Bank7 Q4 Earnings Call Highlights

by · The Cerbat Gem

Bank7 (NASDAQ:BSVN) executives struck an upbeat tone on the company’s fourth-quarter and full-year 2025 earnings call, highlighting what management described as standout performance in loan growth, loan fee income, and organic deposit growth—achieved, they said, without loosening underwriting standards.

President and CEO Tom Travis credited results to the company’s bankers and emphasized that underwriting discipline helped support asset quality. He also said the company did not feel compelled to materially increase provisioning despite strong balance sheet growth, noting that asset quality is “probably better than it’s ever been.”

Loan growth outlook: strong momentum, but discipline remains key

In response to questions about the pace of loan growth and payoff activity, Chief Credit Officer Jason Estes said the company closely tracks originations and payoffs and attributed the volume of opportunities to strong economic conditions in Bank7’s footprint, particularly Oklahoma and Texas.

Estes said payoffs were “accelerated” throughout 2025 and provided a framework for how the company thinks about growth. He said Bank7 expects roughly $25 million per month of payoffs and indicated that to grow, the bank needs about $35 million to $45 million per month of new fundings. He added that fourth-quarter payoffs were lighter than earlier in the year, but he expects some of that to show up in the first quarter.

When asked whether 2026 growth could match 2025, Estes suggested that would be difficult, pointing to competitive pressures in loan pricing. He said the company is focused on staying within market levels while “maximizing” loan dollars and balancing loan growth with funding and margin considerations.

Net interest margin: inflection point with loan floors and deposit pressures

Management addressed fourth-quarter net interest margin compression, noting it followed a period of very strong margins. Travis said the modest compression came after the bank was “coming off of almost an all-time high,” and that management had previously signaled the margin could normalize.

Chief Financial Officer Kelly Harris said rate cuts during the quarter contributed to the change and noted the company has reached an “inflection point” where a number of loans have hit their floors. Looking forward, Harris said management feels “really good” about the current NIM, while acknowledging it could move down slightly. She also noted some time deposits are repricing, which could help offset pressure.

Management discussed a “tight band” around current levels and cited 4.45% as a starting point. In discussing historical context, the team referenced a historical low around 4.35% during the Q&A. Travis added that deeper rate cuts become more challenging, even with loan floors, because deposit customers continue to push for higher rates. He said it would not surprise management if the margin “bled down” toward historical lows or potentially slightly below, depending on the pace and depth of rate cuts.

Deposit competition: betas slowing as customers pay closer attention

On deposit costs and competitive dynamics, Harris said the company’s cost of funds dipped in the fourth quarter and described the current run rate as about 2.40%. She said the trajectory will be influenced by balance sheet growth and incoming deposits, noting the bank added “a couple of nice deposits” after year-end that helped reduce cost of funds.

Estes said the most recent rate cuts have not flowed through to deposit betas as strongly as earlier cuts, a trend he characterized as industry-wide rather than unique to Bank7. He said depositors have become more rate-aware, making the deposit environment “tough.”

The company also discussed mix within deposits. On non-interest-bearing balances, management said the percentage has been drifting down as customers respond to higher-rate options. Travis said that in a near-zero rate environment deposit type mattered less to customers, but that has changed significantly in the current cycle. Regarding seasonality, management said the bank is not heavily exposed to public funds, which can be seasonal, and otherwise did not point to major seasonal patterns in the deposit portfolio.

Capital allocation: focus on discipline, optionality, and selective M&A

Questions also focused on capital levels, stock performance, and strategic options. Travis said the company is not focused on repurchasing shares as a primary objective and emphasized a strategy of producing strong operating results over time. He also pointed to the company’s total shareholder return relative to major bank exchange-traded funds and the KBW index, saying Bank7 has been “top tier” over longer periods even if shorter-term comparisons can vary.

On M&A, management reiterated that pricing expectations and the value of quality deposit franchises can make deals difficult. Travis said accumulated other comprehensive income (AOCI) pressures have “slightly” improved and suggested some sellers had been waiting for rates to fall further. Still, he said quality deposit franchises typically command higher multiples in what he described as a mature and efficient market.

Travis noted the company evaluated multiple opportunities over the past year—two in Oklahoma and one out-of-market—but in each case the bank ultimately walked away, including one deal it exited after due diligence. He emphasized discipline, particularly around asset quality, calling it “non-negotiable.”

He also said Bank7 intends to “resist the urge” for meaningful share buybacks in order to continue building capital and maintain flexibility for a larger strategic opportunity, adding that the company is not opposed to a “merger of equals.” Travis acknowledged that rapid capital accumulation can pressure return on equity, but characterized the tradeoff as a “high-class problem.”

Oil and gas-related items: expected to be immaterial and gradually declining

Management also addressed oil and gas-related revenues and expenses. Travis said the contribution is expected to decline gradually over the next three to four years unless the asset is sold, and he characterized the impact as relatively small for the bank overall.

He also revisited prior accounting commentary, saying management had previously warned that GAAP recognition appeared “front-loaded” based on accounting formulas. He said that, from a strategic perspective, the bank has accomplished its goal and continues to “harvest” revenue, but from a GAAP standpoint the category should remain an “insignificant portion” of the bank, while acknowledging there could be small fluctuations that could affect net income in an immaterial way.

Travis provided fourth-quarter figures as a reference point:

  • Expenses: about $9.1 million core expense and about $1 million oil and gas-related
  • Fee income:about $1 million core and about $1 million oil and gas-related (about $2 million total)

Closing the call, management thanked analysts and shareholders and said the company is excited about 2026.

About Bank7 (NASDAQ:BSVN)

Bank7 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.

Featured Stories