Bank7 Corp. (BSVN) stock intrinsic value fair value estimate & owner earnings analysis

Bank7 Corp. is the holding company for Bank7, a commercial bank that lends to business owners, real estate investors and energy producers from twelve full-service branches in Oklahoma, the Dallas/Fort Worth area of Texas, and Kansas. It earns its money mainly from the spread between interest on loans and the cost of deposits. At the end of 2025 it had $1.61 billion of loans (up 15.0% in the year) and $1.70 billion of deposits, an efficiency ratio of about 40%, and a 2025 net interest margin of 4.94%, down from 5.11% in 2024 as the Federal Reserve cut rates. How we measured earnings. We started from cash generated by operations, then subtracted stock compensation (a real cost to owners) and the portion of equipment and building spending needed just to stay in business. For a bank, day-to-day working-capital swings are not separately reported and are small, so none was removed. On this basis earnings per diluted share were about $3.04 in 2017, $3.23 in 2018, $0.41 in 2019, $2.57 in 2020, $3.15 in 2021, $4.16 in 2022, $4.92 in 2023, $5.16 in 2024 and $4.00 in 2025. The 2019 figure is depressed by an unusually large $12.1 million stock compensation charge (versus $0.2 million in 2018 and $0.8 million in 2020) and is excluded. The earnings level we use is $4.10 per share, the middle of the 2020 to 2025 results, a period that covers a full swing in interest rates and the years since the bank reached its current scale. We did not use the most recent quarters to set the level. Second-quarter 2026 net income of $8.3 million was below $11.1 million a year earlier, which is a reason for caution, but one quarter does not move the level. Growth check. Per-share earnings fell about 22% in 2025 (from $5.16 to $4.00) as margins compressed, while the base case assumes the first year is roughly flat at about $4.0, not a rebound. That holds because loans grew 15% during 2025 and the bank enters 2026 with a larger earning asset base than it averaged in 2025, and first-half 2026 operating cash flow of $24.1 million was above the $20.4 million of the first half of 2025. We give no credit for further loan growth: it requires retaining capital, and dividends of $1.02 per share in 2025 left most earnings retained to support it, so counting both would double count. Base case, $58 per share: earnings of about $4.10 per share held flat for ten years, then gradually declining about 2% a year, since the deposit relationships and low-cost operation are structural but nothing named supports continued growth. Bear case, $30: rate cuts compress the margin further and the bank repeats a large single-borrower loss like the $16.5 million charge-off in 2023 (a customer bankruptcy), and it has credit exposure to the energy sector; earnings fall to about $2.80 per share for five years, then decline about 5% a year. Bull case, $78: earnings return to the roughly $5.10 per share reached in 2024 and hold for ten years, then fade about 1% a year. Debt was not deducted, in line with valuing the cash flows to shareholders directly. What would make this wrong: a run of credit losses well beyond 2023, deposit outflows, or a margin that keeps falling with rates. Earnings depend on the Oklahoma and Texas economies. The margin-of-safety price is about $36 per share, which leaves a cushion for a bank whose results swing with interest rates and a few large borrowers.