Slide 1: BSVN 3Q 2020 Earnings Release
BSVN 3Q 2020 EARNINGS RELEASE October 29, 2020
Slide 2: BSVN – A Strong Value Proposition
BSVN – A Strong Value Proposition • Positioned in a very dynamic market, with a commercial banking emphasis that delivers services via a branch-lite model. • Experienced and talented bankers focused on high-touch personalized service. Company • Strong credit culture that adheres to a robust risk man
Slide 3: 3Q Overview
3Q Overview • Excellent PPE quarter of $7.4 million. Continued Strong • YTD PPE of $22.9 million compared to $20.5 million(1) for YTD 2019, an increase of 11.6%. Performance • YTD TBV increase of $1.43 per share, which is a 19.5% annualized return. As disclosed in our 2Q 8-K: • DFAST stress test res
Slide 4: Outstanding Book Value Appreciation Since IPO
Outstanding Book Value Appreciation Since IPO Tangible Book Value $11.21 $9.78 • We have provided a 40.16% book value per share $8.49 increase to shareholders since our IPO. $7.92 $7.24 • When including the cash dividends, BSVN has produced a 51.23% overall return since our IPO. 2016 2017 2018 2019
Slide 5: A Continuation of BSVN Exceptional Performance
A Continuation of BSVN Exceptional Performance Return on Average Assets (1)(2) 5-year average: 2.17% 2.75% • Even with the significant increase to our ALLL 2.51% reserve, we continue to produce strong ROAA 2.17% Pro 2.07% and ROATCE: 2.07% and 19.47% YTD, Forma 1.78% respectively. 1.65% 1.03% • We h
Slide 6: Strong Organic Growth and PPE
Strong Organic Growth and PPE Total Assets • We continue leveraging our $974.4 $1,004.1 $973.4 employee base by combining $866.4 technology with our branch-lite $770.5 model. $703.6 $613.8 $563.5 • A history of strong organic growth. • Consistently strong PPE. 2015 2016 2017 2018 2019 Q1 '20 Q2 '20
Slide 7: PPE to Average Assets – Much stronger than peers
PPE to Average Assets – Much stronger than peers 4.00% 3.50% 3.80% 3.53% 3.00% 3.36% 3.36% 3.12% 2.50% 2.00% 1.50% 1.42% 1.50% 1.46% 1.52% 1.00% 1.36% 0.50% 0.00% (3) 2016 2017 2018 2019 YTD 2020 Peers BSVN Income Statement as a Percentage of Average Assets 2016 2017 2018 2019 YTD 2020(3) Peer Group
Slide 8: Strong PPE Provides Excellent Shock-Absorption
Strong PPE Provides Excellent Shock-Absorption Earnings-driven cushion far exceeds regulatory minimums as illustrated over two years Regulatory Total Shock Minimum Q3 2020 Excess Capital Excess Capital to Absorption Ability Target Capital to Target Ratio Target Ratio Add: PPE Prior to Hitting Reg (1
Slide 9: Net Interest Margin Strength
Net Interest Margin Strength • Despite the pandemic-induced stress which has temporarily reduced new loan opportunities, our margin continues to show strength. Net Interest Margin 5.87% 5.49% 5.25% 5.35% 5.16% 1.28% 5.02% 0.71% 0.57% 4.81% 0.62% 0.79% 0.57% 4.78% 4.78% 0.45% 4.63% 4.59% 4.37% 4.45%
Slide 10: Asset Quality
Asset Quality Net Charge-Offs to Average Loans • Historically, we have experienced low net 0.09% 0.07% charge-offs and virtually zero oil & gas related 0.004% 0.002% charge-offs. -0.002% • Pandemic-induced stress impact on 2016 2017 2018 2019 Q3 2020 nonperforming assets and loan grades Allowance fo
Slide 11: COVID-19 Loan Deferrals
COVID-19 Loan Deferrals COVID-19 Loan Deferrals – 2Q vs. 3Q $312.85 • 23 loans with outstanding balances of $121 million were on active payment deferrals as of 3Q. A $217.54 decrease of 61% or $192 million from 2Q. 120.95 • Six loans with outstanding balances of $4 million are on the first payment $
Slide 12: Hospitality Loan Portfolio Detail as of 3Q 20
Hospitality Loan Portfolio Detail as of 3Q 20 Hotel Portfolio Exposure by Class Number Balance as of Flag Type of Hotels Q3 2020 Economy 16 $34.44 • Blue collar portfolio that is better protected by the Midscale 22 97.86 “cycle-down” effect of a recession. 28 out of 35 Upper Midscale 6 56.37 operati
Slide 13: Hospitality Loan Portfolio Detail as of 3Q 20
Hospitality Loan Portfolio Detail as of 3Q 20 Outstanding Loan Type Hotels Balance Operating 35 $165.40 Construction 9 $23.27 Portfolio Metrics – 35 Operating Properties(1) Average Loan Size $4.70 Average Loan to Value 63% Average DCR 1.5 Average Remaining Amortization 15.2 Years Outstanding Hotels
Slide 14: Energy Loan Portfolio
Energy Loan Portfolio Energy Portfolio as a % of Total Loans 4.90% 3.65% 3.17% 2.56% Exploration & Mineral / royalty Service Midstream production interest companies Total COVID Number of Modified # of % of Notes Total Loan Modified COVID % of Purpose Code Desc Notes Notes Modified Balances Balances
Slide 15: Energy Portfolio Potential Exposure
Energy Portfolio Potential Exposure Exploration & Production Liquid Guarantor [1], Low decline production with amortizing ability at $30/barrel oil 5% $2.06 34% Hedged Production into 2021 or beyond; 3 yr remaining amortization or less, low loan to value 92% 39.86 Minimal risk of loss Low decline na
Slide 16: Appendix
Appendix BAN)
Slide 17: 2019 Pro Forma Net Income Reconciliation
2019 Pro Forma Net Income Reconciliation • On September 5, 2019, our largest shareholders, the Haines Family Trusts, contributed approximately 6.5% of their shares (656,925 shares) to the Company. Subsequently, the Company immediately issued those shares to certain executive officers, which was char
Slide 18: Bank7 Corp. Financials
Bank7 Corp. Financials As of or for the Nine Months Ended September 30, For the Year Ended December 31, 2020 2019 2019 2019 2019 2018 2017 2016 (Dollars in thousands, except per share data) (3) (3) Pro Forma Pro Forma Income Statement Data: Total interest income $ 39,990 $ 38,714 $ 51,709 $ 46,800 $
Slide 19: Bank7 Corp. Financials
Bank7 Corp. Financials As of or for the Nine (Dollars in thousands, except per share data) Months Ended September 30, For the Year Ended December 31, Performance Ratios: 2020 2019 2019 2019 2019 2018 2017 2016 Pro Forma (5) Pro Forma (5) Return on average: (1) Assets 2.07% 0.64% 2.63% 1.03% 2.51% 2.
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations As of or for the Nine Months Ended September 30, For the Year Ended December 31, 2020 2019 2019 2018 2017 2016 (Dollars in thousands, except per share data) Tangible shareholders' equity Total shareholders equity $ 105,230 $ 100,615 $ 100,126 $ 88,466 $ 69,176 $ 55,136 Goodw
Slide 21: Loan Portfolio Distribution
Loan Portfolio Distribution Gross Loan Portfolio Composition by Purpose Type Agricultural Non- Farmland Agricultural Farmland Consumer $25.00 $24.22 $10.45 3.0% 2.9% PPP Loans 1.2% Hospitality construction $63.97 $17.19 7.6% 2.0% Commercial construction $32.59 3.9% 1-4 family construction $42.60 5.1
Slide 22: Deposit Composition
Deposit Composition Commentary Deposit Composition as of September 30, 2020 NOW deposits • 83.6% of our loan customers also had a deposit relationship $177.4 with us as of September 30, 2020. 20.5% Noninterest- Core Deposits(1) bearing demand $272.0 31.5% Money Markets • Total organic core deposit g
Slide 23: Important Presentation Information
Important Presentation Information The 2020 Dodd-Frank Act Annual Stress Test Results Disclosure (the “Stress Test Results”) included herein has not been prepared under accounting principles generally accepted in the United States of America (“GAAP”). The Stress Test Results present certain forward-
Slide 24: Stress Test Results
Stress Test Results • Resulted in cumulative loan losses over the DFAST period of $27.5 million, which is 3.69% of loans. • Dividend payout was unaffected and continues to be paid. • Annualized actual ROATCE through 3Q 20 was 19.8%, which declines to approximately 8% for the full year ending 2021. •
Slide 25: Legal Information and Disclaimer
Legal Information and Disclaimer This presentation and oral statements made regarding the subject of this presentation contain forward-looking statements. These forward-looking statements are subject to significant uncertainties because they are based upon: the amount and timing of future changes in