Bank7 Corp. Q4 FY2025 earnings call

Thomas L. Travis expressed delight in 2025 results, highlighting outstanding loan growth, strong loan fee income, organic deposit growth, maintained underwriting standards leading to good asset quality, and appreciation for the team. Operations, IT, and finance functions were noted for continuing to evolve and support the business.

Jason E. Estes indicated expecting loan growth similar to 2025 but emphasizing the need to balance funding and margins. Kelly J. Harris discussed net interest margin (NIM) compression, noting historical ranges and potential slight NIM decline with rate cuts but time deposits repricing possibly offsetting some. Thomas L. Travis mentioned focus on top-tier results and capital building, not immediate share buybacks.

• Economic conditions impacting interest rates, credit quality, loan demand, liquidity, and regulatory policies. • Deposit competition challenges with recent rate cuts not strongly translating to deposit betas. • High pricing valuation expectations and AOCI overhang as headwinds for M&A.

Q: Hey, good morning, guys. Morning, Thomas. Wanted to start on loan growth, another really strong quarter of growth. I know in the past, you kind of talked about, you know, sometimes growth is lumpy quarter over quarter. But we never really saw the downside in 2025. You know, has payoff activity been lighter than you expected, and how should we think about forward expectations for growth?

A: Jason E. Estes talked about studying payoffs and originations, noting accelerated payoffs in Oklahoma and Texas, with fourth quarter payoffs lighter than prior quarters and expecting $25 million a month of payoffs in 2026, balancing loan growth with funding and margins.

Q: Yeah. That's helpful color. And then, I mean, I guess, just a follow-up there. Knock on wood, but it feels like the momentum in your local market is continuing to be strong in 2026. I mean, can growth, you know, look like 2025 again in the year ahead? Or would that be a little bit of a stretch?

A: Jason E. Estes said growth like 2025 would be a stretch due to pricing pressure, needing to balance pricing within market and maintaining margins.

Q: Yeah. And then last year, I just wanted to shift over to the net interest margin. And, you know, got some compression this quarter, which I don't think was a huge surprise given some of the commentary you gave last earnings call. But can you talk about how you expect the margin to trend if we get a couple additional cuts from here and remind us sort of of the historical ranges you would expect on the NIM?

A: Thomas L. Travis and Kelly J. Harris discussed NIM compression, historical ranges ($4.35 as historical low), potential slight NIM decline with rate cuts but time deposits repricing possibly offsetting some, and historical NIM ranges.

Q: Hey, Dave. Good morning. Just thinking about the direction of deposit cost going forward. I appreciate the comments earlier around having some opportunities to reduce CD pricing going forward. But wondering if you could speak to the non-maturity side of the deposit equation in terms of, you know, how much additional leverage you have to reduce those deposit costs and what that implies for deposit competition these days.

A: Kelly J. Harris talked about current cost of funds ($2.40 run rate) driven by balance sheet growth and incoming deposits, with deposit competition being tough as recent rate cuts didn't strongly translate to deposit betas.

Q: I just had a question kind of following up on that capital. And regarding M&A. In the past, you guys have mentioned sellers having high pricing valuation expectations. Along with, you know, an AOCI overhang. Are those still some of the biggest headwinds you guys are seeing in getting a deal done, or are you guys seeing more sellers come to the table and willing to negotiate?

A: Thomas L. Travis discussed AOCI overhang easing, challenges with buying quality deposit franchises, staying disciplined in M&A, and capital piling up providing optionality.

Q: I just had a question on kind of the expense and fee guide. If you guys could give any additional commentary on that, on kind of what you're seeing. And then maybe just remind us of how many more quarters we can expect to see impact from the oil and gas revenues?

A: Thomas L. Travis and Jason E. Estes talked about expense control, oil and gas revenues being a minor impact, gradual decline in revenue from oil and gas over next few years, and fee income and expense guidance.