Bank7 Corp. (NASDAQ:BSVN) Q2 2023 Earnings Call Transcript

Jason Estes: Yes. So one of them had a consistent, nice continued improvement and it has now for 12 months, maybe a little more than 12 months. And so we used to refer to it as the green shoots. I don’t even know if you can call it that at this point. It’s just a nice recovery story there. And so we’re optimistic that, that one may come out of that bucket in the near future. And then the other credit, again, that involves litigation, well-secured, don’t expect any loss, but we have to work through the corp system to get that money back.

Nathan Race: Okay. Great. And I appreciate the added details on the office commercial real estate exposure in the slide deck. Any additional color you can provide on that portfolio in terms of kind of the maturities that are expected over the next year or so. And just generally how you’re feeling overall about the office [series] portfolio, just given this an area of focus these days for investors?

Jason Estes: It is, we’re so unique, I think, compared to maybe other banks of our size and especially the bigger banks because a lot of the majority of our office, this is going to be an owner-occupied deal. And it’s typically don’t think downtown at all. I think suburban — we used to call them like a house office almost. These are smaller loans. They’re amortizing rapidly, and we just don’t expect stress in that portfolio of ours. We really don’t see a single loan in there that we have any expected issues on.

Tom Travis: Nate, I would add to Jason’s comments that we all know that the news is dominated and emanates from New York to Washington and some on the West Coast as well. And that’s where you have this spectacular new stories about. I mean you read about the horror in San Francisco Downtown and some of these other cities and also on the East Coast and I’m not making fun of anybody or anything, but I just — it’s just a perfect illustration of somebody decides it’s a big deal, and it is a big deal in those geographies and in those urban markets, but it hasn’t — it doesn’t have anything to do with how we loan money and what goes on in Texas and Oklahoma markets. And so regardless, it’s nice to hear your reinforce with me your comments about we anticipated concern.

And it seems like in the world that we live in, you’re guilty. If you have 1 office loan, it’s like, “Oh, my God.” And so we anticipated the questions and that’s why we went into additional disclosures. And so it’s nice to hear you point that out. And so it’s just a different world than where the news comes from.

Nathan Race: Got it. That’s very helpful. And if I could just ask one last one for Tom, perhaps on just kind of capital management priorities. Obviously, you guys are continuing to build TCE, regulatory capital ratios also increased in the quarter. You guys have, what I think, is a premium currency on tangible book basis relative to peers. And I think a couple of quarters ago, we were talking about a potential acquisition opportunity. So would just love to kind of get your thoughts on kind of how you’re prioritizing excess capital deployment. And within that context, I can understand, just given the macro uncertainty that exists out there that maybe there’s more of an impetus to perhaps just kind of hold capital these days. So I would just love to get any thoughts along those lines, Tom.