Bank7(BSVN) - 2024 Q3 - Quarterly Report

Financial Performance - Pre-tax net income for Q3 2024 was $15.5 million, an increase of$5.3 million, or 51.9%, compared to $10.2 million in Q3 2023[130] - Return on average assets and return on average equity for Q3 2024 were 2.73$21.2 million, an increase from $20.7 million in Q3 2023[134] - Noninterest income for the three months ended September 30, 2024, was$3.7 million, an increase of $2.7 million or 265.1$1.0 million in the same period in 2023[156] - Total noninterest income for the nine months ended September 30, 2024, was $8.9 million, an increase of$6.4 million or 258.1% from $2.5 million in the same period in 2023[157] Loan and Deposit Metrics - Total loans reached$1.44 billion as of September 30, 2024, an increase of $44.8 million, or 3.2$1.52 billion as of September 30, 2024, a decrease of $69.4 million, or 4.4$89.8 million, an increase of $8.7 million, or 10.7$6.95 million as of September 30, 2024, from $18.94 million at December 31, 2023, representing a decline of approximately 63.3$4.2 million, or 100%, compared to the same period in 2023[132] - The allowance for credit losses as a percentage of gross loans decreased by 24 basis points to 1.24%[154] - The allowance for credit losses decreased to $17.9 million as of September 30, 2024, from$19.7 million as of December 31, 2023[163] - The total charge-offs for the nine months ended September 30, 2024, amounted to $2.0 million, compared to$23,000 for the same period in 2023, reflecting a significant increase in charge-offs[172] - The ratio of nonperforming loans to total loans improved to 0.54% as of September 30, 2024, compared to 2.13% at December 31, 2023[177] Interest Rate and Risk Management - The company employs a comprehensive loan grading system to determine risk potential in loans[215] - The ALCO Committee regularly reviews the sensitivity of assets and liabilities to interest rate changes and manages interest rate risk accordingly[230] - The company utilizes interest rate risk simulation models to assess the sensitivity of net interest income and fair value of equity to interest rate changes[231] - Under the static and dynamic growth models, a -100 basis point shift is estimated to result in a 0.66% decline in net interest income, while a +400 basis point shift could increase it by 20.62%[234] - The company’s exposure to interest rate risk is primarily managed through balance sheet structuring, without the use of leveraged derivatives or financial options[229] Capital and Liquidity - The Bank maintained a Tier 1 capital ratio of 12.93% as of September 30, 2024, exceeding the regulatory requirement[204] - Total shareholders' equity increased by $33.8 million to$204.2 million as of September 30, 2024, compared to $170.3 million as of December 31, 2023[205] - The liquidity position is supported by liquid assets and access to alternative funding sources, ensuring the ability to meet cash flow requirements[196] - The Company and the Bank met all capital adequacy requirements under the Basel III Capital Rules as of September 30, 2024[200] - Total capital to risk-weighted assets was 14.12$9.4 million, an increase of $2.0 million, or 27.2$7.4 million for the same period in 2023[159] - Noninterest expense for the nine months ended September 30, 2024, was $27.7 million, an increase of$5.3 million, or 23.5%, compared to $22.4 million for the same period in 2023[160] - Salaries and employee benefits for the three months ended September 30, 2024, were$5.3 million, an increase of 8.6% from $4.9 million in the same period in 2023[159] - Noninterest expense related to "Other expense" surged to$1.9 million, a 176.6% increase from $688,000 in the same period last year[159] - Advertising and public relations expenses increased by 74.3$129,000 for the three months ended September 30, 2024, compared to $74,000 in the same period last year[159]