Q2 2024 Bank7 Corp Earnings Call
Good day and welcome to the Bank7 Corp. second quarter earnings call. Before we get started, I'd like to highlight the legal information and disclaimer on page 26 of the investor presentation.
Unknown Executive: Before we get started, I'd like to highlight the legal information and disclaimer on page 26 of the University of Presentation. For those you 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 own information and are currently available to the management. Other management believes that the expectations reflected in such forward-looking statements are reasonable; they can give never-surance 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 effective economic conditions on interest rates, credit quality, learned demand, liquidity, and monetary and supervisory policies of banking regulators.
Unknown Executive: Before we get started, I'd like to highlight the legal information and disclaimer on page 26 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.
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 the 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,
Unknown Executive: 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 8K that was filed this morning by the company.
Credit Quality, Loan Demand, Liquidity, and Monetary and Supervisory Policies of Banking Regulators.
Unknown Executive: Sure, what are more of these risks materialized, or should underlying assumptions prove incorrect, actual results may vary materially from those expected.
Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected.
Unknown Executive: Also, please note that this conference call contains references to non-GAAP financial measures. You can find recommendations of these non-GAAP financial measures to GAAP financial measures and in 8-K that was filed this morning by the company.
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.
Unknown Executive: Representing the company on today's call are Brad Haynes, Chairman; Tom Travis, President and CEO; JT Phillips, Chief Operating Officer; Jason Estes, Chief Credit Officer; and Kelly Harris, Chief Financial Officer. With that, I'll turn the call over to Tom Travis. Please go ahead. Thank you.
Unknown Executive: Representing the company on today's call, we have Brad Haines, German, Tom Travis, President and CEO, J.T. Phillips, Chief Operating Officer; Jason Estes, Chief Credit Officer; and Kelly Harris, Chief Financial Officer.
Speaker Change: Representing the company on today's call, we have Brad Haynes, Chairman, Tom Travis, President and CEO , J.T. Phillips, Chief Operating Officer, Jason Estes, Credit Officer, and Kelly Harris, Chief Financial Officer. With that, I'll turn the call over to Tom Travis. Please go ahead.
Tom Travis: With that, I'll turn the call over to Tom Travis. Please go ahead. Thank you, and welcome for the, welcome to everyone on the call. We're delighted with our results; they were strong, record profits, and we achieve those.
Thomas L. Travis: Thank you, and welcome to everyone on the call. We're delighted with our results. They were strong, record profits, and we achieved them. We always thank our team members. We don't take them for granted. It's an outstanding group, and we're just very grateful to be part of this team.
Thomas L. Travis: Thank you and welcome to everyone on the call.
Thomas L. Travis: We're delighted with our results. They were strong, record profits.
Tom Travis: We always think our team members; we don't take them for granted. It's an outstanding group, and we're just very grateful to be part of this team. It's just a wonderful group, professional people, that take pride in producing these results. As you can see, we continue to reap the rewards of a well-matched balance sheet, and we, again, post today strong NIM, which drove us to those earnings record earnings. Those earnings were achieved in spite of a relatively flat loan book, and that was because we experienced some large loan paydowns towards the end of the quarter, and a few of our anticipated new loan fundings were pushed to July.
Speaker Change: We achieve those. We always thank our team members. We don't take them for granted. It's an outstanding group, and we're just very grateful to be part of this team. It's just a wonderful group of professional people that take pride in producing these results.
Thomas L. Travis: It's just a wonderful group of professional people that take pride in producing these results. As you can see, we continue to reap the rewards of a well-matched balance sheet. And we again posted a strong NIM, which drove us to those earnings, which were record earnings. Those earnings were achieved in spite of a relatively flat loan book, and that was because we experienced some large loan paydowns towards the end of the quarter, and a few of our anticipated new loan fundings were pushed to July. Earnings were also strong due to our cost discipline and our low efficiency ratio. That's one of the hallmarks of who we are.
Speaker Change: As you can see, we continue to reap the rewards of a well-matched balance sheet, and we again posted a strong NIM, which drove us to those earnings, record earnings.
Speaker Change: Those earnings were achieved in spite of a relatively flat loan book, and that was because we experienced some large loan paydowns towards the end of the quarter, and a few of our anticipated new loan fundings were pushed to July .
Tom Travis: earnings were also strong due to our cost discipline and our low efficiency ratio. That's one of the hallmarks of who we are.
Speaker Change: Earnings were also strong due to our cost discipline and our low efficiency ratio. That's one of the hallmarks of who we are. As far as liquidity goes, our cash position continues to be historically higher than industry averages.
Thomas L. Travis: As far as liquidity goes, our cash position continues to be historically higher than industry averages. And, in addition to that, our public fund segment is small and made up of counties and school districts within our community, so we like our core funding. We also continue to have a large amount of availability on our lines, and we view that as a backstop facility. We don't use those lines, but they're certainly available sources of funding.
Tom Travis: As far as liquidity goes, our cash position continues to be small and made up of the county's and school districts within our communities. We like our core funding. We also continue to have a large amount of availability on our lines. We view those as a backstop facility. We don't use those lines, but they're certainly available sources of funding.
Speaker Change: And in addition to that, our public fund segment is small and made up of counties and school districts within our community, so we like our core funding.
Speaker Change: We also continue to have a large amount of availability on our lines. We view those as a backstop facility. We don't use those lines, but they're certainly available sources of funding.
Thomas L. Travis: And then the drop in deposits compared to last quarter was principally related to one very large deposit we've been carrying of approximately $80 million. At certain points, it was up as much as $100 million. And it related to a bankruptcy court deposit that was finally dispersed by the bankruptcy court.
Tom Travis: And then the drop-in deposits compared to last quarter was principally related to one very large deposit we've been carrying of approximately $80 million. At certain points, it was up as much as 100 million, and it related to a bankruptcy court deposit that was finally dispersed per the bankruptcy court. And so that's really the story on the drop in the deposits, and it never really was part of our core funding. It was a good funding source, though, because there was no interest paid on it for several months. So all in all, the liquidity is really strong.
Speaker Change: And then the drop in deposits compared to last quarter was.
Speaker Change: Principally related to one very large deposit we've been carrying of approximately $80 million.
Speaker Change: At certain points, it was up as much as $100 million. And it related to a bankruptcy court deposit that was finally dispersed per the bankruptcy court.
Thomas L. Travis: And so that's really the story on the drop in the deposits, and it never really was part of our core funding. It was a good funding source, though, because there was no interest paid on it for several months. So, all in all, the liquidity is really strong and good. And then, as far as asset quality is concerned, I constantly shout out to Jason Estes and his team. They do an exceptional job in that area.
Speaker Change: And so, that's really the story on the drop in the deposits, and it never really was part of our...
Speaker Change: It was a good funding source, though, because there was no interest paid on it for several months.
Tom Travis: And as far as asset quality, I constantly shout out to Jason Estes and his team that they do an exceptional job in the air in that area, and our overall credit quality is very, very strong, and it's always a big strength of our company. You will note we had a small net charge-off, and that was the tail end remnant of the large credit that we worked through last year and early this year. We had not charged it down completely at the end of last year because we weren't sure, but we were cautious. We thought there might be a little bit more to charge off, but instead of taking that charge off last year, we had a $2 million specific reserve related to the credit.
Speaker Change: So all in all, the liquidity is really strong and good. And then as far as asset quality, you know, I...
Speaker Change: Constantly shout out to Jason Estes and his team, they do an exceptional job in that area and our overall credit quality.
Thomas L. Travis: And our overall credit quality is very, very strong. And it's always a big strength of our company. You will note we had a small net charge-off. And that was the tail end remnant of the large credit that we worked through last year and early this year. We had not charged it down completely at the end of last year because we weren't sure.
Speaker Change: is very, very strong, and it's always a big strength of our company. You will note we had a small net charge-off, and that was the tail-end remnants.
Speaker Change: of the large credit that we worked through last year and early this year, we had
Speaker Change: Not charged it down completely at the end of last year because we weren't sure
Thomas L. Travis: But we were cautious. We thought there might be a little bit more to charge off. But instead of taking that charge off last year, we had a $2 million specific reserve related to the credit. Again, we were not sure.
Speaker Change: But we were cautious. We thought there might be a little bit more to charge off, but instead of taking that charge off last year, we had a $2 million specific reserve related to the credit. Again, we were not sure, and as we worked through the...
Tom Travis: Again, we were not sure, and as we worked through the resolution of that credit, it became obvious that that reserve was going to be needed. So we went ahead and just took that.
Thomas L. Travis: And as we worked through the resolution of that credit, it became obvious that that reserve was going to be needed. So, we went ahead and just took that. And then I think, Pivoting to the CRE loan vertical, it seems to get a lot of play these days, and we've provided enhanced disclosures in our deck. I'll just say that we are absolutely unconcerned with any aspect of our CRE portfolio. It's very strong, and we just aren't concerned about it.
Speaker Change: Resolution of that credit it became obvious that that reserve was going to be needed. So we went ahead and just took that
Tom Travis: And then I think pivoting to the CRE loan vertical, it seems to get a lot of play these days, and we've provided enhanced disclosures in our deck. I'll just say that we are absolutely unconcerned with any aspect of our CRE portfolio. It's very strong, and we just aren't concerned about it. With regard to our capital levels, clearly they grow rapidly because of the earnings. We benefit from those strong earnings, and we also keep a relatively low dividend payout ratio. I think it's almost half of what the peer group pays out. So when you look at rapid and high earner with a lower dividend payout, it really rapidly rebuilds that capital.
Speaker Change: And then I think...
Speaker Change: Pivoting to
Speaker Change: The CRE Loan Vertical, it seems to get a lot of play these days.
Speaker Change: We've provided enhanced disclosures in our deck.
Speaker Change: I'll just say that we are absolutely unconcerned with any aspect of our CRE portfolio. It's very strong and we just aren't concerned about it. With regard to our capital levels, clearly they grow rapidly because of the earnings.
Thomas L. Travis: With regard to our capital levels, clearly, they grow rapidly because of earnings. We benefit from those strong earnings, and we also keep a relatively low dividend payout ratio. I think it's almost half of what the peer group pays out.
Speaker Change: We benefit from those strong earnings and we also keep a relatively low dividend payout ratio. I think it's almost half of what the
Thomas L. Travis: When you look at rapid and high earners with a lower dividend payout, it really rapidly rebuilds that capital. So we had a strong quarter. We're very pleased with our returns and what we provide to our shareholders, and we're excited about the future. Navigating forward is something that we're mindful of every day, and we know that if we stick to our fundamentals, and we're going to be fine. As optimistic as we are, we are mindful of a large deficit that our national leaders are running. It's disgraceful and reckless to run any enterprise that way.
Speaker Change: So when you look at rapid and high earner with a lower dividend payout, it really rapidly rebuilds that capital.
Tom Travis: So we had a strong quarter. We're very pleased that our returns and what we provide to the shareholders, and we're excited about the future.
Speaker Change: So, we had a strong quarter.
Speaker Change: We're very pleased at our returns and what we provide to the shareholders.
Tom Travis: Navigating forward is something that we're mindful of every day, and we know that if we stick to our fundamentals, we're going to be fine. And as optimistic as we are, we are mindful of the large deficits that our national leaders are running. It's disgraceful and reckless to run any enterprise that way. Regardless, we're cautiously optimistic. We're really comforted by our long term history, but also the fact that we have economic geographic advantages compared to other parts of the country. And I just can't stress enough that the news seems to emanate from the Northeast and some from the West Coast, and it's just a completely different ballgame when you're operating in the environment that we're in down here.
Speaker Change: And we're excited about the future. Navigating forward is something that we're mindful of every day, and we know that we stick to our fundamentals and we're going to be fine. As optimistic as we are, we are mindful of the large deficits.
Speaker Change: that our national leaders are running. It's disgraceful and reckless to run any enterprise that way. Regardless, we're cautiously optimistic.
Thomas L. Travis: Regardless, we're cautiously optimistic. We're really comforted by our long-term history, but also the fact that we have economic geographic advantages compared to other parts of the country. I just can't stress enough that the news seems to emanate, you know, from the Northeast and some from the West Coast, and it's just a completely different ballgame when you're operating in the environment that we are in down here.
Speaker Change: We're really comforted by our long-term history, but also
Speaker Change: The fact that we have economic geographic advantages compared to other parts of the country, and I just can't stress enough that the news seems to emanate
Speaker Change: from the Northeast and some from the West Coast. And it's just a completely different ball game when you're operating.
Tom Travis: And so that's what makes this cautiously optimistic as we move forward in spite of all those other factors.
Thomas L. Travis: And so, that's what makes us cautiously optimistic as we move forward in spite of all those other factors. So, with all that being said, we're standing by for any questions anyone has. Thank you. We will now begin.
Speaker Change: in the environment that we are in down here. And so that's what makes us cautiously optimistic as we move forward in spite of all those other factors. So with all that being said, we're standing by for any questions anyone has. Thank you.
Tom Travis: So, with all that being said, we're standing by for any questions anyone has. Thank you.
Unknown Executive: It 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're using a speaker phone, please pick up your hands up before pressing the keys. To withdraw your question, please press star then two. And at this time, we'll pass momentarily for the first question.
Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then 2, and at this time, we will pause momentarily for the first question. And our first question today comes from Woody Lay with KBW. Please go ahead.
Speaker Change: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: To withdraw your question, please press star then 2. And at this time, we will pause momentarily for the first question.
Woody Ray: And our first question today comes from Woody Ray with KBW.
Unknown Executive: Please go ahead.
Speaker Change: And our first question today comes from Woody Lay with KBW. Please go ahead.
Woody Ray: Hey, good morning, guys. Good morning.
Kelly Harris: So the core name, if you exclude the loan fees, came a little bit better than what I was expecting.
Wood Neblett Lay: Hey, good morning, guys.
Wood Neblett Lay: The core NIM, if you exclude the loan fees, came out a little bit better than I was expecting. I know that $100 million of non-interest-bearing deposits came out midway through the quarter, but what do you think is a good run rate for that core NIM over the back half of the year?
Speaker Change: All right.
Wood Neblett Lay: So the core name, if you exclude the loan fees, came a little bit better than what I was expecting. I know that
Kelly Harris: I know that a hundred million of non-interest bearing deposits came out midway through the quarter. But what do you think is a good run rate for that core name of the back half of the year?
Wood Neblett Lay: A hundred million of non-interest bearing deposits came out midway through the quarter. What do you think is a good run rate for that core NIM over the back half of the year?
Kelly Harris: Hi, Woody. This is Kelly. That's correct. We're forecasting. I'll just give you real time. Junim was down to 458. And I think if you look at the potential loan fundings in Q3, we're forecasting anywhere between 460 and 465 from a core name perspective. Yeah, and I would add to that, I would add to that, Woody, that, you know, a lot of that's going to depend on, you know, the actual. Timing of the loan growth, and if we have to go and secure funding for that, it could be a little more costly. And so Kelly is absolutely technically correct.
Kelly J. Harris: Hi Woody, this is Kelly. That's correct, we're forecasting, I'll just give you real time, June NIM was down to $458,000, and I think if you look at the potential loan funding in Q3, we're forecasting anywhere between $460,000 and $465,000.
Kelly J. Harris: Hi Woody, this is Kelly.
Speaker Change: That's correct. We're forecasting, I'll just give you real time, June NIM was down to $458,000. And I think if you look at the potential loan funding in Q3, we're forecasting anywhere between $460,000 and $465,000 from a core NIM perspective.
Thomas L. Travis: Yeah, and I would add to that. I would add to that, Woody, that a lot of that's going to depend on the actual timing of the loan growth and if we have to go and secure funding for that. It could be a little more costly, and so Kelly is absolutely technically correct. It's kind of, It's tough to believe that we could maintain it at that same exact level, but we're very comfortable that we're going to continue to operate within those ranges. And even if it were to bleed down based on timing, I don't expect it would be a meaningful amount, a meaningful reduction.
Wood Neblett Lay: Yeah, and I would add to that, I would add to that, Woody, that, you know, a lot of that's going to depend on, you know, the, the actual.
Speaker Change: Timing of the loan growth and if we have to go and
Wood Neblett Lay: secure funding for that. It could be a little more costly and so
Jason Estes: It's kind of tough to believe that we could maintain it at that same exact level, but we're very comfortable that we're going to continue to operate within those ranges. And even if it were to bleed down based on timing, I don't expect it would be a meaningful, meaningful reduction. Got it.
Kelly J. Harris: Kelly is absolutely technically correct. It's kind of.
Kelly J. Harris: Tough to believe that we could maintain it at that same exact level, but we're very comfortable that we're going to continue to operate within those ranges. And even if it were to bleed down based on timing, I don't expect it would be.
Kelly J. Harris: A meaningful amount, a meaningful reduction.
Jason E. Estes: Got it. And then maybe turning to the loan growth, you know, I know on a quarter-to-quarter basis, it can be a little lumpy sometimes. You mentioned some funding being pushed out. Is that sort of a reflection of, you know, customers waiting on potential rate cuts? Is it other factors? And a follow-up question: it sounds like, you know, the growth next quarter could be strong.
Woody Ray: And then maybe turning to the loan growth, you know, I know on a quarter-to-quarter basis, it can be a little lumpy sometimes. You mentioned some funding being pushed out.
Speaker Change: Got it. And then maybe turning to the loan growth. I know on a quarter to quarter basis it can be a little lumpy sometimes. You mentioned some funding being pushed out. Is that sort of a reflection of…
Woody Ray: Is that sort of a reflection of customers waiting on potential rate cuts? Is it other factors and a follow-up question?
Speaker Change: customers waiting on potential rate cuts? Is it other factors? And a follow-up question, it sounds like, you know.
Jason Estes: It sounds like the growth next quarter could be strong?
Jason Estes: Yeah, I think it's a combination of a lot of factors, Woody, and this is Jason. We continue to see customers sell businesses, take advantage of maybe equity raises. And so that led to some increase payoff during the quarter that Tom referred to in his comments. So, you know, when you have those lumpy paydowns, even though our new funding's in the quarter, they were what I would describe as pretty average, with June being particularly stronger. We think we'll grow again in the third quarter, but if you go back, you know, I would say 18 months, we've kind of been signaling that, hey, listen, you know, high single digit long growth is kind of what we expect.
Jason E. Estes: Yeah, I think it's a combination of a lot of factors, Woody, and this is Jason. We, you know, we continue to see customers sell businesses, take advantage of maybe equity raises, and so that led to some increased payoffs during the quarter that Tom referred to in his comments. So, you know, when you have those lumpy paydowns, even though our new funding is in the quarter, they were what I would describe as pretty average, with June being particularly stronger.
Speaker Change: The growth next quarter could be strong.
Jason E. Estes: Yeah, I think it's a combination of a lot of factors, Woody, and this is Jason. We, you know,
Jason E. Estes: We continue to see customers...
Speaker Change: Sell businesses.
Speaker Change: Take advantage of maybe equity raises. And so that led to some increased payoffs during the quarter that Tom referred to in his comments.
Speaker Change: You know, when you have those lumpy paydowns, even though our new funding's in the quarter, they were what I would describe as pretty average, with June being particularly stronger.
Jason E. Estes: We think we'll grow again in the third quarter, but if you go back, you know, I would say 18 months, we've kind of been signaling that, hey, listen, you know, high single-digit loan growth is kind of what we expect. And again, I feel really good about that for the full year. And so, as you mentioned, going quarter to quarter, you can see some blips, spikes, peaks, valleys, whatever you want to call them, that just, if you look over the course of the year, I feel really good about that high single-digit.
Speaker Change: We think we'll grow again in the third quarter, but if you if you go back, you know
Speaker Change: I would say 18 months. We've kind of been signaling that, hey, listen, you know, high single-digit loan growth is kind of what we expect. And again, I feel really good about that for the full year. And so as you mentioned, you know, going quarter to quarter, you can see some...
Jason Estes: And again, I feel really good about that for the full year. And so, as you mentioned, you know, going quarter to quarter, you can see some blitz spikes, peaks, valleys, whatever you want to call them. But just if you look over the course of the year, I feel really good about that high single digit. But, you know, the other side of that, and we've talked about this previously as well, you really have to remember we're so focused on maintaining profit margins. We do sacrifice growths for that. And I think this quarter is a really, really good example of that.
Speaker Change: Blips, Spikes, Peaks, Valleys, whatever you want to call them. If you look over the course of the year, I feel really good about that high single digit, but you know the other side of that and we've talked about this previously as well, you really have to
Jason E. Estes: But, you know, the other side of that, and we've talked about this previously as well, you really have to remember we're so focused on maintaining profit margins that we do sacrifice growth for that. And I think this quarter is a really, really good example of that. And, you know, we like that. Some investors may not, but that's how we're going to continue to operate, and we just think it's the right thing to do.
Speaker Change: Remember, we're so focused on maintaining profit margins, we do sacrifice growth for that. And I think this quarter is a really, really good example of that.
Woody Ray: And, you know, we like that; some investors may not, but that's how we're going to continue to operate. And we just think it's the right thing to do. Yeah, that makes sense.
Speaker Change: You know, we like that. Some investors may not, but that's how we're going to continue to operate, and we just think it's the right thing to do.
Thomas L. Travis: Yeah, that uh, that uh, that makes sense. And then lastly... Capital's, you know, grown really nicely over the past couple quarters. Just how do you think about deploying some of that excess capital in the current environment? I'm assuming the preference would be through M&A.
Jason Estes: And then lastly, capital has grown really nicely over the past couple of quarters. How do you think about deploying some of that excess capital in the current environment? I'm assuming the preference would be through M&A. Clearly, that's correct. And, and it's, it's, we're very aware of the fact that, you know, we've had quite a few discussions over the last year, especially with potential targets. And we, I think the industry refers to some of the banks, the zombie banks, but there's a large number of banks that would like to do something, but their hands are tied.
Speaker Change: Yep, that makes sense. And then lastly...
Speaker Change: Capital's, you know, grown really nicely over the past couple quarters. How do you think about deploying some of that excess capital in the current environment? I'm assuming the preference would be through M&A?
Thomas L. Travis: Clearly, that's correct, and we're very aware of the fact that we've had quite a few discussions over the last year, especially with potential targets, and I think the industry refers to some of the banks as zombie banks. But there's a large number of banks that would like to do something, but their hands are tied, and they're wanting to wait until they can unwind some AOCI. And so we're mindful of
Speaker Change: Clearly that's correct and
Speaker Change: it's it's
Speaker Change: We're very aware of the fact that, you know, we've had quite a few discussions over the last year, especially with potential targets, and we, I think the industry refers to some of the banks as zombie banks, but there's a
Jason Estes: And they're wanting to wait until they can unwind some AOCI. And so we're mindful of that. And, and if you, if you believe that we're on the precipice of you know, some rate reductions. Then I think you could see opportunities that arise in the near future. And so we're not in any hurry. And I would say this too, that, you know, we, we hear folks talk to us from time to time about, uh, share repurchase. And, you know, we hear those things.
Speaker Change: There's a large number of banks that would like to do something, but their hands are tied and they're wanting to wait until they can unwind some AOCI. And so we're mindful of that.
Thomas L. Travis: If you believe that we're on the precipice of, you know, some rate reductions, then I think you could see an opportunity that arrives in the near future, and so we're not in any hurry. And I would say this, too, that, you know, we hear folks talk to us from time to time about share repurchase, and, you know, we hear those things, you know, but let's remember, one of the great strengths of Bank7 is this.
Speaker Change: If you believe that we're on the precipice of, you know, some rate reductions,
Speaker Change: then I think you could see opportunities.
Speaker Change: that arise in the near future, and so we're not in any hurry. And I would say this too, that we hear folks talk to us from time to time about,
Jason Estes: But, but let's remember one of the great strengths of Bank7 is this. Um, when you're making call it 20% to 22% return on average tangible common equity, there really shouldn't be a hyper focus on share repurchases because if we can produce really high returns far better than. And, um, most any other bank, and do it safely. Um, we're not as driven to worry about running out and making share repurchases to, you know, to support for whatever reason that the share price. And so I think it's a combination of providing great returns; reduces the sense of urgency.
Speaker Change: Share repurchase, and we hear those things, but let's remember, one of the great strengths of Bank7 is this.
Thomas L. Travis: When you're making, call it a 20% to 22% return on average tangible common equity. There really shouldn't be a hyper focus on share repurchases. Because if we can produce really high returns, far better than most any other bank, and do it safely, we're not as driven to worry about running out and making share repurchases to, you know, support or for whatever reason, the share price. And so I think it's a combination of providing great returns that reduces a sense of urgency, and at the same time, against the backdrop of knowing that there are people out there that are gonna want to sell when the AOCI unwinds.
Speaker Change: When you're making
Speaker Change: Call it 20% to 22% return on average tangible common equity.
Speaker Change: There really shouldn't be a hyper focus on share repurchases.
Speaker Change: Because if we can produce really high returns, far better than
Speaker Change: Most any other bank and do it safely.
Speaker Change: We're not as driven to worry about running out and making share repurchases to
Speaker Change: You know
Speaker Change: To support or for whatever reason that the share price and so I think it's a combination of.
Jason Estes: And at the same time against the backdrop of knowing that there aren't people out there. There are going to want to sell when the AOC eye on wine. And that's, that's our view. And clearly, um, I think, yeah, I would say that we certainly don't predict, and we're not saying that we're going to do something at the end of the year or first quarter. But if we're sitting here in nine months and it doesn't look like there's any opportunities. And I think at some point it would be prudent to revisit that concept.
Speaker Change: Providing great returns, reduces a sense of urgency, and at the same time, against the backdrop of knowing that there are people out there that are going to want to
Thomas L. Travis: And that's our view. And clearly, I think, you know, I would say that we certainly don't predict, and we're not saying that we're gonna do something at the end of the year or first quarter, but if we're sitting here in nine months, and it doesn't look like there are any opportunities, then I think at some point, it would be prudent to revisit that concept. But for now, we're steady as
Speaker Change: Sell when the AOCI unwinds and that's that's our view and clearly I think yeah I would say that we certainly don't predict and we're not saying that we're going to do something at the end of the year or first quarter, but if we're sitting here in nine months and
Speaker Change: And it doesn't look like there's any opportunities, and I think at some point it would be prudent to revisit that concept, but for now, we're steady as she goes.
Jason Estes: But for now we're, we're steady as she goes.
Woody Ray: Got it.
Wood Neblett Lay: Got it. Thanks for taking my question.
Unknown Executive: Thanks for taking my question.
Nathan Race: And our next question will come from Nathan Race with Piper Sandler. Please go ahead. Yeah. Hi guys. Good morning.
Speaker Change: Got it. Thanks for taking my question.
Operator: And our next question will come from Nathan Race with Piper Sandler. Please go ahead. Yeah.
Speaker Change: And our next question will come from Nathan Race with Piper Sandler. Please go ahead.
Nathan James Race: Yeah, guys, good morning. Thanks for taking the question. I was wondering if you could just update us on the oil and gas assets that you acquired late last year in terms of specifically how we should think about the fee income and expenses associated with those assets going forward.
Unknown Executive: Please take me question.
Tom Travis: It was one of you just update us in terms of where you guys stand on the oil and gas assets that you acquired late last year in terms of specifically how we should think about the income and expenses associated with those assets going forward. You know, Kelly, I think has the exact numbers, Nate, but just from a high level, you know, what we described back in December was, you know, when we booked those assets, it was a little over 16 and a half million dollars, and we said at the time that just harvesting the monthly cash flows off that business.
Nathan James Race: Yeah, hi guys, good morning. Thanks for taking the question.
Nathan James Race: I was wondering if you could just update us in terms of where you guys stand on the oil and gas assets that you acquired late last year in terms of specifically how we should think about the fee income and expenses associated with those assets going forward.
Thomas L. Travis: You know, Kelly, I think she has the exact numbers, Nate, but Just from a high level, what we described back in December was when we booked those assets, it was a little over $16.5 million, and we said at the time that just harvesting the monthly cash flows from that business, we would recover between 55% and 60% of that outlay, or I think we would be down to 55% or something as far as remaining.
Speaker Change: Kelly, I think, has the exact numbers, Nate, but
Speaker Change: Just from a high level, what we described back in December was when we booked those assets, it was a little over $16.5 million, and we said at the time that just harvesting the monthly
Kelly Harris: We would recover between 55 and 60% of that outlay, or I think we would be down to 55% or something as far as remaining. And so, Kelly, why don't you follow up on that? But I'll just say, from a high level, we're not only on path, we're actually doing a little bit better. And so we view it as a, we're halfway through the year. And so the $16 million asset is really more of a, you know, $10 million asset compared to the size of our company.
Speaker Change: Cash flows off that business, we would recover between 55% and 60% of that outlay.
Speaker Change: I think we would be down to 55% or something as far as remaining, and so Kelly, why don't you follow up on that, but I'll just say from a high level, we're not only on path, we're actually doing a little bit better, and so we view it as a
Thomas L. Travis: Kelly, why don't you follow up on that? I'll just say from a high level that we're not only on track, we're actually doing a little bit better. We view it as we're halfway through the year. The $16 million asset is really more of a $10 million asset compared to the size of our company. It's not that significant, but Kelly can give you the specifics.
Speaker Change: We're halfway through the year, and so the $16 million asset is really more of a $10 million asset, and compared to the size of our company, it's not that significant, but Kelly can give you the specifics.
Kelly Harris: It's not that significant, but Kelly can give you the specifics. Yeah, Nate, this is Kelly. So if you look at Q2, I mean, total non-interesting income was 3,165. Of that, 2.4 million related to the oil and gas. And so we had core fee of 7 or 35,000, which was a little bit higher than what we anticipated of that normal, normalized $6,750,000 run rate. But I think on a go-forward, I mean you could potentially use $2 million for the oil and gas from a fee perspective, and then still keep that core fee number at $650,000. And on the expense side, non-intersex expenses for the quarter, or $9 million 142, and of that $8 million 142 related to oil and gas.
Kelly J. Harris: Yeah, Nate, this is Kelly. So if you look at Q2, total non-interest income was $3,165,000, of that $2.4 million related to oil and gas, and so we had a core fee of $735,000, which is a little bit higher than what we anticipated at that normalized $650,000 run rate. But I think on a go forward, you could potentially use $2 million for oil and gas from a fee perspective and then still keep that core fee number at $650,000.
Kelly J. Harris: Yeah, Nate, this is Kelly.
Kelly J. Harris: So if you look at Q2, total non-interest income was $3,165,000, of that $2.4 million related to the oil and gas. And so we had a core fee of $735,000, which is a little bit higher than what we anticipated of that normalized $650,000 run rate.
Kelly J. Harris: But I think on a go forward, I mean, you could potentially use $2 million for oil and gas from a fee perspective, and then still keep that core fee number at $650,000.
Kelly J. Harris: And on the expense side, non-interest expenses for the quarter were $9,142,000, and of that, $8,042,000 related to oil and gas, or, I'm sorry, $1.1 related to oil and gas. And so you had core expenses of $8,000,000, which is a little bit below what we had given guidance of 8.3. We still think that 8.3 is a good guide from a core expense perspective for Q3. And potentially using $1 million in additional expenses for oil and gas.
Kelly J. Harris: And on the expense side, non-interest expenses for the quarter.
Kelly J. Harris: We're 9 million 142 and of that 8 million 42 related to oil and gas or I'm sorry 1.1 related to oil and gas and so you had core
Kelly Harris: Or I'm sorry, 1.1 related to oil and gas. So you had core expenses of $8 million, which is a little bit below what we had given guidance on 8.3. We still think that 8.3 is a good guide from a core expense perspective for Q3, and potentially using $1 million in expenses additional for the oil and gas.
Kelly J. Harris: expenses of $8 million, which is a little bit below what we had given guidance on in 8.3. We still think that 8.3 is a good guide from a core expense perspective for Q3.
Kelly J. Harris: Potentially using $1,000,000 in expenses additional for the oil and gas.
Tom Travis: But Kelly, if you just, I'm not being critical; that was a lot of numbers. If you just focus on the revenue and the expenses, what's the net on the oil and gas for the quarter? Yes, the net for Q2 was $1 million for Q3. So, go ahead. Yeah, for Q3, it make it be $800,000 after tax. Right, $750. Right, and that's going to continue to go down. It's going to continue to go down from there, Nate.
Thomas L. Travis: But Kelly, if you just, I'm not being critical, that was a lot of numbers, if you just focus on the revenue and the expenses, what's the net on oil and gas for the quarter? (inaudible)
Kelly J. Harris: But Kelly, if you just, I'm not being critical, that was a lot of numbers, if you just focus on the revenue and the expenses, what's the net on the oil and gas for the quarter?
Kelly J. Harris: Yeah, the net for Q2 was a million dollars. Go ahead. Yeah, for Q.
Speaker Change: Yeah, the net for Q2 was a million dollars.
Speaker Change: Q3
Speaker Change: Go ahead. Yeah for Q3 I make it be $800,000 after tax.
Thomas L. Travis: Right, and that's going to continue to go down.
Speaker Change: Right. 715.
Speaker Change: Right, and that's going to continue to go down. It's going to continue to go down from there, Nate.
Tom Travis: Right, and to your point, Tom, it's a relatively small piece, but is there any interest, or is there any interest, so to speak, in other people acquiring these assets, or is the plan just to retain these assets on balance sheet? You know, we had that discussion recently because we actually are the properties we re-engineered to make sure our values are correct, and the current engineering indicates that the wells are performing even better, and therefore the values are higher. And so, what we talked about was a high-class problem, Nate, meaning do we sell it, and you know, maybe sell it and take some small gain, or do we just keep harvesting the cash flow because we're doing so well.
Thomas L. Travis: Right, and to your point, Tom, it's a relatively small piece, but just is there any interest in it, or isn't there any? Interest, so to speak, in other people acquiring these assets, or is the plan just to retain these assets on a balance sheet? You know, we had that discussion recently because the properties we re-engineered to make sure our values are correct, and the current engineering indicates that the wells are performing even better, and therefore, the values are higher, and so what we talked about was... A high-class problem, Nate, meaning do we sell it and, you know, maybe sell it and take a small gain, or do we just keep harvesting the cash flow because we're doing so And so it's possible that we could sell it, but we don't feel any sense of urgency to do it.
Thomas L. Travis: Right, and to your point Tom, it's a relatively small piece, but just is there any interest in or is there any...
Speaker Change: Any interest, so to speak, in other people acquiring these assets, or is the plan just to retain these assets on a balance sheet? You know, we had that discussion.
Speaker Change: Recently, because
Speaker Change: Wee.
Speaker Change: We actually are, the properties we re-engineer to make sure our values are correct, and the current engineering indicates that the wells are performing even better, and therefore the values are higher, and so what we talked about was
Speaker Change: A high-class problem, Nate, meaning do we sell it and, you know, maybe sell it and take some small gain, or do we just keep harvesting the cash flow because we're doing so well? And so it's possible that we could sell it, but we don't feel any sense of urgency to do it.
Tom Travis: And so, it's possible that we could sell it, but we don't feel any sense of urgency to do it.
Nathan Race: Got it, very helpful.
Jason E. Estes: Got it. Very helpful. And then maybe staying on credit and switching to the Hospitality book. Curious what you guys are seeing just in terms of NOI levels across your client base. Obviously, it seems like a lot of those loans are tied to floating rates, so just curious how a lot of those clients are dealing with the higher cost of debt these days.
Jason Estes: And then just maybe stay on credit and switching to the hospitality book. Curious what you guys are seeing just in terms of NOI levels across your client base? Obviously, it seems like a lot of those loans are tied to floating rates, so just curious how a lot of those clients are dealing with the higher cost of debt these days. Yeah, so, remember just a reminder, everybody, the hospitality activity in our portfolios largely concentrated in Texas, and specifically the Dallas Fort Worth Metro, and businesses usual there for first quarter NOIs were up slightly from last year, and we really don't have the second quarter data yet.
Speaker Change: Got it, very helpful. And then just maybe staying on credit and switching to the
Speaker Change: Hospitality book. Curious what you guys are seeing just in terms of NOI levels across your client base. Obviously, it seems like a lot of those loans are tied to floating rates. So just curious, you know, how a lot of those clients are dealing with the higher
Speaker Change: Higher cost of debt these days.
Jason E. Estes: Yeah, so remember, just as a reminder to everybody, the hospitality activity in our portfolio is largely concentrated in Texas, and specifically the Dallas-Fort Worth metro, and business as usual there. First quarter NOIs were up slightly from last year, and we really don't have the second quarter data yet, but based on performance and conversations with borrowers, I expect second quarter to probably be an all-time high NOIs. And so it was business as usual in the Texas hospitality industry.
Speaker Change: Yeah, so remember, just a reminder to everybody, the hospitality activity in our portfolio is largely concentrated in Texas and specifically the Dallas-Fort Worth metro. And business as usual there, first quarter NOIs were up.
Speaker Change: Slightly from last year and we really don't have the second quarter data yet, but
Jason Estes: Based on performance and conversations with borrowers, I expect a second quarter to probably be all-time high in our eyes, and so business is usual in the Texas hospitality industry.
Speaker Change: Based on performance and conversations with borrowers, I expect second quarter to probably be all-time high NOIs. And so business as usual in the Texas hospitality industry.
Jason Estes: And Jason, as you guys provide for some growth returning going forward in terms of loans, do you guys kind of expect to reserve to kind of remain where it is, come out of the second quarter, how you guys kind of think about the relative reserve level in the back after the year? Yeah, there may be a small provision to keep up if the growth kind of comes in on the top line or top end of what we think could happen. You know, we may have to put a little bit more to it, but yeah, I think that that percentage is pretty good, something that 1, 2, 5, our historical range.
Jason E. Estes: And Jason, you know, as you guys provide for some growth returning going forward in terms of loans, do you guys kind of expect the reserve to kind of remain where it is coming out of the second quarter? How do you guys think about the relative reserve level in the back half of the year? Yeah, there may be a small provision to keep up if the growth kind of comes in on the top line or top end of what we think could happen. We may have to put a little bit more into it. But yeah, I think that percentage is pretty good, something in that 1-2-5, you know, our historical range.
Speaker Change: And Jason, as you guys provide for some growth returning going forward in terms of loans, do you guys kind of expect the reserve to kind of remain where it is coming out of the second quarter? How do you guys kind of think about the relative reserve level in the back half of the year? Yeah, there may be a small provision to keep up if the growth, you know, kind of comes in on the top line or top end of what we think could happen. You know, we may have to put a little bit more to it. But yeah, I think that percentage is...
Jason Estes: Well, I also would add to that that, you know, the rapid growth in equity, it's really comforting, and so we feel like because of the increase in equity so quickly that it's not as critical for us to worry about immediately adding to the reserves. And, you know, when you look at the portfolio and you look at the Cecil methodology and, you know, how we look, we just can't find a lot of stress right now. And so I guess what I'm trying to say is that we've got flexibility relative to the capital building up very quickly, and we really feel like we're in a good spot.
Thomas L. Travis: Well, I also would add to that the rapid growth in equity is really comforting, and so we feel like because of the increase in equity so quickly, it's not as critical for us to worry about immediately adding to the reserves. And, you know, when you look at the portfolio, and you look at the CECL methodology, and you know how we look, we just do. We just can't find a lot of stress right now. And so I guess what I'm trying to say is that we've got flexibility relative to.
Speaker Change: Pretty good, something in that 1-2-5, you know, with our historical range.
Speaker Change: Well, I also would add to that that, you know, the rapid growth in equity, it's really comforting, and so we feel like because of the
Speaker Change: increase in equity so quickly that it's not as critical for us to worry about immediately adding to the reserves and you know when you look at the portfolio and you look at the
Speaker Change: Cecil methodology and you know how we look we just
Speaker Change: We just can't find a lot of stress right now. And so, I guess what I'm trying to say is that we've got flexibility relative to the capital building up very quickly and we really feel like we're in a good spot.
Jason Estes: Okay, great.
Jason E. Estes: Okay, great. And then just one last one for
Kelly Harris: And then just one last one for me, Pastor Kelly, on the NIM going forward. You know, obviously you guys are as sensitive, so just curious, you know, how we should think about the margin impact from each 25-bit cut. Yeah, Nate, and I think I would highlight to our historical NIM, and you can even look like we threw another slot in there on our spread overlay with the loan yields and the cost of funds with the five and ten year treasury. And I think, you know, we just feel comfortable operating in our normal historical range, irrespective of rate hikes and rate cuts.
Speaker Change: Okay great and then just one last one for me perhaps for Kelly on the NIM going forward. You know obviously you guys are asset sensitive so just curious you know how we should think about the margin impact from each 25-bit cut.
Unknown Executive: Yeah, Nate, and I think I would highlight our historical NIM, and you can even look through another slide in there on our spread overlay with the loan yields and the cost of funds with the 5 and 10-year Treasury. And I think we just feel comfortable operating in our normal historical range, irrespective of rate hikes and rate cuts. You know, Tom mentioned we may have to pick up some higher cost of funds to fund some of this loan growth, and so a lot of that. Transcripts provided by Transcription Outsourcing, LLC.
Speaker Change: Yeah, Nate, and I think I would highlight to our historical NIM, and you can even look through another slide in there on our spread overlay with the loan yields and the cost of funds with the 5 and 10-year treasury. And I think, you know, we just feel comfortable operating in our normal historical range irrespective of rate hikes and rate cuts.
Kelly Harris: You know, Tom mentioned, we may have to pick up some higher cost of funds, the funds of his loan growth, and so a lot of that compression would be related to that and not necessarily the rate cut per se. But with that said, Nate, we have the same; we're not worried at all, and Kelly's comments are so accurate.
Speaker Change: You know, Tom mentioned we may have to pick up some higher cost of funds to fund some of this loan growth and so a lot of that compression would be related to that and not necessarily the rate cut per se.
Thomas L. Travis: But with that said, Nate, we have the same, we're not worried at all, and Kelly's comments are so accurate, but with that said, we had an ALCO meeting yesterday morning, and we assigned ourselves a project, which won't take us more than a couple of days, and we're going to go do some testing on the ballot sheet to say, okay, what happens, and we'll be able to tell exactly. We think it's going to be pretty neutral, because if you look at, I don't know the numbers off the top of my head, it's in the deck, but we have so many that are daily floaters on the loan side, and then we've got some deposits that won't reprice, you know, the non-interest bearing, and so we're going to run some scenarios, and just really precisely test and see what happens on 25, what happens on 50, and what happens on 75. But we're very confident, but we'll know the answer to that exactly. And I would be surprised if it I would be really surprised if our core NEM ever got below the long-term average. Yeah.
Speaker Change: But with that said, Nate, we have the same, we're not worried at all, and Kelly's comments are so accurate. But with that said, we had an ALCO meeting yesterday morning, and we assigned ourselves a
Jason Estes: But with that said, we had an Alco meeting yesterday morning, and we assigned ourselves a project which won't take us more than a couple of days, and we're going to go do some testing on the balance sheet to say, okay, what happens, and we'll be able to tell exactly. We think it's going to be pretty neutral because if you look at, I don't know the numbers off top of my head, it's in the deck, but we have so many that are daily floaters on the loan side, and then we've got some deposits that won't reprise, you know, the non-interest bearing, and so we're going to run some scenarios and just really precisely test and see what happens on 25, what happens on 50, and what happens on 75. But we're very confident, but we'll know the answer to that exactly, and I would be surprised if it...
Speaker Change: a project which won't take us more than a couple of days, and we're going to go do some testing on the
Speaker Change: ballot sheet to say, okay, what happens, and we'll be able to tell exactly.
Speaker Change: Pretty neutral because if you look at I don't know the numbers off top my head It's in the deck, but we have so many that are daily floaters on the loan side And then we've got some deposits that won't reprice you know the non-interest bearing and so we we're going to run some scenarios and just
Speaker Change: We can't really precisely test and see what happens on 25, what happens on 50, and what happens on 75, but we're very confident. But we'll know the answer to that exactly, and I would be surprised if it...
Jason Estes: I would be really surprised if our core NIM ever got below the long-term average. Just to clarify, it seems like that long-term average is about 4.5%. Is that kind of what you guys are referencing? I don't even want to give a number, but I was thinking it was more like 4.3 or 3.5. But I think we're almost splitting hairs here. You know? Sure. Got it. Okay.
Speaker Change: I would be really surprised if our core NEM ever got below the, you know, the long-term average.
Unknown Executive: Yeah, just to clarify, it seems like that long-term average is about four and a half percent. Is that kind of what you guys are referencing?
Speaker Change: Yeah, just to clarify, it seems like that long-term average is about four and a half percent. Is that kind of what you guys are referencing?
Thomas L. Travis: I don't even want to give a number, but I was thinking it was more like 4.3 or 3.5, but I think we're almost splitting hairs here, you know? Sure.
Speaker Change: Bye. Bye. You know.
Speaker Change: I don't even want to give a number, but I was thinking it was more like 4.3 or 3.5. But I think we're almost splitting hairs here, you know? Sure, got it. OK, I appreciate all the color. Thanks, guys.
Unknown Executive: Sure, I got it. Okay, bye, appreciate all the color. Thanks guys.
Nathan Race: I appreciate all the color. Thanks, guys.
Jordan Gett: And again, if you would like to ask a question, please press star, then one. My next question is going to come from Jordan Gett with Stevens.
Operator: And again, if you would like to ask a question, please press star then 1. Our next question is going to come from Jordan Gant with Stevens. Please go ahead.
Speaker Change: And again, if you would like to ask a question, please press star then 1. Our next question is going to come from Jordan Gent with Stevens. Please go ahead.
Jason Estes: Please go ahead. Hey, good morning. My question is just on the charge-offs. I know you mentioned that it was for the quarters, the remnants of the larger charge-offs historically, but kind of going forward. Were you guys expecting to see charge-off levels? Are they kind of normalized, or do you expect them to be a little bit lower? Yeah, I would say lower than the last few quarters, definitely, and returning kind of a historical, just look over a 10-year period and come up with a very small number and roll that forward. The credit quality is as good as it's been since really the last seven or eight on 10 years, so feeling really good about the loan book and ask that quality.
Jordan Gant: Hey, good morning. My question is just on charge-offs. I know you mentioned that it was, for the quarters, the remnants of the larger charge-offs historically, but kind of going forward, where are you guys expecting to see charge-off levels? Are they kind of normalized, or do you expect them to be a little bit lower?
Jordan Gent: Hey, good morning. My question is just on the charge-offs. I know you mentioned that it was, for the quarters, the remnants of the larger charge-offs historically, but kind of going forward, where are you guys expecting to see charge-off levels? Are they kind of normalized?
Jason E. Estes: Yeah, I would say lower than the last few quarters, definitely, and return in kind of a historical context, just look over a 10-year period and come up with a very small number and roll that forward. There's not.
Jordan Gent: Or do you expect them to be a little bit lower?
Speaker Change: Yeah, I would say lower than the last few quarters, definitely, and return in kind of a historical, just look over a 10-year period and come up with a very small number and roll that forward.
Jason E. Estes: The credit quality is as good as it's been, you know, since. Really, the last 7 or 8, 9, 10 years. So I'm feeling really good about the loan book and asset quality. Perfect.
Speaker Change: There's not.
Speaker Change: The credit quality is as good as it's been, you know, since really the last seven or eight, nine, ten years. So, feeling really good about the loan book and asset quality.
Jordan Gant: So on the interest-bearing deposit costs, you guys had a minimal amount of increase. And I know you guys talked about that some of the loan funding got pushed out to July and that you might have to go get some funding that's a little bit more expensive. But where do you guys see the interest-pair deposit costs going from this quarter?
Jason Estes: Perfect. And then I just want more, actually. So, on the interest-breaking deposit cost, you guys had like a minimal amount increasing, and I know you guys talked about that. Some of the loan funding got pushed out to July, and that you might have to go get some funding that's a little bit more expensive. But where do you guys see the interest-breaking deposit cost going from this quarter? It's a good question. I think from a total cost of bonds perspective, we're right now currently at 3-10, and so I think it really just depends on the balance sheet needs from a funding perspective.
Jordan Gant: Perfect. And then just one more, actually.
Speaker Change: Perfect. And then just one more, actually. So on the interest-bearing deposit costs, you guys had like a minimal...
Speaker Change: amount increasing. And I know you guys talked about that some of that loan funding got pushed out to July and that you might have to go get some funding that's a little bit more expensive. But where do you guys see the interest bearing deposit costs going from this quarter?
Unknown Executive: That's a good question. I think from a total cost of funds perspective, we're currently at $310,000. And so I think it really just depends on the balance sheet needs from a funding perspective.
Speaker Change: That's a good question. I think from a total cost of funds perspective, we're right now currently at $310,000. And so I think it really just depends on the balance sheet needs from a funding perspective.
Jordan Gant: Okay, perfect. Thank you for answering my question.
Nathan Race: Okay. Perfect. Thanks for answering my questions.
Unknown Executive: And this will conclude our question-and-answer session.
Speaker Change: Okay, perfect. Thank you for answering my questions.
Thomas L. Travis: And that will conclude our question and answer session. I'd like to turn the conference back over to Tom Travis for any closing remarks.
Tom Travis: I'd like to turn the conference back over to Tom Travis for any closing remarks. Well, great quarter, great company, great culture. Thanks to our teammates, and we're going to keep doing what we've always done and keep our heads down and work hard. So we appreciate the partnerships and investors and analysts, and thank you.
Speaker Change: And this will conclude our question and answer session. I'd like to turn the conference back over to Tom Travis for any closing remarks.
Thomas L. Travis: Well, great quarter, great company, great culture. Thanks to our teammates, and we're going to keep doing what we've always done. Keep our heads down and work hard. We appreciate the partnerships, investors, and analysts.
Thomas L. Travis: Well, great quarter, great company, great culture.
Thomas L. Travis: Thanks to our teammates and we're going to keep doing what we've always done.
Thomas L. Travis: Keep our heads down and work hard. So we appreciate the partnerships and investors and analysts and
Unknown Executive: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.
Unknown Executive: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.
Thomas L. Travis: Thank you.
Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.
Unknown Executive: We'll see you in the next video.