Bank7 Corp (NASDAQ:BSVN) Q2 2022 Earnings Conference Call July 27, 2022 11:00 AM ET Company Participants Tom Travis - President and CEO J.T. Phillips - Chief Operating Officer Jason Estes - Chief Credit Officer Kelly Harris - Chief Financial Officer Conference Call Participants Brady Gailey - KBW Thomas Wendler - Stephens Nathan Race - Piper Sandler Operator Welcome to the Bank7 Corp. Second Quarter Earnings Call. Before we get started, I'd like to highlight the legal information and disclaimer on Page 19 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38656 Bank7 Corp. (Exact name of registrant as specified in its charter) Oklahoma 20-0763496 ( State or other jurisdiction of inc ...

Bank7 Corp. (NASDAQ:BSVN) Q1 2022 Earnings Conference Call April 26, 2022 4:00 PM ET Company Participants Thomas Travis - President and Chief Executive Officer Jason Estes - Executive Vice President, Chief Credit Officer and Commercial Loan Manager Kelly Harris - Executive Vice President and Chief Financial Officer John Phillips - Vice Chairman, Senior Executive Vice President and Chief Operating Officer Conference Call Participants Brady Gailey - Keefe, Bruyette, & Woods, Inc. Nathan Race - Piper Sandler & ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Bank7 Corp is a bank holding company with $1.4 billion in assets, focusing on commercial lending in Oklahoma, Texas, and Kansas Company Snapshot (as of December 31, 2021) | Metric | Value | | :--- | :--- | | Total Assets | $1.4 billion | | Total Loans | $1.0 billion | | Total Deposits | $1.2 billion | | Total Shareholders' Equity | $127.4 million | | Full-Service Branches | 12 | - On December 9, 2021, the company **acquired Watonga Bancshares, Inc.**, adding branches in Watonga, Geary, and Mustang, Oklahoma[13](index=13&type=chunk) - The Bank's primary lending focus is on **commercial real estate, hospitality, energy, and commercial and industrial (C&I) loans**[16](index=16&type=chunk) - The company's strategic success is driven by developing deep commercial customer relationships, disciplined growth, leveraging executive experience, process automation, and investing in people and technology[18](index=18&type=chunk) - The company and its bank subsidiary are extensively regulated by federal and state agencies, including the Oklahoma Banking Department (OBD), the Federal Reserve, the FDIC, and the CFPB[31](index=31&type=chunk)[32](index=32&type=chunk) - As of December 31, 2021, the Bank's capital ratios **exceeded minimum requirements** under the Basel III Capital Rules and it was deemed **'well-capitalized'**[38](index=38&type=chunk)[46](index=46&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from geographic concentration, significant credit exposure to volatile industries, and a controlling shareholder structure - The business is heavily dependent on the economies of **Oklahoma and the Dallas/Fort Worth metropolitan area**[95](index=95&type=chunk)[96](index=96&type=chunk) Credit Exposure Concentrations (as of December 31, 2021) | Industry | Loan Amount | % of Total Loans | | :--- | :--- | :--- | | Energy | $98.5 million | 9.6% | | Hospitality | $198.4 million | 19.2% | - The company's Regulatory Commercial Real Estate (CRE) loans represented **302.47% of total Bank capital**, exceeding the 300% supervisory criterion, which could expose the institution to additional regulatory scrutiny[105](index=105&type=chunk) - The **20 largest borrowing relationships** totaled approximately **$405 million** in commitments, representing **32.7%** of total outstanding commitments, while the **20 largest deposit relationships** accounted for **23.2%** of total deposits[111](index=111&type=chunk)[113](index=113&type=chunk) - The Haines Family Trusts control approximately **51.2% of the company's common stock**, giving them the ability to determine the outcome of all matters requiring shareholder approval[149](index=149&type=chunk) - The company is a **'controlled company'** under NASDAQ rules, exempting it from requirements such as having a majority of independent directors and fully independent compensation and nominating committees[150](index=150&type=chunk)[151](index=151&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments - Not applicable[157](index=157&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) The company operates twelve branches across Oklahoma, Kansas, and Texas, with its corporate headquarters in Oklahoma City - The company's corporate office is at 1039 N.W. 63rd Street, Oklahoma City, Oklahoma[158](index=158&type=chunk) - The Bank operates twelve branches: eight in Oklahoma, two in Kansas, and two in the Dallas/Fort Worth area, with four of these locations being leased[158](index=158&type=chunk) [Legal Proceedings](index=26&type=section&id=Item%203.%20Legal%20Proceedings) Current litigation is not expected to have a material adverse effect on the company's financial condition or operations - Management does not believe any present litigation will have a material adverse effect on the business, consolidated financial condition, or results of operations[160](index=160&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[161](index=161&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on NASDAQ under 'BSVN', with a quarterly dividend increased to $0.12 per share in Q4 2021 - The company's common stock trades on The NASDAQ Global Select Market under the symbol **'BSVN'**[163](index=163&type=chunk) - The company paid quarterly dividends of $0.11 per share for the first three quarters of 2021 and **increased it to $0.12 per share** in the fourth quarter, with an expectation to continue this rate[164](index=164&type=chunk) Equity Compensation Plan Information (as of December 31, 2021) | Plan Category | Securities to be issued upon exercise | Weighted-average exercise price | Securities remaining available for future issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by shareholders | 436,993 | $17.41 | 615,873 | [[Reserved]](index=27&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Pre-tax net income grew 16.2% in 2021, driven by asset growth from an acquisition and improved net interest margin - On December 9, 2021, the Company acquired Watonga Bancshares, Inc. for **$29.3 million in cash**, adding total assets of **$267.3 million** and total deposits of **$243.5 million**[186](index=186&type=chunk) 2021 vs. 2020 Performance Highlights | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Pre-tax Net Income | $30.9 million | $25.9 million | +16.2% | | Pre-tax ROAA | 2.96% | 2.73% | +23 bps | | Pre-tax ROAE | 26.41% | 25.29% | +112 bps | | Efficiency Ratio | 36.76% | 36.03% | +73 bps | Year-End Balance Sheet Growth (2021 vs. 2020) | Metric | Dec 31, 2021 | Dec 31, 2020 | Change | | :--- | :--- | :--- | :--- | | Total Loans | $1.03 billion | $839.1 million | +22.9% | | Total Deposits | $1.22 billion | $905.5 million | +34.5% | - Net interest margin **increased to 5.12%** for the year ended 2021, compared to 5.01% in 2020, benefiting from a **50.4% decrease in interest expense on deposits**[197](index=197&type=chunk)[202](index=202&type=chunk) - The provision for loan losses **decreased to $4.2 million** in 2021 from $5.4 million in 2020[207](index=207&type=chunk) - Nonperforming loans as a percentage of total loans **decreased to 1.01%** at year-end 2021 from 1.98% at year-end 2020[238](index=238&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=52&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate volatility, with the balance sheet positioned to benefit from rising rates - The primary component of market risk for the company is **interest rate volatility**, managed by the Asset/Liability Committee (ALCO)[309](index=309&type=chunk)[312](index=312&type=chunk) Interest Rate Sensitivity Analysis (as of December 31, 2021) | Change in Interest Rates (Basis Points) | Simulated % Change in Net Interest Income (12-Month Horizon) | | :--- | :--- | | +400 | 32.34% | | +300 | 23.63% | | +200 | 14.88% | | +100 | 6.07% | | -100 | -5.38% | [Financial Statements and Supplementary Data](index=54&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the audited consolidated financial statements, which received an unqualified opinion from BKD, LLP - The independent registered public accounting firm, BKD, LLP, issued an **unqualified opinion** on the consolidated financial statements[325](index=325&type=chunk) Consolidated Statement of Income Highlights (Year Ended Dec 31) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Net Interest Income | $53,236 thousand | $47,161 thousand | | Provision for Loan Losses | $4,175 thousand | $5,350 thousand | | Noninterest Income | $2,250 thousand | $1,665 thousand | | Noninterest Expense | $20,397 thousand | $17,592 thousand | | Net Income | $23,159 thousand | $19,266 thousand | | Diluted EPS | $2.55 | $2.05 | Consolidated Balance Sheet Highlights (As of Dec 31) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Total Assets | $1,350,549 thousand | $1,016,669 thousand | | Net Loans | $1,018,085 thousand | $826,974 thousand | | Total Deposits | $1,217,471 thousand | $905,514 thousand | | Total Shareholders' Equity | $127,408 thousand | $107,319 thousand | - Note 2 details the acquisition of Watonga Bancshares, Inc. on December 9, 2021, for **$29.3 million in cash**, resulting in the recognition of **$7.5 million in goodwill** and a **$1.3 million core deposit intangible**[398](index=398&type=chunk)[399](index=399&type=chunk) - Note 13 confirms the Bank was categorized as **'well capitalized'** under the regulatory framework for prompt corrective action as of December 31, 2021, with a Total capital to risk-weighted assets ratio of **12.54%** and a CET1 ratio of **11.53%**[491](index=491&type=chunk)[496](index=496&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=100&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with accountants on accounting and financial disclosure - None[550](index=550&type=chunk) [Controls and Procedures](index=100&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2021[551](index=551&type=chunk) - Management determined that the company maintained **effective internal control over financial reporting** as of December 31, 2021, based on the COSO framework[553](index=553&type=chunk) - No significant changes were made to the company's internal control over financial reporting during the fourth quarter of 2021[556](index=556&type=chunk) [Other Information](index=101&type=section&id=Item%209B.%20Other%20Information) There is no other information to report - None[557](index=557&type=chunk) Part III Information on governance, compensation, and ownership is incorporated by reference from the 2022 Proxy Statement [Directors, Executive Officers and Corporate Governance](index=102&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information is incorporated by reference from the Proxy Statement for the 2022 Annual Meeting of Shareholders - The required information is incorporated by reference from the Proxy Statement (Schedule 14A) for the 2022 Annual Meeting of Shareholders[560](index=560&type=chunk) [Executive Compensation](index=102&type=section&id=Item%2011.%20Executive%20Compensation) Information is incorporated by reference from the Proxy Statement for the 2022 Annual Meeting of Shareholders - The required information is incorporated by reference from the Proxy Statement (Schedule 14A) for the 2022 Annual Meeting of Shareholders[561](index=561&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=102&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information is incorporated by reference from the Proxy Statement for the 2022 Annual Meeting of Shareholders - The required information is incorporated by reference from the Proxy Statement (Schedule 14A) for the 2022 Annual Meeting of Shareholders[562](index=562&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=102&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information is incorporated by reference from the Proxy Statement for the 2022 Annual Meeting of Shareholders - The required information is incorporated by reference from the Proxy Statement (Schedule 14A) for the 2022 Annual Meeting of Shareholders[563](index=563&type=chunk) [Principal Accountant Fees and Services](index=102&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information is incorporated by reference from the Proxy Statement for the 2022 Annual Meeting of Shareholders - The required information is incorporated by reference from the Proxy Statement (Schedule 14A) for the 2022 Annual Meeting of Shareholders[564](index=564&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=102&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the exhibits filed with the report and notes the omission of financial statement schedules - The index to Consolidated Financial Statements is located on page 51 of the report[566](index=566&type=chunk) - Financial statement schedules have been omitted as they are not applicable or the required information is included in the financial statements or notes[567](index=567&type=chunk) - A list of exhibits filed with the Form 10-K is provided, including corporate governance documents, equity incentive plans, and required CEO/CFO certifications[567](index=567&type=chunk)[568](index=568&type=chunk)[569](index=569&type=chunk)

Bank7 Corp. (NASDAQ:BSVN) Q4 2021 Earnings Conference Call January 28, 2022 3:00 PM ET Company Participants Brad Haines - Chairmen Tom Travis - President and CEO J.T. Phillips - Chief Operating Officer Jason Estes - Chief Credit Officer Conference Call Participants Nathan Race - Piper Sandler Brady Gailey - KBW Matt Olney - Stephens Operator Good day. And welcome to Bank7 Corp.’s Fourth Quarter and Full Year Earnings Call. Before we get started, I would like to highlight the legal information and disclaimer ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Bank7 Corp.'s unaudited condensed consolidated financial statements and notes for the period ended September 30, 2021 [Unaudited Condensed Consolidated Balance Sheet](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheet) Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and due from banks | $205,762 | $153,901 | | Loans, net | $915,393 | $826,974 | | **Total Assets** | **$1,146,230** | **$1,016,669** | | **Liabilities & Equity** | | | | Total Deposits | $1,018,374 | $905,514 | | Total Liabilities | $1,023,821 | $909,350 | | Total Shareholders' Equity | $122,409 | $107,319 | | **Total Liabilities & Equity** | **$1,146,230** | **$1,016,669** | [Unaudited Condensed Consolidated Statements of Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $13,279 | $11,601 | $39,256 | $34,962 | | Provision for Loan Losses | $750 | $1,250 | $3,325 | $3,300 | | **Net Income** | **$6,264** | **$4,440** | **$17,473** | **$14,527** | | Earnings per share - basic | $0.69 | $0.48 | $1.93 | $1.53 | | Earnings per share - diluted | $0.69 | $0.48 | $1.92 | $1.53 | [Unaudited Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) - Total shareholders' equity increased to **$122.4 million** at September 30, 2021, from **$105.2 million** at September 30, 2020, driven by **$17.5 million** in net income, partially offset by **$3.0 million** in cash dividends[15](index=15&type=chunk) - Cash dividends declared were **$0.11 per share** for the three months ended September 30, 2021, and **$0.33 per share** for the nine months ended September 30, 2021[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Cash Flow Highlights (in thousands) | Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,820 | $18,516 | | Net cash used in investing activities | ($80,832) | ($167,015) | | Net cash provided by financing activities | $109,873 | $92,089 | | **Increase (Decrease) in Cash** | **$51,861** | **($56,410)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - On October 6, 2021, the Company entered into a definitive agreement to acquire Cornerstone Bank for an estimated cash consideration of **$32.0 million**, with closing expected in Q4 2021[48](index=48&type=chunk) - As of September 30, 2021, the Company held **73 Paycheck Protection Program (PPP) loans** totaling **$27.3 million**, fully guaranteed by the Small Business Administration (SBA)[46](index=46&type=chunk) - The Company's share repurchase program expired on September 5, 2021, and a new plan authorizing the repurchase of up to **750,000 shares** was adopted on October 28, 2021, with no shares repurchased during the nine months ended September 30, 2021[23](index=23&type=chunk)[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Bank7 Corp.'s financial condition and results of operations for Q3 and nine months of 2021 [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Performance Summary | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Pre-tax Income | $8.3M | $6.1M | $23.2M | $19.6M | | Provision for Loan Losses | $750k | $1.25M | $3.3M | $3.3M | | Return on Average Assets | 2.36% | 1.83% | 2.29% | 2.07% | | Return on Average Equity | 20.86% | 17.16% | 20.53% | 19.14% | | Efficiency Ratio | 34.49% | 38.40% | 34.84% | 36.35% | - Net interest margin for Q3 2021 was **5.04%**, up from **4.81%** in Q3 2020, and **5.18%** for the first nine months of 2021 compared to **5.02%** for the same period in 2020[168](index=168&type=chunk)[173](index=173&type=chunk) - Noninterest income increased by **72.8%** to **$577,000** in Q3 2021 compared to Q3 2020, driven by higher secondary market income and other fees[182](index=182&type=chunk) - Noninterest expense rose **4.25%** to **$4.8 million** in Q3 2021, primarily due to a **17.6%** increase in salaries and employee benefits[183](index=183&type=chunk) [Financial Condition](index=37&type=section&id=Financial%20Condition) - Total assets grew **12.7%** to **$1.1 billion** as of September 30, 2021, from **$1.0 billion** at year-end 2020, driven by organic loan and deposit growth[186](index=186&type=chunk) Loan Portfolio Composition (Gross Loans, in thousands) | Loan Category | Sep 30, 2021 | % of Total | Dec 31, 2020 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Commercial Real Estate | $463,948 | 50.0% | $427,423 | 50.9% | | Commercial & Industrial | $396,974 | 42.8% | $351,248 | 41.9% | | Agricultural | $59,343 | 6.4% | $50,519 | 6.0% | | Other | $46,416 | 0.8% | $38,977 | 1.2% | | **Total Gross Loans** | **$928,048** | **100.0%** | **$839,088** | **100.0%** | - The Allowance for Loan Losses (ALL) as a percentage of loans decreased to **1.01%** at September 30, 2021, from **1.15%** at December 31, 2020, primarily due to a **$3.8 million** charge-off on a single substandard loan relationship[180](index=180&type=chunk)[194](index=194&type=chunk) - Total nonperforming loans decreased to **$9.9 million** (**1.07%** of total loans) at September 30, 2021, from **$16.5 million** (**1.98%** of total loans) at December 31, 2020[206](index=206&type=chunk) - Total deposits increased to **$1.0 billion** at September 30, 2021, from **$905.5 million** at year-end 2020, with noninterest-bearing deposits growing to **32.7%** of total deposits from **27.2%**[224](index=224&type=chunk)[225](index=225&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2021, the company had borrowing availability with the FHLB of **$76.1 million** and no outstanding advances on unsecured fed funds lines[232](index=232&type=chunk) Bank Capital Ratios | Ratio | Sep 30, 2021 | Dec 31, 2020 | "Well-Capitalized" Minimum | | :--- | :--- | :--- | :--- | | CET 1 Capital Ratio | 13.76% | 13.51% | 6.50% | | Tier 1 Capital Ratio | 13.76% | 13.51% | 8.00% | | Total Capital Ratio | 14.82% | 14.75% | 10.00% | | Tier 1 Leverage Ratio | 11.51% | 10.78% | 5.00% | - Total shareholders' equity increased by **14.1%** to **$122.4 million** as of September 30, 2021, from **$107.3 million** at year-end 2020, primarily driven by retained earnings[239](index=239&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk disclosures were reported since the prior annual report - There have been no significant changes in disclosures regarding market risk since the last annual report on Form 10-K for the year ended December 31, 2020[262](index=262&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[263](index=263&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, such controls[264](index=264&type=chunk) [PART II. OTHER INFORMATION](index=51&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal actions, none expected to materially impact financial statements - The company is involved in routine legal actions incidental to its business, but management believes none would have a material adverse effect on its financial statements[266](index=266&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the prior annual report - No material changes were reported from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020[267](index=267&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new share repurchase plan was approved in October 2021, following the expiration of the previous plan - The stock repurchase plan from September 2019 expired on September 5, 2021[269](index=269&type=chunk) - On October 28, 2021, the Board of Directors approved a new repurchase plan authorizing up to **750,000 shares** of common stock[269](index=269&type=chunk) - No shares were purchased under the company's repurchase plan during the nine months ended September 30, 2021[269](index=269&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and XBRL data

Financial Data and Key Metrics Changes - Bank7 Corp. reported an 85% total return to shareholders over the past three years, indicating strong performance and shareholder value creation [9] - The company maintained high levels of return on assets and return on equity while experiencing strong growth [8][10] - The net interest margin (NIM) has been challenged by competitive pressures and excess liquidity, with expectations of potential degradation in the future [28][29] Business Line Data and Key Metrics Changes - The loan book has grown with good yields without compromising underwriting principles, reflecting strong credit risk management [10][12] - Core deposits have shown solid growth over the last three years, with a consistent portion in non-interest bearing categories [13] Market Data and Key Metrics Changes - The hospitality industry in Texas is recovering, with second-quarter revenue exceeding 2019 levels, indicating improvement in the sector [23] - The company has seen a significant recovery in its hospitality loan portfolio, with expectations of little to no meaningful losses [24][25] Company Strategy and Development Direction - The company announced the pending acquisition of Cornerstone Bank, which is expected to increase core deposits by approximately 20% and lead to a double-digit increase in earnings per share [16][18] - Management emphasized the importance of maintaining strong liquidity and efficient operations, even in a high-growth environment [34][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current reserve levels and credit quality, despite some charge-offs related to specific credits [21] - The company anticipates a slight dip in the non-acquisition loan book for the fourth quarter but expects a quick recovery due to underlying economic activity [30] Other Important Information - The company has maintained a low efficiency ratio and improved assets per employee metric, showcasing operational efficiency [14] - Management highlighted the importance of strong customer relationships in maintaining net interest margin despite competitive pressures [12] Q&A Session Summary Question: Long-term loan growth expectations with Cornerstone acquisition - Management expects loan growth in the low double-digit range post-acquisition [20] Question: Dynamics of net charge-offs and reserve levels - Management confirmed that charge-offs were related to previously reserved credits and expressed comfort with current reserve levels [21] Question: Update on the hospitality loan portfolio - Management noted continued improvement in the hospitality sector, with most properties performing well [23][24] Question: Margin outlook and new loan production rates - New loan originations have remained consistent in the mid-fours, but competitive pressures may lead to a decrease in NIM [27][29] Question: Liquidity levels and changes post-acquisition - Management indicated a need to maintain strong liquidity and plans to reposition the balance sheet to convert bonds into higher-yielding loans [34][35] Question: Operating expenses and inflation impact - Management expects wage pressures but anticipates that non-wage expenses will remain stable [38]

Financial Performance - For Q2 2021, pre-tax income was $8.1 million, up from $6.7 million in Q2 2020, and for the first six months of 2021, pre-tax income was $14.9 million, compared to $13.5 million in the same period in 2020[154]. - Interest income for Q2 2021 increased by $881,000, or 6.5%, compared to Q2 2020, and for the first six months of 2021, it increased by $561,000, or 2.1%[154]. - The return on average assets was 2.39% for Q2 2021, compared to 2.09% for Q2 2020, and the return on average equity was 21.61% for Q2 2021, compared to 20.36% for Q2 2020[156]. - The efficiency ratio for Q2 2021 was 34.22%, compared to 33.71% for Q2 2020, indicating a slight increase in operational efficiency[156]. - Noninterest income for the three months ended June 30, 2021 was $579,000, an increase of $278,000 or 92.4% compared to $301,000 in the same period last year[185]. - Noninterest income for the six months ended June 30, 2021 was $916,000, an increase of $285,000 or 45.2% compared to $631,000 in the same period last year[187]. Asset and Loan Growth - As of June 30, 2021, total assets were $1.1 billion, total loans were $932.0 million, total deposits were $1.0 billion, and total shareholders' equity was $117.0 million[152]. - Total assets increased by $116.4 million or 11.5% to $1.1 billion as of June 30, 2021, driven by strong loan and deposit growth in key metropolitan areas[194]. - Gross loans reached $936.1 million as of June 30, 2021, up from $839.1 million as of December 31, 2020, representing a significant growth in the loan portfolio[196]. - Average total loans for Q2 2021 were $889.3 million with loan yields of 6.48%, compared to $826.1 million with loan yields of 6.52% in Q2 2020[154]. - The company had 359 Paycheck Protection Program (PPP) loans totaling $47.5 million, an increase from 166 loans totaling $44.9 million as of December 31, 2020[158]. Interest and Noninterest Income - Net interest margin for Q2 2021 was 5.38%, compared to 4.99% for Q2 2020, reflecting improved profitability from interest-earning assets[168]. - Loan fees for Q2 2021 totaled $2.5 million, an increase of $895,000 or 54.9%, driven by loan growth and increased PPP fees[168]. - Interest income from short-term investments decreased by $397,000 or 71.7%, totaling $157,000 compared to $554,000 in the same period last year[174]. - Loan fees increased by $1.6 million or 56.2%, totaling $4.5 million, driven by loan growth and increased PPP fees[174]. - Net interest margin for the first six months of 2021 was 5.25%, up from 5.14% in the same period of 2020[174]. Noninterest Expense and Efficiency - Noninterest expense for the three months ended June 30, 2021 was $4.9 million, an increase of $752,000 or 18.2% compared to $4.1 million in the same period last year[188]. - Noninterest expense for the six months ended June 30, 2021, was $9.4 million, an increase of $943,000 or 11.1% compared to the same period in 2020[191]. - Total noninterest expense for the second quarter of 2021 was $4.875 million, reflecting an increase of $752,000 or 18.24% from $4.123 million in the same quarter of 2020[189]. - Salaries and employee benefits increased by $668,000 or 13.17% to $5.739 million for the six months ended June 30, 2021, attributed to organic growth in the employee base[192]. Credit Quality and Loan Losses - The provision for loan losses for Q2 2021 was $1.3 million, slightly down from $1.4 million in Q2 2020, indicating stable credit quality[155]. - The allowance for loan losses as a percentage of loans increased to 1.32% at June 30, 2021, up from 1.15% at December 31, 2020[184]. - The allowance for loan and lease losses was $12.306 million as of June 30, 2021, compared to $9.639 million as of December 31, 2020, indicating a proactive approach to potential loan losses[196]. - Total nonperforming loans decreased to $13.726 million as of June 30, 2021, down from $16.535 million at December 31, 2020, reflecting a reduction of 17.0%[214]. - The ratio of nonperforming loans to total loans improved to 1.47% as of June 30, 2021, compared to 1.98% at December 31, 2020, showing a decrease of 0.51 percentage points[214]. Deposits and Capital - Total deposits as of June 30, 2021, were $1.0 billion, up from $905.5 million as of December 31, 2020, representing an increase of approximately 10.5%[232]. - Noninterest-bearing demand deposits increased to $330.1 million, accounting for 32.7% of total deposits as of June 30, 2021, compared to 27.2% in the previous year[232]. - Total interest-bearing deposits were $678.5 million, representing 67.3% of total deposits as of June 30, 2021[232]. - As of June 30, 2021, total shareholders' equity increased to $117.0 million, up from $107.3 million as of December 31, 2020, representing a 9.0% increase driven by retained capital from net income[245]. - The Bank was categorized as "well-capitalized" under regulatory requirements as of June 30, 2021, exceeding all capital ratios including a total capital ratio of 14.48%[243]. Regulatory and Compliance - Regulatory assessments increased by $185,000 or 158.12% to $302,000 for the six months ended June 30, 2021, reflecting heightened compliance costs[192]. - The Company met all capital adequacy requirements under the Basel III Capital Rules as of June 30, 2021[244]. - The allowance for loan losses is based on management's estimate of probable losses inherent in the loan portfolio, which is regularly reviewed by regulatory agencies[259]. Miscellaneous - The company continues to focus on gathering noninterest-bearing demand deposits through various marketing efforts and community involvement[231]. - There were no payment defaults with respect to loans modified as Troubled Debt Restructurings (TDRs) as of June 30, 2021[228]. - Total TDRs amounted to $12.2 million as of June 30, 2021, with 2 contracts in nonaccrual status[229].

Bank7 Corp (NASDAQ:BSVN) Q2 2021 Earnings Conference Call July 29, 2021 4:30 PM ET Company Participants Thomas Travis - President, CEO & Director Jason Estes - EVP & Chief Credit Officer Conference Call Participants Matthew Olney - Stephens Inc. Brady Gailey - KBW Nathan Race - Piper Sandler & Co. Operator Hello, and welcome to the Bank7 Corp. Second Quarter Earnings Call. Before we get started, I'd like to highlight the legal information and disclaimer on Page 20 of the investor presentation. For those of ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 Par Value Per Share BSVN NASDAQ Global Select Market System FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ...