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Bank7 Corp. Announces 2Q 2021 Earnings

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OKLAHOMA CITY, July 29, 2021 /PRNewswire/ -- Bank7 Corp. (NASDAQ: BSVN) ("the Company"), the parent company of Oklahoma City-based Bank7 (the "Bank"), today reported unaudited results for the fiscal quarter ended June 30, 2021. "We are pleased to announce a record quarter of net income and EPS. Our strong loan growth and loan fee income, combined with our excellent efficiency ratio, continues to produce outstanding results. As we move forward, our goal is to continue to produce exceptional results through organic growth and the pursuit of strategic acquisitions," said Thomas L. Travis, President and CEO of the Company.

Bank7 Logo (PRNewsfoto/Bank7 Corp.)
Bank7 Logo (PRNewsfoto/Bank7 Corp.)

Three months ended June 30, 2021 compared to three months ended June 30, 2020:

  • Pre-tax, pre-provision earnings of $9.4 million compared to $8.1 million, an increase of 15.6%

  • Net income of $6.1 million compared to $5.0 million, an increase of 21.2%

  • Interest income on loans, including loan fee income, totaled $14.4 million compared to $13.4 million, an increase of 9.5%

  • Total assets of $1.1 billion compared to $1.0 billion, an increase of 12.8%

  • Total loans of $932.0 million compared to $837.9 million, an increase of 11.2%

  • Total deposits of $1.0 billion compared to $894.2 million, an increase of 12.8%

  • Tangible book value per share of $12.76 compared to $10.83, an increase of 17.8%

  • Average cost of funds of 0.34% compared to 0.76%, a decrease of 54.7%

  • Earnings per share of $0.67 compared to $0.54, an increase of 24.9%

  • ROAA of 2.39% compared to 2.09%, an increase of 14.6%

  • ROATCE of 21.90% compared to 20.72%, an increase of 5.7%

Six months ended June 30, 2021 compared to six months ended June 30, 2020:

  • Pre-tax, pre-provision earnings of $17.5 million, compared to $15.5 million, an increase of 12.6%

  • Net income of $11.2 million compared to $10.1 million, an increase of 11.1%

  • Efficiency ratio of 35.02% compared to 35.33%, a decrease of 0.86%

  • Average cost of funds of 0.37% compared to 0.91%, a decrease of 58.9%

  • ROAA of 2.25% compared to 2.20%, an increase of 2.51%

  • ROATCE of 20.63% compared to 20.52%, an increase of 0.54%

Both the Bank's and the Company's capital levels continue to be significantly above the minimum levels required to be designated as "well-capitalized" for regulatory purposes. On June 30, 2021, the Bank's Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 11.28%, 13.23%, and 14.48%, respectively. On June 30, 2021, on a consolidated basis, the Company's Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 11.26%, 13.22%, and 14.47%, respectively. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators.

Pre-tax, pre-provision earnings is defined as income before taxes and provision for loan losses. We believe the most directly comparable GAAP financial measure is income before taxes. Disclosure of this measure enables you to compare our operations to those of other banking companies before consideration of taxes and provision expense. We calculate our tax-adjusted net income, return on average assets, and return on average equity, and per share amounts by using a combined effective tax rate for federal and state income taxes of 24.3% and 24.9% in the second quarter of 2021 and 2020, respectively. We acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those we use for non-GAAP financial measures we disclose, but may calculate them differently. You should understand how we and other companies each calculate their non-GAAP financial measures when making comparisons. The following reconciliation table provides a more detailed analysis of these non-GAAP financial measures:



Three months ended
June 30,


Six months ended
June 30,




(Dollars in thousands, except per share data)


2021


2020


2021


2020

Loan interest income (excluding loan fees)









Total loan interest income, including loan fee income


$ 14,357


$ 13,385


$ 27,450


$ 26,491

Loan fee income


(2,527)


(1,632)


(4,517)


(2,892)

Loan interest income excluding loan fee income


$ 11,830


$ 11,753


$ 22,933


$ 23,599










Average total loans


$ 889,278


$ 826,111


$ 868,526


$ 786,943

Yield on loans (including loan fee income)


6.48%


6.52%


6.37%


6.77%

Yield on loans (excluding loan fee income)


5.34%


5.72%


5.32%


6.03%










Pre-tax, pre-provision net earnings









Net income before income taxes


$ 8,069


$ 6,707


$ 14,899


$ 13,466

Plus: Provision for loan losses


1,300


1,400


2,575


2,050

Pre-tax, pre-provision net earnings


$ 9,369


$ 8,107


$ 17,474


$ 15,516










Adjusted provision for income tax









Net income before income taxes


$ 8,069


$ 6,707


$ 14,899


$ 13,466

Total effective adjusted tax rate


24.3%


24.9%


24.8%


25.1%

Adjusted provision for income taxes


$ 1,964


$ 1,671


$ 3,690


$ 3,379










Tax-adjusted net income









Net income before income taxes


$ 8,069


$ 6,707


$ 14,899


$ 13,466

Adjusted provision for income taxes


1,964


1,671


3,690


3,379

Tax-adjusted net income


$ 6,105


$ 5,036


$ 11,209


$ 10,087



















Tax-adjusted ratios and per share data









Tax-adjusted net income (numerator)


$ 6,105


$ 5,036


$ 11,209


$ 10,087










Average assets (denominator)


$ 1,024,751


$ 971,373


$ 1,003,444


$ 923,087

Tax-adjusted return on average assets


2.39%


2.09%


2.25%


2.20%










Average shareholders' equity (denominator)


$ 113,332


$ 99,469


$ 111,108


$ 100,593

Tax-adjusted return on average shareholders' equity


21.61%


20.36%


20.34%


20.17%










Average tangible common equity (denominator)


$ 111,822


$ 97,760


$ 109,573


$ 98,858

Tax-adjusted return on average tangible common equity


21.90%


20.72%


20.63%


20.52%










Weighted average common shares outstanding basic (denominator)


9,050,606


9,232,509


9,050,295


9,598,232

Tax-adjusted net income per common share--basic


$ 0.67


$ 0.54


$ 1.24


$ 1.05










Weighted average common shares outstanding diluted (denominator)


9,074,408


9,232,509


9,066,797


9,598,232

Tax-adjusted net income per common share--diluted


$ 0.67


$ 0.54


$ 1.24


$ 1.05

Tangible assets









Total assets


$ 1,133,031


$ 1,004,085





Less: Goodwill and intangibles


(1,491)


(1,686)





Tangible assets


$ 1,131,540


$ 1,002,399














Tangible shareholders' equity









Total shareholders' equity


$ 117,011


$ 101,618





Less: Goodwill and intangibles


(1,491)


(1,686)





Tangible shareholders' equity


$ 115,520


$ 99,932














Tangible shareholders' equity









Tangible shareholders' equity (numerator)


$ 115,520


$ 99,932





Tangible assets (denominator)


$ 1,131,540


$ 1,002,399





Tangible common equity to tangible assets


10.21%


9.97%














End of period common shares outstanding


9,050,606


9,226,252





Book value per share


$ 12.93


$ 11.01





Tangible book value per share


$ 12.76


$ 10.83





Total shareholders' equity to total assets


10.33%


10.12%







Net Interest Margin Excluding Loan Fee Income



For the Three Months Ended June 30,



2021


2020



Average
Balance


Interest
Income/
Expense


Average
Yield/
Rate


Average
Balance


Interest
Income/
Expense


Average
Yield/
Rate



(Dollars in thousands)

Interest-Earning Assets:













Short-term investments(1)


$ 128,643


$ 64


0.20%


$ 134,764


$ 156


0.47%

Investment securities(2)


1,187


15


5.07


1,089


15


5.54

Loans held for sale


557


-


-


222


-


-

Total loans(3)


889,278


11,830


5.34


826,111


11,753


5.72

Total interest-earning assets


1,019,665


11,909


4.68


962,186


11,924


4.98

Noninterest-earning assets


5,086






9,187





Total assets


$1,024,751






$ 971,373


















Funding sources:













Interest-bearing liabilities:













Deposits:













Transaction accounts


$ 399,293


329


0.33%


$ 373,812


704


0.76%

Time deposits


212,212


443


0.84


219,990


923


1.69

Total interest-bearing deposits


611,505


772


0.51


593,802


1,627


1.10

Total interest-bearing liabilities


611,505


772


0.51


593,802


1,627


1.10














Noninterest-bearing liabilities:













Noninterest-bearing deposits


293,867






272,373





Other noninterest-bearing liabilities


6,047






5,729





Total noninterest-bearing liabilities


299,914






278,102





Shareholders' equity


113,332






99,469





Total liabilities and shareholders' equity


$ 1,024,751






$ 971,373


















Net interest income excluding loan fee income




$ 11,137






$ 10,297



Net interest spread excluding loan fee
income(4)






4.18%






3.88%

Net interest margin excluding loan fee income






4.38%






4.30%



Net Interest Margin With Loan Fee Income



For the Three Months Ended June 30,



2021


2020



Average
Balance


Interest
Income/
Expense


Average
Yield/
Rate


Average
Balance


Interest
Income/
Expense


Average
Yield/
Rate



(Dollars in thousands)

Interest-Earning Assets:













Short-term investments(1)


$ 128,643


$ 64


0.20%


$ 134,764


$ 156


0.47%

Investment securities(2)


1,187


15


5.07


1,089


15


5.54

Loans held for sale


557


-


-


222


-


-

Total loans(3)


889,278


14,357


6.48


826,111


13,385


6.52

Total interest-earning assets


1,019,665


14,436


5.68


962,186


13,556


5.67

Noninterest-earning assets


5,086






9,187





Total assets


$ 1,024,751






$ 971,373


















Funding sources:













Interest-bearing liabilities:













Deposits:













Transaction accounts


$ 399,293


329


0.33%


$ 373,812


704


0.76%

Time deposits


212,212


443


0.84


219,990


923


1.69

Total interest-bearing deposits


611,505


772


0.51


593,802


1,627


1.10

Total interest-bearing liabilities


611,505


772


0.51


593,802


1,627


1.10














Noninterest-bearing liabilities:













Noninterest-bearing deposits


293,867






272,373





Other noninterest-bearing liabilities


6,047






5,729





Total noninterest-bearing liabilities


299,914






278,102





Shareholders' equity


113,332






99,469





Total liabilities and shareholders' equity


$ 1,024,751






$ 971,373


















Net interest income including loan fee income




$ 13,664






$ 11,929



Net interest spread including loan fee
income(4)






5.17%






4.56%

Net interest margin including loan fee income






5.37%






4.99%

(1)

Includes income and average balances for fed funds sold, interest-earning deposits in banks and other miscellaneous interest-earning assets.



(2)

Includes income and average balances for FHLB and FRB stock.



(3)

Non-accrual loans are included in loans.



(4)

Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.



Net Interest Margin Excluding Loan Fee Income




For the Six Months Ended June 30,




2021


2020




Average
Balance


Interest
Income/
Expense


Average
Yield/
Rate


Average
Balance


Interest
Income/
Expense


Average
Yield/
Rate




(Dollars in thousands)


Interest-Earning Assets:














Short-term investments(1)


$ 127,203


$ 157


0.25%


$125,906


$ 554


0.88%


Investment securities(2)


1,180


17


2.91


1,095


18


3.31


Loans held for sale


445


-


-


174


-


-


Total loans(3)


868,526


22,933


5.32


786,943


23,599


6.03


Total interest-earning assets


...

997,354


23,107


4.67


914,118


24,171


5.32


Noninterest-earning assets


6,090






8,969






Total assets


$1,003,444






$923,087




















Funding sources:














Interest-bearing liabilities:














Deposits:














Transaction accounts


$ 412,070


691


0.34%


$358,167


1,714


0.96%


Time deposits


208,903


956


0.92


212,537


1,988


1.88


Total interest-bearing deposits


620,973


1,647


0.53


570,704


3,702


1.30


Total interest-bearing liabilities


620,973


1,647


0.53


570,704


3,702


1.30
















Noninterest-bearing liabilities:














Noninterest-bearing deposits


266,237






246,630






Other noninterest-bearing liabilities


5,126






5,160






Total noninterest-bearing liabilities


271,363






251,790






Shareholders' equity


111,108






100,593






Total liabilities and shareholders' equity


$1,003,444






$923,087
















...



Net interest income excluding loan fee income




$ 21,460






$ 20,469




Net interest spread excluding loan fee
income(4)






4.14%






4.01%


Net interest margin excluding loan fee income






4.34%






4.50%










































































Net Interest Margin With Loan Fee Income




For the Six Months Ended June 30,




2021


2020




Average
Balance


Interest
Income/
Expense


Average
Yield/
Rate


Average
Balance


Interest
Income/
Expense


Average
Yield/
Rate




(Dollars in thousands)


Interest-Earning Assets:














Short-term investments(1)


$ 127,203


$ 157


0.25%


$125,906


$ 554


0.88%


Investment securities(2)


1,180


17


2.91


1,095


18


3.31


Loans held for sale


445


-


-


174


-


-


Total loans(3)


868,526


27,450


6.37


786,943


26,491


6.77


Total interest-earning assets


997,354


27,624


5.59


914,118


27,063


5.95


Noninterest-earning assets


6,090






8,969






Total assets


$1,003,444






$923,087




















Funding sources:














Interest-bearing liabilities:














Deposits:














Transaction accounts


$ 412,070


691


0.34%


$358,167


1,714


0.96%


Time deposits


208,903


956


0.92


212,537


1,988


1.88


Total interest-bearing deposits


620,973


1,647


0.53


570,704


3,702


1.30


Total interest-bearing liabilities


620,973


1,647


0.53


570,704


3,702


1.30
















Noninterest-bearing liabilities:














Noninterest-bearing deposits


266,237






246,630






Other noninterest-bearing liabilities


5,126






5,160






Total noninterest-bearing liabilities


271,363






251,790






Shareholders' equity


111,108






100,593






Total liabilities and shareholders' equity


$1,003,444






$923,087




















Net interest income including loan fee income




$ 25,977






$ 23,361




Net interest spread including loan fee
income(4)






5.05%






4.65%


Net interest margin including loan fee income






5.25%






5.14%


(1)

Includes income and average balances for fed funds sold, interest-earning deposits in banks and other miscellaneous interest-earning assets.



(2)

Includes income and average balances for FHLB and FRB stock.



(3)

Non-accrual loans are included in loans.



(4)

Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

Bank7 Corp.

Consolidated Balance Sheets

Dollars in thousands

Unaudited as of




Assets

June 30,


December 31,



2021


2020







Cash and due from banks

$ 187,732


$ 153,901


Interest-bearing time deposits in other banks

5,478


16,412


Loans, net

919,687


826,974


Loans held for sale

1,334


324


Premises and equipment, net

8,889


9,151


Nonmarketable equity securities

1,187


1,172


Goodwill and intangibles

1,491


1,583


Interest receivable and other assets

7,233


7,152







Total assets

$ 1,133,031


$ 1,016,669







Liabilities and Shareholders' Equity










Deposits





Noninterest-bearing

$ 330,061


$ 246,569


Interest-bearing

678,488


658,945







Total deposits

1,008,549


905,514







Income taxes payable

2,574


9


Interest payable and other liabilities

4,897


3,827







Total liabilities

1,016,020


909,350







Common stock

90


90


Additional paid-in capital

93,635


93,162


Retained earnings

23,286


14,067







Total shareholders' equity

117,011


107,319







Total liabilities and shareholders' equity

$ 1,133,031


$ 1,016,669







Bank7 Corp.

Consolidated Statements of Income



Unaudited as of



Three Months Ended


Six Months Ended



June 30,


June 30,

Dollars in thousands, except per share data


2021


2020


2021


2020

Interest Income









Loans, including fees


$ 14,357


$ 13,385


$ 27,450


$ 26,491

Interest-bearing time deposits in other banks


38


133


106


295

Interest-bearing deposits in other banks


42


38


68


277








-


Total interest income


14,437


13,556


27,624


27,063










Interest Expense









Deposits


772


1,627


1,647


3,702










Total interest expense


772


1,627


1,647


3,702










Net Interest Income


13,665


11,929


25,977


23,361










Provision for Loan Losses


1,300


1,400


2,575


2,050










Net Interest Income After Provision for Loan Losses


12,365


10,529


23,402


21,311










Noninterest Income









Secondary market income


78


39


92


77

Service charges on deposit accounts


119


95


239


214

Other


382


167


585


340










Total noninterest income


579


301


916


631










Noninterest Expense









Salaries and employee benefits


2,949


2,597


5,739


5,071

Furniture and equipment


231


218


433


434

Occupancy


458


413


930


874

Data and item processing


286


269


565


545

Accounting, marketing and legal fees


149


77


297


203

Regulatory assessments


161


94


302


117

Advertising and public relations


71


29


105


298

Travel, lodging and entertainment


118


43


207


96

Other


452


383


841


838










Total noninterest expense


4,875


4,123


9,419


8,476










Income Before Taxes


8,069


6,707


14,899


13,466

Income tax expense


1,964


1,671


3,690


3,379

Net Income


$ 6,105


$ 5,036


$ 11,209


$ 10,087










Earnings per common share - basic


$ 0.67


$ 0.54


$ 1.24


$ 1.05

Diluted earnings per common share


0.67


0.54


1.24


1.05

Weighted average common shares outstanding - basic


9,050,606


9,232,509


9,050,295


9,598,232

Weighted average common shares outstanding - diluted


9,074,408


9,232,509


9,066,797


9,598,232

About Bank7 Corp.

We are Bank7 Corp., a bank holding company headquartered in Oklahoma City, Oklahoma. Through our wholly-owned subsidiary, Bank7, we operate nine locations in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area and Kansas. We are focused on serving business owners and entrepreneurs by delivering fast, consistent and well-designed loan and deposit products to meet their financing needs. We intend to grow organically by selectively opening additional branches in our target markets as well as pursue strategic acquisitions.

Conference Call

Bank7 Corp. has scheduled a conference call to discuss its first quarter results, which will be broadcast live over the Internet, on Thursday, July 29, 2021 at 4:30 p.m. Eastern Time. To participate in the call, dial 1-888-348-6421, or access it live over the Internet at https://www.webcaster4.com/Webcast/Page/2179/41916. For those not able to participate in the live call, an archive of the webcast will be available at https://www.webcaster4.com/Webcast/Page/2179/41916 shortly after the call for 1 year.

Cautionary Statements Regarding Forward-Looking Information

This communication contains a number of forward-looking statements. These forward-looking statements reflect Bank7 Corp.'s current views with respect to, among other things, future events and Bank7 Corp.'s financial performance. Any statements about Bank7 Corp.'s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases. Any or all of the forward-looking statements in (or conveyed orally regarding) this presentation may turn out to be inaccurate. The inclusion of or reference to forward-looking information in this presentation should not be regarded as a representation by Bank7 Corp. or any other person that the future plans, estimates or expectations contemplated by Bank7 Corp. will be achieved.

These forward-looking statements are subject to significant uncertainties because they are based upon: the amount and timing of future changes in interest rates, market behavior, and other economic conditions; future laws, regulations, and accounting principles; changes in regulatory standards and examination policies, and a variety of other matters. These other matters include, among other things, the impact of COVID-19 on the United States economy and our operations, the direct and indirect effect of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators. Bank7 Corp. has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that Bank7 Corp. believes may affect its financial condition, results of operations, business strategy and financial needs. Bank7 Corp.'s actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. If one or more events related to these or other risks or uncertainties materialize, or if Bank7 Corp.'s underlying assumptions prove to be incorrect, actual results may differ materially from what Bank7 Corp. anticipates. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made and Bank7 Corp. undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required by law. All forward-looking statements herein are qualified by these cautionary statements.

About Non-GAAP Financial Measures

This communication includes certain non-GAAP financial measures, including tax-adjusted net income, tax-adjusted earnings per share, tax-adjusted return on average assets and tax-adjusted return on average shareholders' equity. These non-GAAP financial measures and any other non-GAAP financial measures that we discuss in this presentation should not be considered in isolation, and should be considered as additions to, and not substitutes for or superior to, measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Bank7 Corp.'s non-GAAP financial measures as tools for comparison. See the table above in this communication for a reconciliation of the non-GAAP financial measures used in (or conveyed orally during) this communication to their most directly comparable GAAP financial measures.

Contact:

Thomas Travis
President & CEO
(405) 810-8600

Cision
Cision

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SOURCE Bank7 Corp.