Bank7 Corp. Announces Record 2Q 2019 Earnings

OKLAHOMA CITY, July 26, 2019 /PRNewswire/ -- Bank7 Corp. BSVN ("the Company"), the parent company of Oklahoma City-based Bank7 (the "Bank"), today reported unaudited results for the fiscal quarter ended June 30, 2019. "We are pleased to announce record pre-tax income for our second quarter results. Our second quarter performance shows continued balance sheet growth, especially in our core deposits and total loans. That growth, combined with our excellent efficiency ratio and asset quality, continues to produce outstanding returns in both average assets and average tangible common equity. These results were achieved despite incurring additional costs related to our status as a public company as well as the addition of our Tulsa location and a second Dallas area location," said Thomas L. Travis, President and CEO of the Company.

Bank7 Logo (PRNewsfoto/Bank7 Corp.)

Three months ended June 30, 2019 compared to three months ended June 30, 2018:

  • Pre-tax income of $6.8 million, a 7.07% increase
  • Tax-adjusted income of $5.1 million, a 5.88% increase
  • Interest income on loans, including loan fee income, totaled $12.1 million, a 14.34% increase
  • Average loans of $613.9 million, a 7.32% increase

Six months ended June 30, 2019 compared to six month ended June 30, 2018:

  • Pre-tax income of $13.7 million, a 7.26% increase
  • Tax-adjusted income of $10.2 million, a 7.37% increase
  • Interest income on loans, including loan fee income, totaled $23.7 million, a 10.81% increase
  • Average loans of $600.2 million, a 5.50% increase
  • Total loans of $631.5 million, a 7.16% increase
  • Core deposits of $615.4 million, a 18.84% increase
  • Efficiency ratio of 36.4%, compared to 36.6%

Both the Bank's and the Company's capital levels continue to be significantly above the minimum levels required to be designated as "well-capitalized" for regulatory purposes. At June 30, 2019 the Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 12.35%, 15.91%, and 17.16% respectively for the Bank. At June 30, 2019 the Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 12.22%, 15.75%, and 17.00% respectively for the Company on a consolidated basis. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators.

Pre-tax, pre-provision net income is defined as income before taxes and provision for loan losses.  We believe the most directly comparable GAAP financial measure is income before taxes.  Disclosure of this measure enables you to compare our operations to those of other banking companies before consideration of taxes and provision expense, which some investors may consider to be a more appropriate comparison given our S Corporation status prior to September 2018. We calculate our tax-adjusted net income, return on average assets, and return on average equity, and per share amounts by using a combined C Corporation effective tax rate for federal and state income taxes of 25.0% and 24.1% in the second quarter of 2019 and 2018, respectively. This calculation illustrates only the change from our status as a S Corporation into a C Corporation and does not give effect to any other transaction. However, 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 

June 30





Six months ended

June 30,



(Dollars in thousands, except per share data)



2019





2018





2019





2018



Loan interest income (excluding loan fees)

























Total loan interest income, including loan fee income



$

12,101





$

10,583





$

23,723





$

21,408



Loan fee income





(1,369)







(1,117)







(2,658)







(2,949)



Loan interest income excluding loan fee income



$

10,732





$

9,466





$

21,065





$

18,459





































Average total loans



$

613,892





$

572,003





$

600,224





$

569,082



Yield on loans (including loan fee income)





7.91

%





7.42

%





7.97

%





7.53

%

Yield on loans (excluding loan fee income)





7.01

%





6.64

%





7.08

%





6.49

%



































Net interest margin (excluding loan fees)

































Net interest income



$

10,583





$

9,439





$

20,936





$

19,300



Loan fee income





(1,369)







(1,117)







(2,658)







(2,949)



Net interest income excluding loan fees



$

9,214





$

8,322





$

18,278





$

16,351





































Average earning assets



$

777,190





$

704,245





$

761,607





$

697,905



Net interest margin (including loan fee income)





5.46

%





5.38

%





5.54

%





5.53

%

Net interest margin (excluding loan fee income)





4.76

%





4.74

%





4.84

%





4.69

%



































Pre-tax, pre-provision net earnings

































Net income before income taxes



$

6,830





$

6,379





$

13,651





$

12,728



Plus: Provision (reversal of) for loan losses





-







-







-







(100)



Pre-tax, pre-provision net earnings



$

6,830





$

6,379





$

13,651





$

12,828





































Adjusted provision for income tax

































Net income before income taxes



$

6,830





$

6,379





$

13,651





$

12,728



Total effective adjusted tax rate





25.0

%





24.1

%





25.0

%





25.1

%

Adjusted provision for income taxes



$

1,704





$

1,538





$

3,409





$

3,189





































Tax-adjusted net income

































Net income before income taxes



$

6,830





$

6,379





$

13,651





$

12,728



Adjusted provision for income taxes





1,704







1,538







3,409







3,189



Tax-adjusted net income



$

5,126





$

4,841





$

10,242





$

9,539





































Tax-adjusted ratios and per share data

































Tax-adjusted net income (numerator)



$

5,126





$

4,841





$

10,242





$

9,539





































Average assets (denominator)



$

786,773





$

712,827





$

770,621





$

706,560



Tax-adjusted return on average assets





2.61

%





2.72

%





2.68

%





2.72

%



































Average shareholders' equity (denominator)



$

96,044





$

75,350





$

93,443





$

73,395



Tax-adjusted return on average shareholders' equity





21.41

%





25.77

%





22.10

%





25.99

%



































Average tangible common equity (denominator)



$

94,128





$

73,223





$

91,498





$

71,241



Tax-adjusted return on average tangible common equity





21.84

%





26.52

%





22.57

%





27.00

%



































Weighted average common shares outstanding basic (denominator)





10,187,500







7,287,500







10,187,500







7,287,500



Tax-adjusted net income per common share--basic





0.50







0.66







1.00







1.31





































Weighted average common shares outstanding diluted (denominator)





10,192,649







7,287,500







10,187,500







7,287,500



Tax-adjusted net income per common share--diluted





0.50







0.66







1.00







1.31





































Tangible assets

































Total assets



$

798,448





$

727,607



















Less: Goodwill and intangibles





(1,892)







(2,098)



















Tangible assets



$

796,556





$

725,509





















































Tangible shareholders' equity

































Total shareholders' equity



$

99,037





$

77,553



















Less: Goodwill and intangibles





(1,892)







(2,098)



















Tangible shareholders' equity



$

97,145





$

75,455





















































Tangible shareholders' equity

































Tangible shareholders' equity (numerator)



$

97,145





$

75,455



















Tangible assets (denominator)



$

796,556





$

725,509



















Tangible common equity to tangible assets





12.20

%





10.40

%



















































End of period common shares outstanding





10,187,500







7,287,500



















Book value per share



$

9.72





$

10.64



















Tangible book value per share



$

9.54





$

10.35



















Total shareholders' equity to total assets





12.40

%





10.66

%

















 





Net Interest Margin Excluding Loan Fee Income







For the Three Months Ended June 30,







2019





2018







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)



$

162,056





$

941







2.33

%



$

131,084





$

554







1.70

%

Investment securities(2)





1,063







24







9.06







1,051













0.00



Loans held for sale





179













0.00







107













0.00



Total loans(3)





613,892







10,732







7.01







572,003







9,466







6.64



Total interest-earning assets





777,190







11,697







6.04







704,245







10,020







5.71



Noninterest-earning assets





9,583























8,582



















Total assets



$

786,773





















$

712,827





































































Funding sources:

















































Interest-bearing liabilities:

















































Deposits:

















































Transaction accounts



$

294,926







1,388







1.89

%



$

232,128







794







1.37

%

Time deposits





205,978







1,095







2.13







232,925







846







1.46



Total interest-bearing deposits





500,904







2,483







1.99







465,053







1,640







1.41



Other borrowings

















0.00







4,800







58







4.85



Total interest-bearing liabilities





500,904







2,483







1.99







469,853







1,698







1.45





















































Noninterest-bearing liabilities:

















































Noninterest-bearing deposits





185,715























163,815



















Other noninterest-bearing liabilities





4,110























3,809



















Total noninterest-bearing liabilities





189,825























167,624



















Shareholders' equity





96,044























75,350



















Total liabilities and shareholders' equity



$

786,773





















$

712,827





































































Net interest income excluding loan fee income











$

9,214





















$

8,322











Net interest spread excluding loan fee income(4)





















4.05

%





















4.26

%

Net interest margin excluding loan fee income





















4.76

%





















4.74

%



















































(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 With Loan Fee Income







For the Three Months Ended June 30,







2019





2018







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)



$

162,056





$

941







2.33

%



$

131,084





$

554







1.70

%

Investment securities(2)





1,063







24







9.06







1,051













0.00



Loans held for sale





179













0.00







107













0.00



Total loans(3)





613,892







12,101







7.91







572,003







10,583







7.42



Total interest-earning assets





777,190







13,066







6.74







704,245







11,137







6.34



Noninterest-earning assets





9,583























8,582



















Total assets



$

786,773





















$

712,827





































































Funding sources:

















































Interest-bearing liabilities:

















































Deposits:

















































Transaction accounts



$

294,926







1,388







1.89

%



$

232,128







794







1.37

%

Time deposits





205,978







1,095







2.13







232,925







846







1.46



Total interest-bearing deposits





500,904







2,483







1.99







465,053







1,640







1.41



Other borrowings

















0.00







4,800







58







4.85



Total interest-bearing liabilities





500,904







2,483







1.99







469,853







1,698







1.45





















































Noninterest-bearing liabilities:

















































Noninterest-bearing deposits





185,715























163,815



















Other noninterest-bearing liabilities





4,110























3,809



















Total noninterest-bearing liabilities





189,825























167,624



















Shareholders' equity





96,044























75,350



















Total liabilities and shareholders' equity



$

786,773





















$

712,827





































































Net interest income including loan fee income











$

10,583





















$

9,439











Net interest spread including loan fee income(4)





















4.75

%





















4.89

%

Net interest margin including loan fee income





















5.46

%





















5.38

%



















































(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,







2019





2018







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)



$

160,129





$

1,896







2.39

%



$

127,773





$

1,069







1.67

%

Investment securities(2)





1,059







24







4.57







1,050













0.00



Loans held for sale





195













0.00







143













0.00



Total loans(3)





600,224







21,065







7.08







568,939







18,459







6.49



Total interest-earning assets





761,607







22,985







6.09







697,905







19,528







5.60



Noninterest-earning assets





9,014























8,655



















Total assets



$

770,621





















$

706,560





































































Funding sources:

















































Interest-bearing liabilities:

















































Deposits:

















































Transaction accounts



$

290,204







2,687







1.87

%



$

221,490







1,406







1.27

%

Time deposits





199,276







2,020







2.04







238,093







1,653







1.39



Total interest-bearing deposits





489,480







4,707







1.94







459,583







3,059







1.33



Other borrowings

















0.00







5,083







118







4.64



Total interest-bearing liabilities





489,480







4,707







1.94







464,666







3,177







1.37





















































Noninterest-bearing liabilities:

















































Noninterest-bearing deposits





182,760























164,934



















Other noninterest-bearing liabilities





4,938























3,565



















Total noninterest-bearing liabilities





187,698























168,499



















Shareholders' equity





93,443























73,395



















Total liabilities and shareholders' equity



$

770,621





















$

706,560





































































Net interest income excluding loan fee income











$

18,278





















$

16,351











Net interest spread excluding loan fee income(4)





















4.15

%





















4.23

%

Net interest margin excluding loan fee income





















4.84

%





















4.69

%



















































(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 With Loan Fee Income







For the Six Months Ended June 30,







2019





2018







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)



$

160,129





$

1,896







2.39

%



$

127,773





$

1,069







1.67

%

Investment securities(2)





1,059







24







4.57







1,050













0.00



Loans held for sale





195













0.00







143













0.00



Total loans(3)





600,224







23,723







7.97







568,939







21,408







7.53



Total interest-earning assets





761,607







25,643







6.79







697,905







22,477







6.44



Noninterest-earning assets





9,014























8,655



















Total assets



$

770,621





















$

706,560





































































Funding sources:

















































Interest-bearing liabilities:

















































Deposits:

















































Transaction accounts



$

290,204







2,687







1.87

%



$

221,490







1,406







1.27

%

Time deposits





199,276







2,020







2.04







238,093







1,653







1.39



Total interest-bearing deposits





489,480







4,707







1.94







459,583







3,059







1.33



Other borrowings

















0.00







5,083







118







4.64



Total interest-bearing liabilities





489,480







4,707







1.94







464,666







3,177







1.37





















































Noninterest-bearing liabilities:

















































Noninterest-bearing deposits





182,760























164,934



















Other noninterest-bearing liabilities





4,938























3,565



















Total noninterest-bearing liabilities





187,698























168,499



















Shareholders' equity





93,443























73,395



















Total liabilities and shareholders' equity



$

770,621





















$

706,560





































































Net interest income including loan fee income











$

20,936





















$

19,300











Net interest spread including loan fee income(4)





















4.85

%





















5.07

%

Net interest margin including loan fee income





















5.54

%





















5.53

%



















































(1)

Includes income and average balances for fed funds sold, interest-earning deposits in banks and other miscellaneous interest-earning assets.





(2)

Includes income and average balances for FHLB and FRB stock.





(3)

Non-accrual loans are included in loans.





(4)

Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

 

Bank7 Corp.

Consolidated Balance Sheets



Dollars in thousands, exceper per share data



Unaudited as of









Assets



June 30,





June 30,





December 31,







2019





2018





2018























Cash and due from banks



$

123,763





$

96,935





$

128,090



Interest-bearing time deposits in other banks





32,632







30,663







31,759



Loans, net





623,614







581,551







592,078



Loans held for sale





8







840







512



Premises and equipment, net





8,757







9,282







7,753



Nonmarketable equity securities





1,069







1,053







1,055



Foreclosed assets held for sale





188







150







110



Goodwill and intangibles





1,892







2,098







1,995



Interest receivable and other assets





6,525







5,035







7,159





























Total assets



$

798,448





$

727,607





$

770,511





























Liabilities and Shareholders' Equity



















































Deposits

























Noninterest-bearing



$

190,092





$

168,920





$

201,159



Interest-bearing





505,963







472,899







474,743





























Total deposits





696,055







641,819







675,902





























Borrowings





-







4,800







-



Income taxes payable





20







-







1,913



Interest payable and other liabilities





3,336







3,435







4,229





























Total liabilities





699,411







650,054







682,044





























Common stock





102







73







102



Additional paid-in capital





80,604







6,987







80,275



Retained earnings





18,331







70,493







8,090





























Total shareholders' equity





99,037







77,553







88,467





























Total liabilities and shareholders' equity



$

798,448





$

727,607





$

770,511



 

Bank7 Corp.

Consolidated Statements of Income







Unaudited as of







Three Months Ended





Six Months Ended







June 30,





June 30,



Dollars in thousands, exceper per share data



2019





2018





2019





2018



Interest Income







Loans, including fees



$

12,101





$

10,583





$

23,723





$

21,408



Interest-bearing time deposits in other banks





497







142







914







291



Interest-bearing deposits in other banks





468







412







1,006







778





































Total interest income





13,066







11,137







25,643







22,477





































Interest Expense

































Deposits





2,483







1,640







4,707







3,059



Other borrowings





-







58







-







118





































Total interest expense





2,483







1,698







4,707







3,177





































Net Interest Income





10,583







9,439







20,936







19,300





































Provision for Loan Losses





-







-







-







100





































Net Interest Income After Provision for Loan Losses





10,583







9,439







20,936







19,200





































Noninterest Income

































Secondary market income





40







38







77







78



Service charges on deposit accounts





109







93







169







173



Other





146







355







272







499





































Total noninterest income





295







486







518







750





































Noninterest Expense

































Salaries and employee benefits





2,365







1,845







4,536







3,995



Furniture and equipment





218







152







377







309



Occupancy





378







288







721







579



Data and item processing





276







235







538







468



Accounting, marketing and legal fees





142







110







289







144



Regulatory assessments





31







125







63







251



Advertising and public relations





92







163







278







350



Travel, lodging and entertainment





92







165







134







358



Other





454







463







867







768





































Total noninterest expense





4,048







3,546







7,803







7,222





































Income Before Taxes





6,830







6,379







13,651







12,728



Income tax expense





1,704







-







3,409







-



Net Income



$

5,126





$

6,379





$

10,242





$

12,728





































Earnings per common share - basic



$

0.50





$

0.88





$

1.00





$

1.75



Diluted earnings per common share





0.50







0.88







1.00







1.75



Weighted average common shares outstanding - basic





10,187,500







7,287,500







10,187,500







7,287,500



Weighted average common shares outstanding - diluted





10,192,649







7,287,500







10,187,500







7,287,500



About Bank7 Corp.

We are Bank7 Corp., a bank holding company headquartered in Oklahoma City, Oklahoma. Through our wholly-owned subsidiary, Bank7, we operate nine locations in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area and Kansas. We are focused on serving business owners and entrepreneurs by delivering fast, consistent and well-designed loan and deposit products to meet their financing needs. We intend to grow organically by selectively opening additional branches in our target markets as well as pursue strategic acquisitions.

Conference call

Bank7 Corp. has scheduled a conference call to discuss its second quarter 2019 results, which will be broadcast live over the Internet, on Friday, July 26, 2019 at 12:00 p.m. Eastern Time. To participate in the call, dial 1-888-348-6421, or access it live over the Internet at https://services.choruscall.com/links/bsvn190726.html. For those who cannot listen to the live call, a replay will be available through August 9, 2019 and may be accessed by dialing 1-877-344-7529 and using pass code 10133291. Also, an archive of the webcast will be available shortly after the call at https://services.choruscall.com/links/bsvn190726.html 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 direct and indirect effect of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators.  Bank7 Corp. has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that Bank7 Corp. believes may affect its financial condition, results of operations, business strategy and financial needs. Bank7 Corp.'s actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. If one or more events related to these or other risks or uncertainties materialize, or if Bank7 Corp.'s underlying assumptions prove to be incorrect, actual results may differ materially from what Bank7 Corp. anticipates. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made and Bank7 Corp. undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required by law. All forward-looking statements herein are qualified by these cautionary statements.

About Non-GAAP Financial Measures

This communication includes certain non-GAAP financial measures, including tax-adjusted net income, tax-adjusted earnings per share, tax-adjusted return on average assets and tax-adjusted return on average shareholders' equity. These non-GAAP financial measures and any other non-GAAP financial measures that we discuss in this presentation should not be considered in isolation, and should be considered as additions to, and not substitutes for or superior to, measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Bank7 Corp.'s non-GAAP financial measures as tools for comparison. See the table above in this communication for a reconciliation of the non-GAAP financial measures used in (or conveyed orally during) this communication to their most directly comparable GAAP financial measures.

Contact:

Thomas Travis

President & CEO

(405) 810-8600

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/bank7-corp-announces-record-2q-2019-earnings-300891544.html

SOURCE Bank7

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