and advancement of expenses provided by, or granted pursuant to, the Bylaws of Adams shall continue as to any person who has ceased to be a director or officer of Adams, and shall inure to the benefit of the heirs, executors, and administrators of such person.

 

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Equity

  

Adams

AMENDMENTS TO ORGANIZATIONAL DOCUMENTS

Equity reserves the right to amend, alter, change or repeal any provision contained in the Equity articles in the manner now or hereafter prescribed in the Equity articles and by the laws of the state of Kansas, and all rights conferred upon shareholders in the Equity articles are granted subject to such reservation. Notwithstanding the above provision or any other provisions of the Equity articles or bylaws, the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the shares of the then outstanding voting stock of Equity, voting together as a single class, shall be required to amend or repeal, or adopt any provisions inconsistent with, Articles VI (Action by Shareholders), VII (Number, Classification and Election of Directors; Vacancies), VIII (Removal of Directors), IX (Indemnification of Officers and Directors), XI (Control Share Acquisitions), XII (Business Combinations with Interested Shareholders), XIII (Amendment of Bylaws) or XIV (Amendment of Articles) of the Equity articles.

 

The Equity Board is authorized to make, amend, alter or repeal the Equity bylaws, subject to the power of the shareholders as described below to make, amend, alter or repeal the Equity bylaws. Notwithstanding the foregoing or any other provisions of the Equity articles or bylaws, the affirmative vote of at least 66 2/3% of the voting power of all the shares of the then outstanding voting stock of Equity, voting together as a single class, shall be required to amend, alter or repeal, or adopt any provisions inconsistent with, Articles II (Meetings of Shareholders), III (Directors), VIII (Indemnification of Directors, Officers, Employees & Agents) or IX (Amendments) of the Equity bylaws.

  

The Adams articles may be amended in the event that the Adams Board recommends such amendment and a majority of the outstanding shares of Adams common stock votes in favor of such amendment.

 

The Adams bylaws may be amended by the affirmative vote of the holders of a majority of the shares present, or represented by proxy, at a meeting of the shareholders at which a quorum exists.

ACTION BY WRITTEN CONSENT OF THE SHAREHOLDERS
Under the Equity articles, any action required or permitted to be taken by the shareholders of Equity must be effected at a duly called annual or special meeting of shareholders and may not be effected by any consent in writing by such shareholders.    Any action required or permitted to be taken by the shareholders of Adams may be effected pursuant to a written consent signed by all such shareholders.
SHAREHOLDER RIGHTS PLAN
Equity does not have a shareholder rights plan in effect.    Adams does not have a shareholder rights plan in effect.

 

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COMPARATIVE MARKET PRICES AND DIVIDENDS

Equity

Equity common stock is listed on Nasdaq under the symbol “EQBK.” As of [    ], 2018, the latest practicable date prior to the printing of this proxy statement/prospectus, there were approximately [    ] holders of record of Equity common stock. As of such date, approximately [    ] shares of Equity common stock were outstanding.

The following table shows the high and low sales prices per share of Equity common stock as reported on Nasdaq on (i) December 15, 2017, the last full trading day preceding the public announcement that Equity and Adams had entered into the merger agreement, (ii) [    ], 2018, the latest practicable trading day before the printing of this proxy statement/prospectus and (iii) the periods indicated therein.

 

     Equity common stock  
         High              Low      

December 15, 2017(1)

   $ 35.17      $ 34.00  

[    ], 2018(2)

   $ [            $ [        

Quarter Ended

     

March 31, 2016

   $ 24.10      $ 19.72  

June 30, 2016

   $ 23.94      $ 19.81  

September 30, 2016

   $ 25.94      $ 21.02  

December 31, 2016

   $ 38.03      $ 23.94  

March 31, 2017

   $ 35.24      $ 29.82  

June 30, 2017

   $ 33.11      $ 29.13  

September 30, 2017

   $ 36.60      $ 30.67  

December 31, 2017

   $ 35.60      $ 35.00  

March 31, 2018 (through [    ], 2018)

   $ [            $ [        

 

(1) The last full trading day preceding the public announcement of the entry into the merger agreement.
(2) The latest practicable date prior to the printing of this proxy statement/prospectus.

The foregoing table may not provide meaningful information to Adams shareholders in determining whether to approve the Merger Proposal. Each of Equity and Adams shareholders are advised to obtain current market quotations for Equity common stock. The market price of Equity common stock will fluctuate between the date of this proxy statement/prospectus and the date of completion of the merger. No assurance can be given concerning the market price of Equity common stock before or after the closing date of the merger. Changes in the market price of Equity common stock prior to the closing of the merger will affect the market value of the merger consideration that Adams shareholders will be entitled to receive upon completion of the merger. See the section of this proxy statement/prospectus entitled “Risk Factors” beginning on page 24.

Equity Dividend Policy

Equity has not historically declared or paid cash dividends on Equity’s common stock and does not expect to pay dividends on Equity’s common stock for the foreseeable future. Instead, Equity anticipates that all of Equity’s future earnings will be retained to support Equity’s operations and to finance the growth and development of Equity’s business. Any future determination to pay dividends on Equity’s common stock will be made by the Equity Board and will depend on a number of factors, including:

 

    Equity’s historical and projected financial condition, liquidity and results of operations;

 

    Equity’s capital levels and requirements;

 

    statutory and regulatory prohibitions and other limitations;

 

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    any contractual restriction on Equity’s ability to pay cash dividends, including pursuant to the terms of any of Equity’s credit agreements or other borrowing arrangements;

 

    Equity’s business strategy;

 

    tax considerations;

 

    any acquisitions or potential acquisitions that Equity may examine;

 

    general economic conditions; and

 

    other factors deemed relevant by the Equity Board.

Equity is not obligated to pay dividends on its common stock.

As a Kansas corporation, Equity is subject to certain restrictions on dividends under the KGCC. Generally, a Kansas corporation may pay dividends to its shareholders out of its surplus or, if there is no surplus, out of its net profits for the fiscal year in which the dividend is declared or the preceding fiscal year, or both. In addition, if the capital of a Kansas corporation is diminished by depreciation in the value of its property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, the directors of such corporation cannot declare and pay out of such net profits any dividends upon any shares of any classes of its capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets is repaired. Equity is also subject to certain restrictions on the payment of cash dividends as a result of banking laws, regulations and policies.

Since Equity is a bank holding company and does not engage directly in business activities of a material nature, Equity’s ability to pay dividends to its shareholders depends, in large part, upon Equity’s receipt of dividends from Equity Bank, which is also subject to numerous limitations on the payment of dividends under federal and state banking laws, regulations and policies. The present and future dividend policy of Equity Bank is subject to the discretion of its board of directors. Equity Bank is not obligated to pay dividends.

Adams

Adams is a privately held corporation and its common stock is not traded on any established public trading market. As of the Adams record date, there were approximately [    ] holders of record of Adams common stock. As of such date, [    ] shares of Adams common stock were outstanding and [    ] shares of Adams common stock were held as treasury stock. There were no share purchases or redemptions of Adams common stock during 2017. Adams is not obligated to register its common stock or, upon any registration, to create a market for its stock.

Adams has not historically paid any dividends to its shareholders. Adams’s shareholders are entitled to receive dividends out of legally available funds as and when declared by the Adams Board, in its sole discretion, although the Adams Board has never declared, and Adams has never paid, a dividend. As a Missouri corporation, Adams is subject to certain restrictions on dividends under the RSMo and applicable banking laws, regulations and policies. Since Adams is a bank holding company and does not engage directly in business activities of a material nature, Adams’s ability to pay dividends to its shareholders depends, in large part, upon Adams’s receipt of dividends from Adams Dairy Bank, which is also subject to numerous limitations on the payment of dividends under federal and state banking laws, regulations and policies. The present and future dividend policy of Adams Dairy Bank is subject to the discretion of its board of directors. Adams Dairy Bank is not obligated to pay dividends.

 

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LEGAL MATTERS

The validity of the Equity common stock offered by this prospectus will be passed upon for Equity by Wise & Reber, L.C., McPherson, Kansas. Certain legal matters in connection with this offering will be passed upon for Equity by Norton Rose Fulbright US LLP, Dallas, Texas and for Adams by Stinson Leonard Street LLP.

EXPERTS

Equity

The consolidated financial statements of Equity Bancshares, Inc. as of December 31, 2016 and 2015, and for each of the three years in the period ended December 31, 2016, incorporated by reference in this proxy statement/prospectus have been audited by Crowe Chizek LLP, an independent registered public accounting firm, as stated in their report, which is incorporated by reference herein. Such consolidated financial statements have been so incorporated in reliance given on the authority of said firm as experts in accounting and auditing.

Eastman National Bancshares, Inc.

The consolidated financial statements of Eastman National Bancshares, Inc. and its subsidiaries as of December 31, 2016 and December 31, 2015, and for each of the two years in the period ended December 31, 2016, included in this proxy statement/prospectus have been audited by Erwin & Company, an independent registered public accounting firm, as stated in their report, which is incorporated by reference herein. Such consolidated financial statements have been so incorporated in reliance given on the authority of said firm as experts in accounting and auditing.

Cache Holdings, Inc.

The consolidated financial statements of Cache and its subsidiaries as of December 31, 2016 and December 31, 2015, and for each of the two years in the period ended December 31, 2016, included in this proxy statement/prospectus have been audited by Sewell & Taylor LLP, an independent public accounting firm, as stated in their report, which is incorporated by reference herein. Such consolidated financial statements have been so incorporated in reliance given on the authority of said firm as experts in accounting and auditing.

Community First Bancshares, Inc.

The consolidated financial statements of Community First Bancshares, Inc. as of December 31, 2015 and December 31, 2014 and for each of the two years in the period ended December 31, 2015, incorporated by reference in this proxy statement/prospectus have been audited by Erwin & Company, an independent registered public accounting firm, as stated in their report, which is incorporated by reference herein. Such consolidated financial statements have been so incorporated in reliance given on the authority of said firm as experts in accounting and auditing.

 

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WHERE YOU CAN FIND MORE INFORMATION

Equity has filed with the SEC a registration statement on Form S-4 under the Securities Act to register the shares of Equity common stock that Adams shareholders will be entitled to receive in connection with the merger if the merger is completed. This proxy statement/prospectus is a part of that registration statement. The registration statement, including the attached annexes, exhibits and schedules, contains additional relevant information about Equity and Equity common stock.

Equity also files annual, quarterly and current reports, proxy statements and other information with the SEC under the Exchange Act. You may read and copy any of the materials Equity files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website that contains reports, proxy and information statements and other information about issuers who file electronically with the SEC. The address of that site is http://www.sec.gov. General information about Equity, including Equity’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as any amendments and exhibits to those reports, are available free of charge through Equity’s website at investor.equitybank.com as soon as reasonably practicable after Equity files them with, or furnishes them to, the SEC. Information on Equity’s website is not incorporated into this proxy statement/prospectus or Equity’s other securities filings and is not a part of these filings.

Set forth below are additional documents which are incorporated by reference and contain important information about Equity and its financial condition.

This document incorporates by reference the following documents that have previously been filed with the SEC by Equity (Commission File No. 001-37624):

 

    Annual Report on Form 10-K for the year ended December 31, 2016 (including specific portions of Equity’s definitive Proxy Statement for the 2016 Annual Meeting of Shareholders incorporated therein by reference);

 

    Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017; and

 

    Equity’s Forms 8-K filed on December 27, 2016, January 26, 2017, March 15, 2017, March 16, 2017, May 2, 2017, May 23, 2017, July 17, 2017, July 20, 2017, October 10, 2017, October 19, 2017, November 13, 2017, December 18, 2017, January 25, 2018 and February 7, but only to the extent that items therein were “filed” with the SEC, rather than “furnished.”

A description of Equity’s capital stock can be found herein under “Description of Capital Stock of Equity.”

Information about Equity can also be found in additional documents that Equity may file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this proxy statement/prospectus and the date of Adams’s special meeting (other than the portions of those documents not deemed to be filed). These documents include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, as well as proxy statements.

You can obtain any of the documents referred to above through Equity or from the SEC through the SEC’s website at the address described above. Documents incorporated by reference are available from Equity without charge, excluding any exhibits to those documents unless the exhibit is specifically incorporated by reference as an exhibit in this proxy statement/prospectus. You can obtain documents incorporated by reference into this proxy statement/prospectus by requesting them in writing or by telephone from Equity at the following address:

Equity Bancshares, Inc.

7701 East Kellogg Drive, Suite 300

Wichita, Kansas 67207

Attn: Investor Relations

Telephone: (316) 612-6000

 

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Adams is a private company and accordingly does not file reports or other information with the SEC. If you would like to request documents from Adams, please send a request in writing or by telephone to Adams at the following address:

Adams Dairy Bancshares, Inc.

651 NE Coronado Drive

Blue Springs, Missouri 64014

Attention: David Charles Chinnery

Telephone: (816) 655-3333

If you would like to request documents, please do so by [    ], 2018 to receive them before the Adams special meeting. If you request any incorporated documents from Equity, then Equity will mail them to you by first-class mail, or another equally prompt means, within one business day after Equity receives your request.

Equity has supplied all information contained in or incorporated by reference into this proxy statement/prospectus relating to Equity, and Adams has supplied all information contained in this proxy statement/prospectus relating to Adams.

Neither Equity nor Adams has authorized anyone to give any information or make any representation about the merger, the Equity share issuance or their companies that is different from, or in addition to, that contained in this proxy statement/prospectus or in any of the materials that have been incorporated by reference into this proxy statement/prospectus. Therefore, if anyone does give you information of this sort, you should not rely on it. If you are in a jurisdiction where offers to exchange or sell, or solicitations of offers to exchange or purchase, the securities offered by this proxy statement/prospectus or the solicitation of proxies is unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this proxy statement/prospectus does not extend to you. The information contained herein speaks only as of the date of this proxy statement/prospectus unless the information specifically indicates that another date applies.

 

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Annex A

 

 

AGREEMENT AND PLAN OF REORGANIZATION

BY AND AMONG

EQUITY BANCSHARES, INC.,

ABE MERGER SUB, INC.

AND

ADAMS DAIRY BANCSHARES, INC.

Dated as of December 16, 2017

 

 

 


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ARTICLE I THE MERGER

     A-2  

Section 1.01

  Merger of Merger Sub with and into Adams      A-2  

Section 1.02

  Effects of the Merger      A-2  

Section 1.03

  Articles of Incorporation and Bylaws      A-2  

Section 1.04

  Directors and Officers      A-2  

Section 1.05

  Effect on Capital Stock      A-2  

Section 1.06

  Calculation of Consideration      A-3  

Section 1.07

  Exchange Procedures      A-4  

Section 1.08

  Dissenting Shareholders      A-6  

Section 1.09

  Second Step Merger      A-7  

Section 1.10

  Bank Merger      A-7  

Section 1.11

  Tax Treatment      A-7  

Section 1.12

  Modification of Structure      A-7  

ARTICLE II THE CLOSING AND THE CLOSING DATE

     A-7  

Section 2.01

  Time and Place of the Closing and Closing Date      A-7  

Section 2.02

  Actions to be Taken at the Closing by Adams      A-8  

Section 2.03

  Actions to be Taken at the Closing by EQBK      A-9  

ARTICLE III REPRESENTATIONS AND WARRANTIES OF ADAMS

     A-10  

Section 3.01

  Organization and Qualification      A-10  

Section 3.02

  Authority; Execution and Delivery      A-11  

Section 3.03

  Capitalization      A-11  

Section 3.04

  Compliance with Laws, Permits and Instruments      A-12  

Section 3.05

  Financial Statements      A-12  

Section 3.06

  Undisclosed Liabilities      A-13  

Section 3.07

  Litigation      A-13  

Section 3.08

  Consents and Approvals      A-14  

Section 3.09

  Title to Assets      A-14  

Section 3.10

  Absence of Certain Changes or Events      A-14  

Section 3.11

  Leases, Contracts and Agreements      A-16  

Section 3.12

  Taxes      A-17  

Section 3.13

  Insurance      A-19