BSVN - Earnings call transcript Q4 2021

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Operator

Good day. And welcome to Bank7 Corp.’s Fourth Quarter and Full Year Earnings Call.

Before we get started, I would like to highlight the legal information and disclaimer on page 21 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 these such expectations will prove to be correct. quality, to the uncertainties of supervisory direct on rates, subject among assumptions, economic policies are and interest things, liquidity other and credit of statements banking certain super and risks, including, conditions monetary regulators. Such and demand, -- loan indirect effect should vary one those materially Should or expected. more incorrect, prove these of assumptions or from actual materialize risks underlying results may contains references please to financial Also, conference note this measures. call that non-GAAP

GAAP Haines, Chief to of Travis. the Please these Chairmen; have Chief Estes, in non-GAAP company Credit You financial can Phillips, Officer. J.T. to filed go by ahead. measures X-K With measures morning Mr. on Tom turn find company. was President Tom over and that that, CEO; call reconciliations Jason Brad we an Operating Officer; and financial the today’s this I’ll call Travis, the Representing

Tom Travis

Thank I expect in it’s acquisition don’t any be next thing the the We you you. big to weeks we merry the earnings will our and while in as pleased we’re lot there. say, to of of seven the part numbers about and guidance record the for weeks band closing conversion prior days And our that for on excited what had very quarter of were our we acquisition. for had, would call. computer a confident successful later, about going on here, that. acquisition remain on going year. and we well Welcome issues And The year to acquisition in well have been everyone end the went later, we that of and before down eight the the XX those company. report we with June, that we were the of a And really relative sit that last

good. it So looks

-- so and with busy and really to moving the profits. of the that, of record the company were at those forward we organic quarter. we’re fourth much in accomplishing continue reporting we were able in growth So the just In spite pleased

close the the We that million of event sale registration also shares. about had same that an acquisition X.X day and was the the as

more put effect that would little basically on bit market. a out the there volume So

forward in all, for we’ll XXXX positive, and all So, we questions. look it to up open

Operator

Thank you. [Operator go question come Please with Sandler. ahead. Instructions] will And Nathan the from first Piper Race

Nathan Race

Okay. afternoon. Good

Tom Travis

Hi, Nathan.

J.T. Phillips

morning. Good

Nathan Race

single-digit get on quarter the guys outlook. couple you in Maybe range growth, start previously? growth of your excluding Cornerstone I of the we’ve expectations acquired XXXX the just still for tracking quarters, low expect of in been that to loan just fourth kind growth the loans range. of from the high kind organic discussed of terms love Last should double-digit in that we to kind

Tom Travis

most in range years like It’s the order. That’s probably sequential going expecting. come to we’re Yeah. not

We to expect already either more happened due first or the payoffs headwinds have happen. quarter have that to will known

type quarter, with into known so, see growth of some think, push quarter And good activity. that we before probably, normal more to new solid that it and as return overall, had I could are just third us second we’re early as the then, fundings. looks payoffs. see But, new We’ve headwinds generating you’ll but level,

J.T. Phillips

I … would also say that

Nathan Race

Okay.

J.T. Phillips

think, eventually, think to the four or But about same that We’ve of and size years the we’re some …at years bullish. if is or so X% point, going to catch just up response surprise that going or three have think, Jason, range, for it me. in to I wouldn’t low and we pretty had still to sheer fall institution double-digit. X% were I X%

Nathan Race

to the the can be it, Understood. predict It within tough can quarter-to-quarter context. payoffs appreciate definitely

was Just the going margin stable I the in held then anticipating forward, thinking dynamics more quarter. margin overall about longer here than the in

terms color as be would of do floating some profile move back get curious, given curious through you the amount And we think today have what in be of the little liquidity guys to would -- a kind context, earning to floors margin some And opportunities the of bit, imagine around of near-term need how expect kind half short-term of that could about I year, said, you re-pricing that you provide rates so guys we that loans kind maybe, rate remix if support? some then margin. near-term that those need asset am some of any trend, as to there’s raises for expectations presumably acquired I Cornerstone, see within just the loans? order to and with in of to imagine just I this we So guys the

Tom Travis

We started to what floors weeks and ago XX-basis-point loan the extensive the which are and basically to Bank. loan portfolio and ones which some a additional generate will, few amounts would revenue the every modeling at floor relative in increase ones

there’s rate could that they’re fed margin know I’m of XX on too expect full result the that basis you what securities and now a know margin what the don’t expect, be. degrade a much how We saying I’m going a increases would for uncertainty and going modeling. have that I year. as concluded that, points while. pressure and pressure - many have by saying downward not we we in with I to that the so and to are portfolio the to fact And that, a on

that, if the And down over range to those so, were surprise next our lower to me reasons. over the several say we quarters, it wouldn’t degrade time, just would of for end I

Jason Estes

staff pleased that we’ve been, competitors and to spite pleased from our have pressure sales fair continued effective with the very borrowers, the year how and overall with and just Probably throughout the though, been for of, in resilient margins sure. very results also, say last

J.T. Phillips

Yeah.

the you’ll that XX.X% And we in a have. company maintain, strength continues I we were year it’s we and think, margin the that -- help have notice kind decline that grew, so, any deposits might end benefits non-interest-bearing, think of of, some to the I at yet right? there soften

Nathan Race

it starts that fed floating delayed see rate move Understood. within re-pricing, through that also the get characteristics would somewhat But like, sounds portfolio we floors loans? those some as as some there’s within or loan the higher inherent the we should impact

J.T. Phillips

Correct. correct. is That

Nathan Race

Great. recoveries have higher that to relative Okay. the of on the you maybe guys providing and again, high expectations? growth still credit, provision that within double-digit just the single-digit specific any this met how growth to just within provision kind thinking of quarter for portfolio function little context or of of a low the about And charge-offs within quarter loan year, was turning for was guys appears context you that growth in to a higher, charge-offs, downgrades

Tom Travis

to to the the Well, consistent the the be of percentage our just our to at with so Cornerstone provision add low addition end and of history. portfolio, [ph] of range with we’re going our ALLLs

rest so, But that And forever. all we credit we’ve seems I The the say one about sufficiently would that, the reserved. the has exception talked on has improved. like with feel Jason portfolio we’re of of it. data the

a the will we’ve definite and in reserve little company. the NPAs year for bit the in more We had movement positive

Nathan Race

I Thank all Okay. the appreciate guys Great. color. you. step taking you I the questions and will back.

Tom Travis

you. Thank

Operator

Brady Gailey with KBW. The ahead. next from Please will question come go

Brady Gailey

Good afternoon, Thanks. guys. Hey.

Tom Travis

afternoon. Good

Brady Gailey

part that disclose expenses. a tick-up? in but a were necessarily look linked didn’t of know But the it small if your you one-time up was amount, income driving I decent specifics fees all fees quarter. at anything you know driving nature are for business, that I fee and Anything that

Tom Travis

I so. don’t think

J.T. Phillips

a magnitude. of Nothing large

Brady Gailey

stock aware for Okay. are merger Brad as out the in and And quarter? Corner, other one-timers in call expenses the the in far know to of then some the be any nature one-time as sale, to related concerned you I things $XXX,XXX but

J.T. Phillips

Are you increase to non-interest? speaking expense or

Brady Gailey

mean, talking I’m in item… kind expenses I just one-time nature fee of or to any income, large

J.T. Phillips

No...

Brady Gailey

beyond …in the the quarter $XXX,XXX?

J.T. Phillips

No.

Brady Gailey

PPP of I were think fees at million end as year? the finish the did they for they September. about December? of end where And $XX Where were the Okay.

Tom Travis

the total are balance, $XX outstanding million, about you Brady? talking

Brady Gailey

Yeah.

For PPP loans?

Tom Travis

million. In the $XX.X Yeah.

J.T. Phillips

Yeah.

Brady Gailey

$XX.X was Cornerstone exact the loans Okay. And what acquired? amount million. of

Tom Travis

Yeah.

Brady Gailey

I am to ask… to -- trying trying end ask just of I’m

Tom Travis

Yeah.

I of $XXX million end million the the yeah, $XXX at to think, -- was year. it yeah,

Brady Gailey

on PPP, linked they And look core a right. All basis? ex quarter you Okay. loans acquired, were if ex down at

Tom Travis

Yes. Down. Yes.

J.T. Phillips

third to quarter. quarter fourth So

Tom Travis

He’s Yeah. September end to of talking December. the from

J.T. Phillips

Yeah. Slightly.

Tom Travis

Yeah.

J.T. Phillips

Down.

Tom Travis

I call would it.

Brady Gailey

All Okay. me. for That’s guys. right. Thanks, all

J.T. Phillips

Brady. you, Thank

Operator

with question Instructions] Matt Our Olney go [Operator Please next will ahead. Stephens. from come

Matt Olney

afternoon. Good guys. Hey, Thanks.

J.T. Phillips

Matt. Hi,

Tom Travis

Hello.

Matt Olney

modeling over shock the work It you any I commentary the the -- on interest sounds XX% about on that woke found update doing shock a few guys was last can is in that you’ve updated XXX-basis-point some last like XXX-basis-point know analysis didn’t rate NII. analysis see weeks to I analysis little the that? at for benefit sensitivity. more around you’ve bit slides. Any disclosure I been a been But disclose, the to

J.T. Phillips

dollars? in What is XX%

Matt Olney

Are that XX% a reconfirming good you number? is

J.T. Phillips

of dollars your asking. know question to -- don’t I’m in increase. net translates trying No. about what and interest thinking I’m XX% I income I’m

Matt Olney

about was XXXX. NII in million $XX

about So call million? it $X

J.T. Phillips

see to based -- a that’s our look, I floors deep hold that expectations a on see go and subject [ph] don’t going remarks, work million for we going occur me. to and And enhanced next model. big $X Paul’s some dive don’t I mean, week we’ve us Yeah. modify would but number don’t done on we’re to that, with that work have to, the that. loan -- that. then going to is our, But Chairman I to tweak on me that lift. deep, surprise

Matt Olney

that when that We’ll in the for Okay. XX-Q look information, put guess, I you guys out?

J.T. Phillips

Yeah.

Matt Olney

now, of the we’ll outside us a in here, the you you in kind that, expenses, point can quarter. Cornerstone get for throughout -- see into level full impact -- folding and XXXX? operating expenses first XQ that in then of Any Let’s is there of operating towards

Tom Travis

fees quarter is the increase majority But, balance the had change. the obviously, actual No. that in going the of was the XX% that traditional Overall, be about the to of on growth expense Cornerstone non-interest organic between we of for in and $XXX,XXX range.

Matt Olney

as into putting when on any J.T. more commentary a look we expenses broadly, just legacy aside for Bank, investments you Cornerstone Okay. of look second? the or XXXX,

J.T. Phillips

has there’s standpoint, legacy seen. like, labor else a from think pressure costs, everyone on obviously, I

with might you a done in increases Cornerstone. ex labor. So we’ve on little we’re overall, than line what historically see traditional But, higher

Matt Olney

on… Okay. And then

J.T. Phillips

coming new looking don’t, should your BankX the a at? Are $XXX but on you entity? Matt, or what combined was income scenario, to this, I number -- of back for you’re is using I net interest that that know for standalone

Matt Olney

of I as the was XX, so was include can not find, would Cornerstone? disclosure December disclosure XXXX, I referencing That last

J.T. Phillips

that December to had we out. we the this part and That’s lot last the had Yeah. four reason days modify get you. done days a or -- the to XX of get all Got of

I a because So wouldn’t little be But the be us will I year this think Cornerstone portfolio. and million. still expect different $X that modeling securities that for to it of

Matt Olney

Okay.

J.T. Phillips

you. Thank Okay.

Matt Olney

some one, few more things, and potential this energy weeks months. last credits means your on to and I few curious Bank maybe to a the more And few over higher higher want to, -- add thought with sheet? we’re shift respect category, commodity what loan energy seeing balance towards over the few also the for your prices but I guess, risk energy to I’m

Tom Travis

see us us I we up to supported see be doesn’t and out us you’ll in get be to to continue more large energy the think down. have and like people there then, we energy mean lending means disciplines. is where to when get is think there. stay it’s the was be really active the you’ll in on say, I we’re just time more I opportunistic And we fourth when risky It this won’t selective. quarter market the a when the It lot And a space. loan conservative. we’ll aggressive the this stepped space. And payoff in this, would more

Matt Olney

Got it.

Okay.

help. Thanks for guys. Okay, your

J.T. Phillips

Yeah.

Tom Travis

Thank you.

Operator

our to, like remarks. Please closing turn for to concludes Tom Travis, sir. the go over back I ahead, any would question-and-answer This session. conference

Tom Travis

and continue results, shareholders. compounder excellent an be Again, our we’re we happy fellow for to our with

and continue We’re to in we’re the from part of shareholders dynamic to more keep so where the in we and excited pretty about world values excited. for country. XXXX of do benefit there we are we get same greatly and and where It’s our our the our compounding excited that’s

you of the and look So forward rest the we year. to thank

Operator

you The now presentation. concluded. has attending Thank today’s conference for

may disconnect. You now

Bank7 (BSVN) 28 Jan 222021 Q4 Earnings call transcript