Welcome to Bank7 Corp's First Quarter Earnings Call. Before we get started, I'd like to highlight the legal information and disclaimer on page 23 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. 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, monetary and supervisory policies of banking regulators. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may differ 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 8-K that was filed this morning by the company. Representing the company on today's call we have Tom Travis, President and CEO, Jason Estes, Chief Credit Officer, Kelly Harris, Chief Financial Officer. Please note, this event is being recorded. With that, I'll turn the call over to Tom Travis. Please go ahead. Good morning, everyone. Thank you for joining us. Well, as you can see, we posted record earnings and record earnings per share, and we are obviously very pleased with those results. It reflects our continued discipline on the way we manage our balance sheet, match up the interest rate risk, and maintain our liquidity. You can tell that it's been successful with our steady and strong NIM. You can also see that the cost controls continue to be in place, which all add up to really good results. With regard to the loan book, the asset quality is very good, regardless of which vertical you view. I know this day and time there's a hyper-focus on CRE, and I will tell you we have no issues with our portfolio and no issues with our CRE and feel very confident about where we are and how we're doing with asset quality. With all that being said, we'll turn it over for any questions that people might have. We will now begin the question- and- answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Woody Lay with KBW. Please go ahead. Hey, good morning, guys. Morning, Woody. I wanted to start with the Treasury maturity that occurred in the first quarter. I was hoping you could just give some color on where the funds went into. It wasn't super clear to me if it all went into cash or if you redeployed some of that back into the bond book. So any color there would be helpful. Hey, Woody. This is Kelly. We had the maturity occur at the end of February. We reinvested around $85 million into a three-month Treasury product, and then $15 million went to cash. Got it. Do you have the NIM in the month of March post that reinvestment? Yeah. Core NIM, excluding fees, for March was 4.58%. Okay. Got it. I wanted to shift over to M&A and just get your thoughts on sort of your appetite for M&A in this current backdrop. Woody, as you know, we're constantly working on potential acquisitions. We were a finalist in one recently, and it didn't work out. But we're constantly meeting with people and sticking to our strategy of pursuing what we call the right side of the balance sheet and heavily focused on core deposits and good fundamental banks. And so I would say that nothing has changed in regard to our commitment to doing that, and we're going to continue to do that. Got it. And then if an M&A deal feels pushed out, would you look to the buyback as a potential leverage just to deploy your excess capital, or is that less likely in the future? I guess I don't understand the question well enough. Yeah, I guess. I mean, would you be interested in the buyback with where the stock's currently trading, or is that less appealing to you right now? I think what happens is that there's a couple of factors. We have been, as you know, you follow this for a long time, very disciplined on the buybacks with regard to how high the multiple of the stock is. Also, we want to maintain a little bit of extra capital in case we can find an acquisition that makes sense. So it's a delicate balance there because we understand that piling up capital doesn't really benefit people, us, anyone other than if we were able to use it to deploy into an acquisition. As every month that goes by, because we're a strong earner and a strong compounder, it just has a tendency to cause that question to come up increasingly. And so at some point, absent an acquisition, then it may motivate us to think more favorably about stock buybacks, even though a multiple may be a little higher than where we would like it to be. And so that's how we view it. All right. That's helpful. Thanks for taking my questions, guys. The next question is from Thomas Wendler with Stephens. Please go ahead. Hey, good morning, everyone. Good morning. I just wanted to go back to the securities. Can you give us an idea of the yields on the securities that you purchased? Yeah. I believe they were 5.38% at the end of February. And so we picked up, on a go-forward, 15 basis points on NIM. Although because it was only one month in Q1, it was 5 basis points. Let me add some color here. Correct me if I'm wrong, Kelly, but I think people need to understand the only reason we went back into some securities was the final tail end and wind down of us needing to pledge to the court related to that large bankruptcy. Okay? So. Very short term. So the wind down in the bankruptcy court of that large credit, the money's posted, and they wanted securities. And so if not for that, we would not have redeployed the $100 million that matured, went down to $85 million as far as requirement. And so we would not have done that. And so this is not some conscious strategy on our part to pivot to move into that. We would much rather have just put the money at the Fed. Okay. No, I appreciate that color. And then just sticking on the yield side, we saw a large step up in loan yields during the quarter. Can you give me an idea of what drove the increase there and how we should be thinking about loan yields moving forward? I believe that's due to that $1 million of lift. If you look at the slide deck, investor presentation that we put out, you'll see there was a $1 million one-time item related to the full collection of a workout loan that had been showing up in our past dues for, oh gosh, probably six quarters in a row. And so I think that's a good signal or reminder of our commitment to behaving like owners because we are owners. Okay? And I think that there's probably financial institutions out there that maybe would have walked away from that deal without realizing that income, but just another good result from a hardworking team committed to doing things the right way and maximizing our returns. Perfect. Thank you. And then if I can sneak one more in here. Previously, I think we were expecting to collect 60% of the $16.9 million in asset value from the Oil and Gas business in cash flows in 2024. Is that still how we should be thinking about it? I'm just looking for any update from last quarter's call on the revenues and expenses from the Oil and Gas business. Yeah. Thanks for the question. We are spot on with that projection through the first quarter, and so no deviation whatsoever. So far, just for your knowledge, $6.4 million of revenue has been recognized, $5 million of cash has been collected, there's $1.4 million due to us that'll come in in the next 30 days, and then we've got the updated engineering projections for the rest of the year, and we are exactly in line with those previous estimates. I would also add that we are hedged, and just think of, use 70% more or less as a good number. And so the portion that's unhedged, the oil and gas well, the oil prices are significantly more than they were six weeks ago. And so we're in a good position. I guess one could argue that we bought the insurance, the hedge, so to speak, to protect against the downside. And the typical hedge, if we hadn't done it, well, we'd be collecting more. But we all understand the reason that we're doing this is to recover most of the assets and not speculate. So in addition to being on target with the production amounts, we're in a strong position financially with regard to the hedging and the pricing. All right. Those are all my questions. Thank you. Again, if you have a question, please press star then one. The next question is from Nathan Race with Piper Sandler. Please go ahead. Yep. Hi, guys. Good morning. Hi, Nate. Good morning. Just going back to the last question, just curious if you guys are actively shopping those Oil and Gas assets, or is the expectation that you're going to kind of retain those assets through the recuperation period going forward that we just touched on? Honestly, Nate, it's such a small item on our balance sheet. It's really small. It's working as we thought it would, and it's rapidly being recollected I mean, collected. So I'm not going to say that we ignore it, but we've been really busy around here, and we just really haven't focused hard on selling off the asset. So we may look at that over the next two or three months, and we may do that. But it just isn't enough for us to worry about. Gotcha. And then just maybe a technical question on fees and expenses for Kelly. Can you just kind of help us think about the fee income and expense run rate that we should be expecting as these assets remain going forward? Yeah. I think for a core non-interest income number, $650,000 is a good guide. And then on non-interest expense, I believe we were closer to $8 million excluding the Oil and Gas activity. I think on a go-forward, maybe for Q2, $8.3 million is a better run rate excluding the Oil and Gas activity. But I think that maybe the first quarter would provide a good estimate on your go-forward for the Oil and Gas revenue and gross expense. Got it. Great. And then just thinking about the margin outlook fees going forward, I think you mentioned the core margin in March was around 4.50% or so or 4.45%. How do you guys kind of think about the margin trajectory in a higher-for-longer interest rate environment going forward? Yeah. And then just a correction, the core NIM excluding fees in March was 4.58%. And so that was with the fully baked-in migration of Treasuries into higher-yielding assets. On a go-forward, we still feel really comfortable operating in that similar range. And you may see some slight movement either way, but more of the same. Okay. And then how do you guys anticipate the margin reacting or responding to each Fed cut as they occur? I would say that, Nate, as you know, if we had a slide in here, if we expanded the NIM slide back for the last 10 years, you would see that we just operate in our normal ranges. And we really don't see a big change to that. I think that it wouldn't surprise me if the margin would you say it was 4.58% real-time? I mean, it wouldn't surprise me if we were to bleed down a little lower than that, just given the dynamics of the yield curve and the markets. I have noticed the last couple of weeks, though, that some of the online and some of the banks, money markets, and high-yield savings accounts actually have come down without the Fed making any changes. And so I think that we're very close to the end of any cost of funds increases. For us, I don't even know if we have $100 million of CDs left to reprice. Right? So I think when you think about our cost of funds and our margin, it's really a function of do we have to go obtain more deposits to keep up with the loan book? And if you do that, do you have to pay a little bit more? So I think that's the only dynamic that could cause the margin to come down a little bit. But we're going to be in our historical ranges, and we should be fine there. Okay. Great. And then maybe a question for Jason just on kind of the loan growth outlook. It was nice to see some growth in the first quarter here. I think you were a little more guarded last quarter in terms of growth here starting out the year. So just curious to get your updated thoughts on how we should be thinking about loan growth and also deposit growth in 2024. Sure. Thanks. I think you're going to see us continue our commitment to profitability over growth. Right? And so when we were talking three months ago, I kind of emphasized heavily, "Don't expect a 2022-type growth year." We're going to be absent some kind of meaningful change in interest rates or something that really gives us an opportunity to maintain our margins while growing. It's just going to be a single-digit number, in my opinion. And so I think that I'm just going to reiterate what I said then. We are valuing profitability over growth. Got it. And then maybe one last one for you, Jason. Just curious what you saw in terms of criticized classified trends in the quarter. Yeah. No, it was a great quarter in that regard. And I think you're going to see us return to our historical levels throughout this year, maybe bleeding into the first quarter of next year. As you know, there's some litigation going on with that large energy credit. So we don't really want to add much to that other than there is going to be an end to that thing at some point. We feel really comfortable with the provision we've made and the $2 million specific reserve we still have out there. We think that as of today, right now, we've fully accounted for it through the income statement. And so that's also a nice thing to have behind us. And credit-wise, knock on wood, everything's just lined up really well here. And really looking forward to moving past that issue. But in the meantime, the book's performing really, I would say, it's exceeded my expectations when you take into account all those interest rate moves and the impact that has on borrowers. And it's just a really nice thing. And it just reemphasizes to our team here internally, we do underwrite loans in a proper way, and we're seeing the rewards for that right now. Right. That's great to hear. And then, Tom, lastly, can you just remind us in terms of acquisition partners, kind of the size of targets that you're looking at and just kind of the overall range there and also by geography too? I noticed that JPMorgan was down 3% today. They may become a target. It looks like they missed a little bit on their margin. So we're going to call you after this, Nate, and see how much capital we need to raise. But yeah, if they're not amenable to that, then we'll pivot. All the kidding aside. I would just say this about our company, and we're just so proud of our team. And I think if people don't know us and they haven't followed us for a long time. I'm trying not to come across as overconfident or arrogant, but the truth is we are not a $1.7 billion or $1.8 billion company. We are a company that operates and can manage a much larger institution. And so because of that, I believe that it wouldn't bother us to do anything that made sense that was larger. And I think that and so I want to go back to something that was said very early in the conversation, and that is that we're not a bank that's going to go out and buy someone because they have this great loan book or because they have this special vertical. We're going to buy people based on tried and true liquidity and the ability of this team and the history of this team to then take that and efficiently deploy it into what I consider to be the greatest geographical economic area on the planet, which is Texas and Oklahoma. And I mean, it's just a really nice environment. So I think that clearly, it'd be we don't want to get distracted by anything that's too small. But if something comes along that's larger that fits those parameters, then we're not going to be afraid of it. That's our view. Okay. Great. Thanks, guys. Appreciate all the color. Thank you, Nate. This concludes our question-and-answer session. I would like to turn the conference back over to Tom Travis for any closing remarks. Well, thank you again to everyone. I think we've covered most of the components. Again, we're really proud of our team. We're proud of our results. We're really happy with the breadth and depth of the company in all facets and just look forward to continuing to do what we do. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.