Bank7 Corp. (BSVN 4.46%) reported its second-quarter 2025 results on July 17, highlighting “one of our best quarters ever,” with strong loan and deposit growth, a net interest margin (NIM) at the high end of its historical range, and a persistent low efficiency ratio. Management discussed a solid pipeline driven by economic resilience in Oklahoma and Texas, and the bank's ongoing expense discipline.
Consistent High-Efficiency Operations and Robust Loan Growth
Bank7's core efficiency ratio remained within the 36% to 38% range, while quarterly loan growth was particularly strong, especially in commercial and energy segments. Despite marketwide growth headwinds, the company’s geographic focus on Oklahoma and Texas contributed to its above-average momentum.
"As you can see, we maintained our NIM on the higher end of our historical range, and we also continue to benefit from that low efficiency ratio. When you put those factors together, with the solid loan growth, we experienced nice, strong core earnings."
— Thomas Travis, President and CEO
Maintaining a low efficiency ratio alongside robust loan growth demonstrates management’s ability to control costs and drive profitability, positioning the bank favorably against regional peers facing margin and growth pressures.
Loan Book Diversification and Reduced Energy Concentration
Production loans in energy increased by $3.035 million, but management emphasized that energy portfolio exposure is around half of what it was seven to eight years ago, with expanded growth in commercial and hospitality segments, especially in the Dallas-Fort Worth region. This strategic shift has lessened historical sector and regional risks.
"I would add to Jason's comments that if you look at a long-term horizon, going back for the last seven or eight years, the energy exposure today is almost half what it was seven or eight years ago. And because of the growth in the other segments, and the hospitality segment is down exposure-wise from a percentage basis."
— Thomas Travis, President and CEO
The company’s deliberate portfolio realignment enhances credit resilience and positions the balance sheet to capture growth in more diversified, economically robust sectors.
Margin Management and Rate Environment Positioning
Loan yields averaged 7.6% in Q2 2025, and while management anticipates sequential NIM pressure in Q3 2025, it expects the metric to remain within historical bands, leveraging floating rate loans and interest rate floors to offset deposit cost creep. The balance sheet’s asset sensitivity is expected to protect NIM as the Federal Reserve approaches rate cuts. Management anticipates a slight degradation in margin but expects to remain within historical ranges.
"The first few rate cuts, we were able to [keep] the loan beta and deposit beta one for one. We anticipate more of the same for the next couple of rate cuts. And as floors kick in, we'll definitely help out on the liability side."
— Kelly Harris, Chief Financial Officer
This rate positioning provides downside protection for profitability, even as the interest rate environment shifts, allowing the bank to better withstand margin compression compared to less asset-sensitive peers.
Looking Ahead
Guidance for Q3 2025 projects $10 million in total expenses, with about $1 million tied to oil and gas, and management projected $2 million in fee income. Management expects full recovery of oil and gas cash outlays by mid-2026. There was no explicit quantitative loan growth or margin guidance, but management stated the origination pipeline remains strong, with cautious optimism for continued strong performance across its operating footprint.