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)
April 12, 2024
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) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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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 | BSVN | The NASDAQ Global Select Market |
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 April 12, 2024, 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 March 31, 2024. 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 April 12, 2024 at 9:00 am CST to discuss its first quarter 2024 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 April 12, 2024 |
| 99.2 | First Quarter 2024 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: April 12, 2024 | By: | /s/ Kelly J. Harris |
| Kelly J. Harris | ||
| Executive Vice President and Chief Financial Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE: Bank7 Corp. Announces Q1 2024 Earnings
Oklahoma City, April 12, 2024 – Bank7 Corp. (NASDAQ: BSVN) ("the Company"), the parent company of Oklahoma City-based Bank7 (the "Bank"), today reported unaudited results for the quarter ended March 31, 2024. “We are pleased with the strength of our core earnings, as evidenced by our pre-tax, pre-provision earnings (PPE). The Company’s continued ability to exceed historical PPE is a function of our position in dynamic geographic markets, our long-term and broad-based deposit relationships, our debt-free and liquid balance sheet, and our disciplined approach to cost controls. Further, the Company’s credit quality remains a point of strength with minimal exposure to office and retail commercial real estate,” said Thomas L. Travis, President and CEO of the Company.”
For the three months ended March 31, 2024 compared to the three months ended March 31, 2023:
| - | Net income of $11.3 million compared to $9.6 million, an increase of 17.50% |
|---|---|
| - | Earnings per share of $1.21 compared to $1.04, an increase of 16.35% |
| --- | --- |
| - | Total assets of $1.8 billion compared to $1.7 billion, an increase of 6.89% |
| --- | --- |
| - | Total loans of $1.4 billion compared to $1.3 billion, an increase of 7.39% |
| --- | --- |
| - | PPE of $14.9 million compared to $13.0 million, an increase of 14.22% |
| --- | --- |
| - | Total interest income of $33.3 million compared to $27.4 million, an increase of 21.57% |
| --- | --- |
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 March 31, 2024, the Bank’s Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratios were 10.10%, 12.11%, and 13.36%, respectively. On March 31, 2024, on a consolidated basis, the Company’s Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratios were 10.11%, 12.11%, and 13.36%, respectively. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators.
Non-GAAP Financial Measures:
This earnings release contains the non-GAAP financial measure pre-provision pre-tax earnings (“PPE”). The Company’s management uses this non-GAAP measure in their analysis of the Company’s performance. This measure adjusts GAAP performance to exclude from net income, income tax expense, provision for credit losses, and loss on sales and calls of available-for-sale debt securities.
| For the Three Months Ended | ||||
|---|---|---|---|---|
| Mar 31, 2024 | Mar 31, 2023 | |||
| Calculation of Pre-Provision Pre-Tax Earnings ("PPE") | (Dollars in thousands) | |||
| Net Income | $ | 3,595 | $ | 2,947 |
| Income Tax Expense | 14,883 | 12,554 | ||
| Pre-tax net income | 14,883 | 12,554 | ||
| Add back: Provision for credit losses | - | 1 | ||
| Add back: (Gain)Loss on sales/calls of AFS debt securities | 14,883 | 13,030 | ||
| Pre-provision pre-tax earnings | 14,883 | 13,030 |
Bank7 Corp.
Consolidated Balance Sheets
| Assets | December 31, 2023 | ||||
|---|---|---|---|---|---|
| Cash and due from banks | 193,218 | $ | 181,042 | ||
| Interest-bearing time deposits in other banks | 17,181 | 17,679 | |||
| Available-for-sale debt securities | 151,872 | 169,487 | |||
| Loans, net of allowance for credit losses of 19,696 and 19,691 at March 31, 2024 and December 31, 2023, respectively | 1,354,195 | 1,341,148 | |||
| Loans held for sale, at fair value | - | 718 | |||
| Premises and equipment, net | 15,376 | 14,942 | |||
| Nonmarketable equity securities | 1,278 | 1,283 | |||
| Core deposit intangibles | 970 | 1,031 | |||
| Goodwill | 8,458 | 8,458 | |||
| Interest receivable and other assets | 32,435 | 35,878 | |||
| Total assets | 1,774,983 | $ | 1,771,666 | ||
| Liabilities and Shareholders’ Equity | |||||
| Deposits | |||||
| Noninterest-bearing | 452,326 | $ | 482,349 | ||
| Interest-bearing | 1,127,846 | 1,109,042 | |||
| Total deposits | 1,580,172 | 1,591,391 | |||
| Income taxes payable | 3,946 | 302 | |||
| Interest payable and other liabilities | 10,483 | 9,647 | |||
| Total liabilities | 1,594,601 | 1,601,340 | |||
| Shareholders’ equity | |||||
| Common stock, 0.01 par value; 50,000,000 shares authorized; share issued and outstanding: 9,238,206 and 9,197,696 at March 31, 2024 and December 31, 2023, respectively | 92 | 92 | |||
| Additional paid-in capital | 97,669 | 97,417 | |||
| Retained earnings | 88,310 | 78,962 | |||
| Accumulated other comprehensive loss | (5,689 | ) | (6,145 | ) | |
| Total shareholders’ equity | 180,382 | 170,326 | |||
| Total liabilities and shareholders’ equity | 1,774,983 | $ | 1,771,666 |
All values are in US Dollars.
| 2023 | ||||
| Interest Income | ||||
| Loans, including fees | 30,117 | $ | 25,352 | |
| Interest-bearing time deposits in other banks | 253 | 49 | ||
| Debt securities, taxable | 1,012 | 706 | ||
| Debt securities, tax-exempt | 73 | 87 | ||
| Other interest and dividend income | 1,832 | 1,186 | ||
| Total interest income | 33,287 | 27,380 | ||
| Interest Expense | ||||
| Deposits | 11,277 | 7,374 | ||
| Total interest expense | 11,277 | 7,374 | ||
| Net Interest Income | 22,010 | 20,006 | ||
| Provision for Credit Losses | - | 475 | ||
| Net Interest Income After Provision for Credit Losses | 22,010 | 19,531 | ||
| Noninterest Income | ||||
| Mortgage lending income | 51 | 54 | ||
| Loss on sales, prepayments, and calls of available-for-sale debt securities | - | (1 | ) | |
| Service charges on deposit accounts | 249 | 235 | ||
| Other | 1,708 | 384 | ||
| Total noninterest income | 2,008 | 672 | ||
| Noninterest Expense | ||||
| Salaries and employee benefits | 5,289 | 4,680 | ||
| Furniture and equipment | 230 | 249 | ||
| Occupancy | 661 | 719 | ||
| Data and item processing | 458 | 386 | ||
| Accounting, marketing and legal fees | 99 | 298 | ||
| Regulatory assessments | 386 | 394 | ||
| Advertsing and public relations | 145 | 148 | ||
| Travel, lodging and entertainment | 51 | 61 | ||
| Other | 1,816 | 714 | ||
| Total noninterest expense | 9,135 | 7,649 | ||
| Income Before Taxes | 14,883 | 12,554 | ||
| Income tax expense | 3,595 | 2,947 | ||
| Net Income | 11,288 | $ | 9,607 | |
| Earnings per common share - basic | 1.22 | $ | 1.05 | |
| Earnings per common share - diluted | 1.21 | 1.04 | ||
| Weighted average common shares outstanding - basic | 9,220,154 | 9,146,932 | ||
| Weighted average common shares outstanding - diluted | 9,317,813 | 9,264,247 | ||
| Other Comprehensive Income | ||||
| Unrealized gains on securities, net of tax expense of 0 and 554 for the three months ended March 31, 2024 and 2023, respectively | 456 | $ | 1,755 | |
| Reclassification adjustment for realized losses included in net income net of tax of 0 and 0 for the three months ended March 31, 2024 and 2023, respectively | - | 1 | ||
| Other comprehensive income | 456 | $ | 1,756 | |
| Comprehensive Income | 11,744 | $ | 11,363 |
All values are in US Dollars.
| Net Interest Margin | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Three Months Ended March 31, | ||||||||||||||
| 2024<br><br> (unaudited) | 2023 | |||||||||||||
| 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 | $ | 176,072 | $ | 2,085 | 4.75 | % | $ | 134,650 | $ | 1,235 | 3.72 | % | ||
| Debt securities, taxable-equivalent | 153,468 | 1,012 | 2.64 | 153,533 | 706 | 1.86 | ||||||||
| Debt securities, tax exempt | 18,269 | 73 | 1.60 | 20,318 | 87 | 1.74 | ||||||||
| Loans held for sale | 238 | - | - | 43 | - | - | ||||||||
| Total loans(1) | 1,369,692 | 30,117 | 8.82 | 1,271,081 | 25,352 | 8.09 | ||||||||
| Total interest-earning assets | 1,717,739 | 33,287 | 7.77 | 1,579,625 | 27,380 | 7.03 | ||||||||
| Noninterest-earning assets | 39,769 | 23,542 | ||||||||||||
| Total assets | $ | 1,757,508 | $ | 1,603,167 | ||||||||||
| Funding sources: | ||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||
| Deposits: | ||||||||||||||
| Transaction accounts | $ | 845,129 | 8,196 | 3.89 | % | $ | 803,618 | 5,753 | 2.90 | % | ||||
| Time deposits | 264,973 | 3,081 | 4.66 | 213,760 | 1,621 | 3.08 | ||||||||
| Total interest-bearing deposits | 1,110,102 | 11,277 | 4.07 | 1,017,378 | 7,374 | 2.94 | ||||||||
| Total interest-bearing liabilities | $ | 1,110,102 | 11,277 | 4.07 | $ | 1,017,378 | 7,374 | 2.94 | ||||||
| Noninterest-bearing liabilities: | ||||||||||||||
| Noninterest-bearing deposits | $ | 460,028 | $ | 425,640 | ||||||||||
| Other noninterest-bearing liabilities | 10,970 | 11,131 | ||||||||||||
| Total noninterest-bearing liabilities | 470,998 | 436,771 | ||||||||||||
| Shareholders' equity | 176,408 | 149,018 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 1,757,508 | $ | 1,603,167 | ||||||||||
| Net interest income | $ | 22,010 | $ | 20,006 | ||||||||||
| Net interest spread | 3.70 | % | 4.10 | % | ||||||||||
| Net interest margin | 5.14 | % | 5.14 | % | ||||||||||
| (1) | Nonaccrual loans are included in total loans | |||||||||||||
| --- | --- |
About Bank7 Corp.
We are Bank7 Corp., a bank holding company headquartered in Oklahoma City, Oklahoma. Through our wholly-owned subsidiary, Bank7, we operate twelve 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 Friday, April 12, 2024 at 9:00 a.m. central standard time. To participate in the call, dial 1-888-348-6421, or access it live over the Internet at https://app.webinar.net/w8qEpOZ7G6v. For those not able to participate in the live call, an archive of the webcast will be available at https://app.webinar.net/w8qEpOZ7G6v 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 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.
Contact:
Thomas Travis
President & CEO
(405) 810-8600
Exhibit 99.2
Q1 2024 Earnings Release BSVN April 12, 2024
BSVN – Corporate Overview Consistently ranked by S & P Global Market Intelligence as one of the Top Performing Community Banks in the United States Reliable strength in ROATCE, strong earnings and consistent net interest margin Stable deposits, strong liquidity, and a properly matched balance sheet Disciplined credit culture that adheres to a robust risk management framework resulting in strong historical credit quality Experienced and talented bankers focused on high-touch personalized service, targeting entrepreneurs and their commercial banking needs Positioned in dynamic markets, with a commercial banking emphasis delivering services via a branch-lite model Shareholder alignment due to 58% insider ownership Dollars in thousands, all data as of March 31, 2024, unless indicated otherwise
Q1 Overview Uninsured deposits represent 26.85% of total deposits, compared to 28.19% for Q4 2023; adjusted uninsured deposits represent 13.68% of total deposits (1) The sum of cash plus unpledged securities and undrawn lines-of-credit equals $423.69 million, which significantly exceeds adjusted uninsured deposits of $216 million(1), a 1.96x coverage Stable Quality Deposits & Liquidity Dollars in thousands, all data as of March 31, 2024, unless indicated otherwise See slide 3 for adjusted uninsured deposit calculation $925.35 million of gross loans reprice daily, with $119.88 million of those loans that are at their ceiling Disciplined loan pricing combined with our consistent net interest margin drove record earnings Record EPS results were achieved through core earnings with no shares repurchased We continue to benefit from a low efficiency ratio of 37.78% Record Earnings & Strong Net Interest Margin Strong earnings and low dividend payout ratio builds capital rapidly Capital ratios remain strong and exceed “well capitalized” regulatory guidelines CET 1 Capital: 12.11% Tier 1 Leverage: 10.11% Debt free Balance Sheet No HTM securities Prudent Capital Management Proven ability to successfully manage NIM in varying interest rate environments as we continue to operate within historical ranges $1.07 billion or 77.90% of loans reprice in 1 year or less, with $925.35 million(2) or 67.27% repricing daily AOCI is only $5.69 million; the average investment portfolio duration is ~2.1 years, with $84 million of U.S. Treasuries or 52.91% of the total investment portfolio maturing in Q2 of 2024 Proven & Consistent Balance Sheet Management
Asset Sensitivity and Liquidity Dollars in thousands, all data as of March 31,2024, unless indicated otherwise $925.35 million of gross loans reprice daily, with $119.88 million of those loans that are at their ceiling Asset Sensitivity (1) Uninsured deposits total $424.22 million or 26.85% of total deposits; however, after deductions for insider owned, and also collateralized deposits, adjusted uninsured deposits are $216 million, which is 13.68% of total deposits Cash, securities, and undrawn lines of credit totaled $423.69 million, providing a 1.96x coverage of adjusted uninsured deposits Uninsured Deposits | Cash/Liquidity Liquidity
Deposit Composition Deposit Growth & Composition Core and non-interest bearing accounts have shown steady growth(1) CAGR since 2019: 15.0% Dollars in millions Includes interest bearing and non-interest bearing demand deposit, money market, and savings accounts
Consistent Net Interest Margin Financial data is as of or for the twelve months ended December 31 of each respective year and as of or for the three months ended March 31, 2024 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 ◼︎ Loan Fee Income Contribution Net interest margin continues to show strength due to disciplined loan pricing, a healthy amount of non-interest bearing deposits, and our asset sensitive balance sheet During the quarter, we benefited 24 bps by collecting $1 million of interest income, related to full collection of a workout loan relationship
Diluted Earnings Per Share 16.34% Increase Pro Forma $0.81 Tangible Book Value Per Share CAGR since 2018: 16.0% Record EPS: $1.21 for Q1, a 16.34% increase from Q1 2023 No share repurchases during the quarter Reliable and Rapid Capital Compounder Dollars are in thousands, except for per share data Pro Forma 2019 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 2019 Pro Forma Net Income reconciliation table for detailed calculation of this measure Consistently strong earnings increased TBV despite three factors: $0.85 per share paid for an all-cash acquisition in Q4 2021 $0.62 per share AOCI unrealized loss from investments $2.88 per share paid in cash dividends, since IPO 1
Return on Average Tangible Common Equity (1)(2) 5 year average: 20.5% Efficiency Ratio (2) 5 year average: 37.3% Return on Average Assets (1)(2) 5 year average: 2.1% Reliable Top Performer Financial data is as of or for the twelve months ended December 31 of each respective year and as of or for the three months ended March 31, 2023 and March 31, 2024 Pro Forma YTD ROAA, ROATCE and efficiency ratio are non-GAAP financial measures, see Appendix for reconciliation to the most comparable GAAP measures for these metrics Source: S&P Global Market Intelligence. Gross revenue of $1.38 million and gross expense of $1.19 million. 20.90% Pro Forma 2.51% 1.03% Pro Forma Performance ratios remain strong and within historical ranges Excluding oil and gas activity(3), Q1 efficiency ratio is 35.36% Pro Forma 8.60% 38.83%
Consistently Outperforming Peers Income Statement as a Percentage of Average Assets PPE to Average Assets vs Peers Dollars are in thousands Peer group is defined as exchange-traded banks nationwide with assets between $500mm-$5bn (145 banks); Source: S&P Global Market Intelligence. Excludes one-time, non-cash executive stock transfer compensation expense of $11.8 million. As of and for the 12 months ended December 31, 2023, the latest data available.
Maximizing Employee Base (3) PPE(1) 14.21% increase Strength in Core Earnings 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 three months ended March 31, 2023 and March 31, 2024 Pre-provision, pre-tax earnings (“PPE”) is a non-GAAP financial measure. See appendix for reconciliation to their most comparable GAAP measure Pro Forma 2019 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 2019 Pro Forma Net Income reconciliation table for detailed calculation of this measure Pro Forma noninterest expense to average assets is a non-GAAP financial measure. See appendix for reconciliation to their most comparable GAAP measure Pro Forma $26.8 $15.1 Strong PPE: Quarterly PPE of $14.88 million, an increase of 14.21% as compared to Q1 2023 Strong PPE was driven by: Disciplined loan pricing Asset sensitive balance sheet Expense discipline We achieve maximum productivity by: Utilizing a branch-lite model Hiring fewer but better FTEs Operating an efficient delivery system with a strict adherence to processes 3.56% Actual Pro Forma 2 2
Loan Portfolio Trends Loan Portfolio Trends – Selected Categories Dollars are in millions CAGR Since 2019: 13.5% 13.6% 24.5% 21.0% 40.9%
Loan Portfolio Distribution Dollars are in millions. Data as of March 31, 2024 Loan Portfolio Selected Categories
Diverse CRE Portfolio Dollars are in millions. Data as of March 31, 2024 Diverse commercial real estate lending activity in Texas and Oklahoma with an emphasis in the DFW, Oklahoma City, and Tulsa metros Minimal office and retail loans with over-weighting in each segment to owner-occupied properties No office exposure to downtown metropolitan locations Office Loan Average Size: Owner Occupied — $0.68 million Non-Owner Occupied — $0.92 million Construction lending activity primarily in Oklahoma City and the Dallas metroplex with an emphasis on entry level homes with established homebuilders Limited lot and development lending activity Hospitality niche managed by seasoned professionals with proven track record through various economic cycles CONSTRUCTION OWNER OCCUPIED
Hotel Portfolio by Class Hotel Portfolio by Location Hospitality Loan Portfolio Detail Dollars are in millions, data as March 31, 2024 No historical NCOs in the hospitality segment Blue collar portfolio that is well-protected by the “cycle-down” effect of a recession Geographically concentrated in TX (84%) and other markets with favorable economic conditions Loans personally guaranteed by experienced owner/operators with operating history spanning decades of economic cycles Diversified lending to many reputable brands Consistent underwriting fundamentals with disciplined equity requirements, debt coverage ratio requirements, personal recourse, and rapid amortization Average loan size of $5.68 million 3.56% Actual Hotel Portfolio by Location
Total Assets Strategic Growth in Dynamic Markets Dollars are in millions 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q1 2024 LPO opened in Tulsa, OK, full-service branch opened in Frisco, TX Oklahoma acquisition Full-service branch opened in Tulsa, OK Completed IPO Full-service branch opened in Irving, TX LPO opened in Irving, TX Kansas acquisition CAGR Since 2014: 15.2%
Earnings-driven Capital Shock-absorption Earnings-driven cushion far exceeds regulatory capital minimums as illustrated over a two-year period, consistent with DFAST parameters(1) Dollars are in thousands 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 $60.2 million extrapolated over two years
Appendix
Bank7 Corp. Financials BSVN adopted the CECL model (ASC326) on 1/1/2023 using the modified retrospective method. The presented allowance for periods prior to 1/1/2023 is under the incurred loss model (pre-ASC326). 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 22 of this presentation
Bank7 Corp. Performance Ratios Annualized 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 March 31, 2024, Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.11%, 12.11%, and 13.36% 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 22 of this presentation
Non-GAAP Reconciliations
Non-GAAP Reconciliations -- Continued
Available-for-Sale Securities Portfolio Investment Portfolio Dollars are in millions. All mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored entities. Total investment securities of $151.9 million as of March 31, 2024 Weighted Average Duration: 2.1 Years Book Yield: 3.79%
2019 Pro Forma Net Income Reconciliation On September 5, 2019, the largest shareholders, 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.
Legal Information and Distribution 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 in the appendix 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.
