Executive Summary

Q4 2024 delivered resilient core performance: Net income of $11.11M ($1.16 diluted EPS), stable NIM at 5.12% and no provision, aided by one-time nonaccrual interest recoveries; year-over-year compares benefited from a large Q4 2023 provision ($15.5M) that depressed the prior period’s earnings .
Margin exceeded management’s prior caution; however, “real-time” NIM is ~4.50% and would have been ~4.7% ex one-time items, implying near-term compression until excess liquidity is redeployed into loans .
Loan balances contracted sequentially on late-quarter paydowns in energy and hospitality; management expects additional early-Q1 paydowns but plans to redeploy and return to growth in 1H 2025, with stronger momentum likely in the back half .
Deposits remained stable sequentially but mix remains a watch item: noninterest-bearing deposits fell to $0.31B vs $0.48B a year ago; capital ratios rose further, leaving significant dry powder for organic growth and M&A .
Wall Street consensus (EPS/revenue) from S&P Global was unavailable at request time due to access limits; vs-estimates assessment is therefore not included. We focus on YoY/QoQ and qualitative drivers [functions.GetEstimates error].

What Went Well and What Went Wrong

What Went Well
- Net interest margin remained strong at 5.12% in Q4 (vs 5.02% in Q3; 4.85% YoY), reflecting disciplined balance sheet positioning and pricing .
- Asset quality and capital continued to underpin performance; management cited “very strong liquid position” and two liquidity backstops (FHLB and the Fed facility) supporting confidence through cycles .
- Management reiterated its dividend capacity (payout ratio ~20%) and optionality to increase over time, after declaring a $0.24 dividend in December 2024 .
What Went Wrong
- Sequential loan balances declined due to late-quarter unscheduled paydowns in energy and hospitality; more paydowns are expected in Q1, delaying loan growth until redeployment .
- Management flagged near-term NIM pressure: “real-time” NIM ~4.50% and Q4 benefited from ~$0.6M of nonaccrual interest recoveries; ex-these items NIM would have been ~4.7% .
- Noninterest-bearing deposit mix remains below last year (down from $0.48B to $0.31B), a headwind to funding costs if rate cuts stall and deposit beta relief proves limited beyond early cuts .

Financial Results

Quarterly P&L and margin (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2023	Q4 2024
Total Interest Income ($M)	$32.44	$33.49	$32.40	$32.33
Net Interest Income ($M)	$21.23	$21.22	$21.30	$21.74
Noninterest Income ($M)	$3.17	$3.68	$6.77	$2.40
Provision for Credit Losses ($M)	$0.00	$0.00	$15.50	$0.00
Net Income ($M)	$11.52	$11.78	$1.07	$11.11
Diluted EPS ($)	$1.23	$1.24	$0.12	$1.16
Net Interest Margin (%)	5.15%	5.02%	4.85%	5.12%
Net Interest Spread (%)	3.78%	3.78%	3.39%	4.00%

Balance sheet KPIs (period-end; oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2023	Q4 2024
Total Assets ($B)	$1.683	$1.740	$1.772	$1.740
Total Loans, net ($B)	$1.334	$1.420	$1.341	$1.379
Total Deposits ($B)	$1.481	$1.524	$1.591	$1.515
Noninterest-Bearing Deposits ($B)	$0.350	$0.322	$0.482	$0.313
Shareholders’ Equity ($B)	$0.191	$0.204	$0.170	$0.213

Capital ratios (consolidated)

Metric	9/30/2024	12/31/2024
Tier 1 Leverage Ratio (%)	11.64%	12.19%
Tier 1 Risk-Based Capital (%)	12.92%	13.98%
Total Risk-Based Capital (%)	14.11%	15.21%

FY context (select items)

FY 2024 net income $45.7M vs $28.3M (+61.62%); diluted EPS $4.84 vs $3.05 (+58.69%); total interest income $131.5M vs $121.5M (+8.22%); PPE $60.4M vs $58.4M (+3.38%) .

Notes: Q4 2024 NIM benefited from ~$0.6M of nonaccrual interest recoveries; excluding one-offs, management estimates core NIM would have been closer to ~4.7%, with “real-time” NIM ~4.50% exiting the quarter .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Noninterest Expense ($M)	Q4 2024 → Q1 2025	Q4 model: $9.5M total ($1.0M O&G, $8.5M core)	Q1 model: $9.6M total ($1.4M O&G, $8.2M core)	Slightly higher; mix shift toward O&G expense
Noninterest Income ($M)	Q4 2024 → Q1 2025	Q4 model: $3.0M total ($2.3M O&G, $0.7M core)	Q1 model: $2.4M total ($1.7M O&G, $0.7M core)	Lower sequentially; O&G down
Net Interest Margin	Near term	Maintain within historical range (prior)	“Real-time” ~4.50%; ex one-time ~4.7% in Q4; near-term pressure until redeployment	Moderating near-term
Loan Growth	2025 cadence	2024: moderate-to-high single-digit targeted; selective in hospitality/energy	Expect some Q1 paydowns; redeploy; “return to growth” 1H, stronger back half	Reaffirm growth after near-term headwinds
Dividend	Ongoing	—	Declared $0.24/share payable Jan 8, 2025	Maintained/communicated in Dec 2024

Earnings Call Themes & Trends

Topic	Q2 2024 (PR)	Q3 2024 (Call)	Q4 2024 (Call)	Trend
Net Interest Margin	NIM 5.15%; asset-sensitive balance sheet	Expect to stay within historical range amid cuts	Reported 5.12%; “real-time” ~4.50%; ex one-time ~4.7%	Resilient but drifting lower near term
Loan Growth/Mix	Loans down QoQ; YoY +5.94%	Pipeline steady; selectivity in hospitality/energy	Late-Q paydowns in energy/hospitality; redeploying; growth resumes in 2025	Near-term dip; redeploy to re-accelerate
Deposit Costs/Betas	—	Loan/deposit betas moving in lockstep; early-cut relief easier than later	CD book small (~$150–$180M); deposit beta relief limited deeper into cuts	Initial relief; diminishing marginal benefit
Credit Quality	—	NPA resolutions; collected ~$3M on NPAs; reserve ~1.25%	Nonaccrual recoveries boosted Q4 NIM; minimal nonaccruals currently	Stable to improving
Expenses/Fees	—	Q4 NI expense/fees modeled: $9.5M / $3.0M	Q1 NI expense/fees modeled: $9.6M / $2.4M	Modest sequential change; O&G mix
Regulatory/CRE	—	—	Heightened CRE scrutiny muted growth; concentrations below 100%/300% thresholds	Conservative posture maintained
Capital/M&A	—	Robust pipeline; evaluating targets	“Actively pursuing” opportunities; strong currency/capital	Optionality rising; post-Q4 mortgage acquisition announced Feb-25

Management Commentary

“We are pleased to announce record annual results for 2024… properly matched balance sheet, disciplined cost controls, and excellent credit quality continues to produce outstanding performance.” — Thomas L. Travis, President & CEO .
“We… further enhanced [liquidity] last year when we added a second liquidity backstop with the Fed… we now have 2 meaningful sources of additional liquidity.” — Thomas L. Travis .
“We did exceed our own expectations… there is some [NIM] compression on the horizon… we’ll operate in our historical norms.” — Jason Estes; “Currently, we’re at 450 [bps]” (real-time NIM); ex one-time items “closer to 4.7%” — Kelly Harris .
Loan dynamics: “Over $160 million of unscheduled principal payoff” in energy/hospitality during 2024; redeployment planned with C&I a growth highlight (+~5% in 2024) — Jason Estes .
Pricing: “Portfolio-wide [loan yield]… 7.50% range… indicative of new stuff coming in.” — Jason Estes .
Capital returns: “Dividend payout ratio is still in the 20% range… plenty of room for further increases” — Thomas L. Travis ; $0.24 dividend declared Dec. 4, 2024 .
M&A: “Actively pursuing some opportunities… the time is certainly right with the currency value and excess capital.” — Thomas L. Travis .

Q&A Highlights

NIM trajectory: Q4 benefited from onetime nonaccrual interest (~$0.6M); “real-time” NIM ~4.50% suggests near-term compression until liquidity is redeployed; ex one-time, Q4 core NIM ~4.7% .
Loan trends: Late-Q paydowns in energy/hospitality drove shrinkage; additional Q1 paydowns expected, then redeployment and a return to growth in 1H with stronger back half .
Deposit costs: CD book is small (~$150–$180M), limiting repricing leverage; deposit beta relief is greater for the first cuts but diminishes with deeper cuts .
1Q run-rate color: Noninterest expense ~$9.6M ($1.4M O&G / $8.2M core); noninterest income ~$2.4M ($1.7M O&G / $0.7M core) .
M&A optionality: Company is engaged on multiple fronts; disciplined approach with preference for culturally aligned, core-funded franchises; strong currency and excess capital cited as enablers .

Estimates Context

We attempted to retrieve S&P Global consensus for Q4 2024 (EPS and revenue), but access was unavailable due to request limits at the time. As a result, vs-estimate comparisons are not included and cannot be asserted. Focus remains on YoY/QoQ and management commentary [functions.GetEstimates error].

Key Takeaways for Investors

Margin resilience continues to differentiate, but management’s “real-time” NIM (~4.50%) and acknowledgment of one-time boosts imply a near-term step down before redeployment benefits kick in; watch loan growth cadence and liquidity deployment pace .
Sequential loan contraction reflects late-quarter energy/hospitality paydowns; management plans to backfill within these verticals and continue C&I growth, positioning for reacceleration in 2025 (likely stronger in 2H) .
Funding mix remains a focus: NIB deposits are down substantially YoY; deposit beta relief may be limited beyond the first rate cuts, reinforcing the importance of disciplined pricing and mix optimization .
Expense and fee run-rate guidance for Q1 2025 implies modest sequential expense uptick and fee normalization post Q4 O&G peak; model core NI expense ~$8.2M and core fees ~$0.7M near-term .
Capital strength (Tier 1 leverage 12.19%; total risk-based 15.21%) plus dividend capacity (~20% payout) supports both organic and inorganic growth; M&A optionality is a credible medium-term catalyst .
Absent consensus data, the narrative catalyst rests on NIM durability vs expected compression and on visible redeployment/loan growth execution in H1 2025; confirm progress on paydown backfill and margin stabilization quarter-to-quarter .
Post-quarter, Bank7 announced a residential mortgage acquisition (First American Mortgage), expanding mortgage capabilities—supportive of fee income diversification as integration proceeds .

Bank7 Corp. (BSVN)·Q4 2024 Earnings Summary