NASDAQ:BSVN Bank7 Q3 2025 Earnings Report $43.18 +0.34 (+0.79%) Closing price 10/24/2025 04:00 PM EasternExtended Trading$43.13 -0.05 (-0.12%) As of 10/24/2025 04:10 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Bank7 EPS ResultsActual EPS$1.13Consensus EPS $1.03Beat/MissBeat by +$0.10One Year Ago EPS$1.24Bank7 Revenue ResultsActual Revenue$29.27 millionExpected Revenue$24.35 millionBeat/MissBeat by +$4.92 millionYoY Revenue GrowthN/ABank7 Announcement DetailsQuarterQ3 2025Date10/15/2025TimeBefore Market OpensConference Call DateWednesday, October 15, 2025Conference Call Time10:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Bank7 Q3 2025 Earnings Call TranscriptProvided by QuartrOctober 15, 2025 ShareLink copied to clipboard.Key Takeaways Positive Sentiment: Organic growth in both loan and deposit portfolios drove significant capital accumulation, resulting in strong capital ratios and ample liquidity. Positive Sentiment: Management still targets high single-digit year-over-year loan growth for Q4 and 2026, noting a robust pipeline despite occasional lumpy paydowns. Negative Sentiment: Core net interest margin was 4.55% in Q3, but is expected to compress slightly toward the mid-4.40% range as recent rate cuts and rising deposit costs feed through. Neutral Sentiment: Loan fee income contributed about 40 basis points to the margin this quarter, though management anticipates a return toward more normal levels as deal activity fluctuates. Neutral Sentiment: Credit quality remains strong with minimal ratings migrations, yet management built additional reserves to hedge against macroeconomic volatility and continued portfolio growth. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallBank7 Q3 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Welcome to the Bank7 Corp. third quarter 2025 earnings call. Before we get started, I'd like to highlight the legal information and disclaimer on page 27 of the investor presentation. For those who do not have access to the presentation, management is going to discuss certain topics that contain forward-looking information which is based on management's beliefs, as well as assumptions made by and information currently available to management. Although management believes that the expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to be correct. Such statements are subject to certain risks, uncertainties, and assumptions, including, among other things, the direct and indirect effect of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators. Operator00:01:02Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. Also, please note that this conference call contains references to non-GAAP financial measures. You can find reconciliations of these non-GAAP financial measures to GAAP financial measures in an 8K that was filed this morning by the company. Representing the company on today's call, we have Brad Haines, Chairman; Tom Travis, President and CEO; J.T. Phillips, Chief Operating Officer; Jason Estes, Chief Credit Officer; Kelly Harris, Chief Financial Officer; and Paul Timmons, Director of Accounting. With that, I'll turn the call over to Tom Travis. Tom TravisPresident and CEO at Bank7 Corp00:01:55Good morning. Thank you for joining us. As you can see, we had a very solid quarter. Essentially, we just are a broken record, but it's a shout-out to our bankers. If you look at the organic growth in both the loan and deposit portfolios, we had a very, very good quarter, and it's not a surprise. We don't take them for granted, but I think sometimes people take our great result for granted. Organic growth has just been really good all year, and it's continuing to drive the institution forward. When you look at our income and strong capital accumulation, you can see the effect it's had, effects on the capital ratios, which are really, really strong and have us well positioned. All the elements of the bank look fantastic: the liquidity, the capital, earnings, and the margin. We're excited about where we are. Tom TravisPresident and CEO at Bank7 Corp00:03:04We're excited about the markets we operate in, and we're just delighted for the result. With that said, we're here for any questions. Operator00:03:18We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Nathan Race with Piper Sandler. Please go ahead. Adam PearlEquity Analyst at Piper Sandler00:03:47Hi, this is Adam Perl on for Nathan Race. Good morning, and thank you for taking my questions. Tom TravisPresident and CEO at Bank7 Corp00:03:54Morning, Adam. Adam PearlEquity Analyst at Piper Sandler00:03:56Maybe just to start on loan growth, you guys obviously had another really strong quarter in terms of growth. I'd just be curious how the pipeline stands today and how you're thinking about growth in the fourth quarter and into 2026. Jason EstesChief Credit Officer at Bank7 Corp00:04:11Yeah, thanks, Adam. This is Jason. The quarter was outstanding. As Tom mentioned, the team of bankers just keep delivering, and it's not just loans, it's deposits as well, which are so vital to us continuing to be able to expand like this. The current pipeline is good. As we caution each quarter, we're prone to lumpy paydowns as people exit. There are a lot of conversations about what kind of economy we're going to have here in the near term. You see a lot of people exiting businesses or specific assets, and we're not immune to that. We've been able to overcome significant exits this year just with robust growth. I think, continuing the theme that we've had here for really the whole year, I really expect kind of a high single-digit year-over-year growth. That's our target, that's our goal. I think we'll be able to deliver on that. Jason EstesChief Credit Officer at Bank7 Corp00:05:25Right now, the pipeline still has plenty of activity in it. We're always careful with those lumpy paydowns. Adam PearlEquity Analyst at Piper Sandler00:05:36Got it. I really appreciate that. Kind of going off of that, I'd be curious if you could touch on what you're seeing in terms of loan pricing dynamics among competition and what you're seeing new loans come on the portfolio relative to maybe that 7.4% or so that you saw in September. Jason EstesChief Credit Officer at Bank7 Corp00:05:57Yeah, I think if you looked at the average, we'd be slightly below that 7.4, somewhere in between 7 and 7.25, I think, for the bulky new funding. I think there's more pressure. You talk about the competitors. From a loan standpoint, it seems to be less pressing than the deposit side, which ebbs and flows, but that seems to be the flavor of the week right now. There's a little more pressure on the deposit side than the loan side. Adam PearlEquity Analyst at Piper Sandler00:06:34Got it. Last one for me is, you know, obviously there's been plenty of deal activity within your markets. Just any update on the M&A front? Tom TravisPresident and CEO at Bank7 Corp00:06:46We're constantly out there, and we've had opportunities over the last few months and looked at various transactions. We're active in that space, and we continue to proceed with a nod towards strategic combinations, and that hasn't really changed. One of these days, we're going to find something that works. Our posture hasn't changed. Adam PearlEquity Analyst at Piper Sandler00:07:26Got it. Thank you for taking my questions. Jason EstesChief Credit Officer at Bank7 Corp00:07:30Thank you. Operator00:07:33The next question comes from Woody Lay with KBW. Please go ahead. Woody LayAnalyst at KBW00:07:38Hey, good morning, guys. Jason EstesChief Credit Officer at Bank7 Corp00:07:40Morning, Woody. Woody LayAnalyst at KBW00:07:43I wanted to touch on the net interest margin to start. Really strong quarter in the third quarter, but it did look like with the rate cut in September, the quarter-end margin was a little bit lower than where it was in the third quarter. I guess if we get a couple more rate cuts through year-end, can you just talk about how we should think about the trajectory of the margin from here? Kelly HarrisCFO at Bank7 Corp00:08:09Yeah, what is this, Kelly? We did the quarter at 4.55% from a core net interest margin perspective. I think, as Jason mentioned, we did experience some deposit upward pressure on cost of funds towards the end of the quarter. I think if you look at the first rate cut in Q4, you could see further net interest margin compression slightly down to 4.50%, and that starts to slow with the additional rate cut towards the latter half of the quarter. That could creep down to 4.47% as those loan floors kick in, but then also assuming that we can keep pace on the liability side. Woody LayAnalyst at KBW00:08:50Got it. That's helpful. I also wanted to touch on the loan fee income. The past couple of quarters, it's come up pretty nicely, and it now represents about 40 basis points of the margin. Could you just talk about the dynamics there on what's been driving that income up and how sticky can that be going forward? Jason EstesChief Credit Officer at Bank7 Corp00:09:15I think, again, that goes back to successful efforts by the sales team. You know, a robust deal market. We've just seen a lot of activity, a lot of opportunities. Our salespeople have done a fantastic job of converting. When you say how sticky is that, gosh, it feels like we've really beat the mean here for a couple of quarters in a row. I think you'll see it trend back toward normal, though. You know, fourth quarter, who knows? The pipeline's strong, but definitely feels like a bit of outperformance the last couple of quarters. Woody LayAnalyst at KBW00:09:59Got it. Lastly, just on credit, credit trends were really strong in the quarter, but you did elect to increase the reserve some just on a % basis. Could you just sort of walk through the decision there and any over broader thoughts on credit? Tom TravisPresident and CEO at Bank7 Corp00:10:20Yeah, I think this is Tom. The real key here is the growth in the portfolio. When you look at the macro events in the world right now, it's frightening in a lot of areas. It's increased what I think is the volatility of just the overall credit markets. When we grow the portfolio and we see increased volatility in the macro world out there, we believe it's prudent to put hay in the barn, so to speak, relative to all those factors. It gives us a lot of comfort. We benefit from really strong, strong capital levels. It's always been fascinating to me that when people around the world in our space talk about landlocked reserves, there isn't really much discussion usually on the capital levels. Tom TravisPresident and CEO at Bank7 Corp00:11:22One could argue and say, "Why do you even need to worry about anything if you're going to maintain capital levels the way you are?" I think the importance for us is the Rubik's cube, so to speak. We stay really focused on the loan book, the macro factors. When you look at that growth, we felt like it was prudent. To maintain the integrity of our process, that's why we did it. Woody LayAnalyst at KBW00:11:53Got it. Just as a follow-up, was it driven by some changes in the scenario weightings? If that's the case, do you think we could see some additional reserve build from here? Tom TravisPresident and CEO at Bank7 Corp00:12:04I think it was driven by all of the above. Could we see us increasing and putting more provision? It's possible. It's really a factor. It depends on the macro factors, and it depends on the growth. I would say that I don't want to signal anything, but I would say that we're pretty set right now for the foreseeable future. If macro conditions change, adjustments need to be made, or if we have additional growth, then you could see more provisioning. Woody LayAnalyst at KBW00:12:47All right. I appreciate all the color. Thanks for taking my questions. Operator00:12:54Again, if you have a question, please press star, then one. The next question comes from Matt Olney with Stephens. Please go ahead. Matt OlneyAnalyst at Stephens00:13:04Yeah. Hey, guys. Thanks for taking the question. Just wanted to ask about the outlook for fees and expenses. I know this can be impacted by the oil and gas revenue. Just any kind of call you can give with and without that. Thanks. Kelly HarrisCFO at Bank7 Corp00:13:21Hey, Matt. This is Kelly. I think we got pretty close on the core fee income from Q3, and we anticipate a similar run rate both on the core fee and the expense side, the $1 million core fee, and then $9 million-$9.5 million on the non-interest expense side. Yeah, you're correct. The oil and gas is a little bit less predictable, but we're also utilizing the Q3 as a good guide for Q4. Matt OlneyAnalyst at Stephens00:13:51Okay. Thanks for that, Kelly. What about the expectations around mortgage? I know you guys made an investment there recently. We'd love to get your updated thoughts about expectations for this investment, especially within 2026. Thanks. Jason EstesChief Credit Officer at Bank7 Corp00:14:12Yeah, I think right now, the mortgage business, at least here locally, it's pretty slow still. Maybe not as bad for the mortgage lenders as it is for the realtors. Until you see something give, whether it's discounts or lower rates, I think we're kind of expecting more of the same where it's covering itself. It makes a little bit of money, but it's definitely not what we think. It's possible if you see a real change in the rate scenario, or we think there's a lot of headwinds against that business. It's not just rates. That affordability of housing is a big deal, and it's a little hard for us to handicap. Personally, I'd be surprised if 2026 isn't better than 2025, but who knows? Jason EstesChief Credit Officer at Bank7 Corp00:15:14There's so much going on really across the globe that impacts our economy and people's ability to get wage gains and afford a new house. We're as curious as you are. I wish I had a more specific answer, but I would think that next year would be a little bit better for us in the mortgage business. I will say the pipeline has picked up compared to what it was six months ago. We're sitting here with probably, I would say, three times the number of transactions and dollar volume that'll close in the next 60 days than what we had. I'll also tell you the fallout rate's quite high. I don't know how closely you follow the industry, but we're seeing a lot more contracts break and people not close than historically has been the case. Tom TravisPresident and CEO at Bank7 Corp00:16:11Yeah, this is Tom. I would add also just a reminder on who we are and what we are. Specifically, as it relates to mortgage, it was an important acquisition for us. It was obviously a relatively small amount of dollars given our earnings and the size of the company. We're more of a rifle shooter than a shotgun shooter in the business. The strategic implication of buying that company, and Dale built a really fine mortgage operation. We're really glad to have him. We feel like we're a professional mortgage provider now. When you look at what the mortgage space will be for us going forward, we're delighted that we have the ability to deliver to our high-net-worth clients and other people. I don't want to minimize mortgage at all because it's a wonderful, nice little segment. Tom TravisPresident and CEO at Bank7 Corp00:17:13It's always going to be that more niche, specialized service that we provide our customers. Hopefully, one day it'll grow into a much more significant income provider. I think that that's going to take some time. In the meantime, we're really, really happy with the acquisition. Matt OlneyAnalyst at Stephens00:17:40Okay. I appreciate the commentary on mortgage. If I could just circle back to the M&A topic, it sounds like there's still conversations with potential candidates. I guess, Tom, I'm curious, kind of what do you see as a major challenge for M&A today? What do we need to see to see just improved volumes within the region? Tom TravisPresident and CEO at Bank7 Corp00:18:04I would say that we still have the overhang of the AOCI that's keeping some sellers on the bench. It's a slow boat to China. It's not just the AOCI in the bond portfolio, but it's disappointingly surprising how many bankers booked really long maturity, lower fixed-rate loans. It's just going to take some time to work out. That has a dampening effect on the sellers. They all think they're worth fill in the blank, whatever. They all think they're worth one and a half to two times. When you factor all those purchase accounting marks into the equation, it makes it more difficult. I would also say that we own more than 50% of the shares of this company. We act like owners, and we act like owners every day, especially in the M&A space. Tom TravisPresident and CEO at Bank7 Corp00:19:16I think when you look at our disciplined approach and just following the numbers, it makes it a little more challenging as compared to, I'm not going to reference any particular transactions, but there have been two or three transactions recently that are real head-scratchers. I'm not sure that those transactions should have happened the way they did, but they did. I just think the landscape is going to be, it's better. There's a lot of excitement out there, but those factors are always going to make it more challenging for Bank7. With that said, I can't get into specifics on what we've looked at over the last nine months or so, but we've come close on a few transactions. I don't want anybody to think that we're not competitive because we are. Tom TravisPresident and CEO at Bank7 Corp00:20:17I think that you're going to see continued eagerness in the M&A space and our industry, and eventually, we'll find something that works strategically for us. Matt OlneyAnalyst at Stephens00:20:32Thank you for the commentary. It feels like Bank7 Corp. is in a nice spot for M&A activity. I appreciate it. Operator00:20:46We have a follow-up from Nathan Race with Piper Sandler. Please go ahead. Adam PearlEquity Analyst at Piper Sandler00:20:52Yeah, just to follow up on credit, you obviously had really strong credit performance during the quarter. Tom, you mentioned the concerns within the macro environment. I was just curious if you're seeing anything in terms of criticized or classified migrations during the quarter? Jason EstesChief Credit Officer at Bank7 Corp00:21:12No, it was very benign in the quarter migrations. We had a couple move down, a couple move up, a couple pay off that were on our special mention ratings. All in all, very, very neutral. If I had to cap it, was it slightly positive or slightly negative? I would say it was slightly positive. In general, couldn't be happier with where we are credit-wise within the whole portfolio. Adam PearlEquity Analyst at Piper Sandler00:21:44Got it. Thanks for taking my question. Operator00:21:53This concludes our question and answer session. I would like to turn the conference back over to Tom Travis for any closing remarks. Tom TravisPresident and CEO at Bank7 Corp00:22:01Thank you again for joining us. We're happy with our quarter, looking forward to our near future, and thank you. Operator00:22:14The conference is now concluded. Thank you for attending today's presentation.Read moreParticipantsExecutivesKelly HarrisCFOTom TravisPresident and CEOAnalystsWoody LayAnalyst at KBWMatt OlneyAnalyst at StephensAdam PearlEquity Analyst at Piper SandlerJason EstesChief Credit Officer at Bank7 CorpPowered by Earnings DocumentsSlide DeckEarnings Release(8-K) Bank7 Earnings HeadlinesKeefe, Bruyette & Woods Cuts Bank7 (NASDAQ:BSVN) Price Target to $53.00October 19, 2025 | americanbankingnews.comAnalysts’ Opinions Are Mixed on These Financial Stocks: Bank7 (BSVN), Morgan Stanley (MS) and Banner (BANR)October 17, 2025 | theglobeandmail.comTrump's Law S.1582: $21T Dollar Revolution ComingDo you have money in any of these banks? Chase. Bank of America. Citigroup. Wells Fargo. U.S. Bancorp. If you do… | Brownstone Research (Ad)Keefe, Bruyette & Woods Maintains Bank7 (BSVN) Outperform RecommendationOctober 16, 2025 | msn.comBank7 price target lowered to $53 from $54 at Keefe BruyetteOctober 16, 2025 | msn.comBank7 Corp. (NASDAQ:BSVN) Q3 2025 Earnings Call TranscriptOctober 16, 2025 | msn.comSee More Bank7 Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Bank7? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Bank7 and other key companies, straight to your email. Email Address About Bank7Bank7 (NASDAQ:BSVN) Corporation, through its subsidiary Bank7, National Association, is a regional banking organization that offers a full range of deposit and lending products to both consumer and commercial clients. Its deposit offerings include checking and savings accounts, money market funds and certificates of deposit, while its lending portfolio encompasses residential and commercial real estate loans, small business loans and consumer credit products. Complementing its core banking services, Bank7 provides digital banking solutions such as online and mobile platforms for account management, bill payment and remote check deposit. The company also offers treasury management services—including automated clearing house (ACH) transactions, wire transfers, merchant card processing and cash management—to support the operational needs of small to mid-sized businesses in its markets. Headquartered in Hobbs, New Mexico, Bank7 operates a network of branches and ATMs across eastern New Mexico, West Texas and Oklahoma. The company emphasizes relationship banking and community engagement, seeking to serve underserved or rapidly growing local markets through personalized service and local decision-making.View Bank7 ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Freeport-McMoRan Posts Strong Earnings Despite Indonesia ShutdownTesla’s Earnings Review: Does the Juice Justify the Squeeze?Fal.Con Europe Could Be CrowdStrike’s Early Earnings CatalystLogitech Eyes Breakout Before Earnings—Citigroup Sees 30% UpsideLouis Vuitton Earnings Show Luxury Bull Market Isn’t Done YetGoldman Sachs Earnings Tell: Markets Seem OkayWhy Congress Is Buying Intuitive Surgical Ahead of Earnings Upcoming Earnings Cadence Design Systems (10/27/2025)NXP Semiconductors (10/27/2025)Welltower (10/27/2025)Waste Management (10/27/2025)Booking (10/28/2025)Electronic Arts (10/28/2025)Mondelez International (10/28/2025)PayPal (10/28/2025)Regeneron Pharmaceuticals (10/28/2025)American Tower (10/28/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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PresentationSkip to Participants Operator00:00:00Welcome to the Bank7 Corp. third quarter 2025 earnings call. Before we get started, I'd like to highlight the legal information and disclaimer on page 27 of the investor presentation. For those who do not have access to the presentation, management is going to discuss certain topics that contain forward-looking information which is based on management's beliefs, as well as assumptions made by and information currently available to management. Although management believes that the expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to be correct. Such statements are subject to certain risks, uncertainties, and assumptions, including, among other things, the direct and indirect effect of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators. Operator00:01:02Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. Also, please note that this conference call contains references to non-GAAP financial measures. You can find reconciliations of these non-GAAP financial measures to GAAP financial measures in an 8K that was filed this morning by the company. Representing the company on today's call, we have Brad Haines, Chairman; Tom Travis, President and CEO; J.T. Phillips, Chief Operating Officer; Jason Estes, Chief Credit Officer; Kelly Harris, Chief Financial Officer; and Paul Timmons, Director of Accounting. With that, I'll turn the call over to Tom Travis. Tom TravisPresident and CEO at Bank7 Corp00:01:55Good morning. Thank you for joining us. As you can see, we had a very solid quarter. Essentially, we just are a broken record, but it's a shout-out to our bankers. If you look at the organic growth in both the loan and deposit portfolios, we had a very, very good quarter, and it's not a surprise. We don't take them for granted, but I think sometimes people take our great result for granted. Organic growth has just been really good all year, and it's continuing to drive the institution forward. When you look at our income and strong capital accumulation, you can see the effect it's had, effects on the capital ratios, which are really, really strong and have us well positioned. All the elements of the bank look fantastic: the liquidity, the capital, earnings, and the margin. We're excited about where we are. Tom TravisPresident and CEO at Bank7 Corp00:03:04We're excited about the markets we operate in, and we're just delighted for the result. With that said, we're here for any questions. Operator00:03:18We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Nathan Race with Piper Sandler. Please go ahead. Adam PearlEquity Analyst at Piper Sandler00:03:47Hi, this is Adam Perl on for Nathan Race. Good morning, and thank you for taking my questions. Tom TravisPresident and CEO at Bank7 Corp00:03:54Morning, Adam. Adam PearlEquity Analyst at Piper Sandler00:03:56Maybe just to start on loan growth, you guys obviously had another really strong quarter in terms of growth. I'd just be curious how the pipeline stands today and how you're thinking about growth in the fourth quarter and into 2026. Jason EstesChief Credit Officer at Bank7 Corp00:04:11Yeah, thanks, Adam. This is Jason. The quarter was outstanding. As Tom mentioned, the team of bankers just keep delivering, and it's not just loans, it's deposits as well, which are so vital to us continuing to be able to expand like this. The current pipeline is good. As we caution each quarter, we're prone to lumpy paydowns as people exit. There are a lot of conversations about what kind of economy we're going to have here in the near term. You see a lot of people exiting businesses or specific assets, and we're not immune to that. We've been able to overcome significant exits this year just with robust growth. I think, continuing the theme that we've had here for really the whole year, I really expect kind of a high single-digit year-over-year growth. That's our target, that's our goal. I think we'll be able to deliver on that. Jason EstesChief Credit Officer at Bank7 Corp00:05:25Right now, the pipeline still has plenty of activity in it. We're always careful with those lumpy paydowns. Adam PearlEquity Analyst at Piper Sandler00:05:36Got it. I really appreciate that. Kind of going off of that, I'd be curious if you could touch on what you're seeing in terms of loan pricing dynamics among competition and what you're seeing new loans come on the portfolio relative to maybe that 7.4% or so that you saw in September. Jason EstesChief Credit Officer at Bank7 Corp00:05:57Yeah, I think if you looked at the average, we'd be slightly below that 7.4, somewhere in between 7 and 7.25, I think, for the bulky new funding. I think there's more pressure. You talk about the competitors. From a loan standpoint, it seems to be less pressing than the deposit side, which ebbs and flows, but that seems to be the flavor of the week right now. There's a little more pressure on the deposit side than the loan side. Adam PearlEquity Analyst at Piper Sandler00:06:34Got it. Last one for me is, you know, obviously there's been plenty of deal activity within your markets. Just any update on the M&A front? Tom TravisPresident and CEO at Bank7 Corp00:06:46We're constantly out there, and we've had opportunities over the last few months and looked at various transactions. We're active in that space, and we continue to proceed with a nod towards strategic combinations, and that hasn't really changed. One of these days, we're going to find something that works. Our posture hasn't changed. Adam PearlEquity Analyst at Piper Sandler00:07:26Got it. Thank you for taking my questions. Jason EstesChief Credit Officer at Bank7 Corp00:07:30Thank you. Operator00:07:33The next question comes from Woody Lay with KBW. Please go ahead. Woody LayAnalyst at KBW00:07:38Hey, good morning, guys. Jason EstesChief Credit Officer at Bank7 Corp00:07:40Morning, Woody. Woody LayAnalyst at KBW00:07:43I wanted to touch on the net interest margin to start. Really strong quarter in the third quarter, but it did look like with the rate cut in September, the quarter-end margin was a little bit lower than where it was in the third quarter. I guess if we get a couple more rate cuts through year-end, can you just talk about how we should think about the trajectory of the margin from here? Kelly HarrisCFO at Bank7 Corp00:08:09Yeah, what is this, Kelly? We did the quarter at 4.55% from a core net interest margin perspective. I think, as Jason mentioned, we did experience some deposit upward pressure on cost of funds towards the end of the quarter. I think if you look at the first rate cut in Q4, you could see further net interest margin compression slightly down to 4.50%, and that starts to slow with the additional rate cut towards the latter half of the quarter. That could creep down to 4.47% as those loan floors kick in, but then also assuming that we can keep pace on the liability side. Woody LayAnalyst at KBW00:08:50Got it. That's helpful. I also wanted to touch on the loan fee income. The past couple of quarters, it's come up pretty nicely, and it now represents about 40 basis points of the margin. Could you just talk about the dynamics there on what's been driving that income up and how sticky can that be going forward? Jason EstesChief Credit Officer at Bank7 Corp00:09:15I think, again, that goes back to successful efforts by the sales team. You know, a robust deal market. We've just seen a lot of activity, a lot of opportunities. Our salespeople have done a fantastic job of converting. When you say how sticky is that, gosh, it feels like we've really beat the mean here for a couple of quarters in a row. I think you'll see it trend back toward normal, though. You know, fourth quarter, who knows? The pipeline's strong, but definitely feels like a bit of outperformance the last couple of quarters. Woody LayAnalyst at KBW00:09:59Got it. Lastly, just on credit, credit trends were really strong in the quarter, but you did elect to increase the reserve some just on a % basis. Could you just sort of walk through the decision there and any over broader thoughts on credit? Tom TravisPresident and CEO at Bank7 Corp00:10:20Yeah, I think this is Tom. The real key here is the growth in the portfolio. When you look at the macro events in the world right now, it's frightening in a lot of areas. It's increased what I think is the volatility of just the overall credit markets. When we grow the portfolio and we see increased volatility in the macro world out there, we believe it's prudent to put hay in the barn, so to speak, relative to all those factors. It gives us a lot of comfort. We benefit from really strong, strong capital levels. It's always been fascinating to me that when people around the world in our space talk about landlocked reserves, there isn't really much discussion usually on the capital levels. Tom TravisPresident and CEO at Bank7 Corp00:11:22One could argue and say, "Why do you even need to worry about anything if you're going to maintain capital levels the way you are?" I think the importance for us is the Rubik's cube, so to speak. We stay really focused on the loan book, the macro factors. When you look at that growth, we felt like it was prudent. To maintain the integrity of our process, that's why we did it. Woody LayAnalyst at KBW00:11:53Got it. Just as a follow-up, was it driven by some changes in the scenario weightings? If that's the case, do you think we could see some additional reserve build from here? Tom TravisPresident and CEO at Bank7 Corp00:12:04I think it was driven by all of the above. Could we see us increasing and putting more provision? It's possible. It's really a factor. It depends on the macro factors, and it depends on the growth. I would say that I don't want to signal anything, but I would say that we're pretty set right now for the foreseeable future. If macro conditions change, adjustments need to be made, or if we have additional growth, then you could see more provisioning. Woody LayAnalyst at KBW00:12:47All right. I appreciate all the color. Thanks for taking my questions. Operator00:12:54Again, if you have a question, please press star, then one. The next question comes from Matt Olney with Stephens. Please go ahead. Matt OlneyAnalyst at Stephens00:13:04Yeah. Hey, guys. Thanks for taking the question. Just wanted to ask about the outlook for fees and expenses. I know this can be impacted by the oil and gas revenue. Just any kind of call you can give with and without that. Thanks. Kelly HarrisCFO at Bank7 Corp00:13:21Hey, Matt. This is Kelly. I think we got pretty close on the core fee income from Q3, and we anticipate a similar run rate both on the core fee and the expense side, the $1 million core fee, and then $9 million-$9.5 million on the non-interest expense side. Yeah, you're correct. The oil and gas is a little bit less predictable, but we're also utilizing the Q3 as a good guide for Q4. Matt OlneyAnalyst at Stephens00:13:51Okay. Thanks for that, Kelly. What about the expectations around mortgage? I know you guys made an investment there recently. We'd love to get your updated thoughts about expectations for this investment, especially within 2026. Thanks. Jason EstesChief Credit Officer at Bank7 Corp00:14:12Yeah, I think right now, the mortgage business, at least here locally, it's pretty slow still. Maybe not as bad for the mortgage lenders as it is for the realtors. Until you see something give, whether it's discounts or lower rates, I think we're kind of expecting more of the same where it's covering itself. It makes a little bit of money, but it's definitely not what we think. It's possible if you see a real change in the rate scenario, or we think there's a lot of headwinds against that business. It's not just rates. That affordability of housing is a big deal, and it's a little hard for us to handicap. Personally, I'd be surprised if 2026 isn't better than 2025, but who knows? Jason EstesChief Credit Officer at Bank7 Corp00:15:14There's so much going on really across the globe that impacts our economy and people's ability to get wage gains and afford a new house. We're as curious as you are. I wish I had a more specific answer, but I would think that next year would be a little bit better for us in the mortgage business. I will say the pipeline has picked up compared to what it was six months ago. We're sitting here with probably, I would say, three times the number of transactions and dollar volume that'll close in the next 60 days than what we had. I'll also tell you the fallout rate's quite high. I don't know how closely you follow the industry, but we're seeing a lot more contracts break and people not close than historically has been the case. Tom TravisPresident and CEO at Bank7 Corp00:16:11Yeah, this is Tom. I would add also just a reminder on who we are and what we are. Specifically, as it relates to mortgage, it was an important acquisition for us. It was obviously a relatively small amount of dollars given our earnings and the size of the company. We're more of a rifle shooter than a shotgun shooter in the business. The strategic implication of buying that company, and Dale built a really fine mortgage operation. We're really glad to have him. We feel like we're a professional mortgage provider now. When you look at what the mortgage space will be for us going forward, we're delighted that we have the ability to deliver to our high-net-worth clients and other people. I don't want to minimize mortgage at all because it's a wonderful, nice little segment. Tom TravisPresident and CEO at Bank7 Corp00:17:13It's always going to be that more niche, specialized service that we provide our customers. Hopefully, one day it'll grow into a much more significant income provider. I think that that's going to take some time. In the meantime, we're really, really happy with the acquisition. Matt OlneyAnalyst at Stephens00:17:40Okay. I appreciate the commentary on mortgage. If I could just circle back to the M&A topic, it sounds like there's still conversations with potential candidates. I guess, Tom, I'm curious, kind of what do you see as a major challenge for M&A today? What do we need to see to see just improved volumes within the region? Tom TravisPresident and CEO at Bank7 Corp00:18:04I would say that we still have the overhang of the AOCI that's keeping some sellers on the bench. It's a slow boat to China. It's not just the AOCI in the bond portfolio, but it's disappointingly surprising how many bankers booked really long maturity, lower fixed-rate loans. It's just going to take some time to work out. That has a dampening effect on the sellers. They all think they're worth fill in the blank, whatever. They all think they're worth one and a half to two times. When you factor all those purchase accounting marks into the equation, it makes it more difficult. I would also say that we own more than 50% of the shares of this company. We act like owners, and we act like owners every day, especially in the M&A space. Tom TravisPresident and CEO at Bank7 Corp00:19:16I think when you look at our disciplined approach and just following the numbers, it makes it a little more challenging as compared to, I'm not going to reference any particular transactions, but there have been two or three transactions recently that are real head-scratchers. I'm not sure that those transactions should have happened the way they did, but they did. I just think the landscape is going to be, it's better. There's a lot of excitement out there, but those factors are always going to make it more challenging for Bank7. With that said, I can't get into specifics on what we've looked at over the last nine months or so, but we've come close on a few transactions. I don't want anybody to think that we're not competitive because we are. Tom TravisPresident and CEO at Bank7 Corp00:20:17I think that you're going to see continued eagerness in the M&A space and our industry, and eventually, we'll find something that works strategically for us. Matt OlneyAnalyst at Stephens00:20:32Thank you for the commentary. It feels like Bank7 Corp. is in a nice spot for M&A activity. I appreciate it. Operator00:20:46We have a follow-up from Nathan Race with Piper Sandler. Please go ahead. Adam PearlEquity Analyst at Piper Sandler00:20:52Yeah, just to follow up on credit, you obviously had really strong credit performance during the quarter. Tom, you mentioned the concerns within the macro environment. I was just curious if you're seeing anything in terms of criticized or classified migrations during the quarter? Jason EstesChief Credit Officer at Bank7 Corp00:21:12No, it was very benign in the quarter migrations. We had a couple move down, a couple move up, a couple pay off that were on our special mention ratings. All in all, very, very neutral. If I had to cap it, was it slightly positive or slightly negative? I would say it was slightly positive. In general, couldn't be happier with where we are credit-wise within the whole portfolio. Adam PearlEquity Analyst at Piper Sandler00:21:44Got it. Thanks for taking my question. Operator00:21:53This concludes our question and answer session. I would like to turn the conference back over to Tom Travis for any closing remarks. Tom TravisPresident and CEO at Bank7 Corp00:22:01Thank you again for joining us. We're happy with our quarter, looking forward to our near future, and thank you. Operator00:22:14The conference is now concluded. Thank you for attending today's presentation.Read moreParticipantsExecutivesKelly HarrisCFOTom TravisPresident and CEOAnalystsWoody LayAnalyst at KBWMatt OlneyAnalyst at StephensAdam PearlEquity Analyst at Piper SandlerJason EstesChief Credit Officer at Bank7 CorpPowered by