Earnings call transcript: Bank7 Q1 2026 earnings beat expectations, stock rises

Bank7 Corp reported its first-quarter 2026 earnings, surpassing analyst expectations with an EPS of $1.25 compared to the forecasted $1.01, resulting in a 23.76% surprise. Revenue reached $26.16 million, exceeding the anticipated $23.63 million by 10.71%. Following the announcement, Bank7’s stock rose by 4.85% in pre-market trading, reflecting positive investor sentiment.

Key Takeaways

• Bank7 Corp reported a significant earnings and revenue beat for Q1 2026.
• The stock price increased by 4.85% in pre-market trading.
• The company’s net interest margin remains stable, with minimal volatility expected.
• Loan growth is projected in the moderate single-digit range for the year.

Company Performance

Bank7 Corp delivered a strong performance in Q1 2026, with key financial metrics surpassing expectations. The company continues to demonstrate robust operational execution, maintaining a fortress balance sheet with no debt. Its return on equity remains in the top 1% of the banking industry, driven by organic growth rather than financial engineering.

Financial Highlights

• Revenue: $26.16 million, up from the forecast of $23.63 million.
• Earnings per share: $1.25, exceeding the forecast of $1.01.
• Risk-based capital ratio: 15.96%, expected to exceed 16% post-call.
• Non-performing assets: Expected to decline to $4-5 million.

Earnings vs. Forecast

Bank7’s actual EPS of $1.25 significantly beat the forecast of $1.01, marking a 23.76% surprise. Revenue also exceeded expectations, coming in at $26.16 million compared to the $23.63 million forecast, reflecting a 10.71% surprise. These results underscore the company’s strong financial health and operational efficiency.

Market Reaction

Following the earnings announcement, Bank7’s stock price rose by 4.85% in pre-market trading, reaching $45 from a previous close of $42.92. This positive movement reflects investor confidence in the company’s ability to maintain strong financial performance. The stock remains below its 52-week high of $50.1, indicating potential for further appreciation.

The company has delivered impressive returns, with a 24% gain over the past year and a year-to-date return of 5.5%. According to InvestingPro analysis, Bank7 currently trades above its Fair Value, placing it on the platform’s Most Overvalued list. The stock trades at a P/E ratio of 9.89 with a market capitalization of $416 million. Investors can access detailed valuation metrics and exclusive insights through InvestingPro, which offers comprehensive analysis including Fair Value calculations and financial health scores.

Outlook & Guidance

Bank7 projects moderate single-digit loan growth for the full year 2026, supported by stable net interest margin guidance of 440-445 basis points. The company anticipates continued strength in core deposit gathering and minimal fluctuations in deposit costs, barring significant interest rate changes.

Executive Commentary

CEO Thomas L. Travis highlighted the company’s strong capital position, stating, "Capital accumulation is not our top priority given our current profitability levels." The company’s return on equity of 19% supports management’s confidence in profitability. CFO Kelly Harris emphasized progress in reducing liability-side costs, noting, "We’ve made really good progress on the liability side cost of funds through quality core deposit gathering."

According to InvestingPro Tips, Bank7 has raised its dividend for five consecutive years, currently offering a 2.5% yield. For investors seeking deeper insights, Bank7 is among the 1,400+ US equities covered by comprehensive Pro Research Reports, which transform complex Wall Street data into clear, actionable intelligence.

Risks and Challenges

• Geopolitical tensions in the Middle East could impact macroeconomic conditions.
• Energy market volatility might affect Bank7’s energy portfolio.
• Moderate loan growth expectations could limit future revenue expansion.
• Potential inflationary pressures from rising oil prices may pose challenges.

Q&A

Analysts inquired about loan growth expectations and energy portfolio dynamics. Chief Credit Officer Jason Estes reiterated the goal of moderate single-digit loan growth, while CEO Thomas L. Travis noted the energy portfolio’s 10-year low level, emphasizing an opportunistic approach to lending in this sector.

Full transcript - Bank7 Corp (BSVN) Q1 2026:

Moderator/Operator, Bank7 Corp.: Welcome to Bank7 Corp. first 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 prove 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 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 William B. Haines, Chairman, Thomas L. Travis, President and CEO, John T. 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 Thomas L. Travis. Please go ahead.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: Thank you. Welcome today. As you can see, we’re happy with our results today. As we regularly say, and we’re probably a little boring in this area, but we have to thank our team of bankers. I know some of them listen to these calls, and if you’re on the call, thank you. We have a great group that’s been together for a few decades, and it’s very comforting to have such a strong, deep, broad team. That’s why we produce the results that we do. I suppose it’s a little boring for some people, quarter after quarter, where we’re always putting up these fantastic results. It takes a lot of effort, and we don’t take many days off around here, and we do it the right way and the results speak for themselves.

Last quarter, I think the markets were expecting rate cuts in this quarter. Now the market’s thinking maybe the rates will go the other way due to the increase in commodity prices associated with the Middle Eastern conflict. Who knows? The reason that I bring it up is that we are really proud of our ability to manage our NIM and to properly mix our balance sheet. We’re not concerned about rates going down or rates going up. We’re positioned either way. With all of that said, you can see the major metrics in the deck, and we’re here to answer any questions. Thank you.

Moderator/Operator, Bank7 Corp.: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone 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 the question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Nathan Race with Piper Sandler. Please go ahead.

Adam Kroll, Analyst, Piper Sandler: Hi, good morning. This is Adam Kroll on for Nathan Race, and thanks for taking my questions.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: Hey, Adam. Good morning.

Adam Kroll, Analyst, Piper Sandler: Yeah. Maybe just starting on loan growth, looks like average loan growth was pretty solid while some payoffs later in the quarter dragged down end-of-period balances. I guess I’m curious if your expectations for loan growth has changed for the remainder of the year, and along with that, if you’re seeing any noticeable change in demand within your energy portfolio.

Jason Estes, Chief Credit Officer, Bank7 Corp.: Yeah, thanks for the question. This is Jason. I think our goals for the year remain intact. We’re still thinking moderate single digit, but I would say that coming off of the third and fourth quarter we had last year, where we had really robust growth that kind of exceeded expectations in both quarters. We’re not at that pace, so I would say that it has slightly slowed down, but we had really nice bookings in the first quarter. Just expect kind of the same from us this year. I do think, like last year, we offset really sizable early payoffs throughout last year. That’s a routine thing for us. I think you’ll see more of that this year, in the second quarter in particular.

Pretty sizable payoffs, and then we’ll just offset that with new loan bookings throughout the rest of the year.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: As it relates to the energy portfolio, I believe it’s at a 10-year low. It was a little over 8% of the portfolio. In the energy space, most of your well-capitalized professional organizations really are not changing a lot as it relates to rushing out to drill, so to speak, I would say, just because of the spike in energy prices. I don’t think anyone believes that there’s any stability in the oil prices when it goes up due to what’s going on in the Middle East. For us, we’re opportunistic when those energy loan opportunities come along. It’s not a huge driver for our company. We’re active and we like the portfolio we have. I wouldn’t expect the energy piece to be causing a lot of dynamic change one way or the other.

Adam Kroll, Analyst, Piper Sandler: Got it. No, that’s super helpful color. Maybe shifting to the net interest margin, some really nice expansion during the quarter, I was wondering if you could provide some color on how you expect the net interest margin ex loan fees to trend, assuming rates remain here through 2026.

Kelly Harris, Chief Financial Officer, Bank7 Corp.: Hey, Adam, this is Kelly. We did make some really good progress on the liability side cost of funds, and that was related to our talented bankers continuing to bring in some quality core deposits. That said, we are modeling in that same range, 440-445, from a core NIM perspective. On the loan fee side of things, kind of reverting back to the normal of 28 basis points-35 basis points.

Adam Kroll, Analyst, Piper Sandler: Got it. Lastly for me on capital management, just given the strong profitability metrics, you should be building capital at pretty strong clips. I guess I’d be curious to hear your updated thoughts on M&A and just overall comfort level and letting capital levels build from here if the right partner doesn’t come along.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: Well, clearly, as we sit here today, I think we ended the quarter at 15.96% on risk-based. We’re probably over 16% today, who knows? Clearly, the need for us to accumulate more capital is not on the top of our minds, and we’re more into growing organically and then on the M&A side. We’ve always been active in the M&A space, and for the right strategic opportunities, we’re going to continue to pursue those. We think that would be an efficient use of the capital.

Adam Kroll, Analyst, Piper Sandler: Got it. Thanks for taking my questions.

Moderator/Operator, Bank7 Corp.: Our next question comes from Will Jones with KBW. Please go ahead.

Will Jones, Analyst, KBW: Yeah, hey, thanks. Good morning, guys, jumping in for Woody Lay. I wanted to follow up on the margin discussion and specifically just talk about deposit costs. Tom, you alluded that the market has all but pulled cuts out of the forecast. Maybe even we see up rates this year. You guys kind of see the margin more stable in that setting. Specifically with deposit costs, how would you guys kind of characterize the competitive environment right now? In that scenario, is there a chance we actually see deposit costs trickle up towards the back half of the year, just as competitive dynamics increase?

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: I don’t think it’s that dynamic, so to speak. It’s really kind of a two-part question you ask, and I don’t see a massive fluctuation or any meaningful fluctuation in deposit costs. Now, that’s absent a rate increase, right? I’m just assuming that there’s no rate increase. The second part is as far as the margin goes related to that, we provide that in the deck on the stability and the lack of volatility in the margin. We don’t expect anything materially different.

Will Jones, Analyst, KBW: Okay. Got it. That’s helpful. You guys call out some interest recoveries you saw this quarter. Would you be able to just quantify that just so we can think about kind of a clean, more recurring margin run rate this quarter?

Kelly Harris, Chief Financial Officer, Bank7 Corp.: Yeah. From a core NIM perspective, I think the non-accrual interest net up was $1.1 million, a little bit under. On a fee perspective, it was closer to 1.7. Again, that reverts us back to that normalized core NIM of 440 and then 28 basis points-30-plus basis points on the fee side.

Will Jones, Analyst, KBW: Got it. Okay. Very helpful there. I wanted to just pivot to the credit discussion. I know that there’s just puts and takes on credit each quarter. Very little migration, generally speaking, and asset quality is strong. You guys have really kind of hit a zero provision for the past, call it four out of five quarters. What is the messaging on the provision and reserve levels going forward? It feels like at some point that trend may have to give a little bit, but I just wanted to get your views on the provision and where you see the credit story today.

Jason Estes, Chief Credit Officer, Bank7 Corp.: A little bit challenging of a question to answer when we really don’t know what the economy’s going to do for the rest of the year. What we’re looking at today is, I think our credit book is as clean as it’s ever been. There was some migration during the quarter. When you see that non-accrual interest recovery, those loans were paid in full. We had multiple credits transition out, full payoffs, and then we had a couple of downgrades during the quarter. On the surface, it looks like the numbers were fairly neutral, but I can’t overstate how active we are at managing the loan portfolio from a credit quality standpoint. Let’s say we grow the book again a pretty sizable amount and the economy stays the same, yeah, we’ll have to provision a little bit more.

If the loan growth is more timid, think low single digits, then we may not have to provision more. Let’s see what’s going on. There’s quite a conflict going on in the Middle East. Does that intrude into our daily lives here in a bigger way? So far it’s been a non-event, especially within our credit book. We’re going to stay true to our fundamentals and do the same things we’ve done for the last decade.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: I would also add to that we have quoted a payoff for this Friday that for the only really material remaining NPA that we have, we have a high confidence factor that that’s going to happen. If that happens, the net effect would be NPAs of somewhere in that $4 million-$5 million range. When you look at $4 million or $5 million on our portfolio, I think that equates to 25 basis points or something like that. To echo Jason’s comments, we certainly don’t feel any pressure absent a macro event to worry about building more ACL loan loss reserve.

Will Jones, Analyst, KBW: Yeah. Okay. I appreciate all that context. I know I’m asking you to look into a crystal ball a little bit there, so thanks for that. I guess just one last one for me. Just on capital, we’ve talked about buybacks not really being an efficient use for you guys, just through your lens. Could you just remind, is that still kind of how you’re viewing the buyback? Does it look any more attractive today than it did, say, 90 days ago? Would love your thoughts there.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: Well, look, we’ve often said this, that we’re blessed with a very top 1% return on equity in our company. Because of that, we produce really good earnings per share, and we’re not driven to reach for increasing EPS through share buybacks. We’ve been beneficiaries of strong earnings and growth. Now with that said, as we’ve said the last few quarters, we recognize that we’re very capital-heavy, and especially for a company with no debt. At some point, the rubber meets the road. Just generally speaking, our philosophy is too strong of a word. Our view is that the share buybacks really don’t add franchise value, and it’s more of a short-term mechanism. I’m not trying to suggest that we would never do one.

What I’m simply saying is that it hasn’t been a critical need for us in the past. Clearly, if there were ever a time in the future where we felt like that the buybacks would make sense, it would probably be driven by a good share repurchase price, and no other alternatives.

Will Jones, Analyst, KBW: Yeah. Okay. That’s all fair enough. I appreciate all the color, guys. Thank you.

Moderator/Operator, Bank7 Corp.: Our next question is from Jordan Ghent with Stephens. Please go ahead.

Jordan Ghent, Analyst, Stephens: Hey, good morning. Thanks for taking my question. I just had a follow-up on the migration on those downgrades during the quarter. Is there any additional details you could give on the type of credits they were and kind of the loan type and things like that?

Jason Estes, Chief Credit Officer, Bank7 Corp.: Yeah. We had a large builder-developer relationship that we downgraded during the quarter, and that was the one Tom referenced that we think will pay off this week. That’s the only industry-specific thing that I could get into.

Jordan Ghent, Analyst, Stephens: Okay. Got it. Just one more follow-up for me around kind of the M&A discussion. I think previously you’ve brought up the idea of doing an MOE. Is that something that’s still on the table, or would you be kind of looking more towards downstream partners?

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: I think the answer is both. Strategic matters are inherently long-term in nature, and so we’ve not deviated from our thinking on that.

Jordan Ghent, Analyst, Stephens: Perfect. Actually just one more, could you guys maybe touch on the fees and expense guidance going forward and maybe excluding the oil and gas impact?

Kelly Harris, Chief Financial Officer, Bank7 Corp.: Yeah. For Q2, on the expense side, we’re projecting internally in the range of $9 million-$9.25 million. On the fee side, low end is $750,000, upwards of $850,000, range.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: What are you talking about, Nate? I didn’t follow.

Kelly Harris, Chief Financial Officer, Bank7 Corp.: Non-interest income.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: Oh, okay.

Jordan Ghent, Analyst, Stephens: Yeah, non-interest income. Perfect. That’s it for me. Thanks for taking my questions.

Moderator/Operator, Bank7 Corp.: Our next question comes from Nathan Race with Piper Sandler. Please go ahead.

Adam Kroll, Analyst, Piper Sandler: Hi. Yeah, maybe just a follow-up for Kelly, just on updated expectations for the impact to fees and expenses from the oil and gas.

Kelly Harris, Chief Financial Officer, Bank7 Corp.: I think that it’ll be continued, the expense offsetting the income, not really material to the bottom line, but temporarily grossing up both sides of the P&L.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: Nate, this is Tom. As we’ve mentioned, I know the last quarter, and I think the last two quarters, perhaps three, we have accomplished our goal. As you recall, the goal was to reduce the hit that we had on an energy loan, and we’re delighted with the results. We’re, what are we, 20 months in? 20? How many?

Kelly Harris, Chief Financial Officer, Bank7 Corp.: Yeah, 20 months.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: 20 months into it. We’ve accomplished our goal. I think that for us to continue to hold that asset is just not something that we would plan to do. I think that, as a reminder, we have signaled to the market that we look at it as a cash recovery versus a GAAP income item. If we do exit that portfolio, then we may have an adjustment or very slight on the GAAP, the way they’ve recognized income on a GAAP basis. On a cash basis, we already have accomplished what we wanted to accomplish. I bring all that up to say that it’s a really small item. It’s a real outlier item.

We’re delighted with what we’ve done and what we’ve accomplished, and I would expect that to be either gone altogether or diminished quite a bit over the next few months.

Adam Kroll, Analyst, Piper Sandler: Got it. Thanks for taking my questions.

Moderator/Operator, Bank7 Corp.: This concludes our question and answer session. I would like to turn the call back over to Thomas L. Travis for any closing remarks.

Thomas L. Travis, President and Chief Executive Officer, Bank7 Corp.: Again, thank you for joining the call. We’re delighted to be where we are and continue to produce these results. We’re mindful of the macro Middle Eastern situation. When the inflation starts biting as predicted because of the higher oil prices, we’re prepared as much as anybody can be for it. In the meantime, it’s steady as she goes for Bank7. Thank you.

Moderator/Operator, Bank7 Corp.: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.

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