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Bank7 Corp. Announces 4Q and Full Year 2020 Earnings

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OKLAHOMA CITY , Jan. 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 and year ended December 31, 2020.  "We are pleased to report continued strength in our asset quality and liquidity components, and also to report a record level of PPE for our Company.  Strong PPE enabled us to make meaningful increases to our ALLL, repurchase shares at a discount to book value, and increase our cash dividend, all while maintaining higher levels of capital compared to the industry mean.  We benefit from the strong economy in our region, and feel positive about our future; nonetheless, there is still much uncertainty and business activity is somewhat muted, therefore we will continue to use caution moving forward," said Thomas L. Travis , President and CEO of the Company. 

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

Three months ended December 31, 2020 compared to three months ended December 31, 2019 :

  • Pre-tax, pre-provision earnings of $8.4 million , an increase of 31.60%

  • Interest income on loans, including loan fee income, totaled $13.2 million , an increase of 7.18%

  • Cost of funds of 0.51%, a decrease of 59.53%

  • Efficiency ratio of 35.13%, compared to 41.74%

For the year ended December 31, 2020 compared to the year ended December 31, 2019 :

  • Pre-tax, pre-provision earnings of $31.2 million , an increase of 16.25%, excluding the one-time, non-cash executive stock transaction expense in Q3 2019.

  • Interest income on loans, including loan fee income, totaled $52.4 million , an increase of 8.82%

  • Cost of funds of 0.73%, a decrease of 46.71%

  • Total assets of $1.0 billion , an increase of 17.35%

  • Total loans of $824.1 million , an increase of 18.23%

  • Total deposits of $905.5 million , an increase of 19.54%

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 December 31, 2020 , the Bank's Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.78%, 13.51%, and 14.75% respectively.  On December 31, 2020 , on a consolidated basis, the Company's Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.77%, 13.50%, and 14.73% 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 25.6% and 45.4% in 2020 and 2019, 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
December 31,


For the Year ended
December 31,




(Dollars in thousands, except per share data)


2020


2019


2020


2019

Loan interest income (excluding loan fees)









Total loan interest income, including loan fee income


$           13,182


$          12,299


$           52,450


$          48,200

Loan fee income


(1,066)


(944)


(5,035)


(4,443)

Loan interest income excluding loan fee income


$           12,116


$          11,355


$           47,415


$          43,757










Average total loans


$         871,163


$        692,286


$         823,228


$        636,274

Yield on loans (including loan fee income)


6.02%


7.05%


6.37%


7.58%

Yield on loans (excluding loan fee income)


5.53%


6.51%


5.76%


6.88%










Pre-tax, pre-provision net earnings









Net income before income taxes


$             6,317


$            6,358


$           25,884


$          15,069

Plus: Provision for loan losses


2,050


-


5,350


-

Pre-tax, pre-provision net earnings


$             8,367


$            6,358


$           31,234


$          15,069










Adjusted provision for income tax









Net income before income taxes


$             6,317


$            6,358


$           25,884


$          15,069

Total effective adjusted tax rate


25.0%


29.6%


25.6%


45.4%

Adjusted provision for income taxes


$             1,578


$            1,879


$             6,618


$            6,844










Tax-adjusted net income









Net income before income taxes


$             6,317


$            6,358


$           25,884


$          15,069

Adjusted provision for income taxes


1,578


1,879


6,618


6,844

Tax-adjusted net income


$             4,739


$            4,479


$           19,266


$            8,225










Pro Forma Pre-tax, pre-provision net earnings









Net income before income taxes


$             6,317


$            6,358


$           25,884


$          15,069

Plus: Provision for loan losses


2,050


-


5,350


-

Plus: Stock Transfer Compensation Expense


-


-


-


11,797

Pro Forma Pre-tax, pre-provision net earnings


$             8,367


$            6,358


$           31,234


$          26,866










Tax-adjusted ratios and per share data









Tax-adjusted net income (numerator)


$             4,739


$            4,479


$           19,266


$            8,225










Average assets (denominator)


$         982,024


$        845,510


$         948,957


$        798,528

Tax-adjusted return on average assets


1.92%


2.10%


2.03%


1.03%










Average shareholders' equity (denominator)


$         105,283


$        102,691


$         102,359


$          97,430

Tax-adjusted return on average shareholders' equity


17.91%


17.31%


18.82%


8.44%










Average tangible common equity (denominator)


$         103,675


$        100,872


$         100,675


$          95,537

Tax-adjusted return on average tangible common equity


18.18%


17.62%


19.14%


8.61%










Weighted average common shares outstanding basic (denominator)


9,066,737


10,057,506


9,378,769


10,145,032

Tax-adjusted net income per common share--basic


$               0.52


$              0.45


$               2.05


$              0.81










Weighted average common shares outstanding diluted (denominator)


9,068,161


10,059,208


9,379,154


10,147,311

Tax-adjusted net income per common share--diluted


$               0.52


$              0.45


$               2.05


$              0.81

Tangible assets









Total assets


$      1,016,669


$        866,392





Less: Goodwill and intangibles


(1,583)


(1,789)





Tangible assets


$      1,015,086


$        864,603














Tangible shareholders' equity









Total shareholders' equity


$         107,319


$        100,126





Less: Goodwill and intangibles


(1,583)


(1,789)





Tangible shareholders' equity


$         105,736


$          98,337














Tangible shareholders' equity









Tangible shareholders' equity (numerator)


$         105,736


$          98,337





Tangible assets (denominator)


$      1,015,086


$        864,603





Tangible common equity to tangible assets


10.42%


11.37%














End of period common shares outstanding


9,044,765


10,057,506





Book value per share


$             11.87


$              9.96





Tangible book value per share


$             11.69


$              9.78





Total shareholders' equity to total assets


10.56%


11.56%





 



Net Interest Margin Excluding Loan Fee Income





For the Three Months Ended December 31,





2020



2019





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)


$

102,544



$

127




0.49

%


$

143,604



$

674




1.86

%


Investment securities (2)



1,165




15




5.12




1,073




23




8.50



Loans held for sale



198







0.00




289







0.00



Total loans (3)



871,163




12,116




5.53




692,286




11,355




6.51



Total interest-earning assets



975,070




12,258




5.00




837,252




12,052




5.71



Noninterest-earning assets



6,954












8,258











Total assets


$

982,024











$

845,510





































Funding sources:


























Interest-bearing liabilities:


























Deposits:


























Transaction accounts


$

409,174




470




0.46

%


$

314,106




1,133




1.43

%


Time deposits



203,842




655




1.28




213,716




1,205




2.24



Total interest-bearing deposits



613,016




1,125




0.73




527,822




2,338




1.76



Other borrowings









0.00







...




0.00



Total interest-bearing liabilities



613,016




1,125




0.73




527,822




2,338




1.76





























Noninterest-bearing liabilities:


























Noninterest-bearing deposits



258,599












210,986











Other noninterest-bearing liabilities



5,126












4,011











Total noninterest-bearing liabilities



263,725












214,997











Shareholders' equity



105,283












102,691











Total liabilities and shareholders'
equity


$

982,024











$

845,510





































Net interest income excluding loan fee
income






$

11,133











$

9,714







Net interest spread excluding loan fee
income(4)











4.27

%











3.95

%


Net interest margin excluding loan fee
income











4.54

%











4.60

%




Net Interest Margin With Loan Fee Income




For the Three Months Ended December 31,




2020



2019




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)


$

102,544



$

127




0.49

%


$

143,604



$

674




1.80

%

Investment securities(2)



1,165




15




5.12




1,073




23




8.50


Loans held for sale



198







0.00




289







0.00


Total loans(3)



871,163




13,182




6.02




692,286




12,299




7.05


Total interest-earning assets



975,070




13,324




5.44




837,252




12,996




6.16


Noninterest-earning assets



6,954












8,258










Total assets


$

982,024











$

845,510



































Funding sources:

























Interest-bearing liabilities:

























Deposits:

























Transaction accounts


$

409,174




470




0.46

%


$

314,106




1,133




1.43

%

Time deposits



203,842




655




1.28




213,716




1,205




2.24


Total interest-bearing deposits



613,016




1,125




0.73




527,822




2,338




1.76


Other borrowings









0.00










0.00


Total interest-bearing liabilities



613,016




1,125




0.73




527,822




2,338




1.76



























Noninterest-bearing liabilities:

























Noninterest-bearing deposits



258,599












210,986










Other noninterest-bearing liabilities



5,126












4,011










Total noninterest-bearing liabilities



263,725












214,997










Shareholders' equity



105,283












102,691










Total liabilities and shareholders' equity


$

982,024











$

845,510



































Net interest income including loan fee income






$

12,199











$

10,658






Net interest spread including loan fee
income(4)











4.71

%











4.40

%

Net interest margin including loan fee income











4.98

%











5.05

%



(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 Year Ended December 31,





2020



2019





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)


$

116,295



$

828




0.71

%


$

151,434



$

3,459




2.28

%


Investment securities(2)



1,123




36




3.21




1,065




50




4.69



Loans held for sale



244







0.00




236







0.00



Total loans(3)



823,228




47,415




5.76




636,274




43,757




6.88



Total interest-earning assets



940,890




48,279




5.13




789,009




47,266




5.99



Noninterest-earning assets



8,067












9,519











Total assets


$

948,957











$

798,528





































Funding sources:


























Interest-bearing liabilities:


























Deposits:


























Transaction accounts


$

377,519




2,729




0.72

%


$

295,576




5,057




1.71

%


Time deposits



207,442




3,424




1.65




208,375




4,459




2.14



Total interest-bearing deposits



584,961




6,153




1.05




503,951




9,516




1.89



Other borrowings









0.00










0.00



Total interest-bearing liabilities



584,961




6,153




1.05




503,951




9,516




1.89





























Noninterest-bearing liabilities:


























Noninterest-bearing deposits



256,431












192,562











Other noninterest-bearing
liabilities



5,206












4,585











Total noninterest-bearing
liabilities



261,637












197,147











Shareholders' equity



102,359












97,430











Total liabilities and shareholders'
equity


$

948,957











$

798,528





































Net interest income excluding
loan fee income






$

42,126











$

37,750







Net interest spread excluding loan
fee income(4)











4.08

%











4.10

%


Net interest margin excluding
loan fee income











4.48

%











4.78

%




Net Interest Margin With Loan Fee Income




For the Year Ended December 31,




2020



2019




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)


$

116,295



$

828




0.71

%


$

151,434



$

3,459




2.28

%

Investment securities(2)



1,123




36




3.21




1,065




50




4.69


Loans held for sale



244







0.00




236







0.00


Total loans(3)



823,228




52,450




6.37




636,274




48,200




7.58


Total interest-earning assets



940,890




53,314




5.67




789,009




51,709




6.55


Noninterest-earning assets



8,067












9,519










Total assets


$

948,957











$

798,528



































Funding sources:

























Interest-bearing liabilities:

























Deposits:

























Transaction accounts


$

377,519




2,729




0.72

%


$

295,576




5,057




1.71

%

Time deposits



207,442




3,424




1.65




208,375




4,459




2.14


Total interest-bearing deposits



584,961




6,153




1.05




503,951




9,516




1.89


Other borrowings









0.00










0.00


Total interest-bearing liabilities



584,961




6,153




1.05




503,951




9,516




1.89



























Noninterest-bearing liabilities:

























Noninterest-bearing deposits



256,431












192,562










Other noninterest-bearing liabilities



5,206












4,585










Total noninterest-bearing liabilities



261,637












197,147










Shareholders' equity



102,359












97,430










Total liabilities and shareholders' equity


$

948,957











$

798,528



































Net interest income including loan fee income






$

47,161











$

42,193






Net interest spread including loan fee
income(4)











4.61

%











4.67

%

Net interest margin including loan fee income











5.01

%











5.35

%

Bank7 Corp.

Consolidated Balance Sheets

Dollars in thousands, except per share data

Unaudited as of




Assets

2020


December 31,



December 31


September 30


2019









Cash and due from banks

$ 153,901


$ 60,718


$ 117,128


Interest-bearing time deposits in other banks

16,412


23,384


30,147


Loans, net

826,974


869,448


699,458


Loans held for sale

324


315


1,031


Premises and equipment, net

9,151


9,387


9,624


Nonmarketable equity securities

1,172


1,165


1,100


Goodwill and intangibles

1,583


1,634


1,789


Interest receivable and other assets

7,152


7,303


6,115









Total assets

$ 1,016,669


$ 973,354


$ 866,392









Liabilities and Shareholders' Equity














Deposits







Noninterest-bearing

$ 246,569


$ 272,008


$ 219,221


Interest-bearing

658,945


591,661


538,262









Total deposits

905,514


863,669


757,483









Income taxes payable

9


565


357


Interest payable and other liabilities

3,827


3,890


8,426









Total liabilities

909,350


868,124


766,266









Common stock

90


92


101


Additional paid-in capital

93,162


92,960


92,391


Retained earnings

14,067


12,178


7,634









Total shareholders' equity

107,319


105,230


100,126









Total liabilities and shareholders' equity

$ 1,016,669


$ 973,354


$ 866,392


Bank7 Corp.




Consolidated Statements of Income






Unaudited as of





Quarter Ended


Year Ended



2020


2019


2020


2019

Dollars in thousands, except per share data


December 31


September 30


December 31


December 31


December 31

Interest Income











Loans, including fees


$ 13,182


$ 12,777


$ 12,299


$ 52,450


$ 48,200

Interest-bearing time deposits in other banks


107


123


295


526


1,709

Interest-bearing deposits in other banks


35


26


402


338


1,800












Total interest income


13,324


12,926


12,996


53,314


51,709












Interest Expense











Deposits


1,125


1,325


2,338


6,153


9,516












Total interest expense


1,125


1,325


2,338


6,153


9,516












Net Interest Income


12,199


11,601


10,658


47,161


42,193












Provision for Loan Losses


2,050


1,250


-


5,350


-












Net Interest Income After Provision for Loan Losses


10,149


10,351


10,658


41,811


42,193












Noninterest Income











Secondary market income


41


57


18


175


164

Service charges on deposit accounts


124


104


113


442


392

Other


535


173


126


1,048


752












Total noninterest income


700


334


257


1,665


1,308












Noninterest Expense











Salaries and employee benefits


2,554


2,505


2,473


10,130


21,265

Furniture and equipment


210


224


223


868


829

Occupancy


540


543


520


1,957


1,677

Data and item processing


270


276


264


1,091


1,078

Accounting, marketing and legal fees


198


135


250


536


757

Regulatory assessments


225


164


32


506


126

Advertising and public relations


40


62


239


400


588

Travel, lodging and entertainment


95


50


81


241


368

Other


400


625


475


1,863


1,744












Total noninterest expense


4,532


4,584


4,557


17,592


28,432












Income Before Taxes


6,317


6,101


6,358


25,884


15,069

Income tax expense


1,578


1,661


1,879


6,618


6,844

Net Income


$ 4,739


$ 4,440


$ 4,479


$ 19,266


$ 8,225












Earnings per common share - basic


$ 0.52


$ 0.48


$ 0.45


$ 2.05


$ 0.81

Diluted earnings per common share


0.52


0.48


0.45


2.05


0.81

Weighted average common shares outstanding - basic


9,066,737


9,228,128


10,057,506


9,378,769


10,145,032

Weighted average common shares outstanding - diluted


9,068,161


9,228,128


10,059,208


9,379,154


10,147,311

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 Friday, January 29, 2021 at 11:00 a.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/2179/39520. 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/2179/39520 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.