Bank7 Reports Third-Quarter 2026 Results and Discusses Pending Merger

Bank7 (NASDAQ: BSVN ) released third-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This content is powered APIs. For comprehensive financial data and transcripts, visit The full earnings call is available at Summary Bank7 reported strong loan growth despite substantial unscheduled paydowns, showcasing the high performance level of their loan team.

The company is excited about the pending merger with Century Financial, highlighting it as a prudent use of capital and a strategic move to enhance their deposit and banking franchise. Management provided guidance on maintaining a strong net interest margin (NIM) post-merger, expecting an initial neutral impact with potential accretive outcomes depending on strategic cash deployment. Bank7 plans to continue its focus on commercial loans and cater to business owners and high-net-worth individuals, with some potential adjustments in Century's loan participations.

The company anticipates realizing significant cost savings from the Century acquisition, with most expected in the early quarters post-conversion. Management remains optimistic about future growth and strategic opportunities, while maintaining a cautious approach to risk and margin preservation. Full Transcript OPERATOR Welcome to the Bank7 third quarter 2026 earnings call. Before we get started, I'd like to highlight the legal information and disclaimer on page 25 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 be proved 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 the banking regulators. Should 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 8-K that was filed this morning by the company.

Representing the company on today's call we have Brad Haynes, Chairman; Tom Travis, President and CEO; JT 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 Travis, President and CEO Thank you and welcome. Welcome to the call.

First and foremost, what a great company we have here at Bank7. It doesn't happen by accident. Our team's been together a long time. We execute at a high level every day.

We like to say it takes courage to be great and we're proud of our consistent top-tier results. Just a fantastic company and really good results, especially given all the things that we're having to do at the same time closing our recent acquisition. So a really great quarter. I would say that highlights would start out with very strong loan growth that is stronger than what it appears because we overcame substantial unscheduled paydowns from large customers.

So our loan team, as usual, is functioning at a very high level and we're very thankful for them. And we discipline ourselves with our loan pricing and our deposit pricing and we properly manage that balance sheet which enables us to continue benefiting from that strong and consistent NIM. We also benefit from the robust economy and the business-friendly markets down here in Texas and Oklahoma and it's a real blessing and we're mindful of that. For a long time, people on the call were asking us what we were going to do with the excess capital.

And it was tempting to distribute some of those funds while the calls were being made asking us what we were going to do. But we waited and we're glad we did. And we're very excited about the pending merger with Century in New Mexico. And it's a really good example of discipline and patience and prudent use of capital, which really drives the metrics on how transformational and beneficial this transaction will be.

Century is an outstanding deposit and banking franchise that is well entrenched in the communities in New Mexico, especially Santa Fe and its surrounding areas. And we really look forward to that merger. We look forward to continue serving our existing communities and customers as well as theirs and coming together as one team. So we're well positioned for the future, looking forward to executing on our plans.

And with that, we're here to answer any questions anyone might have. Thank you. OPERATOR We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone.

If you are using a speakerphone, 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 today comes from Woody Le with KBW.

Please go ahead. Woody Le, Analyst at KBW Hey, good morning, guys. I wanted to start on the organic growth in the quarter, and as you mentioned, you know, it was very impressive considering all the things you were juggling intra-quarter, maybe specifically on the deposit strategy. Deposits were up pretty significantly in the quarter, and you're about to add a really good source of cheap core funding with Century Financial.

So I was just curious what you sort of plan to do with the excess liquidity that's on the balance sheet. Is this a sign that the loan pipeline's pretty strong in your eyes? Kelly Harris, Chief Financial Officer Hey, Woody, this is Kelly. Yeah, during the quarter, we experienced, as Tom mentioned, substantial loan paydown.

We chose to be conservative from excess liquidity, higher deposit balance because of the known loan fundings as well as the pending merger and some of that cash that goes out related to that. And so that's kind of the game plan going forward, you know, strong pipeline as well as closing this merger. Woody Le, Analyst at KBW Got it. And then, you know, I know the merger is closing November 1st, so midway through the fourth quarter, but just any sort of NIM guidance you could provide, you know, pro forma with Century Financial, plus, you know, the potential for an additional rate hike from here.

I feel like that would be helpful. Kelly Harris, Chief Financial Officer Yeah. I think from a deal perspective, we currently view the deal as neutral to our margin and we intend to sell some to all of Century's bonds. And depending on when those sales occur, it'll generate a meaningful amount of cash and we will be methodical about how we deploy that cash.

In some scenarios it'll be more accretive to our margin. In other scenarios it'll be more neutral to our margin. And from a Bank7 legacy perspective, the loan beta in the quarter was close to 60%. The deposit beta was around 52%.

And I think forward-looking, assuming a rate hike in Q4, we anticipate that loan beta to be in the 65% to 70% range and deposit beta a little bit harder to project, but we assume less. Tom Travis, President and CEO Yeah. And I would add to that—that's really good, Kelly, and accurate. And I would add to that if you could think of the word bias or think of the word tendency.

Once the merger happens, we're going to have a bias or a tendency to be able to more easily maintain that margin due to the influx of a cheaper cost of funds. And that advantage will gradually dissipate over time as we redeploy, and some of it could be redeployed into slightly lower-yielding loans. And so you think of a trade-off between growing slower by maintaining existing pricing compared with growing faster potentially on the loan book because you decide that you want to capitalize on slightly lower cost of funds and therefore you can lower your loan rates. And so I don't think that's going to be a material thing.

It's not like you're going to see all of a sudden lower loan pricing. I'm just pointing out that we're going to have some flexibility in the near term to medium term because of that advantage of a slightly lower cost of funds. Woody Le, Analyst at KBW Yep, got it. And then maybe just last for me—and you've kind of hit on it a little bit on the bond portfolio—but longer term, with the acquisition of Century, it would feel like there's a significant opportunity on the balance sheet remix side to help that 25% accretion.

Longer term, how do you think about remixing Century’s loan portfolio over the medium to longer term? Tom Travis, President and CEO I think you're going to see us continue to do what we've done in the past, and they have commercial banking talent that aligns philosophically with us. And so you'll see us kind of expanding into a couple new markets there, but doing the same thing that we've traditionally done, which is catering to business owners, entrepreneurs, high net worth individuals and really pursuing that commercial loan. And it will look similar to what we've done in our other markets.

And it also gives us some more opportunity, specifically in our Dallas operation where we're constantly funding-challenged there—a lot more loan growth than there is deposit growth. And so maybe we can share some of the newly acquired funds into our Dallas market. Woody Le, Analyst at KBW Got it. All right, well, that's all for me.

Thanks for taking my questions. OPERATOR The next question comes from Nathan Race with Piper Sandler. Please go ahead. Nathan Race, Analyst at Piper Sandler Hey guys, good morning.

Thanks for taking the questions. Just going back to one of the previous questions, you know, just thinking about, you know, any potential runoff that you're anticipating at the Century loan portfolio and just maybe bigger picture, you know, how do you anticipate the addition of Century kind of impacting, you know, Bank7's historical kind of high single- to double-digit loan trajectory that we've seen kind of longer term from you guys? Tom Travis, President and CEO I don't think there's any day-one plan to specifically run off loan balances.

I think you'll hopefully see a steady, similar to what we typically do—and as you just referenced—a 5% mid single-digit to low double-digit company-wide growth, whichever markets are able to contribute to that consistently. And remember, you know, we still run into these chunky periods of payoffs and you can't see it in the numbers, but our payoffs this quarter were over $130 million. Okay. And so we backfilled that and were able to grow nicely over the prior.

But, you know, that is a very atypical amount of payoffs, followed on the heels of, you know, reasonably significant payoffs in Q2. But we knew going, you know, at least midway through Q2 that we were stacked with a big loan pipeline to fund throughout the rest of the year. And most of that funding has occurred. But we still have some clarity, some visibility to a little bit of additional funding in the fourth quarter.

So it's really—go back to Tom's opening statement about the strong economies that we operate within. And we have a great team of bankers, they're out working and we are finding deals and we're not going to stop, we're not going to change. I don't see a consistent move up or down. I want us to keep doing more of the same.

Right. Let's just be what we are, and if we run into a couple periods where we can grow a little faster because things are going well, then let's do it. But we're not going to take unnecessary risk and we're not going to give away our margin. Kelly Harris, Chief Financial Officer Yeah.

There's one minor addition. I would say that Century did have a more aggressive use of buying loan participations. And it's certainly not the majority of the portfolio, but it's a healthy amount that we intend to— we're not going to pursue that. And those particular loan participations, as they mature, as we have the opportunity to exit those, we would.

Which would then provide additional funding sources. Nathan Race, Analyst at Piper Sandler Got it. That's really helpful. And just curious on some of the competitive dynamics in your geographies these days.

I think there's some growing competition across some of those markets. So just curious what you're seeing in terms of kind of new loan pricing these days. It was great to see—I think core loan yields ticked up 2 basis points quarter over quarter. So just curious, kind of what you're seeing from a competitive perspective, particularly across some of the specialties that you guys operate within.

Tom Travis, President and CEO I haven't seen any dynamic changes there, Nate. I mean, it's very consistent. We always have tough competition in all the markets where we're actively loaning money. I don't see that changing.

You know, I guess there was a period during COVID where there were some people that were not particularly aggressive in loaning out money, but it's been very consistent for the last three to four years. Lots of banks looking to deploy into loans, and that's where the relationship bankers, you know, win the day. Nathan Race, Analyst at Piper Sandler Got it. That's helpful.

Maybe one more for Kelly, just on the expense outlook. I think Century is running around $12 million a quarter over the last handful of quarters in terms of overhead costs. So obviously it'll be noisy the next couple of quarters, but just any sense in terms of as you get to kind of 30% saves and the timing around the systems conversion to imagine realize the large majority of those cost saves. Kelly Harris, Chief Financial Officer Yeah, I mean, I like to look at our previous deal with Cornerstone.

I mean, you saw efficiency ratio creep up, you know, a couple hundred basis points initially. And then over time we feel very confident that we can operate Century’s noninterest expense at or below where we currently operate ours. I think from the timing of systems conversions. Is that more of a Q3?

Tom Travis, President and CEO Yeah, I would say we modeled—when we sent that deck out, we talked about expected efficiencies and the numbers in there. And I've got two numbers that I'm looking at in my head. I don't know percentage, but I would say that at least 75% or 80% of the cost savings will occur immediately in the first quarter. And then there will be the remainder spread out between the end of the first quarter and the end of the second quarter.

So call it 75/25—75% cost savings to be achieved right away. But back to Kelly's point, I think you can look at that—what are we at, 2.05% of noninterest expense? Is it close to that number? Yeah.

And so when you think about that number, Nate, we should be well south of 2% if you just look at—if you want to call it the Century standalone. Right. Because you always have heavier at the headquarters. Nathan Race, Analyst at Piper Sandler Gotcha.

Maybe if I could just sneak one more in. You know, obviously it's a pretty transformational deal. You know, I think Century's the largest acquisition in the history of the company. But, you know, just curious.

Is 2027 kind of more of a digest and integrate type of year for Bank7? Or do you guys maybe anticipate some additional M&A coming your way to the extent those opportunities are still there for you guys? Tom Travis, President and CEO You know, Nate, we're always in a shoot, move, communicate mode. And we would be disappointed as a group if we allowed much of the noise and expense to linger far into 2027.

And so, with the exception of the burden that we have because the providers are always so slow to give us conversion dates—I believe our conversion date is in July—and so we don't have any choice but to allow, call it, that 20% to 25% of last cuts to the efficiencies to be realized. But we're not going to be slow. We're not going to take a casual approach to this. We're going to do what we always do, and we're going to make those adjustments and create as many efficiencies as we can, day one.

And so, yes, the back half of the year will be more profitable than the front half of the year. But you're going to see us really achieve very, very meaningful results starting immediately. Nathan Race, Analyst at Piper Sandler Yep, gotcha. Makes sense.

Thanks for that, Tom. If I could actually just make one housekeeping question for Kelly. On the goodwill number for Century, the slide deck indicated you're expecting a material write-up on some assets within some of the locations. Any sense of what kind of all-in goodwill number we can anticipate for the fourth quarter once the deal closes?

Kelly Harris, Chief Financial Officer Yeah, Nate, I think it's too soon. I know that the, you know, the increase in rates are going to impact some of the marks. And so I think—and then some of the valuation pieces. So I think it's too soon to confirm that.

Nathan Race, Analyst at Piper Sandler Okay, fair enough. I appreciate all the color, guys. Congrats on a great quarter again. OPERATOR As a reminder, if you would like to ask a question, please press star then one to join the question queue.

The next question comes from Jordan Ghent with Stephens. Please go ahead. Jordan Ghent, Analyst at Stephens Hey, good morning. Thanks for taking my question.

I just wanted to kind of talk about the loan-to-deposit ratio. I mean historically you guys have been operating with a higher loan-to-deposit ratio kind of in the mid-90s.