Bank7 Corp. Announces Q1 2024 Earnings

Rhea-AI Summary

Bank7 Corp. (NASDAQ: BSVN) reports strong financial performance for Q1 2024 with notable increases in net income, earnings per share, total assets, total loans, and total interest income. The Company maintains robust credit quality and capital levels above regulatory requirements.

Positive

• Net income rose by 17.50% to $11.3 million compared to the same period last year.
• Earnings per share increased by 16.35% to $1.21.
• Total assets grew by 6.89% to $1.8 billion.
• Total loans saw a 7.39% increase to $1.4 billion.
• Pre-tax, pre-provision earnings (PPE) surged by 14.22% to $14.9 million.
• Total interest income jumped by 21.57% to $33.3 million.
• Both the Bank's and the Company's capital levels are well above 'well-capitalized' thresholds.
• Non-GAAP measure PPE is used by management for performance analysis.
• The Company's credit quality remains strong with minimal exposure to certain sectors.
• Comprehensive income for Q1 2024 reached $11.7 million.

Negative

• None.

Financial Analyst

Bank7 Corp's reported financial results indicate a robust performance, with a significant uptick in net income and earnings per share. The year-over-year increase in net income by 17.50% and earnings per share by 16.35% is a reflection of the bank's operational efficiency and growing loan portfolio, which has expanded by 7.39%. Such solid financial metrics are indicative of a strong revenue-generating capability and may positively influence investor sentiment.

Moreover, the bank's total assets have grown by 6.89%, suggesting effective asset management and potential for future earnings growth. This growth, coupled with a disciplined cost control strategy, has resulted in a 14.22% increase in pre-tax, pre-provision earnings (PPE), a key metric for assessing a bank's core earnings and financial health. As PPE is adjusted for taxes and provision for credit losses, it provides a clearer picture of operational performance, which in this case, is on an upward trajectory.

From a risk management perspective, the bank's minimal exposure to office and retail commercial real estate is commendable, especially considering the volatile nature of these sectors in recent times. Additionally, the bank's well-capitalized status, with capital ratios comfortably above regulatory requirements, offers a cushion against potential financial shocks and instills confidence in stakeholders about the bank's stability and compliance with regulatory standards.

Market Research Analyst

The banking industry is highly sensitive to interest rate fluctuations, economic cycles and regulatory environments. Bank7 Corp's reported increase in total interest income by 21.57% is a positive sign, particularly in a competitive banking landscape. This rise is likely due to increased loan activity and higher yielding assets, which can be attributed to strategic positioning in dynamic geographic markets and robust deposit relationships.

However, the bank's net interest margin (NIM) remains unchanged at 5.14%, despite the net interest spread decreasing from 4.10% to 3.70%. This suggests that while the bank is generating more interest income, the cost of funding is also rising, which could squeeze margins if not managed effectively. Stakeholders should monitor future reports to see if the bank can sustain its NIM amidst changing interest rates.

The bank's noninterest income and noninterest expenses also provide insights into its diversified revenue streams and cost management. An increase in noninterest income, albeit modest, combined with controlled noninterest expenses, supports the bank's profitability. The increase in total noninterest expense is relatively low compared to the rise in total assets, indicating scalability and operational leverage.

Legal Expert

Bank7 Corp's financial report mentions that being designated as 'well-capitalized' does not constitute a recommendation or endorsement by bank regulators. This is an important distinction for investors, as it underscores the fact that regulatory capital ratios are merely a baseline for stability and not necessarily a marker of investment quality. Investors should not interpret high capital ratios as an implicit approval by regulators but rather as one of many factors to consider when evaluating a bank's financial condition.

The bank's adherence to regulatory capital requirements, while expected, is essential for compliance and risk mitigation. Yet, the absence of any legal or regulatory issues in the report is just as significant. It suggests that the bank is not only managing its financials well but is also maintaining good standing with regulatory bodies, which is important for long-term operational sustainability.

OKLAHOMA CITY, April 12, 2024 /PRNewswire/ -- Bank7 Corp. (NASDAQ: BSVN) ("the Company"), the parent company of Oklahoma City-based Bank7 (the "Bank"), today reported unaudited results for the quarter ended March 31, 2024.  "We are pleased with the strength of our core earnings, as evidenced by our pre-tax, pre-provision earnings (PPE).  The Company's continued ability to exceed historical PPE is a function of our position in dynamic geographic markets, our long-term and broad-based deposit relationships, our debt-free and liquid balance sheet, and our disciplined approach to cost controls. Further, the Company's credit quality remains a point of strength with minimal exposure to office and retail commercial real estate," said Thomas L. Travis, President and CEO of the Company." 

For the three months ended March 31, 2024 compared to the three months ended March 31, 2023:

• Net income of $11.3 million compared to $9.6 million, an increase of 17.50%
• Earnings per share of $1.21 compared to $1.04, an increase of 16.35%
• Total assets of $1.8 billion compared to $1.7 billion, an increase of 6.89%
• Total loans of $1.4 billion compared to $1.3 billion, an increase of 7.39%
• PPE of $14.9 million compared to $13.0 million, an increase of 14.22%
• Total interest income of $33.3 million compared to $27.4 million, an increase of 21.57%

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 March 31, 2024, the Bank's Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratios were 10.10%, 12.11%, and 13.36%, respectively.  On March 31, 2024, on a consolidated basis, the Company's Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratios were 10.11%, 12.11%, and 13.36%, respectively.  Designation as a well-capitalized institution under regulations does not constitute a recommendation or endorsement by bank regulators. 

Non-GAAP Financial Measures:
This earnings release contains the non-GAAP financial measure pre-provision pre-tax earnings ("PPE").  The Company's management uses this non-GAAP measure in their analysis of the Company's performance.  This measure adjusts GAAP performance to exclude from net income, income tax expense, provision for credit losses, and loss on sales and calls of available-for-sale debt securities.

	For the Three Months Ended
	Mar 31, 2024		Mar 31, 2023
Calculation of Pre-Provision Pre-Tax Earnings ("PPE")	(Dollars in thousands)
Net Income	$                   3,595		$                   2,947
Income Tax Expense	14,883		12,554
Pre-tax net income	14,883		12,554
Add back: Provision for credit losses	-		1
Add back: (Gain)Loss on sales/calls of AFS debt securities	14,883		13,030
Pre-provision pre-tax earnings	14,883		13,030

 

Bank7 Corp.
Consolidated Balance Sheets
Assets	March 31, 2024 (unaudited)		December 31, 2023
Cash and due from banks	$               193,218		$               181,042
Interest-bearing time deposits in other banks	17,181		17,679
Available-for-sale debt securities	151,872		169,487
Loans, net of allowance for credit losses of $19,696 and
$19,691 at March 31, 2024 and December 31, 2023, respectively	1,354,195		1,341,148
Loans held for sale, at fair value	-		718
Premises and equipment, net	15,376		14,942
Nonmarketable equity securities	1,278		1,283
Core deposit intangibles	970		1,031
Goodwill	8,458		8,458
Interest receivable and other assets	32,435		35,878
Total assets	$            1,774,983		$            1,771,666
Liabilities and Shareholders' Equity
Deposits
Noninterest-bearing	$               452,326		$               482,349
Interest-bearing	1,127,846		1,109,042
Total deposits	1,580,172		1,591,391
Income taxes payable	3,946		302
Interest payable and other liabilities	10,483		9,647
Total liabilities	1,594,601		1,601,340
Shareholders' equity
Common stock, $0.01 par value; 50,000,000 shares authorized; shares
issued and outstanding: 9,238,206 and 9,197,696 at March 31, 2024
and December 31, 2023, respectively	92		92
Additional paid-in capital	97,669		97,417
Retained earnings	88,310		78,962
Accumulated other comprehensive loss	(5,689)		(6,145)
Total shareholders' equity	180,382		170,326
Total liabilities and shareholders' equity	$            1,774,983		$            1,771,666

 

		Three Months Ended
		March 31,
		2024 (unaudited)		2023
Interest Income
Loans, including fees		$          30,117		$        25,352
Interest-bearing time deposits in other banks		253		49
Debt securities, taxable		1,012		706
Debt securities, tax-exempt		73		87
Other interest and dividend income		1,832		1,186
Total interest income		33,287		27,380
Interest Expense
Deposits		11,277		7,374
Total interest expense		11,277		7,374
Net Interest Income		22,010		20,006
Provision for Credit Losses		-		475
Net Interest Income After Provision for Credit Losses		22,010		19,531
Noninterest Income
Mortgage lending income		51		54
Loss on sales, prepayments, and calls of available-for-sale debt securities		-		(1)
Service charges on deposit accounts		249		235
Other		1,708		384
Total noninterest income		2,008		672
Noninterest Expense
Salaries and employee benefits		5,289		4,680
Furniture and equipment		230		249
Occupancy		661		719
Data and item processing		458		386
Accounting, marketing and legal fees		99		298
Regulatory assessments		386		394
Advertsing and public relations		145		148
Travel, lodging and entertainment		51		61
Other		1,816		714
Total noninterest expense		9,135		7,649
Income Before Taxes		14,883		12,554
Income tax expense		3,595		2,947
Net Income		$          11,288		$          9,607
Earnings per common share - basic		$              1.22		$            1.05
Earnings per common share - diluted		1.21		1.04
Weighted average common shares outstanding - basic		9,220,154		9,146,932
Weighted average common shares outstanding - diluted		9,317,813		9,264,247
Other Comprehensive Income
Unrealized gains on securities, net of tax expense of $0 and $554 for the three months
ended March 31, 2024 and 2023, respectively		$               456		$          1,755
Reclassification adjustment for realized losses included in net income net of tax of $0 and $0
for the three months ended March 31, 2024 and 2023, respectively		-		1
Other comprehensive income		$               456		$          1,756
Comprehensive Income		$          11,744		$        11,363

 

		Net Interest Margin
		For the Three Months Ended March 31,
		2024 (unaudited)						2023
		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		$        176,072		$        2,085		4.75 %		$        134,650		$        1,235		3.72 %
Debt securities, taxable-equivalent		153,468		1,012		2.64		153,533		706		1.86
Debt securities, tax exempt		18,269		73		1.60		20,318		87		1.74
Loans held for sale		238		-		-		43		-		-
Total loans(1)		1,369,692		30,117		8.82		1,271,081		25,352		8.09
Total interest-earning assets		1,717,739		33,287		7.77		1,579,625		27,380		7.03
Noninterest-earning assets		39,769						23,542
Total assets		$     1,757,508						$     1,603,167
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts		$        845,129		8,196		3.89 %		$        803,618		5,753		2.90 %
Time deposits		264,973		3,081		4.66		213,760		1,621		3.08
Total interest-bearing deposits		1,110,102		11,277		4.07		1,017,378		7,374		2.94
Total interest-bearing liabilities		$     1,110,102		11,277		4.07		$     1,017,378		7,374		2.94
Noninterest-bearing liabilities:
Noninterest-bearing deposits		$        460,028						$        425,640
Other noninterest-bearing liabilities		10,970						11,131
Total noninterest-bearing liabilities		470,998						436,771
Shareholders' equity		176,408						149,018
Total liabilities and shareholders' equity		$     1,757,508						$     1,603,167
Net interest income				$      22,010						$      20,006
Net interest spread						3.70 %						4.10 %
Net interest margin						5.14 %						5.14 %

(1)	Nonaccrual loans are included in total loans

 

About Bank7 Corp. 

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

Conference Call

Bank7 Corp. has scheduled a conference call to discuss its first quarter results, which will be broadcast live over the Internet, on Friday, April 12, 2024 at 9:00 a.m. central standard time. To participate in the call, dial 1-888-348-6421, or access it live over the Internet at https://app.webinar.net/w8qEpOZ7G6v. For those not able to participate in the live call, an archive of the webcast will be available at https://app.webinar.net/w8qEpOZ7G6v 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 the direct and indirect effect of economic conditions on interest rates, credit quality, loan demand, liquidity, and monetary and supervisory policies of banking regulators.  Bank7 Corp. has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that Bank7 Corp. believes may affect its financial condition, results of operations, business strategy and financial needs. Bank7 Corp.'s actual results could differ materially from those anticipated in such forward-looking statements as a result of risks, uncertainties and assumptions that are difficult to predict. If one or more events related to these or other risks or uncertainties materialize, or if Bank7 Corp.'s underlying assumptions prove to be incorrect, actual results may differ materially from what Bank7 Corp. anticipates. You are cautioned not to place undue reliance on forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made and Bank7 Corp. undertakes no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as may be required by law. All forward-looking statements herein are qualified by these cautionary statements.

Contact:

Thomas Travis
President & CEO
(405) 810-8600

 

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SOURCE Bank7 Corp.

FAQ

What is Bank7 Corp.'s ticker symbol?

The ticker symbol for Bank7 Corp. is BSVN.

How much did net income increase by in Q1 2024 compared to Q1 2023?

Net income increased by 17.50% to $11.3 million.

What was the percentage increase in total assets for Bank7 Corp. in Q1 2024?

Total assets grew by 6.89% to $1.8 billion.

What is the non-GAAP financial measure used by Bank7 Corp.'s management for performance analysis?

The non-GAAP measure used is pre-provision pre-tax earnings (PPE).

How much did total interest income increase by in Q1 2024 compared to Q1 2023?

Total interest income jumped by 21.57% to $33.3 million.

What is the designation of Bank7 Corp. in terms of regulatory capital levels?

Both the Bank's and the Company's capital levels are significantly above the minimum 'well-capitalized' threshold.

What was the comprehensive income for Bank7 Corp. in Q1 2024?

Comprehensive income for Q1 2024 reached $11.7 million.