PR Newswire | Jan 29, 2021 09:01AM EST

01/29 08:00 CST

Bank7 Corp. Announces 4Q and Full Year 2020 Earnings OKLAHOMA CITY, Jan. 29, 2021

OKLAHOMA CITY, Jan. 29, 2021 /PRNewswire/ -- Bank7 Corp. (NASDAQ: BSVN) ("the Company"), the parent company of Oklahoma City-based Bank7 (the "Bank"), today reported unaudited results for the fiscal quarter and year ended December 31, 2020. "We are pleased to report continued strength in our asset quality and liquidity components, and also to report a record level of PPE for our Company. Strong PPE enabled us to make meaningful increases to our ALLL, repurchase shares at a discount to book value, and increase our cash dividend, all while maintaining higher levels of capital compared to the industry mean. We benefit from the strong economy in our region, and feel positive about our future; nonetheless, there is still much uncertainty and business activity is somewhat muted, therefore we will continue to use caution moving forward," said Thomas L. Travis, President and CEO of the Company.

Three months ended December 31, 2020 compared to three months ended December 31, 2019:

* Pre-tax, pre-provision earnings of $8.4 million, an increase of 31.60% * Interest income on loans, including loan fee income, totaled $13.2 million, an increase of 7.18% * Cost of funds of 0.51%, a decrease of 59.53% * Efficiency ratio of 35.13%, compared to 41.74%

For the year ended December 31, 2020 compared to the year ended December 31, 2019:

* Pre-tax, pre-provision earnings of $31.2 million, an increase of 16.25%, excluding the one-time, non-cash executive stock transaction expense in Q3 2019. * Interest income on loans, including loan fee income, totaled $52.4 million, an increase of 8.82% * Cost of funds of 0.73%, a decrease of 46.71% * Total assets of $1.0 billion, an increase of 17.35% * Total loans of $824.1 million, an increase of 18.23% * Total deposits of $905.5 million, an increase of 19.54%

Both the Bank's and the Company's capital levels continue to be significantly above the minimum levels required to be designated as "well-capitalized" for regulatory purposes. On December 31, 2020, the Bank's Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.78%, 13.51%, and 14.75% respectively. On December 31, 2020, on a consolidated basis, the Company's Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.77%, 13.50%, and 14.73% respectively. Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators.

Pre-tax, pre-provision earnings is defined as income before taxes and provision for loan losses. We believe the most directly comparable GAAP financial measure is income before taxes. Disclosure of this measure enables you to compare our operations to those of other banking companies before consideration of taxes and provision expense. We calculate our tax-adjusted net income, return on average assets, and return on average equity, and per share amounts by using a combined effective tax rate for federal and state income taxes of 25.6% and 45.4% in 2020 and 2019, respectively. We acknowledge that our non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those we use for non-GAAP financial measures we disclose, but may calculate them differently. You should understand how we and other companies each calculate their non-GAAP financial measures when making comparisons. The following reconciliation table provides a more detailed analysis of these non-GAAP financial measures:

Three months ended For the Year ended December 31, December 31,

(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 $ 13,182 $ 12,299 $ 52,450 $ 48,200

Loan fee income (1,066) (944) (5,035) (4,443)

Loan interest income excluding loan fee income $ 12,116 $ 11,355 $ 47,415 $ 43,757

Average total loans $ 871,163 $ 692,286 $ 823,228 $ 636,274

Yield on loans (including loan fee income) 6.02% 7.05% 6.37% 7.58%

Yield on loans (excluding loan fee income) 5.53% 6.51% 5.76% 6.88%

Pre-tax, pre-provision net earnings

Net income before income taxes $ 6,317 $ 6,358 $ 25,884 $ 15,069

Plus: Provision for loan losses 2,050 - 5,350 -

Pre-tax, pre-provision net earnings $ 8,367 $ 6,358 $ 31,234 $ 15,069

Adjusted provision for income tax

Net income before income taxes $ 6,317 $ 6,358 $ 25,884 $ 15,069

Total effective adjusted tax rate 25.0% 29.6% 25.6% 45.4%

Adjusted provision for income taxes $ 1,578 $ 1,879 $ 6,618 $ 6,844

Tax-adjusted net income

Net income before income taxes $ 6,317 $ 6,358 $ 25,884 $ 15,069

Adjusted provision for income taxes 1,578 1,879 6,618 6,844

Tax-adjusted net income $ 4,739 $ 4,479 $ 19,266 $ 8,225

Pro Forma Pre-tax, pre-provision net earnings

Net income before income taxes $ 6,317 $ 6,358 $ 25,884 $ 15,069

Plus: Provision for loan losses 2,050 - 5,350 -

Plus: Stock Transfer Compensation Expense - - - 11,797

Pro Forma Pre-tax, pre-provision net earnings $ 8,367 $ 6,358 $ 31,234 $ 26,866

Tax-adjusted ratios and per share data

Tax-adjusted net income (numerator) $ 4,739 $ 4,479 $ 19,266 $ 8,225

Average assets (denominator) $ 982,024 $ 845,510 $ 948,957 $ 798,528

Tax-adjusted return on average assets 1.92% 2.10% 2.03% 1.03%

Average shareholders' equity (denominator) $ 105,283 $ 102,691 $ 102,359 $ 97,430

Tax-adjusted return on average shareholders' equity 17.91% 17.31% 18.82% 8.44%

Average tangible common equity (denominator) $ 103,675 $ 100,872 $ 100,675 $ 95,537

Tax-adjusted return on average tangible common equity 18.18% 17.62% 19.14% 8.61%

Weighted average common shares outstanding basic (denominator) 9,066,737 10,057,506 9,378,769 10,145,032

Tax-adjusted net income per common share--basic $ 0.52 $ 0.45 $ 2.05 $ 0.81

Weighted average common shares outstanding diluted (denominator) 9,068,161 10,059,208 9,379,154 10,147,311

Tax-adjusted net income per common share--diluted $ 0.52 $ 0.45 $ 2.05 $ 0.81

Tangible assets

Total assets $ 1,016,669 $ 866,392

Less: Goodwill and intangibles (1,583) (1,789)

Tangible assets $ 1,015,086 $ 864,603

Tangible shareholders' equity

Total shareholders' equity $ 107,319 $ 100,126

Less: Goodwill and intangibles (1,583) (1,789)

Tangible shareholders' equity $ 105,736 $ 98,337

Tangible shareholders' equity

Tangible shareholders' equity (numerator) $ 105,736 $ 98,337

Tangible assets (denominator) $ 1,015,086 $ 864,603

Tangible common equity to tangible assets 10.42% 11.37%

End of period common shares outstanding 9,044,765 10,057,506

Book value per share $ 11.87 $ 9.96

Tangible book value per share $ 11.69 $ 9.78

Total shareholders' equity to total assets 10.56% 11.56%

Net Interest Margin Excluding Loan Fee Income

For the Three Months Ended December 31,

2020 2019

Average Interest Average Average Interest Average Balance Income/ Yield/ Balance Income/ Yield/ Expense Rate Expense Rate

(Dollars in thousands)

Interest-earning assets:

Short-term investments^(1) $ 102,544 $ 127 0.49 % $ 143,604 $ 674 1.86 %

Investment securities^(2) 1,165 15 5.12 1,073 23 8.50

Loans held for sale 198 - 0.00 289 - 0.00

Total loans^(3) 871,163 12,116 5.53 692,286 11,355 6.51

Total interest-earning assets 975,070 12,258 5.00 837,252 12,052 5.71

Noninterest-earning assets 6,954 8,258

Total assets $ 982,024 $ 845,510

Funding sources:

Interest-bearing liabilities:

Deposits:

Transaction accounts $ 409,174 470 0.46 % $ 314,106 1,133 1.43 %

Time deposits 203,842 655 1.28 213,716 1,205 2.24

Total interest-bearing deposits 613,016 1,125 0.73 527,822 2,338 1.76

Other borrowings - - 0.00 - - 0.00

Total interest-bearing liabilities 613,016 1,125 0.73 527,822 2,338 1.76

Noninterest-bearing liabilities:

Noninterest-bearing deposits 258,599 210,986

Other noninterest-bearing liabilities 5,126 4,011

Total noninterest-bearing liabilities 263,725 214,997

Shareholders' equity 105,283 102,691

Total liabilities and shareholders' $ 982,024 $ 845,510 equity

Net interest income excluding loan fee $ 11,133 $ 9,714 income

Net interest spread excluding loan fee 4.27 % 3.95 % income^(4)

Net interest margin excluding loan fee 4.54 % 4.60 % income

Net Interest Margin With Loan Fee Income

For the Three Months Ended December 31,

2020 2019

Interest Average Interest Average Average Average Income/ Yield/ Income/ Yield/ Balance Balance Expense Rate Expense Rate

(Dollars in thousands)

Interest-earning assets:

Short-term investments^(1) $ 102,544 $ 127 0.49 % $ 143,604 $ 674 1.80 %

Investment securities^(2) 1,165 15 5.12 1,073 23 8.50

Loans held for sale 198 - 0.00 289 - 0.00

Total loans^(3) 871,163 13,182 6.02 692,286 12,299 7.05

Total interest-earning assets 975,070 13,324 5.44 837,252 12,996 6.16

Noninterest-earning assets 6,954 8,258

Total assets $ 982,024 $ 845,510

Funding sources:

Interest-bearing liabilities:

Deposits:

Transaction accounts $ 409,174 470 0.46 % $ 314,106 1,133 1.43 %

Time deposits 203,842 655 1.28 213,716 1,205 2.24

Total interest-bearing deposits 613,016 1,125 0.73 527,822 2,338 1.76

Other borrowings - - 0.00 - - 0.00

Total interest-bearing liabilities 613,016 1,125 0.73 527,822 2,338 1.76

Noninterest-bearing liabilities:

Noninterest-bearing deposits 258,599 210,986

Other noninterest-bearing liabilities 5,126 4,011

Total noninterest-bearing liabilities 263,725 214,997

Shareholders' equity 105,283 102,691

Total liabilities and shareholders' equity $ 982,024 $ 845,510

Net interest income including loan fee income $ 12,199 $ 10,658

Net interest spread including loan fee 4.71 % 4.40 % income^(4)

Net interest margin including loan fee income 4.98 % 5.05 %

(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 Year Ended December 31,

2020 2019

Interest Average Interest Average Average Average Income/ Yield/ Income/ Yield/ Balance Balance Expense Rate Expense Rate

(Dollars in thousands)

Interest-earning assets:

Short-term investments^(1) $ 116,295 $ 828 0.71 % $ 151,434 $ 3,459 2.28 %

Investment securities^(2) 1,123 36 3.21 1,065 50 4.69

Loans held for sale 244 - 0.00 236 - 0.00

Total loans^(3) 823,228 47,415 5.76 636,274 43,757 6.88

Total interest-earning assets 940,890 48,279 5.13 789,009 47,266 5.99

Noninterest-earning assets 8,067 9,519

Total assets $ 948,957 $ 798,528

Funding sources:

Interest-bearing liabilities:

Deposits:

Transaction accounts $ 377,519 2,729 0.72 % $ 295,576 5,057 1.71 %

Time deposits 207,442 3,424 1.65 208,375 4,459 2.14

Total interest-bearing deposits 584,961 6,153 1.05 503,951 9,516 1.89

Other borrowings - - 0.00 - - 0.00

Total interest-bearing liabilities 584,961 6,153 1.05 503,951 9,516 1.89

Noninterest-bearing liabilities:

Noninterest-bearing deposits 256,431 192,562

Other noninterest-bearing 5,206 4,585 liabilities

Total noninterest-bearing 261,637 197,147 liabilities

Shareholders' equity 102,359 97,430

Total liabilities and shareholders' $ 948,957 $ 798,528 equity

Net interest income excluding $ 42,126 $ 37,750 loan fee income

Net interest spread excluding loan 4.08 % 4.10 % fee income^(4)

Net interest margin excluding 4.48 % 4.78 % loan fee income

Net Interest Margin With Loan Fee Income

For the Year Ended December 31,

2020 2019

Interest Average Interest Average Average Average Income/ Yield/ Income/ Yield/ Balance Balance Expense Rate Expense Rate

(Dollars in thousands)

Interest-earning assets:

Short-term investments^(1) $ 116,295 $ 828 0.71 % $ 151,434 $ 3,459 2.28 %

Investment securities^(2) 1,123 36 3.21 1,065 50 4.69

Loans held for sale 244 - 0.00 236 - 0.00

Total loans^(3) 823,228 52,450 6.37 636,274 48,200 7.58

Total interest-earning assets 940,890 53,314 5.67 789,009 51,709 6.55

Noninterest-earning assets 8,067 9,519

Total assets $ 948,957 $ 798,528

Funding sources:

Interest-bearing liabilities:

Deposits:

Transaction accounts $ 377,519 2,729 0.72 % $ 295,576 5,057 1.71 %

Time deposits 207,442 3,424 1.65 208,375 4,459 2.14

Total interest-bearing deposits 584,961 6,153 1.05 503,951 9,516 1.89

Other borrowings - - 0.00 - - 0.00

Total interest-bearing liabilities 584,961 6,153 1.05 503,951 9,516 1.89

Noninterest-bearing liabilities:

Noninterest-bearing deposits 256,431 192,562

Other noninterest-bearing liabilities 5,206 4,585

Total noninterest-bearing liabilities 261,637 197,147

Shareholders' equity 102,359 97,430

Total liabilities and shareholders' equity $ 948,957 $ 798,528

Net interest income including loan fee income $ 47,161 $ 42,193

Net interest spread including loan fee 4.61 % 4.67 % income^(4)

Net interest margin including loan fee income 5.01 % 5.35 %

Bank7 Corp.

Consolidated Balance Sheets

Dollars in thousands, except per share data Unaudited as of

Assets 2020 December 31,

December 31 September 30 2019

Cash and due from banks $ 153,901 $ 60,718 $ 117,128

Interest-bearing time deposits in other banks 16,412 23,384 30,147

Loans, net 826,974 869,448 699,458

Loans held for sale 324 315 1,031

Premises and equipment, net 9,151 9,387 9,624

Nonmarketable equity securities 1,172 1,165 1,100

Goodwill and intangibles 1,583 1,634 1,789

Interest receivable and other assets 7,152 7,303 6,115

Total assets $ 1,016,669 $ 973,354 $ 866,392

Liabilities and Shareholders' Equity

Deposits

Noninterest-bearing $ 246,569 $ 272,008 $ 219,221

Interest-bearing 658,945 591,661 538,262

Total deposits 905,514 863,669 757,483

Income taxes payable 9 565 357

Interest payable and other liabilities 3,827 3,890 8,426

Total liabilities 909,350 868,124 766,266

Common stock 90 92 101

Additional paid-in capital 93,162 92,960 92,391

Retained earnings 14,067 12,178 7,634

Total shareholders' equity 107,319 105,230 100,126

Total liabilities and shareholders' equity $ 1,016,669 $ 973,354 $ 866,392

Bank7 Corp.

Consolidated Statements of Income

Unaudited as of

Quarter Ended Year Ended

2020 2019 2020 2019

Dollars in thousands, except per share data December 31 September 30 December 31 December 31 December 31

Interest Income

Loans, including fees $ 13,182 $ 12,777 $ 12,299 $ 52,450 $ 48,200

Interest-bearing time deposits in other banks 107 123 295 526 1,709

Interest-bearing deposits in other banks 35 26 402 338 1,800

Total interest income 13,324 12,926 12,996 53,314 51,709

Interest Expense

Deposits 1,125 1,325 2,338 6,153 9,516

Total interest expense 1,125 1,325 2,338 6,153 9,516

Net Interest Income 12,199 11,601 10,658 47,161 42,193

Provision for Loan Losses 2,050 1,250 - 5,350 -

Net Interest Income After Provision for Loan Losses 10,149 10,351 10,658 41,811 42,193

Noninterest Income

Secondary market income 41 57 18 175 164

Service charges on deposit accounts 124 104 113 442 392

Other 535 173 126 1,048 752

Total noninterest income 700 334 257 1,665 1,308

Noninterest Expense

Salaries and employee benefits 2,554 2,505 2,473 10,130 21,265

Furniture and equipment 210 224 223 868 829

Occupancy 540 543 520 1,957 1,677

Data and item processing 270 276 264 1,091 1,078

Accounting, marketing and legal fees 198 135 250 536 757

Regulatory assessments 225 164 32 506 126

Advertising and public relations 40 62 239 400 588

Travel, lodging and entertainment 95 50 81 241 368

Other 400 625 475 1,863 1,744

Total noninterest expense 4,532 4,584 4,557 17,592 28,432

Income Before Taxes 6,317 6,101 6,358 25,884 15,069

Income tax expense 1,578 1,661 1,879 6,618 6,844

Net Income $ 4,739 $ 4,440 $ 4,479 $ 19,266 $ 8,225

Earnings per common share - basic $ 0.52 $ 0.48 $ 0.45 $ 2.05 $ 0.81

Diluted earnings per common share 0.52 0.48 0.45 2.05 0.81

Weighted average common shares outstanding - basic 9,066,737 9,228,128 10,057,506 9,378,769 10,145,032

Weighted average common shares outstanding - diluted 9,068,161 9,228,128 10,059,208 9,379,154 10,147,311

About Bank7 Corp.

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

Conference Call

Bank7 Corp. has scheduled a conference call to discuss its first quarter results, which will be broadcast live over the Internet, on Friday, January 29, 2021 at 11:00 a.m. Eastern Time. To participate in the call, dial 1-888-348-6421, or access it live over the Internet at https://www.webcaster4.com/Webcast/Page/2179/39520. For those not able to participate in the live call, an archive of the webcast will be available at https://www.webcaster4.com/Webcast/Page/2179/39520 shortly after the call for 1 year.

Cautionary Statements Regarding Forward-Looking Information

This communication contains a number of forward-looking statements. These forward-looking statements reflect Bank7 Corp.'s current views with respect to, among other things, future events and Bank7 Corp.'s financial performance. Any statements about Bank7 Corp.'s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing,"

"expects," "intends" and similar words or phrases. Any or all of the forward-looking statements in (or conveyed orally regarding) this presentation may turn out to be inaccurate. The inclusion of or reference to forward-looking information in this presentation should not be regarded as a representation by Bank7 Corp. or any other person that the future plans, estimates or expectations contemplated by Bank7 Corp. will be achieved.

These forward-looking statements are subject to significant uncertainties because they are based upon: the amount and timing of future changes in interest rates, market behavior, and other economic conditions; future laws, regulations, and accounting principles; changes in regulatory standards and examination policies, and a variety of other matters. These other matters include, among other things, the impact of COVID-19 on the United States economy and our operations, the direct and indirect effect of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators. Bank7 Corp. has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that Bank7 Corp. believes may affect its financial condition, results of operations, business strategy and financial needs. Bank7 Corp.'s actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. If one or more events related to these or other risks or uncertainties materialize, or if Bank7 Corp.'s underlying assumptions prove to be incorrect, actual results may differ materially from what Bank7 Corp. anticipates. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made and Bank7 Corp. undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required by law. All forward-looking statements herein are qualified by these cautionary statements.

About Non-GAAP Financial Measures

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

Contact:

Thomas TravisPresident & CEO(405) 810-8600

View original content to download multimedia: http://www.prnewswire.com/news-releases/bank7-corp-announces-4q-and-full-year-2020-earnings-301217822.html

SOURCE Bank7 Corp.