Bank7 Corp. Announces 3Q 2020 Earnings

OKLAHOMA CITY, Oct. 29, 2020 /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, 2020.  "We are pleased with our third quarter results.  Clearly, the pandemic and election dynamics continue to create extreme uncertainty and that is why we continue to increase our loan loss reserves.  With that being said, we have a high degree of confidence in our asset quality, and we know our strong PPE will carry us through the few potential issues we might encounter," said Thomas L. Travis, President and CEO of the Company. 

Bank7 Logo (PRNewsfoto/Bank7 Corp.)

Three months ended September 30, 2020 compared to three months ended September 30, 2019:

  • Pre-tax, pre-provision earnings of $7.4 million, an increase of 7.57%, excluding the one-time, non-cash executive stock transaction expense in Q3 2019.
  • Interest income on loans, including loan fee income, totaled $12.8 million, an increase of 4.91%
  • Total assets of $973.4 million, an increase of 17.72%
  • Total loans of $869.4 million, an increase of 30.40%
  • Total deposits of $863.7 million, an increase of 14.02%

Nine months ended September 30, 2020 compared to nine months ended September 30, 2019:

  • Pre-tax, pre-provision earnings of $22.9 million, an increase of 11.63%, excluding the one-time, non-cash executive stock transaction expense in Q3 2019.
  • Interest income on loans, including loan fee income, totaled $39.3 million, an increase of 9.38%
  • Cost of funds was 0.81%, a decrease of 42.56%
  • Average loans of $807.1 million, an increase of 30.73%
  • Core deposits of $820.3 million, an increase of 27.87%

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 September 30, 2020 the Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.72%, 12.85%, and 14.10% respectively for the Bank.  At September 30, 2020 the Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.72%, 12.84%, and 14.09% 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 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 27.3% and (31.4%) in the third quarter of 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
September 30,


Nine months ended
September 30,




(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


$   12,777


$     12,179


$   39,268


$     35,902

Loan fee income


(1,078)


(841)


(3,969)


(3,498)

Loan interest income excluding loan fee income


$   11,699


$     11,338


$   35,299


$      32,404










Average total loans


$ 847,076


$   651,186


$ 807,134


$   617,398

Yield on loans (including loan fee income)


6.00%


7.42%


6.50%


7.77%

Yield on loans (excluding loan fee income)


5.49%


6.91%


5.84%


7.02%










Pre-tax, pre-provision net earnings









Net income before income taxes


$     6,101


$     (4,963)


$   19,567


$       8,688

Plus: Provision (reversal of) for loan losses


(1,250)


-


(3,300)


-

Pre-tax, pre-provision net earnings


$     7,351


$     (4,963)


$   22,867


$       8,688










Adjusted provision for income tax









Net income before income taxes


$     6,101


$     (4,963)


$   19,567


$       8,688

Total effective adjusted tax rate


27.2%


-31.4%


25.8%


57.2%

Adjusted provision for income taxes


$     1,661


$       1,556


$     5,040


$       4,965










Tax-adjusted net income









Net income before income taxes


$     6,101


$     (4,963)


$   19,567


$       8,688

Adjusted provision for income taxes


1,661


1,556


5,040


4,965

Tax-adjusted net income


$     4,440


$     (6,519)


$   14,527


$       3,723










Pro Forma Pre-tax, pre-provision net earnings









Net income before income taxes


$     6,101


$     (4,963)


$   19,567


$       8,688

Plus: Provision (reversal of) loan losses


(1,250)


-


(3,300)


-

Plus: Stock Transfer Compensation Expense


-


11,797


-


11,797

Pro Forma Pre-tax, pre-provision net earnings


$     7,351


$       6,834


$   22,867


$     20,485










Tax-adjusted ratios and per share data









Tax-adjusted net income (numerator)


$     4,440


$     (6,519)


$   14,527


$       3,723










Average assets (denominator)


$ 967,044


$   806,440


$ 937,849


$   782,694

Tax-adjusted return on average assets


1.83%


-3.21%


3.11%


0.64%










Average shareholders' equity (denominator)


$  102,929


$    100,012


$  101,377


$      95,655

Tax-adjusted return on average shareholders' equity


17.16%


-25.86%


19.14%


5.20%










Average tangible common equity (denominator)


$ 101,269


$     98,145


$   99,667


$     93,736

Tax-adjusted return on average tangible common equity


17.44%


-26.35%


19.47%


5.31%










Weighted average common shares outstanding basic (denominator)


9,228,128


10,149,007


9,483,540


10,174,528

Tax-adjusted net income per common share--basic


$       0.48


$       (0.64)


$       1.53


$         0.37










Weighted average common shares outstanding diluted (denominator)


9,228,128


10,161,778


9,483,540


10,176,360

Tax-adjusted net income per common share--diluted


$       0.48


$       (0.64)


$       1.53


$         0.37

Tangible assets









Total assets


$ 973,354


$   826,821





Less: Goodwill and intangibles


(1,634)


(1,840)





Tangible assets


$ 971,720


$   824,981














Tangible shareholders' equity









Total shareholders' equity


$ 105,230


$    100,615





Less: Goodwill and intangibles


(1,634)


(1,840)





Tangible shareholders' equity


$ 103,596


$      98,775














Tangible shareholders' equity









Tangible shareholders' equity (numerator)


$ 103,596


$      98,775





Tangible assets (denominator)


$ 971,720


$    824,981





Tangible common equity to tangible assets


10.66%


11.97%














End of period common shares outstanding


9,241,689


10,057,506





Book value per share


$     11.39


$        10.00





Tangible book value per share


$     11.21


$          9.82





Total shareholders' equity to total assets


10.81%


12.17%





 



Net Interest Margin Excluding Loan Fee Income





For the Three Months Ended September 30,





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)


$

111,019


$

147



0.53

%


$

145,147



$

888



2.43

%

Investment securities(2)



1,138



2



0.70




1,069




4



1.48


Loans held for sale



425





0.00




265






0.00


Total loans(3)



847,076



11,699



5.49




651,186




11,338



6.91


Total interest-earning assets



959,658



11,848



4.91




797,667




12,230



6.08


Noninterest-earning assets



7,386









8,773









Total assets


$

967,044









$

806,440































Funding sources:






















Interest-bearing liabilities:






















Deposits:






















Transaction accounts


$

381,572



545



0.57

%


$

287,241




1,234



1.70

%

Time deposits



200,961



780



1.54




220,935




1,237



2.22


Total interest-bearing deposits



582,533



1,325



0.90




508,176




2,471



1.93


Other borrowings







0.00









0.00


Total interest-bearing liabilities



582,533



1,325


0.90




508,176




2,471



1.93
























Noninterest-bearing liabilities:






















Noninterest-bearing deposits



276,219










193,785









Other noninterest-bearing liabilities



5,363










4,467









Total noninterest-bearing liabilities



281,582










198,252









Shareholders' equity



102,929










100,012









Total liabilities and shareholders' equity


$

967,044









$

806,440































Net interest income including loan fee income





$

10,523










$

9,759





Net interest spread including loan fee income(4)









4.01

%










4.15

%

Net interest margin including loan fee income









4.36

%










4.85

%

 



Net Interest Margin With Loan Fee Income



For the Three Months Ended September 30,



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)


$

111,019


$

147


0.53

%


$

145,147


$

888


2.43

%

Investment securities(2)



1,138



2


0.70




1,069



4


1.48


Loans held for sale



425




0.00




265




0.00


Total loans(3)



847,076



12,777


6.00




651,186



12,179


7.42


Total interest-earning assets



959,658



12,926


5.36




797,667



13,071


6.50


Noninterest-earning assets



7,386









8,773







Total assets


$

967,044








$

806,440


























Funding sources:



















Interest-bearing liabilities:



















Deposits:


















Transaction accounts


$

381,572



545


0.57

%


$

287,241



1,234


1.70

%

Time deposits



200,961



780


1.54




220,935



1,237


2.22


Total interest-bearing deposits



582,533



1,325


0.90




508,176



2,471


1.93


Other borrowings






0.00







0.00


Total interest-bearing liabilities



582,533



1,325


0.90




508,176



2,471


1.93





















Noninterest-bearing liabilities:



















Noninterest-bearing deposits



276,219









193,785







Other noninterest-bearing liabilities



5,363









4,467







Total noninterest-bearing liabilities



281,582









197,252







Shareholders' equity



102,929









100,012







Total liabilities and shareholders' equity


$

967,044








$

806,440


























Net interest income excluding loan fee income





$

11,601








$

10,600




Net interest spread excluding loan fee income(4)








4.45

%








4.57

%

Net interest margin excluding loan fee income








4.81

%








5.27

%



(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,





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)


$

120,909



$

701




0.77

%


$

155,073



$

2,785




2.40

%

Investment securities(2)



1,109




21




2.53




1,062




27




3.40


Loans held for sale



258







0.00




219







0.00


Total loans(3)



807,134




35,299




5.84




617,398




32,404




7.02


Total interest-earning assets



929,410




36,021




5.18




773,752




35,216




6.09


Noninterest-earning assets



8,439












8,942










Total assets


$

937,849











$

782,694



































Funding sources:

























Interest-bearing liabilities:

























Deposits:

























Transaction accounts


$

366,162




2,259




0.82

%


$

289,306




3,924




1.81

%

Time deposits



208,650




2,769




1.77




206,575




3,254




2.11


Total interest-bearing deposits



574,812




5,028




1.17




495,881




7,178




1.94


Other borrowings









0.00










0.00


Total interest-bearing liabilities



574,812




5,028




1.17




495,881




7,178




1.94



























Noninterest-bearing liabilities:

























Noninterest-bearing deposits



256,429












186,379










Other noninterest-bearing liabilities



5,231












4,779










Total noninterest-bearing liabilities



261,660












191,158










Shareholders' equity



101,377












95,655










Total liabilities and shareholders' equity


$

937,849











$

782,694



































Net interest income including loan fee income






$

30,993











$

28,038






Net interest spread including loan fee income(4)











4.01

%











4.15

%

Net interest margin including loan fee income











4.45

%











4.84

%

 



Net Interest Margin With Loan Fee Income



For the Nine Months Ended September 30,



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)


$

120,909


$

701


0.77

%


$

155,073


$

2,785


2.40

%

Investment securities(2)



1,109



21


2.53




1,062



27


3.40


Loans held for sale



258




0.00




219




0.00


Total loans(3)



807,134



39,268


6.50




617,398



35,902


7.77


Total interest-earning assets



929,410



39,990


5.75




773,752



38,714


6.69


Noninterest-earning assets



8,439









8,942







Total assets


$

937,849








$

782,694


























Funding sources:



















Interest-bearing liabilities:



















Deposits:



















Transaction accounts


$

366,162



2,259


0.82

%


$

289,306



3,924


1.81

%

Time deposits



208,650



2,769


1.77




206,575



3,254


2.11


Total interest-bearing deposits



574,812



5,028


1.17




495,881



7,178


1.94


Other borrowings






0.00







0.00


Total interest-bearing liabilities



574,812



5,028


1.17




495,881



7,178


1.94





















Noninterest-bearing liabilities:



















Noninterest-bearing deposits



256,429









186,379







Other noninterest-bearing liabilities



5,231









4,779







Total noninterest-bearing liabilities



261,660









191,158







Shareholders' equity



101,377









95,655







Total liabilities and shareholders' equity


$

937,849








$

782,694


























Net interest income excluding loan fee income





$

34,962








$

31,536




Net interest spread excluding loan fee income(4)








4.58

%








4.75

%

Net interest margin excluding loan fee income








5.02

%








5.45

%

 

Bank7 Corp.

Consolidated Balance Sheets

Dollars in thousands, exceper per share data

Unaudited as of




Assets

September 30,


December 31,



2020


2019


2019









Cash and due from banks

$   60,718


$ 110,594


$             117,128


Interest-bearing time deposits in other banks

23,384


31,890


30,147


Loans, net

869,448


666,755


699,458


Loans held for sale

315


-


1,031


Premises and equipment, net

9,387


8,395


9,624


Nonmarketable equity securities

1,165


1,072


1,100


Foreclosed assets held for sale

-


77


0


Goodwill and intangibles

1,634


1,840


1,789


Interest receivable and other assets

7,303


6,198


6,115









Total assets

$ 973,354


$ 826,821


$             866,392









Liabilities and Shareholders' Equity














Deposits







Noninterest-bearing

$ 272,008


$ 202,989


$             219,221


Interest-bearing

591,661


519,145


538,262









Total deposits

863,669


722,134


757,483









Income taxes payable

565


-


357


Interest payable and other liabilities

3,890


4,072


8,426









Total liabilities

868,124


726,206


766,266









Common stock

92


101


101


Additional paid-in capital

92,960


92,353


92,391


Retained earnings

12,178


8,161


7,634









Total shareholders' equity

105,230


100,615


100,126









Total liabilities and shareholders' equity

$ 973,354


$ 826,821


$             866,392


 

Bank7 Corp.

Consolidated Statements of Income



Unaudited as of



 Three Months Ended 


 Nine Months Ended 



September 30,


September 30,

Dollars in thousands, exceper per share data


2020


2019


2020


2019

Interest Income









Loans, including fees


$    12,777


$      12,179


$    39,268


$      35,902

Interest-bearing time deposits in other banks


124


500


419


1,414

Interest-bearing deposits in other banks


26


392


303


1,398










Total interest income


12,927


13,071


39,990


38,714










Interest Expense









Deposits


1,326


2,471


5,028


7,178










Total interest expense


1,326


2,471


5,028


7,178










Net Interest Income


11,601


10,600


34,962


31,536










Provision for Loan Losses


1,250


-


3,300


-










Net Interest Income After Provision for Loan Losses


10,351


10,600


31,662


31,536










Noninterest Income









Secondary market income


57


69


134


146

Service charges on deposit accounts


104


110


318


279

Other


173


330


513


602










Total noninterest income


334


509


965


1,027










Noninterest Expense









Salaries and employee benefits


2,505


14,256


7,576


18,792

Furniture and equipment


224


229


658


606

Occupancy


543


436


1,417


1,157

Data and item processing


276


276


821


814

Accounting, marketing and legal fees


135


218


338


507

Regulatory assessments


164


31


281


94

Advertising and public relations


62


71


360


349

Travel, lodging and entertainment


50


153


146


287

Other


625


402


1,463


1,269










Total noninterest expense


4,584


16,072


13,060


23,875










Income Before Taxes


6,101


(4,963)


19,567


8,688

Income tax expense


1,661


1,556


5,040


4,965

Net Income


$      4,440


$      (6,519)


$    14,527


$        3,723










Earnings per common share - basic


$        0.48


$        (0.64)


$        1.53


$          0.37

Diluted earnings per common share


0.48


(0.64)


1.53


0.37

Weighted average common shares outstanding - basic


9,228,128


10,149,007


9,483,540


10,174,528

Weighted average common shares outstanding - diluted


9,228,128


10,161,778


9,483,540


10,176,360

 

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 29, 2020 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/2179/38169. 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/2179/38169 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 View original content to download multimedia:http://www.prnewswire.com/news-releases/bank7-corp-announces-3q-2020-earnings-301162632.html

SOURCE Bank7 Corp.

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