BSVN 8-K

Bank7 Corp. (BSVN)

8-K 2020-10-29 For: 2020-10-29

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Oklahoma	001-38656	20-0764349
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	BSVN	The NASDAQ Global Select Market

Item		Description

99.1		Press Release dated October 29, 2020
99.2		Third Quarter 2020 Investor Presentation

	BANK7 CORP.

Date: October 29, 2020	By:	/s/ Kelly J. Harris
		Kelly J. Harris
		Senior Vice President and Chief Financial Officer

	Three months ended September 30,						Nine months ended September 30,
(Dollars in thousands, except per share data)	2020			2019			2020			2019
Loan interest income (excluding loan fees)
Total loan interest income, including loan fee income	$	12,777		$	12,179		$	39,268		$	35,902
Loan fee income		(1,078	)		(841	)		(3,969	)		(3,498	)
Loan interest income excluding loan fee income	$	11,699		$	11,338		$	35,299		$	32,404

Average total loans	$	847,076		$	651,186		$	807,134		$	617,398
Yield on loans (including loan fee income)		6.00	%		7.42	%		6.50	%		7.77	%
Yield on loans (excluding loan fee income)		5.49	%		6.91	%		5.84	%		7.02	%

Pre-tax, pre-provision net earnings
Net income before income taxes	$	6,101		$	(4,963	)	$	19,567		$	8,688
Plus: Provision (reversal of) for loan losses		(1,250	)		-			(3,300	)		-
Pre-tax, pre-provision net earnings	$	7,351		$	(4,963	)	$	22,867		$	8,688

Adjusted provision for income tax
Net income before income taxes	$	6,101		$	(4,963	)	$	19,567		$	8,688
Total effective adjusted tax rate		27.2	%		-31.4	%		25.8	%		57.2	%
Adjusted provision for income taxes	$	1,661		$	1,556		$	5,040		$	4,965

Tax-adjusted net income
Net income before income taxes	$	6,101		$	(4,963	)	$	19,567		$	8,688
Adjusted provision for income taxes		1,661			1,556			5,040			4,965
Tax-adjusted net income	$	4,440		$	(6,519	)	$	14,527		$	3,723

Pro Forma Pre-tax, pre-provision net earnings
Net income before income taxes	$	6,101		$	(4,963	)	$	19,567		$	8,688
Plus: Provision (reversal of) loan losses		(1,250	)		-			(3,300	)		-
Plus: Stock Transfer Compensation Expense		-			11,797			-			11,797
Pro Forma Pre-tax, pre-provision net earnings	$	7,351		$	6,834		$	22,867		$	20,485

Tax-adjusted ratios and per share data
Tax-adjusted net income (numerator)	$	4,440		$	(6,519	)	$	14,527		$	3,723

Average assets (denominator)	$	967,044		$	806,440		$	937,849		$	782,694
Tax-adjusted return on average assets		1.83	%		-3.21	%		3.11	%		0.64	%

Average shareholders' equity (denominator)	$	102,929		$	100,012		$	101,377		$	95,655
Tax-adjusted return on average shareholders' equity		17.16	%		-25.86	%		19.14	%		5.20	%

Average tangible common equity (denominator)	$	101,269		$	98,145		$	99,667		$	93,736
Tax-adjusted return on average tangible common equity		17.44	%		-26.35	%		19.47	%		5.31	%

Weighted average common shares outstanding basic (denominator)		9,228,128			10,149,007			9,483,540			10,174,528
Tax-adjusted net income per common share--basic	$	0.48		$	(0.64	)	$	1.53		$	0.37

Weighted average common shares outstanding diluted (denominator)		9,228,128			10,161,778			9,483,540			10,176,360
Tax-adjusted net income per common share--diluted	$	0.48		$	(0.64	)	$	1.53		$	0.37
Tangible assets
Total assets	$	973,354		$	826,821
Less: Goodwill and intangibles		(1,634	)		(1,840	)
Tangible assets	$	971,720		$	824,981

Tangible shareholders' equity
Total shareholders' equity	$	105,230		$	100,615
Less: Goodwill and intangibles		(1,634	)		(1,840	)
Tangible shareholders' equity	$	103,596		$	98,775

Tangible shareholders' equity
Tangible shareholders' equity (numerator)	$	103,596		$	98,775
Tangible assets (denominator)	$	971,720		$	824,981
Tangible common equity to tangible assets		10.66	%		11.97	%

End of period common shares outstanding		9,241,689			10,057,506
Book value per share	$	11.39		$	10.00
Tangible book value per share	$	11.21		$	9.82
Total shareholders' equity to total assets		10.81	%		12.17	%

	Net Interest Margin Excluding Loan Fee Income
	For the Three Months Ended September 30,
	2020							2019
	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Short-term investments⁽¹⁾	$	111,019	$	147		0.53	%	$	145,147	$	888		2.43	%
Investment securities⁽²⁾		1,138		2		0.70			1,069		4		1.48
Loans held for sale		425		—		0.00			265		—		0.00
Total loans⁽³⁾		847,076		11,699		5.49			651,186		11,338		6.91
Total interest-earning assets		959,658		11,848		4.91			797,667		12,230		6.08
Noninterest-earning assets		7,386							8,773
Total assets	$	967,044						$	806,440

Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts	$	381,572		545		0.57	%	$	287,241		1,234		1.70	%
Time deposits		200,961		780		1.54			220,935		1,237		2.22
Total interest-bearing deposits		582,533		1,325		0.90			508,176		2,471		1.93
Other borrowings		—		—		0.00			—		—		0.00
Total interest-bearing liabilities		582,533		1,325		0.90			508,176		2,471		1.93

Noninterest-bearing liabilities:
Noninterest-bearing deposits		276,219							193,785
Other noninterest-bearing liabilities		5,363							4,467
Total noninterest-bearing liabilities		281,582							198,252
Shareholders’ equity		102,929							100,012
Total liabilities and shareholders’ equity	$	967,044						$	806,440

Net interest income including loan fee income			$	10,523						$	9,759
Net interest spread including loan fee income⁽⁴⁾						4.01	%						4.15	%
Net interest margin including loan fee income						4.36	%						4.85	%

	Net Interest Margin With Loan Fee Income
	For the Three Months Ended September 30,
	2020							2019
	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Short-term investments⁽¹⁾	$	111,019	$	147		0.53	%	$	145,147	$	888		2.43	%
Investment securities⁽²⁾		1,138		2		0.70			1,069		4		1.48
Loans held for sale		425		—		0.00			265		—		0.00
Total loans⁽³⁾		847,076		12,777		6.00			651,186		12,179		7.42
Total interest-earning assets		959,658		12,926		5.36			797,667		13,071		6.50
Noninterest-earning assets		7,386							8,773
Total assets	$	967,044						$	806,440

Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts	$	381,572		545		0.57	%	$	287,241		1,234		1.70	%
Time deposits		200,961		780		1.54			220,935		1,237		2.22
Total interest-bearing deposits		582,533		1,325		0.90			508,176		2,471		1.93
Other borrowings		—		—		0.00			—		—		0.00
Total interest-bearing liabilities		582,533		1,325		0.90			508,176		2,471		1.93

Noninterest-bearing liabilities:
Noninterest-bearing deposits		276,219							193,785
Other noninterest-bearing liabilities		5,363							4,467
Total noninterest-bearing liabilities		281,582							197,252
Shareholders’ equity		102,929							100,012
Total liabilities and shareholders’ equity	$	967,044						$	806,440

Net interest income excluding loan fee income			$	11,601						$	10,600
Net interest spread excluding loan fee income⁽⁴⁾						4.45	%						4.57	%
Net interest margin excluding loan fee income						4.81	%						5.27	%

	Net Interest Margin Excluding Loan Fee Income
	For the Nine Months Ended September 30,
	2020							2019
	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance		Interest Income/ Expense		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Short-term investments⁽¹⁾	$	120,909	$	701		0.77	%	$	155,073	$	2,785		2.40	%
Investment securities⁽²⁾		1,109		21		2.53			1,062		27		3.40
Loans held for sale		258		—		0.00			219		—		0.00
Total loans⁽³⁾		807,134		35,299		5.84			617,398		32,404		7.02
Total interest-earning assets		929,410		36,021		5.18			773,752		35,216		6.09
Noninterest-earning assets		8,439							8,942
Total assets	$	937,849						$	782,694

Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts	$	366,162		2,259		0.82	%	$	289,306		3,924		1.81	%
Time deposits		208,650		2,769		1.77			206,575		3,254		2.11
Total interest-bearing deposits		574,812		5,028		1.17			495,881		7,178		1.94
Other borrowings		—		—		0.00			—		—		0.00
Total interest-bearing liabilities		574,812		5,028		1.17			495,881		7,178		1.94

Noninterest-bearing liabilities:
Noninterest-bearing deposits		256,429							186,379
Other noninterest-bearing liabilities		5,231							4,779
Total noninterest-bearing liabilities		261,660							191,158
Shareholders’ equity		101,377							95,655
Total liabilities and shareholders’ equity	$	937,849						$	782,694

Net interest income including loan fee income			$	30,993						$	28,038
Net interest spread including loan fee income⁽⁴⁾						4.01	%						4.15	%
Net interest margin including loan fee income						4.45	%						4.84	%

Dollars in thousands, exceper per share data	Unaudited as of
Assets	September 30,				December 31,
	2020		2019		2019

Cash and due from banks	$	60,718	$	110,594	$	117,128
Interest-bearing time deposits in other banks		23,384		31,890		30,147
Loans, net		869,448		666,755		699,458
Loans held for sale		315		-		1,031
Premises and equipment, net		9,387		8,395		9,624
Nonmarketable equity securities		1,165		1,072		1,100
Foreclosed assets held for sale		-		77		0
Goodwill and intangibles		1,634		1,840		1,789
Interest receivable and other assets		7,303		6,198		6,115

Total assets	$	973,354	$	826,821	$	866,392

Liabilities and Shareholders’ Equity

Deposits
Noninterest-bearing	$	272,008	$	202,989	$	219,221
Interest-bearing		591,661		519,145		538,262

Total deposits		863,669		722,134		757,483

Income taxes payable		565		-		357
Interest payable and other liabilities		3,890		4,072		8,426

Total liabilities		868,124		726,206		766,266

Common stock		92		101		101
Additional paid-in capital		92,960		92,353		92,391
Retained earnings		12,178		8,161		7,634

Total shareholders’ equity		105,230		100,615		100,126

Total liabilities and shareholders’ equity	$	973,354	$	826,821	$	866,392

	Unaudited as of
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
Dollars in thousands, exceper per share data	2020		2019			2020		2019
Interest Income
Loans, including fees	$	12,777	$	12,179		$	39,268	$	35,902
Interest-bearing time deposits in other banks		124		500			419		1,414
Interest-bearing deposits in other banks		26		392			303		1,398

Total interest income		12,927		13,071			39,990		38,714

Interest Expense
Deposits		1,326		2,471			5,028		7,178

Total interest expense		1,326		2,471			5,028		7,178

Net Interest Income		11,601		10,600			34,962		31,536

Provision for Loan Losses		1,250		-			3,300		-

Net Interest Income After Provision for Loan Losses		10,351		10,600			31,662		31,536

Noninterest Income
Secondary market income		57		69			134		146
Service charges on deposit accounts		104		110			318		279
Other		173		330			513		602

Total noninterest income		334		509			965		1,027

Noninterest Expense
Salaries and employee benefits		2,505		14,256			7,576		18,792
Furniture and equipment		224		229			658		606
Occupancy		543		436			1,417		1,157
Data and item processing		276		276			821		814
Accounting, marketing and legal fees		135		218			338		507
Regulatory assessments		164		31			281		94
Advertising and public relations		62		71			360		349
Travel, lodging and entertainment		50		153			146		287
Other		625		402			1,463		1,269

Total noninterest expense		4,584		16,072			13,060		23,875

Income Before Taxes		6,101		(4,963	)		19,567		8,688
Income tax expense		1,661		1,556			5,040		4,965
Net Income	$	4,440	$	(6,519	)	$	14,527	$	3,723

Earnings per common share - basic	$	0.48	$	(0.64	)	$	1.53	$	0.37
Diluted earnings per common share		0.48		(0.64	)		1.53		0.37
Weighted average common shares outstanding - basic		9,228,128		10,149,007			9,483,540		10,174,528
Weighted average common shares outstanding - diluted		9,228,128		10,161,778			9,483,540		10,176,360