Bank7 Corp. Announces 1Q 2020 Earnings

OKLAHOMA CITY, April 30, 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 March 31, 2020.  "Our first quarter financial results were very good, but before moving into the data, we start by acknowledging the current pandemic-induced environment and its terrible effect on all aspects of our lives.  We are especially mindful and grateful to our Bank7 teammates, and will continue to work together to support each other, our customers, and our communities. Working together, we will overcome this.  Regarding our financial results, you can see that we benefited from robust loan growth, and our ability to maintain a strong net interest margin, especially considering the collapse in interest rates," said Thomas L. Travis, President and CEO of the Company. 

Bank7 Logo (PRNewsfoto/Bank7 Corp.)

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

  • Pre-tax, pre-provision income of $7.4 million, an increase of 8.62%
  • Interest income on loans, including loan fee income, totaled $13.1 million, an increase of 12.78%
  • Total assets of $974.4 million, an increase of 23.77%
  • Total loans of $785.7 million, an increase of 33.94%
  • Total deposits of $871.0 million, an increase of 26.84%

Additional Highlights

For the three months ended March 31, 2020 compared to three months ended March 31, 2019:

  • Cost of funds was 1.09%, a decrease of 21.17%
  • Average loans of $747.8 million, an increase of 27.52%
  • Core deposits of $757.7 million, an increase of 23.83%

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, 2020 the Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.97%, 12.45%, and 13.56% respectively for the Bank.  At March 31, 2020 the Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.86%, 12.30%, and 13.41% 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.  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 25.3% and 25.0% in the first 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
March 31,

(Dollars in thousands, except per share data)


2020


2019

Loan interest income (excluding loan fees)





Total loan interest income, including loan fee income


$    13,106


$      11,622

Loan fee income


(1,260)


(1,289)

Loan interest income excluding loan fee income


$    11,846


$      10,333






Average total loans


$  747,774


$    586,408

Yield on loans (including loan fee income)


7.05%


8.04%

Yield on loans (excluding loan fee income)


6.37%


7.15%






Net interest margin (excluding loan fees)





Net interest income


$    11,432


$      10,353

Loan fee income


(1,260)


(1,289)

Net interest income excluding loan fees


$    10,172


$        9,064






Average earning assets


$  866,047


$    745,739

Net interest margin (including loan fee income)


5.31%


5.63%

Net interest margin (excluding loan fee income)


4.72%


4.93%






Pre-tax, pre-provision net earnings





Net income before income taxes


$      6,759


$        6,821

Plus: Provision (reversal of) for loan losses


(650)


-

Pre-tax, pre-provision net earnings


$      7,409


$        6,821






Adjusted provision for income tax





Net income before income taxes


$      6,759


$        6,821

Total effective adjusted tax rate


25.3%


25.0%

Adjusted provision for income taxes


$      1,708


$        1,705






Tax-adjusted net income





Net income before income taxes


$      6,759


$        6,821

Adjusted provision for income taxes


1,708


1,705

Tax-adjusted net income


$      5,051


$        5,116






Tax-adjusted ratios and per share data





Tax-adjusted net income (numerator)


$      5,051


$        5,116






Average assets (denominator)


$  874,803


$    754,176

Tax-adjusted return on average assets


2.32%


2.75%






Average shareholders' equity (denominator)


$  101,718


$      90,813

Tax-adjusted return on average shareholders' equity


19.97%


22.85%






Average tangible common equity (denominator)


$    99,957


$      88,839

Tax-adjusted return on average tangible common equity


20.32%


23.35%






Weighted average common shares outstanding basic (denominator)


9,973,359


10,187,500

Tax-adjusted net income per common share--basic


$        0.51


$          0.50






Weighted average common shares outstanding diluted (denominator)


9,973,819


10,187,500

Tax-adjusted net income per common share--diluted


$        0.51


$          0.50

Tangible assets





Total assets


$  974,350


$    787,236

Less: Goodwill and intangibles


(1,737)


(1,943)

Tangible assets


$  972,613


$    785,293






Tangible shareholders' equity





Total shareholders' equity


$    97,616


$      93,753

Less: Goodwill and intangibles


(1,737)


(1,943)

Tangible shareholders' equity


$    95,879


$      91,810






Tangible shareholders' equity





Tangible shareholders' equity (numerator)


$    95,879


$      91,810

Tangible assets (denominator)


$  972,613


$    785,293

Tangible common equity to tangible assets


9.86%


11.69%






End of period common shares outstanding


9,264,412


10,187,500

Book value per share


$      10.54


$          9.20

Tangible book value per share


$      10.35


$          9.01

Total shareholders' equity to total assets


10.02%


11.91%


 



Net Interest Margin Excluding Loan Fee Income





For the Three Months Ended March 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)


$

117,046



$

398




1.37

%


$

158,068



$

956




2.45

%


Investment securities(2)



1,100




3




1.10




1,055







0.00



Loans held for sale



127







0.00




208







0.00



Total loans(3)



747,774




11,846




6.37




586,408




10,333




7.15



Total interest-earning assets



866,047




12,247




5.69




745,739




11,289




6.14



Noninterest-earning assets



8,756












8,437











Total assets


$

874,803











$

754,176





































Funding sources:


























Interest-bearing liabilities:


























Deposits:


























Transaction accounts


$

342,406




1,010




1.19

%


$

285,289




1,299




1.85

%


Time deposits



205,085




1,065




2.09




192,499




925




1.95



Total interest-bearing deposits



547,491




2,075




1.52




477,788




2,224




1.89



Other borrowings









0.00










0.00



Total interest-bearing liabilities



547,491




2,075




1.52




477,788




2,224




1.89





























Noninterest-bearing liabilities:


























Noninterest-bearing deposits



221,000












179,801











Other noninterest-bearing liabilities



4,594












5,774











Total noninterest-bearing liabilities



225,594












185,575











Shareholders' equity



101,718












90,813











Total liabilities and shareholders' equity


$

874,803











$

754,176





































Net interest income including loan fee income






$

10,172











$

9,064







Net interest spread including loan fee income(4)











4.16

%











4.25

%


Net interest margin including loan fee income











4.72

%











4.93

%















































 



Net Interest Margin With Loan Fee Income




For the Three Months Ended March 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)


$

117,046



$

398




1.37

%


$

158,068



$

956




2.45

%

Investment securities(2)



1,100




3




1.10




1,055







0.00


Loans held for sale



127







0.00




208







0.00


Total loans(3)



747,774




13,106




7.05




586,408




11,622




8.04


Total interest-earning assets



866,047




13,507




6.27




745,739




12,578




6.84


Noninterest-earning assets



8,756












8,437










Total assets


$

874,803











$

754,176



































Funding sources:

























Interest-bearing liabilities:

























Deposits:

























Transaction accounts


$

342,406




1,010




1.19

%


$

285,289




1,299




1.85

%

Time deposits



205,085




1,065




2.09




192,499




925




1.95


Total interest-bearing deposits



547,491




2,075




1.52




477,788




2,224




1.89


Other borrowings









0.00










0.00


Total interest-bearing liabilities



547,491




2,075




1.52




477,788




2,224




1.89



























Noninterest-bearing liabilities:

























Noninterest-bearing deposits



221,000












179,801










Other noninterest-bearing liabilities



4,594












5,774










Total noninterest-bearing liabilities



225,594












185,577










Shareholders' equity



101,718












90,813










Total liabilities and shareholders' equity


$

874,803











$

754,176



































Net interest income excluding loan fee income






$

11,432











$

10,353






Net interest spread excluding loan fee income(4)











4.75

%











4.95

%

Net interest margin excluding loan fee income











5.31

%











5.63

%













































(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,



2020


2019







Cash and due from banks

$ 148,626


$         117,128


Interest-bearing time deposits in other banks

30,102


30,147


Loans, net

777,220


699,458


Loans held for sale

-


1,031


Premises and equipment, net

9,644


9,624


Nonmarketable equity securities

1,089


1,100


Goodwill and intangibles

1,737


1,789


Interest receivable and other assets

5,932


6,115







Total assets

$ 974,350


$         866,392







Liabilities and Shareholders' Equity










Deposits





Noninterest-bearing

$ 254,735


$         219,221


Interest-bearing

616,221


538,262







Total deposits

870,956


757,483







Income taxes payable

1,817


357


Interest payable and other liabilities

3,961


8,426







Total liabilities

876,734


766,266







Common stock

93


101


Additional paid-in capital

92,571


92,391


Retained earnings

4,952


7,634







Total shareholders' equity

97,616


100,126







Total liabilities and shareholders' equity

$ 974,350


$         866,392


 



Unaudited as of



 Quarter Ended



March 31,

Dollars in thousands, except per share data


2020


2019

Interest Income





Loans, including fees


$    13,106


$      11,622

Interest-bearing time deposits in other banks


162


417

Interest-bearing deposits in other banks


239


538






Total interest income


13,507


12,577






Interest Expense





Deposits


2,075


2,224






Total interest expense


2,075


2,224






Net Interest Income


11,432


10,353






Provision for Loan Losses


650


-






Net Interest Income After Provision for Loan Losses


10,782


10,353






Noninterest Income





Secondary market income


38


37

Service charges on deposit accounts


119


60

Other


173


126






Total noninterest income


330


223






Noninterest Expense





Salaries and employee benefits


2,474


2,171

Furniture and equipment


216


159

Occupancy


461


343

Data and item processing


276


262

Accounting, marketing and legal fees


126


147

Regulatory assessments


23


32

Advertising and public relations


269


186

Travel, lodging and entertainment


53


42

Other


455


413






Total noninterest expense


4,353


3,755






Income Before Taxes


6,759


6,821

Income tax expense


1,708


1,705

Net Income


$      5,051


$        5,116






Earnings per common share - basic


$        0.51


$          0.50

Diluted earnings per common share


0.51


0.50

Weighted average common shares outstanding - basic


9,973,359


10,187,500

Weighted average common shares outstanding - diluted


9,973,819


10,187,500

About Bank7 Corp.

We are Bank7 Corp., a bank holding company headquartered in Oklahoma City, Oklahoma. Through our wholly-owned subsidiary, Bank7, we operate 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, April 30 at 3:00 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/2179/34185. 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/2179/34185 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-1q-2020-earnings-301049844.html

SOURCE Bank7 Corp.

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