Bank7(US:BSVN)2025-11-07 21:16Financial Performance - Pre-tax net income for Q3 2025 was $14.2 million, a decrease of $1.3 million or 8.5% from $15.5 million in Q3 2024[144] - Return on average assets was 2.33% and return on average equity was 18.11% for Q3 2025, down from 2.73% and 23.67% respectively in Q3 2024[145] - Net interest income for Q3 2025 was $23.0 million, compared to $21.2 million in Q3 2024[149] - Net interest income increased by $1.5 million, or 10.1%, for the three months ended September 30, 2025, compared to the same period in 2024[166] - Noninterest income for the three months ended September 30, 2025, was $2.2 million, a decrease of $1.5 million, or 39.9%, compared to $3.7 million for the same period in 2024[163] - The efficiency ratio for Q3 2025 was 41.12%, compared to 37.87% in Q3 2024, indicating increased operational costs[145] Loan and Deposit Growth - Total loans increased to $1.53 billion as of September 30, 2025, up by $96.7 million or 6.7% from the previous year[143] - Total deposits reached $1.64 billion as of September 30, 2025, an increase of $112.6 million or 7.4% compared to the same date in 2024[143] - As of September 30, 2025, the company's gross loans amounted to $1.54 billion, an increase from $1.40 billion as of December 31, 2024, representing a growth of approximately 10.3%[171] - The net loans as of September 30, 2025, were $1.51 billion, compared to $1.38 billion at the end of 2024, indicating a year-over-year increase of about 9.7%[171] - Total deposits increased to $1.64 billion as of September 30, 2025, up from $1.52 billion as of December 31, 2024, reflecting an increase of 14.5%[193] Credit Losses and Asset Quality - The provision for credit losses increased by $0.7 million or 100.0% for Q3 2025 compared to the same period in 2024, attributed to loan growth[146] - The provision for credit losses increased from $0 to $0.7 million for the three months ended September 30, 2025, with the allowance as a percentage of total loans increasing by 2 basis points to 1.26%[162] - The allowance for credit losses was $19.4 million as of September 30, 2025, up from $17.9 million at December 31, 2024, reflecting a 8.3% increase[177] - Total nonperforming assets as of September 30, 2025, were $5,317,000, a decrease from $7,170,000 as of December 31, 2024, representing a reduction of 25.8%[184] - The ratio of nonperforming loans to total loans improved to 0.35% as of September 30, 2025, compared to 0.51% as of December 31, 2024[184] Operational Strategy - The company plans to grow organically by selectively opening additional branches and pursuing strategic acquisitions[141] - The company maintains internal concentration limits for various loan types, ensuring all loan types are within established limits[172] - The Company has various borrowing mechanisms in place to meet both short-term and long-term liquidity needs[207] Capital and Liquidity - Total shareholders' equity increased by $28.5 million to $241.7 million as of September 30, 2025, compared to $213.2 million as of December 31, 2024[205] - The Company exceeded all regulatory capital requirements and was categorized as "well-capitalized" as of September 30, 2025[202] - The Company maintained a CET1 capital ratio of 14.22% as of September 30, 2025, exceeding the minimum requirement of 7.00%[205] - The total capital to risk-weighted assets ratio was 15.43% for the Company as of September 30, 2025, above the required 10.50%[205] - As of September 30, 2025, the Bank had borrowing availability with the FHLB of $217.6 million and access to approximately $298.4 million in liquidity with the Federal Reserve Bank[201] Interest Rate and Market Risk - Interest rate risk is a primary component of market risk, with potential economic losses reflected as a loss of future net interest income and/or current fair market values[230] - The ALCO Committee manages interest rate exposure, considering factors such as earnings impact, regional economies, and liquidity[232] - Simulation models indicate that a +400 basis point change in interest rates could increase net interest income by 23.29% as of September 30, 2025[236] - The Company’s internal policy specifies that estimated net interest income at risk for a -100 basis point shift should not decline by more than 10%[234] Tax and Regulatory Compliance - The Company's effective tax rate for Q3 2025 was 23.6%, slightly lower than 24.2% in Q3 2024, primarily due to state income taxes and nondeductible expenses[224] - The Company believes it is more likely than not that all of its tax positions will be utilized in future years[223] Miscellaneous - The Company reviews its portfolio of debt securities in an unrealized loss position at least quarterly, assessing whether it intends to sell or is likely to be required to sell the securities[226] - The impact of inflation on the Company is less significant compared to interest rates, as most assets and liabilities are monetary in nature[238] - The Company’s financial statements are prepared in accordance with GAAP, measuring financial position in historical dollars without considering inflation[237]