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Bank7 Corp. Announces Record 1Q 2019 Earnings

OKLAHOMA CITY, April 30, 2019 /PRNewswire/ -- Bank7 Corp. (BSVN) ("the Company"), the parent company of Oklahoma City-based Bank7 (the "Bank"), today reported unaudited results for the fiscal quarter ended March 31, 2019.  "We are pleased to announce record pre-tax income for our first quarter results.  Our first quarter performance shows continued balance sheet growth, especially in our core deposits.  That growth, combined with our excellent efficiency ratio and asset quality, continues to produce outstanding returns in both average assets and average tangible common equity.  These results were achieved despite incurring additional costs related to our status as a public company and the addition of our Tulsa loan production office," said Thomas L. Travis, President and CEO of the Company.

Bank7 Logo (PRNewsfoto/Bank7 Corp.)

Three months ended March 31, 2019 compared to three months ended March 31, 2018:

  • Pre-tax income of $6.8 million, a 7.43% increase
  • Adjusted income of $5.1 million, a 8.9% increase
  • Interest income on loans, including loan fee income, totaled $11.6 million, a 7.36% increase
  • Net interest margin, excluding loan fee income, of 4.93%, a 28 basis point increase

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.  At March 31, 2019 the Tier 1 leverage ratio, common equity Tier 1 risk-based capital ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 12.18%, 16.05%, 16.05%, and 17.30% respectively for the Bank.  At March 31, 2019 the Tier 1 leverage ratio, common equity Tier 1 risk-based capital ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 12.05%, 15.87%, 15.87%, and 17.13% respectively for the Company on a consolidated basis.  Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators.

Pre-tax, pre-provision net income 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, which some investors may consider to be a more appropriate comparison given our S Corporation status prior to September 2018.  We calculate our adjusted net income, return on average assets, and return on average equity, and per share amounts by using a combined C Corporation effective tax rate for federal and state income taxes of 25.0% and 26.0% in the first quarter of 2019 and 2018, respectively.  This calculation illustrates only the change from our status as a S Corporation into a C Corporation and does not give effect to any other transaction.  However, 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

March 31,


(Dollars in thousands, except per share data)


2019



2018


Loan interest income (excluding loan fees)







Total loan interest income, including loan fee income


$

11,622



$

10,825


Loan fee income



(1,289)




(1,832)


Loan interest income excluding loan fee income


$

10,333



$

8,993











Average total loans


$

586,408



$

566,021


Yield on loans (including loan fee income)



8.04

%



7.65

%

Yield on loans (excluding loan fee income)



7.15

%



6.44

%










Net interest margin (excluding loan fees)









Net interest income


$

10,353



$

9,861


Loan fee income



(1,289)




(1,832)


Net interest income excluding loan fees


$

9,064



$

8,029











Average earning assets


$

745,739



$

690,139


Net interest margin (including loan fee income)



5.63

%



5.72

%

Net interest margin (excluding loan fee income)



4.93

%



4.72

%










Pre-tax, pre-provision net earnings









Net income before income taxes


$

6,821



$

6,349


Plus: Provision (reversal of) for loan losses



-




(100)


Pre-tax, pre-provision net earnings


$

6,821



$

6,449











Adjusted provision for income tax









Net income before income taxes


$

6,821



$

6,349


Total effective adjusted tax rate



25.0

%



26.0

%

Adjusted provision for income taxes


$

1,705



$

1,651











Adjusted net income









Net income before income taxes


$

6,821



$

6,349


Adjusted provision for income taxes



1,705




1,651


Adjusted net income


$

5,116



$

4,698











Adjusted ratios and per share data









Adjusted net income (numerator)


$

5,116



$

4,698











Average assets (denominator)


$

754,176



$

700,983


Adjusted return on average assets



2.75

%



2.72

%










Average shareholders' equity (denominator)


$

90,813



$

71,410


Adjusted return on average shareholders' equity



22.85

%



26.10

%










Average tangible common equity (denominator)


$

88,839



$

69,261


Adjusted return on average tangible common equity



23.35

%



27.51

%










Weighted average common shares outstanding basic (denominator)



10,187,500




7,287,500


Adjusted net income per common share—basic



0.50




0.64











Weighted average common shares outstanding diluted (denominator)



10,187,500




7,287,500


Adjusted net income per common share—diluted



0.50




0.64











Tangible assets









Total assets


$

787,236



$

706,565


Less: Goodwill



(1,943)




(2,149)


Tangible assets


$

785,293



$

704,416











Tangible shareholders' equity









Total shareholders' equity


$

93,753



$

75,524


Less: Goodwill



(1,943)




(2,149)


Tangible shareholders' equity


$

91,810



$

73,375











Tangible shareholders' equity









Tangible shareholders' equity (numerator)


$

91,810



$

73,375


Tangible assets (denominator)


$

785,293



$

704,416


Tangible common equity to tangible assets



11.69

%



10.42

%










End of period common shares outstanding



10,187,500




7,287,500


Book value per share


$

9.20



$

10.36


Tangible book value per share


$

9.01



$

10.07


Total shareholders' equity to total assets



11.91

%



10.69

%

 



Net Interest Margin Excluding Loan Fee Income




For the Three Months Ended March 31,




2019



2018




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)


$

158,068



$

956




2.45

%


$

123,069



$

515




1.67

%

Investment securities(2)



1,055







0.00




1,049







0.00


Loans held for sale



208







0.00




71







0.00


Total loans(3)



586,408




10,333




7.15




565,950




8,992




6.36


Total interest-earning assets



745,739




11,289




6.14




690,139




9,507




5.51


Noninterest-earning assets



8,437












10,844










Total assets


$

754,176











$

700,983



































Funding sources:

























Interest-bearing liabilities:

























Deposits:

























Transaction accounts


$

285,289




1,299




1.85

%


$

211,585




613




1.16

%

Time deposits



192,499




925




1.95




243,319




806




1.33


Total interest-bearing deposits



477,788




2,224




1.89




454,904




1,419




1.25


Other borrowings









0.00




5,369




60




4.47


Total interest-bearing liabilities



477,788




2,224




1.89




460,273




1,479




1.29



























Noninterest-bearing liabilities:

























Noninterest-bearing deposits



179,801












165,974










Other noninterest-bearing liabilities



5,774












3,326










Total noninterest-bearing liabilities



185,575












169,300










Shareholders' equity



90,813












71,410










Total liabilities and shareholders' equity


$

754,176











$

700,983



































Net interest income excluding loan fee income






$

9,064











$

8,029






Net interest spread excluding loan fee income(4)











4.25

%











4.22

%

Net interest margin excluding loan fee income











4.93

%











4.65

%



(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 With Loan Fee Income




For the Three Months Ended March 31,




2019



2018




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)


$

158,068



$

956




2.45

%


$

123,069



$

515




1.67

%

Investment securities(2)



1,055







0.00




1,049







0.00


Loans held for sale



208







0.00




71







0.00


Total loans(3)



586,408




11,622




8.04




565,950




10,825




7.65


Total interest-earning assets



745,739




12,578




6.84




690,139




11,340




6.57


Noninterest-earning assets



8,437












10,844










Total assets


$

754,176











$

700,983



































Funding sources:

























Interest-bearing liabilities:

























Deposits:

























Transaction accounts


$

285,289




1,299




1.85

%


$

211,585




613




1.16

%

Time deposits



192,499




925




1.95




243,319




806




1.33


Total interest-bearing deposits



477,788




2,224




1.89




454,904




1,419




1.25


Other borrowings









0.00




5,369




60




4.47


Total interest-bearing liabilities



477,788




2,224




1.89




460,273




1,479




1.29



























Noninterest-bearing liabilities:

























Noninterest-bearing deposits



179,801












165,974










Other noninterest-bearing liabilities



5,774












3,326










Total noninterest-bearing liabilities



185,575












169,300










Shareholders' equity



90,813












71,410










Total liabilities and shareholders' equity


$

754,176











$

700,983



































Net interest income excluding loan fee income






$

10,353











$

9,861






Net interest spread excluding loan fee income(4)











4.95

%











5.29

%

Net interest margin excluding loan fee income











5.63

%











5.72

%



(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, exceper per share data


Unaudited as of





Assets


March 31,



December 31,




2019



2018









Cash and due from banks


$

156,149



$

128,090


Interest-bearing time deposits in other banks



34,277




31,759


Loans, net



578,790




592,078


Loans held for sale



207




512


Premises and equipment, net



8,289




7,753


Nonmarketable equity securities



1,055




1,055


Foreclosed assets held for sale



110




110


Goodwill and intangibles



1,943




1,995


Interest receivable and other assets



6,416




7,159











Total assets


$

787,236



$

770,511











Liabilities and Shareholders' Equity


















Deposits









Noninterest-bearing


$

185,351



$

201,159


Interest-bearing



501,325




474,744











Total deposits



686,676




675,903











Borrowings



-




-


Income taxes payable



3,650




1,913


Interest payable and other liabilities



3,157




4,229











Total liabilities



693,483




682,045











Common stock



102




102


Additional paid-in capital



80,446




80,275


Retained earnings



13,205




8,089











Total shareholders' equity



93,753




88,466











Total liabilities and shareholders' equity


$

787,236



$

770,511


 

Bank7 Corp. 
Consolidated Quarterly Statements of Income







Unaudited as of




Quarter Ended




March 31,


Dollars in thousands, exceper per share data


2019



2018


Interest Income




Loans, including fees


$

11,622



$

10,825


Interest-bearing time deposits in other banks



417




149


Interest-bearing deposits in other banks



538




366











Total interest income



12,577




11,340











Interest Expense









Deposits



2,224




1,419


Other borrowings



-




60











Total interest expense



2,224




1,479











Net Interest Income



10,353




9,861











Provision for Loan Losses



-




100











Net Interest Income After Provision for Loan Losses



10,353




9,761











Noninterest Income









Secondary market income



37




40


Service charges on deposit accounts



60




80


Other



126




144











Total noninterest income



223




264











Noninterest Expense









Salaries and employee benefits



2,171




2,150


Furniture and equipment



159




157


Occupancy



343




291


Data and item processing



262




233


Accounting, marketing and legal fees



147




34


Regulatory assessments



32




126


Advertising and public relations



186




187


Travel, lodging and entertainment



42




193


Other



413




305











Total noninterest expense



3,755




3,676











Income Before Taxes



6,821




6,349


Income tax expense



1,705




-


Net Income


$

5,116



$

6,349











Basic earnings per common share


$

0.50



$

0.87


Diluted earnings per common share



0.50




0.87


Weighted average common shares outstanding - basic and diluted



10,187,500




7,287,500


About Bank7 Corp.

We are Bank7 Corp., a bank holding company headquartered in Oklahoma City, Oklahoma. Through our wholly-owned subsidiary, Bank7, we operate eight branches 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 2019 results, which will be broadcast live over the Internet, on Tuesday, April 30, 2019 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://services.choruscall.com/links/bsvn190430.html.  For those who cannot listen to the live call, a replay will be available through May 14, 2019 and may be accessed by dialing 1-877-344-7529 and using pass code 10130723. Also, an archive of the webcast will be available shortly after the call at https://services.choruscall.com/links/bsvn190430.html 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 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 adjusted net income, adjusted earnings per share, adjusted return on average assets and 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

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