Bank7 Corp. Announces Q3 2021 Earnings

OKLAHOMA CITY, Oct. 21, 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 September 30, 2021.  "Our company continues to perform at a very high level, we are pleased to report another record quarter of net income for BSVN.  While we are proud of our earnings, capital, and liquidity strength, we also pause to acknowledge the 3-year anniversary of our IPO, and how we had confidence in our team to perform at a high level and we've exceeded those expectations." said Thomas L. Travis, President and CEO of the Company. 

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

  • Pre-tax, pre-provision earnings of $9.1 million compared to $7.4 million, an increase of 23.5%
  • Net income of $6.3 million compared to $4.4 million, an increase of 41.1%
  • Total assets of $1.1 billion compared to $973.4 million, an increase of 17.8%
  • Total deposits of $1.0 billion compared to $863.7 million, an increase of 17.9%
  • Tangible book value per share of $13.34 compared to $11.21, an increase of 19.0%
  • Average cost of funds of 0.33% compared to 0.57%, a decrease of 42.1%
  • Earnings per share of $0.69 compared to $0.48, an increase of 43.8%
  • ROAA of 2.36% compared to 1.83%, an increase of 28.9%
  • ROATCE of 21.12% compared to 17.44%, an increase of 21.1%

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 September 30, 2021, the Bank's Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 11.51%, 13.76%, and 14.82%, respectively.  On September 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 11.50%, 13.74%, and 14.80%, 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 24.8% and 27.2% in the third 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 
September 30,


Nine months ended
September 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


$           13,927


$            12,777


$           41,377


$           39,268

Loan fee income


(1,636)


(1,078)


(6,154)


(3,969)

Loan interest income excluding loan fee income


$           12,291


$            11,699


$           35,223


$           35,299










Average total loans


$         924,391


$          847,076


$         887,353


$         807,134

Yield on loans (including loan fee income)


5.98


6.00


6.23


6.50

Yield on loans (excluding loan fee income)


5.28


5.49


5.31


5.84










Pre-tax, pre-provision net earnings









Net income before income taxes


$             8,327


$              6,101


$           23,226


$           19,567

Plus: Provision for loan losses


750


1,250


3,325


3,300

Pre-tax, pre-provision net earnings


$             9,077


$              7,351


$           26,551


$           22,867










Adjusted provision for income tax









Net income before income taxes


$             8,327


$              6,101


$           23,226


$           19,567

Total effective adjusted tax rate


24.8%


27.2%


24.8%


25.8%

Adjusted provision for income taxes


$             2,063


$              1,661


$             5,753


$             5,040










Tax-adjusted net income









Net income before income taxes


$             8,327


$              6,101


$           23,226


$           19,567

Adjusted provision for income taxes


2,063


1,661


5,753


5,040

Tax-adjusted net income


$             6,264


$              4,440


$           17,473


$           14,527



















Tax-adjusted ratios and per share data









Tax-adjusted net income (numerator)


$             6,264


$              4,440


$           17,473


$           14,527










Average assets (denominator)


$      1,051,873


$          967,044


$      1,019,764


$         937,849

Tax-adjusted return on average assets


2.36%


1.83%


2.29%


2.07%










Average shareholders' equity (denominator)


$         119,145


$          102,929


$         113,817


$         101,377

Tax-adjusted return on average shareholders' equity


20.86%


17.16%


20.53%


19.14%










Average tangible common equity (denominator)


$         117,679


$          101,269


$         112,305


$           99,667

Tax-adjusted return on average tangible common equity


21.12%


17.44%


20.80%


19.47%










Weighted average common shares outstanding basic (denominator)


9,052,718


9,228,128


9,051,112


9,483,540

Tax-adjusted net income per common share--basic


$               0.69


$                0.48


$               1.93


$               1.53










Weighted average common shares outstanding diluted (denominator)


9,105,255


9,228,128


9,078,671


9,483,540

Tax-adjusted net income per common share--diluted


$               0.69


$                0.48


$               1.92


$               1.53

Tangible assets









Total assets


$      1,146,230


$          973,354





Less: Goodwill and intangibles


(1,446)


(1,634)





Tangible assets


$      1,144,784


$          971,720














Tangible shareholders' equity









Total shareholders' equity


$         122,409


$          105,230





Less: Goodwill and intangibles


(1,446)


(1,634)





Tangible shareholders' equity


$         120,963


$          103,596














Tangible shareholders' equity









Tangible shareholders' equity (numerator)


$         120,963


$          103,596





Tangible assets (denominator)


1,144,784


971,720





Tangible common equity to tangible assets


10.57%


10.66%














End of period common shares outstanding


9,070,038


9,241,689





Book value per share


$             13.50


$              11.39





Tangible book value per share


$             13.34


$              11.21





Total shareholders' equity to total assets


10.68%


10.81%





 



Net Interest Margin Excluding Loan Fee Income



For the Three Months Ended September 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)


$      120,078


$           79


0.26%


$  111,019


$         147


0.53%

Investment securities(2)


1,187


2


0.67


1,138


2


0.70

Loans held for sale


610


-


-


425


-


-

Total loans(3)


924,391


12,291


5.28


847,076


11,699


5.49

Total interest-earning assets


1,046,266


12,372


4.69


959,658


11,848


4.91

Noninterest-earning assets


5,607






7,386





Total assets


$   1,051,873






$  967,044


















Funding sources:













Interest-bearing liabilities:













Deposits:













Transaction accounts


$      401,843


332


0.33%


$  381,572


545


0.57%

Time deposits


220,189


397


0.72


200,961


780


1.54

Total interest-bearing deposits


622,032


729


0.46


582,533


1,325


0.90

Total interest-bearing liabilities


622,032


729


0.46


582,533


1,325


0.90














Noninterest-bearing liabilities:













Noninterest-bearing deposits


304,063






276,219





Other noninterest-bearing liabilities


6,633






5,363





Total noninterest-bearing liabilities


310,696






281,582





Shareholders' equity


119,145






102,929





Total liabilities and shareholders' equity


$   1,051,873






$  967,044


















Net interest income excluding loan fee income




$    11,643






$    10,523



Net interest spread excluding loan fee
income(4)






4.23%






4.01%

Net interest margin excluding loan fee income






4.41%






4.36%

 
















Net Interest Margin Including Loan Fee Income



For the Three Months Ended September 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)


$      120,078


$           79


0.26%


$  111,019


$         147


0.53%

Investment securities(2)


1,187


2


0.67


1,138


2


0.70

Loans held for sale


610


-


-


425


-


-

Total loans(3)


924,391


13,927


5.98


847,076


12,777


6.00

Total interest-earning assets


1,046,266


14,008


5.31


959,658


12,926


5.36

Noninterest-earning assets


5,607






7,386





Total assets


$   1,051,873






$  967,044


















Funding sources:













Interest-bearing liabilities:













Deposits:













Transaction accounts


$      401,843


332


0.33%


$  381,572


545


0.57%

Time deposits


220,189


397


0.72


200,961


780


1.54

Total interest-bearing deposits


622,032


729


0.46


582,533


1,325


0.90

Total interest-bearing liabilities


622,032


729


0.46


582,533


1,325


0.90














Noninterest-bearing liabilities:













Noninterest-bearing deposits


$      304,063






276,219





Other noninterest-bearing liabilities


6,633






5,363





Total noninterest-bearing liabilities


310,696






281,582





Shareholders' equity


119,145






102,929





Total liabilities and shareholders' equity


$   1,051,873






$  967,044


















Net interest income including loan fee income




$    13,279






$    11,601



Net interest spread including loan fee
income(4)






4.85%






4.45%

Net interest margin including loan fee income






5.04%






4.81%



(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 Nine Months Ended September 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)


$      124,801


$         236


0.25%


$  120,909


$         701


0.77%

Investment securities(2)


1,182


19


2.15


1,109


21


2.53

Loans held for sale


501


-


-


258


-


-

Total loans(3)


887,353


35,223


5.31


807,134


35,299


5.84

Total interest-earning assets


1,013,837


35,478


4.68


929,410


36,021


5.18

Noninterest-earning assets


5,927






8,439





Total assets


$   1,019,764






$  937,849


















Funding sources:













Interest-bearing liabilities:













Deposits:













Transaction accounts


$      410,299


1,024


0.33%


$  366,162


2,259


0.82%

Time deposits


212,706


1,352


0.85


208,650


2,769


1.77

Total interest-bearing deposits


623,005


2,376


0.51


574,812


5,028


1.17

Total interest-bearing liabilities


623,005


2,376


0.51


574,812


5,028


1.17














Noninterest-bearing liabilities:













Noninterest-bearing deposits


277,308






256,429





Other noninterest-bearing liabilities


5,634






5,231





Total noninterest-bearing liabilities


282,942






261,660





Shareholders' equity


113,817






101,377





Total liabilities and shareholders' equity


$   1,019,764






$  937,849


















Net interest income excluding loan fee income




$    33,102






$    30,993



Net interest spread excluding loan fee
income(4)






4.17%






4.01%

Net interest margin excluding loan fee income






4.37%






4.45%

 



Net Interest Margin With Loan Fee Income



For the Nine Months Ended September 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)


$      124,801


$         236


0.25%


$  120,909


$         701


0.77%

Investment securities(2)


1,182


19


2.15


1,109


21


2.53

Loans held for sale


501


-


-


258


-


-

Total loans(3)


887,353


41,377


6.23


807,134


39,268


6.50

Total interest-earning assets


1,013,837


41,632


5.49


929,410


39,990


5.75

Noninterest-earning assets


5,927






8,439





Total assets


$   1,019,764






$  937,849


















Funding sources:













Interest-bearing liabilities:













Deposits:













Transaction accounts


$      410,299


1,024


0.33%


$  366,162


2,259


0.82%

Time deposits


212,706


1,352


0.85


208,650


2,769


1.77

Total interest-bearing deposits


623,005


2,376


0.51


574,812


5,028


1.17

Total interest-bearing liabilities


623,005


2,376


0.51


574,812


5,028


1.17














Noninterest-bearing liabilities:













Noninterest-bearing deposits


277,308






256,429





Other noninterest-bearing liabilities


5,634






5,231





Total noninterest-bearing liabilities


282,942






261,660





Shareholders' equity


113,817






101,377





Total liabilities and shareholders' equity


$   1,019,764






$  937,849


















Net interest income including loan fee income




$    39,256






$    34,962



Net interest spread including loan fee
income(4)






4.98%






4.58%

Net interest margin including loan fee income






5.18%






5.02%



(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

September 30,


December 31,



2021


2020







Cash and due from banks

$                205,762


$             153,901


Interest-bearing time deposits in other banks

5,229


16,412


Loans, net

915,393


826,974


Loans held for sale

1,002


324


Premises and equipment, net

8,775


9,151


Nonmarketable equity securities

1,193


1,172


Goodwill and intangibles

1,446


1,583


Interest receivable and other assets

7,430


7,152







Total assets

$             1,146,230


$          1,016,669







Liabilities and Shareholders' Equity










Deposits





Noninterest-bearing

$                335,316


$             246,569


Interest-bearing

683,058


658,945







Total deposits

1,018,374


905,514







Interest payable and other liabilities

5,447


3,827







Total liabilities

1,023,821


909,350







Common stock

91


90


Additional paid-in capital

93,766


93,162


Retained earnings

28,552


14,067







Total shareholders' equity

122,409


107,319







Total liabilities and shareholders' equity

$             1,146,230


$          1,016,669


 

Bank7 Corp.

Consolidated Statements of Income



Unaudited as of



Three Months Ended


Nine Months Ended



September 30,


September 30,

Dollars in thousands, except per share data


2021


2020


2021


2020

Interest Income









Loans, including fees


$                13,927


$                12,777


$                41,377


$                39,268

Interest-bearing time deposits in other banks


35


123


141


419

Interest-bearing deposits in other banks


46


26


114


303










Total interest income


14,008


12,926


41,632


39,990










Interest Expense









Deposits


729


1,325


2,376


5,028










Total interest expense


729


1,325


2,376


5,028










Net Interest Income


13,279


11,601


39,256


34,962










Provision for Loan Losses


750


1,250


3,325


3,300










Net Interest Income After Provision for Loan Losses


12,529


10,351


35,931


31,662










Noninterest Income









Secondary market income


161


57


253


134

Service charges on deposit accounts


141


104


380


318

Other


275


173


860


513










Total noninterest income


577


334


1,493


965










Noninterest Expense









Salaries and employee benefits


2,946


2,505


8,685


7,576

Furniture and equipment


218


224


651


658

Occupancy


461


543


1,391


1,417

Data and item processing


292


276


857


821

Accounting, marketing and legal fees


150


135


447


338

Regulatory assessments


162


164


464


281

Advertising and public relations


76


62


181


360

Travel, lodging and entertainment


102


50


309


146

Other


372


625


1,213


1,463










Total noninterest expense


4,779


4,584


14,198


13,060










Income Before Taxes


8,327


6,101


23,226


19,567

Income tax expense


2,063


1,661


5,753


5,040

Net Income


$                  6,264


$                  4,440


$                17,473


$                14,527










Earnings per common share - basic


$                    0.69


$                    0.48


$                    1.93


$                    1.53

Diluted earnings per common share


0.69


0.48


1.92


1.53

Weighted average common shares outstanding - basic


9,052,718


9,228,128


9,051,112


9,483,540

Weighted average common shares outstanding - diluted


9,105,255


9,228,128


9,078,671


9,483,540

 

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, October 21, 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/2179/43192 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/2179/43192 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

SOURCE Bank7 Corp.