8-K
Bank7 Corp. (BSVN)
View as plain text
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)
January 26, 2023
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<br><br> <br>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 January 26, 2023, Bank7 Corp. (the “Company”), the holding company for Bank7, issued a press release announcing its results of operation and financial condition for the quarter and year ended December 31, 2022. 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 January 26, 2023 at 9:00 am CST to discuss its fourth quarter and full year 2022 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 January 26, 2023 |
| 99.2 | Fourth Quarter and Full Year 2022 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: January 26, 2023 | By: | /s/ Kelly J. Harris |
| Kelly J. Harris | ||
| Executive Vice President and Chief Financial Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE: Bank7 Corp. Announces Q4 and Full Year 2022 Earnings
Oklahoma City, January 26, 2023 – Bank7 Corp. (NASDAQ: BSVN) ("the Company"), the parent company of Oklahoma City-based Bank7 (the "Bank"), today reported unaudited results for the quarter and year ended December 31, 2022. “We are pleased to announce record achievements for our full year and also the 4th quarter, as we reached new milestones in net income, PPE, and earnings per share. Our continued success is due to our broad and deep team of talented commercial bankers, and their commitment to disciplined credit fundamentals and pricing. We are blessed to be located in such a dynamic geographic area, and we are confident of our future as we maintain our focus on fundamentals and growing our company,” said Thomas L. Travis, President and CEO of the Company.
For the year ended December 31, 2022 compared to the year ended December 31, 2021:
| - | Net income of $29.6 million compared to $23.2 million, an increase of 27.98% |
|---|---|
| - | Earnings per share of $3.22 compared to $2.55, an increase of 26.27% |
| --- | --- |
| - | Total assets of $1.6 billion compared to $1.4 billion, an increase of 17.30% |
| --- | --- |
| - | Total loans of $1.3 billion compared to $1.0 billion, an increase of 23.54% |
| --- | --- |
| - | PPE of $43.9 million compared to $35.1 million, an increase of 24.97% |
| --- | --- |
| - | Total interest income of $78.7 million compared to $56.3 million, an increase of 39.90% |
| --- | --- |
Three months ended December 31, 2022 compared to three months ended September 30, 2022
| - | Net income of $8.4 million compared to $8.0 million, an increase of 4.29% |
|---|---|
| - | Earnings per share of $0.91 compared to $0.87, an increase of 4.60% |
| --- | --- |
| - | PPE of $13.0 million compared to $12.8 million, an increase of 1.74% |
| --- | --- |
| - | Total interest income of $25.5 million compared to $21.7 million, an increase of 17.39% |
| --- | --- |
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 December 31, 2022, the Bank’s Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 9.18%, 11.26%, and 12.42%, respectively. On December 31, 2022, on a consolidated basis, the Company’s Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 9.19%, 11.25%, and 12.41%, respectively. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators.
Bank7 Corp.
Consolidated Balance Sheets
| Assets | December 31,<br><br> <br>2021 | |||
|---|---|---|---|---|
| Cash and due from banks | 109,115 | $ | 195,359 | |
| Federal funds sold | - | 9,493 | ||
| Cash and cash equivalents | 109,115 | 204,852 | ||
| Interest-bearing time deposits in other banks | 5,474 | 3,237 | ||
| Available-for-sale debt securities | 173,165 | 84,808 | ||
| Loans, net of allowance for loan losses of 14,734 and 10,316 at December 31, 2022<br> and December 31, 2021, respectively | 1,255,722 | 1,018,085 | ||
| Loans held for sale, at fair value | - | 464 | ||
| Premises and equipment, net | 13,106 | 17,257 | ||
| Nonmarketable equity securities | 1,209 | 1,202 | ||
| Core deposit intangibles | 1,336 | 1,643 | ||
| Goodwill | 8,603 | 8,479 | ||
| Interest receivable and other assets | 16,439 | 10,522 | ||
| Total assets | 1,584,169 | $ | 1,350,549 | |
| Liabilities and Shareholders’ Equity | ||||
| Deposits | ||||
| Noninterest-bearing | 439,409 | $ | 366,705 | |
| Interest-bearing | 989,891 | 850,766 | ||
| Total deposits | 1,429,300 | 1,217,471 | ||
| Income taxes payable | 1,054 | - | ||
| Interest payable and other liabilities | 9,715 | 5,670 | ||
| Total liabilities | 1,440,069 | 1,223,141 | ||
| Shareholders’ equity | ||||
| Common stock, 0.01 par value; 50,000,000 shares authorized; shares issued and outstanding: <br> 9,131,973 and 9,071,417 at December 31, 2022 and December 31, 2021 respectively | 91 | 91 | ||
| Additional paid-in capital | 95,263 | 94,024 | ||
| Retained earnings | 58,049 | 33,149 | ||
| Accumulated other comprehensive income (loss) | (9,303 | ) | 144 | |
| Total shareholders’ equity | 144,100 | 127,408 | ||
| Total liabilities and shareholders’ equity | 1,584,169 | $ | 1,350,549 |
All values are in US Dollars.
| Twelve months ended<br><br> <br>December 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2022<br><br> <br>(unaudited) | 2021 | ||||||
| Interest Income | ||||||||
| Loans, including fees | 23,806 | $ | 14,391 | $ | 74,403 | $ | 55,768 | |
| Interest-bearing time deposits in other banks | 7 | 28 | 46 | 169 | ||||
| Debt securities, taxable | 688 | 143 | 2,313 | 143 | ||||
| Debt securities, tax-exempt | 87 | 31 | 360 | 31 | ||||
| Other interest and dividend income | 874 | 63 | 1,627 | 178 | ||||
| Total interest income | 25,462 | 14,656 | 78,749 | 56,289 | ||||
| Interest Expense | ||||||||
| Deposits | 5,081 | 677 | 9,322 | 3,053 | ||||
| Total interest expense | 5,081 | 677 | 9,322 | 3,053 | ||||
| Net Interest Income | 20,381 | 13,979 | 69,427 | 53,236 | ||||
| Provision for Loan Losses | 1,625 | 850 | 4,468 | 4,175 | ||||
| Net Interest Income After Provision for Loan Losses | 18,756 | 13,129 | 64,959 | 49,061 | ||||
| Noninterest Income | ||||||||
| Secondary market income | 91 | 182 | 486 | 435 | ||||
| Loss on sales and calls of available-for-sale debt securities | - | - | (127 | ) | - | |||
| Service charges on deposit accounts | 222 | 170 | 900 | 550 | ||||
| Other | 419 | 405 | 1,680 | 1,265 | ||||
| Total noninterest income | 732 | 757 | 2,939 | 2,250 | ||||
| Noninterest Expense | ||||||||
| Salaries and employee benefits | 4,892 | 3,298 | 17,040 | 11,983 | ||||
| Furniture and equipment | 334 | 232 | 1,468 | 883 | ||||
| Occupancy | 593 | 508 | 2,329 | 1,899 | ||||
| Data and item processing | 600 | 380 | 2,068 | 1,237 | ||||
| Accounting, marketing and legal fees | 203 | 353 | 984 | 800 | ||||
| Regulatory assessments | 371 | 140 | 1,344 | 604 | ||||
| Advertsing and public relations | 164 | 101 | 477 | 282 | ||||
| Travel, lodging and entertainment | 147 | 100 | 363 | 409 | ||||
| Other | 825 | 1,086 | 2,568 | 2,300 | ||||
| Total noninterest expense | 8,129 | 6,198 | 28,641 | 20,397 | ||||
| Income Before Taxes | 11,359 | 7,688 | 39,257 | 30,914 | ||||
| Income tax expense | 2,973 | 2,002 | 9,619 | 7,755 | ||||
| Net Income | 8,386 | $ | 5,686 | $ | 29,638 | $ | 23,159 | |
| Earnings per common share - basic | 0.92 | $ | 0.64 | $ | 3.26 | $ | 2.56 | |
| Earnings per common share - diluted | 0.91 | 0.63 | 3.22 | 2.55 | ||||
| Weighted average common shares outstanding - basic | 9,118,728 | 9,070,967 | 9,101,523 | 9,056,117 | ||||
| Weighted average common shares outstanding - diluted | 9,232,333 | 9,162,124 | 9,204,716 | 9,091,536 | ||||
| Other Comprehensive Income (Loss) | ||||||||
| Unrealized losses on securities, net of tax benefit of 0 and 0 for the three months ended <br> December 31, 2022 and 2021, respectively; 2.8 million and 0 for the twelve months ended <br> December 31, 2022 and 2021, respectively | 1,146 | $ | 144 | $ | (9,543 | ) | $ | 144 |
| Reclassification adjustment for realized (gain)loss included in net income, net of tax of 0 and<br> 0 for the three months ended December 31, 2022 and 2021, respectively; 31 and 0 for the<br> twelve months ended December 30, 2022 and 2021, respectively | - | - | 96 | - | ||||
| Other comprehensive loss | 1,146 | $ | 144 | $ | (9,447 | ) | $ | 144 |
| Comprehensive Income (Loss) | 9,532 | $ | 5,830 | $ | 20,191 | $ | 23,303 |
All values are in US Dollars.
| Net Interest Margin | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Twelve Months Ended December 31, | ||||||||||||||
| 2022<br><br> <br>(unaudited) | 2021 | |||||||||||||
| Average<br><br> <br>Balance | Interest<br><br> <br>Income/<br><br> <br>Expense | Average<br><br> <br>Yield/<br><br> <br>Rate | Average<br><br> <br>Balance | Interest<br><br> <br>Income/<br><br> <br>Expense | Average<br><br> <br>Yield/<br><br> <br>Rate | |||||||||
| (Dollars in thousands) | ||||||||||||||
| Interest-Earning Assets: | ||||||||||||||
| Short-term investments | $ | 129,624 | $ | 1,673 | 1.29 | % | $ | 126,136 | $ | 347 | 0.28 | % | ||
| Investment securities, taxable | 145,915 | 2,313 | 1.59 | 4,663 | 143 | 3.07 | ||||||||
| Debt securities, tax exempt | 21,635 | 360 | 1.66 | 1,852 | 31 | 1.67 | ||||||||
| Loans held for sale | 586 | - | - | 318 | - | - | ||||||||
| Total loans(1) | 1,143,380 | 74,403 | 6.51 | 905,804 | 55,768 | 6.16 | ||||||||
| Total interest-earning assets | 1,441,140 | 78,749 | 5.46 | 1,038,773 | 56,289 | 5.42 | ||||||||
| Noninterest-earning assets | 23,532 | 7,361 | ||||||||||||
| Total assets | $ | 1,464,672 | $ | 1,046,134 | ||||||||||
| Funding sources: | ||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||
| Deposits: | ||||||||||||||
| Transaction accounts | $ | 724,617 | 7,842 | 1.08 | % | $ | 430,268 | 1,396 | 0.32 | % | ||||
| Time deposits | 165,735 | 1,480 | 0.89 | 205,437 | 1,657 | 0.81 | ||||||||
| Total interest-bearing deposits | 890,352 | 9,322 | 1.05 | 635,705 | 3,053 | 0.48 | ||||||||
| Total interest-bearing liabilities | 890,352 | 9,322 | 1.05 | 635,705 | 3,053 | 0.48 | ||||||||
| Noninterest-bearing liabilities: | ||||||||||||||
| Noninterest-bearing deposits | 432,901 | 288,446 | ||||||||||||
| Other noninterest-bearing liabilities | 7,520 | 4,930 | ||||||||||||
| Total noninterest-bearing liabilities | 440,421 | 293,376 | ||||||||||||
| Shareholders' equity | 133,899 | 117,053 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 1,464,672 | $ | 1,046,134 | ||||||||||
| Net interest income | $ | 69,427 | $ | 53,236 | ||||||||||
| Net interest spread | 4.42 | % | 4.94 | % | ||||||||||
| Net interest margin | 4.82 | % | 5.12 | % | ||||||||||
| (1) | Nonaccrual loans are included in total loans | |||||||||||||
| --- | --- |
| For the Three Months Ended December 31, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022<br><br> <br>(unaudited) | 2021 | |||||||||||||
| Average<br><br> <br>Balance | Interest<br><br> <br>Income/<br><br> <br>Expense | Average<br><br> <br>Yield/<br><br> <br>Rate | Average<br><br> <br>Balance | Interest<br><br> <br>Income/<br><br> <br>Expense | Average<br><br> <br>Yield/<br><br> <br>Rate | |||||||||
| (Dollars in thousands) | ||||||||||||||
| Interest-Earning Assets: | ||||||||||||||
| Short-term investments | $ | 101,427 | $ | 881 | 3.45 | % | $ | 130,106 | $ | 91 | 0.23 | % | ||
| Debt securities, taxable-equivalent | 154,869 | 688 | 1.76 | 14,992 | 143 | 3.78 | ||||||||
| Debt securities, tax exempt | 20,247 | 87 | 1.70 | 7,349 | 31 | 16.67 | ||||||||
| Loans held for sale | 291 | - | - | 1,090 | - | - | ||||||||
| Total loans(1) | 1,262,864 | 23,806 | 7.48 | 959,243 | 14,391 | 5.95 | ||||||||
| Total interest-earning assets | 1,539,698 | 25,462 | 6.56 | 1,112,780 | 14,656 | 5.23 | ||||||||
| Noninterest-earning assets | 21,937 | 11,613 | ||||||||||||
| Total assets | $ | 1,561,635 | $ | 1,124,393 | ||||||||||
| Funding sources: | ||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||
| Deposits: | ||||||||||||||
| Transaction accounts | $ | 798,073 | 4,491 | 2.23 | % | $ | 490,739 | 373 | 0.30 | % | ||||
| Time deposits | 157,211 | 590 | 1.49 | 183,867 | 304 | 0.66 | ||||||||
| Total interest-bearing deposits | 955,284 | 5,081 | 2.11 | 674,606 | 677 | 0.40 | ||||||||
| Total interest-bearing liabilities | $ | 955,284 | 5,081 | 2.11 | $ | 674,606 | 677 | 0.40 | ||||||
| Noninterest-bearing liabilities: | ||||||||||||||
| Noninterest-bearing deposits | $ | 457,753 | $ | 320,290 | ||||||||||
| Other noninterest-bearing liabilities | 8,683 | 5,181 | ||||||||||||
| Total noninterest-bearing liabilities | 466,436 | 325,471 | ||||||||||||
| Shareholders' equity | 139,915 | 124,316 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 1,561,635 | $ | 1,124,393 | ||||||||||
| Net interest income | $ | 20,381 | $ | 13,979 | ||||||||||
| Net interest spread | 4.46 | % | 4.83 | % | ||||||||||
| Net interest margin | 5.25 | % | 4.98 | % | ||||||||||
| (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 results, which will be broadcast live over the Internet, on Thursday, January 26, 2023 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/ARZ9lenLgOm. For those not able to participate in the live call, an archive of the webcast will be available at https://app.webinar.net/ARZ9lenLgOm 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.
Contact:
Thomas Travis
President & CEO
(405) 810-8600
Exhibit 99.2
BSVN Q4 and Year End 2022 EARNINGS RELEASE January 26, 2023
1 BSVN – Corporate Overview Dollars in thousands, all data as of December 31, 2022, unless indicated otherwise (1) Core loans is a non-GAAP financial measure and is defined as total loans less PPP loans of $2.6, $2.6, and $18.7 million for December 31, 2022, September 30, 2022, and December 30,2021, respectively Consistently ranked by S & P Global Market Intelligence as one of the Top Performing Community Banks in the United States Disciplined credit culture that adheres to a robust risk management framework resulting in excellent credit quality and a history of low loan losses 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 Continued focus on organic growth in our geographic footprint, while pursuing strategic acquisitions Shareholder alignment due to 58% insider ownership
2 BSVN – Record Year Dollars in thousands, all data as of December 31,2022, unless indicated otherwise (1) Core loans is a non-GAAP financial measure and is defined as total loans less PPP loans of $14.2, $9.9, $2.6, $2.6, and $18.7 million for March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, and December 30,2021, respectively (2) Represents a non-GAAP financial measure, see non-GAAP reconciliations table for reconciliation to the most comparable GAAP measure for this metric How this was accomplished: Record earnings, while also increasing ALLL No share repurchases – EPS growth a function of strong earnings Record organic loan growth Disciplined loan and deposit pricing Virtually no NCOs Seamless integration of Watonga Bancshares and retention of core deposits Achieved new records in PPE, net income and EPS
3 Q4 Overview Dollars in thousands, all data as of December 31,2022, unless indicated otherwise Net Interest Margin Consistency Net interest margin, excluding loan fee income, increased 27 bps or 5.87% in Q4 – attributable to strong loan growth, disciplined loan pricing, and our asset sensitive balance sheet Continued success in capturing non-interest bearing relationship deposits, further enhancing our strong balance sheet liquidity Sound Capital Management Record PPE, Net Income, and EPS Capital ratios remain strong in spite of our all-cash acquisition in 2021, the increase to our cash dividend, and strong organic balance sheet growth 33% increase in our dividend, the 3rd consecutive yearly increase Tier 1 Leverage: 9.19% Risk Based Capital: 12.41% Driven by continued strong organic loan growth and disciplined loan pricing EPS results were achieved through core earnings with no share repurchases
4 Exceptional Capital & EPS Growth Tangible Book Value Per Share 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 CAGR since 2018: 17.2% Diluted Earnings Per Share (1) Pro Forma 4.6% increase Consistently strong earnings increased TBV despite three factors: $0.85 per share paid for an all-cash acquisition in Q4 2021 $0.99 per share AOCI unrealized loss from investments $1.98 per share paid in cash dividends $ 0.81 Record EPS: $0.91 for Q4, a 4.60% increase from Q3 $3.22 for 2022, a 26.27% increase from 2021 No share repurchases in 2022 26.3% increase
2.51% Pro Forma Pro Forma Reliable Top Performer Return on Average Assets (1)(2) Return on Average Tangible Common Equity (1) (2) Dollars are in millions Financial data is as of or for the twelve months ended December 31 of each respective year and December 31, 2022 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 Appendix for reconciliation to the most comparable GAAP measures for these metrics Efficiency Ratio (2) ROATCE of 23.93% for 2022, an 18.83% increase compared to 2021 As expected, the Q4 2021 acquisition of Watonga Bancshares caused a temporary decline in ROAA and a slight increase in our efficiency ratio; however, by year-end both metrics had returned to historical ranges 5 38.3% 20.9% Pro Forma 5 year average: 22.1% 5 year average: 2.3% 5 year average: 37.5%
6 Income Statement as a Percentage of Average Assets Dollars are in thousands Peer group is defined as exchange-traded banks nationwide with assets between $500mm-$5bn (151 banks); Source: S&P Global Market Intelligence. Excludes one-time, non-cash executive stock transfer compensation expense of $11.8 million. As of Q3 2022, the latest data available. PPE to Average Assets vs Peers (3)
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 September 30, and December 31, 2022 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 in a non-GAAP financial measure. See appendix for reconciliation to their most comparable GAAP measure 24.9% increase YoY Strength in Core Earnings PPE 7 $26.8 Pro Forma Record PPE of $43.85 million, an increase of $8.76 million or 24.97% compared to 2021 Strong PPE growth was driven by: Loan growth (Q1-Q4) Disciplined pricing (Q1-Q4) Rising rates and an asset sensitive balance sheet (Q3-Q4) We scale and achieve maximum productivity by: Utilizing a branch-lite model Hiring fewer but better FTEs Operating an efficient delivery system and a strict adherence to process Maximizing Our Employee Base(2) 3.56% Actual Pro Forma (1) (1)
CAGR Since 2014: 16.1% 8 Total Assets Strategic Growth in Dynamic Markets 2015 LPO opened in Irving, TX 2019 LPO opened in Tulsa, OK, full service branch opened in Frisco, TX 2020 Full service branch opened in Tulsa, OK 2017 Full service branch opened in Irving, TX 2014 Kansas acquisition 2018 Completed IPO 2021 Oklahoma acquisition Dollars are in millions
CAGR since 2018: 20.6% Loan Portfolio Trends – Selected Categories 9 Broad & Deep Loan Growth Dollars are in millions
CAGR since 2018: 20.6% 10 Historical Deposit Growth Deposit Growth & Composition YoY total deposits increased $211.8 million or 17.40% Proven ability to grow demand deposits the right way, in core and non-interest bearing accounts Deposit Composition Dollars are in millions
Consistent Net Interest Margin Financial data is as of or for the three months ended September 30 and December 31, 2022 and as of or for the twelve months ended of each respective year 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 continued to show strength due to strong loan growth, disciplined commercial bankers, and to a lesser extent, our asset sensitive balance sheet 11
Loan Portfolio Distribution Dollars are in millions. Data as of December 31, 2022 12
13 Net Charge-Offs to Average Loans Low historical charge-offs due to: Disciplined approach to lending Geographic footprint in high growth metros with thriving economies (OK and TX) Management team with long history of making loans with low historical loss levels Tenured lending staff with over 90% of loan balances generated by lending professionals that have worked with the executive team for > 5 years and 64% of balances from team members with > 10 years common experience
Hospitality Loan Portfolio Detail 14 Hotel Portfolio by Class 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 (87%) 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 Hotel Portfolio by Location Dollars are in millions, data as of December 31, 2022
15 Earnings-driven cushion far exceeds regulatory capital minimums as illustrated over a two-year period, consistent with DFAST parameters(1) Dollars are in thousands The 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 $43.8 million extrapolated over two years Earnings-driven Capital Shock-absorption
Appendix
17 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 tax periods; EPS calculation is based on diluted shares and combined federal and state effective tax rate for the three months ended December 31, September 30, June 30, and March 31, 2022 of 26.2, 22.7%, 24.5%, and 24.5%, 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 21 of this presentation
18 Bank7 Corp. Performance Ratios Return on average assets and shareholder’s 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 December 31, 2022, Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 9.19%, 11.25%, and 12.41% 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 21 of this presentation
19 Non-GAAP Reconciliations
Investment Portfolio Available-for-Sale Securities Portfolio Dollars are in millions. All of our 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 $173 million as of December 31, 2022 20 Weighted Average Duration : 2.9 Years Book Yield: 1.69% (1)
21 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.
22 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 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.