Bank7 Corp. Announces Q4 2023 and Full Year Earnings
- The company experienced an 87.24% decrease in net income for the three months ended December 31, 2023 compared to the same period in 2022.
- Earnings per share also decreased by 87.36% for the same period.
- Total assets saw an increase of 11.84% for the three months ended December 31, 2023 compared to the same period in 2022.
- Total loans increased by 7.11% for the three months ended December 31, 2023 compared to the same period in 2022.
- Total interest income experienced a significant increase of 27.25% for the three months ended December 31, 2023 compared to the same period in 2022.
- For the year ended December 31, 2023, net income decreased by 4.60% compared to the year ended December 31, 2022.
- Earnings per share also decreased by 5.22% for the same period.
- Total interest income increased by 54.34% for the year ended December 31, 2023 compared to the year ended December 31, 2022.
- The company experienced a significant decrease in net income and earnings per share for the quarter and year ended December 31, 2023.
- Despite the increase in total assets and total loans, the decrease in net income and earnings per share is a negative aspect for the company.
- The company's financial performance saw a significant decline in net income and earnings per share, which may affect shareholder confidence.
Insights
The reported financial results from Bank7 Corp. indicate a mixed performance, with significant growth in total assets and pre-provision pre-tax earnings (PPE), yet a stark decrease in net income and earnings per share (EPS) for the quarter. The growth in assets and loans suggests an expanding operational scale, which could signal future revenue potential. However, the drastic decline in quarterly net income, by over 87%, is concerning and may reflect underlying issues such as increased credit losses or operational inefficiencies.
From an investor's perspective, the decrease in EPS could negatively influence the stock price as it may lead to lower investor confidence. The substantial increase in PPE might mitigate concerns to an extent, as it indicates the bank's earning potential before tax and credit loss provisions. The bank's well-capitalized status is positive, but investors should monitor the bank's ability to manage its growing asset base without compromising asset quality.
The reported increase in total interest income by 27.25% for the quarter and 54.34% for the year suggests a favorable interest rate environment for Bank7 Corp., or an expansion in interest-earning assets. This could be indicative of a broader economic trend where rising interest rates benefit financial institutions' net interest margins (NIM). However, the net interest margin for the year has decreased compared to the previous year, which could point to increasing costs of funds or a shift in asset composition that yields lower relative interest.
An economist would also note the increase in provision for credit losses, from $1.625 million to $15.5 million for the quarter, as a potential sign of economic headwinds or a more conservative approach by the bank to potential loan defaults. This provision could be a reaction to economic forecasts or observed deterioration in loan performance and is a critical factor for understanding the bank's future risk exposure.
The financial sector's performance is often closely correlated with broader economic conditions. Bank7's asset growth and the increase in PPE could be reflective of strategic initiatives that may appeal to certain investors looking for growth in the banking sector. However, the sharp decrease in quarterly profits and EPS may raise red flags about the bank's short-term profitability and operational challenges. It's essential to compare these figures with industry averages and competitors to fully gauge Bank7's market position.
Additionally, the report mentions an 'exception of one large credit,' which could imply a significant non-recurring event affecting the financial results. Stakeholders should seek clarity on this item, as it could have material implications for the risk assessment of the bank's loan portfolio. Understanding the nature of this outlier is crucial for a comprehensive market analysis.
For the three months ended December 31, 2023 compared to the three months ended December 31, 2022:
- Net income of
$1.1 million $8.4 million 87.24% - Earnings per share of
$0.12 $0.91 87.36% - Total assets of
$1.8 billion $1.6 billion 11.84% - Total loans of
$1.4 billion $1.3 billion 7.11% - PPE of
$17.1 million $13.0 million 31.41% - Total interest income of
$32.4 million $25.5 million 27.25%
For the year ended December 31, 2023 compared to year ended December 31, 2022
- Net income of
$28.3 million $29.6 million 4.60% - Earnings per share of
$3.05 $3.22 5.22% - PPE of
$58.4 million $43.9 million 33.14% - Total interest income of
$121.5 million $78.7 million 54.34%
Both the Bank's and the Company's capital levels continue to be significantly above the minimum levels required to be designated as "well-capitalized" for regulatory purposes. On December 31, 2023, the Bank's Tier 1 leverage ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratios were
Bank7 Corp. | ||||
Consolidated Balance Sheets | ||||
December 31, | ||||
Assets | 2023 | 2022 | ||
Cash and due from banks | $ 181,042 | $ 109,115 | ||
Interest-bearing time deposits in other banks | 17,679 | 5,474 | ||
Available-for-sale debt securities | 169,487 | 173,165 | ||
Loans, net of allowance for credit losses of | ||||
1,341,148 | 1,255,722 | |||
Loans held for sale, at fair value | 718 | - | ||
Premises and equipment, net | 14,942 | 13,106 | ||
Nonmarketable equity securities | 1,283 | 1,209 | ||
Core deposit intangibles | 1,031 | 1,336 | ||
Goodwill | 8,458 | 8,603 | ||
Interest receivable and other assets | 35,878 | 16,439 | ||
Total assets | $ 1,771,666 | $ 1,584,169 | ||
Liabilities and Shareholders' Equity | ||||
Deposits | ||||
Noninterest-bearing | $ 482,349 | $ 441,509 | ||
Interest-bearing | 1,109,042 | 989,891 | ||
Total deposits | 1,591,391 | 1,431,400 | ||
Income taxes payable | 302 | 1,054 | ||
Interest payable and other liabilities | 9,647 | 7,615 | ||
Total liabilities | 1,601,340 | 1,440,069 | ||
Shareholders' equity | ||||
Common stock, | ||||
issued and outstanding: 9,197,696 and 9,131,973 at | 92 | 91 | ||
December 31, 2023 and December 31, 2022 respectively | ||||
Additional paid-in capital | 97,415 | 95,263 | ||
Retained earnings | 78,964 | 58,049 | ||
Accumulated other comprehensive income (loss) | (6,145) | (9,303) | ||
Total shareholders' equity | 170,326 | 144,100 | ||
Total liabilities and shareholders' equity | $ 1,771,666 | $ 1,584,169 | ||
Three Months Ended | Twelve Months Ended | |||||||
December 31, | December 31, | |||||||
2023 | 2022 | 2023 | 2022 | |||||
Interest Income | ||||||||
Loans, including fees | $ 28,727 | $ 23,806 | $ 109,843 | $ 74,403 | ||||
Interest-bearing time deposits in other banks | 248 | 7 | 519 | 46 | ||||
Debt securities, taxable | 685 | 688 | 2,791 | 2,313 | ||||
Debt securities, tax-exempt | 77 | 87 | 330 | 360 | ||||
Other interest and dividend income | 2,664 | 874 | 8,061 | 1,627 | ||||
Total interest income | 32,401 | 25,462 | 121,544 | 78,749 | ||||
Interest Expense | ||||||||
Deposits | 11,104 | 5,081 | 38,998 | 9,322 | ||||
Total interest expense | 11,104 | 5,081 | 38,998 | 9,322 | ||||
Net Interest Income | 21,297 | 20,381 | 82,546 | 69,427 | ||||
Provision for Credit Losses | 15,500 | 1,625 | 21,145 | 4,468 | ||||
Net Interest Income After Provision for Credit Losses | 5,797 | 18,756 | 61,401 | 64,959 | ||||
Noninterest Income | ||||||||
Mortgage lending income | 159 | 91 | 331 | 486 | ||||
Loss on sales, prepayments, and calls of available-for-sale debt securities | (1) | - | (16) | (127) | ||||
Service charges on deposit accounts | 222 | 222 | 869 | 900 | ||||
Other | 6,389 | 419 | 8,058 | 1,680 | ||||
Total noninterest income | 6,769 | 732 | 9,242 | 2,939 | ||||
Noninterest Expense | ||||||||
Salaries and employee benefits | 3,086 | 4,892 | 17,385 | 17,040 | ||||
Furniture and equipment | 241 | 334 | 995 | 1,468 | ||||
Occupancy | 708 | 593 | 2,689 | 2,329 | ||||
Data and item processing | 450 | 600 | 1,730 | 2,068 | ||||
Accounting, marketing and legal fees | 51 | 203 | 543 | 984 | ||||
Regulatory assessments | 524 | 371 | 1,537 | 1,344 | ||||
Advertsing and public relations | 154 | 164 | 427 | 477 | ||||
Travel, lodging and entertainment | 118 | 147 | 374 | 363 | ||||
Other | 5,673 | 825 | 7,740 | 2,568 | ||||
Total noninterest expense | 11,005 | 8,129 | 33,420 | 28,641 | ||||
Income Before Taxes | 1,561 | 11,359 | 37,223 | 39,257 | ||||
Income tax expense | 491 | 2,973 | 8,948 | 9,619 | ||||
Net Income | $ 1,070 | $ 8,386 | $ 28,275 | $ 29,638 | ||||
Earnings per common share - basic | $ 0.12 | $ 0.92 | $ 3.09 | $ 3.26 | ||||
Earnings per common share - diluted | 0.12 | 0.91 | 3.05 | 3.22 | ||||
Weighted average common shares outstanding - basic | 9,188,888 | 9,118,728 | 9,161,565 | 9,101,523 | ||||
Weighted average common shares outstanding - diluted | 9,274,960 | 9,232,333 | 9,264,307 | 9,204,716 | ||||
Other Comprehensive Income (Loss) | ||||||||
Unrealized gains(losses) on securities, net of (tax expense)tax benefit of ( | ||||||||
and | $ 2,933 | $ 1,146 | $ 3,146 | $ (9,543) | ||||
Reclassification adjustment for realized loss included in net income net of tax of | ||||||||
and | 1 | - | 12 | 96 | ||||
Other comprehensive income(loss) | $ 2,934 | $ 1,146 | $ 3,158 | $ (9,447) | ||||
Comprehensive Income | $ 4,004 | $ 9,532 | $ 31,433 | $ 20,191 | ||||
Net Interest Margin | ||||||||||||
For the Twelve Months Ended | ||||||||||||
2023 | 2022 | |||||||||||
Average | Interest | Average | Average | Interest | Average | |||||||
(Dollars in thousands) | ||||||||||||
Interest-Earning Assets: | ||||||||||||
Short-term investments | $ 174,600 | $ 8,580 | 4.91 % | $ 129,624 | $ 1,673 | 1.29 % | ||||||
Debt securities, taxable-equivalent | 152,094 | 2,791 | 1.84 | 145,915 | 2,313 | 1.59 | ||||||
Debt securities, tax exempt | 19,430 | 330 | 1.70 | 21,635 | 360 | 1.66 | ||||||
Loans held for sale | 158 | - | - | 586 | - | - | ||||||
Total loans(1) | 1,315,578 | 109,843 | 8.35 | 1,143,380 | 74,403 | 6.51 | ||||||
Total interest-earning assets | 1,661,860 | 121,544 | 7.31 | 1,441,140 | 78,749 | 5.46 | ||||||
Noninterest-earning assets | 21,236 | 23,532 | ||||||||||
Total assets | $ 1,683,096 | $ 1,464,672 | ||||||||||
Funding sources: | ||||||||||||
Interest-bearing liabilities: | ||||||||||||
Deposits: | ||||||||||||
Transaction accounts | $ 825,169 | 28,582 | 3.46 % | $ 724,617 | 7,842 | 1.08 % | ||||||
Time deposits | 256,672 | 10,416 | 4.06 | 165,735 | 1,480 | 0.89 | ||||||
Total interest-bearing deposits | 1,081,841 | 38,998 | 3.60 | 890,352 | 9,322 | 1.05 | ||||||
Total interest-bearing liabilities | 1,081,841 | 38,998 | 3.60 | 890,352 | 9,322 | 1.05 | ||||||
Noninterest-bearing liabilities: | ||||||||||||
Noninterest-bearing deposits | 433,603 | 432,901 | ||||||||||
Other noninterest-bearing liabilities | 11,101 | 7,520 | ||||||||||
Total noninterest-bearing liabilities | 444,704 | 440,421 | ||||||||||
Shareholders' equity | 156,551 | 133,899 | ||||||||||
Total liabilities and shareholders' equity | $ 1,683,096 | $ 1,464,672 | ||||||||||
Net interest income | $ 82,546 | $ 69,427 | ||||||||||
Net interest spread | 3.71 % | 4.42 % | ||||||||||
Net interest margin | 4.97 % | 4.82 % | ||||||||||
(1) Nonaccrual loans are included in total loans |
Net Interest Margin | ||||||||||||
For the Three Months Ended | ||||||||||||
2023 | 2022 | |||||||||||
Average | Interest | Average | Average | Interest | Average | |||||||
(Dollars in thousands) | ||||||||||||
Interest-Earning Assets: | ||||||||||||
Short-term investments | $ 210,710 | $ 2,912 | 5.48 % | $ 101,427 | $ 881 | 3.45 % | ||||||
Debt securities, taxable-equivalent | 150,291 | 685 | 1.81 | 154,869 | 688 | 0.76 | ||||||
Debt securities, tax exempt | 18,250 | 77 | 1.67 | 20,247 | 87 | 1.70 | ||||||
Loans held for sale | 284 | - | - | 291 | - | - | ||||||
Total loans(1) | 1,362,533 | 28,727 | 8.36 | 1,262,864 | 23,806 | 7.48 | ||||||
Total interest-earning assets | 1,742,068 | 32,401 | 7.38 | 1,539,698 | 25,462 | 6.56 | ||||||
Noninterest-earning assets | 17,308 | 21,937 | ||||||||||
Total assets | $ 1,759,376 | $ 1,561,635 | ||||||||||
Funding sources: | ||||||||||||
Interest-bearing liabilities: | ||||||||||||
Deposits: | ||||||||||||
Transaction accounts | $ 848,990 | 8,237 | 3.85 % | $ 798,073 | 4,491 | 2.23 % | ||||||
Time deposits | 254,460 | 2,867 | 4.47 | 157,211 | 590 | 1.49 | ||||||
Total interest-bearing deposits | 1,103,450 | 11,104 | 3.99 | 955,284 | 5,081 | 2.11 | ||||||
Total interest-bearing liabilities | $ 1,103,450 | 11,104 | 3.99 | $ 955,284 | 5,081 | 2.11 | ||||||
Noninterest-bearing liabilities: | ||||||||||||
Noninterest-bearing deposits | $ 485,312 | $ 457,753 | ||||||||||
Other noninterest-bearing liabilities | 12,895 | 8,683 | ||||||||||
Total noninterest-bearing liabilities | 498,207 | 466,436 | ||||||||||
Shareholders' equity | 157,719 | 139,915 | ||||||||||
Total liabilities and shareholders' equity | $ 1,759,376 | $ 1,561,635 | ||||||||||
Net interest income | $ 21,297 | $ 20,381 | ||||||||||
Net interest spread | 3.39 % | 4.45 % | ||||||||||
Net interest margin | 4.85 % | 5.25 % | ||||||||||
(1) Nonaccrual loans are included in total loans |
About Bank7 Corp.
We are Bank7 Corp., a bank holding company headquartered in
Conference Call
Bank7 Corp. has scheduled a conference call to discuss its fourth quarter and full year results, which will be broadcast live over the Internet, on Monday, January 29, 2024 at 11:00 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/NXrREy72GnW. For those not able to participate in the live call, an archive of the webcast will be available at https://app.webinar.net/NXrREy72GnW 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
Contact:
Thomas Travis
President & CEO
(405) 810-8600
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SOURCE Bank7 Corp.
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