8-K
Bank7 Corp. (BSVN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 29, 2021
Bank7 Corp.
(Exact name of registrant as specified in its charter)
| Oklahoma | 001-38656 | 20-0764349 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1039 N.W. 63rd Street, Oklahoma City, Oklahoma 73116
(Address of principal executive offices) (Zip Code)
(405) 810-8600
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.01 Par Value Per Share | BSVN | NASDAQ Global Select Market System |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition |
|---|---|
| Item 7.01 | Regulation FD Disclosure |
| --- | --- |
On July 29, 2021, Bank7 Corp. (the “Company”), the holding company for Bank7, issued a press release announcing its results of operation and financial condition for the quarter ended June 30, 2021. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
The Company is conducting a conference call on July 29, 2021 at 4:30 am ET to discuss its first quarter financial results. A copy of the presentation slides to be used during the earnings call is attached to this Current Report on Form 8-K as Exhibit 99.2 and is incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits |
|---|---|
| (d) | Exhibits. |
| --- | --- |
The following exhibits are filed herewith:
| Item | Description |
|---|---|
| 99.1 | Press Release dated July 29, 2021 |
| 99.2 | Second Quarter 2021 Investor Presentation |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BANK7 CORP. | ||
|---|---|---|
| Date: July 29, 2021 | By: | /s/ Kelly J. Harris |
| Kelly J. Harris | ||
| Executive Vice President and Chief Financial Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE: Bank7 Corp. Announces 2Q 2021 Earnings
Oklahoma City, OK, July 29, 2021 – 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 June 30, 2021. “We are pleased to announce a record quarter of net income and EPS. Our strong loan growth and loan fee income, combined with our excellent efficiency ratio, continues to produce outstanding results. As we move forward, our goal is to continue to produce exceptional results through organic growth and the pursuit of strategic acquisitions,” said Thomas L. Travis, President and CEO of the Company.
Three months ended June 30, 2021 compared to three months ended June 30, 2020:
| - | Pre-tax, pre-provision earnings of $9.4 million compared to $8.1 million, an increase of 15.6% |
|---|---|
| - | Net income of $6.1 million compared to $5.0 million, an increase of 21.2% |
| --- | --- |
| - | Interest income on loans, including loan fee income, totaled $14.4 million compared to $13.4 million, an increase of 9.5% |
| --- | --- |
| - | Total assets of $1.1 billion compared to $1.0 billion, an increase of 12.8% |
| --- | --- |
| - | Total loans of $932.0 million compared to $837.9 million, an increase of 11.2% |
| --- | --- |
| - | Total deposits of $1.0 billion compared to $894.2 million, an increase of 12.8% |
| --- | --- |
| - | Tangible book value per share of $12.76 compared to $10.83, an increase of 17.8% |
| --- | --- |
| - | Average cost of funds of 0.34% compared to 0.76%, a decrease of 54.7% |
| --- | --- |
| - | Earnings per share of $0.67 compared to $0.54, an increase of 24.9% |
| --- | --- |
| - | ROAA of 2.39% compared to 2.09%, an increase of 14.6% |
| --- | --- |
| - | ROATCE of 21.90% compared to 20.72%, an increase of 5.7% |
| --- | --- |
Six months ended June 30, 2021 compared to six months ended June 30, 2020:
| - | Pre-tax, pre-provision earnings of $17.5 million, compared to $15.5 million, an increase of 12.6% |
|---|---|
| - | Net income of $11.2 million compared to $10.1 million, an increase of 11.1% |
| --- | --- |
| - | Efficiency ratio of 35.02% compared to 35.33%, a decrease of 0.86% |
| --- | --- |
| - | Average cost of funds of 0.37% compared to 0.91%, a decrease of 58.9% |
| --- | --- |
| - | ROAA of 2.25% compared to 2.20%, an increase of 2.51% |
| --- | --- |
| - | ROATCE of 20.63% compared to 20.52%, an increase of 0.54% |
| --- | --- |
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 June 30, 2021, the Bank’s Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 11.28%, 13.23%, and 14.48%, respectively. On June 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 11.26%, 13.22%, and 14.47%, 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 24.3% and 24.9% in the second 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<br><br> June 30, | Six months ended<br><br> June 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 | $ | 14,357 | $ | 13,385 | $ | 27,450 | $ | 26,491 | ||||
| Loan fee income | (2,527 | ) | (1,632 | ) | (4,517 | ) | (2,892 | ) | ||||
| Loan interest income excluding loan fee income | $ | 11,830 | $ | 11,753 | $ | 22,933 | $ | 23,599 | ||||
| Average total loans | $ | 889,278 | $ | 826,111 | $ | 868,526 | $ | 786,943 | ||||
| Yield on loans (including loan fee income) | 6.48 | % | 6.52 | % | 6.37 | % | 6.77 | % | ||||
| Yield on loans (excluding loan fee income) | 5.34 | % | 5.72 | % | 5.32 | % | 6.03 | % | ||||
| Pre-tax, pre-provision net earnings | ||||||||||||
| Net income before income taxes | $ | 8,069 | $ | 6,707 | $ | 14,899 | $ | 13,466 | ||||
| Plus: Provision for loan losses | 1,300 | 1,400 | 2,575 | 2,050 | ||||||||
| Pre-tax, pre-provision net earnings | $ | 9,369 | $ | 8,107 | $ | 17,474 | $ | 15,516 | ||||
| Adjusted provision for income tax | ||||||||||||
| Net income before income taxes | $ | 8,069 | $ | 6,707 | $ | 14,899 | $ | 13,466 | ||||
| Total effective adjusted tax rate | 24.3 | % | 24.9 | % | 24.8 | % | 25.1 | % | ||||
| Adjusted provision for income taxes | $ | 1,964 | $ | 1,671 | $ | 3,690 | $ | 3,379 | ||||
| Tax-adjusted net income | ||||||||||||
| Net income before income taxes | $ | 8,069 | $ | 6,707 | $ | 14,899 | $ | 13,466 | ||||
| Adjusted provision for income taxes | 1,964 | 1,671 | 3,690 | 3,379 | ||||||||
| Tax-adjusted net income | $ | 6,105 | $ | 5,036 | $ | 11,209 | $ | 10,087 | ||||
| Tax-adjusted ratios and per share data | ||||||||||||
| Tax-adjusted net income (numerator) | $ | 6,105 | $ | 5,036 | $ | 11,209 | $ | 10,087 | ||||
| Average assets (denominator) | $ | 1,024,751 | $ | 971,373 | $ | 1,003,444 | $ | 923,087 | ||||
| Tax-adjusted return on average assets | 2.39 | % | 2.09 | % | 2.25 | % | 2.20 | % | ||||
| Average shareholders' equity (denominator) | $ | 113,332 | $ | 99,469 | $ | 111,108 | $ | 100,593 | ||||
| Tax-adjusted return on average shareholders' equity | 21.61 | % | 20.36 | % | 20.34 | % | 20.17 | % | ||||
| Average tangible common equity (denominator) | $ | 111,822 | $ | 97,760 | $ | 109,573 | $ | 98,858 | ||||
| Tax-adjusted return on average tangible common equity | 21.90 | % | 20.72 | % | 20.63 | % | 20.52 | % | ||||
| Weighted average common shares outstanding basic (denominator) | 9,050,606 | 9,232,509 | 9,050,295 | 9,598,232 | ||||||||
| Tax-adjusted net income per common share--basic | $ | 0.67 | $ | 0.54 | $ | 1.24 | $ | 1.05 | ||||
| Weighted average common shares outstanding diluted (denominator) | 9,074,408 | 9,232,509 | 9,066,797 | 9,598,232 | ||||||||
| Tax-adjusted net income per common share--diluted | $ | 0.67 | $ | 0.54 | $ | 1.24 | $ | 1.05 | ||||
| Tangible assets | ||||||||||||
| Total assets | $ | 1,133,031 | $ | 1,004,085 | ||||||||
| Less: Goodwill and intangibles | (1,491 | ) | (1,686 | ) | ||||||||
| Tangible assets | $ | 1,131,540 | $ | 1,002,399 | ||||||||
| Tangible shareholders' equity | ||||||||||||
| Total shareholders' equity | $ | 117,011 | $ | 101,618 | ||||||||
| Less: Goodwill and intangibles | (1,491 | ) | (1,686 | ) | ||||||||
| Tangible shareholders' equity | $ | 115,520 | $ | 99,932 | ||||||||
| Tangible shareholders' equity | ||||||||||||
| Tangible shareholders' equity (numerator) | $ | 115,520 | $ | 99,932 | ||||||||
| Tangible assets (denominator) | $ | 1,131,540 | $ | 1,002,399 | ||||||||
| Tangible common equity to tangible assets | 10.21 | % | 9.97 | % | ||||||||
| End of period common shares outstanding | 9,050,606 | 9,226,252 | ||||||||||
| Book value per share | $ | 12.93 | $ | 11.01 | ||||||||
| Tangible book value per share | $ | 12.76 | $ | 10.83 | ||||||||
| Total shareholders' equity to total assets | 10.33 | % | 10.12 | % |
| Net Interest Margin Excluding Loan Fee Income | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Three Months Ended June 30, | ||||||||||||||
| 2021 | 2020 | |||||||||||||
| Average<br><br> Balance | Interest<br><br> Income/<br><br> Expense | Average<br><br> Yield/<br><br> Rate | Average<br><br> Balance | Interest<br><br> Income/<br><br> Expense | Average<br><br> Yield/<br><br> Rate | |||||||||
| (Dollars in thousands) | ||||||||||||||
| Interest-Earning Assets: | ||||||||||||||
| Short-term investments^(1)^ | $ | 128,643 | $ | 64 | 0.20 | % | $ | 134,764 | $ | 156 | 0.47 | % | ||
| Investment securities^(2)^ | 1,187 | 15 | 5.07 | 1,089 | 15 | 5.54 | ||||||||
| Loans held for sale | 557 | - | - | 222 | - | - | ||||||||
| Total loans^(3)^ | 889,278 | 11,830 | 5.34 | 826,111 | 11,753 | 5.72 | ||||||||
| Total interest-earning assets | 1,019,665 | 11,909 | 4.68 | 962,186 | 11,924 | 4.98 | ||||||||
| Noninterest-earning assets | 5,086 | 9,187 | ||||||||||||
| Total assets | $ | 1,024,751 | $ | 971,373 | ||||||||||
| Funding sources: | ||||||||||||||
| Interst-bearing liabilities: | ||||||||||||||
| Deposits: | ||||||||||||||
| Transaction accounts | $ | 399,293 | 329 | 0.33 | % | $ | 373,812 | 704 | 0.76 | % | ||||
| Time deposits | 212,212 | 443 | 0.84 | 219,990 | 923 | 1.69 | ||||||||
| Total interest-bearing deposits | 611,505 | 772 | 0.51 | 593,802 | 1,627 | 1.10 | ||||||||
| Total interest-bearing liabilities | 611,505 | 772 | 0.51 | 593,802 | 1,627 | 1.10 | ||||||||
| Noninterest-bearing liabilities: | ||||||||||||||
| Noninterest-bearing deposits | 293,867 | 272,373 | ||||||||||||
| Other noninterest-bearing liabilities | 6,047 | 5,729 | ||||||||||||
| Total noninterest-bearing liabilities | 299,914 | 278,102 | ||||||||||||
| Shareholders' equity | 113,332 | 99,469 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 1,024,751 | $ | 971,373 | ||||||||||
| Net interst income excluding loan fee income | $ | 11,137 | $ | 10,297 | ||||||||||
| Net interest spread excluding loan fee income^(4)^ | 4.18 | % | 3.88 | % | ||||||||||
| Net interest margin excluding loan fee income | 4.38 | % | 4.30 | % |
| Net Interest Margin With Loan Fee Income | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Three Months Ended June 30, | ||||||||||||||
| 2021 | 2020 | |||||||||||||
| Average<br><br> Balance | Interest<br><br> Income/<br><br> Expense | Average<br><br> Yield/<br><br> Rate | Average<br><br> Balance | Interest<br><br> Income/<br><br> Expense | Average<br><br> Yield/<br><br> Rate | |||||||||
| (Dollars in thousands) | ||||||||||||||
| Interest-Earning Assets: | ||||||||||||||
| Short-term investments^(1)^ | $ | 128,643 | $ | 64 | 0.20 | % | $ | 134,764 | $ | 156 | 0.47 | % | ||
| Investment securities^(2)^ | 1,187 | 15 | 5.07 | 1,089 | 15 | 5.54 | ||||||||
| Loans held for sale | 557 | - | - | 222 | - | - | ||||||||
| Total loans^(3)^ | 889,278 | 14,357 | 6.48 | 826,111 | 13,385 | 6.52 | ||||||||
| Total interest-earning assets | 1,019,665 | 14,436 | 5.68 | 962,186 | 13,556 | 5.67 | ||||||||
| Noninterest-earning assets | 5,086 | 9,187 | ||||||||||||
| Total assets | $ | 1,024,751 | $ | 971,373 | ||||||||||
| Funding sources: | ||||||||||||||
| Interst-bearing liabilities: | ||||||||||||||
| Deposits: | ||||||||||||||
| Transaction accounts | $ | 399,293 | 329 | 0.33 | % | $ | 373,812 | 704 | 0.76 | % | ||||
| Time deposits | 212,212 | 443 | 0.84 | 219,990 | 923 | 1.69 | ||||||||
| Total interest-bearing deposits | 611,505 | 772 | 0.51 | 593,802 | 1,627 | 1.10 | ||||||||
| Total interest-bearing liabilities | 611,505 | 772 | 0.51 | 593,802 | 1,627 | 1.10 | ||||||||
| Noninterest-bearing liabilities: | ||||||||||||||
| Noninterest-bearing deposits | 293,867 | 272,373 | ||||||||||||
| Other noninterest-bearing liabilities | 6,047 | 5,729 | ||||||||||||
| Total noninterest-bearing liabilities | 299,914 | 278,102 | ||||||||||||
| Shareholders' equity | 113,332 | 99,469 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 1,024,751 | $ | 971,373 | ||||||||||
| Net interst income including loan fee income | $ | 13,664 | $ | 11,929 | ||||||||||
| Net interest spread including loan fee income^(4)^ | 5.17 | % | 4.56 | % | ||||||||||
| Net interest margin including loan fee income | 5.37 | % | 4.99 | % | ||||||||||
| (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 Six Months Ended June 30, | ||||||||||||||
| 2021 | 2020 | |||||||||||||
| Average<br><br> Balance | Interest<br><br> Income/<br><br> Expense | Average<br><br> Yield/<br><br> Rate | Average<br><br> Balance | Interest<br><br> Income/<br><br> Expense | Average<br><br> Yield/<br><br> Rate | |||||||||
| (Dollars in thousands) | ||||||||||||||
| Interest-Earning Assets: | ||||||||||||||
| Short-term investments^(1)^ | $ | 127,203 | $ | 157 | 0.25 | % | $ | 125,906 | $ | 554 | 0.88 | % | ||
| Investment securities^(2)^ | 1,180 | 17 | 2.91 | 1,095 | 18 | 3.31 | ||||||||
| Loans held for sale | 445 | - | - | 174 | - | - | ||||||||
| Total loans^(3)^ | 868,526 | 22,933 | 5.32 | 786,943 | 23,599 | 6.03 | ||||||||
| Total interest-earning assets | 997,354 | 23,107 | 4.67 | 914,118 | 24,171 | 5.32 | ||||||||
| Noninterest-earning assets | 6,090 | 8,969 | ||||||||||||
| Total assets | $ | 1,003,444 | $ | 923,087 | ||||||||||
| Funding sources: | ||||||||||||||
| Interst-bearing liabilities: | ||||||||||||||
| Deposits: | ||||||||||||||
| Transaction accounts | $ | 412,070 | 691 | 0.34 | % | $ | 358,167 | 1,714 | 0.96 | % | ||||
| Time deposits | 208,903 | 956 | 0.92 | 212,537 | 1,988 | 1.88 | ||||||||
| Total interest-bearing deposits | 620,973 | 1,647 | 0.53 | 570,704 | 3,702 | 1.30 | ||||||||
| Total interest-bearing liabilities | 620,973 | 1,647 | 0.53 | 570,704 | 3,702 | 1.30 | ||||||||
| Noninterest-bearing liabilities: | ||||||||||||||
| Noninterest-bearing deposits | 266,237 | 246,630 | ||||||||||||
| Other noninterest-bearing liabilities | 5,126 | 5,160 | ||||||||||||
| Total noninterest-bearing liabilities | 271,363 | 251,790 | ||||||||||||
| Shareholders' equity | 111,108 | 100,593 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 1,003,444 | $ | 923,087 | ||||||||||
| Net interst income excluding loan fee income | $ | 21,460 | $ | 20,469 | ||||||||||
| Net interest spread excluding loan fee income^(4)^ | 4.14 | % | 4.01 | % | ||||||||||
| Net interest margin excluding loan fee income | 4.34 | % | 4.50 | % |
| Net Interest Margin With Loan Fee Income | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Six Months Ended June 30, | ||||||||||||||
| 2021 | 2020 | |||||||||||||
| Average<br><br> Balance | Interest<br><br> Income/<br><br> Expense | Average<br><br> Yield/<br><br> Rate | Average<br><br> Balance | Interest<br><br> Income/<br><br> Expense | Average<br><br> Yield/<br><br> Rate | |||||||||
| (Dollars in thousands) | ||||||||||||||
| Interest-Earning Assets: | ||||||||||||||
| Short-term investments^(1)^ | $ | 127,203 | $ | 157 | 0.25 | % | $ | 125,906 | $ | 554 | 0.88 | % | ||
| Investment securities^(2)^ | 1,180 | 17 | 2.91 | 1,095 | 18 | 3.31 | ||||||||
| Loans held for sale | 445 | - | - | 174 | - | - | ||||||||
| Total loans^(3)^ | 868,526 | 27,450 | 6.37 | 786,943 | 26,491 | 6.77 | ||||||||
| Total interest-earning assets | 997,354 | 27,624 | 5.59 | 914,118 | 27,063 | 5.95 | ||||||||
| Noninterest-earning assets | 6,090 | 8,969 | ||||||||||||
| Total assets | $ | 1,003,444 | $ | 923,087 | ||||||||||
| Funding sources: | ||||||||||||||
| Interst-bearing liabilities: | ||||||||||||||
| Deposits: | ||||||||||||||
| Transaction accounts | $ | 412,070 | 691 | 0.34 | % | $ | 358,167 | 1,714 | 0.96 | % | ||||
| Time deposits | 208,903 | 956 | 0.92 | 212,537 | 1,988 | 1.88 | ||||||||
| Total interest-bearing deposits | 620,973 | 1,647 | 0.53 | 570,704 | 3,702 | 1.30 | ||||||||
| Total interest-bearing liabilities | 620,973 | 1,647 | 0.53 | 570,704 | 3,702 | 1.30 | ||||||||
| Noninterest-bearing liabilities: | ||||||||||||||
| Noninterest-bearing deposits | 266,237 | 246,630 | ||||||||||||
| Other noninterest-bearing liabilities | 5,126 | 5,160 | ||||||||||||
| Total noninterest-bearing liabilities | 271,363 | 251,790 | ||||||||||||
| Shareholders' equity | 111,108 | 100,593 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 1,003,444 | $ | 923,087 | ||||||||||
| Net interst income including loan fee income | $ | 25,977 | $ | 23,361 | ||||||||||
| Net interest spread including loan fee income^(4)^ | 5.05 | % | 4.65 | % | ||||||||||
| Net interest margin including loan fee income | 5.25 | % | 5.14 | % | ||||||||||
| (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 | June 30, | December 31, | ||
| 2021 | 2020 | |||
| Cash and due from banks | $ | 187,732 | $ | 153,901 |
| Interest-bearing time deposits in other banks | 5,478 | 16,412 | ||
| Loans, net | 919,687 | 826,974 | ||
| Loans held for sale | 1,334 | 324 | ||
| Premises and equipment, net | 8,889 | 9,151 | ||
| Nonmarketable equity securities | 1,187 | 1,172 | ||
| Goodwill and intangibles | 1,491 | 1,583 | ||
| Interest receivable and other assets | 7,233 | 7,152 | ||
| Total assets | $ | 1,133,031 | $ | 1,016,669 |
| Liabilities and Shareholders’ Equity | ||||
| Deposits | ||||
| Noninterest-bearing | $ | 330,061 | $ | 246,569 |
| Interest-bearing | 678,488 | 658,945 | ||
| Total deposits | 1,008,549 | 905,514 | ||
| Income taxes payable | 2,574 | 9 | ||
| Interest payable and other liabilities | 4,897 | 3,827 | ||
| Total liabilities | 1,016,020 | 909,350 | ||
| Common stock | 90 | 90 | ||
| Additional paid-in capital | 93,635 | 93,162 | ||
| Retained earnings | 23,286 | 14,067 | ||
| Total shareholders’ equity | 117,011 | 107,319 | ||
| Total liabilities and shareholders’ equity | $ | 1,133,031 | $ | 1,016,669 |
Bank7 Corp.
Consolidated Statements of Income
| Unaudited as of | ||||||||
|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| Dollars in thousands, except per share data | 2021 | 2020 | 2021 | 2020 | ||||
| Interest Income | ||||||||
| Loans, including fees | $ | 14,357 | $ | 13,385 | $ | 27,450 | $ | 26,491 |
| Interest-bearing time deposits in other banks | 38 | 133 | 106 | 295 | ||||
| Interest-bearing deposits in other banks | 42 | 38 | 68 | 277 | ||||
| Total interest income | 14,437 | 13,556 | 27,624 | 27,063 | ||||
| Interest Expense | ||||||||
| Deposits | 772 | 1,627 | 1,647 | 3,702 | ||||
| Total interest expense | 772 | 1,627 | 1,647 | 3,702 | ||||
| Net Interest Income | 13,665 | 11,929 | 25,977 | 23,361 | ||||
| Provision for Loan Losses | 1,300 | 1,400 | 2,575 | 2,050 | ||||
| Net Interest Income After Provision for Loan Losses | 12,365 | 10,529 | 23,402 | 21,311 | ||||
| Noninterest Income | ||||||||
| Secondary market income | 78 | 39 | 92 | 77 | ||||
| Service charges on deposit accounts | 119 | 95 | 239 | 214 | ||||
| Other | 382 | 167 | 585 | 340 | ||||
| Total noninterest income | 579 | 301 | 916 | 631 | ||||
| Noninterest Expense | ||||||||
| Salaries and employee benefits | 2,949 | 2,597 | 5,739 | 5,071 | ||||
| Furniture and equipment | 231 | 218 | 433 | 434 | ||||
| Occupancy | 458 | 413 | 930 | 874 | ||||
| Data and item processing | 286 | 269 | 565 | 545 | ||||
| Accounting, marketing and legal fees | 149 | 77 | 297 | 203 | ||||
| Regulatory assessments | 161 | 94 | 302 | 117 | ||||
| Advertising and public relations | 71 | 29 | 105 | 298 | ||||
| Travel, lodging and entertainment | 118 | 43 | 207 | 96 | ||||
| Other | 452 | 383 | 841 | 838 | ||||
| Total noninterest expense | 4,875 | 4,123 | 9,419 | 8,476 | ||||
| Income Before Taxes | 8,069 | 6,707 | 14,899 | 13,466 | ||||
| Income tax expense | 1,964 | 1,671 | 3,690 | 3,379 | ||||
| Net Income | $ | 6,105 | $ | 5,036 | $ | 11,209 | $ | 10,087 |
| Earnings per common share - basic | $ | 0.67 | $ | 0.54 | $ | 1.24 | $ | 1.05 |
| Diluted earnings per common share | 0.67 | 0.54 | 1.24 | 1.05 | ||||
| Weighted average common shares outstanding - basic | 9,050,606 | 9,232,509 | 9,050,295 | 9,598,232 | ||||
| Weighted average common shares outstanding - diluted | 9,074,408 | 9,232,509 | 9,066,797 | 9,598,232 |
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, July 29, 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/2179/41916. 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/2179/41916 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
Exhibit 99.2
BSVN Q2 2021EARNINGS RELEASEJuly 29, 2021
1 BSVN – Corporate Overview Shareholder alignment due to 71.5% insider ownership and zero insider salesContinued focus on organic growth in our geographic footprint, while pursuing strategic acquisitionsMultiple year recipient of annual Raymond James Community Bankers Cup award recognizing top 10% of community banks across the U.S. All data as of June 30, 2021, and income statement information is annualized unless indicated otherwise. Positioned in dynamic markets, with a commercial banking emphasis that delivers services via a branch-lite modelExperienced and talented bankers focused on high-touch personalized serviceHighly disciplined credit culture that adheres to a robust risk management framework resulting in excellent credit quality and a history of low loan losses Consistently highly ranked by S & P Global Market Intelligence as one of the Top Performing Community Banks in the United States
2 Q2 2021 Overview Continued Strong Performance Consistent & Robust Growth Our talented sales team grew core loans(3) by $88.1 million, or 11% during the quarter, reaching a record of $887.7 millionCore deposits continue to keep pace with our loan demandDuring the quarter, we grew total deposits by $79.5 million, of which 76.7% was non-interest bearing All data as of June 30, 2021, unless indicated otherwise.Pre-tax pre-provision earnings (PPE) is a non-GAAP financial measure, see Appendix for reconciliation to the most comparable GAAP measure for this metric.As of Q1 2021, the latest figures available. Peer group is defined as 184 exchange-traded banks nationwide with assets between $500 million and $5 billion. Source: S&P Global Market IntelligenceCore loans is defined as gross loans less PPP loans of $48.4 million for June 30, 2021 EPS of $0.67, an increase of 19.6% compared to the prior quarterEfficiency ratio of 35.02% as of Q2 2021Continued focus on cost control, noninterest expense to average assets equaled 1.89% through Q2 2021 Double-digit PPE Growth PPE totaled $9.4 million(1) for the quarter, an increase of 15.6% compared to the prior quarterPPE strength is far greater than our peer group: 3.30% PPE to average assets vs. peer average of 1.61% PPE to average assets(2)
3 Exceptional Book Value Appreciation Tangible Book Value Per Share At YE 2018 – the year of our IPO – tangible book value per share was $8.49, compared to tangible book value of $12.76 for the current quarter, an increase of 50.38% Including cash dividends, BSVN has produced a 64.87% overall return over the same period Dollars are in thousands, except for per share data. CAGR since 2018 = 17.7%
2.51% Pro Forma Pro Forma Reliable BSVN Performance Return on Average Assets (2)(3) Return on Average Tangible Common Equity (2) (3) Dollars are in millionsFinancial data is as of or for the twelve months ended December 31 of each respective year and as of and for the six months ended June 30, 2021.Efficiency ratio of 35.56% vs. peer average of 60.67% as of Q1 2021. Peer group is defined as exchange-traded banks nationwide with assets between $500mm-$5bn (184 banks); Source: S&P Global Market Intelligence. See slide 6.Profitability metrics are tax-adjusted as if the Company were a C Corporation at the estimated tax rates for the respective periods. Pro Forma YTD ROAA, ROATCE and efficiency ratio are non-GAAP financial measures, see slide 16 for reconciliation to the most comparable GAAP measures for these metrics. Efficiency Ratio (3) Annualized ROAA and ROATCE as of Q2 2021: 2.25% and 20.6%, respectively. Even with the additional ALLL build and a challenging rate environment, we continue to produce robust annualized ROAA and ROATCEIndustry-leading efficiency ratio(1) 4 5-year average: 2.25% 5-year average: 22.3% 38.3% 20.9% Pro Forma
Dollars are in millions. Financial data is as of or for the twelve months ended December 31 of each respective year and as of and for the six months ended June 30, 2020 and 2021.Pro Forma noninterest expense to average assets is a non-GAAP financial measure. See slide 16 for reconciliation to their most comparable GAAP measure.Pro Forma 2019 PPE is a non-GAAP financial measure which adds back the one-time, extraordinary compensation expense related to the non-cash executive stock transaction that took place during the period. See Pro Forma Net Income reconciliation table for detailed calculation of this measure. 12.7% increase YoY Robust and Consistent Organic Growth PPE(2) Total Assets 5 $26.8 Pro Forma PPE grew 12.7% YoY- Our high level of PPE is achieved in part because of our strategy of having fewer, but better FTEs, who excel at providing services and solutions utilizing our technology and processes, delivered through our branch-lite model Leveraging Our Employee Base(1) 3.56%Actual Pro Forma CAGR Since 2016: 14.6%
6 Income Statement as a Percentage of Average Assets Dollars are in thousandsPeer group is defined as exchange-traded banks nationwide with assets between $500mm-$5bn (184 banks); Source: S&P Global Market Intelligence.Excludes one-time, non-cash executive stock transfer compensation expense of $11.8 million.As of Q1 2021, the latest data available. PPE to Average Assets (3)
Deposit Composition Historical Deposit Growth Compound Annual Growth Rate = 14.6% Deposit Composition as of June 30, 2021 82.30% of our loan customers also had a deposit relationship with us as of June 30, 2021Total organic core deposit growth YoY was $108 million, or 13.5%Core deposits totaled $910.8 million as of June 30, 2021 compared to $802.8 million as of June 30, 2020 Dollars are in millions.Financial data is as of or for the twelve months ended December 31 of each respective year and as of or for the six months ended June 30, 2021.(1) We define core deposits as deposits obtained directly from the depositor and exclude deposits obtained from listing services and brokered deposits that are obtained through an intermediary. Core Deposits(1) 7
8 Earnings-driven cushion far exceeds regulatory capital minimums as illustrated over a two-year period, consistent with DFAST parameters(1) Dollars are in millionsThe above assumes no cash dividends and is simply an illustration and should not be considered a projection or forward-looking guidance of any kind. DFAST = Dodd-Frank Act Stress Test.Excess capital to target ratio expressed in % is the difference between the actual ratio and regulatory minimum divided by the regulatory minimum.Excess capital to target ratio expressed in $ is the excess capital % multiplied by either average assets or risk-weighted assets, assuming a static balance sheet over the next 24 months. Trailing twelve months PPE of $33.19 million extrapolated over two years. Earnings-driven Capital Shock-absorption
Net Interest Margin Strength Financial data is as of or for the twelve months ended December 31 of each respective year and as of or for the six months ended June 30, 2021 and for the three months ended March 31, 2021 and June 30 2021.Net interest margin (excluding loan fee income) is a non-GAAP financial measure, see Appendix for reconciliation to the most comparable GAAP measure for this metric. Net Interest Margin Despite a challenging yield curve, low-yielding PPP loans, and excess liquidity, our net interest margin continues to show strengthPPP loan fee income recognized during the quarter totaled $913,000, with $830,000 remaining to be recognized; YTD PPP loan fees recognized totaled $1.74 million. 9
Driven by growth in the loan portfolio during the quarter, ALLL increased by $1.44 million, or 13.3%, totaling $12.3 million, or 1.39% of total loans(1)Reduction of energy loan portfolio; down from 18.6% of total loans at YE 2017 to 11.1% of total loans as of June 30, 2021Full effect of the pandemic-related downturn continues to become more clear and management remains confident that the overall cycle NCOs will be within our expected range and within historical norms 10 Allowance for Loan Losses to Total Loans Asset Quality Net Charge-Offs to Average Loans Financial data is as of or for the twelve months ended December 31 of each respective year and as of or for the six months ended June 30, 2021. (1) “Total Loans” excludes $44.9, $64.7 and $48.4 million in PPP loans for YE 2020, Q1 2021 and Q2 2021, respectively. With PPP loans included, ratio is 1.15%, 1.26% and 1.32%, respectively. (1) Energy Portfolio as a % of Total Loans (1) (1)
Dollars are in millions Energy Portfolio Potential Exposure 11
Hospitality Loan Portfolio Detail 12 Blue collar portfolio that is well-protected by the “cycle-down” effect of a recession Experienced owner/operators with decades of history that spans multiple recessionsAverage occupancy for June 2021 within the portfolio was 75% compared to 63% for June 2020. Average Daily Rate for June 2021 was $75 compared to $61 for June 2020Diversified lending to many reputable brands Dollars are in millions. Hotel Portfolio Exposure by Class Hotel Portfolio Exposure by Flag
13 Hospitality Loan Portfolio Detail Consistent underwriting fundamentals with disciplined equity requirements, debt coverage ratio requirements, personal recourse, and rapid amortization Portfolio Metrics – 36 Operating Properties Dollars are in millions except per room data. Data as of June 30, 2021. Concentrated primarily in “Drive-To” markets in the Dallas/Fort Worth metropolitan area, with most of the remaining exposure also in TexasNo exposure to towns or cities that are heavily dependent on the energy space, or that are “gateway” cities that depend on airline traffic
Appendix 14
15 Bank7 Corp. Financials Net income and earnings per share are tax-adjusted as if the Company were a C Corporation at the estimated tax rates for the respective periods. EPS calculation is based on diluted shares. Combined federal and state effective tax rates for the six months ended June 30, 2020 and 2021 of 25.1% and 24.8%, respectively.Represents a non-GAAP financial measure. See non-GAAP reconciliations table for reconciliation to most comparable GAAP measure for this metric. All pro forma amounts relate to the one-time, non-cash executive stock transfer which occurred in September 2019. These amounts remove the compensation and related tax impact from net income. See detail and reconciliation on slide 19 of this presentation.
16 Bank7 Corp. Financials Return on average assets and shareholders’ equity are tax-adjusted as if the Company were a C Corporation at the estimated tax rates for the respective periods.Efficiency ratio is calculated by dividing noninterest expense by the sum of net interest income on a tax equivalent basis and noninterest income. Represents a non-GAAP financial measure, see non-GAAP reconciliations table for reconciliation to the most comparable GAAP measure for this metric. Ratios are based on Bank level financial information rather than consolidated information. At June 30, 2021, Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 11.26%, 13.22%, and 14.47% respectively for the Company.All pro forma amounts relate to the one-time, non-cash executive stock transfer which occurred in September 2019. These amounts remove the compensation expense and related tax impact from net income. See detail and reconciliation on slide 19 of this presentation.
17 Non-GAAP Reconciliations
Loan Portfolio Distribution Dollars are in millions. Data as of June 30, 2021. Gross Loan Portfolio Composition by Purpose Type 18
19 2019 Pro Forma Net Income Reconciliation On September 5, 2019, our largest shareholders, the Haines Family Trusts, contributed approximately 6.5% of their shares (656,925 shares) to the Company. Subsequently, the Company immediately issued those shares to certain executive officers, which was charged as compensation expense of $11.8 million, including payroll taxes, through the income statement of the Company. Additionally, at the discretion of the employees receiving shares to assist in paying tax withholdings, 149,425 shares were withheld and subsequently canceled, resulting in a charge to retained earnings of $2.6 million.
20 Legal Information and Disclaimer This presentation and oral statements made regarding the subject of this presentation contain forward-looking statements. 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. 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. 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. Within this presentation, we reference certain market, industry and demographic data, forecasts and other statistical information. We have obtained this data, forecasts and information from various independent, third party industry sources and publications. Nothing in the data, forecasts or information used or derived from third party sources should be construed as advice. Some data and other information are also based on our good faith estimates, which are derived from our review of industry publications and surveys and independent sources. We believe that these sources and estimates are reliable, but have not independently verified them. Statements as to our market position are based on market data currently available to us. Although we are not aware of any misstatements regarding the economic, employment, industry and other market data presented herein, these estimates involve inherent risks and uncertainties and are based on assumptions that are subject to change. This presentation includes certain non-GAAP financial measures, including pro forma net income, 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 on Slides 17 and 19 of this presentation for a reconciliation of the non-GAAP financial measures used in (or conveyed orally during) this presentation to their most directly comparable GAAP financial measures.