Okla. energy lender plans IPO to fund acquisitions
A 117-year-old Oklahoma City bank that focuses on hospitality and energy lending plans to raise $75 million through an initial public offering.
Bank7 said in a prospectus filed on Monday that it expects to earmark much of the funds its receives for general corporate purposes, including acquisitions. The $728 million-asset company, which has completed two M&A deals since 2011, intends “to pursue acquisitive growth as a public company,” the filing said.
Bank7 should have plenty of capital to pursue deals. Its common equity Tier 1 capital ratio was 13.45% on June 30.
Bank7 traces its roots to 1901, when it was founded as First National Bank of Medford. Until 2004, the bank was controlled by the Stewart family of Wellington, Okla.
In 2004, Bank7 was sold to William Haines, who is its chairman and biggest shareholder. His family will still control more than half of the company’s stock after the IPO.
First National Bank of Medford had $27 million in assets when Haines acquired it. After taking control and changing the name, he moved the bank to Oklahoma City. In 2015, Bank7 expanded to Dallas, where it has focused on making hospitality loans to Southeast Asian hoteliers.
Energy loans, which totaled $151.2 million on June 30, make up the largest share of total loans. Hospitality-related loans made up about a fifth of Bank7’s $589 million loan portfolio on June 30.
Haines co-founded a pipeline construction company with his father in 1981. He entered other industries such as banking after selling Haines Pipeline Construction in 1999.
Bank7 has operated as an S corporation, paying no federal income tax, since August 2004. After the IPO, the company plans to convert to C corporation status, making its net income subject to federal income tax.
For the first half of 2018, Bank7 reported net income of $12.7 million. Had it paid income tax, its profit would have been about $9.5 million.