Q1 2024 Bank7 Corp Earnings Call
Unknown Executive: Welcome to Bank7 Corp's first quarter earnings call. Before we get started, I'd like to highlight the legal information and disclaimer on page 23 of the investor presentation for those who do not have access to the presentation.
Welcome to bank seven Corp's first quarter earnings call.
Speaker Change: Before we get started I'd like to highlight the legal information and disclaimer on page 23 of the Investor presentation.
Speaker Change: Those who do not have access to the presentation.
Unknown Executive: 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, it can give no assurance that such expectations will prove to be correct. All 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, monetary policy, and supervisory policies of banking regulators. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may differ 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 8K that was filed this morning by the company.
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.
Speaker Change: 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.
Speaker Change: 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 monetary and supervisory policies of banking regulators.
Speaker Change: Should one or more of these risks materialize or should underlying assumptions prove incorrect actual results may differ materially from those expected.
Speaker Change: 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.
Unknown Executive: Representing the company on today's call are Tom Travis, President and CEO; Jason Estes, Chief Credit Officer; and Kelly Harris, Chief Financial Officer. Please note, this event is being recorded. With that, I'll turn the call over to Tom Travis. Please go ahead.
Representing the company on today's call, we have Tom Travis President and CEO, Jason Estes, Chief Credit Officer, Kelly Harris, Chief Financial Officer. Please note. This event is being recorded with that I'll turn the call over to Tom Travis. Please go ahead.
Thomas L. Travis: Good morning, everyone. Thank you for joining us.
Thomas L. Travis: Good morning, everyone. Thank you for joining us. Well, as you can see, we posted record earnings and record earnings per share, and we are obviously very pleased with those results. It reflects our continued discipline in the way we manage our balance sheet, match up the interest rate risk, and maintain our liquidity. And you can tell that it's been successful with our steady and strong NIM. And you can also see that the cost controls continue to be in place, which all add up to really good results. And with regard to the loan book, the asset quality is very good regardless of which vertical you view. And I know that in this day and time, there's a hyper focus on CRE. And I will tell you we have no issues with our portfolio and no issues with our CRE and feel very confident about where we are and how we're doing with asset quality. So with all that being said, we'll turn it over to you for any questions that people might have.
Thomas L. Travis: Well as you can see we posted record earnings and record earnings per share and we are obviously very pleased with those results.
Thomas L. Travis: It reflects our continued discipline on the way, we manage our balance sheet match up the interest rate risk and maintain our liquidity and you can tell that it's been successful with our steady and strong NIM and you can also see that the cost control.
We'll continue to be in place switch, which all add up to really good results ending with regard to the loan book the asset quality is very good regardless of which vertical you view and I know this day in time Theres, a hyper focus on CRE and I would tell you we have no issues with our.
Thomas L. Travis: Portfolio and no issues with our CRE in and feel very confident about where we are.
Thomas L. Travis: And how we're doing with the with asset quality, so with all that being said we'll turn.
Turn it over for any questions that people might have.
Thomas L. Travis: Okay.
Speaker Change: We will now begin the question and answer session.
Unknown Executive: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. The first question today comes from Woody Lay with KBW. Please go ahead.
Speaker Change: To ask a question you May press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question today comes from Woody lay with K B W. Please go ahead.
Hey, good morning, guys.
Wood Neblett Lay: Hey, good morning, guys. Board of Wooding. I wanted to start with the treasury maturity that occurred in the first quarter. I was hoping you could just give some color on where the funds went. It wasn't super clear to me if it all went into cash or if you redeployed some of that back into the bond book, so any color there would be helpful.
Woody Lay: Good morning.
Woody Lay: I wanted to start with the the treasury maturity that occurred in the first quarter.
Woody Lay: I was hoping you could just give some color on on where the funds went into what then super clear to me if it all went into cash or if you redeploy some of that back into the bond book, So any color there would be helpful.
Kelly J. Harris: Hey Woody, this is Kelly. We had the maturity occured at the end of February. We reinvested around $85 million into a three-month treasury product, and then $15 million went to cash.
Woody Lay: Hey, Woody this is Kelly.
We had the maturity occurred at the end of February we reinvested around $85 million in two or three months treasury.
Kelly: And then $15 million with the cash.
Speaker Change: Got it.
Kelly: Do you have the name in the month of March post that reinvestment.
Speaker Change: Yeah core NIM, excluding fees for March was $4 58.
Speaker Change: Okay.
Got it.
I wanted to shift over to M&A and just get your thoughts on sort of your appetite for M&A in this current backdrop.
Kelly J. Harris: Got it. Do you have the NIM and the month of March post that you want to reinvest?
Kelly J. Harris: Your NIM, excluding fees, for March was $4.58.
Speaker Change: You know what he as you know we're constantly.
Thomas L. Travis: Got it.
Wood Neblett Lay: You know, Woody, as you know, we're constantly working on potential acquisitions. We were a finalist in one recently, but it didn't work out. But we're constantly meeting with people and sticking to our strategy, pursuing what we call the right side of the balance sheet and heavily focused on core deposits and good fundamental banks. And so I would say that nothing has changed in regard to our commitment to doing that, and we're going to continue to do that.
Speaker Change: Working on potential acquisitions.
We were a finalist and won recently and it didn't work out.
Speaker Change: But we're constantly meeting with people and sticking to our strategy.
Speaker Change: Pursuing what we call the right side of the balance sheet and heavily focused on core deposits and good fundamental bank.
Speaker Change: Banks, and so I would say that nothing has changed in regard to our commitment to doing that and.
Speaker Change: We're going to continue to do that.
Wood Neblett Lay: Got it. And then, you know, if an M&A deal feels pushed out, would you look to the buyback as a potential lever just to deploy your excess capital? Or is that less likely in the future?
Speaker Change: Got it and then if you know if an M&A deal field.
Speaker Change: <unk>, what would you look to the buyback at the potential leverages to deploy your excess capital or is that.
Speaker Change: Is that less likely in the future.
Speaker Change: I guess I don't understand the question well enough yet.
Thomas L. Travis: I guess I don't understand the question well enough.
Wood Neblett Lay: Yeah, I guess, I mean, would you be interested in the buyback at where the stock's currently traded or trading or? [inaudible]
Speaker Change: Yes, I guess I mean would you be interested in the buyback with where the stock currently trades at or trading or.
Speaker Change: Now is that less appealing to you right now.
Thomas L. Travis: I think what's going on is that there are a couple of factors, and we have been, as you know, you've followed us for a long time, and we have been very disciplined on the buybacks with regard to how high the multiple of the stock is. Also, we want to maintain a little bit of extra capital in case we can find an acquisition that makes sense. And so it's a delicate balance there because we understand that piling up capital doesn't really benefit people, us, anyone, other than if we were able to use it to deploy it into an acquisition. And so as every month goes by, because we're a strong earner and a strong compounder, it just has a tendency to cause that question to come up increasingly. And so at some point, absent an acquisition, then it may motivate us to think more favorably about stock buybacks, even though the multiple may be a little higher than where we would like it to be. And so that's how we view it.
Speaker Change: I think what happens is that there is a couple of factors and we have been as you know you follow this for a long time and we have been very disciplined on the buybacks with regard to how high the multiple of the stock is and.
Speaker Change: Also we want to maintain a little bit.
Extra capital in.
Speaker Change: In case.
Speaker Change: We can find an acquisition that makes sense and so it's a delicate balance there.
Speaker Change: Because we understand that piling up capital.
Speaker Change: Doesn't really benefit people.
Speaker Change: Anyone other than if we were able to use it to deploy into.
Speaker Change: And acquisition so as every month that goes by because we're a strong earner and his strong compound or.
Speaker Change: It just had the tendency to cause that question to come up increasingly.
Speaker Change: And so at some point absent an acquisition then.
Speaker Change: It may motivate us to to think more favorably about stock buybacks, even though our multiple may be.
Speaker Change: A little higher than where we would like it to be and so that's how we view it.
Speaker Change: Alright, that's helpful. Thanks for taking my questions guys.
Thomas L. Travis: All right, that's helpful. Thanks for taking my questions, guys.
Unknown Executive: Mm-hmm.
Speaker Change: Mhm.
Speaker Change: The next question is from Thomas Wendler with Stephens. Please go ahead.
Thomas Alexander Wendler: The next question is from Thomas Wendler with Stevens. Please go ahead.
Thomas Alexander Wendler: Hey, good morning, everyone.
Thomas Alexander Wendler: Hey, good morning, everyone. I just wanted to go back to the securities. Can you give us an idea of the yields on the securities that you purchased?
Thomas Alexander Wendler: Good morning.
Thomas Alexander Wendler: I just wanted to go back to the Securities can you give us some idea of the yields on the securities that you purchased.
Thomas Alexander Wendler: Yes, I believe they were $5 38 at the end of February and so we picked up I go for 15 basis points on NIM, although because it was only one month in Q1, it was five basis points.
Kelly J. Harris: I believe they were 538 at the end of February, so we picked up, on a going forward basis, 15 basis points on them, although because it was only one month in Q1, it was 5 basis points.
Thomas L. Travis: Let me add some color here. Correct me if I'm wrong, Kelly.
Speaker Change: Let me add some color here correct me, if I'm wrong, Kelly, but I think people need to understand the only reason we went back into some securities was the final tailwind and wind down.
Thomas L. Travis: I think people need to understand the only reason we went back into some securities was the final tail-end and wind-down of us needing to pledge to the court related to that large bankruptcy. The wind-down in the bankruptcy court of that large credit, the money's posted, and they wanted securities. If not for that, we would not have redeployed the $100 million that matured and went down to $85 as far as requirements were concerned. This is not some conscious strategy on our part to pivot to move into that. We would much rather have just put the money in the Fed.
Speaker Change: We're needing to pledge to the core related to that large bankruptcy correct. Okay. So very short time so.
Speaker Change: The wind down in the bankruptcy court of a of that large credit the monies posted and they wanted securities and so if not for that we would not have redeployed. The 100 million that matured went down to 85 as far as requirement and so we would not have done that.
Speaker Change: And so this is not some conscious strategy on our part to pivot to to move into that we would much rather have just put the money at the fed.
Thomas Alexander Wendler: Okay, no, but I appreciate that color.
Okay.
Speaker Change: Okay. No I appreciate that color and then just sticking on the yield side, we saw a large step up in loan yields during the quarter can you give me an idea of what drove the increase there and how we should be thinking about loan yields moving forward.
Kelly J. Harris: And then just sticking on the yield side, we saw a large step up in loan yields during the quarter. Can you give me an idea of what drove the increase there and what I should be thinking about loan yields moving forward?
Speaker Change: I believe thats due to that $1 million of lift if you look at the slide deck investor presentation that we put out you'll see there was a $1 million one time item related to the full collection of AR.
Kelly J. Harris: I believe that's due to that $1 million in lift. If you look at the slide deck, that's the presentation that we put out, you'll see there was a $1 million one-time item related to the full collection of a workout loan that had been showing up in our past dues for, oh gosh, probably six quarters in a row. And so I think that's a good signal or reminder of our commitment to behaving like owners because we are owners, okay? And I think that there are probably financial institutions out there that maybe would have walked away from that deal without realizing that income, but just another good result from a hardworking team committed to doing things the right way and maximizing our returns.
Speaker Change: Have a workout loan that had been showing up in our past news for <unk>.
Speaker Change: Gosh, probably six quarters in a row and so I think that's a good signal a reminder.
Our commitment to behaving like owners, because we are owners, okay, and I think theres, probably financial institutions out there that maybe would have.
Speaker Change: Walked away.
Speaker Change: From that deal without realizing that income, but just another good result from.
Speaker Change: A hard hard working team committed to doing things the right way and maximizing our returns.
Speaker Change: Perfect. Thank you.
Thomas Alexander Wendler: Perfect. Thank you. And then, if I can, let's sneak one more in here. Previously, I think we were expecting to collect 60% of the $16.9 million in asset value from the oil and gas business and cash flows in 2024. Is that still how we should be thinking about it? I'm just looking for any update from last quarter's call on the revenues and expenses from the oil and gas business.
Speaker Change: And then if I can.
Speaker Change: Sneak one more in here.
Speaker Change: Previously I think we were expecting to collect 60% of the $16 9 million in asset value from the oil and gas business and cash flows.
Speaker Change: In 2024 is that still how we should be thinking about it I'm just looking for any update on from last quarters call on the revenues and expenses from the oil and gas business.
Unknown Executive: Yeah, thanks for the question. We are spot-on with that projection through the first quarter, so there will be no deviation whatsoever. So, so far, just for your knowledge, 6.4 million of revenue has been recognized, 5 million of cash has been collected, there's 1.4 million due to us that will come in during the next 30 days, and then we've got the updated engineering projections for the rest of the year, and we are exactly in line with those previous.
Speaker Change: Yes. Thanks for the question, we are spot on with that projection through the first quarter.
Speaker Change: No deviation whatsoever. So so far yes, just for your knowledge $6 4 million of revenue has been recognized $5 million of cash has been collected theres, one 4 million due to us that will come in in the next 30 days and then we've got the.
Speaker Change: Updated engineering.
Speaker Change: <unk> for the rest of the year and we are exactly in line with the previous estimates.
Unknown Executive: I would also add that we are hedged. And just think of you. 70% more or less is a good number.
Speaker Change: I would also add that.
Speaker Change: We are hedged.
Speaker Change: And just think of use 70% more or less is a good number.
Unknown Executive: And so the portion that's unhedged. The oil and gas, well, oil prices are significantly higher than they were six weeks ago, and so, you know, we're in a good position. I guess one could argue that we bought the insurance, the hedge, so to speak, to protect against the downside. And, you know, the typical hedge, if we hadn't done it, well, we'd be collecting more. But we all understand the reason that we're doing this is to recover most of the assets and not speculate. So, in addition to being on target with the production amounts, we're in a strong position financially with regard to the hedging and the pricing.
Speaker Change: And so the.
Speaker Change: The portion that's unhedged.
Speaker Change: <unk>.
Speaker Change: The oil and gas while the oil prices are significantly more than they were six.
Speaker Change: Six weeks ago and so.
Speaker Change: We're in a we're in a good position I guess, one could argue that we bought the insurance the hedge so to speak to protect against the downside.
Speaker Change: The typical hedge if we hadn't done it well we'd be collecting more but we all understand the reason that we're we're doing this is to recover most of the assets and not speculate. So in addition to.
Speaker Change: Being on target with their production amounts.
Speaker Change: We're in a strong position financially with regard to the hedging and the pricing.
Speaker Change: Alright, those are all my questions. Thank you.
Thomas Alexander Wendler: All right, those are all my questions. Thank you.
Again, if you have a question. Please press Star then one.
Unknown Executive: Again, if you have a question, please press star then 1. The next question is from Nathan Race with Piper Sandler.
Nathan James Race: The next question is from Nathan race with Piper Sandler. Please go ahead.
Nathan James Race: Yeah. Hi guys. Good morning. Hi Nate, good morning. Going back to the last question, just curious if you guys are actively shopping those oil and gas assets, or is the expectation that you're going to kind of retain those assets through the recuperation period going forward that we just touched on?
Nathan James Race: Yeah, Hi, guys good morning.
Nathan James Race: Hi, Good morning, just going back to the last question. Just curious if you guys are actively shopping those oil and gas assets or is the expectation that youre going to.
Nathan James Race: Turning those assets through the.
Nathan James Race: Recuperation period going forward and we just touched on.
Speaker Change: Honestly Nader is such a small item on our balance sheet, it's really small it's working as we thought it would and its rapidly being recollected Amit collected so it's I'm not going to say that we ignore it but we've been really busy around here and we just really havent focused hard on.
Thomas L. Travis: Honestly, Nate, it's such a small item on our balance sheet. It's really small. It's working as we thought it would, and it's rapidly being recollected, I mean collected, so it's, I'm not going to say that we ignore it, but we've been really busy around here, and we just really haven't focused hard on selling off the asset. So we may look at that over the next two or three months, and we may do that, but it just isn't enough for us to worry about.
Speaker Change: Selling off the assets. So we may look at that over the next two or three months and we may do that but it just isn't enough for us to worry about.
Speaker Change: Gotcha, and then just maybe a technical question on fees and expenses for Kelly could you just kind of help us think about the fee income and expense run rate that we should be.
Nathan James Race: Gotcha. And then maybe a technical question on fees and expenses for Kelly. Can you just kind of help us think about the fee, income, and expense run rate that we should be expecting as these assets remain going forward?
Speaker Change: <unk>.
Speaker Change: As these assets.
We remain going forward.
Kelly: Yes, I think for our core noninterest income number 650000 I think.
Speaker Change: Good Good guide and then on noninterest expense I believe we were closer to eight.
Kelly J. Harris: Yeah, I think for a core non-interest income number, you know, $650,000 is a good guide. And then on non-interest expense, I believe we were closer to $8 million, excluding the oil and gas activity. I think on a go forward basis, maybe for Q2, $8.3 million is a better run rate, excluding oil and gas activity. But I think that maybe the first quarter would provide a good estimate on your go forward for oil and gas revenue and gross expense.
Speaker Change: Excluding the oil and gas activity I think on a go forward maybe for Keith to $8 3 million as a better run rate, excluding the oil and gas activity.
Speaker Change: Maybe the first quarter would provide a good.
Speaker Change: Demand on your go forward for the oil and gas revenue and gross expense.
Speaker Change: Got it great and then just thinking about the margin outlook X P. As going forward I think you mentioned the core margin in March was around $4 50, or so or 445 have you guys kind of thinking about the margin trajectory and a higher for longer interest rate environment going forward.
Speaker Change: And then just a correction the co.
Core NIM excluding fees in March was 458, and so that was what the fully baked in migration of treasuries into higher yielding assets.
On a go forward, we still feel really comfortable operating in that similar range and you may see some slight movement either way but.
Kelly J. Harris: Got it. Great.
Nathan James Race: And then just think about the margin outlook X fees going forward. I think you mentioned the core margin in March was around 450 or so or 445. How do you guys kind of think about the margin trajectory, you know, in a higher for longer interest rate environment going forward?
Speaker Change: More of the same.
Speaker Change: And then how do you guys anticipate the margin reacting or responding to each fed cut as they occur.
Speaker Change: I would say that Nate as you know.
Speaker Change: Yeah.
Speaker Change: If we had a slide in here, we expanded the NIM slide back to for the last 10 years, you would see that we just operate in our normal ranges and we really don't see.
Unknown Executive: Yeah, and then just a correction: the core NIM, excluding fees.
Speaker Change: A big change to that I think that it wouldn't surprise me if.
Unknown Executive: And so that was with the fully baked-in migration of treasuries into higher yielding assets. On a go forward, we still feel really comfortable operating in that similar range. And you may see some slight movement either way. More of the same.
Speaker Change: If the margin would you say of $4 58 real time I mean, it wouldn't surprise me if we were to bleed down a little lower than that just given the dynamics of the yield curve and the.
Speaker Change: Markets.
Speaker Change: Have noticed the last couple of weeks, though that some of the online and some of the banks money markets and high yield savings account to actually have come down and without the fed making any changes and so I think that we're very close to the end of any cost of funds increases.
Thomas L. Travis: Okay, and then how do you guys anticipate the margin reacting to or responding to each Fed cut as they occur?
Thomas L. Travis: I would say that, Nate, as you know, if we had a slide in here, if we expanded the NIMS slide back to the last 10 years, you would see that we just operate in our normal ranges, and we really don't see a big change to that. I think that it wouldn't surprise me if the margin, what you said, was 458 real-time. I mean, it wouldn't surprise me if we were to bleed down a little lower than that, just given the dynamics of the yield curve and the markets. I have noticed in the last couple of weeks, though, that some of the online and some of the banks' money markets and high-yield savings accounts actually have come down, and without the Fed making any changes.
Speaker Change: I don't even know if we have $100 million of Cds left to reprice.
Right. So I think when you think about our cost of funds.
Speaker Change: And our margin.
It's really a function of.
Speaker Change: Do we have to go obtain more deposits to keep up with the loan book and if you do that do you have to pay a little bit more so I think that's the only dynamic that could cause the margin to come down a little bit, but we're going to be in our historical ranges and we should be fine there.
Speaker Change: Okay, Great and then maybe a question for Jason just on the loan growth outlook.
Jason: Nice to see some growth in the first quarter here I think you were a little more guarded Alaska in terms of growth here starting out the year. So just curious to get your updated thoughts on how we should be thinking about loan growth and also.
Jason: Deposit growth in 2024.
Speaker Change: Sure. Thanks, I think youre going to see US continue our commitment to profitability over growth right and so when we were talking three months ago.
Thomas L. Travis: And so I think that we're very close to the end of any cost of funds increases. So I think when you think about our cost of funds and our margin, it's really a function of, you know, do we have to get more deposits to keep up with the loan book? And if you do that, do we have to pay a little bit more? So I think that's the only dynamic that could cause the margin to come down a little bit, but we're going to be in our historical range.
Speaker Change: Kind of emphasized heavily don't expect that 2022 type growth year.
Speaker Change: Going to be.
Speaker Change: Absent some kind of meaningful change in interest rates or something that really gives us an opportunity to maintain our margins while growing its just going to be a single digit number in my opinion, and so I think that I'm just going to reiterate what I said, then we're valuing profitability.
Nathan James Race: Okay, great. And then, maybe, a question for Jason.
Speaker Change: Over growth.
Speaker Change: Got it and then maybe one last one for you Jason just curious what you saw in terms of criticized classified trends in the quarter.
Jason E. Estes: It was nice to see some growth in the first quarter here. I think we were a little more guarded last quarter in terms of growth here starting out the year. So, just curious to get your updated thoughts on how we should be thinking about loan growth and also deposit growth in 2024.
Jason: Yes, no. It was a great quarter in that regard and I think youre going to see us return to our historical levels throughout this year, maybe maybe bleeding into the first quarter of next year. As you know there is some litigation going on with that large energy credits.
Jason: Really want to add much to that other than there is going to be in into that thing at some point, we feel really comfortable with the provision. We've made in that 2 million specific reserve, we still have out there. We think that you know as of today right now Thats, we fully accounted for it through the income statement and so that's also a nice thing to have behind us.
Jason E. Estes: Sure, thanks. I think you're going to see us continue our commitment to profitability over growth, right? And so when we were talking three months ago, you know, I kind of emphasized heavily, you know, don't expect a 2022-type growth year. You know, we're going to be, you know, absent, you know, some kind of meaningful change in interest rates or something that really gives us an opportunity to maintain our margins while growing. It's just going to be a single-digit number, in my opinion. And so I think that I'm just going to reiterate what I said then: we are valuing profitability over growth.
Jason: Credit wise.
Jason: Knock on wood everything just lined up really well here and really looking forward to moving past that.
Jason: That issue.
Jason: But in the meantime.
Jason: The book's performing really I would say it's exceeded my expectations. When you take into account all of those interest rate moves and the impact that has on borrowers and it's just a really nice thing and it is just really emphasizes to our team here internally.
Jason: We do underwrite loans.
In a proper way and we're getting we're seeing the rewards for that right now.
Speaker Change: Right that's great to hear and then Tom Lastly, can you just remind us in terms of acquisition partners kind of the size of targets that youre looking at.
Jason E. Estes: Got it, and then maybe one last one for you, Jason. I was just curious what you saw in terms of criticized classified trends in the quarter.
Tom: And just kind of the overall range there and also.
Tom: Okay.
Tom: Geography too.
Jason E. Estes: Yeah, no, it was a great quarter in that regard, and I think you're going to see us return to our historical levels, you know, throughout this year, maybe bleeding into the first quarter of next year. As you know, there's some litigation going on with that large energy credit, so we don't really want to add much to that other than, you know, there is going to be an end to that thing at some point.
Tom: I noticed the J P. Morgan was down 3% today, they may become a target it looks like they missed a little bit on their on their margin. So we're going to we're going to we're going to call you. After this Nate and see what how much capital we need to raise but.
Tom: If they're not if they're not amenable to that then.
Tom: We will pivot all the kidding aside.
Tom: I would just say this about our company.
Tom: We're just so proud of our team and I think when when if people don't know us and they haven't followed us for a long time.
Jason E. Estes: We feel really comfortable with the provision we've made and the $2 million specific reserve we still have out there. We think that, you know, as of today, right now, we've fully accounted for it through the income statement, and so that's also a nice thing to have behind us. And, you know, credit-wise, knock on wood, everything just lined up really well here, and I'm really looking forward to moving past that issue and the impact that has on borrowers. And it's just a really nice thing. And it just re-emphasizes to our team here internally that we do underwrite loans in a proper way. And we're seeing the
Tom: I'm trying not to come across as overconfident or arrogant, but the truth is we're not a billion 700 billion. Eight company. We are we are a company that operates and can manage a much larger institution and so because of that.
Tom: I believe that.
It wouldn't bother us too to do anything that that made sense it was larger and.
Tom: And I think that.
Tom: So I wanted to go back to something that was said very early in the conversation and that is that we're not a bank that's going to go out and buy someone because they have this great loan book or because they have this special vertical we're going to buy people based on tried and true liquidity and the ability of this team.
Tom: <unk> in the history of this team to then take that and efficiently deploy it into what I consider to be the greatest geographical economic area on the planet, which is Texas and Oklahoma.
Nathan James Race: Right, that's great to hear. And then Tom, lastly.
Thomas L. Travis: In terms of acquisition partners, the kind of targets that you're looking at, and just kind of the overall range there, and also. Thank you.
Tom: It's just a really nice environment so.
Thomas L. Travis: You know, I noticed that J.P. Morgan was down 3% today. They may become a target. You know, it looks like they missed a little bit on their margin. So we're going to call you after this, Nate, and see how much capital we need to raise. But yeah.
Tom: I think that clearly it would be.
Tom: We don't want to get distracted by anything that's too small, but if something comes along that's larger that fit those parameters and we're not going to be afraid of it and that's our view.
Speaker Change: Okay great.
Speaker Change: Thanks, guys I appreciate all the color.
Thomas L. Travis: If they're not amenable to
Speaker Change: Thank you Nate.
Thomas L. Travis: We'll pivot. All the kidding aside, we... You know, I would just say this about our company. And we're just so proud of our team.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Tom Travis for any closing remarks.
Thomas L. Travis: Well. Thank you again to everyone I think we've covered most of the components and again, we're really proud of our team. We're proud of our results, we're really happy with the breadth and depth of the company in all facets and just look forward to continuing to do what we do so thank you.
Thomas L. Travis: And I think when people don't know us and they haven't followed us for a long time, and I'm trying not to come across as overconfident or arrogant, but the truth is we are not a billion seven or billion eight company. We are a company that operates and can manage a much larger institution. And so because of that, I believe that it wouldn't bother us to do anything that made sense that was larger. And I think that, and so I want to go back to something that was said very early in the conversation, and that is that, you know, we're not a bank that's going to go out and buy someone because they have this great loan book or because they have this special vertical.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Thomas L. Travis: We're going to buy people based on tried and true liquidity and the ability of this team and the history of this team to then take that and efficiently deploy it into what I consider to be the greatest geographical economic area on the planet, which is Texas and Oklahoma. I mean, it's just a really nice environment. So I think that, you know, clearly it'd be, we don't want to get distracted by anything that's too small, but if something comes along that's larger, that fits those parameters, then we're not going to be afraid of it. And that's our view.
Nathan James Race: Okay, great. Thanks guys. I appreciate it.
Unknown Executive: Thank you.
Unknown Executive: Thank you, Nate.
Thomas L. Travis: This concludes our question and answer session. I would like to turn the conference back over to Tom Travis for any closing remarks.
Thomas L. Travis: Well, thank you again to everyone. I think we've covered most of the components.
Unknown Executive: And again, we're really proud of our team. We're proud of our results. We're really happy with the breadth and depth of the company in all facets and just look forward to continuing to do what we do. So thank you.
Unknown Executive: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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