Oct 15, 2026 earnings call — Century merger and loan growth
Merger with Century expected to close November 1st; management views the deal as neutral to margin.
Revenue $0.0B (est $0.0B) · EPS $1.06 (est $1.05)
Key quotes
"And we are very excited about the pending merger with Century in New Mexico, and it is a really good example of discipline and patience and prudent use of capital, which really drives the metrics on how transformational beneficial this transaction will be."
"you cannot see it in the numbers, but our payoffs for the quarter were over a $130 million."
"And from a bank 7 legacy perspective, the loan beta in the quarter was close to 60%. Deposit beta was around 52%."
Analyst Q&A 3
Excess cash and margin impact
Q (Woody Lay · KBW): He asked what they will do with excess liquidity and whether the loan pipeline is strong. He also asked pro forma NIM guidance with Century and how they will remix Century's loan portfolio longer term.
A: Management said they held higher deposits and stayed conservative because of substantial loan paydowns and the pending merger. They view the Century deal as neutral to margin, may sell some or all of Century's bonds to generate cash, and expect loan beta around 65% to 70% if rates rise while deposit beta is harder to project. They also said the merged bank will have flexibility from cheaper funds to help maintain margin, and they plan to keep doing their existing commercial lending approach while expanding into some markets like Dallas.
"I think from a deal perspective, we currently view the deal as neutral to our margin." — Kelly J. Harris (CFO)
Loan growth, runoff, and expense cuts
Q (Nathan Race · Piper Sandler): He asked whether Century's loan balances will run off and how Century affects Bank7's long-term loan growth path. He also asked about competitive loan pricing, timing to realize 30% cost savings and system conversion, whether 2027 will be digest-and-integrate or include M&A, and expected goodwill.
A: John said there is no day-1 plan to run off loans and they expect company-wide steady growth in the 5%/mid-single digit to low double digit range, noting unusually large payoffs of over a $130 million in the quarter and a strong pipeline. Tom said Century used more loan participations that they will not pursue as they mature, which will free funding, and he sees no major change in competitive dynamics; relationship bankers still win. On expenses, Kelly said they believe they can operate Century's noninterest expense at or below their current levels and Tom said about 75% to 80% of cost savings will occur immediately in the first quarter; Kelly said it is too soon to confirm the all-in goodwill number.
"I would say that at least 75% or 80% of the cost savings will occur immediately in the first quarter" — Thomas L. Travis (CEO)
Loan-to-deposit ratio and merger costs
Q (Jordan Gendt · Stephens): He asked whether the loan-to-deposit ratio will go back to the mid-90s or near 100% after adding Century, or be kept lower. He also asked about the $16.2 million one-time merger expenses and how much has been realized.
A: Tom said the loan-to-deposit ratio depends on many factors including liquidity, capital, debt instruments, and loan maturity schedule, so it is complex. He said they probably will not operate much below 80% and may occasionally reach about 95%, but if they operate at higher ranges they will ensure overnight-capable funding to protect the bank. Regarding the one-time merger costs, he said those are a catch-all of items like investment banker fees, conversion fees, and early contract termination and will be realized.
"I would just say that just similar to our NIM, you know, you probably will not see us operate much below 80% in our in our world." — Thomas L. Travis (CEO)