PR Newswire | Jul 29, 2021 09:03AM EDT

07/29 08:00 CDT

Bank7 Corp. Announces 2Q 2021 Earnings OKLAHOMA CITY, July 29, 2021

OKLAHOMA CITY, July 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 ended June 30, 2021. "We are pleased to announce a record quarter of net income and EPS. Our strong loan growth and loan fee income, combined with our excellent efficiency ratio, continues to produce outstanding results. As we move forward, our goal is to continue to produce exceptional results through organic growth and the pursuit of strategic acquisitions," said Thomas L. Travis, President and CEO of the Company.

Three months ended June 30, 2021 compared to three months ended June 30, 2020:

* Pre-tax, pre-provision earnings of $9.4 million compared to $8.1 million, an increase of 15.6% * Net income of $6.1 million compared to $5.0 million, an increase of 21.2% * Interest income on loans, including loan fee income, totaled $14.4 million compared to $13.4 million, an increase of 9.5% * Total assets of $1.1 billion compared to $1.0 billion, an increase of 12.8% * Total loans of $932.0 million compared to $837.9 million, an increase of 11.2% * Total deposits of $1.0 billion compared to $894.2 million, an increase of 12.8% * Tangible book value per share of $12.76 compared to $10.83, an increase of 17.8% * Average cost of funds of 0.34% compared to 0.76%, a decrease of 54.7% * Earnings per share of $0.67 compared to $0.54, an increase of 24.9% * ROAA of 2.39% compared to 2.09%, an increase of 14.6% * ROATCE of 21.90% compared to 20.72%, an increase of 5.7%

Six months ended June 30, 2021 compared to six months ended June 30, 2020:

* Pre-tax, pre-provision earnings of $17.5 million, compared to $15.5 million, an increase of 12.6% * Net income of $11.2 million compared to $10.1 million, an increase of 11.1% * Efficiency ratio of 35.02% compared to 35.33%, a decrease of 0.86% * Average cost of funds of 0.37% compared to 0.91%, a decrease of 58.9% * ROAA of 2.25% compared to 2.20%, an increase of 2.51% * ROATCE of 20.63% compared to 20.52%, an increase of 0.54%

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 June 30, 2021, the Bank's Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 11.28%, 13.23%, and 14.48%, respectively. On June 30, 2021, on a consolidated basis, the Company's Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 11.26%, 13.22%, and 14.47%, 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 24.3% and 24.9% in the second quarter of 2021 and 2020, 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 Six months ended June 30, June 30,

(Dollars inthousands, 2021 2020 2021 2020except pershare data)

Loan interestincome(excludingloan fees)

Total loaninterestincome, $ 14,357 $ 13,385 $ 27,450 $ 26,491including loanfee income

Loan fee (2,527) (1,632) (4,517) (2,892)income

Loan interestincome $ 11,830 $ 11,753 $ 22,933 $ 23,599excluding loanfee income

Average total $ 889,278 $ 826,111 $ 868,526 $ 786,943loans

Yield on loans(including 6.48% 6.52% 6.37% 6.77%loan feeincome)

Yield on loans(excluding 5.34% 5.72% 5.32% 6.03%loan feeincome)

Pre-tax,pre-provisionnet earnings

Net income $ before income $ 8,069 6,707 $ 14,899 $ 13,466taxes

Plus:Provision for 1,300 1,400 2,575 2,050loan losses

Pre-tax, $ pre-provision $ 9,369 8,107 $ 17,474 $ 15,516net earnings

Adjustedprovision forincome tax

Net income $ before income $ 8,069 6,707 $ 14,899 $ 13,466taxes

Totaleffective 24.3% 24.9% 24.8% 25.1%adjusted taxrate

Adjusted $ $ $ provision for $ 1,964 1,671 3,690 3,379income taxes

Tax-adjustednet income

Net income $ before income $ 8,069 6,707 $ 14,899 $ 13,466taxes

Adjustedprovision for 1,964 1,671 3,690 3,379income taxes

Tax-adjusted $ 6,105 $ $ 11,209 $ 10,087net income 5,036

Tax-adjustedratios and pershare data

Tax-adjusted $ net income $ 6,105 5,036 $ 11,209 $ 10,087(numerator)

Average assets $ 1,024,751 $ 971,373 $ 1,003,444 $ 923,087(denominator)

Tax-adjustedreturn on 2.39% 2.09% 2.25% 2.20%average assets

Averageshareholders' $ 113,332 $ 99,469 $ 111,108 $ 100,593equity(denominator)

Tax-adjustedreturn onaverage 21.61% 20.36% 20.34% 20.17%shareholders'equity

Averagetangible $ 111,822 $ 97,760 $ 109,573 $ 98,858common equity(denominator)

Tax-adjustedreturn onaverage 21.90% 20.72% 20.63% 20.52%tangiblecommon equity

Weightedaverage commonshares 9,050,606 9,232,509 9,050,295 9,598,232outstandingbasic(denominator)

Tax-adjustednet income per $ $ $ $ common 0.67 0.54 1.24 1.05share--basic

Weightedaverage commonshares 9,074,408 9,232,509 9,066,797 9,598,232outstandingdiluted(denominator)

Tax-adjustednet income per $ $ $ $ common 0.67 0.54 1.24 1.05share--diluted

Tangibleassets

Total assets $ 1,133,031 $ 1,004,085

Less: Goodwilland (1,491) (1,686)intangibles

Tangible $ 1,131,540 $ 1,002,399assets

Tangibleshareholders'equity

Totalshareholders' $ 117,011 $ 101,618equity

Less: Goodwilland (1,491) (1,686)intangibles

Tangibleshareholders' $ 115,520 $ 99,932equity

Tangibleshareholders'equity

Tangibleshareholders' $ 115,520 $ 99,932equity(numerator)

Tangibleassets $ 1,131,540 $ 1,002,399(denominator)

Tangiblecommon equity 10.21% 9.97%to tangibleassets

End of periodcommon shares 9,050,606 9,226,252outstanding

Book value per $ 12.93 $ share 11.01

Tangible book $ value per $ 12.76 10.83share

Totalshareholders' 10.33% 10.12%equity tototal assets

Net Interest Margin Excluding Loan Fee Income

For the Three Months Ended June 30,

2021 2020

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) $ 128,643 $ 64 0.20% $ 134,764 $ 156 0.47%

Investment securities^(2) 1,187 15 5.07 1,089 15 5.54

Loans held for sale 557 - - 222 - -

Total loans^(3) 889,278 11,830 5.34 826,111 11,753 5.72

Total interest-earning assets 1,019,665 11,909 4.68 962,186 11,924 4.98

Noninterest-earning assets 5,086 9,187

Total assets $1,024,751 $ 971,373

Funding sources:

Interest-bearing liabilities:

Deposits:

Transaction accounts $ 399,293 329 0.33% $ 373,812 704 0.76%

Time deposits 212,212 443 0.84 219,990 923 1.69

Total interest-bearing deposits 611,505 772 0.51 593,802 1,627 1.10

Total interest-bearing liabilities 611,505 772 0.51 593,802 1,627 1.10

Noninterest-bearing liabilities:

Noninterest-bearing deposits 293,867 272,373

Other noninterest-bearing liabilities 6,047 5,729

Total noninterest-bearing liabilities 299,914 278,102

Shareholders' equity 113,332 99,469

Total liabilities and shareholders' equity $ 1,024,751 $ 971,373

Net interest income excluding loan fee income $ 11,137 $ 10,297

Net interest spread excluding loan fee 4.18% 3.88%income^(4)

Net interest margin excluding loan fee income 4.38% 4.30%

Net Interest Margin With Loan Fee Income

For the Three Months Ended June 30,

2021 2020

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) $ 128,643 $ 64 0.20% $ 134,764 $ 156 0.47%

Investment securities^(2) 1,187 15 5.07 1,089 15 5.54

Loans held for sale 557 - - 222 - -

Total loans^(3) 889,278 14,357 6.48 826,111 13,385 6.52

Total interest-earning assets 1,019,665 14,436 5.68 962,186 13,556 5.67

Noninterest-earning assets 5,086 9,187

Total assets $ 1,024,751 $ 971,373

Funding sources:

Interest-bearing liabilities:

Deposits:

Transaction accounts $ 399,293 329 0.33% $ 373,812 704 0.76%

Time deposits 212,212 443 0.84 219,990 923 1.69

Total interest-bearing deposits 611,505 772 0.51 593,802 1,627 1.10

Total interest-bearing liabilities 611,505 772 0.51 593,802 1,627 1.10

Noninterest-bearing liabilities:

Noninterest-bearing deposits 293,867 272,373

Other noninterest-bearing liabilities 6,047 5,729

Total noninterest-bearing liabilities 299,914 278,102

Shareholders' equity 113,332 99,469

Total liabilities and shareholders' equity $ 1,024,751 $ 971,373

Net interest income including loan fee income $ 13,664 $ 11,929

Net interest spread including loan fee 5.17% 4.56%income^(4)

Net interest margin including loan fee income 5.37% 4.99%

(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,

2021 2020

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) $ 127,203 $ 157 0.25% $125,906 $ 554 0.88%

Investment securities^(2) 1,180 17 2.91 1,095 18 3.31

Loans held for sale 445 - - 174 - -

Total loans^(3) 868,526 22,933 5.32 786,943 23,599 6.03

Total interest-earning assets 997,354 23,107 4.67 914,118 24,171 5.32

Noninterest-earning assets 6,090 8,969

Total assets $1,003,444 $923,087

Funding sources:

Interest-bearing liabilities:

Deposits:

Transaction accounts $ 412,070 691 0.34% $358,167 1,714 0.96%

Time deposits 208,903 956 0.92 212,537 1,988 1.88

Total interest-bearing deposits 620,973 1,647 0.53 570,704 3,702 1.30

Total interest-bearing liabilities 620,973 1,647 0.53 570,704 3,702 1.30

Noninterest-bearing liabilities:

Noninterest-bearing deposits 266,237 246,630

Other noninterest-bearing liabilities 5,126 5,160

Total noninterest-bearing liabilities 271,363 251,790

Shareholders' equity 111,108 100,593

Total liabilities and shareholders' equity $1,003,444 $923,087

Net interest income excluding loan fee income $ 21,460 $ 20,469

Net interest spread excluding loan fee 4.14% 4.01%income^(4)

Net interest margin excluding loan fee income 4.34% 4.50%

Net Interest Margin With Loan Fee Income

For the Six Months Ended June 30,

2021 2020

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) $ 127,203 $ 157 0.25% $125,906 $ 554 0.88%

Investment securities^(2) 1,180 17 2.91 1,095 18 3.31

Loans held for sale 445 - - 174 - -

Total loans^(3) 868,526 27,450 6.37 786,943 26,491 6.77

Total interest-earning assets 997,354 27,624 5.59 914,118 27,063 5.95

Noninterest-earning assets 6,090 8,969

Total assets $1,003,444 $923,087

Funding sources:

Interest-bearing liabilities:

Deposits:

Transaction accounts $ 412,070 691 0.34% $358,167 1,714 0.96%

Time deposits 208,903 956 0.92 212,537 1,988 1.88

Total interest-bearing deposits 620,973 1,647 0.53 570,704 3,702 1.30

Total interest-bearing liabilities 620,973 1,647 0.53 570,704 3,702 1.30

Noninterest-bearing liabilities:

Noninterest-bearing deposits 266,237 246,630

Other noninterest-bearing liabilities 5,126 5,160

Total noninterest-bearing liabilities 271,363 251,790

Shareholders' equity 111,108 100,593

Total liabilities and shareholders' equity $1,003,444 $923,087

Net interest income including loan fee income $ 25,977 $ 23,361

Net interest spread including loan fee 5.05% 4.65%income^(4)

Net interest margin including loan fee income 5.25% 5.14%

(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 Unaudited as of

Assets June 30, December 31,

2021 2020

Cash and due from banks $ 187,732 $ 153,901

Interest-bearing time deposits in other banks 5,478 16,412

Loans, net 919,687 826,974

Loans held for sale 1,334 324

Premises and equipment, net 8,889 9,151

Nonmarketable equity securities 1,187 1,172

Goodwill and intangibles 1,491 1,583

Interest receivable and other assets 7,233 7,152

Total assets $ 1,133,031 $ 1,016,669

Liabilities and Shareholders' Equity

Deposits

Noninterest-bearing $ 330,061 $ 246,569

Interest-bearing 678,488 658,945

Total deposits 1,008,549 905,514

Income taxes payable 2,574 9

Interest payable and other liabilities 4,897 3,827

Total liabilities 1,016,020 909,350

Common stock 90 90

Additional paid-in capital 93,635 93,162

Retained earnings 23,286 14,067

Total shareholders' equity 117,011 107,319

Total liabilities and shareholders' equity $ 1,133,031 $ 1,016,669

Bank7 Corp.

Consolidated Statements of Income

Unaudited as of

Three Months Ended Six Months Ended

June 30, June 30,

Dollars in thousands, except per share data 2021 2020 2021 2020

Interest Income

Loans, including fees $ 14,357 $ 13,385 $ 27,450 $ 26,491

Interest-bearing time deposits in other banks 38 133 106 295

Interest-bearing deposits in other banks 42 38 68 277

-

Total interest income 14,437 13,556 27,624 27,063

Interest Expense

Deposits 772 1,627 1,647 3,702

Total interest expense 772 1,627 1,647 3,702

Net Interest Income 13,665 11,929 25,977 23,361

Provision for Loan Losses 1,300 1,400 2,575 2,050

Net Interest Income After Provision for Loan Losses 12,365 10,529 23,402 21,311

Noninterest Income

Secondary market income 78 39 92 77

Service charges on deposit accounts 119 95 239 214

Other 382 167 585 340

Total noninterest income 579 301 916 631

Noninterest Expense

Salaries and employee benefits 2,949 2,597 5,739 5,071

Furniture and equipment 231 218 433 434

Occupancy 458 413 930 874

Data and item processing 286 269 565 545

Accounting, marketing and legal fees 149 77 297 203

Regulatory assessments 161 94 302 117

Advertising and public relations 71 29 105 298

Travel, lodging and entertainment 118 43 207 96

Other 452 383 841 838

Total noninterest expense 4,875 4,123 9,419 8,476

Income Before Taxes 8,069 6,707 14,899 13,466

Income tax expense 1,964 1,671 3,690 3,379

Net Income $ 6,105 $ 5,036 $ 11,209 $ 10,087

Earnings per common share - basic $ 0.67 $ 0.54 $ 1.24 $ 1.05

Diluted earnings per common share 0.67 0.54 1.24 1.05

Weighted average common shares outstanding - basic 9,050,606 9,232,509 9,050,295 9,598,232

Weighted average common shares outstanding - diluted 9,074,408 9,232,509 9,066,797 9,598,232

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 Thursday, July 29, 2021 at 4:30 p.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/2179/41916. 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/2179/41916 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

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SOURCE Bank7 Corp.