FOR IMMEDIATE RELEASE: Bank7 Corp. Announces 3Q 2020 Earnings

Oklahoma City, OK, October 29, 2020 – 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 September 30, 2020.  “We are pleased with our third quarter results.  Clearly, the pandemic and election dynamics continue to create extreme uncertainty and that is why we continue to increase our loan loss reserves.  With that being said, we have a high degree of confidence in our asset quality, and we know our strong PPE will carry us through the few potential issues we might encounter,” said Thomas L. Travis, President and CEO of the Company.

Three months ended September 30, 2020 compared to three months ended September 30, 2019:

Nine months ended September 30, 2020 compared to nine months ended September 30, 2019:

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 September 30, 2020 the Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.72%, 12.85%, and 14.10% respectively for the Bank.  At September 30, 2020 the Tier 1 leverage ratio, Tier 1 risk based capital ratio, and total risk-based capital ratios were 10.72%, 12.84%, and 14.09% 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 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 27.3% and (31.4%) in the third quarter of 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:

		Net Interest Margin Excluding Loan Fee Income
		For the Three Months Ended September 30,
		2020												2019
		Average Balance				Interest Income/ Expense				Average Yield/ Rate				Average Balance				Interest Income/ Expense				Average Yield/ Rate
		(Dollars in thousands)
Interest-earning assets:
Short-term investments(1)		$	111,019			$	147				0.53	%		$	145,147			$	888				2.43	%
Investment securities(2)			1,138				2				0.70				1,069				4				1.48
Loans held for sale			425				—				0.00				265				—				0.00
Total loans(3)			847,076				11,699				5.49				651,186				11,338				6.91
Total interest-earning assets			959,658				11,848				4.91				797,667				12,230				6.08
Noninterest-earning assets			7,386												8,773
Total assets		$	967,044											$	806,440
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts		$	381,572				545				0.57	%		$	287,241				1,234				1.70	%
Time deposits			200,961				780				1.54				220,935				1,237				2.22
Total interest-bearing deposits			582,533				1,325				0.90				508,176				2,471				1.93
Other borrowings			—				—				0.00				—				—				0.00
Total interest-bearing liabilities			582,533				1,325				0.90				508,176				2,471				1.93
Noninterest-bearing liabilities:
Noninterest-bearing deposits			276,219												193,785
Other noninterest-bearing liabilities			5,363												4,467
Total noninterest-bearing liabilities			281,582												198,252
Shareholders’ equity			102,929												100,012
Total liabilities and shareholders’ equity		$	967,044											$	806,440
Net interest income including loan fee income						$	10,523											$	9,759
Net interest spread including loan fee income(4)											4.01	%											4.15	%
Net interest margin including loan fee income											4.36	%											4.85	%

		Net Interest Margin With Loan Fee Income
		For the Three Months Ended September 30,
		2020												2019
		Average Balance				Interest Income/ Expense				Average Yield/ Rate				Average Balance				Interest Income/ Expense				Average Yield/ Rate
		(Dollars in thousands)
Interest-earning assets:
Short-term investments(1)		$	111,019			$	147				0.53	%		$	145,147			$	888				2.43	%
Investment securities(2)			1,138				2				0.70				1,069				4				1.48
Loans held for sale			425				—				0.00				265				—				0.00
Total loans(3)			847,076				12,777				6.00				651,186				12,179				7.42
Total interest-earning assets			959,658				12,926				5.36				797,667				13,071				6.50
Noninterest-earning assets			7,386												8,773
Total assets		$	967,044											$	806,440
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts		$	381,572				545				0.57	%		$	287,241				1,234				1.70	%
Time deposits			200,961				780				1.54				220,935				1,237				2.22
Total interest-bearing deposits			582,533				1,325				0.90				508,176				2,471				1.93
Other borrowings			—				—				0.00				—				—				0.00
Total interest-bearing liabilities			582,533				1,325				0.90				508,176				2,471				1.93
Noninterest-bearing liabilities:
Noninterest-bearing deposits			276,219												193,785
Other noninterest-bearing liabilities			5,363												4,467
Total noninterest-bearing liabilities			281,582												197,252
Shareholders’ equity			102,929												100,012
Total liabilities and shareholders’ equity		$	967,044											$	806,440
Net interest income excluding loan fee income						$	11,601											$	10,600
Net interest spread excluding loan fee income(4)											4.45	%											4.57	%
Net interest margin excluding loan fee income											4.81	%											5.27	%

		Net Interest Margin Excluding Loan Fee Income
		For the Nine Months Ended September 30,
		2020												2019
		Average Balance				Interest Income/ Expense				Average Yield/ Rate				Average Balance				Interest Income/ Expense				Average Yield/ Rate
		(Dollars in thousands)
Interest-earning assets:
Short-term investments(1)		$	120,909			$	701				0.77	%		$	155,073			$	2,785				2.40	%
Investment securities(2)			1,109				21				2.53				1,062				27				3.40
Loans held for sale			258				—				0.00				219				—				0.00
Total loans(3)			807,134				35,299				5.84				617,398				32,404				7.02
Total interest-earning assets			929,410				36,021				5.18				773,752				35,216				6.09
Noninterest-earning assets			8,439												8,942
Total assets		$	937,849											$	782,694
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts		$	366,162				2,259				0.82	%		$	289,306				3,924				1.81	%
Time deposits			208,650				2,769				1.77				206,575				3,254				2.11
Total interest-bearing deposits			574,812				5,028				1.17				495,881				7,178				1.94
Other borrowings			—				—				0.00				—				—				0.00
Total interest-bearing liabilities			574,812				5,028				1.17				495,881				7,178				1.94
Noninterest-bearing liabilities:
Noninterest-bearing deposits			256,429												186,379
Other noninterest-bearing liabilities			5,231												4,779
Total noninterest-bearing liabilities			261,660												191,158
Shareholders’ equity			101,377												95,655
Total liabilities and shareholders’ equity		$	937,849											$	782,694
Net interest income including loan fee income						$	30,993											$	28,038
Net interest spread including loan fee income(4)											4.01	%											4.15	%
Net interest margin including loan fee income											4.45	%											4.84	%

		Net Interest Margin With Loan Fee Income
		For the Nine Months Ended September 30,
		2020												2019
		Average Balance				Interest Income/ Expense				Average Yield/ Rate				Average Balance				Interest Income/ Expense				Average Yield/ Rate
		(Dollars in thousands)
Interest-earning assets:
Short-term investments(1)		$	120,909			$	701				0.77	%		$	155,073			$	2,785				2.40	%
Investment securities(2)			1,109				21				2.53				1,062				27				3.40
Loans held for sale			258				—				0.00				219				—				0.00
Total loans(3)			807,134				39,268				6.50				617,398				35,902				7.77
Total interest-earning assets			929,410				39,990				5.75				773,752				38,714				6.69
Noninterest-earning assets			8,439												8,942
Total assets		$	937,849											$	782,694
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts		$	366,162				2,259				0.82	%		$	289,306				3,924				1.81	%
Time deposits			208,650				2,769				1.77				206,575				3,254				2.11
Total interest-bearing deposits			574,812				5,028				1.17				495,881				7,178				1.94
Other borrowings			—				—				0.00				—				—				0.00
Total interest-bearing liabilities			574,812				5,028				1.17				495,881				7,178				1.94
Noninterest-bearing liabilities:
Noninterest-bearing deposits			256,429												186,379
Other noninterest-bearing liabilities			5,231												4,779
Total noninterest-bearing liabilities			261,660												191,158
Shareholders’ equity			101,377												95,655
Total liabilities and shareholders’ equity		$	937,849											$	782,694
Net interest income excluding loan fee income						$	34,962											$	31,536
Net interest spread excluding loan fee income(4)											4.58	%											4.75	%
Net interest margin excluding loan fee income											5.02	%											5.45	%

Bank7 Corp.

Consolidated Balance Sheets

Bank7 Corp.

Consolidated Statements of Income

		Unaudited as of
		Three Months Ended								Nine Months Ended
		September 30,								September 30,
Dollars in thousands, exceper per share data		2020				2019				2020				2019
Interest Income
Loans, including fees		$	12,777			$	12,179			$	39,268			$	35,902
Interest-bearing time deposits in other banks			124				500				419				1,414
Interest-bearing deposits in other banks			26				392				303				1,398
Total interest income			12,927				13,071				39,990				38,714
Interest Expense
Deposits			1,326				2,471				5,028				7,178
Total interest expense			1,326				2,471				5,028				7,178
Net Interest Income			11,601				10,600				34,962				31,536
Provision for Loan Losses			1,250				-				3,300				-
Net Interest Income After Provision for Loan Losses			10,351				10,600				31,662				31,536
Noninterest Income
Secondary market income			57				69				134				146
Service charges on deposit accounts			104				110				318				279
Other			173				330				513				602
Total noninterest income			334				509				965				1,027
Noninterest Expense
Salaries and employee benefits			2,505				14,256				7,576				18,792
Furniture and equipment			224				229				658				606
Occupancy			543				436				1,417				1,157
Data and item processing			276				276				821				814
Accounting, marketing and legal fees			135				218				338				507
Regulatory assessments			164				31				281				94
Advertising and public relations			62				71				360				349
Travel, lodging and entertainment			50				153				146				287
Other			625				402				1,463				1,269
Total noninterest expense			4,584				16,072				13,060				23,875
Income Before Taxes			6,101				(4,963	)			19,567				8,688
Income tax expense			1,661				1,556				5,040				4,965
Net Income		$	4,440			$	(6,519	)		$	14,527			$	3,723
Earnings per common share - basic		$	0.48			$	(0.64	)		$	1.53			$	0.37
Diluted earnings per common share			0.48				(0.64	)			1.53				0.37
Weighted average common shares outstanding - basic			9,228,128				10,149,007				9,483,540				10,174,528
Weighted average common shares outstanding - diluted			9,228,128				10,161,778				9,483,540				10,176,360

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, October 29, 2020 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/2179/38169.  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/2179/38169 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.