- Earnings call transcript Q3 2022

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Operator

Welcome to the Bank7 Corp, Third Quarter Earnings Call.

Before we get started, I'd like to highlight the legal information and disclaimer on Page 20 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 the management's beliefs, as well as its 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 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. of incorrect, materialize materially actual expected. more underlying should from or prove assumptions results one these or risks any those Should may vary please references call Also, this financial non-GAAP measures. contains that note to conference

find measures the by financial the can to this was in reconciliations financial X-K non-GAAP You measures these GAAP company. filed that morning of

Chief Kelly representing company on Chief Haines, Chief President Travis, Tom J.T. With the turn today's Phillips, Brad that, and Travis. Now the to and Officer; Operating Credit Financial Officer. Estes, call Jason Chairman; Harris, Mr. call, we Officer; CEO; I'll have Tom over

Tom Travis

the were Good third preparing us quarter morning. today. for well. robust recent joining June same year-to-date time our occurred in our of was successful. we extremely with as results integration were loan a bankers pleased that most part busy Thank and busy At early for early very In our We're you the acquisition with pipeline. very our the it and systems commercial ’XX of

we of as and it quarter, that we about talked successfully the moved members. team great we third about had all we a group adopted the as seamless and then managed felt conversion new good into So

ratio increase exceeded double expectations that for profits, we efficiency So per we we met all the We record the them quarter, added earnings to digit expanded our book, and had our share. we low to extremely actually loan slightly. up grew NIM, our in returned back

level quarter. core just daily every of our our we're discipline delighted members, lot hard by of value, on So team the executing and with we at transaction A added our just work a value the highest of to shareholders. amount on the significant and done focus

here to So with Thank you. any answer being said, questions. that we're

Operator

Thank [Operator Instructions]. you.

Please Wendler. ahead. First go Thomas from question comes

Thomas Wendler

everyone. morning Good Hey!

Tom Travis

Good morning.

Thomas Wendler

Just of it loans grew with XX% energy looks gross to off quarter. loans, you them like last starting

growing portfolio of give you're Just this me comfortable where to? with of an idea

Tom Travis

last the probably talked much think see about that XX%. I quarter, in past won't you you we as know

a I little think know with it. room range, of absolutely, bit You to comfortable grow in this

Thomas Wendler

that. appreciate be idea interest with in your which growth where NIM might this quarter? you I increasing Yeah, with bearing quarter, And deposit have your do peaking, then costs an the NIM

Tom Travis

’XX of thought I say playing the budgeted of second it in sensitivity of and because in of of that and it's exactly expansion, our we the for the on might expected the would the the asset discipline NIM year, we way out the and sheet. half so because Fed actions balance especially

to beginning it and managed year. believe we interest sometime yields on a economic more expect of through the continued customer increases can it next cycles rate pushback rate end several us slightly quarter cost depends the factors, strength the somewhat We Whether Regardless, increases. of funds study though we deposit in perhaps to see So, NIM rate higher. hard XXXX year, they loan including and similar we've push loan on or of surprise how first wouldn't NIM to cycles. expand historically a and bit on

in what like slides of depends deck does it course looked the XXXX it what in on stable see how can You is. economy and the the fed and

high margins margins at starting some will and continue depending strong and benefit the on compress, level. So very a point to at again we'll from we're Fed, but eventually

Thomas Wendler

It that me. in should Thank step-up is there last there your This of modeling Perfect! of like a bit one other unusual non-interest And then for quarter. looks anything thinking about? I income question. be kind you. a a Was took last one

Kelly Harris

have think It in to one-time run some and that, QX. did. the It quarter an I items was so closer rate increase $XXX,XXX previous from normal did a about is income we

Thomas Wendler

Thanks everything for that's guys and great right, quarter. me. All

Operator

go ahead. Please next The Instructions] Lee, question from Thank [Operator you. comes KBW. Woody

Woody Lee

Hey, morning guys! good

Tom Travis

Good morning.

Woody Lee

at So was loan it growth, third the growth I quarter. strong quarter for looking another in mean

expectations but given moderate, the growth environment, growth for that know you assuming will I'm macro Just going loan forward. just

Kelly Harris

our a I double From that as know pretty will reply to standard call year-over-year the always point a next two quarter low we or say large But it that. expected standpoint, you we toward growth you few digit do quarters. know have in maybe pay-offs

you last more to growth pace quarters we've you'll know the normal So slide of see over that metrics. our back had robust of couple definitely

Woody Lee

non-interest growth about you in just matched the bearing the good success chunk side front can that loan on of the growth had other the – and you mean Could do that on here? do know that then continue segment balance growth of bearing. deposit And of I the and sheet, was talk Okay. think non-interest you you deposit think a you kind growth from

Tom Travis

Well, just eventually prior was end to account bit bearing, and typical then it into and shortly non-interest started or part XX% believe really of a an quarter they we We right few one a quarter come and happened the of we the anomaly. so to in it had and interest in a accounts hit or XX%. new of that transferred those large so accounts at the I out bank was bearing had XX% and number thereafter increased that had

would and it's a XX%, what by was that is and an So do always of driven and bit to dynamic. making historical don't discipline would of which see to going core loans that our that deposits bank, anomaly extreme the we've anything We bring of to much expect people that done, that change XX%, values XX%, increase so not there. to we not are

Woody Lee

a looks quarter. like for the last it. jump got Okay, then NPA saw it And in up me,

non-accrual? can you added loans that to those were on provide color any Just

Kelly Harris

relationship one it's and… Yeah,

Tom Travis

is did on that up, One second, that non-accrual? NPA’s loan go loan, but

Kelly Harris

past No, it.

Tom Travis

Right.

let me sure question. up, make not your did believe go – question did that non-accruals I – understand the but So I your go NPA up.

Woody Lee

Okay.

Kelly Harris

by under of are court securities tied to there's going control say relationship secured marketable appointed it, it's they and to litigation, I'm receiver. well not are into to and and than a so Yeah, one go and other we the

don't discussion, I one all that, get to it's into beyond the into so it's want really you but increase. – know And relationship, tied

Woody Lee

Thanks for me. right, it. That's guys. all All got

Operator

you. Thank

Nathan Race, question Piper will be Next Please go ahead. Sandler. from

Nathan Race

guys! hi Good Yeah, morning.

Tom Travis

Nate! Hey

Kelly Harris

Good morning Nate!

Nathan Race

question Just to of like the it any quarter, going last secured loan content increase and expecting the on on the non-performing how in quarter, the guys loss you given the much sound that doesn't in you're back in collateralized there. NPAs just to are moved

growth quarter So purely provision saw? was just this function a largely the in loan we stronger the larger of that just

Kelly Harris

loan and Its is know definitely economy down. to slow the driven going you growth

Tom Travis

be what therefore became more to in we big be that we in loss we weren't how wanted loss and to want probably, way to been acquisition sticky and third what But and with loan part be, us sticky it's did. down, primarily growth sure second almost really loan we've we obvious we to quarter was to of of come did, should in so June have, reserves the the the and so our a – that had quarter, about relative always timeframe our drove going the growth. don't reserve loan but was and was I say the growth loan consistent the it's going after so what May loan to most

Nathan Race

in growth the And this Jason got previously I helpful. late quarter, to guys in maybe you ratio some of given for sounds the maybe next expectations want you apologize as growth, to like quarter, thinking how of terms great the guys in described moderation was but rise, share it slowdown fourth XXXX in Obviously I about on and in in that’s growth touched manage But gains be guys there terms question come loan previous just near footprint the year. are kind changing some may you some know to that know loan you where we're had in loan-to-deposit maybe growth if somewhat deposit of from you through a side a just this into Understood, on not but bit what operate guys little that market just on of necessarily gears you things. and into of the morning. payoffs seeing that given the term

Tom Travis

the headwinds. that macroeconomic current mindful I we're Well, think of very

very good is mention right and focus war the front. So is in you around world going the what's to financial in not know – our the obviously for everyone distress team aware on markets now of pretty in caution much and the are

to opportunities entering XX’s mindset quarter done us of And our the being and ratio believe know surprise is fact caution, were as entrepreneurs to it and stress well locations loan we geographic predict so mean, you when the if opportunistic that we we've wouldn't the to time it's and hard the the low us with surprise were would it given and in were wouldn't at opportunities, because our seek same XX% loan-to-deposit – you market, make given so Kelly? same I acquisitions. in know, we the continue we with Nate, typically relative starts if at the

so you surprise pretty And bounce it low there, up back to further, volatility us so in rambling wouldn't to if low it's out the – okay. there's be XX’s, a without we lot know just the XX’s, of

Nathan Race

internal some thinking below are kind Understood. you kind know concentration guys loan And know loans. about of of you the of just on kind you for growth your of forward, drivers limit energy going

to guys that than want no XX%. I think keep you more

least be driver curious expect what next the over days, for loan you're these quarter nice two? can energy growth and you arena you future in the lending at Just seeing if kind of to know or that a

Kelly Harris

next pipeline to think for is continue the active, so deal segment continue strong you you and that know still be that The quarters. will and selectively we very I know of couple in

Tom Travis

customers so that of facilities in. and baked right We a anything don't it little bit those on their also us using facilities, owe credit large some they'll have now be there's credit

Nathan Race

just one. Got one last it, okay. Maybe

like at sounds in this you point. You Cornerstone the know are integrating innings it of guys final

impacted over rate flexibility have peers, relative most more AOCI guys that excess You haven't been just by cycle. capital you to guys given this

with terms so difficult So additional get forth these some seeing pretty the of to maybe math what curious color are acquisition days? guys you in or interest still of and marks terms just is just opportunities in just

Tom Travis

probably there just on well aren't as the further. many Yeah, I and There there's know think call, is as you and opportunities. people – fewer most

You've they they the other then this you currencies can't now, aren't know be. buyers because you where sell big got some sellers of that have to adjustment, right can't, used just that AOCI and

lot don't. we a activity there, see don't we just So out of

Nathan Race

one on forward. going last one sneak actually in just could the I outlook margin If Okay.

gas You know for out and the hikes imagine forward you guess nice implies just see as quarter the we're future of seeing kind quarters given from I your some look margin, guys at is kind what and at floating some one least fair of obviously the nature away next book. we few next some expansion of two the additional you can the just of in given the still foot know fed year? assume expansion loan over middle point the quarters, curve really takes to I its peak off rate it this or rate assuming

Tom Travis

that. would say and point and we've we say doing would wouldn't to would we're predict. I than at February you closer – margin it's hard know today I increasingly. to some I in January been this peak be that

your And have so for who You Can saying, franchise guys, bit we're start little relationships, of most enough. you by deposit a a you of know give those is providing that relief. are great customers relief?’ – enough those me which protecting is ours, ‘hey little

margin that's advantage fine, we of rate If break increases has in to seen our happen. people it was started we but where to more along is. here believe fed passing that give the borrowers year, the have or that's aggressively again, point it I bit, so what for the strategically NIM a to at half there quarter choose impacts and a much little we the And the which what and budgeted last we've

from deposit rate. going the get it's So on to you're keep really to going a increasing little difficult rates and more be squeeze to those loan

us for I our XXXX, at and as at cost you think then we yields look said, if our look of you I So then. at look loan funds

with tell that with information a the it's know just is going and hard the bit higher. numbers, perhaps little The in could deck, we to get what's really You on fed. close to so

Nathan Race

in loans on below the seeing your lastly Gotcha. And of the know Tom, within portfolio costs you're the are maybe guys you you books around to similar that given loans competitive quarter? saw just portfolio of the resulting that context, that the of we books, yield here just the are expansion new on some pressures margin or maybe increasing yield kind putting new some come kind in third that loan, is

Kelly Harris

quarter. I the coming third new think are in on you seeing for the are much the line loans very with data

Nathan Race

questions. the on appreciate great. guys you Congrats and Okay, the I all taking a color great quarter!

Tom Travis

you. Thank

Operator

closing you. concludes Mr. Tom for like to I remarks. over This our the session. Thank Travis back turn question-and-answer to call

Tom Travis

excited delighted at Thank and you have wide that's rest our we the in with Again, for we're same for our for eyes again and the volatility results the time markets. of joining. year, the the we're open

I so and appreciate And today you. thank everyone's participation

Operator

conference The now today's attending for is concluded. presentation. Thank you

disconnect. now may You

Brad Haines	Chairman
Tom Travis	President, Chief Executive Officer
J.T. Phillips	Chief Operating Officer
Jason Estes	Chief Credit Officer
Kelly Harris	Chief Financial Officer.
Thomas Wendler	Stephens
Woody Lee	KBW
Nathan Race	Piper Sandler

Bank7 (BSVN) 26 Oct 222022 Q3 Earnings call transcript